Earnings Call Transcript - ACM Q1 2026

Operator, Operator

Thank you for joining us. My name is Jay, and I will be facilitating the conference today. I would like to welcome everyone to the AECOM First Quarter 2026 Earnings Conference Call. I will now hand over the conference to Will Gabrielski, Senior Vice President of Finance and Investor Relations. You may begin.

Will Gabrielski, Senior Vice President, Finance, Investor Relations

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 statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. We use certain non-GAAP financial measures in our presentation. The appropriate GAAP reconciliations are incorporated into our materials, which are posted to our website. Growth rates are presented on a year-over-year basis unless otherwise noted. Any references to segment margins or segment adjusted operating margins will reflect the performance for the Americas and International segments. When discussing revenue and revenue growth, we will refer to net service revenue or NSR, which is defined as revenue excluding pass-through revenue. NSR growth rates are presented on a constant currency basis unless otherwise noted. Today's remarks will focus on continuing operations. This morning, we announced the completion of the review of strategic alternatives for the Construction Management business. We have concluded that we will continue to own and operate the business. Both our reported results and financial guidance are inclusive of construction management. Also, as a reminder, our year-over-year growth rates were impacted by fewer workdays compared to the prior year first quarter. Accordingly, our discussion will include adjustments to improve comparability of results. On today's call, Troy Rudd, our Chief Executive Officer, will review our key accomplishments, our strategy and our outlook for the business. Lara Poloni, our President, will discuss key operational successes and priorities; Gaurav Kapoor, our Chief Financial and Operations Officer, will review our financial performance and outlook in greater detail. We will conclude with a question-and-answer session. With that, I will turn the call over to Troy.

