AECOM 10-Q

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations Forward-Looking Statements This Quarterly Report contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect the Company’s current beliefs, expectations or intentions regarding future events. These statements include forward-looking statements with respect to the Company, including the Company’s business, operations and strategy, and infrastructure consulting industry. Statements that are not historical facts, without limitation, including statements that use terms such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “potential,” “projects,” and “will” and that relate to our future revenues, expenditures and business trends; future reduction of our self-perform at-risk construction exposure; future accounting estimates; future contractual performance obligations; future conversions of backlog; future capital allocation priorities, including common stock repurchases, future trade receivables, future debt pay downs; future post-retirement expenses; future tax benefits and expenses, and the impact of future tax laws; future compliance with regulations; future legal claims and insurance coverage; future effectiveness of our disclosure and internal controls over financial reporting; future costs savings; and other future economic and industry conditions, are forward-looking statements. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this Quarterly Report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. 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; 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 are subject to uncertainties related to government contract appropriations; losses under fixed-price contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; potential high leverage and inability to service our debt and guarantees; 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; inflation, currency exchange rates and interest rate fluctuations; changes in capital markets and stock market volatility; retaining and recruiting key technical and management personnel; legal claims and litigation; inadequate insurance coverage; environmental law compliance and inadequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs; AECOM Capital’s real estate development; cybersecurity issues, IT outages and data privacy; 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; 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. All subsequent written and oral forward-looking statements concerning the Company or other matters attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. You are cautioned not to place undue reliance on these forward-looking statements, which speak only to the date they are made. The Company is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise. Please review “Part II, Item 1A—Risk Factors” in this Quarterly Report for a discussion of the factors, risks and uncertainties that could affect our future results. Overview We are a leading global provider of professional infrastructure consulting and advisory services for governments, businesses and organizations throughout the world. We provide advisory, planning, consulting, architectural and engineering design, construction and program management services, and investment and development services to public and private clients worldwide in major end markets such as transportation, facilities, water, environmental, and energy. Our business focuses primarily on providing fee-based knowledge-based services. We primarily derive income from our ability to generate revenue and collect cash from our clients through the billing of our employees’ time spent on client projects and our ability to manage our costs. AECOM Capital primarily derives its income from real estate development sales and management fees. 30 Table of Contents We report our continuing business through three segments, each of which is described in further detail below: Americas, International, and AECOM Capital (ACAP). Such segments are organized by the differing specialized needs of the respective clients and how we manage the business. We have aggregated various operating segments into our reportable segments based on their similar characteristics, including similar long-term financial performance, the nature of services provided, internal processes for delivering those services, and types of customers. • Americas : 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 : Planning, advisory, consulting, architectural and engineering design services, site supervision and program management to public and private clients in Europe, the Middle East, India, Africa and the Asia-Australia-Pacific regions in major end markets such as transportation, water, government, facilities, environmental, and energy. • AECOM Capital (ACAP) : Primarily invests in and develops real estate projects. Our revenue is dependent on our ability to attract and retain qualified and productive employees, identify business opportunities, allocate our labor resources and capital to profitable and high growth markets, secure new contracts, and renew existing client agreements. Demand for our services may be vulnerable to sudden economic downturns and reductions in government and private industry spending, which may result in clients delaying, curtailing or canceling proposed and existing projects. Moreover, as a professional services company, maintaining the high quality of the work generated by our employees is integral to our revenue generation and profitability. Given the global nature of our business, our revenue is exposed to currency rate fluctuations that could change from period to period and year to year. 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 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. We intend to deploy future available cash towards dividends and stock repurchases consistent with our returns driven capital allocation policy. We have exited substantially all of our self-perform at-risk construction businesses. As part of our ongoing plan to improve profitability and maintain a reduced risk profile, we continuously evaluate our business portfolio. We completed a transaction that transitioned the AECOM Capital team to a new third-party platform in the third quarter of fiscal 2024. 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 March 31, 2026 as the Company continues to assess the value of the tax liabilities and the acquired intellectual property, including digital assets. 