What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-10 compared with 2025-08-05 · 127 added, 172 removed, 292 unchanged (51% of the section changed)

18 unchanged sentences

Although management believes that the assumptions underlying the forward-looking statements are reasonable, these assumptions and the forward-looking statements are subject to various factors, risks and uncertainties, many of which are beyond our control, including, but not limited to, our business is cyclical and vulnerable to economic downturns and client spending reductions;

potential government shutdowns;

changes in administration or other funding directives and circumstances may cause governmental agencies to modify, curtail or terminate our contracts;

government shutdowns;

changes in administration or other funding directives and circumstances that cause governmental agencies to modify, curtail or terminate our contracts;

government contracts are subject to audits and adjustments of contractual terms;

long-term government contracts and subject to uncertainties related to government contract appropriations;

long-term government contracts are subject to uncertainties related to government contract appropriations;

losses under fixed-price contracts;

4 unchanged sentences

potential high leverage and inability to service our debt and guarantees;

ability to continue payment of dividends;

our capital allocation strategy, including our ability to continue payment of dividends and repurchase stock;

exposure to political and economic risks in different countries, including tariffs and trade policies, geopolitical events, and conflicts;

11 unchanged sentences

risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect;

as well as other additional risks and factors discussed in this Quarterly Report on Form 10‑Q and any subsequent reports we file with the SEC.

risks associated with our strategic initiatives, including AI investments and potential acquisitions and divestitures, as well as other additional risks and factors discussed in this Quarterly Report on Form 10‑Q and any subsequent reports we file with the SEC.

Accordingly, actual results could differ materially from those contemplated by any forward-looking statement.

13 unchanged sentences

Planning, advisory, consulting, architectural and engineering design, construction management and program management services to public and private clients in the United States, Canada, and Latin America in major end markets such as transportation, water, government, facilities, environmental, and energy.

As previously announced, the strategic review of our construction management business has been completed, and we intend to continue to own and operate the business.

• International :

7 unchanged sentences

Our costs consist primarily of the compensation we pay to our employees, including salaries, fringe benefits, the costs of hiring subcontractors, other project-related expenses and sales, general and administrative costs.

At June 30, 2025, we had approximately $894.5 million remaining of the Board’s stock repurchase authorization.

On November 14, 2024, the Board approved an increase in our stock repurchase authorization to $1.0 billion.

At December 31, 2025, we had approximately $336 million remaining of the Board’s stock repurchase authorization.

On February 4, 2026, the Board approved an increase in our stock repurchase authorization to $1.0 billion.

We intend to deploy future available cash towards dividends and stock repurchases consistent with our returns driven capital allocation policy.

2 unchanged sentences

We completed a transaction that transitioned the AECOM Capital team to a new third-party platform in the third quarter of fiscal 2024.

The team will continue to support AECOM Capital’s investment vehicles pursuant to certain advisory agreements in a manner consistent with their current obligations.

Members of the legacy team continue to support AECOM Capital's investment vehicles pursuant to certain advisory agreements in a manner consistent with their historical responsibilities.

There were two business acquisitions consummated during the year ended September 30, 2025.

The Company accounted for these acquisitions as business combinations and preliminarily estimated the amount of identifiable assets and the results of operations of the acquired companies have been included in our consolidated results since the dates of acquisition.

Those results of operations were not material to our consolidated results.

The initial accounting for these acquisitions is not complete as of December 31, 2025 as the Company continues to assess the value of the tax liabilities and the acquired intellectual property, including digital assets.

Results of Operations

Three and nine months ended June 30, 2025 compared to the three and nine months ended June 30, 2024

Three months ended December 31, 2025 compared to the three months ended December 31, 2024

Consolidated Results

Three Months Ended Nine Months Ended

2025 June 30,

2024 Changes June 30,

2025 June 30,

Three Months Ended

2025 December 31,

($ in millions)

2 unchanged sentences

Gross profit 281.0 268.4 12.6 4.7

Equity in earnings (losses) of joint ventures 5.3 7.7 (2.4) (31.2) 21.7 (1.8) 23.5 (1305.6)

Equity in earnings of joint ventures 9.8 9.6 0.2 2.1

General and administrative expenses (40.9) (40.5) (0.4) 1.0

Restructuring costs — (29.1) 29.1 (100.0) — (80.7) 80.7 (100.0)

Restructuring and acquisition costs (27.9) — (27.9) —

Income from operations 222.0 237.5 (15.5) (6.5)

Other income (loss) 0.8 1.0 (0.2) (20.0) (1.0) 6.2 (7.2) (116.1)

Other income 7.9 6.9 1.0 14.5

Interest income 13.7 16.6 (2.9) (17.5)

3 unchanged sentences

Net income from continuing operations 159.3 188.7 (29.4) (15.6)

Net (loss) income from discontinued operations (43.9) 5.7 (49.6) (870.2) (63.8) (105.0) 41.2 (39.2)

Net loss from discontinued operations (65.9) (9.6) (56.3) 586.5

Net income 93.4 179.1 (85.7) (47.9)

3 unchanged sentences

Net income attributable to AECOM from continuing operations 140.4 177.4 (37.0) (20.9)

Net (loss) income attributable to AECOM from discontinued operations (43.9) 4.9 (48.8) (995.9) (64.9) (107.8) 42.9 (39.8)

Net loss attributable to AECOM from discontinued operations (65.9) (10.4) (55.5) 533.7

Net income attributable to AECOM $ 74.5 $ 167.0 $ (92.5) (55.4) %

The following table presents the percentage relationship of statement of operations items to revenue:

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Three Months Ended

2025 December 31,

Revenue 100.0 % 100.0 %

1 unchanged sentence

Gross profit 7.3 6.7

Equity in earnings (losses) of joint ventures 0.1 0.2 0.2 0.0

Equity in earnings of joint ventures 0.3 0.2

General and administrative expenses (1.1) (1.0)

Restructuring costs 0.0 (0.7) 0.0 (0.7)

Restructuring and acquisition costs (0.7) 0.0

Income from operations 5.8 5.9

Other income (loss) 0.0 0.0 0.0 0.1

Other income 0.2 0.2

Interest income 0.4 0.4

2 unchanged sentences

Income tax expense for continuing operations

1.5 1.1 1.2 1.0

Net income from continuing operations 4.2 4.7

Net (loss) income from discontinued operations (1.1) 0.2 (0.5) (0.9)

Net loss from discontinued operations (1.8) (0.2)

Net income 2.4 4.5

3 unchanged sentences

Net income attributable to AECOM from continuing operations 3.7 4.4

Net (loss) income attributable to AECOM from discontinued operations (1.1) 0.2 (0.5) (0.9)

Net loss attributable to AECOM from discontinued operations (1.8) (0.2)

Net income attributable to AECOM 1.9 % 4.2 %

Our revenue for the three months ended June 30, 2025 increased $27.2 million, or 0.7%, to $4,178.4 million as compared to $4,151.2 million for the corresponding period last year.

Our revenue for the nine months ended June 30, 2025 decreased $30.8 million, or 0.3%, to $11,964.2 million as compared to $11,995.0 million for the corresponding period last year.

The Company's portion of revenue excluding pass-through revenue attributable to subcontractors increased for both the three- and nine-month periods ending June 30, 2025.

Underlying revenue excluding pass-through revenues increased across most of our end markets as a result of increased investment by large, publicly financed, global infrastructure programs including the Infrastructure Investment and Jobs Act in the U.S.

Our revenue for the three months ended December 31, 2025 decreased $183.4 million, or 4.6%, to $3,830.8 million as compared to $4,014.2 million for the corresponding period last year.

Revenue for the three months ended December 31, 2025 was lower by approximately 3 percentage points due to fewer working days compared to the same period in the prior year.

The Company's portion of revenue excluding pass-through revenue attributable to subcontractors increased for the three-month periods ended December 31, 2025.

Underlying revenue excluding pass-through revenues increased across most of our end markets as a result of increased investment by large, publicly financed, global programs with infrastructure incentive and spending including including the Infrastructure Investment and Jobs Act and the One Big Beautiful Bill Act in the U.S.

and similar large programs in our largest end markets globally.

Additionally, a clear trend emerging globally across our markets is the rapid acceleration in national defense spending, and this is contributing to our revenue growth as well as driving growth in our backlog and pipeline of opportunities.

Our Water end market has been benefiting from increased investment to address drought, flooding, emerging contaminant remediation, water storage, and clean and safe drinking water.

5 unchanged sentences

Because these pass-through revenues can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends.

Pass-through revenues for the quarters ended June 30, 2025 and 2024 were $2.2 billion and $2.3 billion, respectively.

Pass-through revenue as a percentage of total revenue was 54% and 56% during the three months ended June 30, 2025 and 2024, respectively.

Pass-through revenues for the nine months ended June 30, 2025 and 2024 were $6.4 billion and $6.6 billion, respectively.

Pass-through revenue as a percentage of total revenue was 53% and 55% during the nine months ended June 30, 2025 and 2024, respectively.

Pass-through revenues for the quarters ended December 31, 2025 and 2024 were $2.0 billion and $2.2 billion, respectively.

Pass-through revenue as a percentage of total revenue was 52% and 55% during the three months ended December 31, 2025 and 2024, respectively.

Cost of Revenue

Our cost of revenue decreased to $3,851.5 million for the three months ended June 30, 2025 compared to $3,866.1 million for the corresponding period last year, a decrease of $14.6 million, or 0.4%.

Our cost of revenue decreased to $11,078.1 million for the nine months ended June 30, 2025 compared to $11,204.8 million for the corresponding period last year, a decrease of $126.7 million, or 1.1%.

Substantially all of the change in our cost of revenue for the three and nine months ended June 30, 2025 occurred in our Americas and International reportable segments, which is discussed in more detail below.

Our gross profit for the three months ended June 30, 2025 increased $41.8 million, or 14.7%, to $326.9 million as compared to $285.1 million for the corresponding period last year.

For the three months ended June 30, 2025 , gross profit, as a percentage of revenue, increased to 7.8% from 6.9% in the corresponding period last year.

Our gross profit for the nine months ended June 30, 2025 increased $95.9 million , or 12.1% , to $886.1 million as compared to $790.2 million for the corresponding period last year.

For the nine months ended June 30, 2025 , gross profit, as a percentage of revenue, increased to 7.4% from 6.6% in the corresponding period last year.

Our cost of revenue decreased to $3,549.8 million for the three months ended December 31, 2025 compared to $3,745.8 million for the corresponding period last year, a decrease of $196.0 million, or 5.2%.

Substantially all of the change in our cost of revenue for the three months ended December 31, 2025 occurred in our Americas and International reportable segments, which is discussed in more detail below.

Our gross profit for the three months ended December 31, 2025 increased $12.6 million, or 4.7%, to $281.0 million as compared to $268.4 million for the corresponding period last year.