Troy Rudd, Chief Executive Officer

Thank you, Will, and thank you all for joining us today. As our first quarter results demonstrate, we are off to an exceptional start to the year. We exceeded expectations across every key financial metric, including record first quarter NSR, adjusted EBITDA, margins, and backlog. Backlog increased 9% to a new all-time high, fueled by a 1.5 book-to-burn ratio, even while managing through an unprecedented 43-day U.S. federal government shutdown. I should note that we expect award activity in the U.S. to pick up with the recent passage of all critical federal funding bills. As a result, our visibility is high, and we are increasing our full-year financial guidance, which I will discuss shortly. Across the business, our focus remains on extending our competitive advantages. We have a strong moat that is built on our scale, technical leadership, trusted client relationships, and domain expertise. Our target investments in program management advisory services, AI, and technology position us to unlock greater value for our clients and deliver on our multiyear financial targets. Underscoring our confidence in the long-term value creation opportunity, today, we also announced an increased share repurchase authorization to $1 billion. We repurchased more than $300 million in the first quarter and expect to continue to deploy our strong free cash flow to deliver greater value to our shareholders over time. Turning to financial performance. Net service revenue increased by 5% when adjusted for fewer billable days in the period. The segment adjusted operating margin increased by 100 basis points to 16.4%. This is a new first quarter record and reflects the ongoing benefits of our strategy and high-returning investments. These investments include key hires to drive growth in our advisory business, to build on our technology teams and capabilities and in business development to capitalize on strong demand. Reflecting this outperformance, both adjusted EBITDA of $287 million and adjusted EPS of $1.29 exceed our expectations. As I mentioned earlier, we ended the quarter with a record backlog, and our book-to-burn ratio has been above 1 for 21 consecutive quarters. This consistent performance is a function of the value we bring to our clients. Our win rate remains strong in this quarter, especially on large pursuits. I would like to highlight two key wins that provide greater insight into how we are advantaged in the marketplace. First, we were selected as a delivery partner for the 2032 Olympic and Paralympic Games in Brisbane, Australia. Our selection is a testament to the trust and credibility we've built with clients in delivering complex infrastructure projects on a worldwide stage. It also underscores the benefits of combining our leading technical expertise with programmatic delivery capabilities. Further, this win builds on our proud history as a critical infrastructure partner to the Olympic Games across the globe, including our ongoing role as the infrastructure delivery partner for the LA '28 games. Another great example is our selection to provide the engineering services for Scottish Water's multiyear capital investment program, which represents one of the largest capital programs in the world. This win demonstrates several key advantages. For one, we're the world's #1 ranked water firm. In addition, our rapidly expanding technology roadmap was key to our selection as we were able to demonstrate a tangible value opportunity from AI and technology over time. Our emphasis on bringing best-in-class technology-led solutions and the overwhelmingly positive client response is a growing trend in our business, and we believe this win serves as a blueprint for the value we expect to deliver from our investments. Turning to a discussion of our end markets. In the U.S., market conditions are strong. The recent passage of all key federal funding bills for fiscal '26 provides greater certainty for our clients and for us. Additionally, over half of the IIJA funding remains to be spent and progress is accelerating for the multiyear surface transportation authorization. Our expectation is for another sizable investment that will build on this momentum and support a growing U.S. economy. Investment in the private sector is also gaining momentum. This is evident in the booming data center market where we benefit both directly and indirectly from the infrastructure opportunities. This includes water, facilities, energy, and environmental services, all sectors where we lead our industry. Additionally, incentives in the One Big Beautiful Bill and ongoing reshoring initiatives are creating new opportunities with several years of visibility ahead. Turning to international. Near-term trends remained varied, but strong long-term demand for infrastructure investment is undeniable. In the U.K., we had the significant Scottish Water win, and the AMP8 water cycle is underway. In the Middle East, we are successfully navigating the reprioritization of funding with substantial wins in the first quarter that underpin our outlook for this year and beyond. This includes our new leading design role on the Dubai Metro and ongoing growth opportunities in the UAE and across Saudi Arabia. In Australia, our backlog reached a new multiyear high and included strong wins in the quarter, notably in the transportation sector. Offsetting this in the near term are pockets of weakness resulting from geopolitical and funding uncertainties. Importantly, our efforts to reposition across international markets are paying off as our 25% backlog growth and record pipeline demonstrate. As a result, we expect revenue trends to improve as the year progresses and into fiscal '27. Globally, national defense budgets are meaningfully increasing. This is a key driver for our business as defense represents approximately 10% of our NSR. The U.S. Department of War is our largest client and spending is set to increase for the next several years. Further, our other key clients are also ramping investment, including the U.S. Coast Guard and the broader DHS. President Trump also reaffirmed the U.S. commitment to the AUKUS trilateral defense pact with Australia and the U.K., and we are pursuing a substantial pipeline. Before turning the call to Lara, I want to provide an update on two strategic initiatives. Beginning with technology and AI. We've completed the integration of our September acquisition. We have already doubled the size of our team, and engineers are deeply engaged and collaborating to extend our capabilities. The technology is now live on our projects, and the initial performance results achieved have matched our expectations. Our confidence in these investments and the potential positive benefit of the business is getting stronger. Every day, we're uncovering fresh use cases and new opportunities. We're deploying our resources to tackle new problems. And in doing so, we are creating significantly more value for our clients. All of this rests on the foundation we've built, namely our technical leadership, the deep trust we've earned with our clients over many years, and the domain expertise we have at scale. As it relates to the construction management business, we've completed our comprehensive review of strategic alternatives. We concluded we will continue to own and operate the business and believe it is exceptionally well positioned for the future. Backlog is strong and the pipeline continues to reflect a robust set of opportunities. As we look ahead, our confidence is underpinned by our successes and growing backlog. We increased our adjusted EBITDA and EPS expectations for fiscal '26, which includes operational outperformance in the first quarter and the benefits from capital allocation. We also reaffirmed our long-term value creation algorithm, which includes expectations for annual revenue growth of 5% to 8%, achieving a 20% margin exit rate by fiscal '28 and delivering mid-teens compounded earnings and free cash flow growth per share. With that, I will turn the call over to Lara.

