AECOM (ACM) 19 Nov 242024 Q4 Earnings call transcript

Good morning, and welcome to the AECOM Fourth 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 copyrighted 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. a conduct will we question-and-answer session. Later, would to Will Instructions] I Investor now Finance, like over call Relations. the turn Gabrielski, and to Treasury [Operator Senior President, Vice

uncertainties, our the to our our are operator. and periodic today's from key operations. noted. today's of Chief Kapoor, discuss reports measures Officer, those continuing or Poloni, outlook as SEC. rates outlook margins On adjusted revenues. the and Growth differ in operational statements. presented will Except the Any update forward-looking financial by discussion will discussing which our Troy greater growth appropriate operating otherwise for reflect required remarks including performance on segments. about priorities; the International will today's your a Lara service call, and strategy posted performance would on defined expectations. We presented review accomplishments, pass-through the currency you, no detail. rates Operations Americas and will our and key basis and in as statements Rudd, Today's statement statements like projected segment Executive are segment net our revenue forward-looking to otherwise various and unless review and constant are our President, revenue on forward-looking business Thank is will in our references attention Page focus undertake noted. Today's growth, revenue obligation year-over-year to in I filed presentation. or risks to refer described due business. with Chief Financial revenue financial margins we unless reconciliations our excluding will significantly our for our Officer, Gaurav future safe to contains financial are successes X Actual NSR, the NSR harbor When law, basis our on may into and direct GAAP risks we website. to non-GAAP and a presentation. The use certain results incorporated to materials

question-and-answer will We Troy? conclude I the that, call session. With to with will Troy. a over turn

in you, for their purpose by commitment joining want across all world. our begin the I a our States. unwavering clients a for testament Hurricanes professionals to thanking to would communities thank both strengths every to United for our collective we and better of Milton that by teams is supporting of and day Southeastern organization. professionals to Will, Thank us like the communities impacted globe to The the thank delivering and you our also today. I bring and Helene our value our

safety our core the employees remain at great well the AECOM. in above our is safe, our We of peers. best-in-class All safety is take which record, and value pride

comment to I our want election. U.S. discussing financials, Before the on

the certainty. which not of this a election is First The incoming economy, is built changing. foundation and U.S. creates focused Infrastructure investment foresee world-class administration a and strong bipartisan priority on a infrastructure. foremost, we on is do Trump

X% are our points combined revenue. we may Reduction want sectors, highlight of And Inflation and the the capitalize fungible revenue. XX our to the projects. in infrastructure The the revenue. a position Within on client X% initiatives to in and investments shift with economy. Specific our of EPA following. U.S. of basis our across objectives multiyear, workforce The federal that, specific than for accounts XX% While I exposure, our great of for essential represent nearly mission-critical less enterprise less U.S. our all work federal market to represents USAID is of than funded Act and similarly, U.S.

several from growth equation, of side the new other we the priorities. the see administration's emerging opportunities On

greatest permitting and deregulation With not Prudent our reform, A plenty IIJA, services project is to reduction and bottlenecks and for XX% investment includes to clients staffing and would technical infrastructure of positive respect the date, in would volume support of This opportunities. funding business. the government increase with our to deregulation. for simplification the and one is only remains. a allocated IIJA example, which For the at increase investment. of X/X risk, secure demand money runway of program advisory, of the management infrastructure is to

bonds in for including transportation as demonstrated as billion that ballot sizable investments include in voters billion measures water. in the specific state of continued Lastly, support and $XX infrastructure elections, $XX local funding of well California, November

we several well on. suited to years new are for we expect next together, the Taken which deliver to bring growth opportunities

XXXX fiscal our accomplishments. to and financial key results Turning

net performance financial and on fronts and earnings margins, all our service was cash First, for strong revenue, included records flow.

EPS We dividend payments. to of and record growth, free through and adjusted and shareholders EBITDA repurchases in million driven EBITDA approximately our adjusted by XX% expansion basis midpoints points quarter the XX% the with also flow This of increased of respectively. XXX and previously the fourth margin return $XXX was enabled guidance exceeded cash

are and strength year quarter we the backlog. visibility. had matters Second, segments our we with and business winning in a ratio record extending both with book-to-burn in design X.Xx what We in fourth a the the ended

our our has book-to-burn strength of markets. the competitive end ratio advantage in enterprise-wide of been fact, last XX which at greater quarters, In speaks our and or X each to the

increased pipeline a by high achieved XX%. and Our new

XX% our greatest. record win where at pace pursuits in largest higher and Our are high a XX%-plus at we larger at rate And recompetes even notably winning on advantages is a markets. competitive our remains are

market share. we gained revenue organic Third,

For our market. to is in consistent step now the Global big our water market practice the highlight #X first our goal over growth million during #X policy. that water capital took investments Management every includes $X dividend ranking, in XX% our history, achieved returns-focused organic an another XX% announced the executed be #X repurchases we this and record we Today, also increase increase in quarterly repurchase of we year doubling allocation in sector. I $XXX Program Board of the growth our ranking Directors are moving the years, This following in record and next is by we on share also news key an to XXXX. year. to in X and approved forward growth #X track billion that want the continued dividend. authorization with Fourth, design in a fiscal engineering our which on the time initiatives, of This to in

of dividend Our growth dividend annually the the peer to of years, of dividend and direct by in average remain share committed X is our at the double-digit XX% value our has the for now increased yield long annual an top over per group. We the last indicative term.

