AECOM’s second quarter results were met with a negative market response after the company missed Wall Street’s expectations on both revenue and adjusted earnings. Management attributed the shortfall primarily to a large charge related to delays and cost overruns on a legacy construction management project, which CEO Troy Rudd said was “primarily the result of a delay in delivering a large construction management project due to several factors, the largest of which is overall productivity of subcontractors.” The company also noted that slower-than-expected new project starts and ongoing headwinds in the Middle East weighed on performance.
Is now the time to buy ACM? Find out in our full research report (it’s free for active Edge members).
AECOM (ACM) Q2 CY2026 Highlights:
- Revenue: $3.59 billion vs analyst estimates of $4.31 billion (14.2% year-on-year decline, 16.7% miss)
- Adjusted EPS: -$0.50 vs analyst estimates of $1.46 (significant miss)
- Adjusted EBITDA: -$8.2 million vs analyst estimates of $327.5 million (-0.2% margin, significant miss)
- Management lowered its full-year Adjusted EPS guidance to $4.05 at the midpoint, a 32.5% decrease
- EBITDA guidance for the full year is $950 million at the midpoint, below analyst estimates of $1.28 billion
- Operating Margin: -2.1%, down from 7% in the same quarter last year
- Backlog: $27.82 billion at quarter end, up 13.1% year on year
- Market Capitalization: $8.11 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From AECOM’s Q2 Earnings Call
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Sabahat Khan (RBC Capital Markets) asked about the timeline and cost visibility for completing the two troubled construction management projects. CEO Troy Rudd detailed expected completion by mid-2027, while CFO Gaurav Kapoor outlined ongoing cash impacts and noted scenario planning had built in reasonable buffers.
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Andrew Kaplowitz (Citi) probed the outlook for Americas margins and whether margin normalization would occur next quarter. Kapoor said, “Americas margin, you should expect it to normalize and be a little bit better than last year,” while also highlighting continuing strength in international margins.
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Andrew J. Wittmann (Baird) inquired about the progress and size of claims related to the troubled projects. Kapoor indicated claims remain around $600 million, with the company confident in its recovery efforts but keeping strategy details confidential.
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Steven Fisher (UBS) asked about the timing of business development costs translating into new revenue and the competitive environment. President Lara Poloni described healthy win rates, with major project wins achieved without joint ventures, and Kapoor noted immediate ROI from elevated business development efforts.
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Jamie Cook (Truist Securities) questioned whether legacy project issues and the construction management ramp would weigh on organic growth in early 2027. Rudd explained that CM growth should pick up in the second half of the year, and the business had been fully scrubbed for similar risk exposures.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) the pace at which AECOM resolves cash flow and operational challenges tied to legacy construction management projects, (2) how quickly newly awarded contracts in the Americas and international markets begin to contribute meaningfully to revenue and margins, and (3) whether margin normalization and free cash flow recovery materialize as legacy burdens recede. Execution on risk management reforms and conversion of record backlog will be key indicators for sustainable growth.
AECOM currently trades at $62.96, down from $73.30 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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