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AECOM’s AI investments are starting to show in project wins.
The Dallas-based infrastructure company said during its second quarter fiscal earnings call Tuesday, its proprietary AI tools helped secure two major contracts worth nearly $1 billion combined. One of these contracts was closed after the quarter and has not yet entered its portfolio.
“We were recently selected for a substantial re-compete for a major energy customer, where our proprietary AI solution was a central element of the project proposal and our competitive advantage,” CEO Troy Rudd said during the call. “In particular, this contract includes specific mechanisms that allow us to capture value as we deploy AI to deliver more value to our customers.”
Executives on the call said the technology is starting to improve win rates in large activities and has pushed the company into markets where it previously had less exposure, including healthcare design.
“What we’re seeing is an enhanced revenue opportunity as a result of the competitive advantage we’ve created,” Rudd said. “We will see improved margins on these contracts.”
Troy Rudd
Authorization granted by AECOM
Artificial intelligence is positioned as one of several tailwinds behind infrastructure demand, moreover energy and wateraccording to AECOM. The company’s high-tech business is now one of its fastest-growing sectors in the US, according to Lara Poloni, president of AECOM.
“Energy demand continues to increase,” Poloni said on the call. “We work across the entire power generation stack and have also taken a leadership position in emerging areas.”
Poloni highlighted nuclear fusion as a growing opportunity for the company. AECOM expects the industry to generate nine figures in net service revenue over the next few years through work with Type One Energy and the Tennessee Valley Authority.
Defense expenses
Rudd also pointed to defense spending as another key driver of growth.
He said AECOM’s pipeline with the U.S. Department of Defense, the company’s biggest customer, was up 50 percent amid a jump in global military investment. Meanwhile, more than half of the funding from the Jobs and Infrastructure Investment Act, which expires on September 30, remains unspent, Rudd said.
However, geopolitical instability in the Middle East heavy on the quarter. Executives said the conflict in the region created a headwind of roughly 100 basis points for the utility’s net revenue growth and delayed some project payments. AECOM said collections in the Middle East recovered at the start of the fiscal third quarter.
“We expect the Middle East to grow quite significantly,” Rudd said. “The part that’s hard for us to forecast is exactly how fast it’s going to grow in the third quarter.”
Q2 for the numbers
AECOM posted profits of $179.86 million in the fiscal second quarter, up 25.4% from the same period last year. The company’s second-quarter revenue was $3.8 billion, up 1% from a year earlier, according to the earnings report.
The portfolio reached $26.2 billion in the fiscal second quarter, up 8% from a year earlier.
Baird, a Milwaukee-based financial services firm, singled out the report for a strong number of delays, particularly in the US.
“AECOM’s F2Q26 results slightly beat revenue and profit,” wrote Andrew Wittmann, senior research analyst at Baird. “Execution, margins, prizes all decent, considering. We’re patient with the AI stuff, but recognize a much-improved foundation.”
