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AECOM expects sustained strength across its entire larger construction end markets as clients push a broader wave of projects into the portfolio, leaders at the Dallas-based firm said Tuesday during an investor presentation linked to its fiscal fourth-quarter earnings.
State DOT budgets remain high and the five-year Jobs and Infrastructure Investment Act continues encourage the formation of projectssaid CEO Troy Rudd. Those underlying tailwinds will set the company up for years with transportation and water-related work, he said.
“We built an organization that will play in markets where, over the long term, our opportunities will be to grow more than the GDP of a typical economy,” Rudd said on the call. “There is no doubt that over the coming decades, there needs to be significant continued investment in traditional infrastructure, whether it’s water or transport infrastructure or social infrastructure.”
Rudd added that these trends extend far beyond transport and water. The firm expects continued momentum in defense construction as well as energy and power work tied to the artificial intelligence boom.
“There is an insatiable need for energy, particularly electricity,” Rudd said on the call. “There’s going to be an amazing investment in AI and data centers, and all the energy and water you need to make it happen.”
AECOM leaders also stood out enable changes in key marketsincluding the United States. This is creating opportunities to advance major civilian programs more quickly than in previous cycles.
Exit of construction management, rise of AI
AECOM will begin evaluating a possible sale of its construction management business to focus resources on higher-margin design and engineering work, Rudd said on the call. Beginning next quarter, the construction management unit will be classified as held for sale and moved to discontinued operations.
Movement comes as M&A activity has begun to accelerate throughout the construction sector. For example, construction companies such as Zachry Construction and Cumming Group recently acquired specialty companies to expand capabilities. WSP and Jacobs They have also reportedly explored a possible deal.
Rudd said the decision is based on the company’s strategic priorities and that the underlying business performed well.
“We’ve come to the point where we believe there’s a better place, a better home, eventually for our construction management team,” Rudd said on the call. “It’s a great business.”
The company also described early results from its internal AI program. Call executives said the program could shorten design cycles and reduce material use in infrastructure projects.
The AI platform consists of math-based generative design models, trained on engineering principles and synthetic data, which act as AI “teammates” to help with important infrastructure designs, Rudd said. He added that the company spent about 18 months building its in-house AI team.
“It gives us the ability to materially reduce costs,” Rudd said. “As we’ve gone through the design process, we’ve found that we’re able to take 10% to 20% of the materials, and therefore potentially the cost, out of a design. That’s the client’s bottom line.”
Takeaway food Q4
AECOM reported profit of $120.4 million in the fiscal fourth quarter, down from $172.5 million last year, a 30.2 percent drop. The company’s fourth-quarter revenue was $4.18 billion, up 2% from a year earlier, according to the earnings report.
The backlog rose to a record $24.8 billion, up 4 percent from a year earlier, the firm reported.
AECOM’s fourth quarter results it got positive reactions from analysts after the presentation. Several pointed to the company’s long-term outlook and plans to scale AI across its platforms.
“AECOM’s fiscal fourth quarter 2025 report coincides with its analyst day and has upgraded its long-term outlook through 2028,” Andrew Wittmann, senior research analyst at Baird, a Milwaukee-based financial services firm, wrote in a research note. “The results slightly exceeded expectations in every way.”
