Transformation and Margin Expansion in Industrial Segment
The Industrial segment achieved a record adjusted operating margin of 25.1%, up 90 basis points from the previous year, driven by The Win Strategy.
The company expects a 700 basis point margin expansion from FY '19 through FY '26, demonstrating significant margin resilience even during negative organic growth periods.
The portfolio's shift towards longer cycle, secular trend, and aftermarket revenues is a key factor, with 67% now in these categories.
International and diversified industrial businesses are using cost reduction and efficiency tools to sustain margin growth amid market challenges.
The transformation includes acquisitions and international distribution growth, with an aim for 85% of the portfolio to be longer cycle, secular, and aftermarket by FY '29.
AECOM's third quarter 2025 financial results exceeded expectations with record NSR, margins, EBITDA, EPS, backlog, and pipeline.
Backlog and contracted backlog both grew sequentially and year-over-year, reaching all-time highs.
Business development expenses increased above prior year and plan, supporting strong pipeline and backlog growth.
Capital allocation included returning nearly $240 million to shareholders year-to-date and maintaining a strong balance sheet with net leverage of 0.6.
Free cash flow increased by 27% year-to-date, with $262 million generated in the quarter.
International segment NSR grew 3%, driven by the U.K. and Middle East, with an 11.9% adjusted operating margin.
Organic NSR growth accelerated to 6%, led by 8% growth in the Americas segment, the highest margin segment.
Segment adjusted operating margin reached a record 17.1%, a 90 basis point improvement year-over-year.
The Americas segment NSR grew 8% with a 20.5% adjusted operating margin, a new quarterly record.
Third quarter adjusted EBITDA and EPS increased by 10% and 16%, respectively; year-to-date increases were 9% and 20%.
Dafinchi