For the three months ended December 31, 2025 , gross profit, as a percentage of revenue, increased to 7.3% from 6.7% in the corresponding period last year.

Gross profit changes were due to the reasons noted in our Americas and International reportable segments below.

Equity in Earnings of Joint Ventures

Our equity in earnings of joint ventures for the three months ended June 30, 2025 was $5.3 million as compared to $7.7 million in the corresponding period last year.

Our equity in earnings of joint ventures for the nine months ended June 30, 2025 was $21.7 million as compared to equity in losses of $1.8 million in the corresponding period last year.

The decrease in equity in earnings of joint ventures for the three months ended June 30, 2025 compared to the same period in the prior year was primarily due to decreases in the Americas and Asia compared to the prior year.

The increase in equity in earnings of joint ventures for the nine months ended June 30, 2025 compared to the same period in the prior year was primarily due to impairment losses recorded by our AECOM Capital segment in the first half of fiscal 2024 that did not repeat in fiscal 2025.

Our equity in earnings of joint ventures for the three months ended December 31, 2025 was $9.8 million as compared to $9.6 million in the corresponding period last year.

General and Administrative Expenses

Our general and administrative expenses for the three months ended June 30, 2025 increased $2.0 million, or 5.5%, to $38.2 million as compared to $36.2 million for the corresponding period last year.

For the three months ended June 30, 2025, general and administrative expenses, as a percentage of revenue, remained the same at 0.9% from the corresponding period last year.

Our general and administrative expenses for the nine months ended June 30, 2025 increased $2.1 million, or 1.8%, to $118.7 million as compared to $116.6 million for the corresponding period last year.

For the nine months ended June 30, 2025, general and administrative expenses, as a percentage of revenue, remained the same at 1.0% from the corresponding period last year.

The increase in general and administrative expenses for the three and nine months ended June 30, 2025 was primarily due to increased investments in expanding our advisory and digital capabilities.

Restructuring Costs

Restructuring costs are comprised of personnel costs, real estate costs, and costs associated with business exits.

No new transformative restructuring actions were initiated during the three and nine months ended June 30, 2025.

During the three and nine months ended June 30, 2024, we incurred total restructuring costs of $29.1 million and $80.7 million, respectively, primarily related to costs incurred to continue to align our real estate portfolio with our employee flexibility initiatives, continue our exit of certain countries in Southeast Asia, drive support function efficiency, and reduce our risk profile.

Other Income (Loss)

Our other income for the three months ended June 30, 2025 was $0.8 million compared to $1.0 million for the corresponding period last year.

Our other loss for the nine months ended June 30, 2025 was $1.0 million compared to other income of $6.2 million for the corresponding period last year.

The decreases in other income for the three and nine months ended June 30, 2025 were primarily due to the decrease in fair value of our investments measured at fair value.

Our general and administrative expenses for the three months ended December 31, 2025 increased $0.4 million, or 1.0%, to $40.9 million as compared to $40.5 million for the corresponding period last year.

For the three months ended December 31, 2025, general and administrative expenses, as a percentage of revenue, increased to 1.1% from 1.0% in the corresponding period last year.

Restructuring and Acquisition Costs

Restructuring and acquisition costs are comprised of personnel costs, real estate costs, and costs associated with business acquisitions and exits.

During the three months ended December 31, 2025, we incurred total restructuring and acquisition costs of $27.9 million, primarily related to actions taken for acquisitions and optimizing our organization structure.

No new restructuring costs were incurred during the three months ended December 31, 2024.

Our other income for the three months ended December 31, 2025 was $7.9 million compared to $6.9 million for the corresponding period last year.

The increase in other income for the three months ended December 31, 2025 was primarily due to the increase in fair value of our investments measured at fair value.

Interest Income

Our interest income for the three months ended June 30, 2025 decreased to $14.1 million from $15.8 million for the corresponding period last year.

Our interest income for the nine months ended June 30, 2025 increased to $45.2 million from $43.3 million for the corresponding period last year.

The increase in interest income for the nine months ended June 30, 2025 was primarily due to an increase in our interest-bearing assets.

Our interest income for the three months ended December 31, 2025 decreased to $13.7 million from $16.6 million for the corresponding period last year.

The decrease in interest income for the three months ended December 31, 2025 was primarily due to a decrease in our interest-bearing assets.

Interest Expense

Our interest expense for the three months ended June 30, 2025 was $40.1 million as compared to $51.4 million for the corresponding period last year.

Our interest expense for the nine months ended June 30, 2025 was $125.4 million as compared to $140.4 million for the corresponding period last year.

The decreases in interest expense for the three and nine months ended June 30, 2025 were primarily due to a decrease in our interest-bearing liabilities as well as additional financing charges recorded in the three months ended June 30, 2024 related to the New Credit Facilities, defined below, that did not repeat in the current year.

Our interest expense for the three months ended December 31, 2025 was $45.3 million as compared to $43.0 million for the corresponding period last year.

The increase in interest expense for the three months ended December 31, 2025 was primarily due to an increase in our interest-bearing liabilities.

Income Tax Expense

Our income tax expense for the three months ended June 30, 2025 was $65.1 million as compared to $46.1 million in the corresponding period last year.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income of $75.9 million and tax expense of $5.5 million related to return to provision adjustments resulting from the filing of the prior year's tax return.

