NYSE:ACM
AECOM
A leading global engineering and design consultancy delivering critical infrastructure solutions across transportation, urban development, and environmental sectors.
Key Metrics
Investment Thesis
Bull Case
ACM offers compelling value through its diversified revenue base which mitigates sector-specific downturns, supported by a consistent track record of profitability improvement. The company's ability to win large-scale government contracts provides stable long-term visibility into future earnings growth potential. Strong balance sheet metrics with $1.59B in cash enable aggressive capital return programs including share buybacks while funding strategic acquisitions.
Bear Case
Valuation concerns may arise if the company fails to sustain its recent profit growth trajectory amidst rising labor costs and inflationary pressures on construction materials. Heavy reliance on public sector spending makes earnings vulnerable to fiscal tightening by federal or state governments during economic slowdowns. Significant goodwill of $3.70B represents a potential impairment risk if acquired projects underperform expectations over the long term.
About AECOM
AECOM (ACM) is a global infrastructure consulting firm providing engineering, design, planning, and management services across transportation, urban development, energy, and environmental sectors. Serving clients in over 150 countries, the company leverages its extensive network of offices to deliver complex project solutions for government agencies and private enterprises. With revenue exceeding $16 billion, ACM integrates technology and expertise to optimize infrastructure delivery worldwide.
Analysis
Management Discussion
Recent financial performance shows a robust recovery with net income surging to $636.2M in 2025 from just $100.1M in 2023, reflecting successful portfolio optimization and cost management. Revenue growth of approximately 12% year-over-year demonstrates effective demand generation despite a challenging macro environment. The strong operating cash flow of $821.6M provides ample liquidity to fund share repurchases and maintain investment in emerging technology capabilities.
Industry Overview
The global engineering and design services industry is experiencing a transformation driven by the need for sustainable infrastructure development and digitalization of construction processes. Market participants are consolidating to achieve economies of scale while adapting to stricter environmental regulations and evolving client requirements for integrated project delivery. Technological advancements in AI and BIM modeling are reshaping service offerings, favoring large firms with significant R&D investments.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $14.38B | $16.11B | $16.14B |
| Cost of Revenue | $13.43B | $15.02B | $14.92B |
| Gross Profit | $945.5M | $1.08B | $1.22B |
| Operating Expenses | $621.3M | $256.9M | $190.2M |
| Operating Income | $324.1M | $827.4M | $1.03B |
| G&A | $153.6M | $160.1M | $157.8M |
| Stock-Based Comp | $45.9M | $61.5M | $61.4M |
| D&A | $175.7M | $178.8M | $175.9M |
| Depreciation | $152.3M | $152.3M | $166.3M |
| Amortization | $18.6M | $18.8M | $1.5M |
| Other OpEx | $467.8M | $96.8M | $32.3M |
| Non-Operating Income | $-110.7M | $-109.3M | $-111.0M |
| Interest Income | $40.3M | $58.6M | $62.9M |
| Pre-Tax Income | $213.4M | $718.2M | $915.6M |
| Income Tax | $56.1M | $152.9M | $204.0M |
| Continuing Ops | $157.3M | $565.3M | $711.6M |
| Discontinued Ops | $-57.2M | $-105.0M | $-75.4M |
| Net Income | $100.1M | $460.3M | $636.2M |
| Minority Interest | $44.8M | $58.0M | $74.4M |
| Net to Common | $55.3M | $402.3M | $561.8M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $6.17B | $7.18B | $6.73B |
| Cash & Equivalents | $1.26B | $1.58B | $1.59B |
| Accounts Receivable | $2.54B | $2.79B | $2.50B |
| Prepaid Expenses | $730.1M | $758.7M | $716.1M |
| Other Current Assets | $1.63B | $2.04B | $1.93B |
| Long-Term Assets | $5.06B | $4.89B | $5.47B |
| PP&E (Net) | $382.6M | $354.4M | $416.2M |
| Goodwill | $3.42B | $3.48B | $3.70B |
| Operating Leases | $447.0M | $432.2M | $463.5M |
| Other LT Assets | $815.3M | $618.9M | $889.8M |
| Total Assets | $11.23B | $12.06B | $12.20B |
| Current Liabilities | $5.85B | $6.37B | $5.93B |
| Accounts Payable | $2.19B | $2.56B | $2.26B |
| Current Leases | $139.8M | $135.1M | $132.4M |
| Deferred Revenue | $1.19B | $1.30B | $1.09B |
| Other Current Liab | $43.4M | $-5.2M | $-42.6M |
| Long-Term Liabilities | $3.00B | $3.32B | $3.58B |
| LT Operating Leases | $548.9M | $510.6M | $516.0M |
| Other LT Liab | $2.45B | $2.81B | $3.06B |
| Total Liabilities | $8.85B | $9.69B | $9.50B |
| Shareholders' Equity | $2.38B | $2.37B | $2.70B |
| Paid-In Capital | $4.24B | $4.35B | $4.61B |
| Retained Earnings | $-1.10B | $-1.28B | $-1.22B |
| AOCI | $-926.6M | $-882.7M | $-893.0M |
| Total L&E | $11.23B | $12.06B | $12.20B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $100.1M | $460.3M | $636.2M |
| Non-Cash Adjustments | $407.3M | $-397.7M | $496.7M |
| Working Capital Changes | $188.6M | $765.0M | $-311.3M |
| Cash from Operations | $696.0M | $827.5M | $821.6M |
| Capital Expenditures | $105.6M | $119.6M | $136.7M |
| Cash from Investing | $-138.2M | $-210.6M | $-413.2M |
| Share Buybacks | $379.3M | $478.5M | $388.4M |
| Dividends Paid | $96.2M | $115.2M | $133.6M |
| Cash from Financing | $-472.9M | $-295.5M | $-403.7M |
| FX Effect | $512.0K | $1.3M | $-3.8M |
| Net Change in Cash | $85.4M | $322.7M | $877.0K |
| Beginning Cash | $1.18B | $1.26B | $1.58B |
| Ending Cash | $1.26B | $1.58B | $1.59B |
Frequently Asked Questions
How does AECOM make money?
The company operates primarily through its Integrated Delivery Services segment, which combines consulting, design, and construction management capabilities. Revenue is further diversified into specialized practice areas including Transportation, Urban Development, Energy & Environment, and Government Services, allowing for balanced exposure to various economic cycles.
What are the main risks for ACM?
Significant exposure to macroeconomic fluctuations can lead to project cancellations or delays, particularly in the transportation and energy sectors where government funding is critical. The company faces intense competition from other large consulting firms which may drive down margins on standardized projects like roads and bridges. Regulatory changes regarding environmental standards and labor laws could increase operational costs and impact project timelines unexpectedly.
What is ACM's competitive advantage?
AECOM possesses a massive global footprint with offices in over 150 countries, providing unparalleled local expertise and rapid deployment capabilities for international projects. The firm maintains strong recurring revenue streams from government contracts and long-term client relationships that insulate it from short-term market volatility. Its integrated approach combining design, engineering, and construction management creates high barriers to entry for smaller competitors.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.