Lara Maria Poloni, President

Thanks, Troy. Echoing your sentiments, our teams are proud of our many accomplishments to date, as well as how we are redefining the future of infrastructure delivery. Demand for infrastructure has never been greater. Rapid urbanization has pushed 45% of the world's population into cities today with projections showing dramatic further growth. Even in advanced economies, aging and inadequate systems are under severe strain. The U.S. alone faces a $3.7 trillion investment gap over the next decade. Meanwhile, Energy Systems face mounting pressure from data center expansion and widespread electrification. These dynamics are intensifying, and we're deliberately positioning clients to capitalize on this demand. This includes our ongoing investment to expand our higher-margin advisory practice attacking what we believe to be a $50 billion addressable annual spend. Our advantage is that we combine our deep infrastructure domain expertise and technical leadership with superior strategic advice to deliver greater value for our clients. This is a distinct offering and fills a large gap in the market. We have made substantial progress on our goal to double this business. The team is growing and hiring activity is expected to continue to accelerate through the year. Importantly, our pipeline is also expanding rapidly, and several recent wins demonstrate our value to clients and how our addressable market is expanding. Let me highlight two examples. First, in the U.K., we were selected to advise the water industry to advance business plans for the AMP9 water cycle. This is an important win and a great demonstration of how we are positioning to help shape our clients' investments. Second, through advisory, we are positioned to support the trillions of dollars of private capital seeking to invest in infrastructure. For these clients, we can accelerate and derisk their investments and achieve better outcomes. This is a valuable benefit that also extends to our public clients who are increasingly partnering with private investors. As is evident, we are expanding the value we can deliver for clients, which is driving strong performance across the business. With that, I'll turn the call over to Gaurav.

Gaurav Kapoor, Chief Financial and Operations Officer

Thanks, Lara. As first quarter operational outperformance and financial guidance demonstrate, we continue to extend our track record of exceeding our expectations and creating a more valuable company. A few highlights from our performance bear repeating. First, we overdelivered on the financial expectations we provided for the first quarter, and we are raising our guidance for the full year as a result. Second, we saw strong increases in both our NSR and margins. This serves as clear evidence that we are scaling our advantages and expanding our operating leverage. Third, our backlog and pipeline are both at an all-time high. This reflects our competitive advantages, the strength of our end markets, and continued expansion of our addressable market. And finally, we continue to execute our returns-based capital allocation priorities. After investments in high-return organic growth and efficiency initiatives, which are expensed through our margins, we returned nearly $350 million to shareholders in the first quarter and over $3.3 billion over the last several years. We're also pleased to announce an increase in our share repurchase authorization to $1 billion. Going forward, we'll continue to deploy capital thoughtfully while maintaining a nimble balance sheet so we can maximize the benefits of our strong operational performance for our shareholders. Turning to our segment performance. In the Americas, NSR increased by 9%. Growth was broad-based, but stronger in the Eastern states and Canada, where budgets and visibility are best. The adjusted operating margin was 19.9%, up 120 basis points from the prior year. This includes the operating leverage created by strong growth, mix shift to higher-margin services, and the benefits from deploying technology to deliver efficiencies. Turning to International, NSR was essentially flat after adjusting for fewer billable days. This was materially consistent with our expectations, as we've discussed for several quarters, the slower level of activity in areas including the U.K., Australia, Transportation, and in Hong Kong. While international segment growth will likely remain subdued in the second quarter, consistent with the expectations we had at the start of the year, the successful repositioning of the business to growth areas resulted in a 25% backlog increase in the quarter, and we expect growth to pick up in the second half of the year as a result. Turning to details of our guidance. We are increasing the midpoints of our adjusted EBITDA and adjusted EPS guidance ranges for the full year and now expect adjusted EPS of $5.95 at the midpoint of our range as compared to $5.75 previously. This increase reflects the operational outperformance we delivered in the first quarter, the benefits of our capital deployment strategy, a lower expected tax rate, and the strong visibility from our record backlog. I want to share a few details on phasing to help with modeling. We expect second quarter NSR and adjusted EBITDA to approximate 24% of our full-year guidance. We also expect the second quarter tax rate to be approximately 12% to 13%. With that, operator, we are ready for questions.

Sabahat Khan, Analyst, RBC Capital Markets

Great. Before I dive into the fundamental aspects, could you share some insights on the decision to retain the CM business? Clearly, there’s a strategic rationale behind that. Also, could you discuss how the demand environment in the U.S. has evolved compared to last year, especially considering the current stability and the priorities of the U.S. government? I'd appreciate a broad outlook and any potential synergies from maintaining the CM business.

Troy Rudd, Chief Executive Officer

Thank you. And I'll take the first question with respect to construction management, and then I'll turn the second part of this question over to Gar. So first, just we said that we would evaluate options last quarter, including the sale, but that also always included ways that we would drive more value in the business and see in the business and the combined AECOM business in general. As we went through that process, a couple of important factors were key to our decision. One is recognizing the construction management business is a high-quality business. In fact, I'd consider it a strong industry leader, and it does have a great backlog of opportunities in front of it. It also has a great cash flow profile that creates the ability for us to invest. But most importantly, we see substantial opportunities resulting from a closer connection between the construction management team and the rest of AECOM. That alignment and collaboration, we think, will give substantial opportunities beyond where we see those businesses operate today. A couple of examples are the work that we're doing together on the LA '28 games, and now we'll begin that work on the Brisbane 2032 games. So we see great opportunities for the business to work together, and we were pleased to get to this decision quickly.