that strengths. new in we businesses Finally, leverage are existing investing growth high-margin

and in the and business, #X becoming draws Advisory environment advisory which the on our leadership global leader of instance, Environment furthers Water our the services. infrastructure of For practices, vision technical ranked water

accomplished business to billion within expect already years what million we've from platform, $XXX become program this to management. We next X $X and similar of NSR double today our with will

be target Importantly, this delivering exceeding higher only growth but long-term it. on in XX% which margins, further will at margin underpins our confidence our not

never As intact. to XXXX and beyond, secular The has look are our infrastructure we the investment firmly for of greater. growth need been drivers business

grant the with and years considered federal and more record driving world's and more bridge, instance, backlog the the demand Urbanization And infrastructure which infrastructure bridges than competitive world, safe, than continue program on while goal for highway, and and grants than is lead are old. the which structurally is the created improving designer has For years. Funding reliability. XX minimizing also and a of building in bridge Nearly population aviation received of for average the drinking water on impacts. to growth large pipeline more of is by billion U.S., increasing, rail safety live which in deficient in seeing bridge Americas. transit, IIJA transforming Around modern is XX% The Brent transportation XXXX, enormous AECOM created environmental projects we more is reliable a demand. several bridge for is $X expected are investment larger XX,XXX Spence such a the for will as cities systems double-digit

we electrification from growth a has benefited for demand of energy and are energy permitting data creates several grid to us. air give capitalize how to this to AI poised storage To directly support you Additionally, to modernization. quality opportunities centers where sense and

Xx has a Our to compared transmission distribution just few and years ago. increased backlog

as as the and the as demonstrate on transmission partner U.K.'s role design on investment, the expertise the of market. major brand partner Australia grid a a in manager program our San undergrounding project for the our depth Grid and Our advisory strength & Electric's Gas in the of build-out Diego

to XXXX. Turning

growth and for the over could $X.XX not and continued created expanding at what high of To and includes on record another X% underpin focus backlog, prouder last strategy expectations to X% years. and year EPS the we've what and business. accomplished I pipeline of and win in our adjusted EBITDA our midpoints. winning billion conviction for competitive Our our This be NSR $X.XX several their advantage. matters, are we rates respective

As look to possible call turn to over Lara. for that, the been never has and ceiling the XXXX we what's beyond, I will higher. With

incredibly of in Thanks, Troy. proud XXXX. I'm accomplishments team's our fiscal

strong realization elements key the reflects our of consistently performance Our the strategy. of

Let me provide a few examples.

markets Ireland and X an high. our focus Today, and rate Canada, all-time and best our geographies only of and profits U.K., First is approximately remains growth clients. Australia, our for on the the top returning win highest of our U.S., XX% account at

our industry. to Second, AECOM is the place most in desirable work

our ranked major clients the exciting on leadership markets, are most firm tremendous training We and ENR and end iconic consistently which our and And which professionals. our the of the matters the opportunity creates across a recruits. We career best technical both all in development for industry. win offer we #X key roles to by projects,

leadership is fact, the and than the rates in is time voluntary more on in any of return attrition workforce in these amongst our training participants. development investments given XX% at reduction In evident enrolled

this right Jill a market in experience, the domain markets record some to Finally, career. our proven expertise for advisory most blend to Environment solutions wealth September, with we Water track led leading our in technical element advice and initiative clients was This of appointing Jill the is leader. has of to throughout organically brings will largest in her And a Hutkin and fastest-growing AECOM new AECOM new credibility joining value-creating the and we announced critical unlock strategic the of formed and business business. The initiatives lead and any world. expertise similar business. of

