What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-12 compared with 2026-02-10 · 164 added, 121 removed, 298 unchanged (49% of the section changed)

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

At March 31, 2026, we had approximately $884 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.

7 unchanged sentences

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.

The initial accounting for these acquisitions is not complete as of March 31, 2026 as the Company continues to assess the value of the tax liabilities and the acquired intellectual property, including digital assets.

Results of Operations

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

Three and six months ended March 31, 2026 compared to the three and six months ended March 31, 2025

Consolidated Results

Three Months Ended

2025 December 31,

Three Months Ended Six Months Ended

2026 March 31,

2025 Changes March 31,

2026 March 31,

($ in millions)

6 unchanged sentences

Income from operations 247.8 257.6 (9.8) (3.8) 469.8 495.1 (25.3) (5.1)

Other income 7.9 6.9 1.0 14.5

Other income (loss) 10.5 (8.7) 19.2 (220.7) 18.4 (1.8) 20.2 (1122.2)

Interest income 13.8 14.5 (0.7) (4.8) 27.5 31.1 (3.6) (11.6)

12 unchanged sentences

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

Three Months Ended

2025 December 31,

Three Months Ended Six Months Ended

2026 March 31,

2025 March 31,

2026 March 31,

Revenue 100.0 % 100.0 % 100.0 % 100.0 %

5 unchanged sentences

Income from operations 6.5 6.8 6.2 6.4

Other income 0.2 0.2

Other income (loss) 0.3 (0.2) 0.2 0.0

Interest income 0.4 0.4 0.4 0.4

2 unchanged sentences

Income tax expense for continuing operations

0.7 1.4 0.9 1.0

Net income from continuing operations 5.1 4.5 4.6 4.6

7 unchanged sentences

Net income attributable to AECOM 4.7 % 3.8 % 3.3 % 4.0 %

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.

Our revenue for the three months ended March 31, 2026 increased $29.6 million, or 0.8%, to $3,801.2 million as compared to $3,771.6 million for the corresponding period last year.

Our revenue for the six months ended March 31, 2026 decreased $153.8 million, or 2.0%, to $7,632.0 million as compared to $7,785.8 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 six-month periods ended March 31, 2026.

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 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.

For example, in Canada, the federal government is helping drive infrastructure investment with its Major Projects Office and launching a Sovereign Wealth Fund.

In the United Kingdom, infrastructure investment is backed by the 10 Year Infrastructure Strategy with £725 billion in long-term funding.

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.

We are benefiting from the rapid growth in the energy and high-tech sectors driven by robust demand from population and economic growth, widespread electrification, and rapid data center development.

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 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.

Pass-through revenues for the three-month periods ended March 31, 2026 and 2025 were $1.9 billion and $1.9 billion, respectively.

Pass-through revenue as a percentage of total revenue was 49% and 50% during the three months ended March 31, 2026 and 2025, respectively.

Pass-through revenues for the six-month periods ended March 31, 2026 and 2025 were $3.8 billion and $4.1 billion, respectively.

Pass-through revenue as a percentage of total revenue was 50% and 53% during the six months ended March 31, 2026 and 2025, respectively.

Cost of Revenue

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.

Our cost of revenue increased to $3,504.7 million for the three months ended March 31, 2026 compared to $3,480.8 million for the corresponding period last year, an increase of $23.9 million, or 0.7%.

Our cost of revenue decreased to $7,054.5 million for the six months ended March 31, 2026 compared to $7,226.6 million for the corresponding period last year, a decrease of $172.1 million, or 2.4%.

Substantially all of the change in our cost of revenue for the three and six months ended March 31, 2026 occurred in our Americas and International reportable segments, which is discussed in more detail below.

Our gross profit for the three months ended March 31, 2026 increased $5.7 million, or 2.0%, to $296.5 million as compared to $290.8 million for the corresponding period last year.

For the three months ended March 31, 2026 , gross profit, as a percentage of revenue, increased to 7.8% from 7.7% in the corresponding period last year.

Our gross profit for the six months ended March 31, 2026 increased $18.3 million, or 3.3%, to $577.5 million as compared to $559.2 million for the corresponding period last year.