Gaurav Kapoor, Chief Financial and Operations Officer

Sabahat, this is Gaurav. Thanks for the question. I'm glad you raised it. We're seeing continued strength in our Americas market, particularly across our design business. All of our end markets from transportation, water facilities continue to deliver very strong growth, including what we reported in the first quarter, which was 9% for our design business. If you look over the last 2.5 years, our organic growth has been very strong, leading to enterprise at high single digits. When we continue to dive deeper into the markets, our pipeline continues to be very robust. It's up 20% year-over-year at the end of the first quarter. In fact, the early stage pipeline for us is up 34% over that same time frame, while IIJA funds, as you guys are all aware, less than 50% is still unspent. What sometimes gets lost in some of the numbers reported is our business, where we have and have positioned, this very healthy environment, funding environment on MSAs and IDIQs within our transportation, our water, and our environment business lines. These IDIQs and MSAs are not generally part of our awarded or contracted backlog because it's call off task order work and provide a lot of support, book-to-burn support just during the quarter. At any point in time, we have between 35,000 to 50,000 contracts ongoing across the globe. Given that backdrop, we have a lot of confidence as we look forward into the near term, not just FY '26, but beyond that; the growth drivers continue to be well in place for our Americas business.

Andrew Kaplowitz, Analyst, Citigroup

Troy, just regarding how to think about AI's impact on AECOM, I'm just trying to understand a little more what you're saying today. So to be clear, in your opinion, does a new value model shaped by AI not lead to shrinking revenue for AECOM? And then when you look at that EBITDA to employee calculations, it's up as you said, I think, 50% over the last 5 years. Does that rate of improvement now shift up substantially? So for instance, you could gain 15% or more productivity in the year from AI? Any thoughts on all that?

Troy Rudd, Chief Executive Officer

Yes, Andy, that's quite a broad question. Let me begin by highlighting that our clients consistently seek more value from us. When we are able to deliver that additional value, they are willing to compensate us for it, whether that's through fees or more work that allows us to extend their funding. The principles required to succeed in this business have not changed. It starts with building long-term trusted relationships with clients, having exceptional technical leadership—which we believe is the best in the industry—and possessing deep and broad domain expertise. Technology has always played a role in the evolution of our industry, and AI is simply another progression in our technological investments. This enhances our foundational attributes and opens up better long-term opportunities for us. We're currently experiencing strong acceptance from clients, as illustrated by our work with Scottish Water, where we built a relationship through an inclusive bidding process. We showcased our essential attributes and, more importantly, demonstrated our ability to leverage AI to transform their thinking and design processes for the future. We're optimistic about our investments because fundamentally, if you create more value for your clients, they will recognize and reward you for it.

Andrew Kaplowitz, Analyst, Citigroup

I appreciate all the color there, Troy. Maybe just shifting gears, can you give more color on how your private-facing business is doing in the U.S.? I'm sure as you know, one of your large peers seems to get a relatively sizable amount of, let's call it, advanced facilities work in areas such as data centers. You mentioned your strong positioning in data centers, and maybe it's offshoots. But can you remind us of AECOM's positioning, and do you expect to see an inflection in this private work here over the next few quarters?

Lara Maria Poloni, President

Yes. Thanks, Andy. We have one of the larger global data center practices in our industry. In fact, we grew the business 50% in FY '25, and we see a lot of very positive trends for this high growth to continue. As Troy said in his earlier remarks, we are direct beneficiaries of the growth in this segment through the work that we do, serving the entire digital ecosystem and the electrical engineering infrastructure. But we're also seeing growing opportunities in terms of the indirect work, the associated work. That includes some of our advisory services, the work that we do around due diligence, and we're performing this work for all of the major hyperscalers around the world. It also includes some of the associated water and power studies, which are critical to getting these projects moving. We remain quite positive about our continued growth in the sector.

Adam Bubes, Analyst, Goldman Sachs

Can you update us on integration of the acquired AI technology across your workflows? Which workflows and end markets are you targeting to scale via AI in 2026? Just trying to get a sense of what milestones we should be tracking as the investments progress.