XXX% market is new To gaining digital incumbent utility services through water, with in investments we and regulated modernize to from to digital our the In operations, key people. a the engage U.S. AMP years, our water $XX there including are our and increase U.K., the cybersecurity and services in secured had over clients billion on utilities with consistent water substantial trajectory X predictive of business of XXX which conception set embed next more emphasis grow date, AMPX serving we $X.X the is digital this process municipal XXX,XXX of XXXX. populations expect have approximately to share a focus to opportunity frameworks we've investments. the won substantially the FY requires execution. within which alone, efficiencies. years of X each element drive a an to Similarly, is XX% few in water management, with 'XX. A project provide deeply hundred the a we million investment detailed, ago of increased our of from on the is and rapidly delivered only also Troy deeper framework billion program. Expanding strategy position, through similar example in we As which to advisory great program opportunity and dollars analytics over

with lead firms. a scientific excellence competitively us compared position which places and traditional to in technical we as our advisory Importantly, advantaged

the capabilities turn energy I'll that, the is Gaurav. inside of result, to palpable. With a it advisory organization build as our As over we

Lara's and that results Thanks, strong double-digit both which is X comments, in guidance growth our built evident and Troy metrics consistently Echoing strategy have I value to in strong a for our Lara. creation. want our results in continued adjusted and EPS both underpin we performance, highlight culture XXXX. in XXXX that

basis fourth the to lead adjusted year. our We year first up XX.X% continue with from XXX the is a prior the points EBITDA where margin margins exited quarter, we in industry. The

EBITDA the by points year, margin continued increased adjusted and XX% expansion key margin basis full to initiatives. reflecting execution the on For XXX

income level record and Importantly, investments the are through have we the which continuing statement. make, expensed high-value to made this margin funds organic expansion is what are of

the is in EPS delivered XX% adjusted fourth the growth. second The and for year. growth quarter We full EPS XX%

directly EPS correlates XX% Our creation. compounded at which has XXXX, value since rate shareholder to

earnings. representation million Finally, of cash for XX% of free which $XXX our exceeded free cash quality our our high flow, net a history, great the time first which is flow Notably, services in revenue, of represented

highlights other our results. to from Turning

For the strong year, we the better, even X rate. including business, a been revenue, historically could not Results quarter. if for organic X% growth which the net service delivered have record is in in growth fourth impacts design

in dates larger several Hurricane resulted a in First, loss Helene our few of markets.

We first quarter, impact Hurricane similar Milton in XXXX. is for expect incorporated but fiscal a our strong in from the this guidance

to decision commercial the awarded construction management the to made we change proceed not owner an Second, with project wanted risk profile. the where already

the management new revenue on the the prioritize guidance to competitive some cash adjusted also with has in which risk, performance even leader smaller our investment here the I and high water business. be I'm and EBITDA, to grow We in on the if and payback. environment was evident the flow. term. Despite organically cost advisory means of how risk is over required cost appropriate sacrificing this, much teams business. upfront the will EPS hiring will what edge focus always adjusted you're the comment versus near and is M&A, asking and of much platform our for Unlike margins, a it yourselves sure want right

XX% unlike is the M&A, beyond already we've capital runs year cost As reflected and growth of XXXX we on expansion in than through continued that. margins incremental deliver margins proven, expectation on investments. in our our growth another our return record and of organic for Also, our fiscal more

still Turning Key and the our XX.X% the historically budget business to ramping outlooks net Beginning continue Americas, revenue to adjusted in the a to fourth achieved at which increased high fourth and Americas fourth and that including X% our IIJA, strong The design and the confidence. margin results. all end in key up strong based our quarter XX.X%, included X.X, strong quarter. markets. across are are backlog continue local operating the high drivers, in increase The and clients to reserves, state the annual service design contributions funding have adds the segment was in book-to-burn including pipeline. in new confident on quarter for will the we

capital We increase in on and in are deliver that initiatives continue on to return and and beyond. confident margin expansion margins XXXX our

revenue an Net the adjusted was and in prior consistent X% all-time This and the ratio had fourth operating a remains margin Turning high. with is to an high. at for quarter basis X.X points We our segment. all-time International which the backlog We materially the at increased expectations. increased year. by year XX.X% quarter, in a the service book-to-burn delivered XXX from

our benefit Giga lowest late energy, health funding XXX strong. clients continue for growth our in on We and for to including housing focus U.K. continuous from and budget highest as ongoing The initiatives. our infrastructure, and billion hydrogen billion such growth and and are trends Across risk end CapEx GBP autumn improvement markets, industries the GBP in provides transport, October key green care for and factories. released markets XX

by and large X-figure we accelerate other is backlog to PMD position East, and In increased water continue work, wins. including AMPX driven scopes And Middle picking share. XX%, our date market in to our wins gain Australia, set larger to fourth in are the opportunities up. win and of in quarter the win another us UAE the spending Additionally, to by

even the share more our capital demonstrating cash to the free to from shareholders. first We exceeding flow and further time Turning the per at XX% delivered cash increasing increased allocation. capital value Free and flow $XXX year. policy for million prior of XX%, cash record allocation flow

free As I was margin on milestone a earlier, net we And a cash service noted, flow free with cash I noted conversion XXX%. revenue. achieved flow new XX% as