For the six months ended March 31, 2026, gross profit, as a percentage of revenue, increased to 7.6% from 7.2% 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 December 31, 2025 was $9.8 million as compared to $9.6 million in the corresponding period last year.

Our equity in earnings of joint ventures for the three months ended March 31, 2026 was $9.1 million as compared to $6.8 million in the corresponding period last year.

Our equity in earnings of joint ventures for the six months ended March 31, 2026 was $18.9 million as compared to $16.4 million in the corresponding period last year.

The increases in equity in earnings of joint ventures for the three and six months ended March 31, 2026 as compared to the periods in the prior year was primarily due to improved earnings in our AECOM Capital segment.

General and Administrative Expenses

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.

Our general and administrative expenses for the three months ended March 31, 2026 increased $4.2 million, or 10.5%, to $44.2 million as compared to $40.0 million for the corresponding period last year.

For the three months ended March 31, 2026, general and administrative expenses, as a percentage of revenue, was 1.1% which was consistent with the corresponding period last year.

Our general and administrative expenses for the six months ended March 31, 2026 increased $4.6 million, or 5.7%, to $85.1 million, as compared to $80.5 million for the corresponding period last year.

For the six months ended March 31, 2026, general and administrative expenses, as a percentage of revenue, increased to 1.1% as compared to 1.0% in the corresponding period last year.

The increases in general and administrative expenses for the three and six months ended March 31, 2026 were consistent with the increases to revenue and primarily represented investments in technology.

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.

Restructuring and acquisition costs are comprised of personnel costs, real estate costs, and costs associated with optimizing our organizational structure that position us for broader deployment of AI and technology tools to drive efficiencies.

During the three and six months ended March 31, 2026, we incurred total restructuring and acquisition costs of $13.6 million and $41.5 million, respectively, primarily related to actions taken for acquisitions and optimizing our organization structure.

No new restructuring costs were incurred during the three and six months ended March 31, 2025.

Other Income (Loss)

Our other income for the three months ended March 31, 2026 was $10.5 million compared to a loss of $8.7 million for the corresponding period last year.

Our other income for the six months ended March 31, 2026 was $18.4 million compared to a loss of $1.8 million for the corresponding period last year.

The increases in other income for the three and six months ended March 31, 2026 was primarily due to the increases in fair values of our investments measured at fair value.

Interest Income

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.

Our interest income for the three months ended March 31, 2026 decreased $0.7 million to $13.8 million from $14.5 million for the corresponding period last year.

Our interest income for the six months ended March 31, 2026 decreased $3.6 million to $27.5 million from $31.1 million for the corresponding period last year.

The decrease in interest income for the three and six months ended March 31, 2026 was primarily due to a decrease in our interest-bearing assets.

Interest Expense

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.

Our interest expense for the three months ended March 31, 2026 was $50.5 million as compared to $42.3 million for the corresponding period last year.

Our interest expense for the six months ended March 31, 2026 was $95.8 million as compared to $85.3 million for the corresponding period last year.

The increase in interest expense for the three and six months ended March 31, 2026 was primarily due to an increase in our interest-bearing liabilities.

Income Tax Expense

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.

Our income tax expense for the three months ended March 31, 2026 was $27.0 million as compared to $51.2 million in the corresponding period last year.

Our income tax expense for the six months ended March 31, 2026 was $66.0 million as compared to $80.5 million in the corresponding period last year.

The decrease in tax expense for the current period compared to the corresponding period last year was due primarily to a tax benefit of $54.7 million related to deferred tax assets recognized due to legal entity restructuring implemented in the second quarter of fiscal 2026, a decrease in tax expense of $6.1 million related to state income taxes, and a decrease in tax expense of $4.3 million related to foreign residual income, partially offset by tax expense of $34.4 million related to changes in uncertain tax positions and 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.

During the second quarter of fiscal 2026, we recognized a net deferred tax asset of $54.7 million related to legal entity restructuring.

