Fourth quarter operating income increased by 9% over the prior year to $203 million and increased by 8% for the full year to $775 million. On an adjusted1 basis, fourth quarter operating income increased by 9% to $208 million and increased by 8% to $792 million for the full year. The fourth quarter adjusted operating margin on net service revenue increased by 70 basis points to 19.6%. The full year adjusted operating margin on net service revenue increased by 20 basis points over the prior year to 18.8%, a new record that reflects the ongoing execution of initiatives to deliver operating efficiencies, as well as strong execution and growth.
International
Revenue in the fourth quarter was $948 million, a 5% increase from the prior year. Full year revenue was $3.6 billion, a 6% increase from the prior year.
Net service revenue2 in the fourth quarter was $754 million, a 4% increase from the prior year. Full year net service revenue2 was $3.0 billion, a 6% increase from the prior year.
Fourth quarter operating income increased by 31% over the prior year to $95 million and increased by 32% to $337 million for the full year. On an adjusted1 basis, operating income increased by 31% to $95 million in the fourth quarter and increased by 32% to $339 million for the full year. The fourth quarter adjusted operating margin on net service revenue increased by 260 basis points to 12.6%. The full year adjusted operating margin on net service revenue increased by 230 basis points over the prior year to 11.5%, which reflected continued strong execution and the benefits of actions taken to narrow the Company’s focus on high-returning opportunities across its largest geographies.
Balance Sheet
As of September 30, 2024, AECOM had $1.6 billion of total cash and cash equivalents, $2.5 billion of total debt and $959 million of net debt (total debt less cash and cash equivalents). Net leverage10 was 0.8x.
Tax Rate
The effective tax rate was 16.0% in the fourth quarter and 21.3% in the full year. On an adjusted1 basis, the effective tax rate was 21.8% in the fourth quarter and 24.8% in the full year, which was consistent with the Company’s guidance. The adjusted tax rate was derived by re-computing the quarterly effective tax rate on adjusted net income11. The adjusted tax expense differs from the GAAP tax expense based on the taxability or deductibility and tax rate applied to each of the adjustments.
Conference Call
AECOM is hosting a conference call tomorrow at 8 a.m. Eastern Time, during which management will make a brief presentation focusing on the Company's results, strategy and operating trends, and outlook. Interested parties can listen to the conference call and view accompanying slides via webcast at https://investors.aecom.com. The webcast will be available for replay following the call.
1 Excludes the impact of certain items, such as restructuring costs, amortization of intangible assets, non-core AECOM Capital and other items. See Regulation G Information for a reconciliation of non-GAAP measures to the comparable GAAP measures. |
2 Revenue, less pass-through revenue; growth rates are presented on a constant-currency basis. |
3 Reflects segment operating performance, excluding AECOM Capital and G&A, and margins are presented on a net service revenue basis. |
4 Net income before interest expense, tax expense, depreciation and amortization. |
5 Adjusted EBITDA margin includes non-controlling interests in EBITDA and is on a net service revenue basis. |
6 Free cash flow is defined as cash flow from operations less capital expenditures, net of proceeds from disposals of property and equipment; free cash flow conversion is defined as free cash flow divided by adjusted net income attributable to AECOM. |
7 Backlog represents the total value of work for which AECOM has been selected that is expected to be completed by consolidated subsidiaries and includes the proportionate share of work expected to be performed by unconsolidated joint ventures. |
8 Book-to-burn ratio is defined as the dollar amount of wins divided by revenue recognized during the period, including revenue related to work performed in unconsolidated joint ventures. |
9 Return on invested capital, or ROIC, reflects continuing operations and is calculated as the sum of adjusted net income as presented in the Company’s Regulation G Information and adjusted interest expense, net of interest income, divided by average quarterly invested capital as defined as the sum of attributable shareholder’s equity and total debt, less cash and cash equivalents. |
10 Net leverage is comprised of EBITDA as defined in the Company’s credit agreement dated October 17, 2014, as amended, and total debt on the Company’s financial statements, net of total cash and cash equivalents. |
11 Inclusive of non-controlling interest deduction and adjusted for financing charges in interest expense, the amortization of intangible assets and is based on continuing operations. |
About AECOM
AECOM (NYSE: ACM) is the global infrastructure leader, committed to delivering a better world. As a trusted professional services firm powered by deep technical abilities, we solve our clients’ complex challenges in water, environment, energy, transportation and buildings. Our teams partner with public- and private-sector clients to create innovative, sustainable and resilient solutions throughout the project lifecycle – from advisory, planning, design and engineering to program and construction management. AECOM is a Fortune 500 firm that had revenue of $16.1 billion in fiscal year 2024. Learn more at aecom.com.
Forward-Looking Statements
All statements in this communication other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, capital allocation strategy including stock repurchases, risk profile and investment strategies, and any statements regarding future economic conditions or performance, and the expected financial and operational results of AECOM. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, but are not limited to, the following: our business is cyclical and vulnerable to economic downturns and client spending reductions; potential government shutdowns or other funding circumstances that may cause governmental agencies to modify, curtail or terminate our contracts; losses under fixed-price contracts; limited control over operations that run through our joint venture entities; liability for misconduct by our employees or consultants; 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; ability to continue payment of dividends; exposure to political and economic risks in different countries, including tariffs, geopolitical events, and conflicts; currency exchange rate and interest fluctuations; retaining and recruiting key technical and management personnel; legal claims; inadequate insurance coverage; environmental law compliance and adequate 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 real estate development projects; 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 businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and result in any future proceeds owed to us as part of the transactions could be lower than we expect; as well as other additional risks and factors that could cause actual results to differ materially from our forward-looking statements set forth in our reports filed with the Securities and Exchange Commission. Any forward-looking statements are made as of the date hereof. We do not intend, and undertake no obligation, to update any forward-looking statement.
