Despite tariffs and other uncertainty stemming from the Trump administration’s policy moves, AECOM CEO Troy Rudd said in a Tuesday earnings call that he is feeling optimistic about the president’s push for deregulation, as well as long-term demand for the Dallas-based firm’s services in the U.S. and globally.
“Given the professional services nature of our work, tariffs are not expected to directly affect our business,” Rudd said. “Over 70% of our workforce is versatile across market sectors and can be deployed to the strongest growth opportunities.”
At the same time, he attributed slightly lower revenue and modest backlog growth to those same policy impacts.
“We experienced isolated delays and deferred decisions on a limited set of projects, which impacted our top-line growth,” Rudd said. “That said, these delays are not uncommon whenever there is a change in administration and the impact to our backlog was minimal.”
Rudd noted that although “changes will be ongoing” at federal agencies for the time being, many projects that were paused due to Trump’s funding freeze have now resumed, and he was bullish about the impact of the president’s moves to slash regulations and the federal workforce.
“Deregulation and permitting reform are tailwinds to our business,” Rudd said. “A declining public sector workforce has been a secular tailwind for our industry and increasingly a demand-driver for advisory and program management services.”
Plus, the construction industry is still benefitting from the Biden-era funding boost. Less than a third of the 2021 Infrastructure Investment and Jobs Act funding has been spent, according to Rudd, and both parties are broadly supportive of infrastructure investment.
“Aging infrastructure, growing requirements for sustainability and resilience and the rising energy demand create a favorable backdrop that drives inevitable demand,” Rudd said. “Infrastructure enjoys strong bipartisan support across all of our markets and is an essential element of thriving economies.”
Wins from Q2
In April, AECOM announced it had acquired Allen Gordon, a Scottish water and energy consultancy, in order to boost its U.K. and Ireland presence.
Rudd also highlighted that AECOM will serve as the venue infrastructure partner for the Los Angeles 2028 Olympic and Paralympic Games in Los Angeles.
“We are honored to be selected for an unprecedented scope that includes all critical elements of architecture, engineering, planning, program management and construction management,” Rudd said.
By the numbers
AECOM reported $143.4 million in profits for the second quarter, a huge jump from just $1 million in net income a year ago. Those earnings came on lower revenue of $3.77 billion, down 4% from the same period in 2024. Backlog stood at $24.27 billion, an increase of 3%.
Rudd noted that the results were impacted by fewer working days and some project issues.
Nearly all of the IIJA funding has been appropriated and therefore is not at risk of being cut, which gives clients some confidence, said AECOM President Lara Poloni during the call. Congress’ passage of a continuing resolution in March to keep the government open also provides its public sector clients with budget certainty for the remainder of the year, she said.
The administration has taken steps to close the U.S. Agency for International Development and gut the Environmental Protection Agency — both of which AECOM counts as clients. But there is more defense spending on the horizon, according to Poloni.
“We are well positioned to capitalize on Department of Defense funding increases, where we provide highly technical and mission critical services,” said Poloni. “In fact, our pipeline of DOD opportunities was up by double digits over the prior quarter.”