Our income tax expense for the nine months ended June 30, 2025 was $145.6 million as compared to $118.1 million in the corresponding period last year.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income of $207.7 million, a tax benefit of $20.1 million related to deferred tax assets recognized due to legal entity restructuring implemented in the first quarter of fiscal 2025, an increase in tax benefit of $10.2 million related to changes in valuation allowances, a tax benefit of $6.9 million related to an audit settlement in the first quarter of fiscal 2024 that did not repeat in fiscal 2025, and tax expense of $5.5 million related to return to provision adjustments resulting from the filing of the prior year's tax return.

Our income tax expense for the three months ended December 31, 2025 was $39.0 million as compared to $29.3 million in the corresponding period last year.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to a tax benefit of $20.1 million recognized in the first quarter of fiscal 2025 related to deferred tax assets, partially offset by the tax impact of a decrease in pre-tax income of $19.6 million, tax benefit of $3.1 million related to return to provision adjustments, and a reduction in tax expense of $2.6 million related to state income taxes.

During the first quarter of fiscal 2025, we recognized deferred tax assets of $20.1 million related to legal entity restructuring.

The restructuring resulted in the recognition of deferred tax assets related to tax attributes that are expected to be utilized against future taxable income.

During the first quarter of fiscal 2024, we settled our tax audit in Hong Kong for fiscal year 2011 through fiscal year 2021 and recorded a tax benefit of $6.9 million due primarily to changes in uncertain tax positions.

On July 4, 2025, the U.S.

government enacted the One Big Beautiful Bill Act (the “Tax Act”), which permanently extends many provisions of the Tax Cuts and Jobs Act of 2017 and introduces new tax provisions relevant for multinational businesses.

Most of the new provisions take effect starting in fiscal 2026.

We’re currently evaluating the potential impact of this legislation on our consolidated financial statements, but based on our preliminary assessment, we do not expect the legislation to have a material impact.

Net Loss From Discontinued Operations

1 unchanged sentence

As a result of these strategic actions, the self-perform at-risk construction businesses were classified as discontinued operations.

Net loss from discontinued operations was $43.9 million for the three months ended June 30, 2025 compared to net income of $5.7 million for the three months ended June 30, 2024, a decrease of $49.6 million.

Net loss from discontinued operations was $63.8 million for the nine months ended June 30, 2025 and was $105.0 million for the nine months ended June 30, 2024, a decrease of $41.2 million.

The increase in net loss from discontinued operations for the three months ended June 30, 2025 was primarily due to a revision to estimated recoveries of $53.0 million on a refinery turn around project resulting from unfavorable court orders on post-trial motions during the third quarter of fiscal 2025.

The decrease in net loss from discontinued operations for the nine months ended June 30, 2025 was primarily due to the settlement of contingent consideration related to the sale of our civil infrastructure construction business in 2024 that did not recur in 2025.

Net loss from discontinued operations was $65.9 million for the three months ended December 31, 2025 compared to net loss of $9.6 million for the three months ended December 31, 2024, an increase of $56.3 million.

The increase in net loss from discontinued operations for the three months ended December 31, 2025 was primarily due to a change in our expected recovery on a deactivation, demolition, and removal project in the current year.

Net Income Attributable to AECOM

The factors described above resulted in net income attributable to AECOM of $131.0 million and $441.4 million for the three and nine months ended June 30, 2025 as compared to net income attributable to AECOM of $134.3 million and $229.7 million for the three and nine months ended June 30, 2024.

The factors described above resulted in net income attributable to AECOM of $74.5 million for the three months ended December 31, 2025 as compared to net income attributable to AECOM of $167.0 million for the three months ended December 31, 2024.

Results of Operations by Reportable Segment

Three Months Ended Nine Months Ended

June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change

($ in millions) ($ in millions)

Three Months Ended

December 31, 2025 December 31, 2024 Change

($ in millions)

Revenue $ 2,977.3 $ 3,112.0 $ (134.7) (4.3) %

2 unchanged sentences

The following table presents the percentage relationship of statement of operations items to revenue:

Three Months Ended Nine Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended

December 31, 2025 December 31, 2024

Revenue 100.0 % 100.0 %

1 unchanged sentence

Gross profit 7.0 % 6.1 %

Revenue for our Americas segment for the three months ended June 30, 2025 increased $30.3 million, or 0.9%, to $3,277.2 million as compared to $3,246.9 million for the corresponding period last year.

Revenue increased despite a $52.3 million decrease in pass-through revenues on contracts for which we subcontract work on behalf of our clients compared to the corresponding period in the prior year.

Revenue from increased project activity in the Americas included growth in our Transportation end market of $73.7 million, or 12.9%, and an increase in our Water and Environment end markets of $49.1 million, or 9.3%, partially offset by a decrease in our Facilities end market of $77.8 million, or 3.7%, compared to the corresponding period last year.

Revenue for our Americas segment for the nine months ended June 30, 2025 decreased $38.3 million, or 0.4%, to $9,285.9 million as compared to $9,324.2 million for the corresponding period last year.

Pass-through revenues on contracts for which we subcontract work on behalf of our clients decreased $245.6 million compared to the corresponding period last year.

Revenue from increased project activity in the Americas included growth in our Transportation end market of $173.1 million, or 10.5%, and our Water and Environment end markets of $69.9 million, or 4.4%, offset by a decrease in our Facilities end market of $295.6 million, or 5.0%, compared to the corresponding period last year.

Revenue for our Americas segment for the three months ended December 31, 2025 decreased $134.7 million, or 4.3%, to $2,977.3 million as compared to $3,112.0 million for the corresponding period last year.

The decrease in revenue was primarily due to a $198.4 million decrease in pass-through revenues on contracts for which we subcontract work on behalf of our clients compared to the corresponding period in the prior year.