$XXX the fourth year. stock full strong $XXX the in our quarter flow, of we for approximately result of a million million and repurchased cash As

during $XXX on an administration. and opportunity of year, also Trump of we acquisition under dividends growing We completed land, rapidly the environment permitting an practice paid is focused million federal incoming which the

We with quarterly repurchase dividend to priorities. billion allocation of our are and our the beginning XXXX our affirming to This increase capital increase payment. returns-focused authorization January includes XX% the our $X

in net visibility infusion This discontinued remain in call our $XXX quarterly X ability on project opportunistic of approximately infusion how which sheet provide I disputes cash resulting Our of enhances resolved reduces the balance our to and million. we update operations. Since leverage want supports Shimmick last cash August, strong our profile. deploy risk X.X%, their with gross successfully of legacy to an is capital. in

guidance. Turning to our

We record pipeline. service backlog in in expect net and quarter to revenue the a of book-to-burn X% X.X growth our ratio by X% fourth in XXXX, business supported the and design

seasonal normal follow which phasing revenue to growth progresses. accelerate means year expect we We the will expect as a pattern, NSR

expansion billion points increase for to ready margin operator, basis the we're EBITDA to XX% $X.XX to midpoint XX midpoint by EBITDA adjusted at adjusted increase expected expect X% We is $X.XX. With to EPS the Adjusted at XX.X%. of questions. and that, to

Wittman [Operator Instructions] Baird. our from question of We'll Andy first the line take with

nothing looking to in wondering and guidance you I kind kind after that earnings in there a I costs your restructuring will And a of expect $XXX ask clarification because what it that Great. if of just of noticed 'XX, big listed know wanted I was just million kinds was is, onetime EBITDA or for at number, which be of charges? was if these was and just that's adjusted here. on the don't XXXX. devoid transaction you I spending that. reconciliation your

Andy, thanks for the question.

turn to that You know a I'm good observation. Gaur what, over is acknowledged I'm also to but going that

Andy, thanks for question. the

FY contemplate being as that have very and There were we we exiting as growth have that significant restructuring, rightsize countries assumption on any before. focused the that geographies not programs best said do your some So to 'XX, X restructuring the we've were fundamentals. we

restructuring. There's completed We have it. contemplated new through no

should beyond and clean. be results 'XX FY our So

Got it.

doing different. a little one just because you, something Okay. you're similar bit a to for maybe noticed I but Gaur, just Kind understand another That's of good question, that to hear.

EBITDA the here guys are calculating margins would you from people at income calculate adjusted statement. in the number but that's XX.X%, immediately not the So again, that the

the XX.X% about back that maybe is and the and the about. XX.X% EBITDA it take calculating why us and same adjusted at implied you're organic between can could the are concept you growth you're apply look difference When So at doing towards that the of the guidance. and talking maybe most you just the that? doesn't if And dollar talk margins, what that guidance what's that it look is rates I into

has that of I so this all could maybe and And for same us. clarify of all you think thing the do to with

Not at Andy. problem a absolutely. No, all,

the guiding adjusted started midway through margin So specific to from prospective shareholders, there include last that EBITDA of comparative that we that corporate we're feedback inclusive were not And for target was we was we operating as and that costs segments adjusted to, wanted all as that a incurring. year you did income they our well, know, shareholders that enterprise. of provided costs

adjusted So for has within that attributable only. reconciled the EBITDA all EBITDA. report, in services now is but consolidated denominator our EBITDA that EBITDA net Further, JVs, adjusted we is revenue it

back. So X that articulated. release the clean have just us, it for is that included -- reconciliation also and it's walks simplicity through steps about What I for we excludes all a for That as NCI. compare we've with the in we you go results can add forward included us. provided margin easily we bridge separate that We investors. for And

it. Got

Okay. the I was straightforward. thought quarter pretty

good me. definitional day. just . a those questions So Have for

of from the line KeyBanc. Our is with Sangita come question Jain next

would particular where had more strength? sizable on you segment. have geography that out the a a international Is or just XQ, anything specific call maybe on may in the project in seen a you I there backlog strength couple international

to it for Thanks to I'm and going pass question, the over Lara.

with strength whether closed of Middle end megatrends strong key We're be Sangita, terms Zealand, international. all for most of capitalize the renewed for certainty U.K., for you, where seeing or lead markets And of going we that to in Thank another on continue terms in clarity U.K. continued year long-term the amongst us, the creates where for wave is can now the East, of it's New we've for long-term positioning for question. energy. budget, got in which importantly, frac We've frameworks, our through whether to Australia, infrastructure those We the infrastructure the us they're transportation the and in the got water and board next or energy. optimism investment.