Troy Rudd, Chief Executive Officer

Yes. So Adam, I'll let Gar talk you through the integration.

Gaurav Kapoor, Chief Financial and Operations Officer

Adam, thank you for that question. Specific to the integration question that you asked, we're 3 months into our roadmap, and it has actually gone exceptionally well compared to our initial expectations. Integration is complete; investments that we will make as we laid out at the beginning of the year will ramp up as we go through the year. As a result, there’s a great deal of momentum and excitement across the organization. Clients are reaching out to us to better understand how we will deliver value for them through this process, as it has happened in our industry for decades. Anytime there has been a technological inflection, it has created a higher TAM for everybody. Profitability has always gone up when things like that have happened in our industry, whether it be when going from paper to CAD designs or BIM modeling. Specifically, our focus is on the facilities market because, as we laid out back in November, our initial roadmap is focused on disciplines and asset types where our clients have good existing commercial structures advantageous to everyone. At the same time, these solutions create workflow operating leverage efficiencies impacting all of our business lines. From a metric standpoint, a key metric that we have now started sharing is employee NSR and employee EBITDA profitability by headcount. This mirrors what Troy alluded to earlier. When we step back and look at what we've accomplished over the last 5 years, it has been making investments in differentiating our competitive edge platform. This is investment in our clients and our professionals; it continues to drive better profitability and NSR growth, and this will be no different.

Troy Rudd, Chief Executive Officer

Let me sort of give a little bit of background on the international markets, and then I'll have Lara answer this specific question. About 18 months ago, there was a substantial number of elections occurring worldwide, particularly in the international markets. With any of these changes in government or agendas, we recognized that we needed to reposition the business to take advantage of those changes. Now those agendas are being fixed, and funding is coming to market for the infrastructure priorities of foreign governments. As a result of our repositioning, we're winning and building significant backlog to fuel the future of the business in '26 and beyond. Now Lara, I'll turn it over to you.

Lara Maria Poloni, President

Yes. I think as Troy just explained, one of the examples for the quarter was the Sydney Metro win in ANZ, which highlights that we are now seeing an uptick in the next wave of infrastructure investment. The wins in the quarter demonstrated that upturn. The rest of the wins were well balanced, such as the Scottish Water win in Europe, and Middle East wins such as the Dubai Metro. There were good balances across other segments of our business as well.

Jamie Cook, Analyst, Trust Securities

Troy, not to continue on the AI topic. But has there been any progress in communicating with customers regarding opportunities to renegotiate projects? Or is that more so on upcoming projects? I wonder if that could be an incremental positive to numbers over the longer term. And then my second question, Gaurav, on cash flow in the quarter. The cash flow was a little weaker than I thought. Can you clarify that and your confidence level in the cash flow for the year?

Troy Rudd, Chief Executive Officer

So Jamie, we certainly expected some questions on AI. When we're having discussions with our clients, they typically want to know how they can work with us to deploy something more valuable. It's not a renegotiation; it's more of a discussion about how we can find ways to do more work together because we're bringing them value. Our clients recognize that we might not have had a contracting method that makes sense, so they are discussing how they'd like to move to a type of contracting that acknowledges value. For instance, moving from a cost-plus model to something that resembles a fixed fee is a mutually beneficial idea and revolves around the value discussion. If you create more value for your clients, they want to pay for it and do more of it.

Gaurav Kapoor, Chief Financial and Operations Officer

Jamie, this is Gaurav. Regarding your question on cash, it was quite consistent with our expectations. Historically, over the last 5 years, we’ve properly phased our cash flow. In our experience, the first quarter approximates about 10% of our cash outlook, which was what this quarter reflected. If you look at the last 5 years, first half approximates 30%. Our first half does have some meaningful large disbursements related to compensation matters and large vendor software payments, specifically in the first half of the year, which is normal for us.

Sangita Jain, Analyst, KeyBanc Capital Markets

Now that you've decided to keep the construction management business, do you have plans to run it differently? I know it’s just 8% of the NSR today, but do you think it can grow more as you synergize it with your design business?

Troy Rudd, Chief Executive Officer

Yes, we're looking to run it differently. We aim for a closer alignment and find opportunities for collaboration across the rest of our business. Combined program management and construction management create significant opportunity for us. They deliver greater value to customers compared to traditional offerings. This perspective is pivotal for us, and we expect to advance our competitive advantage.