Revenue for the three months ended December 31, 2025 was also adversely affected by approximately 3 percentage points due to fewer working days compared to the corresponding period in the prior year.

The decrease in revenue from the Americas was primarily due to our Facilities end market, which decreased $191.2 million, or 9.9%, and was partially offset from increased project activity in our Transportation end market of $36.2 million, or 6.3%, and an increase in our Water and Environment end markets of $43.8 million, or 8.1%, compared to the corresponding period last year.

Cost of Revenue

Cost of revenue for our Americas segment for the three months ended June 30, 2025 decreased by $4.6 million, or 0.2%, to $3,038.4 million compared to $3,043.0 million for the corresponding period last year.

Cost of revenue for our Americas segment for the nine months ended June 30, 2025 decreased by $120.5 million, or 1.4%, to $8,644.4 million compared to $8,764.9 million for the corresponding period last year.

The decreases in cost of revenue for the three and nine months ended June 30, 2025 were primarily due to the decreases in subcontractor and other direct costs offset by increased project activity.

Gross profit for our Americas segment for the three months ended June 30, 2025 increased $34.9 million, or 17.1%, to $238.8 million as compared to $203.9 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 7.3% of revenue for the three months ended June 30, 2025 from 6.3% in the corresponding period last year.

Gross profit for our Americas segment for the nine months ended June 30, 2025 increased $82.2 million, or 14.7%, to $641.5 million as compared to $559.3 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 6.9% of revenue for the nine months ended June 30, 2025 from 6.0% in the corresponding period last year.

The increases in gross profit and gross profit as a percentage of revenue for the three and nine months ended June 30, 2025 were primarily due to the benefit from restructuring actions taken last year, growth in enterprise capability centers, ongoing continuous improvement initiatives, and growth in higher margin advisory services.

Cost of revenue for our Americas segment for the three months ended December 31, 2025 decreased by $154.1 million, or 5.3%, to $2,767.7 million compared to $2,921.8 million for the corresponding period last year.

The decrease in cost of revenue for the three months ended December 31, 2025 was primarily due to fewer working days for the first three months of fiscal year 2026 and the decreases in subcontractor and other direct costs offset by increased project activity.

Gross profit for our Americas segment for the three months ended December 31, 2025 increased $19.4 million, or 10.2%, to $209.6 million as compared to $190.2 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 7.0% of revenue for the three months ended December 31, 2025 from 6.1% in the corresponding period last year.

The increase in gross profit and gross profit as a percentage of revenue for the three months ended December 31, 2025 was primarily due to the benefit from restructuring actions taken last year, growth in enterprise capability centers, ongoing continuous improvement initiatives, and growth in higher margin advisory services.

International

Three Months Ended Nine Months Ended

June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change

($ in millions) ($ in millions)

Three Months Ended

December 31, 2025 December 31, 2024 Change

($ in millions)

Revenue $ 853.5 $ 902.0 $ (48.5) (5.4) %

2 unchanged sentences

The following table presents the percentage relationship of statement of operations items to revenue:

Three Months Ended Nine Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended

December 31, 2025 December 31, 2024

Revenue 100.0 % 100.0 %

1 unchanged sentence

Gross profit 8.4 % 8.6 %

Revenue for our International segment for the three months ended June 30, 2025 decreased $3.1 million, or 0.3%, to $901.1 million as compared to $904.2 million for the corresponding period last year.

The decrease in revenue for the three months ended June 30, 2025 was primarily due to a decrease in pass-through revenues of $32.5 million compared to the corresponding period in the prior year.

Revenue increased in our Water and Environment end market by $11.5 million, or 5.9%, and an increase in our Facilities end market of $2.3 million, or 0.7%, offset by a decrease in our Transportation end market of $14.7 million, or 4.5%, compared to the corresponding period last year.

Revenue for our International segment for the nine months ended June 30, 2025 increased $7.9 million, or 0.3%, to $2,677.9 million as compared to $2,670.0 million for the corresponding period last year.

Revenue increased despite a $38.3 million decrease in pass-through revenues on contracts for which we subcontractor work on behalf of our client compared to the corresponding period in the prior year.

Growth was led by our Facilities end market, which increased $37.1 million, or 3.5%, and our Water and Environment end market, which increased by $33.7 million, or 6.0%, partially offset by a decrease in our Transportation end market of $60.7 million, or 6.3%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Revenue for our International segment for the three months ended December 31, 2025 decreased $48.5 million, or 5.4%, to $853.5 million as compared to $902.0 million for the corresponding period last year.

The decrease in revenue for the three months ended December 31, 2025 was primarily due to a 3 percentage point decrease in working days, and by a decrease in pass-through revenues of $34.5 million, compared to the corresponding period in the prior year.

Revenue decreased in our Facilities end market by $51.1 million, or 13.4%, and in our Transportation end market by $29.5 million, or 9.8%, partially offset by increased project activity in our Water and Environment end market of $26.5 million, or 13.9%, compared to the corresponding period last year.

Cost of Revenue

Cost of revenue for our International segment for the three months ended June 30, 2025 decreased $10.0 million, or 1.2%, to $813.1 million as compared to $823.1 million for the corresponding period last year.

The decrease in cost of revenue for the three months ended June 30, 2025 was due to the decreases in subcontractor and other direct costs partially offset by increased project activity.

Cost of revenue for our International segment for the nine months ended June 30, 2025 decreased $6.2 million, or 0.3%, to $2,433.7 million as compared to $2,439.9 million for the corresponding period last year.