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

During the second quarter of fiscal 2026, we recorded a reserve of $34.4 million related to uncertain tax positions associated with certain federal and state tax credits claimed for fiscal 2017 through fiscal 2026.

The reserve reflects the Company’s assessment that it is more likely than not that a portion of the credits may not be sustained under examination by the tax authorities based on recent discussions and developments related to our ongoing audits.

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

3 unchanged sentences

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 $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 loss from discontinued operations was $4.2 million for the three months ended March 31, 2026 compared to net loss of $10.3 million for the three months ended March 31, 2025, an increase of $6.1 million.

Net loss from discontinued operations was $70.1 million for the six months ended March 31, 2026 compared to a net loss of $19.9 million for the six months ended March 31, 2025, an increase of $50.2 million.

The increase in net loss from discontinued operations for the six months ended March 31, 2026 was primarily due to a change in our expected recovery on a deactivation, demolition, and removal project in the first quarter of the current year.

Net Income Attributable to AECOM

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.

The factors described above resulted in net income attributable to AECOM of $179.9 million and $254.4 million for the three and six months ended March 31, 2026, respectively, as compared to net income attributable to AECOM of $143.4 million and $310.4 million for the three and six months ended March 31, 2025, respectively.

Results of Operations by Reportable Segment

Three Months Ended

December 31, 2025 December 31, 2024 Change

($ in millions)

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 Change March 31, 2026 March 31, 2025 Change

($ in millions) ($ in millions)

Revenue $ 2,911.6 $ 2,896.7 $ 14.9 0.5 % $ 5,888.9 $ 6,008.7 $ (119.8) (2.0) %

2 unchanged sentences

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

Three Months Ended

December 31, 2025 December 31, 2024

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025

Revenue 100.0 % 100.0 % 100.0 % 100.0 %

1 unchanged sentence

Gross profit 7.7 % 7.3 % 7.3 % 6.7 %

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.

Revenue for our Americas segment for the three months ended March 31, 2026 increased $14.9 million, or 0.5%, to $2,911.6 million as compared to $2,896.7 million for the corresponding period last year.

Revenue increased despite a $54.8 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.

The increase in revenue from the Americas was primarily due to increased project activity in our Transportation end market of $69.6 million, or 11.6%, and an increase in our Water and Environment end markets of $47.9 million, or 9.0%, and was partially offset by our Facilities end market, which decreased $77.7 million, or 4.6%, compared to the corresponding period last year.

Revenues for our Americas segment for the six months ended March 31, 2026 decreased $119.8 million, or 2.0%, to $5,888.9 million as compared to $6,008.7 million for the corresponding period last year.

The decrease in revenues was primarily due to a $253.2 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.

The decrease in revenue was also due to a decrease in our Facilities end market, which decreased $268.8 million, or 7.4%, and was partially offset by increased project activity in our Transportation end market of $106.0 million, or 9.0%, and an increase in our Water and Environment end markets of $91.5 million, or 8.5%, compared to the corresponding period last year.

Cost of Revenue

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.

Cost of revenue for our Americas segment for the three months ended March 31, 2026 increased by $4.3 million, or less than 1%, to $2,688.5 million compared to $2,684.2 million for the corresponding period last year.

Cost of revenue for our Americas segment for the six months ended March 31, 2026 decreased by 149.8 million, or 2.7%, to $5,456.2 million compared to $5,606.0 million for the corresponding period last year.

The decrease in cost of revenue for the six months ended March 31, 2026 was primarily due to the decreases in subcontractor and other direct costs partially offset by increased project activity.

Gross profit for our Americas segment for the three months ended March 31, 2026 increased $10.6 million, or 5.0%, to $223.1 million as compared to $212.5 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 7.7% of revenue for the three months ended March 31, 2026 from 7.3% in the corresponding period last year.

Gross profit for our Americas segment for the six months ended March 31, 2026 increased $30.0 million, or 7.4%, to $432.7 million as compared to $402.7 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 7.3% of revenue for the six months ended March 31, 2026 from 6.7% in the corresponding period last year.

