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Accenture for physical infrastructure.

IBM for the built environment.

A global 'McKinsey & Company' for infrastructure projects.

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• Design and Engineering Services: AECOM provides architectural, civil, structural, and specialized engineering designs for a vast array of infrastructure and building projects worldwide.
• Consulting and Advisory Services: The company offers strategic planning, economic analysis, master planning, and program advisory to support complex infrastructure development and urban regeneration.
• Environmental Services: AECOM delivers environmental impact assessments, remediation solutions, regulatory compliance, and sustainability consulting to manage environmental risks and promote sustainable practices.
• Program and Construction Management: This service involves overseeing large-scale construction programs and projects, ensuring efficient delivery through expertise in scheduling, cost control, and quality assurance.

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AECOM (NYSE: ACM) is a global infrastructure consulting firm, providing design, engineering, construction, and program management services. As such, it sells primarily to other companies, government agencies, and organizations rather than individuals.

AECOM's major customers and customer categories include:

• U.S. Federal Government Agencies: AECOM provides significant services to various departments and agencies of the U.S. federal government, including the Department of Defense, General Services Administration, and others. These government entities do not have stock symbols.
• U.S. State and Local Governments: The company serves a wide array of state, county, and municipal government bodies across the United States for various infrastructure projects (e.g., transportation, water, buildings). These government entities do not have stock symbols.
• Private Sector Clients: AECOM works with numerous private companies across diverse industries globally, including transportation, water, energy, manufacturing, and commercial development. However, according to AECOM's financial disclosures (e.g., 10-K reports), no single commercial client accounts for more than 10% of its consolidated revenue. Therefore, no specific private company names are identified as major customers.

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• Autodesk (ADSK)
• Microsoft (MSFT)
• Oracle (ORCL)

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The key risks to AECOM's business, a global leader in infrastructure consulting, are primarily concentrated around its market dependence, intense competition, and regulatory compliance requirements. These factors can significantly influence the company's operational and financial performance.

1. Market Dependence on Government Contracts and Economic/Political Uncertainties: AECOM heavily relies on government contracts for a substantial portion of its revenue, which stood at approximately 41% to 46% of total revenues from government entities in fiscal years 2022-2024. This reliance makes the company vulnerable to fluctuations in government budgets, political shifts, and changes in infrastructure spending policies. Furthermore, global economic downturns, political instability, tariffs, and currency exchange rate fluctuations can reduce demand for infrastructure projects and negatively impact the company's operations and financial results across its international markets.
2. Intense Competition and Pricing Pressure: AECOM operates in a highly competitive market for design and engineering services. The presence of numerous competitors, some with greater financial resources or specialized expertise, can lead to increased pricing pressure and potentially impact AECOM's market share and profitability.
3. Regulatory Compliance Risks: The company operates globally and is subject to a complex web of environmental, safety, and anti-corruption regulations, including laws like the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. Non-compliance with these regulations could result in substantial penalties, legal claims, and damage to AECOM's reputation and financial position.

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The increasing capabilities of artificial intelligence and automation in design, engineering, and project management pose a clear emerging threat. As AI tools advance in areas such as generative design, predictive modeling, automated surveying, and construction automation, they could significantly automate tasks traditionally performed by AECOM's highly-skilled engineers, architects, and consultants. This could lead to a commoditization of services, reduced demand for human expertise, and lower margins, potentially enabling new, lean competitors or even clients to perform these functions more cost-effectively, thus eroding AECOM's traditional fee-for-service model.

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AECOM, a multinational infrastructure consulting firm, operates in several large addressable markets globally, encompassing a wide range of engineering, consulting, and program management services.

• Construction Management/Program Management: The global market for construction management and program management services is estimated to be over US$100 billion.
• Environmental Consulting Services: The global environmental consulting services market was valued at $43.04 billion in 2023 and is projected to reach $77.35 billion by 2031, growing at a Compound Annual Growth Rate (CAGR) of 7.6% from 2023 to 2031. Another estimate valued the global market at approximately $41.01 billion in 2025, with a projected CAGR of 4% from 2025 to 2033. In the U.S., AECOM holds an estimated 19.8% of the total industry revenue in Environmental Consulting.
• Engineering Services: The global engineering services market is expected to grow by USD 365.9 billion from 2022 to 2027, with a CAGR of 4.2% during this forecast period.
• Digital Consulting: AECOM has an addressable market of $50 billion for its digital consulting services, globally.
• Global Infrastructure Market: The overarching global infrastructure market, where AECOM is a leading player, is projected to expand from $2.72 trillion in 2024 to $3.69 trillion by 2029, at a CAGR of 6.27%.

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1. Increased Public Infrastructure Spending: AECOM is well-positioned to benefit from robust global public infrastructure investment, particularly driven by initiatives like the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) in the United States. This funding is directed towards key sectors such as transportation, water, environment, energy, and digital infrastructure, including data centers. Similar strong public spending trends are also evident in international markets, including the United Kingdom, Canada, and the Middle East, further enhancing AECOM's growth prospects.
2. Strategic Focus on High-Margin Program Management and Advisory Services: AECOM is intentionally shifting its strategy to prioritize and accelerate investment in higher-margin and lower-risk professional services, specifically program management and advisory. The company aims to grow these services to eventually represent 50% of its net service revenue. This strategic pivot also includes capitalizing on growing client demand for ESG (Environmental, Social, and Governance), sustainability, and decarbonization initiatives.
3. Record Backlog and Strong Pipeline: AECOM continues to report a record-high total backlog and a robust pipeline of future opportunities, providing significant visibility into upcoming revenue streams. For instance, the company reported a record backlog of approximately $24.59 billion as of the third quarter of fiscal 2025, reflecting a 5% year-over-year increase. The strong book-to-burn ratio, particularly in its design business, further underpins confidence in future net service revenue growth.
4. Advancements in Digital Transformation and AI Capabilities: The company is accelerating its deployment of Artificial Intelligence and other digital capabilities. These technological advancements are aimed at delivering greater operational efficiencies, transforming how services are provided to clients, and extending AECOM's competitive advantage. Tools like PlanSpend, an AI-powered fund navigator, assist clients in optimizing bids for federal infrastructure funding.

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Share Repurchases

• Since initiating its stock repurchase program in September 2020, AECOM has repurchased more than $2.3 billion of stock, representing approximately one-third of the Company's market capitalization at that time.
• As of November 2024, AECOM's Board of Directors increased its share repurchase authorization to $1 billion.
• In fiscal year 2024, the company returned approximately $560 million to shareholders through repurchases and dividends.

Outbound Investments

• AECOM's "AECOM Capital" segment primarily involves investments in real estate projects.
• The company has strategically transformed its portfolio by exiting several business lines, including fixed-price combined-cycle gas power plant construction and at-risk oil and gas and international construction projects, and sold its Management Services business in January 2020.
• Net change in long-term investments, which reflects net cash flows from the sale and purchase of investments, was -$52 million in 2024, -$33 million in 2023, and -$71 million in 2020.

Capital Expenditures

• AECOM's capital expenditures for fiscal years ending September 2020 to 2024 averaged $2.461 billion.
• Capital expenditures reached a 5-year peak of $2.813 billion in September 2021 and a 5-year low of $1.841 billion in September 2023.
• The primary focus of capital allocation includes high-returning investments in organic growth and expanding capabilities, particularly in areas like Program Management, Advisory, and digital delivery.