Q2 2024 AECOM Earnings Call Transcript
Key Points
- AECOM (ACM) increased the midpoint of their adjusted EBITDA guidance for the full year based on strong second quarter and first half operational performance.
- Net service revenue grew by 8%, with a 9% adjustment for year-on-year fluctuations in workdays, showing strong performance across key geographies and growth in environment, water, and transportation end markets.
- AECOM (ACM) achieved record highs in adjusted EBITDA, margins, backlog, pipeline of opportunities, and adjusted EPS, which increased by 13%.
- The company's cash flow remains strong, supporting a returns-focused capital allocation policy, including organic growth investments and returns to shareholders through repurchases and dividends.
- AECOM (ACM) is expanding its program management advisory services, aiming to deliver 50% of revenue through these services, enhancing technical expertise and market share.
- AECOM (ACM) incurred a noncash $103 million loss in discontinued operations related to revisions to estimated contingent consideration receivables recognized at the time of the sale of the civil construction business in 2021.
- Near-term election uncertainty in the U.K. has clouded the outlook for larger transportation projects, although the backlog remains at record levels.
- The company's business development investment in the Americas segment increased by 50 basis points as a percentage of net revenue, which may impact short-term profitability.
- In the International segment, fewer working days this year compared to last year impacted growth by approximately 200 basis points.
- While AECOM (ACM) is increasing its focus on program management advisory services, the transition may require time to fully realize financial benefits and market position.
Good morning and welcome to the AECOM Second Quarter 2024 Conference Call. I would like to inform all participants that this call is being recorded at the request of AECOM. This broadcast is the copyright property of AECOM. Any rebroadcast of this information in whole or part without the prior written permission of AECOM is prohibited. As a reminder, AECOM is also simulcasting this presentation with slides at the Investors section at www.aecom.com. (Operator Instructions) I would now like to turn the conference over to Will Gabrielski, Senior Vice President, Finance, Treasury and Investor Relations. Will, you may begin your conference.
Thank you, operator. I would like to direct your attention to the safe harbor statement on Page 1 of today's presentation. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking
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