to position of over new got going those we've were XXX% there. XX% and in the we've value importantly, recompetes frameworks, define those framework. And frameworks, months. next where coverage of most won very incumbent So of a including the the of few the we're we got of we've And where the continue strong AMPX, importantly, those now to

terms also to opportunities included we our But in we our strength And market XX% and there see KSA Equally, where so continue of and backlog. infrastructure grew in currently fiscal long-term for then year, not we have around infrastructure there as then $XXX XXXX the Australia also World also terms seeing FIFA we're well. billion a Zealand, New initiatives And and initiatives investment trend the in of long-term there's and that the Cup other long-term of there.

strength continued international all the key across in infrastructure business. our So segments of

Lara. That's Great. helpful,

I on international ask expansion. if a margin just So can you stay on and question

margins in expectations over XX.X%. we go double-digit same just a you're improvement we Or expect You year and the of we in pace Should should into moderate 'XX? fiscal ago, now as 'XX. somewhat only turned international

led segments. in in similar guidance. increase provided high-growth, to We expansion. way and now be launched is have point, art -- made FY are continues the is QX, that make advisory what And ceiling we to North Sangita, the to to in of we that have Star comes 'XX, made it take possible, will the investing margin prior to industry, When as platforms the international art question. in North terms margin, efficiently our we years, to realized and of investments that Star services I'll of including for has on investments services both this we the delivering continue Because possible. it and continue Gaurav. in your we high-margin industry we've have

we end international expect way. One expansion. do is top the will will on expect increase lead And for are our expect we that investments margin bps want the do that will be income enterprise We make. through long-term our what we XX of and note algorithm record the go 'XX FY They to that have made These to in is contemplating. continue we're investments again range, I thing statement. FY And able not to XX% But to 'XX, in be and margins. at the going allows we beyond with the here are 'XX continue to we the it deliver for again, enterprise, now to percent lead only FY industry as that, sit us confidence are making. it say we XX-plus initiatives our that we're significant confident exit and all ceiling, pretty is our investments

Our next question comes from Kaplowitz the line with of Citigroup. Andy

is This [indiscernible].

I'd seen First Or X% you East. growth update segments range? X% question the like XX%, the to in Americas in if to NSR And grow was could Middle do the had us grow in you've positives both organic the the you've ask, in any also faster? improvement does if

and expect funding NSR articulated do between off of East. slower leader our some algorithm be her their half. be first ramp our is that will questions, in the of and because, again, and your into now during is expectations The X will Americas NSR with coming articulated the the part, consistent, in till you've X% half which international in back to up the year, Lara our take Lara online response FY the year. X%, to growth of on to as growth that We we X the we to the opening comments the Middle long-term and it's I'll were start Day. in segments expect, we second organic respond during international for markets, key will organic on Sure. growth for second as question contemplating Investor 'XX, seen

We QX. Yes. can And a specifically all on see at Middle in slowdown if I add, just didn't East. the

year. of the as larger us. another terms said segments we grew confidence visibility. some of of some QX, program the business us giving longer-term are long-term programs the it in In QX, earlier, for that fact, I our to major business, additional we've then the going continue grew like won And in got Arabia Saudi And X-figure in in

well. have And consultant coverage of leading projects programs the infrastructure many are broad we region. the key across and we as that So major the cover in

focusing That's helpful. And then on question maybe a margins.

Just on margins.

you annually, did good XX in expansion with And XX in average still XX 'XX. bps you of bps XX. would from a bps expansion? more of expansion And over what's So growth about of holding margin back expansion past averaged margin and few little you've 'XX? Why XXX I the for margin reasonably like years you think only bp, margin

future it's a we've there's I you than of to highlight obviously that, for a not held expansion. back in being business. I'll the last of number business. where more had Again, that it significant of would we're describe continuing business. few move of in and question. kind invested. in last just the years, years. times as pretty the the And give in we've great the a prior forward, said growing year. we returns continue the invest margin And And the as X we've a over we're each going to in We've So invest heavily to from this which is higher is invested in margins business

importantly, we've of organization, investing invested invested development to in technical our and in most in all, First workforce, of recruiting and the extraordinary professionals leadership workforce. our we've

deliver And forward. way differently we investing as in significant to now we'll that business. deliver Secondly, transforming we're our we deliver it are the in our it benefit very that and and then go looking expand actually us margin we very we the to work, have future, think

expand and or is business, to we've We our have that base said and looked this. design science the of of knowledge our engineering

program it we're $X.X and we've our the engineering XX% investment significant grown past $X actually now work have we represents business that platform. and that advisory NSR referenced that this see growth that Lara making performing which management our the of next business in to year, design, growing that in XX% And years, billion business. is to other X a for management double in of of look an our program business last in rest that the and our and in vision make Our future. We've billion have business. to investment and going about the advisory comments so business, double-digit we're -- made in so

our again, of So growing that as in are it's terms it's thoughtful not as the It's they in margins very -- going we're have. being that fast investing not as future of business. the

go Our beyond margins XX% target. the will well

Our line from with America. the next of Feniger Michael question will of come Bank