The increase in gross profit and gross profit as a percentage of revenue for the three and six months ended March 31, 2026 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

December 31, 2025 December 31, 2024 Change

($ in millions)

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 Change March 31, 2026 March 31, 2025 Change

($ in millions) ($ in millions)

Revenue $ 889.6 $ 874.8 $ 14.8 1.7 % $ 1,743.1 $ 1,776.8 $ (33.7) (1.9) %

2 unchanged sentences

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

Three Months Ended

December 31, 2025 December 31, 2024

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025

Revenue 100.0 % 100.0 % 100.0 % 100.0 %

1 unchanged sentence

Gross profit 8.3 % 8.9 % 8.3 % 8.8 %

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.

Revenue for our International segment for the three months ended March 31, 2026 increased $14.8 million, or 1.7%, to $889.6 million as compared to $874.8 million for the corresponding period last year.

The increase in revenue for the three months ended March 31, 2026 was benefitted by an increase in pass-through revenues of $3.0 million, compared to the corresponding period in the prior year.

Revenue increased in our Facilities end market by $9.4 million, or 2.6%, and in Water and Environment end markets of $10.9 million, or 5.5%, partially offset by a decrease in our Transportation end market by $18.8 million, or 6.6%, compared to the corresponding period last year.

Revenue in our International segment for the six months ended March 31, 2026 decreased $33.7 million, or 1.9%, to $1,743.1 million as compared to $1,776.8 million for the corresponding period last year.

The decrease in revenue for the six months ended March 31, 2026 was primarily due to a $31.5 million decrease in pass-through revenues, compared to the corresponding period in the prior year.

Revenue decreased in our Transportation end market by $48.4 million, or 8.2%, and in our Facilities end market by $41.6 million, or 5.6%, partially offset by an increase in our Water and Environment end markets of $37.4 million, or 9.6%, compared to the corresponding period last year.

Cost of Revenue

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.

Cost of revenue for our International segment for the three months ended March 31, 2026 increased $19.6 million, or 2.5%, to $816.2 million as compared to $796.6 million for the corresponding period last year.

The increase in cost of revenue for the three months ended March 31, 2026 was primarily due the increase project activity compared to the corresponding period last year.

Cost of revenue for our International segment for the six months ended March 31, 2026 decreased $22.3 million, or 1.4%, to $1,598.3 million as compared to $1,620.6 million for the corresponding period last year.

The decrease in cost of revenue for the six months ended March 31, 2026 was primarily due to the $31.5 million decrease in subcontractor and other direct costs compared the corresponding period last year.

Gross profit for our International segment for the three months ended March 31, 2026 decreased $4.8 million, or 6.1%, to $73.4 million as compared to $78.2 million for the corresponding period last year.

As a percentage of revenue, gross profit decreased to 8.3% of revenue for the three months ended March 31, 2026 from 8.9% in the corresponding period last year.

The decreases in gross profit and gross profit as a percentage of revenue for the three months ended March 31, 2026 were primarily due to decreases in Asia and the Middle East, which were partially offset by increases in Europe and Australia.

Gross profit for our International segment for the six months ended March 31, 2026 decreased $11.4 million, or 7.3%, to $144.8 million as compared to $156.2 million for the corresponding period last year.

As a percentage of revenue, gross profit decreased to 8.3% of revenue for the six months ended March 31, 2026 from 8.8% in the corresponding period last year.

The decreases in gross profit and gross profit as a percentage of revenue for the six months ended March 31, 2026 were primarily due to decreases in Asia and the Middle East, which were partially offset by increases in Europe.

AECOM Capital

Three Months Ended

December 31, 2025 December 31, 2024 Change

($ in millions)

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 Change March 31, 2026 March 31, 2025 Change

($ in millions) ($ in millions)

Revenue $ — $ 0.1 $ (0.1) (100.0) % $ — $ 0.3 $ (0.3) (100.0) %

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

Equity in earnings (losses) of joint ventures 0.6 (2.1) 2.7 (128.6) % $ 1.3 $ (0.9) $ 2.2 (244.4) %

General and administrative expenses $ (2.2) $ (2.8) $ 0.6 (21.4) % $ (4.0) $ (5.2) $ 1.2 (23.1) %

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.

