AECOM, a global leader in infrastructure consulting services, has reported another impressive quarter, extending its track record of strong financial and operational performance. The company's unwavering focus on technical excellence, strategic investments, and disciplined execution have positioned it as a premier provider of professional services in the infrastructure, environment, and energy sectors.
Financials
In the latest quarter, AECOM delivered net service revenue of $3.94 billion, up 13.0% year-over-year. For the full fiscal year 2023, the company reported net service revenue of $14.38 billion, reflecting its ability to capitalize on robust demand across its key end markets. Net income for the year reached $555.32 million, while operating cash flow and free cash flow stood at $695.98 million and $590.38 million, respectively.
Segment Performance
The company's strong performance is underpinned by its diversified geographic footprint and end-market exposure. In the Americas segment, net service revenue increased 15.5% in the latest quarter, driven by growth in the water, transportation, and environment end markets. The International segment also delivered a solid 5.2% increase in net service revenue, highlighting the breadth of AECOM's global reach.
Business Overview
A key driver of AECOM's success has been its strategic focus on program management advisory services. The company has invested heavily in building a world-class program management capability, which now accounts for 15% of its net service revenue. This focus has enabled AECOM to win larger, more complex projects, further strengthening its competitive position. In the latest quarter, the company won 15 of its last 16 large pursuits, including several high-profile projects such as the FEMA PATAC contract, the California High-Speed Rail program, and the U.S. Navy's largest environmental contracts.
Competitive Advantages
AECOM's technical expertise and collaborative culture have been instrumental in its ability to consistently win work at a high rate. The company's win rate on large pursuits over $25 million has increased significantly, with one-third of its wins in the latest quarter falling into this category. This underscores AECOM's ability to deliver complex, high-value projects for its clients.
The company's focus on technical excellence is further evidenced by its recent recognition as the number one water consulting firm by Engineering News-Record (ENR). This achievement, coupled with the company's leadership positions in transportation, environment, and facilities, demonstrates AECOM's unparalleled capabilities and the trust it has earned from its clients.
Outlook
Looking ahead, AECOM remains optimistic about the long-term trends driving demand for its services. The company sees robust opportunities in infrastructure investment, sustainability and resilience initiatives, and the energy transition, both in its core markets and through its expanded program management advisory capabilities. In the Americas, the company's book-to-burn ratio was 1.3 in the latest quarter, reflecting the strength of its pipeline. Similarly, the International segment delivered strong book-to-burn ratios, with the UK at 1.7, Canada at 1.1, and Australia at 1.2.
Strategic Investments
To capitalize on these opportunities, AECOM has increased its business development investments, allocating more resources to capture a greater share of its record pipeline. While this has resulted in a slight margin compression in the Americas segment in the latest quarter, the company remains confident in its ability to deliver on its full-year adjusted EBITDA margin guidance of 15.6%.
Conclusion
AECOM's consistent financial performance, strategic investments, and market-leading positions have positioned the company for continued success. With a strong backlog, robust pipeline of opportunities, and a disciplined approach to capital allocation, AECOM is well-equipped to navigate the evolving infrastructure landscape and deliver long-term value for its shareholders.