Just hold the to what I some concerns to there public it to new new tailwinds tighter of those get bigger side? Are love be could know as am picture There but federal a kind risks hear we early you're curious hearing here into of of sense under starting days, over budgets are Does on a administration. turn it's any heading customers scrutiny. the around some this I you Troy, funding or and as would the your are we're Troy, concerns out administration? of that back on just pipeline? from

Yes.

hearing moment, we're So the at not clients. directly anything from our

coming thoughts of the that impact just sort think I election of the around itself. the of election from are sort the actually process

what a federal election government. of what the that across things. on we to to -- period what insight is what is we One workforce business. But And of exists agile know our is is this, perspective, is we markets. fact time, than that made new agenda fungible understand so And to of create a investment federal the XX% federal very based We know about agenda that does don't my of the have a be going for we're from our we today. our reference going have -- clients over our into the certainty any do couple clients the

majority in clients represents The know other clients. our that comes or municipal and And supported we to there local thing well continued needs be investment from predominantly federal funding city our is the where and infrastructure. than investment state a that private clients by that that of more XX% of And clients do that work.

going improving in we invest that government to going we in know infrastructure private when So our base what those manufacturing awful the the to and know for supporting lot of in the then roads, all the aviation, U.S. the other you're and net agenda have an permitting governments invest increased they're do And of if the manufacturing thing that there reform that also if on States, because we we on the the going there's investment accelerating to of be years, And degree believe look sort administration or And certainty on on infrastructure an we need going going to have priorities in the ports, of a manufacturing in investment. meaningful about years. and that infrastructure that agenda. that in few there that on as the United U.S. you're rail, permanent what investment of clients is infrastructure. to is new have if -- of money reform, base, based to the and forward, is great next their the next returns is strengthen is the the the are election see we spent actually that's X to

the and focus there's think of our I uncertainty need infrastructure, environment we clients about good think of the -- very So, the we I future. on kind some forward, given for just of feel an focus of when the look

some the that just mention like of Troy. XXXX, second things there's NSR to NSR were half in in holding back on growth there growth in were And that it a acceleration 'XX. Helpful, And QX. of sounds

So acceleration pipeline the Or half, bigger recompete have just half pickup certain to a require or seeing the wins you kind first or acceleration? and half second the on on get we're of do curious that half visibility it now? second in in that that second does

on have the as answer on. the of work of market with -- by half to frameworks. work has visibility some that driven going that, out, been And Lara to some that we're election, is second has work will take coming second kind contract result the acceleration. that good simple of of that those The of been the through in awarded the has and agendas changing out and year And that as even the of gives us awarded confidence Yes. a been that's frameworks pointed we half the

terms just the the which year. terms us X of continued And the but then confidence NSR also in growth this in weeks success, second quarter, the the happened the in half had of confidence of we've confidence in in also year of in what's gives first in

that X 'XX, more in is is actually Gaur,just view, just in, 'XX, to free -- in could I flow, If cash Great. expand Can 'XX. of the that you XX% sustainable. your sneak NSR that

going that how Just curious of free about cash NSR conversion on to think flow forward?

fantastic thank Sure. acknowledging Mike, that XX% to for NSR you and Not a enterprise of problem. accomplishment for the growth.

We time. have are ongoing XX,XXX at any to XX,XXX in projects that point

core even what and for that investments of levels to and And we continued great of best we're XX-plus the very bode in, unheard is cash very to precise cash margins XX% high conversion, going margin -- It's things great to at delivered, All that DNA that that those rate. out embedded to industry-leading be the expansion professionals So to on focus tenets. will us that the the operate. percent. rate. expectations point, at our confidence of on. XX% conversion in exceptionally our including move is dividends, land leading achievable, culture driven well hard us our on provides more a margin forward, conversion XX to number continue especially we pay these your And conversion importantly, have results deliver be will year as it What cash to that's how results, has it's year is X that the say of

line take We'll from of next question our Fisher with the Steven UBS.