Equity in earnings of joint ventures for the three months ended March 31, 2026 increased $2.7 million, or 128.6%, to $0.6 million compared to a loss $2.1 million for the corresponding period last year.

Equity in earnings of joint ventures for the six months ended March 31, 2026 increased $2.2 million to $1.3 million compared to a loss of $0.9 million for the corresponding period last year.

The increases in equity in earnings of joint ventures for the three and six months ended March 31, 2026 was primarily due to favorable earnings of investments in the current year compared to the prior year.

We experience seasonal trends in our business.

19 unchanged sentences

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

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.

At March 31, 2026, 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 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.

At March 31, 2026, cash and cash equivalents were $1,034.3 million, a decrease of $551.4 million from $1,585.7 million at September 30, 2025.

Net cash provided by operating activities was $74.0 million for the six months ended March 31, 2026 as compared to $341.7 million for the six months ended March 31, 2025.

The change was primarily attributable to a decrease in net income of approximately $54.9 million, which was impacted by a longer than anticipated claims resolution process, and an increase in cash used by changes in working capital of $282.1 million, partially offset by an increase in adjustments for non-cash items of approximately $69.3 million.

The sale of trade receivables to financial institutions included in operating cash flows decreased $13.6 million during the six months ended March 31, 2026 compared to the six months ended March 31, 2025.

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 $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.

Net cash used in investing activities was $75.2 million for the six months ended March 31, 2026, as compared to $86.0 million for the six months ended March 31, 2025.

The change was primarily attributable to a $45.4 million cash outflow from the deconsolidation of a joint venture recognized in the prior year period, which did not reoccur in the current year period, partially offset by a $22.3 million change in our investment in the revolving credit facility which was comprised of net cash collections of $14.3 million in the prior year period compared to net cash loaned of $8.0 million in the current year period.

Net cash used in financing activities was $547.4 million for the six months ended March 31, 2026 as compared to $236.4 million for the six months ended March 31, 2025.

The change from the prior year was primarily attributable to a $308.2 million increase in cash used to repurchase common stock.

1 unchanged sentence

Working Capital

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.

Working capital, or current assets less current liabilities, decreased $183.1 million, or 22.9%, to $618.3 million at March 31, 2026 from $801.4 million at September 30, 2025.

Net accounts receivable and contract assets, net of contract liabilities, increased to $3,505.2 million at March 31, 2026 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 83 days at March 31, 2026 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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In such cases, revenue is recorded only to the extent that contract costs relating to the claim have been incurred.

Award fees in contract assets are accrued only when there is sufficient information to assess contract performance.

Award fees in contract assets are accrued only when there is sufficient information

to assess contract performance.

On contracts that represent higher than normal risk or technical difficulty, award fees are generally deferred until an award fee letter is received.

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Long-term debt $ 2,654.3 $ 2,647.2

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

2026 (nine months remaining) $ 56.5

The following table presents, in millions, scheduled maturities of our debt as of March 31, 2026:

2026 (six months remaining) $ 45.4

Thereafter 2,627.5

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Credit Agreement

On April 19, 2024, we entered into Amendment No.

14 to Syndicated Facility Agreement (as amended, modified or otherwise supplemented, the "Credit Agreement"), pursuant to which we obtained a new $1,500,000,000 revolving credit facility (the “New Revolving Credit Facility”), a new $750,000,000 term loan A facility (the “New Term A Facility” and, together with the New Revolving Credit Facility, the “New Pro Rata Facilities”) and a new $700,000,000 term loan B facility (the “New Term B Facility” and, together with the New Pro Rata Facilities, the “New Credit Facilities”).

The New Revolving Credit Facility and the New Term A Facility mature on April 19, 2029.

The New Term B Facility matures on April 19, 2031.

The New Term A Facility and the New Term B Facility were borrowed in full on April 19, 2024 in U.S.

Loans under the New Revolving Credit Facility may be borrowed, and letters of credit thereunder may be issued, in U.S.

On March 10, 2026 (the "Amendment Effective Date"), we and certain of our subsidiaries entered into Amendment No.