31 Table of Contents Results of Operations Three and six months ended March 31, 2026 compared to the three and six months ended March 31, 2025 Consolidated Results Three Months Ended Six Months Ended March 31, 2026 March 31, 2025 Changes March 31, 2026 March 31, 2025 Changes $ % $ % ($ in millions) Revenue $ 3,801.2 $ 3,771.6 $ 29.6 0.8 % $ 7,632.0 $ 7,785.8 $ (153.8) (2.0) % Cost of revenue 3,504.7 3,480.8 23.9 0.7 7,054.5 7,226.6 (172.1) (2.4) Gross profit 296.5 290.8 5.7 2.0 577.5 559.2 18.3 3.3 Equity in earnings of joint ventures 9.1 6.8 2.3 33.8 18.9 16.4 2.5 15.2 General and administrative expenses (44.2) (40.0) (4.2) 10.5 (85.1) (80.5) (4.6) 5.7 Restructuring and acquisition costs (13.6) — (13.6) — (41.5) — (41.5) — Income from operations 247.8 257.6 (9.8) (3.8) 469.8 495.1 (25.3) (5.1) 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) Interest expense (50.5) (42.3) (8.2) 19.4 (95.8) (85.3) (10.5) 12.3 Income from continuing operations before taxes 221.6 221.1 0.5 0.2 419.9 439.1 (19.2) (4.4) Income tax expense for continuing operations 27.0 51.2 (24.2) (47.3) 66.0 80.5 (14.5) (18.0) Net income from continuing operations 194.6 169.9 24.7 14.5 353.9 358.6 (4.7) (1.3) Net loss from discontinued operations (4.2) (10.3) 6.1 (59.2) (70.1) (19.9) (50.2) 252.3 Net income 190.4 159.6 30.8 19.3 283.8 338.7 (54.9) (16.2) Net income attributable to noncontrolling interests from continuing operations (10.5) (15.9) 5.4 (34.0) (29.4) (27.2) (2.2) 8.1 Net income attributable to noncontrolling interests from discontinued operations — (0.3) 0.3 (100.0) — (1.1) 1.1 (100.0) Net income attributable to noncontrolling interests (10.5) (16.2) 5.7 (35.2) (29.4) (28.3) (1.1) 3.9 Net income attributable to AECOM from continuing operations 184.1 154.0 30.1 19.5 324.5 331.4 (6.9) (2.1) Net loss attributable to AECOM from discontinued operations (4.2) (10.6) 6.4 (60.4) (70.1) (21.0) (49.1) 233.8 Net income attributable to AECOM $ 179.9 $ 143.4 $ 36.5 25.5 % $ 254.4 $ 310.4 $ (56.0) (18.0) % 32 Table of Contents The following table presents the percentage relationship of statement of operations items to revenue: 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 % Cost of revenue 92.2 92.3 92.4 92.8 Gross profit 7.8 7.7 7.6 7.2 Equity in earnings of joint ventures 0.2 0.2 0.2 0.2 General and administrative expenses (1.1) (1.1) (1.1) (1.0) Restructuring and acquisition costs (0.4) 0.0 (0.5) 0.0 Income from operations 6.5 6.8 6.2 6.4 Other income (loss) 0.3 (0.2) 0.2 0.0 Interest income 0.4 0.4 0.4 0.4 Interest expense (1.4) (1.1) (1.3) (1.2) Income from continuing operations before taxes 5.8 5.9 5.5 5.6 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 Net loss from discontinued operations (0.1) (0.3) (0.9) (0.2) Net income 5.0 4.2 3.7 4.4 Net income attributable to noncontrolling interests from continuing operations (0.3) (0.4) (0.4) (0.3) Net income attributable to noncontrolling interests from discontinued operations 0.0 0.0 0.0 (0.1) Net income attributable to noncontrolling interests (0.3) (0.4) (0.4) (0.4) Net income attributable to AECOM from continuing operations 4.8 4.1 4.2 4.3 Net loss attributable to AECOM from discontinued operations (0.1) (0.3) (0.9) (0.3) Net income attributable to AECOM 4.7 % 3.8 % 3.3 % 4.0 % Revenue 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. 33 Table of Contents 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. Our Transportation end market has been benefiting from incremental investments across the globe to modernize transportation infrastructure and address growth and urbanization trends, while our Environment end market has been benefiting from infrastructure that requires permitting, compliance, and remediation as well as investments in energy. Our Facilities end market has been benefiting from positive public sector investment, trends in asset maintenance and repositioning as well as demand for modern, efficient facilities. The quantification of the impact of these trends by end market is noted within our Americas and International reportable segments discussion below, where applicable, and represents substantially all of our revenue change. In the course of providing our services, we routinely subcontract for services and incur other direct costs on behalf of our clients. These costs are passed through to clients and, in accordance with industry practice and GAAP, are included in our revenue and cost of revenue. 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 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 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. Gross Profit 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 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. 34 Table of Contents 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 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 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 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 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. 35 Table of Contents Income Tax Expense 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. 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 and tax expense of $34.4 million related to changes in uncertain tax positions. 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. The restructuring resulted in the recognition of deferred tax assets related to tax attributes that are expected to be utilized against future taxable income. Net Loss From Discontinued Operations During the first quarter of fiscal 2020, management approved a plan to dispose of via sale our self-perform at-risk construction businesses. 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 $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 $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. 36 Table of Contents Results of Operations by Reportable Segment Americas 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) % Cost of revenue 2,688.5 2,684.2 4.3 0.2 5,456.2 5,606.0 (149.8) (2.7) Gross profit $ 223.1 $ 212.5 $ 10.6 5.0 % 432.7 $ 402.7 $ 30.0 7.4 % The following table presents the percentage relationship of statement of operations items to revenue: 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 % Cost of revenue 92.3 % 92.7 92.7 93.3 Gross profit 7.7 % 7.3 % 7.3 % 6.7 % Revenue 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 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 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. 