The decrease in cost of revenue for the nine months ended June 30, 2025 was primarily due to a decrease compared to the corresponding period in the prior year of subcontractor and other direct costs of $38.3 million, partially offset by increased project activity.

Gross profit for our International segment for the three months ended June 30, 2025 increased $6.9 million, or 8.5%, to $88.0 million as compared to $81.1 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 9.8% of revenue for the three months ended June 30, 2025 from 9.0% in the corresponding period last year.

Gross profit for our International segment for the nine months ended June 30, 2025 increased $14.1 million, or 6.1%, to $244.2 million as compared to $230.1 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 9.1% of revenue for the nine months ended June 30, 2025 from 8.6% in the corresponding period last year.

The increases in gross profit and gross profit as a percentage of revenue for the three and nine months ended June 30, 2025 were primarily due to benefits from restructuring actions taken last year, ongoing exits from lower margin countries, growth in the enterprise capability centers, and continuous improvement initiatives.

Cost of revenue for our International segment for the three months ended December 31, 2025 decreased $41.9 million, or 5.1%, to $782.1 million as compared to $824.0 million for the corresponding period last year.

The decrease in cost of revenue for the three months ended December 31, 2025 was due to fewer working days in the first three months of fiscal year 2026 and the decreases in subcontractor and other direct costs as well as improved project execution.

Gross profit for our International segment for the three months ended December 31, 2025 decreased $6.6 million, or 8.5%, to $71.4 million as compared to $78.0 million for the corresponding period last year.

As a percentage of revenue, gross profit decreased to 8.4% of revenue for the three months ended December 31, 2025 from 8.6% in the corresponding period last year.

The decreases in gross profit and gross profit as a percentage of revenue for the three months ended December 31, 2025 were primarily due to decreases in Asia and Australia, which were partially offset by an increase in Europe.

AECOM Capital

Three Months Ended Nine Months Ended

June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change

($ in millions) ($ in millions)

Three Months Ended

December 31, 2025 December 31, 2024 Change

($ in millions)

Revenue $ — $ 0.2 $ (0.2) (100.0) %

Equity in earnings (losses) of joint ventures $ 1.0 $ 0.7 $ 0.3 42.9 % $ 0.1 $ (26.5) $ 26.6 (100.4) %

Equity in earnings of joint ventures 0.7 1.2 (0.5) (41.7) %

General and administrative expenses $ (1.8) $ (2.4) $ 0.6 (25.0) %

Equity in earnings of joint ventures for the three months ended June 30, 2025 increased $0.3 million, or 42.9%, to $1.0 million compared to $0.7 million for the corresponding period last year.

The increase in equity in earnings of joint ventures for the three months ended June 30, 2025 was primarily due to favorable earnings of an investment in the current year compared to the prior year.

Equity in earnings of joint ventures for the nine months ended June 30, 2025 increased $26.6 million, or 100.4%, to $0.1 million compared to a loss of $26.5 million for the corresponding period last year.

The change in equity in losses of joint ventures for the nine months ended June 30, 2025 was primarily due to impairment losses of $35.9 million recognized in fiscal 2024 that did not repeat in fiscal 2025.

Equity in earnings of joint ventures for the three months ended December 31, 2025 decreased $0.5 million, or 41.7%, to $0.7 million compared to $1.2 million for the corresponding period last year.

The decrease in equity in earnings of joint ventures for the three months ended December 31, 2025 was primarily due to favorable earnings of an investment in the prior year compared to the current year.

We experience seasonal trends in our business.

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subsidiaries because such basis differences are able to and intended to be reinvested indefinitely.

At June 30, 2025, we have determined that we will continue to indefinitely reinvest the earnings of some foreign subsidiaries and, therefore, we will continue to account for these undistributed earnings based on our existing accounting under ASC 740 and not accrue additional tax.

At December 31, 2025, we have determined that we will continue to indefinitely reinvest the earnings of some foreign subsidiaries and, therefore, we will continue to account for these undistributed earnings based on our existing accounting under ASC 740 and not accrue additional tax.

Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

Based on the available sources of cash flows discussed above, we anticipate we will continue to have the ability to permanently reinvest these remaining amounts.

At June 30, 2025, cash and cash equivalents were $1,794.1 million, an increase of $209.2 million from $1,584.9 million at September 30, 2024, which included cash and cash equivalents included in current assets held for sale.

Net cash provided by operating activities was $625.5 million for the nine months ended June 30, 2025 as compared to $528.7 million for the nine months ended June 30, 2024.

The change was primarily attributable to an increase in net income of approximately $221.3 million, partially offset by cash used by changes in working capital of $52.9 million, and a decrease in adjustments for non-cash items of approximately $71.7 million.

The sale of trade receivables to financial institutions included in operating cash flows increased $60.1 million during the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024.

At December 31, 2025, cash and cash equivalents were $1,246.7 million, a decrease of $339.0 million from $1,585.7 million at September 30, 2025.

Net cash provided by operating activities was $70.2 million for the three months ended December 31, 2025 as compared to $151.1 million for the three months ended December 31, 2024.

The change was primarily attributable to a decrease in net income of approximately $85.7 million, and an increase in cash used by changes in working capital of $97.3 million, partially offset by an increase in adjustments for non-cash items of approximately $102.3 million.

The sale of trade receivables to financial institutions included in operating cash flows increased $12.3 million during the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

We expect to continue to sell trade receivables in the future as long as the terms continue to remain favorable to us.

Net cash used in investing activities was $133.3 million for the nine months ended June 30, 2025, as compared to $185.9 million for the nine months ended June 30, 2024.