16 to Syndicated Facility Agreement ("Amendment") with Bank of America, N.A.

as administrative agent (the "Administrative Agent") and the other lenders party thereto, which amended the Syndicated Facility Agreement, dated October 17, 2014, to which we and certain of our subsidiaries are party (as amended prior to the Amendment Effective Date, the "Existing Credit Agreement" and as amended by the Amendment, the "Credit Agreement"), pursuant to which we obtained a new $1,500,000,000 revolving credit facility (the “Revolving Credit Facility”), a new $950,000,000 term loan A facility (the “Term Loan A Facility” and a new $500,000,000 term loan B facility (the “Term Loan B Facility” and, together with the Revolving Credit Facility and the Term Loan A Facility, the "Amended Facilities").

The Revolving Credit Facility and the Term Loan A Facility mature on March 10, 2031, which represents a two-year extension of the maturity date applicable to such facilities under the Existing Credit Agreement.

The Term Loan B Facility matures on April 19, 2031, which is unchanged from the Existing Credit Agreement.

The Term Loan A Facility and the Term Loan B Facility were borrowed in full on the Amendment Effective Date in U.S.

Loans under the Revolving Credit Facility may be borrowed, and letters of credit thereunder may be issued, in U.S.

dollars or in certain foreign currencies.

The New Credit Facilities replace in full our existing revolving credit facility, term loan A facility and term loan B facility, and borrowings under the New Credit Facilities were used to refinance in full our existing credit facilities and for general corporate purposes.

The Amended Facilities replace in full our existing revolving credit facility and term loan facilities under the Existing Credit Agreement, and borrowings under the Amended Facilities were used on the Amendment Effective Date to refinance in full our existing credit facilities under the Existing Credit Agreement.

The Credit Agreement permits us to designate certain of our subsidiaries as additional co-borrowers from time to time.

Currently, there are no co-borrowers under the New Credit Facilities.

On October 29, 2024, we entered into Amendment No.

15 to Syndicated Facility Agreement, pursuant to which we reduced the interest rate spread applicable to our New Term B Facility.

Borrowings under (a) the New Revolving Credit Facility (in U.S.

dollars) and the New Term A Facility bear interest at a rate per annum equal to, at our option, (i) a Term SOFR rate (with a 0% floor and SOFR adjustment of 0.10%) or (ii) a base rate (with a 0% floor), in each case, plus an applicable margin of 1.225% in the case of the Term SOFR rate and 0.225% in the case of the base rate, and (b) the New Revolving Credit Facility in currencies other than U.S.

dollars bear interest at a rate per annum equal to the applicable reference rate for such currency (including any related adjustments), plus an applicable margin of 1.225%.

The applicable margin is subject, in each case, to adjustment based on our consolidated leverage ratio from time to time.

Borrowings under the New Term B Facility, after giving effect to Amendment No.

15 to Syndicated Facility Agreement, bear interest at a rate per annum equal to, at our option, (a) a Term SOFR rate (with a 0% floor and a SOFR adjustment of 0%) or (b) a base rate (with a 0% floor), in each case, plus an applicable margin of 1.75% in the case of the Term SOFR rate and 0.75% in the case of the base rate.

Certain of our material subsidiaries (the “Guarantors”) have guaranteed our obligations of the borrowers under the Credit Agreement, subject to certain exceptions.

The borrowers’ obligations under the Credit Agreement are secured by a lien on substantially all of our assets and the Guarantors’ assets, subject to certain exceptions.

The Credit Agreement contains customary negative covenants that include, among other things, limitations on our ability and certain of our subsidiaries, subject to certain exceptions, to incur liens and debt, make investments, dispositions, and restricted payments, change the nature of our business, consummate mergers, consolidations and the sale of all or substantially all of our respective assets and transact with affiliates.

We are also required to maintain a consolidated leverage ratio of less than or equal to 4.00 to 1.00 (subject to certain adjustments in connection with permitted acquisitions), tested on a quarterly basis (the “Financial Covenant”).

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

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

Currently, there are no co-borrowers under the Amended Facilities.