kind I you pursuits. pipeline follow to you I that thought the if growth the you you're of growth us of up the what's rate wanted heard rate have. just remind the in XX%. I seeing the larger could on just But mention pipeline in

quarter, pursues. and sure that program differentiating kind last general in but was not maybe management was pursuits I'm of program think if between I just management. large it XX% you're

a on So rate? little to just trying pipeline clarify the growth bit

this that is question. Sure. take Gaur. I'll Steven,

recollection. your In right. You're

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FY confidence it us of into 'XX. we a So as lot gives march

maybe also a sort bit And short-term sector and versus of is Okay. sector helpful. public That's as still little a private around rates open long-term an then for policy outlook and interest question well. the question rate

see and how here? public you of about the next from there do couple for private the do business sector So the you versus on influence see years, when private sector think sector you your how

resiliency climate in agenda seen the economy infrastructure. for support There's going So there's -- of for of going a to around support Steve, obviously, to optimism, a clearly the the that's there's events. the we and and both. -- expansion actually need addressing of sustainability impact you've like on kind concerns in a things certainly have around it's as the again, need infrastructure,

clients. it private it that by made is being also investments our the the exemplifies as need really governments have that need our look we places insatiable for look customer significant sort at around we to you And optimism see So the really that pipeline. But amount we And base. see simple in and within energy. -- for of of our private

pipeline. it, around that of invest it optimism private larger across our have increase entire clients when have so in we're will the ambitions. to reform, support we an infrastructure sort is look hopeful growth to for appetite the need returns The thing permitting that their fact, that private of in and even clients we with And will our they

where the having Is did that exactly you Actually, it where the reform, talked permitting impact follow-up just ask sector see you there. since business. I to the want on you biggest a side? it see private your you on about

is work is from see you No. across a in can a of something I of has permitting whether to the years, the look it it's infrastructure of take that at projects, publicly start significant done of work funded I all of X industry regulatory amount that get we to construction, government portfolio private way that mean take that's a sort anywhere sort or process look review the process. design do. answer X statistical all you average. and But sort When entire of the on to even when at there beyond that, the through that to goes from

the actually that an simplifying opportunity see we as as So well. for process.

right So of delivery permitting, into it it's also but the extends the project.

significant And a really so opportunity. it's

Vertical Dudas We'll take the Michael question our line of next Research. with from

it's your can end new your more where much getting or In looking of to mostly there you've created in you're sure be to driven advisory adding involved to especially going government with is from the final by some that grow, that away grow I'm as from business. current and clients Water is you're just services? Or clients? your and beginning be that account type opportunities business -- existing the but base program management more management both, impactful, your to program looking non-U.S. and

we Yes. new our sector. business coverage internally private the X Thanks but been player, obviously also it's of answer your a terms to and It's for for -- possibilities new and got have. the in we've aspiration we the business of us of excitement weeks. Jill But And there's question, such flying obviously, about And the both. question, in Mike. start across clients. off leading externally have a to the strong opportunities sort water where positivity we're this lot that this many federal municipal leader, very Huckins any is Look, new and been in segment there's

X.X of U.S. example, certainly So serving over million them the water populations operations. utilities core the take opportunities if in modernize and look of there's at municipal -- we market substantial people, there their for municipal where require the investment to alone, there share XXX are at in each markets, to space, more digital the

challenges clients of existing supply So all optimization. these in order of have terms

there's the take for benefit rate clients win us. And around there space will anticipation that the in time fact business augurs positioning So our more just we've wave existing earlier for that's Again, moment, mentioned of also opportunities bag and mean, clients clients business is terms I directly the of established. well new share important the coming these those that the right to the our the with market U.K., at this frameworks. and other very in program. this municipal work I from the many in new are with

opportunity, we're timing poised we're on and up super it. to the of really the advisory about standing capitalize So excited

question Our next will Truist from with the come of Securities. Wilson line Kevin

expecting be spending & level that to reinvestment margins or business, in Water wondering, speak the the can on the of the sort but of Environment and investment Advisory I you may that to weighs required area, -- potentially I'm you're lower the up level term? of development margin think you Following on understanding the business spoke sort how shorter higher business of at in

take question. that I'll Gar. is this Kevin, Yes.

NSR our less great our it's this now almost that our X P&L organic and record, overall on lower years that including management a to it X% just very was make comment you is we if at were we're would based If program to we've through organically. able of look in this program terms smart our of drive right? investments space. professionals investments. investment, resources X.X, track that and type than expensive of of to overall very by XX% NSR, market to which management be attracting do our level comparative business, M&A, a In the proven of ago,

separate make that what we what specific all ourselves confidence nobody forward our thought at investments, continue from to We XX% march in possible. We're years individually continue ROI, build high was we that XX-plus break going is going are continue to an margin few on industry out investments, and when XX% through in say organic us ago, we investments ago, fact, XX-plus the very look it's percent. is again, all drive to they're XX% the thought and to what statement. Two because included this, the gives possible. to comparatively years But income low to be not it's to deliver close nobody guidance and investment and So cost. don't but in And leader percent. was delivery. A our

question, could why? That's helpful. services Are of consolidation optimization And biggest be infrastructure your then to firms. see as to related think a to peers like speak portfolio if or And sort creating scale peers from wondering so, that you opinion? distracted. being you potential services, second AECOM would to maybe something share what if to in you gain I'm among risks if that, my opportunities is And M&A for extent do can the benefits? space opportunity be the What there

