‒ Through ongoing investments in Program Management and Advisory, the Company has extended its competitive advantages, expanded its addressable share of the high value global infrastructure cycle, and elevated its value proposition for clients.

Fiscal 2024 Financial Guidance

• The Company raised its fiscal 2024 adjusted EBITDA⁴ guidance to between $1,070 million and $1,105 million, reflecting strong operational performance to date and confidence in the second half of the fiscal year, supported by a record backlog position.
• The Company’s guidance also includes expectations for:

‒ Organic NSR² growth of approximately 8% to 10%.

‒ A segment adjusted¹ operating income margin³ of approximately 15.6%, representing a 90 basis point increase from fiscal 2023.

‒ Adjusted¹ EPS of between $4.35 and $4.55, representing a 20% increase at the mid-point over fiscal 2023.

• Other assumptions incorporated into guidance:

‒ 100%+ free cash flow⁶ conversion, reflecting the highly cash generative nature of the Company’s Professional Services business.

‒ An average fully diluted share count of 137 million, which reflects only shares repurchased to-date, though the Company intends to continue repurchasing stock which would provide a benefit to per share earnings.

‒ An adjusted effective tax rate of between 24% and 26% for the full year; this includes an expected tax rate in the high 20%’s in the third fiscal quarter, consistent with last year’s phasing.

• The Company expects to deliver a return on invested capital⁹ (ROIC) of approximately 20% in fiscal 2024.
• See the Regulation G Information tables at the back of this release for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Cash Flow, Balance Sheet and Capital Allocation Update

• Operating cash flow in the second quarter was $94 million and free cash flow⁶ was $74 million, which contributed to a 156% increase in free cash flow in the first half of the fiscal year as compared to the prior year period.
• The Company’s returns-focused capital allocation policy prioritizes investments in organic growth followed by share repurchases and dividends.

– Returned $145 million to shareholders through share repurchases and dividends in the first half of the fiscal year, consistent with the Company’s free cash flow phasing.

– In total, the Company has returned nearly $2.1 billion of capital to shareholders through share repurchases and dividends since September 2020.

• In April, the Company completed a strategic refinancing of its revolving credit facility, Term Loan A and Term Loan B to lock in historically attractive pricing and extend the maturity of its debt, with no material change to expected annual net interest expense. This transaction enhanced the Company’s ability to operate with greater certainty, invest in organic growth, and return capital to shareholders.

“We delivered strong second quarter and first half financial performance, and as a result we are increasing the mid-point of our adjusted EBITDA guidance for the full year,” said Troy Rudd, AECOM’s chief executive officer. “Across our performance, our strong revenue growth, record profitability, and a record backlog and pipeline demonstrate the competitive advantage we have built. Our Program Management and Advisory services are a key element of our success as we leverage the strength of our 52,000 technical experts, elevate the value of our capabilities and capture a greater share of the profit opportunity on our pursuits. Our Program Management backlog increased 45% year-over-year in the quarter and continues to represent an increasing share of our work, which provides us with greater visibility as the secular mega trends of global infrastructure investment, sustainability and resilience, and the energy transition accelerate.”

“We are investing in our technical expertise and in global collaboration, and as a result, we continue to win at a high rate, which is evident in our record backlog and pipeline,” said Lara Poloni, AECOM’s president. “To build on this momentum, we recently launched our TechEx initiative aimed at elevating our culture through an unrivaled commitment to technical and professional development programs for our teams. When combined with our focus on our highest-returning markets and largest clients, we have created a platform that allows us to consistently bring our best resources to our clients’ most challenging infrastructure investments. As a result, on all of our largest wins, it is the strength of our technical proposal and expertise that have led to our successes.”

“Our strong second quarter and year-to-date results underpin our confidence in the full year, including in delivering on the increase to the mid-point of our adjusted EBITDA guidance,” said Gaurav Kapoor, AECOM’s chief financial and operations officer. “Building on the strength of our financial performance, after the quarter ended, we successfully amended and extended our credit facility, creating greater certainty around our cost of capital and maintaining a prudent mix of approximately 70% fixed and 30% floating rate debt. Importantly, even in the current higher interest rate environment, we maintained our historically low cost of debt and are able to continue to execute on our returns-focused capital allocation policy with confidence.”

Business Segments

Americas

Revenue in the second quarter was $3.0 billion. Net service revenue² was $1.1 billion, a 10% increase from the prior year.

Operating income increased by 6% over the prior year to $189 million. On an adjusted¹ basis, operating income increased by 6% to $194 million. The adjusted operating margin on net service revenue was 18.0%, which remains at the top of our industry, and includes the positive impacts of growth and enables investments to enhance the Company’s technical and digital capabilities and to pursue a record volume of opportunities.

International

Revenue in the second quarter was $905 million. Net service revenue² was $746 million, a 6% increase from the prior year. The Company had fewer working days compared to the prior year period, which resulted in an approximately 200 basis point headwind to net service revenue growth.

Operating income and adjusted¹ operating income both increased by 35% over the prior year to $81 million and $82 million, respectively. The adjusted operating margin on net service revenue increased by 240 basis points over the prior year to 10.9%, which is driven by the Company’s narrowed geographic focus, reduced real estate footprint, and ongoing operational efficiencies.

AECOM Capital

After the quarter ended, the Company completed a transaction that transitioned the AECOM Capital team to a new platform and enabled the team to continue to support AECOM Capital’s existing investments and investment vehicles in a manner consistent with its current obligations, while capping expected future G&A costs associated with the wind-down of activities.

Discontinued Operations

The Company recorded a $103 million loss related to revisions of estimated contingent consideration receivables recognized at the time of sale related to the 2021 sale of the Company’s civil construction business.

Balance Sheet

As of March 31, 2024, AECOM had $1.2 billion of total cash and cash equivalents, $2.2 billion of total debt and $1.0 billion of net debt (total debt less cash and cash equivalents). Net leverage¹⁰ was 0.9x.

Tax Rate

The effective tax rate was 26.6% in the second quarter. On an adjusted¹ basis, the effective tax rate was 28.2%. The adjusted tax rate was derived by re-computing the quarterly effective tax rate on adjusted net income¹¹. The adjusted tax expense differs from the GAAP tax expense based on the taxability or deductibility and tax rate applied to each of the adjustments.

Conference Call

AECOM is hosting a conference call tomorrow at 8 a.m. Eastern Time, during which management will make a brief presentation focusing on the Company's results, strategy and operating trends, and outlook. Interested parties can listen to the conference call and view accompanying slides via webcast at https://investors.aecom.com . The webcast will be available for replay following the call.