37 Table of Contents 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 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) % Cost of revenue 816.2 796.6 19.6 2.5 1,598.3 1,620.6 (22.3) (1.4) Gross profit $ 73.4 $ 78.2 $ (4.8) (6.1) % $ 144.8 $ 156.2 $ (11.4) (7.3) % The following table presents the percentage relationship of statement of operations items to revenue: 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 % Cost of revenue 91.7 91.1 91.7 91.2 Gross profit 8.3 % 8.9 % 8.3 % 8.8 % Revenue 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 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. 38 Table of Contents 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 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 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 (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 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. Seasonality We experience seasonal trends in our business. Our revenue is typically higher in the last half of the fiscal year. The fourth quarter of our fiscal year (July 1 to September 30) is typically our strongest quarter. We find that the U.S. federal government tends to authorize more work during the period preceding the end of our fiscal year, September 30. In addition, many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available. Further, our construction management revenue typically increases during the summer months when weather and daylight hours are more conducive to outdoor activities. Within the United States, as well as other parts of the world, our business generally benefits from milder weather conditions in our fiscal fourth quarter. Our construction and project management services also typically expand during the summer months when weather and daylight hours are more conducive to outdoor activities. The first quarter of our fiscal year (October 1 to December 31) is typically our lowest revenue quarter. The harsher weather conditions impact our ability to complete work in parts of North America and the holiday season schedule affects our productivity during this period. For these reasons, coupled with the number and significance of client contracts commenced and completed during a particular period, as well as the timing of expenses incurred for corporate initiatives, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results. 39 Table of Contents Liquidity and Capital Resources Cash Flows Our principal sources of liquidity are cash flows from operations, borrowings under our credit facilities, and access to financial markets. Our principal uses of cash are operating expenses, capital expenditures, working capital requirements, acquisitions, repurchases of common stock, dividend payments, and refinancing or repayment of debt. We believe our anticipated sources of liquidity including operating cash flows, existing cash and cash equivalents, borrowing capacity under our revolving credit facility and our ability to issue debt or equity, if required, will be sufficient to meet our projected cash requirements for at least the next twelve months. We expect to spend approximately $36 million for restructuring costs in fiscal 2026 associated with restructuring actions taken in prior periods that are expected to deliver continued margin improvement and efficiencies. Generally, we do not provide for U.S. taxes or foreign withholding taxes on gross book-tax basis differences in our non-U.S. subsidiaries because such basis differences are able to and intended to be reinvested indefinitely. 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 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 $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. 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, 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. Except for claims, substantially all contract assets are expected to be billed and collected within twelve months. Contract assets related to claims are recorded only if it is probable that the claim will result in additional contract revenue and if the amount can be reliably estimated. 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 40 Table of Contents 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. Because our revenue depends to a great extent on billable labor hours, most of our charges are invoiced following the end of the month in which the hours were worked, the majority usually within 15 days. Other direct costs are normally billed along with labor hours. However, as opposed to salary costs, which are generally paid on either a bi-weekly or monthly basis, other direct costs are generally not paid until payment is received (in some cases in the form of advances) from the customers. Debt Debt consisted of the following: March 31, 2026 September 30, 2025 (in millions) Credit Agreement $ 1,450.0 $ 1,439.9 2033 Senior Notes 1,200.0 1,200.0 Other debt 97.7 103.8 Total debt 2,747.7 2,743.7 Less: Current portion of debt and short-term borrowings (63.0) (66.3) Less: Unamortized debt issuance costs (30.4) (30.2) Long-term debt $ 2,654.3 $ 2,647.2 The following table presents, in millions, scheduled maturities of our debt as of March 31, 2026: Fiscal Year 2026 (six months remaining) $ 45.4 2027 32.6 2028 23.6 2029 12.8 2030 5.8 Thereafter 2,627.5 Total $ 2,747.7 Credit Agreement 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. dollars. 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 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 Amended Facilities. 41 Table of Contents 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. 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. 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 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 On February 21, 2017, we completed a private placement offering of $1,000,000,000 aggregate principal amount of our unsecured 5.125% Senior Notes due 2027 (the “2027 Senior Notes”). On June 30, 2017, we completed an exchange offer to exchange the unregistered 2027 Senior Notes for registered notes, as well as related guarantees. 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”). 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. 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. 