The change was primarily attributable to cash repayments of $16.6 million on the revolving credit facility from the counterparty to our sale of our civil infrastructure construction business, a $17.9 million decrease in investments in unconsolidated joint ventures and a decrease in cash payments for capital expenditures of approximately $20.6 million, partially offset by cash outflow from the deconsolidation of a discontinued operation of $45.4 million.

Net cash used in financing activities was $281.6 million for the nine months ended June 30, 2025 as compared to net cash provided by financing activities of $44.4 million for the nine months ended June 30, 2024.

The change from the prior year was primarily attributable to $320.1 million in net cash proceeds pursuant to Amendment No.

14 of the Credit Agreement that occurred in the third quarter of fiscal 2024.

Net cash used in investing activities was $34.8 million for the three months ended December 31, 2025, as compared to $24.7 million for the three months ended December 31, 2024.

The change was primarily attributable to a $23.3 million increase in investments in unconsolidated joint ventures partially offset by a decrease in cash payments for capital expenditures of approximately $11.9 million.

Net cash used in financing activities was $374.2 million for the three months ended December 31, 2025 as compared to $121.3 million for the three months ended December 31, 2024.

The change from the prior year was primarily attributable to a $270.7 million increase in cash used to repurchase common stock.

Total borrowings under our Credit Agreement may vary during the period as we regularly draw and repay amounts to fund working capital.

Working Capital

Working capital, or current assets less current liabilities, increased $237.1 million, or 29.6%, to $1,039.1 million at June 30, 2025 from $802.0 million at September 30, 2024.

Net accounts receivable and contract assets, net of contract liabilities, decreased to $3,355.0 million at June 30, 2025 from $3,301.4 million at September 30, 2024.

Days Sales Outstanding (DSO), which includes net accounts receivable and contract assets, net of contract liabilities, was 72 days at June 30, 2025 compared to 70 days at September 30, 2024.

Working capital, or current assets less current liabilities, decreased $191.3 million, or 23.9%, to $610.1 million at December 31, 2025 from $801.4 million at September 30, 2025.

Net accounts receivable and contract assets, net of contract liabilities, increased to $3,292.3 million at December 31, 2025 from $3,194.4 million at September 30, 2025.

Days Sales Outstanding (DSO), which includes net accounts receivable and contract assets, net of contract liabilities, was 77 days at December 31, 2025 compared to 74 days at September 30, 2025.

In Note 4, Revenue Recognition, in the notes to our consolidated financial statements, a comparative analysis of the various components of accounts receivable is provided.

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Long-term debt $ 2,643.8 $ 2,647.2

The following table presents, in millions, scheduled maturities of our debt as of June 30, 2025:

2025 (three months remaining) $ 22.5

The following table presents, in millions, scheduled maturities of our debt as of December 31, 2025:

2026 (nine months remaining) $ 56.5

Thereafter 1,856.1

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The Financial Covenant does not apply to the New Term B Facility.

As of June 30, 2025, we were in compliance with the covenants of the Credit Agreement.

As of December 31, 2025, we were in compliance with the covenants of the Credit Agreement.

The Credit Agreement contains customary affirmative covenants, including, among other things, compliance with applicable law, preservation of existence, maintenance of properties and of insurance, and keeping proper books and records.

The Credit Agreement contains customary events of default, including, among other things, nonpayment of principal, interest or fees, cross-defaults to other debt, inaccuracies of representations and warranties, failure to perform covenants, events of bankruptcy and insolvency, change of control and unsatisfied judgments, subject in certain cases to notice and cure periods and other exceptions.

At June 30, 2025 and September 30, 2024, letters of credit totaled $4.4 million and $4.4 million, respectively, under our New Revolving Credit Facility.

As of June 30, 2025 and September 30, 2024, we had $1,495.6 million and $1,495.6 million, respectively, available under our New Revolving Credit Facility.

At December 31, 2025 and September 30, 2025, letters of credit totaled $4.4 million and $4.4 million, respectively, under our New Revolving Credit Facility.

As of December 31, 2025 and September 30, 2025, we had $1,495.6 million and $1,495.6 million, respectively, available under our New Revolving Credit Facility.

2027 Senior Notes

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On June 30, 2017, we completed an exchange offer to exchange the unregistered 2027 Senior Notes for registered notes, as well as related guarantees.

As of June 30, 2025, the estimated fair value of the 2027 Senior Notes was approximately $993.6 million.

The fair value of the 2027 Senior Notes as of June 30, 2025 was derived by taking the mid-point of the trading prices from an observable market input (Level 2) in the secondary bond market and multiplying it by the outstanding balance of the 2027 Senior Notes.

Interest was payable on the 2027 Senior Notes at a rate of 5.125% per annum.

Interest on the 2027 Senior Notes was payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017.

The 2027 Senior Notes were set to mature on March 15, 2027.

At any time and from time to time prior to December 15, 2026, we may redeem all or part of the 2027 Senior Notes, at a redemption price equal to 100% of their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to the redemption date.

The indenture pursuant to which the 2027 Senior Notes were issued contained customary events of default, including, among other things, payment default, exchange default, failure to provide notices thereunder and provisions related to bankruptcy events.

The indenture also contained customary negative covenants.

We were in compliance with the covenants relating to the 2027 Senior Notes as of June 30, 2025.

On July 22, 2025, we used a portion of the net proceeds of the offering of the 2033 Senior Notes (defined below) to purchase $732,914,000 in principal amount of the 2027 Senior Notes that were validly tendered and not validly withdrawn at or prior to the July 21, 2025 expiration date of its previously announced tender offer for the 2027 Senior Notes.