Borrowings under (a) the Revolving Credit Facility (in U.S.

dollars) and the Term Loan A Facility bear interest at a rate per annum equal to, at our option, (i) excluding the sustainability adjustment, a SOFR rate (with a 0% floor) plus a margin ranging from 1.125% to 2% or (ii) a base rate (with a 0% floor) plus a margin ranging from 0.125% to 1%, in each case, with the actual margin determined from time to time on the basis of our consolidated leverage ratio;

and (b) the Revolving Credit Facility in currencies other than U.S.

dollars bear interest at a rate per annum equal to the applicable reference rate for such currency (including any related adjustments), plus the same margin applicable to SOFR rate loans.

An unused commitment fee ranging from 0.15% to 0.30% (with the actual fee amount determined from time to time on the basis of our consolidated leverage ratio) is payable on the average daily undrawn portion of the commitments in respect of the Revolving Credit Facility.

Borrowings under the Term Loan B Facility bear interest at a rate per annum equal to, at our option, (a) a SOFR rate (with a 0% floor) or (b) a base rate (with a 0% floor), in each case, plus an applicable margin of 1.50% in the case of the SOFR rate and 0.50% in the case of the base rate.

Such applicable margin represents a 0.25% reduction from that applicable under the Existing Credit Agreement.

Certain of our subsidiaries (the “Guarantors”) have guaranteed our obligations under the Credit Agreement and the obligations under the Credit Agreement are secured by a lien on substantially all of the assets of ours and the Guarantors, subject to certain exceptions.

The Credit Agreement contains customary negative covenants that include, among other things, limitations or restrictions on our ability and our subsidiaries, subject to certain exceptions, to incur liens and debt, make investments, dispositions, and restricted payments, change the nature of our business, consummate mergers, consolidations and the sale of all or substantially all of our respective assets and transact with affiliates.

Such financial covenant does not apply to the Term B Facility.

As of March 31, 2026, 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 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.

At March 31, 2026 and September 30, 2025, letters of credit totaled $4.4 million and $4.4 million, respectively, under the Revolving Credit Facility.

As of March 31, 2026 and September 30, 2025, we had $1,495.6 million and $1,495.6 million, respectively, available under the Revolving Credit Facility.

2027 Senior Notes

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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”).

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.

As of March 31, 2026, the estimated fair value of the 2033 Senior Notes was approximately $1,197.0 million.

The fair value of the 2033 Senior Notes as of March 31, 2026 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.

13 unchanged sentences

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 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.

At March 31, 2026 and September 30, 2025, these outstanding standby letters of credit totaled $900.1 million and $899.4 million, respectively.

As of March 31, 2026, we had $419.3 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 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.

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 six months ended March 31, 2026 and 2025 was 5.3% and 5.1%, respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three and six months ended March 31, 2026 of $3.5 million and $4.9 million, respectively, and for the three and six months ended March 31, 2025 of $1.2 million and $2.6 million, respectively.

Other Commitments

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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 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.

Under the Revolving Credit Facility and other facilities discussed in Other Debt and Other Items above, as of March 31, 2026, there was approximately $904.5 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 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.

At March 31, 2026, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately $66.5 million.

The total amounts of employer contributions paid for the six months ended March 31, 2026 were $4.4 million for U.S.

plans and $11.8 million for non-U.S.

8 unchanged sentences

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 three months ended December 31, 2025.

There have been no changes, outside of the ordinary course of business, to these contractual obligations during the six months ended March 31, 2026.

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 December 31, 2025 and September 30, 2025, and for the three months ended December 31, 2025.

Amounts provided do not represent our total consolidated amounts as of March 31, 2026 and September 30, 2025, and for the six months ended March 31, 2026.

Condensed Combined Balance Sheets

1 unchanged sentence

(unaudited - in millions)

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

Current assets $ 3,195.3 $ 3,367.3

9 unchanged sentences

(unaudited - in millions)

For the three months ended

December 31, 2025

For the six months ended

March 31, 2026

Revenue $ 4,408.9

14 unchanged sentences

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