42 Table of Contents Prior to August 1, 2028, we may redeem all or part of the 2033 Senior Notes at a redemption price equal to 100% of the principal amount to be redeemed, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to, but excluding, the redemption date. In addition, prior to August 1, 2028, we may redeem up to 40% of the aggregate principal amount of the 2033 Senior Notes with proceeds from certain equity offerings at a redemption price equal to 106% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Furthermore, at any time on or after August 1, 2028, we may redeem on one or more occasions all or part of the 2033 Senior Notes at the redemption prices set forth below, plus accrued and unpaid interest thereon to, but excluding, the redemption date, if redeemed during the 12-month period beginning on August 1 of each of the years indicated below: Percentage 2028 ................................................................................................................... 103.000% 2029 ................................................................................................................... 101.500% 2030 and thereafter ................................................................................................ 100.000% The indenture pursuant to which the 2033 Senior Notes were issued contains customary events of default, including, among other things, payment default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. 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 Other debt consists primarily of obligations under capital leases and loans, and unsecured credit facilities. 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 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 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 We enter into various joint venture arrangements to provide architectural, engineering, program management, construction management and operations and maintenance services. The ownership percentage of these joint ventures is typically representative of the work to be performed or the amount of risk assumed by each joint venture partner. Some of these joint ventures are considered variable interest entities. We have consolidated all joint ventures for which we have control. For all others, our portion of the earnings is recorded in equity in earnings of joint ventures. See Note 5, Joint Ventures and Variable Interest Entities, in the notes to our consolidated financial statements. Other than normal property and equipment additions and replacements, expenditures to further the implementation of our various information technology systems, commitments under our incentive compensation programs, amounts we may expend to repurchase stock under our stock repurchase program and acquisitions from time to time and disposition costs, we currently do not have any significant capital expenditures or outlays planned except as described below. 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 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. 43 Table of Contents 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 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. plans. Funding requirements for each plan are determined based on the local laws of the country where such plan resides. In some countries, the funding requirements are mandatory while in other countries, they are discretionary. There is a required minimum contribution for one of our domestic plans; however, we may make additional discretionary contributions. In the future, such pension funding may increase or decrease depending on changes in the levels of interest rates, pension plan performance and other factors. In addition, we have collective bargaining agreements with unions that require us to contribute to various third-party multiemployer plans that we do not control or manage. For the year ended September 30, 2025, we contributed $2.7 million to multiemployer pension plans. Contractual Obligations 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 six months ended March 31, 2026. Condensed Combined Financial Information The 2033 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by some of AECOM’s directly and indirectly 100% owned subsidiaries (the Subsidiary Guarantors). Accordingly, AECOM became subject to the requirements of Rule 3-10 of Regulation S-X, as amended, regarding financial statements of guarantors and issuers of guaranteed securities. Other than customary restrictions imposed by applicable statutes, there are no restrictions on the ability of the Subsidiary Guarantors to transfer funds to AECOM in the form of cash dividends, loans or advances. The following tables present condensed combined summarized financial information for AECOM and the Subsidiary Guarantors. 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 March 31, 2026 and September 30, 2025, and for the six months ended March 31, 2026. Condensed Combined Balance Sheets Parent and Subsidiary Guarantors (unaudited - in millions) March 31, 2026 September 30, 2025 Current assets $ 3,195.3 $ 3,367.3 Non-current assets 3,173.3 3,189.2 Total assets $ 6,368.6 $ 6,556.5 Current liabilities $ 2,794.1 $ 2,853.8 Non-current liabilities 3,087.7 3,102.8 Total liabilities 5,881.8 5,956.6 Total stockholders’ equity 486.8 599.9 Total liabilities and stockholders’ equity $ 6,368.6 $ 6,556.5 44 Table of Contents Condensed Combined Statement of Operations Parent and Subsidiary Guarantors (unaudited - in millions) For the six months ended March 31, 2026 Revenue $ 4,408.9 Cost of revenue 4,094.0 Gross profit 314.9 Net income from continuing operations 79.1 Net loss from discontinued operations — Net income $ 79.1 Net income attributable to AECOM $ 79.1 New Accounting Pronouncements and Changes in Accounting For information regarding recent accounting pronouncements, see Notes to Consolidated Financial Statements included in Part I, Item 1. Critical Accounting Estimates Our accounting policies often require management to make significant estimates and assumptions using information available at the time the estimates are made. Such estimates and assumptions significantly affect various reported amounts of assets, liabilities, revenues and expenses. If future experience differs significantly from these estimates and assumptions, our results of operations and financial condition could be affected. The Notes to Consolidated Financial Statements in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended September 30, 2025 (the “2026 Form 10-K”), and “Critical Accounting Estimates” in Part II, Item 7 of the 2026 Form 10-K describe the significant accounting policies and estimates used in the preparation of our consolidated financial statements. We have not materially changed our estimation methodology since the 2026 Form 10-K.