AECOM

Thank you for standing by. At this time, I would like to welcome everyone to AECOM's second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. We do ask you limit to one question and one follow-up. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Will Gabrielski, Senior Vice President of Finance and Investor Relations. You may begin.

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 uncertainty, including the risks described in our periodic report 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 reference 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. On today's call, Troy Rudd, our Chief Executive Officer, will review our key accomplishments, our strategy, and outlook for the business. Laura Piloni, our President, will discuss key operational successes and priorities. And 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 now turn the call over to Troy. Troy?

Thank you, Will, and thank you all for joining us today. Our second quarter results demonstrate the strength and resilience of our teams and our focus on delivering the most iconic infrastructure projects around the world. Before discussing our results, I want to highlight that we have once again been named the number one firm by ENR in the transportation, facilities, and water markets. Our industry leadership, investments in our professionals and technical excellence, Infrastructure domain expertise and strong client relationships are pivotal in our competitive advantage and the unparalleled value we deliver to our clients. Turning to our results, NSR margins adjusted EBITDA and adjusted EPS reached new second quarter highs despite a dynamic market environment and backlog increased 8% to a new record. The increase in NSR was driven by 8% growth in our America's design business, which is our most profitable. The segment adjusted operating margin increased by 50 basis points to 16.5%, which is reflective of the high value we deliver to our clients, our focus on efficiency, and the benefits of our strategy. Through these margins, we are investing in and beginning to realize the benefits from our strategic priorities, which include our proprietary AI and growing our advisory practice. Backlog reached a new high in the quarter, which further enhances our visibility. This was driven by a design book to burn of 1.2 times. This performance reflects the combination of strong secular growth demand and robust funding in many of our markets, as well as continued strong win rates. This is especially apparent across our largest pursuits where our advantages are greatest and our win rates are consistently highest. Turning to our development and deployment of proprietary AI, we are delivering on all of our key internal milestones, and investments expanded in the quarter as expected. Importantly, deployment of AI onto projects and client deliverables is growing rapidly, as are the number of use cases identified by our teams. The best measure of how AI is benefiting AECOM is our largest wins. We were recently selected for a substantial re-compete for a major energy client where our proprietary AI solution was a central element of the project proposal and our competitive edge. Notably, this contract includes specific mechanisms that allow us to capture value and deploy AI to deliver greater value to our clients. Turning to end markets. In the U.S., both of the demand and funding environments are strong. More than half of the IIJA funding remains to be spent, and that number is even greater for several of our largest clients and market sectors. An example of the positive benefit of this funding is the Brent Spence Bridge Project, in Ohio, where our strong performance on phase one helped us win a sizable contract for phase two during the second quarter. As we highlighted last quarter, investment in U.S. national defense is also growing rapidly. Our pipeline with the Department of War, which is our single largest client, increased by 50 percent. The President's $1.5 trillion budget proposal points to accelerating defense spending in the key areas that we support. This includes significant increased facilities work where we are a leading provider to the Army and Navy. In Canada, NSR growth continues to be strong and broad-based across all market sectors. We maintain a leading position in this market and recent national and provincial funding pronouncements underpin our confidence that this growth will continue. Turning to the international segment. In the UK, growth turned positive with continued strength in water and energy led by accelerated activity on AMP8 and Great Grid Project. However, partially offsetting this strength is ongoing weakness in the transportation market. Longer term, there is an undeniable need for transportation investment. In Australia, trends have improved and our backlog reached new multi-year high. This includes a notable set of wins to support the $3 billion AUKUS partnership and other defense investments. In addition to defense, we also have a growing pipeline of transportation work, which bodes well for 2027 and beyond. Finishing in the Middle East, despite the near-term uncertainty, we continue to end work at a high rate, including strong winds after the quarter ended. In addition, an estimated $40 to $50 billion of spending is likely to be needed to repair, fortify, and expand the U.S. military infrastructure in the region, which presents another growth opportunity for us. Turning to our outlook for the remainder of the year, we are increasing our full-year profit guidance for the second time this year. This guidance increase reflects our strong year-to-date financial performance, record backlog position, strong funding across our core markets, and execution of our strategic initiatives. At the same time, our guidance is capturing uncertainties related to the Middle East as the ongoing conflict continues to have an unclear resolution timeline. At the midpoints of our updated guidance ranges, we expect adjusted EBITDA and adjusted EPS to increase by 7% and 14% from the prior year. Taken together, we continue to deliver consistently strong performance with a record backlog and pipeline and are confident in delivering on our increased guidance for the year and our long-term strategic and financial objectives. With that, I will turn the call over to Laura.