Gaurav Kapoor, Chief Financial and Operations Officer

To your question on the design backlog for fiscal 1Q, the shutdown impacted our fourth quarter, as we indicated, and that generally leads to high levels of awards. Therefore, this quarter we didn’t see the timely pickup we were expecting due to early year uncertainty. We now expect that with a resolution in the Federal award activity, the second and third quarters should reflect the expected pickup. In the state and municipal budgets, we see them quite healthy, especially in larger markets like California, Florida, and Texas, with much better tax projections for FY '25 collections than expected 6 or 12 months ago.

Michael Dudas, Analyst, Vertical Research

Troy, as you've indicated, we've talked about the strong book-to-bill and the pipelines. How has the mix been historically regarding design, project management, and advisory? Are we seeing tangible evidence of that? Back to your comments on contract pricing, is there a significant change in the incoming orders of fixed fee versus cost plus and timing of materials? Any meaningful change we can expect?

Troy Rudd, Chief Executive Officer

I'm answering the second question first. We have not noticed any material changes concerning pricing or discussions with our customers. When discussing large programs, it's premature to consider changes. We notice that what we bring to customers is well received and is perceived as additional value. This positively impacts our positioning, and it will improve our margins over time as we enhance our delivery through technology. Regarding your first question, we're actively driving our transition towards a broader base of business, including advisory, program management, and design. Our program management business continues to grow faster than our design business, and advisory is also growing rapidly. Over time, we're slowly changing the mix towards advisory and program management representing about 50% of our business.

Judah Aronovitz, Analyst, UBS

I wanted to ask about international. Given some of the improving trends you've talked about in Australia and the Middle East, should we expect a continued trend of book-to-bill greater than one? In terms of the margins embedded in those bookings, should we expect a margin step-up in international from some of these bookings? Or should we expect a similar margin profile?

Gaurav Kapoor, Chief Financial and Operations Officer

Judah, this is Gaurav. If you look at the last 6 months, we’ve achieved very strong book-to-burn rates. With that strong backlog growth from Q4, it's important to evaluate the pipeline. Our pipeline remains robust, up double-digit percentages, particularly in early-stage metrics. We anticipate that our international sector will see increased growth, especially in Australia and the Middle East. While we expect headwinds from working days in Q4, the second half is poised for improvement based on this performance. We are projecting gross margin expansion between 90 and 100 bps at the enterprise level, expecting solid performance from both Americas and International.

Judah Aronovitz, Analyst, UBS

Where do you think we are regarding the Americas? Is there acceleration potential, or should we expect steady growth?

Troy Rudd, Chief Executive Officer

We're seeing good trends in our Americas business, with our backlog up 3% year-over-year. Our pipeline is up 20%, and early-stage pipeline is up 34%. Given the IIJA funds available, we have strong confidence in delivering consistent organic growth of 6% to 8% this year.

Nandita Nayar, Analyst, Bank of America

Could you provide additional color on the 1.5x book-to-bill in the quarter, specifically the 2.3x in international? You mentioned impressive wins, but could you break that down regarding the market health and how much credit you’d attribute to leveraging AI capabilities?

Gaurav Kapoor, Chief Financial and Operations Officer

We exceeded backlog growth from Q4 with exceptional international performance. The drivers of exceptional growth included factors like the geopolitical landscape, where our clients were seeking stability amid numerous election cycles. It’s apparent that demand for our services far exceeds current funding. Our technical expertise and competitive positioning resonate with clients, allowing us to secure significant contracts. The Scottish Water win exemplifies this, showcasing the value we bring to clients, including AI-driven enhancements. With that, our investments and continuous improvements are encouraging for future growth.

Troy Rudd, Chief Executive Officer

Regarding recent reauthorization discussions, we now have federal funding in place through the end of the year. We recognize that key long-term authorizations are being discussed positively as we move into '26. However, predicting the federal government’s legislative agenda is quite complex. Overall, I'm optimistic about the tone emanating from Washington. Thank you, operator. Let me conclude with two things. First of all, thank you everyone for joining us today and for the questions and dialogue. Second, very importantly, I want to thank all of our professionals and AECOM folks around the world who have done such an outstanding job this quarter, and continue to do an outstanding job delivering value for their clients. It proves it shows up in our results. Thank you very much.

Operator, Operator

This concludes today's conference call. You may now disconnect.