can but it's difficult are, about ambitions to talk I about other what yes, people's our talk own. So

going deliver that it make the the do less people work. to we fact investments so And investments in capability. term, I you business that first transform there business more marketplaces going to is, think to if so. sense in a there trends do some And We believe we you do say industry grow people the your do a this Does the deliver need in to where, that long an lead some the wouldn't is And is do is all, even are going work. need to business. need are with don't to are a we're again, making future question. to We acquisitions to do made #X way be grow, to There of that kind a keep could and in all, serve, to in of that of the to to the need all of it? scale invest we if There fact, you're way think trends. really in amount you're us. acquisition in that there this so of M&A, that first up is acquire you're you to about need same are The the of already

the the we're in that continuing say, expanding this and at So vision growing deliver way future we we organically our and to actually program by management. by our transforming advisory business extend going look how focused work of to and clients grow the growing serve on we're

to organic where So we focused. is think it's investments important be

the are look the making when Now acquisition market, at issue is an very other you in today's expensive. prices

that, last we're to make XX%. so in just growth just least we're earnings excess do return especially that at the terms it X of we're in compounding delivering any of our EPS delivering doesn't deploying compound when so the capital actually existing years, And -- in and model, again, sense

focused. where others see the so the management going business that's greatest And deploy an that in the to there also we have we're opportunity we resource be we view to described. would is but time. continue time And Possibly, just not for that's the that where detract scarcest capital. Is And our actually opportunity industry? in in If competitive were acquisition, advantage. spending is time what management absolutely to create management a is from how to I dedicated to large we to do their it participate a

So our focus. that's

of Our with from the question will Thalhimer & Thompson, Adam Company. next Davis line come

that up are Did caution curious the any see private improvement the guys to you leading public in if was or from case, election seeing months of quarter. just And there? Nice the clients. the you sector in signs U.S. any I'm

they clients, our sector were were they clients. signs didn't whether from really public or see any We whether private

when as the project larger the One that on lot larger a the of contract bid project focused to did observe, process to and the said that a of little award awards to takes things bit and focused you're and we've been is winning we and this, on we awards, though, that is process longer. process

see So in what as programs. the or we what business result our we things larger describe a larger we a as focus iconic that that saw kind of anything on of didn't really our was matter, unusual, but winning

state management on reflection a was whole. Curious that the that of industry Okay. then one-off the if I called Or you a as Interesting. that And wanted to issue issue? construction ask is out. of the a

was a That question. issue. that take I'll Gaur. is one-off this Adam,

a ever. my remarks, time a try in as any experienced away. to my will onerous we push that where I risk haven't situation prepared client to there's walk And We said will on us, comments,

time, owners XX,XXX interest not X something we no material. I again, the We have at projects thing point alluded any And have in to is, ever is earlier, risk. taking ongoing XX,XXX to given and in great project

we his management mentioned growth. we to to a continue employ Troy Kevin, in deliver continue So CAGR importantly, as X-year and compounded our but will XX% comment manage risk organic will to And period. over EPS

the I'm And would it's something again, be it's I to willing culture to add and recognize going just organization again, not itself. this want how that is that we detriment continue the important not about necessarily project uncomfortable comment, think risk the chase make, really revenue, chase decisions in of Gaur's it's And into I that, the term. are I business your to also to we're thoughtful we is just manage think the manage built around our growth the But to risk when we that sometimes in projects. with we're revenue where to, long not to

So of become our important what's again, that's a part really culture.

that to a theme, could then the for And couple you years? of case next on Construction opposite better that is real the Management quickly, just to actually staying the about make business get

And from the of it's I to construction about you phase sudden, preconstruction won great and expands you we the and projects time win take for of significant a and backlog move amount have phase next a on the anywhere in have the your a to startup months start-up that or course then quarters, no is we've materials think that years. don't reason for when But they We it are phase, then better X that margins And into you deliver visibility couple X get projects, where award They good show X and of of work the pretty over projects, they're a preconstruction. a few significant you during them. that basis. have point and that last sort But to future. management, that getting you the have years. the typically smaller as there's in phase all year. doubt up from next of can

that that business significant some phase. preconstruction fairly has And so in wins. We're had

the become we that as it time. backlog a but short And as so isn't will believe the it gives period it impression perhaps . in visible strong be, to of

Troy turn for will remarks. closing the that question-and-answer back call conclude over And I'll our session. to Rudd, CEO,

everyone, contributions people today. call and all you, close want just thanking they're at joining talk to that thank by exited what for Again, into doing . you. very thank Thank effort fiscal And for the significant already the the during I And year. of they to start and year. this of you course entering Again, we'll this thanks is next again, new we the quarter. all. you I AECOM And

today's you Thank for joining call. all

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