The purchase included a make-whole payment of $6.4 million.

In addition, we also issued a redemption notice to noteholders to redeem on August 14, 2025 the remaining 2027 Senior Notes that are outstanding and not tendered in the tender offer.

The redemption is expected to include a make-whole payment of $2.3 million.

In July 2025, we used a portion of the proceeds of the 2033 Senior Notes (defined below) to purchase $732,914,000 in principal amount of the 2027 Senior Notes that were validly tendered and not validly withdrawn at or prior to the expiration date of the tender offer for the 2027 Senior Notes.

In August 2025, we redeemed the remaining 2027 Senior Notes with a portion of the proceeds of the 2033 Senior Notes.

The purchase and redemption included an aggregate make-whole payment of $9.1 million.

2033 Senior Notes

On July 22, 2025, we completed an offering of $1,200,000,000 aggregate principal amount of our 6.000% Senior Notes due 2033 (the “2033 Senior Notes”).

Interest will be payable on the 2033 Senior Notes at a rate of 6.000% per annum.

Interest on the 2033 Senior Notes will be payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026.

As of December 31, 2025, the estimated fair value of the 2033 Senior Notes was approximately $1,222.5 million.

The fair value of the 2033 Senior Notes as of December 31, 2025 was derived by taking the mid-point of the trading prices from an observable market input (Level 2) in the secondary bond market and multiplying it by the outstanding balance of the 2033 Senior Notes.

Interest is payable on the 2033 Senior Notes at a rate of 6.000% per annum.

Interest on the 2033 Senior Notes is payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026.

The 2033 Senior Notes will mature on August 1, 2033.

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The indenture also contains customary negative covenants.

We were in compliance with the covenants related to the 2033 Senior Notes as of December 31, 2025.

Other Debt and Other Items

1 unchanged sentence

The unsecured credit facilities are primarily used for standby letters of credit issued in connection with general and professional liability insurance programs and for contract performance guarantees.

At June 30, 2025 and September 30, 2024, these outstanding standby letters of credit totaled $895.2 million and $934.5 million, respectively.

As of June 30, 2025, we had $376.7 million available under these unsecured credit facilities.

At December 31, 2025 and September 30, 2025, these outstanding standby letters of credit totaled $926.6 million and $899.4 million, respectively.

As of December 31, 2025, we had $399.0 million available under these unsecured credit facilities.

Effective Interest Rate

Our average effective interest rate on our total debt, including the effects of the interest rate swap agreements and interest rate cap agreements during the nine months ended June 30, 2025 and 2024 was 5.1% and 5.5%, respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three and nine months ended June 30, 2025 of $1.2 million and $3.9 million, respectively, and for the three and nine months ended June 30, 2024 of $4.0 million and $6.4 million, respectively.

Our average effective interest rate on our total debt, including the effects of the interest rate swap agreements and interest rate cap agreements during the three months ended December 31, 2025 and 2024 was 5.3% and 5.2%, respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three months ended December 31, 2025 of $1.4 million and for the three months ended December 31, 2024 of $1.4 million.

Other Commitments

7 unchanged sentences

However, if we acquire additional businesses in the future or if we embark on other capital-intensive initiatives, additional working capital may be required.

Under our secured revolving credit facility and other facilities discussed in Other Debt and Other Items above, as of June 30, 2025, there was approximately $899.6 million, including both continuing and discontinued operations, outstanding under standby letters of credit primarily issued in connection with general and professional liability insurance programs and for contract performance guarantees.

Under the New Revolving Credit Facility and other facilities discussed in Other Debt and Other Items above, as of December 31, 2025, there was approximately $931.0 million, including both continuing and discontinued operations, outstanding under standby letters of credit primarily issued in connection with general and professional liability insurance programs and for contract performance guarantees.

For those projects for which we have issued a performance guarantee, if the project subsequently fails to meet guaranteed performance standards, we may either incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards.

We recognized on our balance sheet the funded status of our pension benefit plans, measured as the difference between the fair value of plan assets and the projected benefit obligation.

At June 30, 2025, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately $102.5 million.

The total amounts of employer contributions paid for the nine months ended June 30, 2025 were $7.7 million for U.S.

At December 31, 2025, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately $77.2 million.

The total amounts of employer contributions paid for the three months ended December 31, 2025 were $2.4 million for U.S.

plans and $6.4 million for non-U.S.

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Refer to our Annual Report on Form 10-K for the year ended September 30, 2025 for a discussion of our contractual obligations.

There have been no changes, outside of the ordinary course of business, to these contractual obligations during the nine months ended June 30, 2025.

There have been no changes, outside of the ordinary course of business, to these contractual obligations during the three months ended December 31, 2025.

Condensed Combined Financial Information

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All intercompany balances and transactions are eliminated in the presentation of the combined financial statements.

Amounts provided do not represent our total consolidated amounts as of June 30, 2025 and September 30, 2024, and for the nine months ended June 30, 2025.

Amounts provided do not represent our total consolidated amounts as of December 31, 2025 and September 30, 2025, and for the three months ended December 31, 2025.

Condensed Combined Balance Sheets

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(unaudited - in millions)

June 30, 2025 September 30, 2024

December 31, 2025 September 30, 2025

Current assets $ 3,187.6 $ 3,367.3

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(unaudited - in millions)

For the nine months ended

June 30, 2025

For the three months ended

December 31, 2025

Revenue $ 2,205.2

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis