Q4 2025 AECOM Earnings Call and Investor Day

<unk> operating officer, and so we have a lot to cover today I'm sorry before you arrived you had the opportunity to spend a little bit of time with some of the announcements that we put out.

And we.

We have a lot of ground that we want to cover with you and we think some really important ground.

And so we're going to try and move to a little bit of the material at pace and spend some time or we think we need to make sure that we have ample time for Q&A.

So it's been two years.

Since we were together our last Investor day here in New York.

And we've been doing a lot of work to try and content continue to build an industry leader.

And we've been driven by and a really important paradigm that paradigm has been a paradigm of continuous improvement we've been doing that for six years, we've been trying to do that constantly for the last two years to drive to drive results for the organization and to make a common infrastructure leader.

That's what's driving our conversation today that.

The continued roulette relentless pursuit of continuous improvement.

So.

We'll talk a little bit about.

How we're different.

And then others in our industry.

We've we've sort of gone down a different path over the last six years and certainly over the last two years.

Where others and industry have continued down the path of M&A and growing their organizations through M&A and we've taken a very different path and a very different approach and I hope you understand for good reason as we go through the rest of the conversation.

I'm also really excited to talk about what we think is a generational opportunity.

In our industry.

So before I before I do that I.

Did want to make just a few comments about what you would've seen in our press release. This morning. Our press releases. This morning first of all is we're where we're very proud of the fact that we had a very strong fourth quarter and a very strong fiscal 'twenty five.

That was I think evidenced by the fact that we raised our guidance three times of the three times during the year and we beat that we also delivered more than half a billion dollars in capital to our shareholders through dividends and through stock repurchases.

And rebuilt our record backlog to carry us into fiscal 'twenty six.

The other thing in our announcement is we announced that we're undertaking a strategic process to evaluate the alternatives for our construction management business now.

Now, we're not exiting the construction management business because it isn't a good business. We have just made the decision that we need to make sure that we're allocating the time of our executive team our management team and the capital of the organization to the highest returning opportunities in.

In the highest returning opportunities we see in what has been our design and consulting business.

And in building and advisory business, and making sure that we actually actually execute on our plan on how we transformed the business through artificial intelligence and so that's where we're going to spend our time and our capital and we've reached that point in time, where we think there's a better place a better home event you for our construction management team and it's a fantastic business shrank.

Number two or number three in the industries that it plays in here in the United States.

It has done a great job building up a very diverse portfolio of our backlog.

One of the things that has come through a few conversations this morning, and I'll make sure we highlight is.

Misnomer, the construction management business is a low margin business.

We've been saying this for years is that all of our businesses.

Have margins that are all around the same level of margin.

And so construction management as a margin that has margins consistent with our Americas business.

So again, we think it's a fantastic business and we will go through this process and over the next 12 months, we'll we'll we'll see what happens.

Also we initiated our guidance for 'twenty, six and you'll see that our EBITDA and our EPS, we're expecting for the entire business to grow at 9% or 7% and 9% and then lastly.

Troy Rudd: The capital of the organization, the highest returning opportunities. The highest returning opportunities we see in what has been our design and consulting business, in building an advisory business, and making sure that we actually execute on our plan around how we transform the business through artificial intelligence. That's where we're going to spend our time and our capital, and we've reached that point in time where we think there's a better place, a better home eventually for our construction management team. It's a fantastic business. It's ranked number two or number three in the industry as it plays in here in the United States, and it has done a great job of building up a very diverse portfolio of backlog. One of the things that has come through in a few conversations this morning that I'll make sure we highlight is, Ms.

We've raised our long term guidance.

And in particular, our long term margin guidance.

To achieve in a margin of over 20%.

And.

Within that there's a really important message and then important messages that we are.

We are changing the paradigm of operating leverage in our industry.

And I'll give you some more details we've talked through the rest of the presentation.

So a few key messages like you to walk away with today, we're going to go through this discussion, but again just to remind you. This is what I'd like you to walk away with first of all is that over the last six years.

We've always done what we said we're going to do.

And so we've consistently announced targets in which they are sometimes aggressive targets for growth and for margins and performance of the business.

And we've consistently achieved those over the last six years.

Troy Rudd: Nomer, the construction management business is a low-margin business. We've been saying this for years, is that all of our businesses have margins that are all around the same level of margin. Construction management is a margin that has margins consistent with our Americas business. Again, we think it's a fantastic business, and we'll go through this process, and over the next 12 months, we'll see what happens. Also, we initiated our guidance for 2026, and you'll see our EBITDA and our EPS, we're expecting for the entire business to grow at 9% or 7% and 9%. Lastly, we've raised our long-term guidance, and in particular, our long-term margin guidance to achieving a margin of over 20%. Within that, there's a really important message. That important message is that we are changing the paradigm of offering leverage in our industry.

And so we stand here today to talk about what we're going to do and we're not talking about the context of this is what we hope to do some point in the future we're going to talk about this in the context that we're already doing it and we're now willing to talk about it with you.

Secondly is for the last two years.

We have been quietly investing.

And building an AI capability.

And we've been doing that quietly through our own margins.

Next is as you'll hear we have a great foundation of technical expertise upon which we are.

Our expanded our influence and what that means is we built the program management business off the capabilities in our design business.

And we started building an advisory business and we'll talk more about our expectations as we continue to build that advisory business and the last point is as again I said, we're going to we're going to flip the operating leverage paradigm for industry on its head.

So in our business operating leverage has typically been determined by the fact that you have 15% proxy, 15% fixed costs. So think about those things like real estate or I T.

Troy Rudd: I'll give you some more details as we talk through the rest of the presentation. A few key messages that I'd like you to walk away with today. We're going to go through this discussion, but again, I just remind you this is what I'd like you to walk away with. First of all, over the last six years, we've always done what we said we're going to do. We've consistently announced targets, and we think are sometimes aggressive targets for growth, margins, and performance of the business, and we've consistently achieved those over the last six years. We stand here today to talk about what we're going to do, and we're not talking about it in the context of this is what we hope to do at some point in the future.

And as you grow your business.

That remains the same so as you grow your business it creates operating leverage or improve margins.

Well that also means that in order to grow your business.

You have to add people.

I always said that we have to add professionals to the organization's ability to grow and the cost that you're out of the organization for every dollar of revenue.

It's about 75, I 75 cents of actually cost of people to deliver that work.

Well, how we're flipping that paradigm on its head is.

So the use of AI.

We do not have to add head count to grow.

Troy Rudd: We're going to talk about this in the context that we're already doing it, and we're now willing to talk about it with you. Secondly, for the last two years, we have been quietly investing in building an AI capability, and we've been doing that quietly through our own margins. Next, as you'll hear, we have a great foundation of technical expertise upon which we've expanded our influence. What that means is we've built a program management business off the capabilities in our design business, and we started building an advisory business. We'll talk more about our expectations as we continue to build that advisory business. The last point is, again, I said we're going to flip the operating leverage paradigm for industry on its head.

That means.

But the operating leverage that we have in our business isn't 15% of our cost structure, it's 80% of our cost structure.

And we think that's extraordinary.

Fact is will be able to continue to grow the business without having to add head count and one of the largest constraints for growing businesses in the past and this has been the rate at which new engineers or architects or designers or program managers can enter the industry can be trained to be successful that has always been a limiting factor.

We believe that's no longer going to be a limiting factor in the industry and for us.

So I'm going to go through a few things that I think are important just to get an accumulated to lay the foundation of the vision for the company and our strategy and our place in the marketplace.

So again we.

We are on very solid footing, we have an extraordinary group of engineers and scientists and architects.

Troy Rudd: In our business, operating leverage has typically been determined by the fact that you have 15%, approximately 15% fixed costs. Think about that as things like real estate or IT. As you grow your business, that remains the same. As you grow your business, it creates operating leverage or improved margins. That also means that in order to grow your business, you have to add people. We've always said that we have to add professionals to the organization's ability to grow. The cost that you add to the organization for every dollar of revenue is about 75, right? Seventy-five cents of actually the cost of people to deliver that work. Well, how we're flipping that paradigm on its head is through the use of AI, we do not have to add headcount to grow.

And frankly, we think about this as a large competitive advantage. There are only a few players in the industry that have the size and the scale and the experience and the depth to compete with us. So it's already a narrowed plainfield, where there is a competitive advantage that already exists and we've continued to build upon that.

We've continued to strengthen that organization.

And moved to a place where we're number one are recognized as number one. So we moved this year to be number one in engineering and design the overall design firm and.

And we still maintained our position as the number one in transportation water environments and facilities or what we call buildings in places. So we have a fair.

Fantastic platform as an industry leader.

And then that's enabled us to actually win an extraordinarily high rate.

And this has had a profound impact on our margins as well.

We work with our clients, our largest clients and they trust us with their largest and most complex and iconic and important projects and programs.

Troy Rudd: That means that the operating leverage that we have in our business isn't 15% of our cost structure. It's 80% of our cost structure, and we think that's extraordinary. The fact is we'll be able to continue to grow the business without having to add headcount. One of the largest constraints for growing businesses in the past has been the rate at which new engineers or architects or designers or program managers can enter the industry and be trained to be successful. That has always been a limiting factor. We believe that's no longer going to be a limiting factor in the industry and for us. I'm going to go through a few things that I think are important just to, again, continue to lay the foundation of the vision for the company, the strategy, and our place in the marketplace.

And when we bid on those competitively for the last three years, we've been winning those at an 80% rate.

Said differently when our customers say, there's something incredibly important.

We're winning at four out of five times and again, so we have an extraordinarily powerful platform upon which we're building.

We also have again I've set a track record of delivering on our performance.

We have an extraordinary group of engineers and scientists.

I don't think I'm going to spend a lot of time on this our history sort of speaks for itself, but you can see the truck greater performance and as we stand here today rely on that track record of performance as we move forward. We built an incredibly strong management team, that's very broad and very diverse and works together and collaborate globally.

Yeah.

And when we think about this as a large competitive advantage only.

There isn't any industry.

Okay.

Yep and compete with us.

It's already a narrower.

What is the competitive advantage that already exist.

To drive everything we do across the organization and we built a culture in the organization, where our people also focus on bringing the best of the.

Troy Rudd: Again, we are on very solid footing. We have an extraordinary group of engineers, scientists, and architects. Frankly, we think about this as a large competitive advantage. There are only a few players in the industry that have the size, scale, experience, and depth to compete with us. It's already a narrow playing field where there is a competitive advantage that already exists. We've continued to build upon that. We've continued to strengthen that organization and move to a place where we're number one or recognized as number one. We moved this year to be number one in engineering and design, the overall design firm. We still maintained our position as being number one in transportation, water, environments, and facilities, or what we call buildings and places. We have a fantastic platform as an industry leader.

And we continue to build that.

We've continued amortization.

Amortization.

And the place where we're number one.

Their best experiences are across the organization to the individual clients and we've referred to it as our thinking that globally strategy and it's been incredibly powerful and it's it's the track. It's what's allowed us to build this track record of performance.

Okay.

So we can move.

Now for one and engineering and design the overall design firm and we still maintained our position as the number one on transportation water environments.

<unk> or what we call building places so we have.

So this is our vision and this remains unchanged.

Fantastic platform as an industry leader.

This has been our vision for the last four years.

And then that's it.

For us to actually win an extraordinarily high rate.

Is.

We wanted to extend our influence with our customers. So again as I said, we have this extraordinarily great and experienced team globally.

And this has had a profound impact on our margins as well.

We work with our clients are.

And they trust us with their largest and most complex and iconic important projects and programs.

It does design engineering does science work this environmental design work and so you take all that together and you have this incredibly powerful platform.

And when we bid competitively for the last three years we.

And we said well with those incredibly powerful platform and experiences how do we expand our influence in our individual clients. We first started with program management.

At an 80% rate.

Troy Rudd: That's enabled us to actually win at an extraordinarily high rate. This has had a profound impact on our margins as well. We work with our clients, our largest clients, and they trust us with their largest, most complex, iconic, and important projects and programs. When we bid on those competitively, for the last three years, we've been winning those at an 80% rate. Said differently, when our customers say there's something incredibly important, we're winning it four out of five times. We have an extraordinarily powerful platform upon which we're building. We also have, again, a set of track record of delivering on our performance. I don't think I'm going to spend a lot of time on this. Our history, so to speak, speaks for itself. You can see the track record of performance.

Said differently when archive and.

Been incredibly important.

Right.

We said, if we look at extending that incredible body of knowledge and experience, adding some people to our team that do program management work, so coupling that with their team, we can expand or extend our influence within our clients or our customer base and so we started that four years ago. We added members to our team based on the extraordinary.

Friday.

So we have an extraordinarily powerful platform on which we're building.

We also have again the track record of delivering on performance.

I don't think I'm going to spend time with us.

Our history soda speaks for itself.

The experience that we have an infrastructure.

Can see attract greater performance and as we stand here today rely on that track record performance as we move forward, we built an incredibly strong management team.

And we've grown our business.

And we've grown our business from a few hundred million dollars in four years, there have been over $1 3 billion dollar business and again.

Very broad and very diverse and works together globally to drive everything we do across the organization, we built the <unk>, where our people also focus on bringing them.

With an incredibly healthy and consistent margins.

So the next step in that journey for us.

Was to build an advisory business.

And Laura will spend a lot more time talking about it but but the advisory business is a little bit different than what you think about from other advisors and consultants.

Yes.

Okay.

Clients and we referred to as we're thinking probably strategy and it's been incredibly powerful.

Troy Rudd: As we stand here today, we're allowing that track record of performance as we move forward. We've built an incredibly strong management team that's very broad, very diverse, and works together and collaborates globally to drive everything we do across the organization. We built a culture in the organization where our people also focus on bringing the best of their best experiences across the organization to the individual clients. We've referred to it as our Think and Act Globally strategy, and it's been incredibly powerful. It's the track, it's what's allowed us to build this track record of performance. This is our vision, and this remains unchanged. This has been our vision for the last four years, as we want to extend our influence with our customers.

So when you think about folks like pain with BCG and Mckinsey.

It's the track, it's what's allowed us to build this track.

Okay.

They come to the come to the table with a very strong consulting offering.

So.

But what they don't come to the table with is an incredibly strong experience and infrastructure.

Okay.

This has been our vision for the last four years.

<unk>.

We wanted to extend our influence with our customers.

Right and in science, and so recognizing that difference. We then are going to add more members to our team and we started to do that over the last year to build an advisory business and what does that mean, when I say extending our influence so no longer just relying on design.

So again as I said, we have this.

Extraordinary great and experienced team globally.

It does design engineering does science work this environmental design work and so you take all of that together and you have this incredibly powerful.

But effective through advisory being there on day one.

And we said.

Our customers create their own vision develop their strategy.

All right.

Got it.

Inches.

How do you expect.

Staying there throughout the process to design, a program management and actually delivering the outcomes within infrastructure to execute on their own individual visions and strategy.

Okay.

Program management.

Okay.

Hum.

Okay.

Troy Rudd: As I said, we have this extraordinarily great and experienced team globally that does design, does engineering, does science work, does environmental design work. You take all of that together and you have this incredibly powerful platform. We said, well, with those incredibly powerful platform and experiences, how do we expand our influence to our individual clients? We first started with program management. We said, if we look at extending an incredible body of knowledge and experience, adding some people to our team that do program management work, coupling that with our team, we can expand or extend our influence within our clients or our customer base. We started that four years ago. We added members to our team based on the extraordinary experience that we have in infrastructure, and we've grown our business.

The knowledge and experience.

Full towards that new program management work.

So thinking about this a slightly different way.

With their team, we can expand or extend our influence within our clients or our customer base and you start to.

It was going to say extending our influence.

Think about that is addressing or improving or increasing our addressable market spend.

We added members to our team based on the.

And so in the past go back to 2020, when we focused on engineering and design.

Great.

Okay.

We were being exposed to about 15% of our customers addressable spend.

Yes.

Okay.

$100 million.

$3 billion business.

Today by expanding that into advisory and program management within that same client by extending our influence we're now exposed to 35% of our clients' addressable spend.

With an incredibly healthy and consistent margins.

So the next step in that journey for us.

Was to build an advisory business.

And Laura will spend a lot more time talking about it but but the advisory business.

So effectively what that means for us as you know we have more at bats, with the same clients.

Is a little bit different than what you think about it from other advisors and consultants.

So it's a way for us to actually increase our market presence and drive organic growth in a way that you don't typically think about it.

So think about it.

It looks like pain or BCG mckinsey they come to the come to the table with a very strong consulting offering.

So when we talk about our vision again, two to extend ourselves in advisory program management, and our underlying design and engineering, where we're really trying to say is we're increasing our addressable spend with our existing clients.

Troy Rudd: We've grown a business from a few hundred million dollars in four years to now being over a $1.3 billion business, with incredibly healthy and consistent margins. The next step in that journey for us was to build an advisory business. Lara will spend a lot more time talking about it, but that advisory business is a little bit different than what you think about from other advisors or consultants. When you think about folks like Bain, BCG, or McKinsey, they come to the table with a very strong consulting offering. What they don't come to the table with is an incredibly strong experience in infrastructure, right, and in science. Recognizing that difference, we then are going to add more members to our team, and we started to do that over the last year to build an advisory business.

But what they don't come to the table with us.

Is an incredibly strong experience in infrastructure.

Right and in science, and so recognizing that difference.

And again I won't spend a lot of time on this but I think this is worthwhile to point out that.

Remember.

We still do that over the last year.

Three business and what does that mean, when I say extending our influence.

In the long run.

We play in incredibly healthy markets.

No longer just reliant.

But.

There's no question that over the next few decades, there needs to be a significant continued investment in traditional infrastructure, whether it's water infrastructure of transportation infrastructure, where social infrastructure.

Yes.

Okay.

Okay.

How does create their own vision.

Strategy.

Stay in their throat process to design, a program management and actually delivering the outcomes within infrastructure to execute on their own individual visions and strategy.

So there's no question that we play in great markets.

In addition to that there's a focus on improving the sustainability and the resilience of infrastructure and even that definition is expanding.

So thinking about this a slightly different way.

It was going to say extending our influence.

Think about that is addressing are improving or increasing our addressable market spend.

So in the past we have not thought about defense.

Troy Rudd: What does that mean when I say extending our influence? No longer just relying on design, but effectively through advisory, being there on day one to help our customers create their own vision and develop their strategy, staying there throughout the process through design and program management, and actually delivering the outcomes within infrastructure to execute on their own individual visions and strategy. Think about this a slightly different way. It was, as I say, extending our influence. Think about that as addressing, improving, or increasing our addressable market spend. In the past, go back to 2020, when we focused on engineering and design, we were being exposed to about 15% of our customers' addressable spend. Today, by expanding that into advisory and program management within that same client, by extending our influence, we're now exposed to 35% of our clients' addressable spend.

Is improving the sustainability and resilience of communities in a infrastructure and it's become even more important.

And so in the past go back to 2020, when we focused on engineering and design.

It's even more important than even clearer now that investment in it in defense is actually improving the resilience of communities and countries and so if you sort of look forward, there's an even larger opportunity for us as that continues to grow and there will be for decades to come and then there's an insatiable need for energy.

We were being exposed to about 15% of our customers addressable spend.

Today by expanding that into advisory and program management within that same client by extending our in.

<unk> two.

Incentive clients' addressable spend.

So effectively what that means.

And particularly electricity.

We have more at bats, with the same clients.

As there is an investment.

At an amazing investment is going to take place in AI and data centers and all the power and water you need the power of that.

So it's a way for us to actually increase our presence and drive organic growth in a way that you don't typically think about it.

To make that a reality and so as we look at these markets we are.

So when we talk about our vision.

We built an organization that's going to play in markets, where in the long run our opportunities are going to be to grow greater than the GDP of a typical economy.

To extend ourselves.

In Advisory program management, and our underlying design and engineering what were trying to say is we're increasing our addressable spend with our existing clients.

And then we add to that.

We're increasing our addressable market spend.

And again.

We add to that that we've created and are going to continue to create a competitive advantage in all three of those things give us confidence than long run and we will continue to grow organically much faster pace and economies in GDP.

Spent a lot of time on this but I think this is worthwhile to point out that.

Troy Rudd: Effectively, what that means for us is we have more bats with the same clients. It's a way for us to actually increase our market presence and drive organic growth in a way that you don't typically think about it. When we talk about our vision, again, to extend ourselves in advisory, program management, and our underlying design and engineering, what we're really trying to say is we're increasing our addressable spend with our existing clients. I won't spend a lot of time on this, but I think this is worthwhile to point out that in the long run, we play in incredibly healthy markets. There is no question that over the next few decades, there needs to be a significant continued investment in traditional infrastructure, whether it's water infrastructure, transportation infrastructure, or social infrastructure.

Long Island.

We play in incredibly healthy markets.

There's no question that over the next few decades, there needs to be.

And so that gives us confidence about the growth in your organization.

Continued investment in transmission infrastructure.

So.

With perhaps George for transportation.

Now, let me talk about something.

Okay.

We spent a lot of time thinking about for the past 18 months.

So not quite.

In addition to that.

I will say that 18 months ago.

A focus on premises and building resilience of infrastructure and even that definition is expanding.

We questioned whether AI was an existential risk for our industry.

So in the past would not.

We were genuinely concerned.

Yes.

Is it improving the sustainability and resilience of communities in a infrastructure and <unk>.

That maybe one of our peers.

Or a new entrant into the market.

Become even more important.

There may be one of our existing industry software providers, which is a technology that we've used for 25 years to do design.

It's even more important and even clear now that an investment in India.

Is actually improving the resilience of communities and countries and.

We had legitimate concern that.

So if you sort of look forward theirs.

Could AI.

Find a way.

Okay.

Secondly, put us out of business.

Tony for Us as that continues to grow and there will be for decades to come and then there is clean.

Troy Rudd: There's no question that we play in great markets. In addition to that, there's a focus on improving the sustainability and resilience of infrastructure. Even that definition is expanding. In the past, we had not thought about defense as improving the sustainability and resilience of communities and of infrastructure. It's become even more important. It's even more important and even clearer now that investment in defense is actually improving the resilience of communities and countries. If you sort of look forward, there's an even larger opportunity for us as that continues to grow, and there will be for decades to come.

We had a very genuine concern.

So.

Clean energy.

We started that we embarked upon a project and this is what I said 18 months ago. We did this we've been doing this work and we've been we've been very very concerned about it over the course of the last 18 months and it takes time to do.

The electricity.

As there is an investment.

I mean it out.

Amazing, it's going to take place in AI and data centers and all the power and water you need the power of that to.

We've gone out and said well to start this journey, we actually need to find some leaders in the organization.

To make that a reality and so as we look at these markets we have.

<unk> is going to smart.

Who have an understanding of AI and an understanding of our industry.

Hardware in the long run our opportunities youre going to be to grow greater than the GDP of a typical economy.

So we can start to understand what is possible and find out is there someone or is there way theres someone can actually put us out of business and.

And then we add to that.

We're increasing our addressable market spend.

And so we started to add people to the organization, we hired people to the organization. We started to build up that team. So we can sort of gauge that understanding. The next thing. We did is we said well across our organization, let's take people within the business and it's effectively retrain them well lets go out with partners in mouse experiments.

We add to that that we've created aren't going to continue to grow because of it.

Troy Rudd: There's an insatiable need for energy, in particular electricity, as there's an investment, I mean, an amazing investment that's going to take place in AI and data centers and all the power and water you need to power that and to make that a reality. As we look at these markets, we've built an organization that's going to play in markets where in the long run, our opportunities are going to be to grow greater than the GDP of a typical economy. We add to that, we're increasing our addressable market spend. We add to that that we've created and are going to continue to create a competitive advantage. All three of those things give us confidence that in the long run, we will continue to grow organically at a much faster pace than economies and GDP.

Thanks for giving us confidence then longer we will continue to grow organically much faster pace and economies in GDP.

And so that gives us confidence about the growth of an organization.

Alright, let's go out with technology firms, let's actually go out and do some real experimentation can we actually create artificial.

So.

Now, let me talk about something.

Okay.

For the past 18 months.

You'll intelligence models that we can use in engineering think about this as simply as today. There are large language models, which I'm sure everyone. In this room uses.

I will say that 18 months ago.

Questions.

Or a new entrant in a moment.

But other mass models.

Or maybe one of our existing industry software providers, which is a technology that we've used for 25 years to do design.

And so that's where we went to experiment in the world of mass models and older stand how large language models can actually influence of business as well.

We have a legitimate concern.

So we are starting to experiment.

Could AI.

And we started to see what was possible.

Yes.

Okay.

We continue to build that team. We then went out and we found new entrants into the marketplace and we started to partner with them. So they understand what they were doing be a partner and see where they actually building a team and a capability that we should really be concerned about where they in fact going to put us out of business.

We had a very genuine concern.

Troy Rudd: That gives us confidence about the growth in the organization. Let me talk about something that we spent a lot of time thinking about for the past 18 months. I will say that 18 months ago, we questioned whether a new entry into the market or maybe one of our existing industry software providers, which is a technology that we've used for 25 years to do design, could pose a legitimate concern. We had a legitimate concern that AI could find a way to effectively put us out of business. We had a very genuine concern. We embarked upon a project. This is what I said 18 months ago. We did this. We've been doing this work, and we've been very, very concerned about it.

Okay.

We started that we embarked upon a project and this is what I said.

No.

We did this we've been doing this work and we've been we've been very very concerned about it over the course of the last 18 months and this takes time to do.

So.

We've gone out and said well to start this journey, we actually define some leaders in the organization.

We grew through all of those experiences we built the team we.

We started to experiment.

Who have an understanding of AI and an understanding of our industry.

Bearing with people outside the organization and then at a certain point in time, we actually made an acquisition. We found an organization that had built math models.

So we can start talking about what is possible and find out is there someone or is the way theres someone can actually put it.

And they were going to profoundly change the industry.

And so we started to add people to the organization one of the organization. We started that team. So we can sort of gained that understanding. The next thing. We did is we said well across our organization, let's take people within the business and that's effectively retrained.

And they weren't going to put us out of business.

And they were very bold about that.

So they were unique and now they're part of a calm. So again, we spent the last 18 months building a team.

Hiring training and acquiring and so now we have a unique team. The next thing. We did is we said well we actually have to start to build models think about this is building out the door.

With partners amongst experiment.

Troy Rudd: Over the course of the last 18 months, and this takes time to do, we've gone out and said, well, to start this journey, we actually need to find some leaders in the organization who have an understanding of AI and an understanding of our industry. So we can start to understand what is possible and find out, is there someone or is there a way there's someone who can actually put us out of business? We started to add people to the organization. We hired people into the organization. We started to build with that team so we could sort of gain that understanding. The next thing we did is we said, well, across our organization, let's take people within the business and let's effectively retrain them. Let's go out with partners, and let's experiment. Right? Let's go out with technology firms.

Right.

Knowledge firms, let's actually go out and do some real experimentation.

And he created.

Building tools building models or even think about this is building new teammates.

Initial intelligence.

We can use in engineering think about this as simply as they either.

Actually building new teammates the way we thought about this as you know we have our people to do engineering and design.

Okay.

I'm sure everyone in this room uses.

But other mass models.

Well they can have a teammate and our teammates can be what's referred to as an AI agent.

Okay.

And to experiment in the world of mass models, and Alder stand how large life digital's can actually influences as well.

So we.

We've now built this out and we've gone through the process is actually testing this with our clients and delivering projects and also understanding when you make a comparison right. The way we've delivered project and the outcomes. We've delivered for our customers are they different.

So we started to experiment and we started to see possible.

We continue to build that team. We then went out and we found new entrants into the marketplace and we started to partner with them.

Understand what they were doing the a partner and see where they actually building a team and the capabilities that we shouldn't really be concerned about where they in fact going to put us out of business.

And they are dramatically different and I'll give you some more detail and explain that.

Troy Rudd: Let's actually go out and do some real experimentation. Can we actually create artificial intelligence models that we can use in engineering? Think about this simply as today there are large language models, which I'm sure everyone in this room uses, but other math models. That's where we went to experiment in the world of math models and to understand how large language models can actually influence the business as well. We started to experiment, and we started to see what was possible. We continued to build that team. We then went out and we found new entrants in the marketplace, and we started to partner with them, say, understand what they were doing, be a partner, and see were they actually building a team and a capability that we should really be concerned about? Were they, in fact, going to put us out of business?

And so we've now gotten to a place where we've been investing for 18 months I've been doing this quietly through our margins.

So.

And we built a team that we know it doesn't exist anywhere else in our industry and it doesn't exist in other new entrants and certainly doesn't exist that our traditional software vendors that we've relied upon.

Grew through all of those experiences rebuilt the team.

We started to experiment.

Bearing with people out to the organization.

And then at one time, we actually fishing, we found an organization that had built out models.

And so we view this as a generational opportunity.

And through that again, we can flip the operating leverage paradigm.

And then we're going to profoundly change the industry.

And they weren't going to put us out of business.

Let me give a little more detail.

And they were very bold about that.

Right.

So they were unique and now they're part of a car. So again, we spent the last 18 months building a team.

Said that we were worried someone's gonna put us out of business.

I think it's foundational to answer. This question is what should you be concerned and how could this happen is let's look at what clients ask us to deliver for them.

Hiring training and acquiring and so now we have a unique team. The next thing. We did is we said well we actually have to start to build models thinking about this is building.

And what they hire us to do is they hire us to deliver incredibly complex outcomes.

Troy Rudd: We grew through all of those experiences. We built a team. We started to experiment. We experimented with people outside the organization. At a certain point in time, we actually made an acquisition. We found an organization that had built math models. They were going to profoundly change the industry, and they were going to put us out of business. They were very bold about that. They were unique, and now they're part of AECOM. We spent the last 18 months building a team, hiring, training, and acquiring. Now we have a unique team. The next thing we did is we said, well, we actually have to start to build models. Think about this as building tools, building tools, building models, or even think building new teammates, right? Actually building new teammates.

Building tools building models.

Whether that's an incredibly complex design.

Building new teammates.

Or whether that's incredibly complex infrastructure outcome.

I'd actually building new teammates the way we thought about.

That's what they hire us to deliver.

Are people that do engineering.

And that's not changing.

Yeah.

They can have a team and that team is referred to as an AI agent.

The clients are going to expect us to continue to deliver that.

So to deliver that you have to have a really experienced team right. We're still going to need the team of globally experienced engineers and designers and architects I'll be able to come together.

Okay.

We've now built this out and we've gone through the process is actually testing this with our clients and delivering projects and also understanding when you make a comparison right the way we deliver.

And give our clients confidence that we can deliver those outcomes for them.

And they also have to be able to certify those results. So they would be able to stand in front of regulators and say be comfortable with this outcome. So.

And we've.

We delivered for our customers.

Okay.

And they are dramatically different.

Give you some more detail and explain that.

So that doesn't change.

So we've now gotten to a place where we've been investing for 18 months and doing this quietly through our margins.

The next thing is you have to have a trusted client relationships a client does not trust you with billions of dollars of infrastructure investment or even a design.

And we've built a team that we know exists fourth street.

Troy Rudd: The way we thought about this is we have our people that do engineering and design. Well, they can have a teammate, and that teammate can be what's referred to as an AI agent, right? We've now built this out, and we've gone through the process of actually testing this with our clients and delivering projects, and also understanding when you make a comparison, right? The way we've delivered a project and the outcomes we've delivered for our customers, are they different? They are dramatically different. I'll give you some more detail and explain that. We've now gotten to a place where we've been investing for 18 months and doing this quietly through our margins.

Excuse me that that takes tens of millions of dollars to deliver right. They don't do that unless you have a trusted relationship. So you have to have the team.

It doesn't exist in other new entrants and certainly doesn't exist that our traditional software vendors that we've relied upon.

And so we view this as a generational.

And you have to have a trusted relationship with your clients.

Okay.

And through that again.

Next is you have to have a balance sheet you have to be able to stand behind those designs and you have to be able to do something as simple as procured insurance program to support their clients' project.

The operating leverage paradigm.

Let me give you more detail.

Okay.

I said it put us out of business.

And then the last thing is as you use technology.

The.

And so the technology that we have used has been the same for the last 25 years, it's been software.

Yeah.

So how could this happen.

Look at what.

And it's been evolving slowly.

<unk> got to deliver for them.

And so we see that's the place to insert ourselves.

And what they hire us to do as a higher risk to deliver incredibly hot.

This is by building a team of AI professionals right now we're talking about.

Troy Rudd: We've built a team that we know doesn't exist anywhere else in our industry, and it doesn't exist at other new entrants, and certainly doesn't exist at our traditional software vendors that we've relied upon. We view this as a generational opportunity. Through that, again, we can flip the operating leverage paradigm. Let me give you a little more detail. Right? I said that we were worried someone's going to put us out of business. I think foundationally the answer to this question is, should you be concerned and how could this happen? Let's look at what clients ask us to deliver for them. What they hire us to do is they hire us to deliver incredibly complex outcomes, whether that's an incredibly complex design or whether that's an incredibly complex infrastructure outcome. That's what they hire us to deliver.

Okay.

Whether that's incredibly complex design or.

AI ph DS machine learning Phds data scientists Phds, we're talking about a group of people that have this unique ability and skill that we have now tested and more importantly got them to work with our engineers.

Or whether that's incredibly powerful outcome.

Outcome.

The highest to deliver.

And that's not changing contract and.

Expect us to continue to deliver that.

So to deliver that you have to have a really experienced team right.

To be able to build the tools or the teammates to transform how engineering has delivered.

Thank you.

Engineered.

We now step back and say well you have to have all of those four things to be successful. We're the only one that has that team.

Yes.

And give us confidence that we can deliver those outcomes for them.

And we're the only one that has a tested team and we're the only one that wherever they can deliver this and then you step back and say well should you be worried about new entrants not really because they might be able to they might be able to develop technology.

And also have to be able to certify those results and they'll be able to stand in front of regulators and say be comfortable with this outcome.

That doesn't change.

The next thing is you have to have a trusted client relationships a client does not trust you with billions of dollars of infrastructure investment or even a design excuse.

But they don't have the engineering teams.

Where you have the confidence that result will get delivered they don't have the trusted relationships and they don't have a balance sheet.

Excuse me that that takes tens of millions of dollars to deliver.

So.

New entrants they become unconcerned about when you look at our software traditional software companies, yes. They can provide tools, but they don't have those other conditions as well, yes. They have a balance sheet, but they don't have a team that trusted relationship with clients.

Troy Rudd: That's not changing. The clients are going to expect us to continue to deliver that. To deliver that, you have to have a really experienced team, right? We're still going to need the team of globally experienced engineers, designers, and architects to all be able to come together and give our clients confidence that we can deliver those outcomes for them. They also have to be able to certify those results, and they have to be able to stand in front of regulators and say, be comfortable with this outcome. That doesn't change. The next thing is you have to have a trusted client relationship. A client does not trust you with billions of dollars of infrastructure investment or even a design, excuse me, that takes tens of millions of dollars to deliver, right? They don't do that unless you have a trusted relationship.

They don't do that unless you have a trusted relationship. So you have to have the team and you have to have a trusted relationship with your clients.

Next is you have to have a balance sheet you have to be able to stand behind those designs and you have to be able to do something as simple as procured insurance program to support that clients project.

And then you look at our peers and appears of all of those conditions, but they are using old tech.

And then the last thing is as you use technology.

And so the technology that we have used has been the same for the last 25 years, it's been software.

An old tech will deliver a very different answer.

So I actually think we view this as an existential risk 18 months ago today, we view this as an existential opportunity.

And it's been evolving slowly.

And so we see that as the place to insert ourselves.

And maybe we should be considered the disruptor.

This is by building a team of AI professionals.

So I talked about this in terms of a generational opportunity and he'll think about changing the outcomes that we deliver for clients.

And we're talking about.

AI Phds machine learning Phds data scientists Phds, we're talking about a group of people that have this unique ability and skill that we have now tested and more importantly got them to work with our engineers.

And the outcomes that we changed it a calm and how we deliver.

Troy Rudd: You have to have the team, and you have to have a trusted relationship with your clients. Next, you have to have a balance sheet. You have to be able to stand behind those designs, and you have to be able to do something as simple as procure an insurance program to support that client's project. The last thing is you use technology. The technology that we have used has been the same for the last 25 years. It's been software, and it's been evolving slowly. We see that's the place to insert ourselves, by building a team of AI professionals, right? We're talking about AI PhDs, machine learning PhDs, data science PhDs.

So in terms of what we've learned and delivering client outcomes.

To be able to build the tools or the team made to transform how engineering has delivered.

We have learned.

Using AI with our teams.

We now step back and say well you have to have all of those four things to be successful. We're the only one that has that team.

That we can deliver things at an incredibly fast pace.

So in the design process what might take months.

And we're the only one that has a tested team and we're the only one that wherever they can deliver this then you step back and say well should you be worried about new entrants not really because they might be able to they might be able to develop technology.

AI can do almost instantaneously.

Now what we would deliver it would not be instantaneous because you still have to have your team be part of the process.

So you have the ability to certify and give the confidence to your customers that you're going to deliver something that's different.

But they don't have the engineering teams.

Where you have the confidence that result will get delivered they don't have the trusted relationships and they don't have a balance sheet.

But now you're taking something every months and maybe you're shortening that designs timeframe two weeks.

Troy Rudd: We're talking about a group of people that have this unique ability and skill that we have now tested and, more importantly, got them to work with our engineers to be able to build the tools or the teammates to transform how engineering is delivered, right? We now step back and say, Well, you have to have all of those four things to be successful. We're the only one that has that team, and we're the only one that has a tested team, and we're the only one that we're able to deliver this. Well, should you be worried about new entrants? Not really, because they might be able to develop technology, but they don't have the engineering teams where you have the confidence that the result will get delivered.

So you.

New entrants you become unconcerned about when you look at our software traditional software companies yesterday can provide tools, but they don't have those other conditions as well, yes. They have a balance sheet, but they don't have the team and all of that trusted relationship with clients.

And for our customer what that means is that mean.

That's an asset that can be put in place at a much faster pace.

It also means that the really important decisions that you need to make.

And those decisions are typically around the cost of the design or the cost of the infrastructure, you're designing you make those decisions much earlier in the process. So think about it is the opportunity to value engineering to get to your customers budget much earlier in the process. We can now accelerate that that's incredibly valuable for customers, but the next thing is.

And then you look at our peers and our peers have all of those conditions, but they are using old tech.

And old Tech will deliver a very different answer.

So I actually think we view this as an existential risk 18 months ago today, we view this as an existential opportunity.

<unk>.

And maybe we should be considered the disruptor.

There's a lot of times Theres redesign and there's rework as you go through the process.

So I talked about this.

Because we were relying on AI and the pace at which it can work.

Troy Rudd: They don't have the trusted relationships, and they don't have a balance sheet. New entrants, you become unconcerned about. You look at our software, traditional software companies. Yes, they can provide tools, but they don't have those other conditions as well. Yes, they have a balance sheet, but they don't have a team, and that trusted relationship with clients. You look at our peers. Our peers have all those conditions, but they're using old tech. Old tech will deliver a very different answer. I actually think we viewed this as an existential risk 18 months ago. Today, we view this as an existential opportunity, and maybe we should be considered the disruptor. I talked about this in terms of a generational opportunity. Think about changing the outcomes that we deliver for clients, and the outcomes that we change at AECOM.

Paresh.

How about changing the outcomes.

We can do rework, we can do redesign or we can adjust the models.

Okay.

And <unk>.

We can.

At a much faster pace.

Changes in the economy.

I think we could have in the past again more acceleration in the process for a customer which is incredibly valuable.

So in terms of what we learn and delivering client outcomes.

We have learned they're using AI with our teams.

The last thing it does is.

It gives us the ability to materially reduce cost.

So we can deliver things at an incredibly fast pace.

So in the design process what might take months.

And so as we've gone through the design process. We have found that we're able to take 10% to 20% of the materials.

AI can do almost instantaneously.

Now what we would deliver it would not be instantaneous because you still have to have your team be part of the process.

And thus potentially the cost out of the design.

That's the client outcome.

So you have the ability to certify and gives us confidence to your customers.

It's an.

And an incredibly different value proposition than using high deliveries to customers and therefore us a profoundly changed the way that the ways all the ways that our team will work.

Something that's different now.

Now you're taking something away.

Yeah sure designs timeframe two weeks.

And what that means.

So you think about this as I said, we've shortened months right into a very sharp at time of weeks.

That means it's an asset that can be put in place at a much faster pace.

Troy Rudd: In terms of what we've learned in delivering client outcomes, we have learned through using AI with our teams that we can deliver things at an incredibly fast pace. In the design process, what might take months, AI can do almost instantaneously. Now, what we would deliver would not be instantaneous because you still have to have your team be part of the process so that you have the ability to certify and give the confidence to your customers that you're going to deliver something that's different. Now you're taking something that would be months, and maybe you're shortening that design timeframe to weeks. For a customer, what that means is that means it's an asset that can be put in place at a much faster pace.

But the really important decisions that you need to make in.

So it does two things one is obviously it allows us to deliver that work.

And those decisions are typically around.

With far less participants and that's what I said is that changes the operating model, our operating leverage model and the business now we can grow without having to add people.

The cost of the design or the cost of the infrastructure Youre designing you make those decisions much earlier in that process. So think about it is the opportunity to value engineering to get to your customers budget much early in the process. We can now accelerate that that's incredibly valuable for customers.

The other thing it does for people and makes us more attractive as a place to be is it gives us the ability to accelerate their careers of our professionals.

The next thing is.

There's a lot of times.

Could you walk through the process.

So in the past right come up the organization and you'd spend years learning how to design and doing the same thing over and over and over and so we'd said in the past, but it takes a long time, maybe a decade for similar to design that particular kind of infrastructure.

Brian on AI.

At which it can work we can do the work we can do redesign or we can adjust the models.

At a much faster pace.

I think we could have in the past again more acceleration in the process for a customer which is incredibly valuable.

Troy Rudd: It also means that the really important decisions that you need to make, and those decisions are typically around the cost of the design or the cost of the infrastructure you're designing, you make those decisions much earlier in the process. Think about it as the opportunity to value engineering to get to your customer's budget much earlier in the process. We can now accelerate that. That's incredibly valuable for customers, right? The next thing is there's a lot of times there's redesign and there's rework as you go through the process. Because we're relying on AI and the pace at which it can work, we can do rework, and we can do redesign, or we can adjust the models at a much faster pace than we could have in the past. Again, more acceleration in the process for your customer, which is incredibly valuable.

Well now.

Because we're able to take those professionals and give them those profound experiences in my short period of time, we can accelerate their careers and their career growth we can turn right.

The last thing it does is.

It gives us the ability to materially reduce cost.

10 year season design professional right, we can create it in a much shorter period of time.

And so as we've gone through the design process. We have found that we were able to take 10% to 20% of the materials.

And so that's profound for us it gives us the ability to go and attract people to have a profoundly better and different career.

And thus potentially the cost out of the design.

Spend more time being more innovative or come up with ideas for their customers that's fantastic.

That's the client outcome.

Let's.

And the other thing it does is again it just changes the operating paradigm.

And an incredibly different value proposition than using AI deliveries to customers and therefore us it profoundly changed the way that the ways ways that our team will work.

So.

As you can appreciate.

I'm going to talk a little bit.

So you think about this as I said, we've shortened months right into a very short time of weeks.

Matt.

How we're thinking about this and why this works.

But again for obvious reasons, we don't want to create a roadmap for our for our four what I'll say all of our peers are perhaps used to be our peers.

So it does two things one is obviously.

Troy Rudd: The last thing it does is it gives us the ability to materially reduce cost. As we've gone through the design process, we have found that we're able to take 10% to 20% of the materials and thus potentially the cost out of a design. That's the client outcome. That's an incredibly different value proposition than using AI deliveries to customers. For us, it profoundly changed the ways that our team will work. You think about this. As I said, we've shortened months into a very short time of weeks. It does two things. One is obviously it allows us to deliver that work with far less participants. That's what I said is that changes the operating model, our operating leverage model in the business. Now we can grow without having to add people.

To deliver that work.

Far less participants and that's what I said is that changes the operating model, our operating leverage model and the business now we can grow without having to add people.

We don't want to create that roadmap.

So I'm going to be a little cautious in how I talk about this but as I said, starting with we've created a team.

That can work with the.

The other thing it does for people.

The engineers of the designers of the architects in our business.

And mixes subtractive, it's a place to be.

They understand how to design.

Is it gives us the ability to accelerate their careers of our professionals.

And they take the technology and merge it together.

So you create math models that can support our do the design.

So in the past right and come up to your organization that you would spend years learning how to design and doing the same thing over and over and over and so we said in the past it takes a long time maybe ever.

Now we've had success built in and out and segments and deployed an unprotected and testing it for over a year.

Now we have the confidence that we can extend this across our entire portfolio.

Similar to that particular kind of infrastructure.

Well no because we're able to take those professionals and give them those profound experiences in my short period of time, we can accelerate there.

Engineering design and so we have a roadmap over the next 18 months, where these teams.

And we're building those teams again at a fast pace, we can accelerate this process.

We can turn right a 10 year season design professionals right, we can create a much shorter period of time.

But over the next 18 months, we're going to actually do this across our entire portfolio of engineering and design and.

Okay.

And transform the way, we do work and bring those client outcomes those outcomes for our organization across the entire spectrum of what we do.

It gives us the ability to go and attract people to have a profoundly better and different.

Troy Rudd: The other thing it does for people and makes us more attractive to the place to be is it gives us the ability to accelerate the careers of our professionals. In the past, right, you'd come up to the organization, and you'd spend years learning how to design and doing the same thing over and over and over. We've said in the past, well, it takes a long time, maybe a decade, for someone to design that particular kind of infrastructure. Well, now, because we're able to take those professionals and give them those profound experiences in a much shorter period of time, we can accelerate their careers and their career growth. We can turn, right, a 10-year seasoned design professional, right, we can create that in a much shorter period of time. That's profound for us.

Spend more.

A more innovative ideas for their customers that's fantastic.

Now I'll give a little bit of insight is sort of how do you. How do you actually create AI that can produce these results well first of all again you have to have the right team of people that can come together to do it.

The other thing it does is it changes the operating paradigm.

Okay.

So.

As you can appreciate.

I'm going to talk a little bit about.

Two very diverse skill sets that come together and we know that they work together and they can actually build these these again a column teammates or they can build these models. So we can deploy.

How we're thinking about this and why this works.

But again for obvious reasons, we don't want to create greater rollout.

So think about it.

What I'll say all of our peers are perhaps used to their peers.

<unk> taken a designing delivering a design with 2010 or 20% less materials. So why is that.

No.

So to be able to cautious in how I talk about this but as I said starting with.

Two fundamental reasons one is.

The team.

The engineering and design process today is fraught with human bias.

They can work with the.

The engineers of the designers of the architects in our business.

Troy Rudd: It gives us the ability to go and attract people to have a profoundly better and different career, spend more time, be more innovative, or come up with ideas for their customers. That's fantastic. The other thing it does is, again, it just changes the operating paradigm. As you can appreciate, I'm going to talk a little bit about how we're thinking about this and why this works. Again, for obvious reasons, we don't want to create a roadmap for what I'll say are our peers or perhaps used to be our peers. We don't want to create that roadmap. I'm going to be a little cautious in how I talk about this.

And so the way as the process goes is the client gives you a specification.

They understand how to design.

And then you start to design it.

And they take the technology and merge it together so you create math models that can support our do the design.

And as you design it you take a conservative approach.

And so think about that through that conservative approach.

You know it needs to sort of withstand a lot of scrutiny in the process regulatory scrutiny client scrutiny and so you might design it to be a little better than maybe it needs to be and then you take something that has all of these various designers and with various disciplines coming together right mechanical civil electrical they come together and they all just make it a little.

Now we've had success building it out and segments and deployed on projects and testing it for over a year.

Now we have the confidence that we can extend this across our entire portfolio of engineering design and so we have a roadmap over the next 18 months, where these teams.

And we're building those teams again at a fast pace, we can accelerate this process.

Better than it needs to be.

And he doesn't do that.

But over the next 18 months, we're going to actually do this across our entire portfolio of engineering and design.

And that gives you the answer right. It gives you is this is exactly the right answer is exactly what you need you need to design too.

Troy Rudd: As I said, starting with we've created a team that can work with the engineers, the designers, or the architects in our business because they understand how to design, and they take the technology and merge it together. You create math models that can support or do the design. We've had success building it out in segments and deploying it on projects and testing it for over a year. Now we have the confidence that we can extend this across our entire portfolio of engineering and design. We have a roadmap over the next 18 months where these teams, and we're building those teams again at a fast pace, so we can accelerate this process.

And transform the way, we do work and bring those client outcomes those outcomes for our organization across the entire spectrum of what we do.

The other thing and that process is optimization a lot of times, you'll do a design, we'll price it out and we'll find out it's too expensive.

Now I'll give you a little bit of insight is sort of how do you. How do you actually create AI that can produce these results well first of all again you have to have the right team of people that can come together to do it.

So we go through a process called value engineering.

Value engineering means that you have the team come together you say.

What can we do to make this more effective how can we take some cost out of this design and so they try and optimize the design and so it's again human beans under a lot of a lot of time pressure because at that point in time, and you've got your customers, saying I need the new design.

Two very diverse skill sets that come together and we know that they work together and they can actually build these these again a column teammates or they can build these models. So we can deploy.

So think about <unk>.

I can't wait and so you've come together and I'll call the optimization as being incremental.

Taken a designing delivering a design with 22.

Material why is that.

Two fundamental reasons one is.

Well imagine that a as I said can work.

Troy Rudd: Over the next 18 months, we're going to actually do this across our entire portfolio of engineering and design, and transform the way we do work and bring those client outcomes, I mean, those outcomes for our organization across the entire spectrum of what we do. Now, I'll give you a little bit of insight as sort of how do you actually create AI that can produce these results? Well, first of all, again, you have to have the right team of people that can come together to do it. Two very diverse skill sets that come together, and we know that they work together, and they can actually build these, again, I'll call them teammates, or they can build these models that we can deploy. Think about taking a design and delivering a design with 10% or 20% less materials. Why is that?

The engineering process today is fraught with human bias.

And do this math the math malls can do this instantaneously.

So if you start upfront in the process.

So the way the process goes is.

And you've trained AI.

Okay.

So that it takes the human buy side of the equation.

When you start to design it.

And as you design it you take a conservative approach.

And you've trained it so that it can optimize to the absolute best answer.

And so think about that through that conservative approach.

You know it needs to sort of withstand a lot of scrutiny in the process regulatory scrutiny client scrutiny and so my designed it to be a little better than maybe it needs to be and then you take something that has all of these various designers and with various disciplines coming together right mechanical civil electrical they come together and they all just make it a little.

Upfront.

That's how you end up with you.

Your designs, having 10% to 20% less material and therefore cost.

And so the way that you go about doing that again as you take these teams and do that.

You also have to have a knowledge of design.

You have to have knowledge of first principles that you used for design.

And then you have an understanding of how do you actually go through the process. What are the steps are for example, designing a bridge.

Better than it needs to be.

And he doesn't do that and that gives you the answer right. It gives you. The this is exactly the right answer is exactly what you need you need to design too.

You have to have that knowledge then the next thing you. Just you have to have some data that you can use but not too much data.

Troy Rudd: Two fundamental reasons. One is the engineering and design process today is fraught with human bias. The way the process goes is the client gives you a specification, and then you start to design it. As you design it, you take a conservative approach. Think about that through that conservative approach. You know it needs to sort of withstand a lot of scrutiny in the process, regulatory scrutiny, client scrutiny. You might design it to be a little better than maybe it needs to be. You take something that has all of these various designers and with various disciplines coming together, right? Mechanical, civil, electrical. They come together, and they all just make it a little bit better than it needs to be. AI doesn't do that. AI gives you the answer, right?

The other thing and that process is optimization a lot of times, you'll do a design or price it out and we'll find out it's too expensive.

And they're really important powerful part of this is Ben.

You create synthetic data upon which you train a model.

And so it's a combination of those things it's a combination of the two teams coming together, having the experience of design with right AI capability the ability to build math models and then you bring that together with a little bit of the data and you bring it together and you create synthetic data to train models.

So we go through a process called value engineering bioengineering means that you have the team come together do you say.

What can we do to make this more effective how can we take some cost out of this design and so they try and optimize the design and so it's again human beans under a lot of a lot of time pressure because at that point in time and you've got your customers, saying I need the new design I can't wait and so you come together and I'll call the optimization is being inked.

And then you get the output.

And so where we are today as well.

We've been able to work through those things and have confidence that we're now going to be able to build this across the entire spectrum of what we do everyday and again that will transform the outcomes for our clients.

Mental.

Well imagine that AI as I said can work.

They will transform our operating our leverage model.

And do this math math malls can do this instantaneously.

Troy Rudd: It gives you the, this is exactly the right answer. This is exactly what you need to design to. The other thing in that process is optimization. A lot of times you'll do a design, we'll price it out, and we'll find out it's too expensive. We go through a process called value engineering. Value engineering means that you have the team come together, and you say, what can we do to make this more effective? How can we take some cost out of this design? They try and optimize the design. It's, again, human beings under a lot of time pressure because at that point in time, you've got your customer saying, I need the new design. I can't wait. You come together, and I'll call the optimizations being incremental.

So if you start upfront in the process.

So.

And you've trained AI.

I said this didn't come together overnight.

So that it takes the human buy side of the equation.

This is actually goes back years on our journey.

And you've trained it so that it can optimize to the absolute best answer.

This was we were we didn't as constant pursuit of innovation and improvement.

Upfront.

That's how you end up with your.

And we built the team we built a culture.

Youre designs, having 10% to 20% less material for.

Does this mean.

Cost.

And we said it again as I said 18 months ago, we'd started on kind of a digital journey four years ago, and we very quickly realized that the digital digital journey was old news right and as I said, we recognize that there might be an extra potential risk with AI and so we started two years ago experimented in 18 months ago. We really started this is our new journey.

And so the way, we're doing that and as you take.

You also have knowledge of design I'll call. It you have to have knowledge of first principles you use for that.

And then you have to have an understanding of how you actually go through the process. What are the steps for example, designing a bridge.

You have to have that.

Troy Rudd: Well, imagine that AI, as I said, can work and do this math. The math models can do this instantaneously. If you start upfront in the process and you've trained AI so that it takes the human bias out of the equation and you've trained it so that it can optimize to the absolute best answer upfront, that's how you end up with your designs having 10% to 20% less material and therefore cost. The way that you go about doing that, again, is you take these teams and do that. You also have to have a knowledge of design. I'll call it you have to have knowledge of first principles that you use for design. Then you have to have an understanding of how do you actually go through the process? What are the steps of, for example, designing a bridge?

And then the next thing you should have some data that you can use but not too much data.

And so this is what's taken us to get here and the reason I bring this up is because this isn't something that you can do overnight you can just flip a switch and say I'm going to do AI Tomorrow, you can't if someone wants to do what we do in our industry. They have to follow this journey that it's taken US 18 months to get here. This isn't something you can catch up quickly.

I mean really important powerful part of this is Ben.

You create synthetic data upon which you train a model.

Okay.

It's a combination of the team.

And together, having the experience of design site AI capability ability to build mass models.

And then the other big question, we've had for I'll say, maybe the last year or 18 months is boy you have industry, leading margins and you set a target of 17% and you just achieved them.

And then you bring that together with a little bit of the data and you bring it together and you create synthetic data to train models.

And then you get the output.

And so where we are today is.

We've been able to work through.

I guess, there's really no margin upside in your business and we've quietly been saying no.

We're now being able to build this across.

Tires.

And again that would transport.

There is upside in our business, we just havent been ready to talk about it yet and now we are.

Correct.

Okay.

Our operating leverage model.

Troy Rudd: You have to have that knowledge. The next thing is you have to have some data that you can use, but not too much data. The really important, powerful part of this is you create synthetic data upon which you train a model. It is a combination of those things. It is a combination of the two teams coming together, having the experience of design with the right AI capability, ability to build math models, and then you bring that together with a little bit of the data, and you bring it together, and you create synthetic data to train models, and then you get the output. Where we are today is we have been able to work through those things and have confidence that we are now going to be able to build this across the entire spectrum of what we do every day.

And the upside in our business hopefully becomes self evident in the way, we're actually going to change the delivery of what we do and so that upside now as we see our margins going beyond the 20% and theyre going to be enabled by this team and by the AI and the way we're deploying it across the business.

Okay.

As I said this on their own.

Right, that's actually goes back years Andrea.

As far as where we've been is constant pursuit of.

Innovation and improvement.

So.

And we built the team we built a culture of doses.

You've heard a lot for me I just thought it might be helpful. For you to hear from some of the other leaders in our business to get their opinion.

And then with that.

As I said 18 months ago, we'd start the.

<unk> heard from some of our AI leaders.

The digital.

So very.

Just so you get a sense of how we feel about it as an organization.

Very quickly realized that the digital digital journey was old news right.

So if you run the video please.

As I said, we recognize that there might be an extra central risks so.

[music] innovation in our industry has provided for safer infrastructure more sustainable infrastructure, better construction materials, and even better construction techniques, but the reality is we haven't seen a lot of innovation in the way, we develop and design really since we switched from paper to computers.

So we started two years.

It seems to go really started this journey.

Troy Rudd: That will transform the outcomes for our clients, and it'll transform our operating or our leverage model. As I said, this didn't come together overnight. This actually goes back years on our journey. We did this as a constant pursuit of innovation and improvement. We built a team, we built a culture that does this. As I said, 18 months ago, we'd started on kind of the digital journey four years ago, and we very quickly realized that the digital journey was old news, right? As I said, we recognized that there might be an existential risk with AI. We started two years ago, experimented, and then 18 months ago, we really started, this is our new journey. This is what's taken us to get here.

So this is what's taken us to get here and there isn't I bring this up is because this isn't something you can do overnight you can just flip a switch and say I'm going to do AI Tomorrow, you can't if someone wants to do what we do in our industry. They have to follow this journey that has taken months together.

Guy is going to profoundly change that.

It's an opportunity for us to drive speed and in the process.

To reduce the cost of materials and delivery for our clients to allow for more investments in infrastructure for our community.

It doesn't sound like that you can catch up.

And then the other big question, we've had for say maybe the last year or 18 months is boy you have industry, leading margins and you set a target of 17% can you just achieved.

[music] our approach to tax has been very intentional and it has been impacted.

I guess, there's really no margin upside in your business and we've quietly been saying no.

Strategically embrace AI and automation is not because they are trending.

It really enable us to deliver better faster and more cost effective outcomes.

There is upside in our business, we just havent been ready to talk about it yet and now we are.

We can stimulate that can optimize we can really iterative fractions.

And the upside in our business hopefully becomes self evident way, we're actually going to change the delivery of what we do and so that upside now as we see our margins going beyond the 20% and theyre going to be named by this team.

I'm, absolutely confident of our position.

We're not just experimenting with AI, we have made a deliberate companywide commitment to really embedded in how we deliver value.

Troy Rudd: The reason I bring this up is because this isn't something you can do overnight. You can't just flip a switch and say, I'm going to do AI tomorrow. You can't. If someone wants to do what we do in our industry, they have to follow this journey that has taken us 18 months to get here. This isn't something you can catch up quickly. The other big question we've had for, I'll say, maybe the last year, 18 months is, boy, you have industry-leading margins, and you set a target at 17%, and you just achieved them. I guess there's really no margin upside in your business. We've quietly been saying, no, there is upside in our business. We just haven't been ready to talk about it yet. Now we are.

And by the AI and the way, we're deploying it across the business.

We have already seen how transformation that's taking place.

This sector and E. Commerce is now helping to drive a similar shift in an industry that urgently needs both innovation and transformation.

So.

But for me.

Just thought it might be helpful to hear from you.

We accelerated the engineering costs by integrating AI agents directly into the design team. This collaborative approach allowed team its expertise to focus on connectivity decision, making in strategic direction.

It isn't exactly opinion.

And hear from some of our AI leaders.

Just so you get a sense of how we feel about as an organization.

So if you run the video please.

[music] innovation in our industry has provided us a safer infrastructure more sustainable infrastructure better construction materials, and even better construction techniques, but the reality is we haven't seen a lot of innovation in the way, we develop and design really since we switched from paper to computers.

I handle the detailed analysis and problem solving.

<unk> transformation is both boldly lead truly transformative.

Our ability to take an automation a great way of delivering shot they can take it to another geography demonstrating for our clients.

Troy Rudd: The upside in our business hopefully becomes self-evident in the way we're actually going to change the delivery of what we do. That upside now is we see our margins going beyond 20%, and they're going to be enabled by this team and by the AI and the way we're deploying it across the business. You've heard a lot from me. I just thought it might be helpful for you to hear from some of the other leaders in our business to get their opinion and hear from some of our AI leaders just so you get a sense of how we feel about it as an organization. If you're on the video, please. Innovation in our industry has provided for safer infrastructure, more sustainable infrastructure, better construction materials, and even better construction techniques.

Is one of the key ways in which we differentiate ourselves from many of our competitors.

<unk> is going to profoundly change that.

It's an opportunity for us to drive speed and a process to reduce the cost of materials and delivery for our clients to allow for more investments in infrastructure for our community.

Now we're in a world where things are changing rapidly and we've got to upscale our workforce very quickly and we can upscale them faster on whatever job we deploy.

We're pushing the boundaries of what is traditionally done in our industry and find that next level of value for our clients and for Asia.

Okay.

Yes.

Okay.

Okay.

Yes.

With the advancement of our AI strategy going forward will be able to take a leap ahead of our peers to deliver a better solution for our clients.

And Gary.

Okay.

We have strategically right.

Not because theyre trending because it really enable us to deliver better faster and more cost effective.

[music].

Yeah.

We can.

Okay.

Okay.

So we're well positioned.

Troy Rudd: The reality is we haven't seen a lot of innovation in the way we develop and design, really, since we switched from paper to computers. AI is going to profoundly change that. It's an opportunity for us to drive speed into the process, to reduce the cost of materials and delivery for our clients, to allow for more investment in infrastructure for our community. Our approach to tech has been very intentional, and it has been impact-driven. We have strategically embraced AI and automation, not because they're trending, but because they really enable us to deliver better, faster, and more cost-effective outcomes at scale. We can simulate, we can optimize, we can really iterate in a fraction of the time. I'm absolutely confident we're positioned to lead. We're not just experimenting with AI.

We're not just experimenting with AI, we have made a deliberate company wide commitment to really embedded in how we deliver value.

But we will move to the materials and we'll get to that in a few more minutes I. Just wanted to conclude with this you know transforming our industry and transform our business, obviously has a pretty broad and important financial implications and so this is the way we think about the business in terms of <unk>.

We have already seen Hutch information, that's taking place within the sector and outcome is now helping to drive and the shift in an industry that agency needs, both innovation and transformation.

We accelerated the engineering process by integrating AI agents directly into <unk> 19. This collaborative approach allows human expertise just focus on connectivity decision, making in strategic direction.

Our our enhanced or changed financial performance.

We don't see a change in the organic growth opportunity in the business.

Laid out why we think that's the case and what we haven't built into this is we haven't built into what might be a competitive advantage that gives us an even bigger opportunity for organic growth.

AI handles the detail analysis, and if you can help us.

<unk> transformation is suppose boldly lead and truly transformative.

We also see our margins again growing beyond 20%, that's a fairly compelling insignificant outcome.

Our ability to take an automation a great way of delivering shopping and take it to another geography demonstrating for our clients.

And all of that means that we expect an EPS CAGR of over 15%.

Is one of the key ways in which we differentiate ourselves from many of our competitors.

Now we're in a world where things are changing rapidly we've got to upscale our workforce very quickly we can upscale them faster on whatever job we deploy.

And this is how we're planning on getting there.

Troy Rudd: We have made a deliberate company-wide commitment to really embed it in how we deliver value. We have already seen how transformation has taken place within the IT sector, and AECOM is now helping to drive a similar shift in an industry that urgently needs both innovation and transformation. We accelerate the engineering process by integrating AI agents directly into the design team. This collaborative approach allows humans' expertise to focus on creativity, decision-making, and strategic directions, while AI handles the detailed analysis and intricate problem-solving. AECOM's transformation is both boldly led and truly transformative. Our ability to take an automation, a great way of delivering something, and take it to another geography, demonstrate it for a client, is one of the key ways in which we differentiate ourselves from many of our competitors. Now we're in a world where things are changing rapidly.

The other thing I'll point out is it doesn't change the underlying cash flow profile of the business.

We're pushing the boundaries of what is traditionally done in our industry and find that next level of value for our clients and for Asia.

And so we expect to deliver convert earnings to cash at 100% in the long run which means again that we will have ample capital to continue how our capital location opportunity into enhance.

With the advancement of our AI strategy going forward will be able to take a leap ahead of our peers to deliver a better solution for our clients.

That's 50% EPS CAGR.

[music].

And so all of this comes together sort of in financial terms.

This is the summary of what we see in our future.

Yeah.

And then I will turn this over to Laura.

Thank you Troy.

Yeah.

Thank you Troy and good morning, everyone.

We will move to the materials and we'll get to that in a few more minutes I just wanted to conclude with this you know transformer Harry <unk>.

So one year into the create.

Creation of our next billion dollar platform.

Three and transform our business, obviously has a pretty broad and important financial implications and so this is the way we think about the business in terms of our enhanced or changed financial performance.

Higher margin platform paying advisory business and now more than ever we see a tremendous opportunity for this to be a key contributor to that competitive advantage all.

Troy Rudd: We've got to upskill our workforce very quickly, and we can upskill them faster on whatever job we deploy them. We're pushing the boundaries of what is traditionally done in our industry, and find that next level of value for our clients and for AECOM. With the advancement of our AI strategy going forward, we'll be able to take a leap ahead of our peers to deliver a better solution for our clients. We'll move to the materials, and we'll get to that in a few more minutes. I just want to conclude with this. Transforming our industry and transforming our business obviously has pretty broad and important financial implications. This is the way we think about the business in terms of our enhanced or changed financial performance. We don't see a change in the organic growth opportunity in the business.

We don't see a change in the organic growth opportunity in the business.

Differentiated by out tremendous technical capability that is the key differentiator for us and our particular advisory offering we've seen over the last few years the management consultants try to encroach. Upon this infrastructure space everyone's excited about isn't ization infrastructure. So there has been a big move side to manage that consult.

Laid out why we think that's the case and while we haven't built into this is we haven't built into what might be a competitive advantage that gives us an even bigger opportunity for organic growth.

We also see our margins again growing beyond 20%, that's a fairly compelling insignificant outcome.

And the big fall into our space. However, they don't have the technical substance. The reason why we are number one to number one design firm number one across all of that can market is because we have the industry's best technical professionals and our clients and will they ever need this technical expertise as they plan their next strategic.

And all of that means that we expect an EPS CAGR of over 15%.

And this is how we're planning on getting there.

The other thing I'll point out is it doesn't change the underlying cash flow profile of the business.

So we expect to deliver convert earnings to cash at 100% in the long run which means again that we will have ample capital to continue how our capital location opportunity into enhance.

Plans, which projects to bring to market. So lots of management consultants can come with incredible cachet and brand them. They don't show up with their technical substance and they get the in depth knowledge of our clients' portfolios and their assets like wages and we have the long standing relationships, we've built that client relationship.

That 50% EPS CAGR.

And so all of this comes together sort of in financial terms.

Troy Rudd: I've sort of laid out why we think that's the case. What we haven't built into this is we haven't built into what might be a competitive advantage that gives us an even bigger opportunity for organic growth. We also see our margins, again, growing beyond 20%. That's a fairly compelling and significant outcome. All of that means that we expect an EPS CAGR of over 15%. This is how we're planning on getting there. The other thing I'll point out is it doesn't change the underlying cash flow profile of the business. We expect to deliver, convert earnings to cash at 100% in the long run, which means, again, that we will have ample capital to continue our capital location opportunity and to enhance that 15% EPS CAGR. All of this comes together sort of in financial terms.

And this is the summary of what we see in our future.

Right.

And then I will turn this over to Laura.

And advisory offering.

Is it all enable us to further consolidate that relationship that we have so we typically say the management consultants show up too. Many have asked similar clients with a different model, it's full management consultants and one technical expert and often that technical expert comes is a subject matter expert from outside sometimes it's for.

Thank you Troy.

Thank you Troy and good morning, everyone.

So one year into the creation.

Creation of our next billion dollar platform.

Higher margin platform being advisory business and now more than ever we see a tremendous opportunity for this to be a key contributor to that competitive advantage.

On a same like a come if they need well engineering and design Knowhow.

We're flipping that model on its head. So we show up advisory team show up with four technical experts, who are well nine over many years to my clients. They know us for that tremendous technical capability and knowledge and we also bring along one management consultant, we didn't grow that capability over not that way.

Yes.

Differentiated by out tremendous technical capability that is the key differentiator for us and our particular advisory offering we've seen over the last few years. The management consultants tried to encourage upon this infrastructure space everyone's excited about isn't ization infrastructure. So there has been a big move five months they consult.

Now one year in have ethane that is that complement the four technical experts and their management consultant.

Troy Rudd: This is the summary of what we see in our future. I'm going to now turn this over to Lara. Thank you, Troy. Thank you, Troy, and good morning, everyone. We're one year into the creation of our next billion-dollar platform, our higher margin platform being our advisory business. Now, more than ever, we see a tremendous opportunity for this to be a key contributor to our competitive advantage, all differentiated by our tremendous technical capability. That is the key differentiator for us and our particular advisory offering. We've seen over the last few years the management consultants try to encroach upon this infrastructure space. Everyone's excited about urbanization infrastructure. There has been a big move by the management consultants and the Big Four into our space. However, they don't have the technical substance.

Within the Ping fall into our space. However, they don't have the technical substance. The reason why we are number one the number one design plan number one across all of that can market is because we have the industry's best technical professionals and our clients and more than ever need this technical expertise as they plan their next strategic.

So it really disrupting the advisory industry, and we think that there is a tremendous white space that we haven't moved into them, which is unique to us because of that technical differentiation. So people are really noticing.

As I mentioned one of the key things is because of the long standing client relationships that we have we can automatically opened the doors at the faceplate, if many of our client organizations and give them.

Planned which projects to bring to market. So lots of management consultants can come with incredible cachet and brand.

They don't show up with a technical substance and get the in depth knowledge of our clients' portfolios and their assets like wages and we have the long standing relationships, we've built that client relationship moat.

Dips in the advice that we give them in terms of whatever challenges or opportunities they have.

One thing I want to be very clear on we have not just package up and packaged up a different team amongst that 50000 professionals globally. This is this is a different team and with a different commercial.

And advisory offering.

Is it all enable us to further consolidate that relationship that we have so we typically see the management consultants show up too many of that similar clients with a different model. It's full management consultants and one technical expert and also on that technical ex that comes is a subject matter expert from outside sometimes.

Aspiration.

So we've taken the time within E comm to be very clear that we have a higher margin expectation higher rates and what we're excited about is this is an entirely different commercial proposition with our clients. It's about value based pricing and the same applies to the the game changing a plan that we have around.

Troy Rudd: The reason why we are the number one design firm, number one across all of our key end markets is because we have the industry's best technical professionals. Our clients now, more than ever, need this technical expertise as they plan their next strategic plans, which projects to bring to market. Whilst the management consultants can come with incredible cachet and brand, they don't show up with the technical substance and the in-depth knowledge of our clients' portfolios and their assets like we do. We have the long-standing relationships. We've built that client relationship moat, and our advisory offering will enable us to further consolidate that relationship that we have. We typically see the management consultants show up to many of our similar clients with a different model. It's four management consultants and one technical expert.

Some of them like a come if they need well engineering and design Knowhow.

We're flipping that model on its head. So we show up advisory team show up with four technical experts, who are well nine over many years to our clients. They know us for that tremendous technical capability and knowledge and we also bring along one management consultant, we didn't grow that capability overnight that we.

AI is well it enables us to have a different very different commercial conversation and without pes had antecourt create that with our clients and to talk about what are the key success factors and how are we going to be incentivized and sharing that and really cross that model. So we really havent moved to another paradigm.

Now one year in have ethane that is that complement the technical experts and their management consultant.

Of advice to our clients when we joined that up with our program management capability that we've been building for the last few years, we extended our involvement across the project lifecycle and we it is positioned to come to a very different paradigm compared to our traditional peers.

So it really disrupting the advisory industry, and we think that there is a tremendous white space that we have moved into them, which is unique to us because of that technical differentiation. So people are really noticing.

So advisory is a key pillar of K component of the three pillars all stay in long term growth algorithm and I'll just explain how we sort of break that down in and make that contribution number one we see tremendous opportunity to really grow our market share and extend our influence as I say, we're moving to a different group.

Troy Rudd: Often that technical expert comes as a subject matter expert from outside. Sometimes it's from a firm like AECOM if they need real engineering and design know-how. We're flipping that model on its head. We show up. Our advisory team show up with four technical experts who are well-known over many years to our clients. They know us for that tremendous technical capability and knowledge. We also bring along one management consultant. We didn't grow that capability overnight, but we now, one year in, have a team that is that complement, the four technical experts and the management consultant. We're really disrupting the advisory industry, and we think that there is a tremendous white space that we have moved into, which is unique to us because of that technical differentiation. People are really noticing.

As I mentioned one of the key things is because of the long standing client relationships that we have we can automatically opened the doors at the faceplate, if many of our client organizations and give them.

And in the advice that we give them.

In terms of whatever challenges or opportunities they have.

That is occupied by the management consultants and that and we have tremendous confidence in the long days long term secular trends.

One thing I want to be very clear on we have not just package up and packaged up a different team amongst that 50000 professionals globally. This is this is a different team and with a different commercial.

In infrastructure urbanization. They are long term trends and we have deep knowledge of those trends and we are well poised now to be able with our advisory capability to help our clients can save what what is the best business case for their projects how do they rapidly bring projects to market you won't know that there is a lot of pent up demand in the infrastructure world.

Aspiration.

So we've taken the time within E comm to be very clear that we have a higher margin expectation higher rates and what we're excited about is this is an entirely different proposition with our clients. It's about value based pricing and the same applies to the the game changing.

Because of the budgetary challenges the geopolitical shocks that have happened, particularly over the last 12 months, So who better then I come to help our clients execute on that and bring those projects to market in the infrastructure World. The same applies to the energy transition the same applies to the world of resilience and sustainability.

Plan that we have around AI as.

Troy Rudd: As I mentioned, one of the key things is because of the long-standing client relationships that we have, we can automatically open the doors at the C-suite of many of our client organizations and give them depth in the advice that we give them in terms of whatever challenges or opportunities they have. One thing I want to be very clear on, we have not just packaged up a different team amongst our 50,000 professionals globally. This is a different team, and with a different commercial aspiration. We have taken the time within AECOM to be very clear that we have a higher margin expectation, higher rates. What we're excited about is this is an entirely different commercial proposition with our clients. It's about value-based pricing. The same applies to the game-changing plan that we have around AI as well.

It enables us to have a different very different commercial conversation than what our peers have.

Antique car create that with our clients and to talk about what are the key success factors and how are we going to be incentivized and sharing that and and really crossed that model. So we really havent moved to another paradigm.

We have market leading credentials through the the work that we've undertaken over the last couple of decades, particularly with our environmental services fan and the new advisory consultants that we've brought in.

Of advice to our clients when we joined that out with our program management capability that we've been building for the last few years, we extend our involvement across the project life cycle and we it is positioned and come to a very different paradigm compared to our traditional peers.

There are other market market share gains that we absolutely believe that we can take this market share to be taken at the municipal level. Many clients for example that traditional water clients.

So advisory is a key pillar of K component of the three pillars of thinking long term growth algorithm and I'll just explain how we sort of break that down in and make that contribution number one we see tremendous opportunity to really grow our market share and extend our influence as I say, we're moving to a different group that he.

Has revenue leakage they have a real need for advisory services to come and help them plan out what's next with respect to the portfolio of assets.

And then there is a very exciting white space that our advisory team. He has already made a great impact in and that is the world of private capital and infrastructure funds and financing you will know that there is a there are trailing it there are trillions literally abdullah that their infrastructure is a very attractive place for southern wealth funds.

Troy Rudd: It enables us to have a very different commercial conversation than what our peers have, to co-create that with our clients, and to talk about what are the key success factors and how we're going to be incentivized and share in that, and really craft that model. We really have moved to another paradigm of advice to our clients. When we join that up with our program management capability that we've been building for the last few years, we extend our involvement across the project lifecycle, and it's positioned AECOM to a very different paradigm compared to our traditional peers. Advisory is a key component of the three pillars of the long-term growth algorithm. I'll just explain how we sort of break that down and make that contribution. Number one, we see tremendous opportunity to really grow our market share and extend our influence.

Is occupied by the management consultants and that and we have tremendous confidence in the long days long term secular trends.

Infrastructure urbanization, how long term trends and we have deep knowledge of those trends and we are well poised now to be able with our advisory capability to help our clients. Okay. What is the best business case for their projects how do they rapidly bring projects to market. You. All know there is a lot of pent up demand in the infrastructure.

For pension funds for superannuation funds and investment firms to put their money. They say the long term value of it infrastructure and we're excited about many of the conversations that advisory team are having at the moment with many of their need clients in that space, who really want rapid timely advice and they want ideas.

The world because of budgeting challenges of geopolitical shocks.

At project creation. So it means that we can break free from the traditional transaction rate environment that many of our peers I mean, it will still be a participant in that but this is a very exciting white space for us to move into in terms of project creation market led proposals and an unsolicited proposals as well so.

Okay.

Who better then I come to help our clients.

Execute on that.

Projects to lock in the infrastructure World. The same applies to the energy transition the same applies to the world of <unk>.

In sustainability, we have.

Troy Rudd: As I said, we're moving to a different group that is occupied by the management consultants, and we have tremendous confidence in those long-term secular trends. Infrastructure, urbanization, they are long-term trends, and we have deep knowledge of those trends, and we are well poised now to be able, with our advisory capability, to help our clients conceive what is the best business case for their projects. How do they rapidly bring projects to market? You all know there is a lot of pent-up demand in the infrastructure world because of the budgetary challenges, the geopolitical shocks that have happened, particularly over the last 12 months. Who better than AECOM to help our clients execute on that and bring those projects to market in the infrastructure world? The same applies to the energy transition.

Okay.

That is a third element of that long term growth algorithm that represents a new space for us.

Okay.

Okay.

For decades, particularly with our environmental services side.

Clients need that support them now more than ever and our and our influence in the way that we grow this advisory business is going to be X life will scale.

Advisory and consulting with Godaddy.

There are other market market share gains that we absolutely believe that we can take this market share to be taken at the municipal level. Many clients for example that traditional water clients.

Obviously, there's a key opportunity here in the U S, but around the world. We look at the rebound that we're expecting in infrastructure over the next decade UK For example has a tenure infrastructure blueprint $725 billion of wash out of transportation energy infrastructure, they're going to need those clients are going to need our help with that.

Has revenue Lake H, they have a real need for advisory services to come and help them plan.

Planned out what's next with respect to the it portfolio of assets.

And then there is a very exciting white space that our advisory team has already made great impact in and that is the world of private capital and infrastructure funds and financing you will know that there is a there are trailing there are trillions literally a dollars out their infrastructure is a very attractive place for sovereign wealth funds.

How to rationalize and prioritize which projects and what is the technical advice that they need to bring those projects to market and here in the U S where in a 41% spent in terms of IHA a as I said is we know that there's significant opportunity at all levels of government to help bring these projects to market with those adviser.

Troy Rudd: The same applies to the world of resilience and sustainability, where we have market-leading credentials through the work that we've undertaken over the last couple of decades, particularly with our environmental services firm and the new advisory consultants that we've brought in. There are other market share gains that we absolutely believe that we can take. There's market share to be taken at the municipal level. Many clients, for example, our traditional water clients, have revenue leakage. They have a real need for advisory services to come and help them plan out what's next with respect to their portfolio of assets. There is a very exciting white space that our advisory team has already made a great impact in. That is the world of private capital and infrastructure funds and financing. You all know that there are trillions, literally, of dollars out there.

For.

Pension funds for seed.

Funds and investment firms to put their money they save the long term value of it infrastructure and we're excited about many of the conversations that advisory team are having at the moment with many of the new clients in that space, who really want rapid timely advice and they want ideas about project creation. So it means that we can be.

Our capabilities so our advisory capability in a nutshell is really helping our clients to prioritize projects had to navigate this new and ever changing funding environment also.

And as Troy explained when coupled with our.

AI capability, it's going to give tremendous confidence to our clients who have many great ideas about projects, but want a heightened level of technical understanding and confidence around what it's going to take and to deliver in a timely and cost efficient manner.

Mike framed from their traditional transactional environment that many of our peers.

We'll still be a participant in that but this is a very exciting white space for us to move into in Tencel project creation market led proposals and an unsolicited proposals as well. So that is the third element of that long term growth algorithm that represents a new space for us our clients need that support.

Critical to our success so far in India going forward has been the ability to attract the industry's best talent and you'll recall a year ago. We brought Joe had guns to E com as the leader of our advisory business. We started first in water and environment, only but one year in <unk>.

Now more than ever and our and our influence in the way that we grow with this advisory business is going to be ecological scale. Obviously, that's a key opportunity here in the U S. But around the world. We look at the rebound that we're expecting in infrastructure over the next decade U K for example has a tenure infrastructure.

Troy Rudd: Infrastructure is a very attractive place for sovereign wealth funds, pension funds, superannuation funds, and investment firms to park their money. They see the long-term value in infrastructure. We're excited about many of the conversations that our advisory team are having at the moment with many of the new clients in that space who really want rapid, timely advice, and they want ideas about project creation. It means that we can break free from the traditional transactionary environment that many of our peers are in. We'll still be a participant in that, but this is a very exciting white space for us to move into in terms of project creation, market-led proposals, and unsolicited proposals as well. That is the third element of that long-term growth algorithm that represents a new space for us. Our clients need that support now more than ever.

So a tremendous opportunity to really broaden that across all of our services, whether it's environment water transportation.

Facilities.

<unk>.

<unk> $725 billion of wash out transportation energy infrastructure, they can and that those clients are going to need our help with that how to rationalize and prioritize which projects and what is the technical advice that they need to bring those projects to market and here in the U S where in a 41% spent in terms of <unk>.

There's been great interest from many of our clients and most importantly, many of the people that kill his hide from the world of the Big four and the management consultants are truly excited about what we've been creating at icon I've had the pleasure to join until on many of those early interviews with some of those consultants and they said.

J a.

Very clearly we have the knowhow, we have the playbook in terms of what makes it mckinsey or base H a successful we now had to.

As I said is we know that there is significant opportunity at all levels of government to help bring these projects to market with those advisory capabilities.

Frame that differently to what you guys do we know how to price that differently to realize values, but what we're excited about and why you want to come and join economies. Because there is no. Other company that has the technical capability and the breadth of what you have at icon and we're really excited about what youll, creating with your advisory business. So it is relatively easy to attract.

Our advisory capability in a nutshell is really helping our clients to prioritize projects how to navigate this new and ever changing funding environment also.

Troy Rudd: Our influence and the way that we grow this advisory business is going to be at global scale. Obviously, there's a key opportunity here in the US, but around the world, we look at the rebound that we're expecting in infrastructure over the next decade. UK, for example, has a 10-year infrastructure blueprint, $725 billion of water, transportation, and energy infrastructure. Those clients are going to need our help about how to rationalize and prioritize which projects and what is the technical advice that they need to bring those projects to market. Here in the US, we're only 41% spent in terms of IIJA. As I said, we know that there's significant opportunity at all levels of government to help bring these projects to market with those advisory capabilities.

And as Roy explained when coupled with our.

AI capability, it's going to give tremendous confidence to our clients who have many great ideas about projects, but want a heightened level of technical understanding and confidence around what it's going to take in to deliver in a timely and cost efficient manner.

This fantastic talent to E com and we're excited about the many more team members that are going to join.

We have great confidence and the ability to double the size of this business are the three easily well advanced with that and to for this to be our next billion dollar platform and as Troy explained the longer term aspiration is painful advisory business and full program management, when we view those together.

Critical to our success so far in India going forward has been the ability to attract the industry's best talent and you'll recall a year ago, we brought Jill hudkins to E com as the leader of our advisory business. We started first in water and environment, only but one year and we.

For that to comprise 50% of our business in time and those two businesses together will be growing at a faster rate than the rest of the that the base business.

So a tremendous opportunity to really broaden that across all of our services, whether it's environment water transportation.

Troy Rudd: Our advisory capability, in a nutshell, is really helping our clients to prioritize projects, how to navigate this new and ever-changing funding environment also. As Troy explained, when coupled with our AI capability, it's going to give tremendous confidence to our clients who have many great ideas about projects but want a heightened level of technical understanding and confidence around what it's going to take to deliver in a timely and cost-efficient manner. Critical to our success so far, and indeed going forward, has been the ability to attract the industry's best talent. You'll recall a year ago, we brought Jill Hodkins to AECOM as the leader of our advisory business. We started first in water and environment only, but one year in, we saw tremendous opportunity to really broaden that across all of our services, whether it's environment, water, transportation, or our facilities.

We've taken a very disciplined approach to the talent the beat the plan that we have and the aspiration for our advisory business.

Facilities.

<unk>.

Theres been great interest from many of our clients and most importantly, many of the people that kill us hide from the world of the Big four and the management consultants are truly excited about what we've been creating at icon I've had the pleasure to join Jill on many of those early interviews with some of those consultants and they said.

And the investment of time and capital that we've had but we're well on track in terms of our aspiration for this business.

Just a quick update in terms of our talent capabilities and how important that is and what we've been building over the last few years you frequently get an update from us in terms of talent attraction and retention.

Very clearly we have the knowhow, we have the playbook in terms of what makes it mckinsey or base H a successful we now have two <unk>.

This is this is another great story, we've put a lot of time and attention into ensuring that we continue to attract the industry's best talent, whether it's an advisory or whether it's all about advocate disciplines.

Frame that differently to what you guys do we know how to price that differently to realize value, but what we're excited about and why do you want to come and join economies. Because there is no other company that has the technical capability.

And if they stay so the investments that we have made them are about the engagement of our people recognizing that the economy is the best place for them to build takes the reason we invested in leadership development at all levels instead of industry, leading learning and development programs and we're going to continue to do that well you recognize that.

The breadth of what you have at icon and we're really excited about what youll, creating with your advisory business. So it is relatively easy to attract this fantastic talent to E com and we're excited about the many more team members that are going to join.

Troy Rudd: There's been great interest from many of our clients. Most importantly, many of the people that Jill has hired from the world of the Big Four and the management consultants are truly excited about what we've been creating at AECOM. I've had the pleasure to join Jill on many of those early interviews with some of those consultants, and they said very clearly, we have the know-how. We have the playbook in terms of what makes a McKinsey or a BCG successful. We know how to frame that differently to what you guys do. We know how to price that differently to realize value. What we're excited about and why we want to come and join AECOM is because there is no other company that has the technical capability and the breadth of what you have at AECOM.

We have great confidence and the ability to double the size of this business are the three easily well advanced with that and to for this to be our next billion dollar platform and as Troy explained the longer term aspiration is painful advisory business and full program manager I mean do you guys together.

We now have a tremendous and even more diverse base of talented professionals and we remain very focused on continuing to expand out the AI team and our advisory team with the niche expertise that we require to successfully grow these businesses.

But that to comprise 50% of our business in time and those two businesses.

All of these talent acquisition and retention strategies are critical for ensuring that we continue to win at the rate that we have and have set levels of client satisfaction that we currently enjoy and most importantly, the levels there.

We're growing at a faster rate than the rest of the division.

So we've taken a disciplined approach to the talent the beat the plan that we have an aspiration for our advisory business.

Record high levels of staff engagement that we've been able to achieve as well. So all of this very important talent agenda, which remains a key priority for our management team will continue to ensure that we further extend our competitive advantage is a key factor for ensuring that we execute on our growth strategies and.

And the investment of time and capital that we've had but we're well on track in terms of our aspiration for this business.

Troy Rudd: We're really excited about what you're creating with your advisory business. It has been relatively easy to attract this fantastic talent to AECOM, and we're excited about the many more team members that are going to join. We have great confidence in the ability to double the size of this business over three years. We're well advanced with that for this to be our next billion-dollar platform. As Troy explained, the longer-term aspiration has been for our advisory business and for program management. When we view those together, for that to comprise 50% of our business in time. Those two businesses together will be growing at a faster rate than the rest of the business.

Just a quick update in terms of our talent capabilities.

And how important that is and what we've been building over the last few years, you frequently get an update from us in terms of talent attraction and retention.

And continue to create value for our shareholders. So thank you very much.

I bet you got now thank you Bob.

This is this is another great story, we've put a lot of time attention into ensuring that we continue to attract the industry's best talent, whether it's an advisory board.

Okay.

Thank you Laura good morning afternoon, everybody.

Without advocate disciplines.

First of all wanted to say thanks to our 50000 strong professionals across the globe because of whom we have been able to create sustained value for all of our stakeholders over the last five years, which has been really gratifying for this management team.

If they stay so the investments that we have made are about the engagement of our people recognizing that the economy is the best place for them to build Victoria. So we invested in leadership development at all levels.

Troy Rudd: We've taken a very disciplined approach to the talent, the plan that we have, and the aspiration for our advisory business and the investment of time and capital that we've had, but we're well on track in terms of our aspiration for this business. Just a quick update in terms of our talent capabilities and how important that is and what we've been building over the last few years. You frequently get an update from us in terms of talent attraction, retention. This is another great story. We've put a lot of time and attention into ensuring that we continue to attract the industry's best talent, whether it's in advisory or whether it's in all of our other key disciplines, and that they stay.

Instead of industry, leading learning and development programs and we're going to continue to do that we recognize that we now have a tremendous and even more diverse base of talented professionals and we remain very much on.

But as we stand here today in front of you that value creation opportunity of what we have achieved over the last five years is far greater.

In the near mid and long term as we move forward, leveraging what Troy and Lora I have shared with you.

Thanks.

The AI team and our advisory team.

And taste that we require to be successful I think all of these businesses.

Now the reason for my excitement and confidence is not because of the artist possible.

Uh huh.

All of these talent acquisition and retention strategies are critical for ensuring that we continue to win at the rate that we have and have the levels of client satisfaction that we currently enjoy and most importantly, the levels the record high levels of staff engagement that we've been at which at which AIDS as well so all of this very.

It is because we have already achieved what Troy has discussed specific to generative engineering design technology.

Please allow me be a little redundant here.

We're not standing here today discussing what we can do what the art of possible will be sometimes in the tomorrow. We have already achieved what we're sharing with you today now over the next 12 to 18 months, we will be scaling it across all of our end markets geographies and various asset.

Troy Rudd: The investments that we have made are about the engagement of our people, recognizing that AECOM is the best place for them to build their careers. We invested in leadership development at all levels, in sort of industry-leading learning and development programs, and we're going to continue to do that. We recognize that we now have a tremendous and even more diverse base of talented professionals, and we remain very focused on continuing to expand out the AI team and our advisory team with the niche expertise that we require to successfully grow these businesses. All of these talent acquisition and retention strategies are critical for ensuring that we continue to win at the rate that we have and have the levels of client satisfaction that we currently enjoy. Most importantly, the record-high levels of staff engagement that we've been able to achieve as well.

Important talent agenda, which remains a key priority for our management team will continue to ensure that we further extend our competitive advantage is a key factor for ensuring that we execute on our growth strategies.

And continue to create value for our shareholders. So thank you very much.

Types.

This management team takes a lot of pride in delivery.

I bet you got now thank you.

Over delivering in fact to any commitments make to our investor community.

This is because when we provide a commitment we have researched it we have piloted it we have tested it when you rinse and repeat that process again and again that is why we stand here today very confident in the financial commitment and the out.

Thank you Laura.

Good morning afternoon, everybody.

Yeah.

First of all wanted to say thanks to our 50000 strong professionals across the globe because of whom we have been able to create sustained value for all of our stakeholders over the last five years, which has been really gratifying for this management team.

Comes we will achieve over the next 36 months.

But as we stand here today in front of you that value creation opportunity of what we have achieved over the last five years is far greater in the near mid and long term as we move forward leveraging what Troy and Lora I have shared with you.

And the excitement and Youll see us from today is not solely limited to generative technology, we will scale.

Troy Rudd: All of this very important talent agenda, which remains a key priority for our management team, will continue to ensure that we further extend our competitive advantage. It is a key factor for ensuring that we execute on our growth strategies and continue to create value for our shareholders. Thank you very much. Over to Gar now. Thank you, Gar.

It is due to the expansive opportunities it provides our professionals to deliver solutions for their clients, which in turn deliver value for our shareholders. Now. Please let me allow give me some time to explain that a little bit more.

Now the reason for my excitement and confidence is not because of the RF possible.

You heard Troy state earlier and industrial <unk>.

It is because we have already achieved what choice you have discussed.

Age old problem and engineering and construction.

It is it takes always longer.

Generative engineering planning model.

Gaurav Kapoor: Thank you, Lara. Morning, afternoon, everybody. First of all, I wanted to say thanks to our 50,000 strong professionals across the globe because of whom we have been able to create sustained value for all of our stakeholders over the last five years, which has been really gratifying for this management team. As we stand here today in front of you, that value creation opportunity of what we have achieved over the last five years is far greater in the near, mid, and long term as we move forward, leveraging what Troy and Lara have shared with you. Now, the reason for my excitement and confidence is not because of the art of possible. It is because we have already achieved what Troy has discussed, specific to generative engineering design technology. Please allow me to be a little redundant here.

And it always cost more on projects.

Please allow me to be a little redundant here.

It doesn't matter, which geography, what type of project it will always take longer historically and it is always cost more than you originally anticipated and that cycle goes on again and again and again.

Standing here today discussing.

Yeah.

Art, if possible will be sometime tomorrow.

We have already achieved what we're sharing with you today now over the next 12 to 18 months, we will be scaling it across all of our end markets geographies and various asset types.

What we have created what we will allow our professionals to deliver solutions faster than anyone to their clients.

This management team takes a lot of pride in deliberate over delivering in fact through any commitments, we make to our investor community.

Make changes for whatever reasons, they may be in a matter of days and hours instead of months and weeks.

This is because when we provide a commitment we have research.

Now our professionals will create synthetic inference space mathematical design models, which supported the generative technology that will cut down total construct the book cost.

Piloted it we have tested it.

Rinse and repeat that process again, and again that is why we stand here today very confident in the financial commitment and the outcomes, we will achieve over the next 36 months.

I want to repeat that again, it will cut down total construct double cost by anywhere between 10% to 20% based on what we have already achieved.

Gaurav Kapoor: We're not standing here today discussing what we can do, what the art of possible will be sometimes in the tomorrow. We have already achieved what we're sharing with you today. Over the next 12 to 18 months, we will be scaling it across all of our end markets, geographies, and various asset types. This management team takes a lot of pride in delivering, over-delivering, in fact, to any commitments we make to our investor community. This is because when we provide a commitment, we have researched it, we have piloted it, we have tested it, we rinse and repeat that process again and again. That is why we stand here today very confident in the financial commitments and the outcomes we will achieve over the next 36 months. The excitement you see us from today is not solely limited to generative technology we will scale.

And the excitement youll see us from today is not solely limited to generative technology, we will scale.

I'll ask a question to the audience and all of those who are listening.

Today to our Investor day, what is the monetization opportunity.

It is due to the expansive opportunities that provides our professionals to deliver solutions for their clients, which in turn deliver value for our shareholders. Now. Please let me allow give me some time to explain that a little bit more.

When you have technology.

Which will deliver an asset earlier for your clients use of revenue generation may.

You heard Troy state earlier and industrial age.

Two its constituents at a lower cost basis, delivering a higher ROI.

The age old problem and engineering and construction.

What is the value to our public clients across all layers of government federal state local with limited funding, but significant infrastructure needs when we with our support our professionals and our tools generative tools, we have created and will scale.

It is it takes always longer.

And it always cost more on projects.

It doesn't matter, which geography, what type of project it will always take longer historically and it is always cost more than you originally anticipated and that cycle goes on again and again and again.

We'll make those dollars go farther.

What we have created what we will allow our professionals to deliver solutions faster than anyone to their clients.

Now I haven't even gotten into expanding.

Our Tam or total addressable market.

By all accounts every research report I've ever read somewhere between 60% to 80%.

<unk> changes for whatever reasons, they may be in a matter of days and hours instead of months and weeks.

Gaurav Kapoor: It is due to the expansive opportunities it provides our professionals to deliver solutions for their clients, which in turn deliver value for our shareholders. Now, please let me give me some time to explain that a little bit more. You heard Troy state earlier, an industrial age-old problem in engineering and construction. It takes always longer, and it always costs more on projects. It doesn't matter which geography, what type of project. It will always take longer historically, and it has always costed more than you originally anticipated. That cycle goes on again and again and again. What we have created, what we will allow our professionals to deliver solutions faster than anyone to their clients, make changes for whatever reasons they may be in a matter of days and hours instead of months and weeks.

Of our industry is fragmented. It is served by law small firms local proprietors because of constraints on labor.

Now.

Our professionals will create synthetic entrance base mathematical design models, which supported regenerative technology that will cut down total constructed will cost.

60% to 80% that is not being addressed by companies like E. Com, we have the technical prowess and now combined with this technology with our professionals, which expands their labor productivity.

To repeat that again, it will cut down total constructed will cost by anywhere between 10% to 20% based on what we have already achieved.

The fragmented fragmented market is for ours for the taking.

And not by doing expensive risky low ROI M&A. It is again by expanding labor productivity that till this point.

I'll ask a question to the audience and all of those who are listening today to our Investor day.

What is the monetization opportunity.

What's not possible that as the paradigm shift we're discussing.

When you have technology.

Which will deliver an asset earlier for your clients use of revenue generation.

Yeah.

Now.

One of the things that Troy has mentioned and as you see on this slide here is operating leverage let me explain this a little bit more.

Two its constituents at a lower cost basis, delivering a higher ROI.

What is the value to our public clients across all layers of government federal state local with limited funding, but significant infrastructure needs when we with our support our professionals and our tools generative tools, we have created and will scale.

Historically and AECOM has been part of that historical delivery.

For every dollar of revenue we generate it takes somewhere between 80 to 90 cents of variable cost to deliver that revenue, resulting in operating leverage of 10% to 20%.

Gaurav Kapoor: Now, our professionals will create synthetic inference-based mathematical design models with support of the generative technology that will cut down total constructible cost. I want to repeat that again. It will cut down total constructible cost by anywhere between 10% to 20% based on what we have already achieved. I'll ask a question to the audience and all of those who are listening today to our investor day. What is the monetization opportunity when you have technology which will deliver an asset earlier for your clients' use of revenue generation, maybe to its constituents at a lower cost basis, delivering a higher ROI?

We have been at the higher end of this operating leverage clearly as evidenced by the strong margins, we have delivered head and shoulders above our peer average.

We'll make those dollars go farther.

Now I haven't even gotten into expanding.

Our Tam or total addressable market.

With the technology generative technology that we have achieved and will be scaling it will allow us to expand that operating leverage we have already realized some of that in FY 'twenty six and the guidance, we're putting forth.

By all accounts every research report I've ever read somewhere between 60% to 80%.

Of our industry is fragmented. It is served by law small firms local proprietors because of constraints on labor.

It will continue to expand in the near future in the midterm to 30 60, 80%.

60% to 80% that is not being addressed by companies like E. Com, we have the technical prowess and now combined with this technology with our professionals, which expands their labor productivity.

And by the way this is not just for incremental revenue that we drive it is for the entire revenue base. That's the part that I left the best.

Gaurav Kapoor: What is the value to our public clients across all layers of government, federal, state, local, with limited funding but significant infrastructure needs when we, with our support, our professionals, and our tools, generative tools we have created and will scale, will make those dollars go farther? Now, I haven't even gotten into expanding our TAM, our total addressable market. By all accounts, every research report I've ever read, somewhere between 60% to 80% of our industry is fragmented. It is served by small firms, local proprietors because of constraint on labor. 60% to 80%, that is not being addressed by companies like AECOM. We have the technical prowess. Now, combined with this technology with our professionals, which expands their labor productivity, that defragmented market is ours for the taking. Not by doing expensive, risky, low ROI M&A.

The fragmented fragmented market is for ours for the taking.

Now we're not naive to think that this will just happen overnight.

And not by doing expensive risky low ROI M&A. It is again by expanding labor productivity that till this point was.

But it is going to happen quickly because again the disruption has already occurred and it has occurred we are at the forefront of it.

It was not possible that as the paradigm shift we're discussing.

We've already seen the progress we have made reaction of our people and clients and the investments that we're making in fiscal 2026 to scale those.

Now.

One of the things that Troy has mentioned and as you see on this slide here is operating leverage let me explain this a little bit more.

Those investments are reflected in the margins.

This is excluding our cm business, where we expect to deliver even with the investments of 60 to 70 Bips that.

Historically and AECOM has been part of that historical delivery for.

For every dollar of revenue we generate it takes somewhere between 80 to 90 of variable cost to deliver that revenue, resulting in operating leverage of 10% to 20%.

But we're gonna be making in the business through our margins that is included in the $16 six even with that 60 to 70 basis points.

We will be delivering higher margins than what we achieved.

For FY 'twenty five.

We have been at the higher end of this operating leverage clearly as evidenced by the strong margins, we have delivered head and shoulders above our peer average.

It gives you a bridge of what we expect are the building blocks to deliver 20 plus percent margin as we exit velocity for fiscal year 2028. So these investments that we're making in fiscal 2026 to scale are not just driving FY 'twenty six benefit but an extrapolation.

With the technology generative technology that we have achieved and will be scaling it will allow us to expand that operating leverage we have already realized some of that in FY 'twenty six and the guidance. We're putting forward. It will continue to expand in the near future.

Gaurav Kapoor: It is, again, by expanding labor productivity that till this point was not possible. That is the paradigm shift we're discussing. Now, one of the things that Troy has mentioned, and as you see on this slide here, is operating leverage. Let me explain this a little bit more. Historically, and AECOM has been part of that historical delivery. For every dollar of revenue we generate, it takes somewhere between $0.80 to 0.90 of variable cost to deliver that revenue, resulting in operating leverage of 10% to 20%. We have been at the higher end of this operating leverage, clearly as evidenced by the strong margins we have delivered, head and shoulders above our peer average. With the technology, generative technology that we have achieved and will be scaling, it will allow us to expand that operating leverage.

<unk> expansive benefit throughout the organization into the near and midterm advisory business as Lora pointed out we'll continue to also provide tailwind as we scale up from a base level of $200 million of MSR to 400 millions as we exit FY 'twenty eight at higher value.

In the midterm to 30 60, 80%.

And by the way this is not just for incremental revenue that we drive it is for the entire revenue base. That's the part that I left the best.

Higher margins and one thing that you all have become accustomed to and should always hold a econ responsible for it.

Now we're not nave to think that this will just happen overnight.

Is our focus and management continuous improvement, we will always look for opportunities to better our margins make our infrastructure and our cost more efficient let it be from our global business services, which are our support functions.

But it is going to happen quickly because again the disruption has already occurred and it has occurred we are at the forefront of it.

We've already seen the progress we have made reaction of our people and clients and the investments that we're making in fiscal 2026 two scale.

R E C centers, where we're exiting close to 7% of our direct labor hours running through those capability centers, we know theres still a lot of room for us available to continue to utilize that and driving technology agenda technology generative technology in the way that we work.

Those investments are reflected in the margins.

This is excluding our cm business, where we expect to deliver even with the investments of 60 to 70 bps that.

Gaurav Kapoor: We have already realized some of that in FY26 and the guidance we're putting forth. It will continue to expand in the near future, in the midterm, to 30%, 60%, 80%. By the way, this is not just for incremental revenue that we drive. It is for the entire revenue base. That's the part that I love the best. Now, we're not naive to think that this will just happen overnight, but it is going to happen quickly because, again, the disruption has already occurred, and it has occurred. We are at the forefront of it. We've already seen the progress we have made, reaction of our people and clients, and the investments that we're making in fiscal 2026 to scale. Those investments are reflected in the margins.

That we're going to be making in the business through our margins that is included in the $16 six even with that 60 to 70 basis points.

We will be delivering higher margins than what we achieved.

One key element.

For FY 'twenty five.

To our success has been focus.

It gives you a bridge of what we expect are the building blocks to deliver 20 plus percent margin as we exit velocity for fiscal year 2028. So these investments that we're making in fiscal 2026 to scale are not just driving FY 'twenty six benefit but an extrapolation.

Five and a half years ago. When this team took over.

We looked at the best and highest returning opportunities best ROI opportunities and made decisions where to focus to create sustainable value.

Create value for all of our stakeholders that included exiting almost 65 countries over that time period exiting from risky businesses that did not drive the right value creation opportunities for our shareholders.

<unk>.

<unk> benefit throughout the organization into the near and midterm Advisory business as Lora pointed out we'll continue to also provide tailwind as we scale up from a base level of $200 million of MSR to 400 millions as we exit FY 'twenty eight at higher value higher margins.

Gaurav Kapoor: This is excluding our CM business, where we expect to deliver, even with the investments of 60 to 70 basis points that we're going to be making in the business through our margins. That is included in the 16.6. Even with that 60 to 70 basis points, we will be delivering higher margins than what we achieved for FY25. It gives you a bridge of what we expect are the building blocks to deliver 20% plus margin as we exit velocity for fiscal year 2028. These investments that we're making in fiscal 2026 to scale are not just driving FY26 benefit, but an extrapolated, expansive benefit throughout the organization into the near and midterm.

As we sit here today, hopefully, it's becoming clear to you the opportunity in our professional services design engineering business argument.

And one thing that you all have become accustomed to and should always hold AE com responsible for it.

Arguments made by our advisory services, but the opportunity for generalists technology.

As our focus and management of continuous improvement, we will always look for opportunities to better our margins make our infrastructure and our cost more efficient let it be from our global business services, which are our support functions.

The ROI opportunity is significant in front of us.

It deserves our full focus and attention and although our cm business, which has been a very good business over the last few years, we will be undertaking strategic reviews, including potential sale that means starting in Q1.

R E C centers, where we're exiting close to 7% of our direct labor hours running through those capability centers, we know theres still a lot of room for us available to continue to utilize that.

It will be shifting to discontinued operations as required by the accounting rules.

And driving technology agenda technology generative technology in the way that we work.

One of the things I did want to share on capital allocation.

Gaurav Kapoor: Advisory business, as Lara pointed out, will continue to also provide tailwinds as we scale up from our base level of $200 million of NSR to $400 million as we exit FY28 at higher value, higher margins. One thing that you all have become accustomed to and should always hold AECOM responsible for is our focus and management of continuous improvement. We will always look for opportunities to better our margins, make our infrastructure and our cost more efficient. Let it be from our global business services, which are our support functions, our EC centers, where we're exiting close to 7% of our direct labor hours running through those capability centers. We know there's still a lot of room for us available to continue to utilize that and driving technology, agentic technology, generative technology in the way that we work.

No changes from us.

We will continue to focus returns because that is what drives sustained value creation for our shareholders.

One key element.

To our success has been focus.

Five and a half years ago. When this team took over.

That includes proceeds from our construction management business. Upon a sale will be used consistently with how have we have use capital in the past to repurchase our stock at the same time I think it is very important for everybody to remember we don't build in buybacks into our guidance. It is impossible to do so.

We looked at the best and highest returning opportunities best ROI opportunities and made decisions where to focus to create sustainable value.

Create value for all of our stakeholders that included exiting almost 65 countries over that time period exiting from risky businesses that did not drive the right value creation opportunities for our shareholders.

Based on timing quantum pricing all of those things.

Those proceeds we expect based on everything we know.

Once we have bought back our stock E. P. S will not be dilutive for the Standalone remain co company.

As we sit here today.

Hopefully, it's becoming clear to you the opportunity and our professional services design engineering business.

Quickly sharing our results for FY 'twenty five.

Arguments made by our advisory services, but the opportunity for generalists technology.

It was another very strong year, including driving.

Gaurav Kapoor: One key element to our success has been focus. Five and a half years ago, when this team took over, we looked at the best and highest returning opportunities, best ROI opportunities, and made decisions where to focus to create sustainable value, create value for all of our stakeholders. That included exiting almost 65 countries over that time period, exiting from risky businesses that did not drive the right value creation opportunities for our shareholders. As we sit here today, hopefully, it's becoming clear to you the opportunity in our professional services design engineering business, augmented by our advisory services, but the opportunity for generative technology, the ROI opportunity is significant in front of us. It deserves our full focus and attention. Although our CM business, which has been a very good business over the last few years, we will be undertaking strategic reviews, including potential sale.

The ROI opportunity is significant in front of us.

Strong organic growth at the top end of our peer set from those who have reported in fourth quarter. We raised our guidance three times during the year and even after raising it three times.

It deserves our full focus and attention and although our <unk> business, which has been a very good business over the last few years, we will be undertaking strategic reviews, including potential sale that means starting in Q1.

Due to the hard work of our professionals, we were able to over deliver in Q4 compared to consensus again.

We've exceeded on EBITDA and EPS and margins in fact, when you look at EBITDA and EPS. The original guidance that we made for FY 'twenty five this point last year, we're at the top end of the range.

It will be shifting to discontinued operations as required by the accounting rules.

Yeah.

One of the things.

I did want to share on capital allocation expect no changes from us.

Margin percentage.

I'd be remiss, if I didn't go back and remind everybody we were supposed to achieve the 17% exit velocity.

We will continue to focus returns because that is what drives sustained value creation for our shareholders.

Next year.

That includes proceeds from our construction management business upon a sale will be used consistently with how we have used capital in the past to repurchase our stock at the same time I think it is very important for everybody to remember we don't build in buybacks into our guidance it.

We achieved it five quarters early second half of the year, we've delivered 17, 1% margins.

And as importantly on the right side.

Is our backlog.

Any way you slice and dice it.

It is impossible to do so based on timing quantum pricing all of those things.

20 quarters in a row, we have delivered while contributing organic growth above or at the near top every single quarter of our peer group our backlog has been one extra better.

Those proceeds we expect based on everything we know.

Once we have bought back our stock EPS will not be dilutive for the Standalone remain co company.

Gaurav Kapoor: That means starting in Q1, it will be shifting to distribute operations as required by the accounting rules. One of the things I did want to share on capital allocation, expect no changes from us. We will continue to focus returns, because that is what drives sustained value creation for our shareholders. That includes proceeds from our construction management business upon a sale will be used consistently with how we have used capital in the past to repurchase our stock. At the same time, I think it is very important for everybody to remember we don't build in buybacks into our guidance. It is impossible to do so based on timing, quantum, pricing, all of those things. Those proceeds we expect, based on everything we know, once we have bought back our stock, EPS will not be dilutive for the standalone remaining co-company.

In Q4, FY 'twenty five we delivered one onex with strong organic growth.

Quickly sharing our results for FY 'twenty five.

This was in our international markets.

And in Americas market.

It was another very strong year, including driving.

And when we look at our pipeline our pipeline continues to be very robust, including the early phase of our pipeline, where we see growth of almost 20% across most geographies and all end markets, which sets us up well going into FY 'twenty six.

Strong organic growth at the top end of our peer set from those who have reported in fourth quarter. We.

We raised our guidance three times during the year and even after raising it three times.

The hard work of our professionals, we were able to over deliver in Q4 compared to consensus again.

Allows us to make the investments we have been making and will continue to make in FY 'twenty six including the 60 to 70 bps of margin investments organically in FY 'twenty six to scale the technology, we have developed.

We've exceeded.

On EBITDA and EPS and margins in fact, when you look at EBITDA and EPS. The original guidance that we made for FY 'twenty five this point last year, we're at the top end of the range.

For FY 'twenty six guidance, we hadn't providing it two ways one is an apples and apples comparison for everybody's benefit for Holdco, which includes.

Margin percentage be remiss, if I didn't go back and remind everybody we were supposed to achieve 17% exit velocity.

Next year.

Construction management.

We achieved it five quarters early second half of the year, we've delivered 17, 1% margins.

Gaurav Kapoor: Quickly sharing our results for FY25, it was another very strong year, including driving strong organic growth at the top end of our peer set from those who have reported in fourth quarter. We raised our guidance three times during the year, and even after raising it three times, due to the hard work of our professionals, we were able to overdeliver in Q4 compared to consensus again. We've exceeded on EBITDA, EPS, and margins. In fact, when you look at EBITDA and EPS, the original guidance that we made for FY25, this point last year, we're at the top end of the range. Margin percentage, be remiss if I didn't go back and remind everybody, we were supposed to achieve the 17% exit velocity next year. We achieved it five quarters early. Second half of the year, we've delivered 17.1% margins.

7% and 9%, respectively on adjusted EBITDA, and EPS and as we're going through the discontinued op.

Yeah.

And as importantly on the right side.

Operations calculations right now we've also provided to you our FY 'twenty six guidance, excluding construction management or what we called remain Coke that is what we will be reporting on going forward.

As our backlog.

Any way you slice and dice it.

20 quarters in a row, we have delivered while contra.

Contributing organic growth above or at the near top every single quarter of our peer group our backlog has been one extra better.

The growth.

Is very consistent on topline.

On EBITDA and EPS.

And one thing this management team has been focused on and we'll always be focused on is ensuring not that just we deliver but for every opportunity provides to us we over deliver on the commitments we make.

In Q4, FY 'twenty five we delivered one onex with strong organic growth. This was in our international markets and in Americas market.

And when we look at our pipeline our pipeline continues to be very robust, including the early phase of our pipeline, where we see growth of almost 20% across most geographies and all end markets, which sets us up well going into FY 'twenty six.

For FY 'twenty six cash will be impacted only in FY 'twenty six based on the investments and the restructuring we will undertake to right size our platform with the divestment of C M and overall adoption of the technologies that.

Gaurav Kapoor: As importantly, on the right side is our backlog. Any way you slice and dice it, 20 quarters in a row, we have delivered while contributing organic growth above or at the near top every single quarter of our peer group. Our backlog has been 1x or better. In Q4 FY2025, we delivered 1.1x with strong organic growth. This was in our international markets and in America's market. When we look at our pipeline, our pipeline continues to be very robust, including the early phase of our pipeline where we see growth of almost 20% across most geographies and all end markets, which sets us up well going into FY2026.

Laos us to make the investments we have been making and will continue to make in FY 'twenty six including the 60 to 70 bps of margin investments organically in FY 'twenty six to scale the technology, we have developed.

And that we're creating and scaling.

Okay.

One thing.

I wanted to share with you guys on our long term targets and emphasize as I walk through the different pieces, we don't see a change.

For FY 'twenty six guidance, we hadn't providing it two ways one is an apples and apples comparison for everybody's benefit for Holdco, which includes <unk>.

Into our long term growth algorithm for top line.

Hopefully again, it's becoming clear to you we're expanding the ways on how we will be approaching the market and taking market share away continue to take market share away.

Construction management.

7% and 9%, respectively on adjusted EBITDA, and EPS and as we're going through the discontinued operations calculations right now.

Based on the technology, we have developed.

We're not no longer just solely reliant on the funding of our clients because we have a competitive edge in our platform more than we have ever had before something that we have not seen in the marketplace from anybody not our peers not software providers for the clear reasons.

We've also provided to you our FY 'twenty six guidance, excluding construction management or what we call remain coal that is what we will be reporting on going forward.

The growth.

Gaurav Kapoor: It allows us to make the investments we have been making and will continue to make in FY26, including the 60 to 70 basis points of margin investments organically in FY26 to scale the technology we have developed. For FY26 guidance, we have been providing it two ways. One is an apples and apples comparison for everybody's benefit for Holdco, which includes construction management, 7% and 9% respectively on adjusted EBITDA and EPS. As we are going through the discontinued operations calculations right now, we have also provided to you our FY26 guidance excluding construction management or what we call Remain Co. That is what we will be reporting on going forward. The growth is very consistent on top line, on EBITDA, and EPS.

Is very consistent on top line.

On EBITDA and EPS.

Roy stated earlier.

We're also raising what we think.

And one thing this management team has been focused on and we'll always be focused on is ensuring not that just we deliver but for every opportunity provides to us we over deliver on the commitments we make.

We will be delivering on EPS growth.

CAGR over the next few years again. This does not include our capital allocation impact of repurchases, which our capital allocation strategy.

Okay.

For FY 'twenty six cash will be impacted only in FY 'twenty six based on the investments and the restructuring we will undertake to rightsize our platform with the divestment of <unk> and overall adoption of the technologies.

Continues to be unchanged.

Yeah.

And the last thing.

I want to leave you guys with as we take a step back.

As we think the future is bright for many reasons.

That we're creating and scaling.

As we have shared with you today.

Okay.

But if you have one takeaway I remember this.

One thing.

The most common question when we have spoken to our analyst community to our investors prospective investors over the past five years.

I wanted to share with you guys on our long term targets and emphasize as I walk through the different pieces, we don't see a change.

Has been.

Into our long term growth algorithm for top line.

How can you grow in a labor constrained market.

Hopefully again, it's becoming clear to you we're expanding the ways on how we will be approaching the market and taking market share away continuing to take market share away.

Gaurav Kapoor: One thing this management team has been focused on and will always be focused on is ensuring not that just we deliver, but for every opportunity provided to us, we overdeliver on the commitments we make. For FY26, cash will be impacted only in FY26 based on the investments and the restructuring we will undertake to right-size our platform with the divestment of CM and overall adoption of the technologies that we're creating and scaling. One thing I wanted to share with you guys on our long-term targets and emphasize as I walk through the different pieces, we don't see a change into our long-term growth algorithm for top line. Hopefully, again, it's becoming clear to you. We're expanding the ways on how we will be approaching the market and taking market share away, continue to take market share away based on the technology we have developed.

How can you continue to grow when you're delivering such strong organic growth year after year and the labor market is constrained in our industry.

Based on the technology, we have developed where it's no longer just solely reliant on the funding of our clients because we have a competitive edge in our platform more than we have ever had before something that we have not seen in the marketplace from anybody not our peers.

It's a valid question, even today, but not for E. Com. It is a valid question for our peers.

Because we have changed the paradigm of the value creation opportunity.

Thank you very much.

Thank you.

My Mic on.

Not software providers for the clear reasons Troy stated earlier.

That's good.

Again, so I think it will at this point in time, we'll open it up to questions.

We're also raising what we think.

Okay.

We will be delivering on EPS growth.

I think Steve you had your hand up first.

CAGR over the next few years again. This does not include our capital allocation impact of repurchases, which our capital allocation strategy.

Thanks for the Great presentation, Steve Fisher UBS, So I just want to clarify how you get to this 50% operating leverage improvement.

Continues to be unchanged.

Yeah.

And the last thing.

Is that the combination of having fewer team members on the team.

I want to leave you guys with as we take a step back.

And using your internal resources more efficiently, but then at the same time since your cost central or do you need to.

As we think the future is bright for many reasons.

Gaurav Kapoor: We're no longer just solely reliant on the funding of our clients because we have a competitive edge in our platform more than we have ever had before, something that we have not seen in the marketplace from anybody, not our peers, not software providers, for the clear reasons Troy stated earlier. We're also raising what we think we will be delivering on EPS growth, CAGR, over the next few years. This does not include our capital allocation impact of repurchases, which our capital allocation strategy continues to be unchanged. The last thing I want to leave you guys with as we take a step back is we think the future is bright for many reasons, as we have shared with you today. If you have one takeaway, remember this.

As we have shared with you today, but if you have one takeaway I remember this.

The most common question when we have spoken to our analyst community to our investors prospective investors over the past five years.

Change the revenue model can you talk about price for value does it become a sort of blanket fixed price for a project and then you just deliver at a lower cost could you just clarify that please thanks for starting with a really simple question Steve.

Has been.

How can you grow in a labor constrained market.

Yeah.

So I would take that in two pieces.

How can you continue to grow when you're delivering such strong organic growth year after year and the labor market is constrained in our industry.

First in terms of the operating leverage.

The way we think about this is you know our traditional team has had a group of let's just say a group of engineers with different disciplines that would come together and they would spend their hours to deliver project.

It's a valid question, even today, but not for AE com. It is a valid question for our peers, because we have changed the paradigm of the value creation opportunity.

So you can think about it. This way is you can introduce an AI model or you can use introduce elements of AI and they can act like a teammate.

Thank you very much.

Yeah.

So now the engineer will work together with an AI model or it'll work together with our new team made and as a result of that.

Thank you.

My Mic on.

That's good.

That work gets done differently, so you're effectively you're extending the ability of the team of engineers.

Again, so I think it will at this point in time, we'll open it up to questions.

Gaurav Kapoor: The most common question when we have spoken to our analyst community, to our investors, prospective investors over the past five years has been, how can you grow in a labor-constrained market? How can you continue to grow when you're delivering such strong organic growth year after year and the labor market is constrained in our industry? It's a valid question even today, but not for AECOM. It is a valid question for our peers because we have changed the paradigm of the value creation opportunity. Thank you very much. Thank you, Mark. My mic on? It's good? Great. Again, I think at this point in time, we'll open it up to questions. I think, Steve, you had your hand up first.

Okay.

I think Steve you had your hand up first.

The other thing Youre doing is youre actually shrinking the time and the effort that it took because of the new teammates to do it and so effectively you know that changes the operating leverage paradigm and so one of the things that we've been doing is we've been working with us on projects to actually understand what the implications are in terms of a reduction.

Thanks for a great presentation, Steve Fisher UBS, So I just want to clarify how you get to this 50% operating leverage improvement.

Is that the combination of having fewer team members on the team.

In the late traditional labor right or the traditional hours that our engineers would deploy in a project and so we've seen that we've taken an extraordinary amount of hours to date out of those projects and so that you know again I'll give you a sense of what we're talking about we're talking about entirely different teammates that are AI models.

And using your internal resources more efficiently, but then at the same time since your cost central or do you need to.

<unk> changed the revenue model, you're talking about price for value does it become a sort of blanket fixed price for a project and then you just deliver at a lower cost could you just clarify that please thanks for starting with a really simple question Steve.

I think we're talking about a significantly less amount of time to deliver the same outcome with those people's time and that creates a slug. This operating leverage now.

Yes.

So I would take that in two pieces.

Now you asked a question about revenue.

First in terms of the operating leverage.

Think about it this way is in our industry.

The way we think about this is you know.

There's a market price for what we do.

Our traditional team has had a group of let's just say a group of engineers with different disciplines that would come together and they would spend their hours to deliver project.

And when we compete we all have worked with our customers a lot of times those prices are actually public and public procurements and so there's a market price for what we do put aside.

Steven Fisher: Thanks for that great presentation, Steven Fisher, UBS. I just want to clarify how you get to this 50% operating leverage improvement. Is that the combination of having fewer team members on the team and using your internal resources more efficiently, but then at the same time, since you're cost-central, or do you need to change the revenue model? You're talking about price for value. Does it become a sort of blanket fixed price for a project and then you just deliver at a lower cost? You could just clarify that, please.

So you can think about it. This way is you can introduce an AI model or you can introduce elements of AI and they can act like a teammate.

How it's actually structured whether it's a fee a fixed fee or cost plus or unit price.

There is a value that the industry pays for getting a design outcome or getting a program management outcome.

So now the engineer will work together with an AI model or it'll work together with our new team made and as a result of that that work gets done differently. So you're effectively you're extending the ability of the team of engineers.

And so we look at it this way as we sort of have the opportunity to price to market.

And if the margins are better in price in the market. We decide what we wanted to do with it our objective is to keep it.

The other thing Youre doing is youre actually shrinking the time and the effort that it took because of the new teammates to do it and so.

We may make some different decisions and then you start to think about okay. Well there are different means of our customers price.

Troy Rudd: Thanks for starting with a really simple question, Steve. I'll take that in two pieces. First, in terms of the operating leverage, the way we think about this is a traditional team has had a group of, let's just say, a group of engineers with different disciplines that would come together, and they would spend their hours to deliver a project. You can think about it this way: you can introduce an AI model, or you can introduce elements of AI, and they can act like a teammate. Now the engineer will work together with an AI model, or it'll work together with a new teammate. As a result of that, that work gets done differently. Effectively, you're extending the ability of the team of engineers.

Yeah.

That changes the operating leverage paradigm and so one of the things that we've been doing is we've been working with us on projects to actually understand what the implications are in terms of a reduction in the late traditional labor right or the traditional hours that our engineers would deploy in a project and so we've seen that we've taken extraordinary.

And you know.

When we go through we do this work we're going to have an experience where we will decide this is what the market price would be and we would deliver it for that quantum of work. We can now deliver it for an entirely different quantum of work with that experience will then have the opportunity to go and have a discussion with our customers, but maybe we want to change the market price.

Erie Mount of hours to date out of those projects and so that you know again I'll give you a sense of what we're talking about we're talking about entirely different teammates that are AI models.

But I don't think we need to I actually think it's the opposite I think because we're gonna be delivering designs or does it not work that's such a profoundly improved outcome for our customers I don't think we need to change market price to actually capture capture more market share.

We're talking about a significantly less amount of time to deliver the same outcome with those people's time and that creates a slump this operating leverage now.

Thanks, and my follow up is in terms of customer receptivity and I know, it's still pretty early but based on what you've been kind of working on and the customers who've been working with already is there any early indication as to kind of where the adoption is going to be most prevalent in and quick basically.

Now you asked a question about revenue.

Think about it this way is in our industry.

Troy Rudd: The other thing you're doing is you're actually shrinking the time and the effort that it took because of the new teammates to do it. Effectively, that changes the operating leverage paradigm. One of the things that we've been doing is we've been working with this on projects to actually understand what the implications are in terms of a reduction in the traditional labor, right, or the traditional hours that our engineers would deploy in a project. We've seen that we've taken an extraordinary amount of hours to date out of those projects. That, again, will give you a sense of what we're talking about. We're talking about entirely different teammates that are AI models, and we're talking about a significantly less amount of time to deliver the same outcome with those people's time. That creates this operating leverage.

There's a market price for what we do.

And when we compete we all have worked with our customers a lot of times those prices are actually public and public procurements and so there's a market price for what we do put aside.

<unk> private sector public sector large projects smaller projects end markets geographies, how do you see that.

How it's actually structured whether it's a fee a fixed fee or cost plus or unit price.

Well I can't give you I can't give you a data point on everything because again, we've only sort of taken us out.

There is a value that the industry pays for getting a design outcome or getting a program management outcome.

Sort of a certain segments of our client base or a market.

And so we look at it this way as we sort of have the opportunity to price to market.

But what we did is we did a couple of things in the process. One is I can tell you from.

The work we're doing now.

And if the margins are better in price in the market. We decide what we wanted to do with it our objective is to keep it but.

Client acceptance is easy.

Because again as I said, they still require the same things they still require the confidence of that team. They still require you to certify the results that that is not changing but the.

We may make some different decisions.

So I just think about okay, where there are different means of our customers price.

Gulf that they're getting is different and more valuable right. They still have that trusted client relationships. So they trust us to deliver that and so when you come in and you sort of explain the different kind of out you can get for them. They are incredibly receptive to that and especially when you sort of go through the I call. It the private customer in the public customer they all face the same.

Troy Rudd: Now, you asked a question about revenue. Think about it this way: in our industry, there's a market price for what we do. When we compete, we all have worked with our customers. A lot of times, those prices are actually public in public procurements. There's a market price for what we do. Put aside how it's actually structured, whether it's a fee, a fixed fee, a cost plus, a unit price, there is a value that the industry pays for getting a design outcome or getting a program management outcome. We look at it this way: we sort of have the opportunity to price to market. If the margins are better in pricing to market, we decide what we want to do with it. Our objective is to keep it, but we make some different decisions.

And you know.

When we go through we do this work we're going to have an experience where we will decide this is what the market price would be and we would deliver it for that quantum of work. We can now deliver for an entirely different quantum of work with that experience will then have the opportunity to go and have a discussion with our customers about maybe we want to change the market price.

<unk>.

And the same challenges is there's a limited amount of funding.

But I don't think we need to I actually think it's the opposite I think because we're gonna be delivering designs are delivering our work that's such a profoundly improved outcome for our customers I don't think we need to change market price to actually capture capture more market share.

And there's an unlimited amount of infrastructure ambition.

And so.

They're they're widely accepting this we don't we haven't found a client yet that says well hang on a second I'm not willing to do that we actually found the opposite the other thing we did as part of this process. We went out and we actually talk to customers. When we actually went out with an outside firm that wasn't us.

Thanks, and my follow up is in terms of customer receptivity and I know, it's still pretty early but based on what you've been kind of working on the customers who've been working with already is there any early indication as to kind of where the adoption is going to be most prevalent in.

To just to test this on our customer base and we found across the across our customer public and private.

Troy Rudd: You sort of think about, well, okay, there are different means of how our customers price. When we go through and we do this work, we're going to have an experience where we will decide this is what the market price would be, and we would deliver it for that quantum of work. We can now deliver it for an entirely different quantum of work. With that experience, we'll then have the opportunity to go and have a discussion with our customers about maybe we want to change the market price. I don't think we need to. I actually think it's the opposite. I think because we're going to be delivering designs or delivering our work that's such a profoundly improved outcome for our customers, I don't think we need to change market price to actually capture more market share.

And almost unbridled willingness to accept this innovation.

Quick basically private sector public sector large projects smaller projects end markets geographies, how do you see that.

Thank you.

[laughter].

Well I can't give you I can't give you a data point on everything because again, we've only sort of taken us out.

Uh huh.

Good morning, Adam <unk> with Goldman Sachs, It looks like you're investing through margins.

It's sort of a certain segments of our client base of our market.

To invest in AI development do you have strong visibility on the duration and magnitude of those investments or should we think about this.

But what we did is we did a couple of things in the process. One is I can tell you from.

The work we're doing now.

Our client acceptance is easy.

It's a moving target as you continue to iterate on your tools Yeah. That's a good question Adam.

Because again as I said, they still require the same things they still require the confidence of that team. They still require you to certify the results that that's not changing.

The easiest way to think about it is we're going to continue to invest however, all of those investments are built into the targets. We have set so there's the initial investment year. That's why you see the 60 to 70 bps in FY 'twenty six coming into play, but as the targets. We put forward for FY 'twenty seven exiting FY 'twenty eight.

Steven Fisher: Great, thanks. My follow-up is in terms of customer receptivity. I know it's still pretty early, but based on what you've been kind of working on and the customers you've been working with already, is there any early indication as to kind of where the adoption is going to be most prevalent and quick, basically? Private sector, public sector, large projects, smaller projects, and markets, geographies? How do you see that?

But the result that theyre getting is different and more valuable right. They still have that trusted client relationships. So they trust us to deliver that and so when you come in and you sort of explain the different kind of out you can get for them.

They are incredibly receptive to that and especially when you sort of go through the I'll call. It the private customer in the public customer they all face the same challenges.

Plus per cent that is net of the investment that's going to take us to continue to scale continue to develop and always be ahead of the curve as we are right now.

And the same challenges is there's a limited amount of funding.

And then a follow up on program management looks like your ambitions are to continue to grow out the mix of that business can you just provide an update on what the trajectory there looks like today and then curious how are customers using you for the total package today will you be engaged for program management advisory.

Troy Rudd: Well, I can't give you a data point on everything because, again, we've only sort of taken this out in sort of certain segments of our client base or our market. What we did is we did a couple of things in the process. One is I can tell you from the work we're doing now, the client acceptance is easy. Because, again, as I said, they still require the same things. They still require the confidence of that team. They still require you to certify the results. That's not changing. The result that they're getting is different and more valuable, right? They still have that trusted client relationship, so they trust you to deliver that. When you come in and you sort of explain the different kind of outcome you can get for them, they're incredibly receptive to that.

And there is an unlimited amount of infrastructure ambition.

And so.

They're they're widely accepting this we don't we haven't found a client yet that says well hang on a second I'm not willing to do that we actually found the opposite the other thing we did as part of this process. We went out and we actually talk to customers. When we actually went out with an outside firm that wasn't us.

Engineering and design is there a way to frame the opportunity to sort of internal lives all that with an acre.

So just to test this on our customer base.

We found across the across our customer public and private.

So I.

I would think about program management now growing it.

And almost unbridled willingness to accept this innovation.

A pace, that's slightly outpaces, our engineering and design business. Thank Laura mentioned this in her points is we expect it to grow at a faster rate, but we grew that business very very quickly to get to the size and the scale and the competence that it is today.

Thank you.

[laughter].

Oh I'm sorry.

Hi, Good morning, Adam <unk> with Goldman Sachs, It looks like you're investing through margins.

Troy Rudd: Especially when you sort of go through the, I'll call it the private customer and the public customer, they all face the same challenges. The same challenges is there's a limited amount of funding and there's an unlimited amount of infrastructure ambition. They're widely accepting this. We haven't found a client yet that says, well, hang on a sec, I'm not willing to do that. We actually found the opposite. The other thing we did as part of this process, we went out and we actually talked to customers. We actually went out with an outside firm that wasn't us to just test this on our customer base. We found across our customer, public and private, an almost unbridled willingness to accept this innovation.

Still see there are tremendous opportunities and program management around the world, but we see it growing it not that rate we were growing at double digit rates in the past, we said outpacing the overall growth of our business.

To invest in AI development do you have strong visibility on the duration and magnitude of those investments or should we think about this as a moving target as you continue to iterate on your tools Yeah. That's a good question Adam.

And then the other.

The easiest way to think about it is we're going to continue to invest however, all of those investments are built into the targets. We have set so there's the initial investment year. That's why you see the 60 to 70 bps in FY 'twenty six coming into play, but as the targets. We put forward for FY 'twenty seven exiting FY 'twenty eight.

So to answer your second question. The answer is yes, we do we actually see where we're delivering kind of the whole spectrum right advisory and design and program management take them through the process.

But it's different for every client and so we find that theres, a more willingness or more acceptance within private clients.

They're more accustomed to doing that within the public sector. It depends on the clients. Some actually have some pretty strict rules about what roles. You can play. If you are an advisor you can't be a designer and you can't be a program manager.

18, plus percent that is net of the investment that's going to take us to continue to scale continue to develop and always be ahead of the curve as we are right now.

Steven Fisher: Thank you. Sorry.

And then a follow up on program management looks like your ambitions are to continue to grow out the mix of that business can you just provide an update on what the trajectory there looks like today and then curious how are customers using you for the total package today will you be engaged for program management Advisory engineer.

But you can even put that aside in some places because sometimes what you provide is so compelling that they're willing to make exceptions and so I won't discuss the client client projects, but we've actually found places where.

Adam Bubes: Hi, good morning. Adam Bubes with Goldman Sachs. It looks like you're investing through margins to invest in AI development. Do you have strong visibility on duration and magnitude of those investments, or should we think about this as a moving target as you continue to iterate on your tools?

What we've provided is so compelling that they're willing to sort of go through a process to set that aside for you, but again, it's a you know it's very mixed at this point.

And design.

Is there a way to frame the opportunity to sort of internal lives all that with an acre.

Gaurav Kapoor: Yeah, that's a good question, Adam. The easiest way to think about it is we're going to continue to invest. However, all of those investments are built into the targets we have set. There's the initial investment year. That's why you see the 60 to 70 basis points in FY26 coming into play. As the targets we put forth for FY27, exiting FY28, 18+%, that is net of the investment that's going to take us to continue to scale, continue to develop, and always be ahead of the curve as we are right now.

So.

I would think about program management now growing at.

A pace, that's slightly outpaces, our engineering and design business. Thank Laura mentioned this in her points as we expect it to grow at a faster rate.

Saba Yep.

Yep.

Thanks sub icon RBC I guess, just continuing the discussion you had with Steve on the pricing models I guess.

We grew that business very very quickly to get to the size and the scale and the competence that it is today.

You've got about 60% to 80% of the industry is still fragmented many of those folks probably can't invest in this stuff.

You'll see there are tremendous opportunities and program management around the world, but we see it growing it not that rate we were growing at double digit rates in the past, we said outpacing the overall growth of our business.

At times, its been said pricing, maybe not a factor in some of the beds or many of the beds.

How do those other 60% to 80% sort of compete how do you expect the bidding processes to involve our so I'm going to show up with their eyes somewhere not just just trying to think through how the competitive dynamic involves as maybe.

Adam Bubes: A follow-up on program management looks like your ambitions are to continue to grow the mix of that business. Can you just provide an update on what the trajectory there looks like today? Curious, are customers using you for the total package today? Will you be engaged for program management, advisory, engineering, and design? Is there a way to frame the opportunity to sort of internalize all that within AECOM?

And then the other so to answer your second question. The answer is yes, we do we actually see where we're delivering kind of the whole spectrum, Alright advisory and design and program management take them through the process.

Some folks are able to invest in this stuff and so I'm not in how you price for it are you familiar with blockbuster.

That's the way to think about it.

But it's different for every client and so we find that theres, a more willingness or more acceptance within private clients right, they're more accustomed to doing that within the public sector. It depends on the clients. Some actually have some pretty strict rules about what roles. You can play. If you are an advisor you can't be a designer and you can't be a program manager.

Adam been serious right I mean.

So I'll give you. An example of if we go to do environmental work.

And I talked about different teammates.

Troy Rudd: I would think about program management now growing at a pace that slightly outpaces our engineering and design business. I think Lara mentioned this in her points. We expect it to grow at a faster rate. We grew that business very quickly to get to the size, the scale, and the confidence that it is today. We still see there are tremendous opportunities in program management around the world, but we see it growing at not that rate. We were growing at double-digit rates in the past. We see it outpacing the overall growth of our business. To answer your second question, the answer is yes, we do. We actually see where we're delivering kind of the whole spectrum, right? Advisory, design, and program management taken through the process, but it's different for every client.

Imagine they show up with a group of five teammates right five people that work in this project imagine if we show up with.

One teammate.

And for AI techniques.

And we can deliver something that's seems like it feels like it's almost instantaneous.

But you can even put that aside in some places because sometimes what you provide is so compelling that they're willing to make exceptions and so I won't discuss the client client projects, but we've actually found places where.

I mean, that's the outcome and so I can't speak to what's going to happen to them, but I would suspect that they're really really capable people.

What we've provided is so compelling that they are willing to sort of go through a process to set that aside for you, but again, it's a you know it's it's very mixed at this point.

And they're going to have to figure out how to use AI and you know we've had this discussion internally with our people for a long period of time, and we say I AI is nothing to be afraid of.

AI is not going to replace people.

But people with AI are going to replace people and so to your point sorry about it if because of the nature of the trade the smaller businesses, they're fragmented they they don't have the scale and ability to invest well.

Saba.

Yep.

Thanks, Saba Khan RBC I guess, just continuing the discussion you had with Steve on the pricing models I guess.

Troy Rudd: We find that there's more willingness or more acceptance within private clients, right? They're more accustomed to doing that. Within the public sector, it depends on the client. Some actually have some pretty strict rules about what roles you can play. If you are an advisor, you can't be a designer, and you can't be a program manager. You can even put that aside in some places because sometimes what you provide is so compelling that they're willing to make exceptions. I won't discuss client projects, but we've actually found places where what we've provided is so compelling that they're willing to sort of go through a process to set that aside for you. Again, it's very mixed at this point.

Something's going to happen over a period of time, and so that theyre going to be able to eventually compete and have a successful career, because they're going to find a path to being able to use AI and and maybe that's with us, but I think that.

You've got about 60% to 80% of the industry is still fragmented many of those folks probably can't invest in this stuff.

At times, its been said pricing, maybe not a factor in some of the beds or many of the beds.

How do those other 60% to 80% sort of compete how do you expect the bidding processes to involve our so I'm going to show up where there is some are not just trying to think through how the competitive dynamic involves as maybe.

I think it was a pretty profound shift coming in the industry.

Thanks, and then one of the concepts will hurt us to hold or keep some of the benefits of AI companies or firms like yourself I'm trying to get more fixed bid contracts. So you've got to sort of keep all of that is that something you were trying to do and what's been the customer reception to shifting more to a fixed bed model.

Some folks are able to invest in this stuff and so I'm not in how you price for it are you familiar with blockbuster.

That's the way to think about it.

Been serious right I mean, so I'll give you. An example of if we go to do environmental work.

Within this new construct so at this point, we we haven't had those because we haven't needed to have those discussions.

And I've talked about different teammates.

Because where we can deploy we can play it on unit cost or fixed price. So as I said, so we can test it and we can understand what that difference is going to look like.

I imagine they show up with a group of five teammates right five people to work in this project imagine if we show up with.

Steven Fisher: Saba, yep. Thanks. Sabahat Khan, RBC. I guess just continuing the discussion you had with Steve around the pricing models, I guess. I know you indicated about 60% to 80% of the industry is still fragmented. Many of those folks probably can't invest in this stuff. At times, it's been said pricing may be not a factor in some of the bids or many of the bids. How do those other 60% to 80% sort of compete? How do you expect the bidding processes to evolve? Are some going to show up with AI, some are not? Just trying to think through how the competitive dynamic evolves as maybe some folks are able to invest in this stuff and some not, and how you price for it.

One teammate.

That will then enable us with that information to actually go have a client conversation.

And for AI techniques.

And we can deliver something that's seems like it feels like it's almost instantaneous.

And I you know again it.

I mean, that's the outcome and so I can't speak to what's going to happen to them, but I would suspect that they're really really capable people.

At the end of the day, if you could provide something that's much more compelling in terms of value.

And you have a discussion about maybe doing it for a little bit low what they consider to be the market price or even more value and maybe a little above the market price.

And they're going to have to figure out how to use AI and you know we've had this discussion internally with our people for a long period of time.

You will have an ability in that conversation to shift right the pricing model and shift from cost plus to a fixed price when you gain more certainty around that outcome and again, they're sort of they're theres. There are more creative ways to have that conversation.

Say I AI is nothing to be afraid of.

AI is not going to replace people but.

People with AI are going to replace people and so to your point sorry about it if because of the nature of those the smaller businesses, they're fragmented they they don't have the scale and ability to invest well.

Troy Rudd: Are you familiar with Blockbuster? That's a way to think about it. I'm being serious, right? I mean, I'll give you an example. If we go to do environmental work and I talked about different teammates, imagine they show up with a group of five teammates, right? You have five people that work on this project. Imagine if we show up with one teammate and four AI teammates, and we can deliver something that seems like or feels like it's almost instantaneous. I mean, that's the outcome. I can't speak to what's going to happen to them, but I would suspect that they're really, really capable people, and they're going to have to figure out how to use AI. We've had this discussion internally with our people for a long period of time. We say AI is nothing to be afraid of, right?

But we view it is it will eventually happen it's like all industries that happens over time, you know, it's when water runs downhill you can only stop it for so long.

Something's going to happen over a period of time, and so that theyre going to be able to eventually compete and have a successful career, because theyre going to find a path to being able to use AI and and maybe that's with us, but I think that.

Good morning, Mike Dudas vertical research.

I think it was a pretty profound shift coming in the industry.

Troy.

Thanks, and then one of the concepts will hurt us to hold or keep some of the benefits of AI companies or firms like yourself from trying to get more fixed bid contracts. So you've got to sort of keep all of that is that something you were trying to do and what's been the customer reception to shifting more to a fixed to bottle.

The 18 month quote unquote head start where the head start that you've had relative to the industry.

As we look today do you think that's going to be exponential in the.

The leadership and how you're going to move forward, while others are going to try to catch up and within the disciplines of E&E Advisory project manager where is the we're seeing the first benefits from the AI investment, helping revenue and profit growth in each of those divisions is it getting bringing more advisory work that you wouldn't have had otherwise.

Within this new construct so at this point, we havent handled because we haven't needed to have those discussions.

Troy Rudd: AI is not going to replace people, but people with AI are going to replace people. To your point, Saba, if, because of the nature of the smaller businesses, they're fragmented, they don't have the scale and ability to invest, well, then something's going to happen over a period of time. They're going to be able to eventually compete and have a successful career because they're going to find a path to being able to use AI. Maybe that's with us, but I think there's a pretty profound shift coming in the industry.

Because where we can deploy we can play it on unit cost or fixed price. So as I said, so we can test. It we can understand what that difference is going to look like.

<unk> you can develop with this and how does that play through the rest of those divisions.

That will then enable us with that information to actually go have a client conversation.

You want to take the I think the two are Mike to answer the question that we're seeing great complementarity between two of them. So I'll give you. An example, one of the advisory types of work that we do these due diligence to say for data centers what for the Hyperscale is where they went up rapidly move through assessment of candidate sides to rapidly build out these new data.

And I you know again.

At the end of the day, if you could provide something that's much more compelling in terms of value.

And you have a discussion about maybe doing it for a little bit low what they consider to be the market price or even more value and maybe a little above the market price.

Steven Fisher: Thanks. One of the concepts we've heard is to hold or keep some of the benefits of AI companies or firms like yourself from trying to get more fixed bid contracts, so you get to sort of keep more of that. Is that something you're trying to do? What's been the customer reception to shifting more to a fixed bid model within this new construct?

We'll have an ability in that conversation to shift right the pricing model and shift from cost plus to fixed price work.

[noise] centers at scale.

The tools the way of creating at the moment I mean, some of those are in the due diligence space and they they can rapidly assess a whole range of attributes of the site the physical the legal the environmental and social So you put those two together and there's a lot of interest already from any of the private and.

Getting more certainty around that outcome and again theres sort of theirs, they're more creative ways to have that conversation.

But we view it is it will eventually happen it's like all industries that happens over time, you know, it's when water runs downhill you can only stop it for so long.

Troy Rudd: At this point, we haven't had those discussions. We haven't needed to have those discussions, right? Where we can deploy, we can deploy it on unit cost or fixed price. As I said, we can test it, we can understand what that difference is going to look like. That will then enable us with that information to actually go have a client conversation.

Public sector clients who'd wanted by advisory services, I would say enhanced now with with our AI tools.

Yeah.

Okay.

And maybe as a.

Good morning, Mike Dudas vertical research.

Just following up on the markets, maybe you could share a little bit maybe from domestic Americas to international what how to twenty-five look how does the next 12 to 24 months from a customer demand standpoint.

Troy.

The 18 month cornered quota head start or the head start that <unk> had relative to the industry.

Troy Rudd: At the end of the day, if you can provide something that's much more compelling in terms of value, right, and you have a discussion about maybe doing it for a little bit below what they consider to be the market price or even more value and maybe a little above the market price, you will have an ability in that conversation to shift, right, the pricing model and shift from cost plus to a fixed price where you gain more certainty around that outcome. There are more creative ways to have that conversation. We view it as it will eventually happen. It's like all industries. It happens over time. It's when water runs down a hill, you can only stop it for so long.

As we look today do you think that's going to be exponential in the kingdom.

And is that 5% to 8% type of target lean one way or the other or are there certain markets that we should focus on that might be more helpful to achieve mid to upper range of those targets and others.

<unk> ship and how youre going to move forward, while others are going to try to catch up and within the disciplines of E&E Advisory approach management, where is the we're seeing the first benefits from the AI investment, helping revenue and profit growth in each of those divisions is it getting bringing more advisory work that you wouldn't have had otherwise because.

So.

I won't spend a lot of time on 25, but I think 25, you can see from our results is that.

North American markets were healthier markets and the international markets.

As you can develop with this and how does that play through the rest of those divisions.

And in our international markets were challenged there were some that were in.

You want to take the I think the two are Mike to answer the question that we're saying great complementarity between two of them. So I'll give you. An example, one of the advisory types of work that we do is due diligence to say for data centers. What are the hyper scale is where they went up rapidly move through assessment of candidate sites to rapidly build out these new.

There were some markets that were good for example, the U K marketplace was was surprisingly a healthy market and twenty-five, but if you looked across Australia, and Asia and even in the Middle East right. Those markets were certainly not as healthy and so you saw it in our results right. The growth internationally was much more challenging than it was.

Steven Fisher: Good morning, Mike Dudas, Vertical Research. Troy, the 18-month head start or the head start that you've had relative to the industry, as we look today, do you think that's going to be exponential in the leadership and how you're going to move forward while others are going to try to catch up? Within the disciplines of V&D, advisory, project management, where is the we're seeing the first benefits from the AI investment helping revenue and profit growth in each of those divisions? Is it bringing more advisory work that you wouldn't have had otherwise because you can develop this? How does that play through the rest of those divisions?

Data centers at scale.

The tools the way in creating at the moment I mean, some of those are in the due diligence space and they they can rapidly assess a whole range of attributes of the site the physical the legal the environmental and social So you put those two together and there's a lot of interest already from any of the.

Much better in North America.

As we look forward.

There's been a lot of work that's been done and sort of repositioning those businesses and building up the opportunities over the course of this last year.

And so we sort of look at the U K.

It's been a healthy market.

Questionably healthy right.

That decline.

Wanted by Advisory services, I would say enhanced now with with our AI tools.

And the reason is again, they have a large announced infrastructure ambition there.

The question is as you know.

And maybe as a <unk>.

How does how does that work when it's becoming clear that they either have a large budget deficit and they're either going to have to borrow or they're going to have to raise taxes and those create more challenging environments. So we're optimistic about the U K, but.

Following up on the markets, maybe you could share a little bit maybe from domestic Americas to international what how to twenty-five look how does the next 12 to 24 months from a customer demand standpoint.

Troy Rudd: Do you want to take the advisory?

Lara Poloni: Yeah, I think the two of Mike to answer the question. We're seeing great complementarity between two of them. I'll give you an example. One of the advisory types of work that we do is due diligence. Say for data centers, work for the hyperscalers where they want to rapidly move through assessment of candidate sites to rapidly build out these new data centers at scale. The tools that we're creating at the moment, I mean, some of those are in the due diligence space, and they can rapidly assess a whole range of attributes of a site: the physical, the legal, the environmental, the social. You put those two together, and there's a lot of interest already from many of the private and public sector clients who want to buy advisory services, I would say enhanced now with our AI tools.

And is that 5% to 8% type of target lean one way or the other or are there certain markets that we should focus on that might be more helpful to achieve mid to upper range of those targets and others.

I would sort of wait and see but go to the middle East and you.

Our middle East business is positioned repositioned very quickly and we've had great great backlog that we've won and so we actually see that business being I think.

Sure so.

I won't spend a lot of time on 25, but I think 25, you can see from our results is that.

A good growth market over the course of this next year.

Australia, and Asia are still going to be a little bit challenging, but again theres been some work that's been one.

North American markets were healthier markets and the international markets and.

And in our international markets were challenged there were some that were there were some markets that were good for example, the UK marketplace was was surprisingly a healthy market and 25, but if you looked across Australia, and Asia and even in the Middle East right. Those markets, we're certainly not as healthy and so you saw it in our in our result.

And it's in water and defense and less so in transportation, because they've been coming off a large investment transportation investment cycle and.

So that will be a tougher market as we look into the future.

Steven Fisher: Maybe as a follow-up on the markets, maybe you could share a little bit, maybe from domestic Americas to international, how did 2025 look? How does the next 12 to 24 months from a customer demand standpoint? Is that 5% to 8% type of target lean one way or the other? Are there certain markets that we should focus on that might be more helpful to achieve mid to upper range of those targets than others?

And so then you come back to North America in North America, we see being a healthy market of course again.

Alright, the growth internationally was much more challenging and it was much better in North America.

There are speed bumps and we can't predict all of those speed bumps.

As we look forward.

Couldn't have predicted that there was going to be of a government shutdown for 40 days now say the positive is that really didn't have material impact on our business, but it had a little bit of an impact on collections and it had an impact on awards for the future and so we expect that those awards will come over the next couple of quarters.

There's been a lot of work that's been done and sort of repositioning those businesses and building up the opportunities over the course of this last year.

So we sort of look at the U K has been a healthy market.

Troy Rudd: Sure. I won't spend a lot of time on '25, but I think '25, you can see from our results, is that North American markets were healthier markets than the international markets. International markets were challenged. There were some that were good. For example, the UK marketplace was surprisingly a healthy market in '25. If you looked across Australia, Asia, and even in the Middle East, those markets were certainly not as healthy. You saw that in our results, right? The growth internationally was much more challenging, and it was much better in North America. As we look forward, there's been a lot of work that's been done in sort of repositioning those businesses and building up the opportunities over the course of this last year.

What questionably healthy.

And we don't know, whether there's going to be another shutdown.

And the reason is again they have a large announced infrastructure ambition. The question is as you know.

On February one.

Entirely possible, but we still see the conditions for investment and the need for investment infrastructure and the funding to be good and our north American markets, especially in the United States over the course of the next year, but it could be a little bit it could be a little bit bumpy.

How does how does that work when it's becoming clear that they either have a large budget deficit and they are they're going to have to borrow or they're going to have to raise taxes and those create more challenging environment. So we're optimistic about the U K, but I would.

Very good thank you.

Yeah.

Sure.

Okay.

I would sort of wait and see.

We go to the Middle East and.

Okay.

Our middle East business is position reposition very quickly and we've had great great backlog that we've won and so we actually see that business being I think.

Thank you Mike Feniger Bank of America, Troy, just back to discussion with blockbuster.

Giving an example of someone coming to a site with with with five engineers E Comm rolling them with one and four AI chat bots are helpful. Agents I guess the question is you know when you go to that customer.

Good growth market over the course of this next year.

Australia, and Asia are still going to be a little bit challenging, but again theres been some work that's been one.

Troy Rudd: We sort of look at the UK as being a healthy market, but questionably healthy, right? The reason is, again, they have a large announced infrastructure ambition. The question is, how does that work when it's becoming clear that they either have a large budget deficit and they're either going to have to borrow or they're going to have to raise taxes? Those create more challenging environments. We're optimistic about the UK, but I would sort of wait and see. We go to the Middle East, and our Middle East business is positioned, repositioned very quickly. We've had a great backlog that we've won, and we actually see that business being, I think, a good growth market over the course of this next year. Australia and Asia are still going to be a little bit challenging.

And it's in water and defense and less so in transportation, because they've been coming off a large investment transportation investment cycle.

There seems like Theres, an advantage, but are you able to charge and bill for five or do you have to say well, they're charging for five we can do the same productivity, but we can only charge you for one and a half or two and I noticed a theoretical example, it's just I think it. Together example question Troy is basically how much of it is competitive.

So that will be a tougher market as we look into the future.

And so then you come back to North America, and North America, we see being healthy market of course again.

There are speed bumps and we can't predict all of those speed bumps.

Couldn't have predicted that there was going to be a government shutdown for 40 days and I'll say the positive is is that really didn't have material impact on our business, but it had a little bit of an impact on collections and it had an impact on awards for the future and so we expect that those awards will come over the next couple of quarters.

Edge or how much can you guys actually.

Give back to the customer how much comes that flows down to Aegon. So in that example, I think.

We can get stuck in like very specific examples of the day, but I think you've given a really good example.

There's a market price for what we do so amusing, let's just use environment work theres a market price for that.

And we don't know whether there's going to be another shutdown on February one.

Entirely possible, but we still see the conditions for investment and the need for investment infrastructure and the funding to be good and our north American markets, especially in the United States over the course of the next year, but it could be a little bit it could be a little bit bumpy.

The customer reaction is is they don't.

Troy Rudd: There's been some work that's been won, and it's in water and defense and less so in transportation because they've been coming off a large transportation investment cycle. That will be a tougher market as we look into the future. You come back to North America. North America we see being a healthy market. Of course, again, there's speed bumps, and we can't predict all of those speed bumps. We couldn't have predicted that there was going to be a government shutdown for 40 days. The positive is that really didn't have material impact on our business. It had a little bit of an impact on collections, and it had an impact on awards for the future. We expect that those awards will come over the next couple of quarters.

They don't care, how you deliver it to them.

There's a market price and there's some expectation for what your deliverables going to be so if you can deliver that outcome and they're comfortable because they trust you as their advisor.

Very good thank you.

They don't care, how you delivered it now if you can deliver it faster.

And then thinking about it this way there's a there's a unique problem in the world of consulting.

Thank you.

Mike Feniger Bank of America, Troy, just back to discussion with blockbuster.

Alright.

The challenge for consulting and Theres been billions of dollars invested in this.

Giving an example of someone coming to a site with with with five engineers E Comm rolling them with one and four AI chat bots are helpful agent I guess the question is.

And its knowledge sharing.

But the whole world is how do we create a knowledge sharing system. So that you can bring all the knowledge of our organization to that particular customer problem.

Imagine what we've accomplished.

When you go to that customer.

Troy Rudd: We don't know whether there's going to be another shutdown on 1 February. It's entirely possible. We still see the conditions for investment and the need for investment in infrastructure and the funding to be good in our North American markets, especially in the United States over the course of this next year. It could be a little bit bumpy.

Right, we have access to all information publicly.

There seems like there is an advantage, but are you able to charge and bill for five or do you have to say well, they're charging for five we can do the same productivity, but we can only charge you for one and a half or two and I noticed a theoretical example, it's just I think that together example question Troy is basically how much of this is repetitive.

Right. We're building access to all of the information that he has become has internally.

Current and from our past colleagues.

It can be brought to the AI agent or agents to that individual and to the customer.

Steven Fisher: Very good. Thank you.

You're solving this most significant problem and the consulting business it's existed for decades.

Hedge or how much can you guys actually.

Give back to the customer how much comes close down to AA com. So in that example, I think.

That's value that you bring to customers. So putting aside you know we have it priced we have this is the market price for what you do this is what my expectations are going to deliver to me I'm willing to pay that and if you deliver something that's more valuable and you deal with in a shorter period of time.

Michael Feniger: Thank you. Michael Feniger, Bank of America. Troy, just back to discussion with Blockbuster, you were giving an example of someone coming to a site with five engineers, AECOM rolling up with one and four AI chatbots or helpful agents. I guess the question is, when you go to that customer, there seems like there's an advantage, but are you able to charge and bill for five? Or do you have to say, well, they're charging for five, we can do the same productivity, but we can only charge you for one and a half or two. I know this is a theoretical example. It's just, I think.

We can get stuck in like very specific examples of the day, but I think you've given a really good example.

There's a market price for what we do so I'm using let's just use environment work there is a market price for that.

Youre going to be able to keep the benefit from doing that.

That's the approach that we're taking.

The customer reaction is they don't they.

Helpful and just on C. M. Maybe you could talk about you know the timeline what drove this decision.

They don't care, how you deliver it to them.

There's a market price and there's some expectation for what youre deliverables going to be so if you can deliver that outcome and they're comfortable because they trust you as their advisor.

I think people feel like you guys are continuing to simplify the portfolio, but anything in the backlog of the underlying market conditions that that might have played a part and I think he said EPS neutral. Once all set is done is there like a timeline that we should be considering around that yeah.

They don't care, how you delivered it now if you can deliver it faster.

And then thinking about it this way there's a there's a unique problem in the world of consulting.

Mike we're going to be starting the process within the next week.

Alright.

Troy Rudd: It's a good example.

The challenge for consulting and Theres been billions of dollars invested in this.

Michael Feniger: The question, Troy, is basically, how much of this is a competitive edge, or how much can you guys actually give back to the customer, and how much flows down to AECOM?

<unk> given a similar type transactions we've undertaken it.

And his knowledge sharing.

It could be six to nine months by the time. It occurs now in regards to our rationale it didn't have anything to do with the political outcomes that have happened in New York. This was a conversation we've had with our board.

But the whole world is how do we create a knowledge sharing system. So that you can bring all the knowledge of our organization to that particular customer problem.

Troy Rudd: In that example, I think we could get stuck in very specific examples today, but I think you've given a really good example. There is a market price for what we do. Let's just use environment work. There is a market price for that. The customer reaction is they don't care how you deliver it to them. There's a market price, and there's an expectation for what your deliverable is going to be. If you can deliver that outcome and they're comfortable because they trust you as their advisor, they don't care how you delivered it. If you can deliver it faster, and then think about it this way, there's a unique problem in the world of consulting, right? It's been the challenge for consulting, and there's been billions of dollars invested in this, and it's knowledge sharing, right?

Imagine what we've accomplished.

Alright, we have access to all information publicly.

Many months ago once we understood what we had on our hands from a technology standpoint specific to our design and engineering business.

Right. We're building access to all of the information that has come has internally.

Current and from our past colleagues.

And looking back and saying 93% of your business you can apply this great technology, where you are far ahead of anybody else in the curve. It represents 93% of our profit as well, but that 7% takes inordinate amount of time because it.

That can be brought to the AI agent or agents to that individual and to the customer.

You're solving this most significant problem in that consulting business, it's existed for decades.

That's value that you bring to customers. So putting aside we have it priced we have this is the market price for what you do this is what my expectation is you're going to deliver to me I'm willing to pay that and if you deliver something that's more valuable and you deal with in a shorter period of time.

It is a business that has a very good business, great cash flow generation business.

But you have to be focused to make sure. Our teams are within the risk swim lanes.

Those of you that have been part of the E comm journey for longer than this management team has been has been responsible for it will recall when you get out of those swim lanes, what happens to those results and that's why the decision has been let's focus on the highest and best ROI opportunity that we have created for almost 93.

Youre going to be able to keep the benefit from doing that.

Troy Rudd: The whole world is, how do we create a knowledge sharing system so that you can bring all the knowledge of our organization to that particular customer problem? Imagine what we've accomplished, right? We have access to all information publicly, right? We're building access to all of the information that AECOM has internally, current and from our past colleagues that can be brought to that AI agent or agents to that individual and to that customer. You're solving the most significant problem in the consulting business that's existed for decades. That's value that you bring to customers. Putting aside, we have it priced. This is the market price for what you do. This is what my expectations are going to deliver to me. I'm willing to pay that.

That's the approach that we're taking.

Helpful and just on <unk>, maybe you could talk about that.

The timeline what drove this decision.

I think people feel like you guys are continuing to simplify the portfolio, but anything in the backlog of the underlying market conditions that might have played a part and I think you said EPS neutral. Once all said is done is there like a timeline that would you be considering around that.

Percent of our business because the returns are truly truly going to be special once we fully scaled it.

Appreciate it I'll just try to squeeze one more in a large is there were some comments in the presentation about private.

Mike we're going to be starting the process within the next week.

<unk> given a similar type transactions we've undertaken.

Markets private funding and I'm, just curious because I mean I feel like in the U S. At least we really haven't seen that private public partnership I think that is something that gets talked about a little bit more in the international markets that you guys made a couple of comments on the advisory side was private markets. Just curious what are you seeing there what has kind of changed if anything has offered this inflection point.

It could be six to nine months by the time. It occurs now in regards to our rationale it doesn't have anything to do with the political outcomes that have happened in New York. This was a conversation we've had with our board.

Troy Rudd: If you deliver something that's more valuable and you deliver in a shorter period of time, you're going to be able to keep the benefit from doing that. That's the approach that we're taking.

Many months ago once we understood what we had on our hands from a technology standpoint specific to our design and engineering business.

We're this is maybe part of the discussion and where E com pitch in on this maybe paradigm shift with private public shall I'd say, it's a great question. Thanks for that.

Michael Feniger: That's helpful. Just on CM, maybe you could talk about the timeline. What drove this decision? I think people feel like you guys are continuing to simplify the portfolio, but anything in the backlog or the underlying market conditions that might have played a part? I think you said EPS neutral once all is said and done. Is there a timeline that we should be considering around that?

And looking back and saying 93% of your business you can apply this great technology, where you are far ahead of anybody else in the curve. It represents 93% of our profit as well, but that 7% takes inordinate amount of time because.

We're saying, we're saying a few things I mean, we obviously operate around the world. There are a couple of mature markets with respect to private investment in infrastructure and the set of frameworks to make that happens at the most mature of those in Canada, Australia and to elicit degrade the U K, although they've been constrained with.

It is a business that has a very good business, great cash flow generation business.

Steven Fisher: Yeah. Mike, we're going to be starting the process within the next week. Expect, given similar type transactions we've undertaken, it could be six to nine months by the time it occurs. Now, in regards to rationale, it didn't have anything to do with the political outcomes that have happened in New York. This was a conversation we've had with a board many months ago, once we understood what we had on our hands from a technology standpoint specific to our design and engineering business. Looking back and saying, 93% of your business, you can apply this great technology where you are far ahead of anybody else in the curve, it represents 93% of our profit as well.

Funds, but they have been on the receiving end, particularly in the last decade of some very significant private financing for particularly transportation and rail projects that that's quite mature I think what a lot of those private investment funds.

But you have to be focused to make sure. Our teams are within the risk swim lanes.

Those of you that have been part of the E comm journey for longer than this management team has been has been responsible for it will recall when you get out of those swim lanes, what happens to those results and that's why the decision has been let's focus on the highest and best ROI opportunity that we have created for almost 9%.

Thing two wash at the moment is.

Now now seems like a great time in the U S with particularly a deregulated environment you know that.

3% of our business because the returns are truly truly gonna be special once we fully scaled it.

And openness for them once again for private sector participation yesterday worse in Patriot examples they weren't necessarily the best examples across various sectors.

Appreciate it I'll just try to squeeze one more in largest there were some comments in the presentation about private markets private funding and I'm, just curious because I mean I feel like in the U S. At least we really haven't seen that private public partnership I think that is something that gets talked about a little bit more on the international markets that you guys made a couple of comments on <unk>.

But they they really saying that now might be the opportune time, and so we're having some great shared conversations around particular states or in the environment, where we think there is much interest and appetite to progress some of those proposals shall we say so.

Steven Fisher: That 7% takes an inordinate amount of time because it is a business that is a very good business, great cash flow generation business, but you have to be focused to make sure teams are within the risk swim lanes. Those of you that have been part of the AECOM journey for longer than this management team has been responsible for it will recall when you get out of those swim lanes, what happens to those results. That's why the decision has been, let's focus on the highest and best ROI opportunity that we have created for almost 93% of our business because the returns are truly, truly going to be special once we fully scaled it.

There's some great conversations and they're really interested in our advisory capability backed by the tremendous technical expertise that we have and have very in depth knowledge of many of those assets, whether you're talking about a road network, whether you're talking about a port assets or what rail network or even.

<unk> shied was private marks just curious what are you seeing there what has kind of changed if anything thats offered this inflection point, where decision may be part of the discussion and we're a comp pitch in on this maybe paradigm shift with private public shall I say, it's a great question. Thanks for that.

We're saying, we're saying a few things I mean, we obviously operate around the world. There are a couple of mature markets with respect to private investment and infrastructure and a set of frameworks.

A lot of interest nice surprise to all of you in in the World is datacenters. So.

We're really excited about that particular sort of group of clients and the opportunity to create a different set of market for ourselves in cocreation with those bonds.

Jim do you make that happens at the most mature where that is in Canada, Australia and to a lesser degree the U K, although they've been constrained with funds, but they have been on the receiving end, particularly in the last decade of some very significant private financing.

Michael Feniger: Appreciate it. I'll just try to squeeze one more in. Lara, there were some comments in the presentation about private markets, private funding. I'm just curious because, I mean, I feel like in the US, at least, we really haven't seen that private-public partnership. I think that is something that gets talked about a little bit more in the international markets. You guys made a couple of comments on the advisory side with private markets. Just curious, what are you seeing there? What has kind of changed, if anything, that's offered this inflection point where this is maybe part of the discussion and where AECOM fits in on this maybe paradigm shift with private-public?

Hi, This is Jose salt Gulf from city.

<unk> transportation and rail projects that that's quite mature I think what a lot of those private investment funds.

You guys have talked about the 20% margin exit rate by FY 'twenty eight maybe can you talk about how we should think about the contributions from the Americas and internationals for that obviously, we understand theres been a structural reason for that gap historically speaking.

Saying to us at the moment is.

Now now seems like a great time in the U S with particularly a deregulated environment you know that.

And openness.

Once again for private sector participation yesterday wish and Patriot examples they weren't necessarily the best examples across various sectors.

But should we continue to expect that moving forward or should there be some change with the AI benefits flowing through thank you. Yeah, you should expect a consistent uplift on margins between both our Americas and international and you should also at the same time continue to expect that differentiation and the differentiation is for the.

Lara Poloni: Sure. It's a great question. Thanks for that. We're seeing a few things. I mean, we obviously operate around the world. There are a couple of mature markets with respect to private investment in infrastructure and the sort of frameworks to make that happen. The most mature of those are Canada, Australia, and to a lesser degree, the UK, although they've been constrained with funds. They have been on the receiving end, particularly in the last decade, of some very significant private financing for particularly road transportation and rail projects. That's quite mature. I think what a lot of those private investment funds are saying to us at the moment is now seems like a great time in the US with particularly a deregulated environment and an openness, once again, for private sector participation. Yes, there were some P3 examples.

But they they really saying that now might be the opportune time, and so we're having some great shared conversations around particular states or an environment, where we think there is much interest and appetite to progress some of those proposals shall we say so.

Same rationale we have shared with you before multiple countries multiple regulations statutory requirements and alike versus one geography one.

There's some great conversations and they're really interested in our advisory capability backed by the tremendous technical expertise that we have and have very in depth knowledge of many of those assets, whether you're talking about a road network, whether you're talking about a port S. It or rail network, our or even.

To support center for the entirety of it.

Yeah.

Hi, just a quick follow up I guess, when you talk about I think you're indicating the eye buildup, it's been a big differentiator versus your peers as you think about investing it in the next few years how.

A lot of interest nice surprise to all of you in in the World is datacenters. So.

We're really excited about that particular sort.

How should we think about maybe the I don't talk about a bit of a drag on margin that's being netted out but is it going be more SG&A is it going to be capex is at more than 200 people go to 400 more software. So you can just maybe detail out to the extent you can build out plan yes.

Sort of group of clients and the opportunity to create a different set of market for ourselves in cocreation with British pounds.

Lara Poloni: They weren't necessarily the best examples across various sectors, but they're really saying that now might be the opportune time. We're having some great shared conversations around particular states or environments where we think there is most interest and appetite to progress some of those proposals, shall we say. There are some great conversations, and they're really interested in our advisory capability, backed by the tremendous technical expertise that we have and our very in-depth knowledge of many of those assets, whether you're talking about a road network, whether you're talking about a port asset, a rail network, or even a lot of interest, no surprise to all of you, in the world of data centers. We're really excited about that particular sort of group of clients and the opportunity to create a different sort of market for ourselves in co-creation with those funds.

The build out you should think about Saba is theres, a 60 to 70 Bips of investment, we're making and like I said in the 20 plus percent exit velocity for FY 'twenty eight we have built in the required investments to get to it. So it isn't that net of it from a opex versus Capex clearly anything that's built into.

Hi, This is jose silica from Citi.

You guys have talked about the 20% margin exit rate by FY 'twenty eight maybe can you talk about how we should think about the contributions from the Americas and internationals for that obviously, we understand theres been a structural reason for that gap historically speaking.

Our margins is opex simply being put that is more R&D. It is pilot.

But should we continue to expect that moving forward or should there be some change with the AI benefits flowing through.

Piloting and testing and Capex starts once you have a minimum viable product a model for a specific asset type.

Yeah, you should expect a consistent uplift on margins between both our Americas and international and you should also at the same time continue to expect that differentiation and the differentiation is for the same rationale we have shared with you before multiple countries multiple regulations statutory requirements and allow.

That point, you can a lot you're allowed to capitalize it.

We don't expect our capex to shift materially based on what we're doing because a lot of that that upfront cost is going through opex.

And then just one last follow up I know you said you've been testing yourself for the last little while has there been any notable difference between public or private customer receptivity like how it government government customer think about a bit more of an automated approach versus private sector are there end markets that have been more receptive. Thank you.

Versus one geography one.

To support center for the entirety of it.

Michael Feniger: Hi, this is Jose Solca from Citigroup. You guys have talked about the 20% margin exit rate by FY28. Maybe can you talk about how we should think about the contributions from the Americas and internationals for that? Obviously, we understand there's been a structural reason for that gap, historically speaking, but should we continue to expect that moving forward, or should there be some change with the AI benefits flowing through? Thank you.

Okay.

Well I think there's a I think there are difference between those two customers I don't think it's it really relates to the adoption of AI.

Hi, just a quick follow up I guess when you talk about I think you indicate India buildup, it's been a big differentiator versus your peers as you think about investing it in the next few years how.

Fact of matter is it private customers move faster.

Right. There that's their decision making processes are used a little bit faster than public organizations, but I mean, we see within certain governments in certain organizations of the government, we actually see a paradigm shift as well where those decisions would be made a lot faster than they had been in the past.

How should we think about maybe the I don't talk about a bit of a drag on margin that's being netted out but is it going to be more SG&A is it going to be capex is it more than 200 people go to 400 more software. So you can just maybe detail out to the extent you can build out plan yes.

Steven Fisher: Yeah. You should expect a consistent uplift on margins between both our Americas and international. You should also, at the same time, continue to expect that differentiation. The differentiation is for the same rationale we have shared with you before: multiple countries, multiple regulations, statutory requirements, and alike versus one geography, one support center for the entirety of it.

The build out you should think about Saba is theres, a 60 to 70 bps of investment, we're making and like I said in the 20 plus percent exit velocity for FY 'twenty eight we have built in the required investments to get to it. So it isn't that net of it from a opex versus Capex clearly anything that's built into.

Gar, maybe you could share on the financial profile of how you think about the balance sheet or your position today, you've done a lot of good things with the last 12 18 months and then we on the capital allocation you didn't makes little acquisitions over the last several years, how does that look the next three to four years as it is.

Our margins as Opex simply being put that is more R&D. It is.

If something opportunistic in this AI realm or something that that would be outside the realm of the 67 Bips that youre looking at going forward and finally on a monetization of C. M. If that possible how does that impact on your allocation if its scale quantum accelerated or not how how do we think about that thank you.

Michael Feniger: Thank you. Hi. Just a quick follow-up, I guess. When you talk about, I think you indicated in the AI build-up, it's been a bit differentiated versus your peers. As you think about investing it in the next few years, how should we think about maybe the—I know you talked about a bit of a drag on margin that's being netted out, but is it going to be more SG&A? Is it going to be CapEx? Is it more than does 200 people go to 400? More software? If you can just maybe detail out, to the extent you can, the build-out plan.

Piloting and testing and Capex starts once you have a minimum viable product a model for a specific appetite at that point you can a lot you're allowed to capitalize it.

We don't expect our capex to shift materially based on what we're doing because a lot of that that upfront cost is going through opex.

Mike I'll answer all those different pieces, but always pivot back there is no change in our capital allocation strategy, we want to be very reductive and consistent to that point where return space.

And just one last follow up I know you said you've been testing yourself for the last little while has there been any notable difference between public or private customer receptivity like how would the government government customer think about.

What will drive the best outcome of sustained value creation for our shareholders. We will continue to undertake it and as we sit here today, including the <unk> monetization and the sale proceeds we expect to use that for repurchases and why he said based on everything we know right now it's net neutral from an EPS standpoint, after that sale and.

Steven Fisher: Yeah. The build-out you should think about, Saba, is there's a 60 to 70 basis points of investment we're making. Like I said, in the 20-plus percent exit velocity for FY28, we have built in the required investments to get to it. It is net of it. From an OpEx versus CapEx, clearly, anything that's built into our margins is OpEx. Simply being put, that is more R&D, it is piloting and testing. CapEx starts once you have a minimum viable product, a model for a specific asset type. At that point, you're allowed to capitalize it. We don't expect our CapEx to shift materially based on what we're doing because a lot of that upfront cost is going through OpEx.

More of an automated approach versus private sector are there end markets that have been more receptive. Thank you.

Well I think there's a I think there are difference between those two customers I don't think it really relates to the adoption of AI.

The matter is is it private customers move faster.

Utilization of those proceeds for repurchases.

Alright, there their decision, making processes are used a little bit faster than public organizations, but I mean, we see within certain governments in certain organizations of the government, we actually see a paradigm shift as well where those decisions will be made a lot faster than they had been in the past.

As we look forward, including what we have done in FY 'twenty five I.

I think it's important for us to share we have worked with every big three big four consulting hyper scaler in term specific in terms of generative technology talk to them spoken with them tested with them, we've worked with various startups hundreds of them.

Got it maybe if you could share on the financial profile of how you think about the balance sheet, where youre positioned today, you've done a lot of good things with the last 12 18 months and then on the capital allocation you did makes little acquisitions over the last several years, how does that look the next three to four years as it is.

We've created we created a partnership.

Little over two years ago.

Michael Feniger: Just one last follow-up. You said you've been testing this out for the last little while. Has there been any notable difference between public or private customer receptivity? How would a government customer think about a bit more of an automated approach versus private sector? Are there end markets that have been more receptive? Thank you.

With a venture and we brought them now in Q4 onto our platform to support our deployment scaling and development on the generative standpoint. So we're always on the lookout for anything that will continue to expand our competitive advantage, but no change in capital allocation.

If something opportunistic in this AI realm or something that that would be outside the realm of the 67 bps that you are looking at going forward and finally on a monetization of cm. If that's possible how does that impact on your allocation if its scale quantum accelerated or not how do we think about that thank you.

Troy Rudd: Well, I think there are differences between the two customers. I don't think it really relates to the adoption of AI. The fact of the matter is that private customers move faster, right? Their decision-making processes are used a little bit faster than public organizations. I mean, we see within certain governments and certain organizations of the government, we actually see a paradigm shift as well, where those decisions will be made a lot faster than they had been in the past.

Yeah.

Again, I'll make it doesn't make a point in addition to that as well.

The other thing that we see is the highest return opportunities or just obviously investments.

Mike I'll answer all of those different pieces, but always pivot back there is no change in our capital allocation strategy, we want to be very robust and consistent to that point where return space.

Inorganic growth and margins are in the business. So those are the highest return opportunities and they do go through our margin.

Even when we think about expanding I'll call. It the AI AI, enabling team. We're also looking at.

What will drive the best outcome of sustained value creation for our shareholders. We will continue to undertake it and as we sit here today, including the <unk> monetization and the sale proceeds we expect to use that for repurchases and why you said based on everything we know right now it's net neutral from an EPS standpoint, after that sale and.

We've created unique ways. So that we are building a talent pipeline. So that again will be actually working to develop the type that the pipeline of talent say a ph DS in a way that we're actually working with them to build the novel research that will benefit our business.

Lara Poloni: Gaurav, maybe you could share on the financial profile how you think about the balance sheet or your position today. You've done a lot of good things with it the last 12 to 18 months. On the capital allocation, you did make little acquisitions over the last several years. How does that look the next three to four years? Is it something opportunistic in this AI realm or something that would be outside the realm of the 67 basis points that you're looking at going forward? Finally, on amortization of CM, if that's possible, how does that impact on your allocation if it's scale, quantum, accelerated, or not? How do we think about that? Thank you.

Utilization of those proceeds for repurchases.

And so you know where we're thinking about you can sort of think of it. That's organic you might think of that well you could make an acquisition to acquire that we're not going to stop looking at all of those avenues to continue to build this ability to just capacity to match up with the tremendous ability of the again the.

As we look forward, including what we have done in FY 'twenty five.

I think it is.

Important for us to share we have worked with every big three big four consulting hyper scaler in terms specific in terms of generative technology talk to them spoken with them tested with them, we've worked with various startups hundreds of them.

The engineer and that sort of scientific community of acre.

Yeah.

Hi, This is Steven Fox from true Securities. Obviously, we're early on in the process here.

Steven Fisher: Mike, I'll answer all those different pieces, but always pivot back. There is no change in our capital allocation strategy. We want to be very redundant and consistent to that point. We're returns-based. What will drive the best outcome of sustained value creation for our shareholders, we will continue to undertake it. As we sit here today, including the CM monetization and the sale proceeds, we expect to use that for repurchases. Why I said, based on everything we know right now, it's net neutral from an EPS standpoint after that sale and utilization of those proceeds for repurchases. As we look forward, including what we have done in FY25, I think it's important for us to share. We have worked with every Big 3, Big Four consulting hyperscalers specific in terms of generative technology. Talked to them, spoken with them, tested with them.

We've created we created a partnership a little over two years ago.

You spoke to about.

AI models that Theres, a training process involves as you scale that business.

A venture and we brought them now in Q4 onto our platform to support our deployment scaling and development on the generative standpoint. So we're always on the lookout for anything that will continue to expand our competitive advantage, but no change in capital allocation.

Or a scale to AI across your business, how should we think about some of the challenges you're facing and then going back on the previous question.

Or your previous answer to the question how do we think about your ability or the competitive nature to gain the talent of people that's evolved in your AI process.

Yeah.

Again, I'll make to make a point in addition to that as well.

I'll answer that in reverse order.

The other thing that we see is the highest return opportunities or just obviously investments.

At this point I don't think we we don't.

Don't think we feel like we.

We're concerned about our ability to go and find and attract talent.

Inorganic growth and margins are in the business those are the highest return opportunities and they do go through our margin.

In terms of you know again, what what are you concerned about.

Even when we think about expanding I'll call. It the AI AI, enabling team. We're also looking at.

The most significant concern we have.

Is how we allocate management time right the shortage the shortage that we have in the business and I think everybody has this is.

We've created unique ways.

So we're building a talent pipeline so that again will be actually working to develop the type that the pipeline of talent say a ph DS in a way that we're actually working with them to build the novel research that will benefit our business.

Steven Fisher: We've worked with various startups, hundreds of them. We created a partnership a little over two years ago with a venture. We brought them now in Q4 onto our platform to support our deployment, scaling, and development on the generative standpoint. We're always on the lookout for anything that will continue to expand our competitive advantage, but no change in capital allocation.

Is how do you find really capable leaders and management that have the time to devote all of their time to make this a success.

And that gets back to we're constantly.

Evaluating where we spend management time, and where we deploy capital in the business to those highest returning opportunities and so we're consciously trying to again find the right executives to add to the organization like adding Joel Hudkins when she joined US guest what she had 100% of her time available.

And so we're thinking about and you can sort of think of it. That's organic you might think of that well you could make an acquisition to acquire that we're not going to stop looking at all of those avenues to continue to build this ability and its capacity to match up with the tremendous ability of the again, the engineer and that sort of scientific community of acre.

Troy Rudd: I'll make a point in addition to that. The thing that we see as the highest return opportunities are just obviously investments in organic growth, and margins are in the business. Those are the highest return opportunities. They do go through our margin. Even when we think about expanding, I'll call it the AI-enabling team, we're also looking at we've created unique ways so that we're building a talent pipeline so that, again, we'll be actually working to develop the pipeline of talent, say, AI PhDs, in a way that we're actually working with them to build the novel research that will benefit our business. We're thinking about you can sort of think of it that's organic. You might think of that, well, you can make an acquisition to acquire that.

It's the biggest challenge that we have in order to build an advisory business and so we are finding people and adding that capacity to build the business.

Yeah.

Hi, This is Steven Fox from true Securities. Obviously, we're early on in the process here.

It's the same thing when we look across everything we do we have to go.

Spoke to about these AI models that there is a training process involves as you scale that business across or scaled the AI across your business. How should we think about some of the challenges you're facing and then going back on the previous question.

Go back to the <unk>.

Process around construction management gets to how do we create bandwidth for our management team to make this happen that also means not being distracted by things right.

And that's one of the reasons that we haven't focused on it there's a whole bunch of reasons, we haven't focused on M&A. If we did a large acquisition.

Or your previous answer to the question how do we think about your ability or the competitive nature of the game the talent of people that's evolved process yeah.

We would have no bandwidth for the next three years or four years to devote to this.

And that would be our biggest problem and that's always been our largest concern is making sure that you have the leadership to actually make this happen.

I'll answer in reverse order.

I don't think we.

I don't think we feel like we.

Alright, thank you.

We're concerned about our ability to go and find and attract talent.

Troy Rudd: We're not going to stop looking at all of those avenues to continue to build this ability and this capacity to match up with the tremendous ability of the, again, the engineer and the sort of scientific community of AECOM.

Yeah.

In terms of you know again, what what are you concerned about.

Adam <unk> with Goldman Sachs.

You talked about the need for power to power data centers you used. The example of due diligence on data center projects.

The most significant concern we have.

Is how we allocate management time right the shortage the shortage that we have in the business and I think everybody has this.

Michael Feniger: Hi, this is Steven Fisher from Truist Securities. Obviously, we're early on in the process here. You spoke about these AI models, that there's a training process involved. As you scale that business or scale the AI across your business, how should we think about some of the challenges you're facing? Going back on the previous question or your previous answer to the question, how do we think about your ability or the competitive nature to gain the talent of people that's involved in your AI process?

Just as you think about the end market mix evolution over the next five years anything to call out where you're seeing backlog head today, you spoke about from a regional perspective, but wondering if we should expect end market mix to shift around over the next couple of years.

How do you find really capable leaders and management that have the time to devote all of their time to make this a success.

And that gets back to we're constantly evaluating where we spend management time, and where we deploy capital in the business to those highest returning opportunities.

I mean in terms of the trends, they're quite consistent across the end markets. We continue to see our pipeline. It is up approximately 20% across all end markets to your point at them. There are some based on what Troy spoke earlier on certain international markets versus the U S markets, which are very rote.

The comps are you trying to again find the right executives to Abbvie organization like adding Joel Hudkins.

This guest when she had 100% of her time available.

Troy Rudd: Yeah. I'll answer in reverse order. At this point, I don't think we feel like we're concerned about our ability to go and find and attract AI talent. In terms of, again, what are you concerned about? The most significant concern we have is how we allocate management time, right? The shortage that we have in the business, and I think everybody has this, is how do you find really capable leaders in management that have the time to devote all of their time to make this a success? That gets back to we're constantly evaluating where we spend management time and where we deploy capital in the business to those highest returning opportunities. We're constantly trying to, again, find the right executives to add to the organization, like adding Jill Hodkins. When she joined us, guess what she had?

The biggest challenge that we have in order to build an advisory business and so we are finding.

Finding people and adding that capacity to build the business.

Bus continue to be very healthy at a global quaint.

Same thing when we look across everything we do we have to again go back.

One thing I will add to that is.

Process around construction management gets to how do we create bandwidth for our management team to make this happen that also means not being distracted by things.

When we look at the opportunity into the mid and long term. So let's say five to 10 years out and how we will be able to leverage this technology proprietary technology that we have created how we will be able to extract value for our clients and deliver sustained value for our shareholders. One thing clearly stood out.

And that's one of the reasons that we haven't focused on it there's a whole bunch of reasons that we haven't focused on M&A. If we did a large acquisition.

We would have no bandwidth for the next three years or four years to devote to this.

For us our construction management business.

And that would be our biggest problem and that's always been our largest concern is making sure that you have the leadership to actually make this happen.

There's we don't see that same level of opportunity.

Alright, thank you.

That we see here again, and that's why to choice point, focusing in on highest and best use greatest return on 90 plus percent of our business.

Adam <unk> with Goldman Sachs again.

Troy Rudd: 100% of her time available. It's the biggest challenge that we have in order to build an advisory business. We are finding people and adding that capacity to build the business. It's the same thing when we look across everything we do. We have to, again, go back to the process around construction management. It gets to how do we create bandwidth for our management team to make this happen? That also means not being distracted by things, right? That's one of the reasons that we haven't focused on, there's a whole bunch of reasons that we haven't focused on M&A. If we did a large acquisition, we would have no bandwidth for the next three years or four years to devote to this. That would be our biggest problem.

And can I, just add something to it so.

You talked about the need for power to power data centers you used. The example of due diligence on data center projects.

Think about it this way is.

We have a really diverse portfolio of skills right. Instead. So we're it's kind of a number one in transportation number one in water number one environmental engineering number one in buildings and so.

Just as you think about the end market mix evolution over the next five years anything to call out where you're seeing backlog had today you spoke about from a regional perspective, but wondering if we should expect end market mix to shift around over the next couple of years.

It really means that you know we're exposed as the trends change. So there's no question that there's going to be a massive investment over the next 15 years.

I mean in terms of the trends there quite consistent across the end markets. We continue to see our pipeline. It is up approximately 20% across all end markets to your point at them. There are some based on what Troy spoke earlier on certain international markets versus the U S markets, which are very.

And generating power or electricity and so are we exposed to that yes, right and so the trends are going to vary across the world over the next decade, but the beauty of our organization is is where we're not exposed to one of those markets. We're exposed to the right markets geographically and where we're exposed to all of these various end mark.

Troy Rudd: That's always been our largest concern, making sure that you have the leadership to actually make this happen.

Michael Feniger: All right. Thank you. Adam, you're with Goldman Sachs again. You talked about the need for power to power data centers. You used the example of due diligence on data center projects. Just as you think about the end market mix evolution over the next five years, anything to call out where you're seeing backlog head today? You spoke about from a regional perspective, but wondering if we should expect end market mix to shift around over the next couple of years.

Robust continue to be a very healthy at a global 0.1 thing I will add to that is.

And so what typically happens is those skills are a little bit transferable as you go across those end markets right because there's a growth in transportation will then people on our buildings in places or facilities business start to participate right. When you. When you have lots of rail work theres lots of stations and so.

When we look at the opportunity into the mid and long term, so let's say five to 10 years out.

And how we will be able to leverage this technology proprietary technology that we have created how we will be able to extract value for our clients and deliver sustained value for our shareholders. One thing clearly stood out for us our construction management business.

We really have a platform that is sort of exposes us to participate in all of those trends and we don't see any particular trend in the future that we don't have them a meaningful way to participate in nor do we say boy. If this doesn't work over the next five years for US we have a problem we're not exposed like data centers, that's what's gonna mean, that's meaningful for us sure.

There's we don't see that same level of opportunity.

That we see here again, and that's why to choice point, focusing on highest and best use greatest return on 90 plus percent of our business.

Steven Fisher: I mean, in terms of the trends, they're quite consistent across the end markets. We continue to see our pipeline. It is up approximately 20% across all end markets. To your point, Adam, there are some, based on what Troy spoke earlier, on certain international markets versus the US markets, which are very robust, continue to be, very healthy at a global point. One thing I will add to that is when we look at the opportunity into the mid and long term, let's say five to 10 years out, and how we will be able to leverage this technology, proprietary technology that we have created, how we will be able to extract value for our clients and deliver sustained value for our shareholders, one thing clearly stood out for us: our construction management business. We don't see that same level of opportunity that we see here again.

It's meaningful for us, but because of our portfolio effect all of this investment infrastructure is meaningful and we have the ability to adjust.

Can I just add something to it so.

Think about it this way is.

We have a really diverse portfolio of skills right. Instead. So we're it's kind of a number one in transportation number one in water number one in environmental engineering number one in buildings and so.

Thanks, just wanted to ask about the guidance for fiscal 'twenty six in terms of the organic growth rate that 6% to 8%.

It really means that you know we're exposed as the trends change. So there's no question that there's going to be a massive investment over the next 15 years.

Just curious how you approached it in terms of it's obviously, a 2% window I think previous years, you've had 3%.

Alright, and generating power or electricity and so are we exposed to that yes, right and so the trends are going to vary across the world over the next decade, but the beauty of our organization is is where we're not exposed to one of those markets. We're exposed to the right markets geographically and where we're exposed to all these various end mark.

Maybe that's not that big a difference how much of this is.

Is a increased level of specification because you don't have construction management in there or is that generally a bigger a uncertainty to factor in or is there something about this year that makes it a little more confident of a narrower range now.

Steven Fisher: That's why, to Troy's point, focusing on highest and best use, greatest return on 90-plus percent of our business.

And so what typically happens is those skills are a little bit transferable.

Good question, Steve I'll answer the last part first which is C. M is not a contributor to that more concise range of 6% to 8% versus five tweak what we have said on an organic level.

You go across those end markets right because there's a growth in transportation will then people on our buildings in places or facilities business start to participate right. When you're when you have lots of rail work theres lots of stations.

Troy Rudd: Gary, just to add something to that. Think about it this way: we have a really diverse portfolio of skills, right? We're kind of number one in transportation, number one in water, number one in environmental engineering, number one in buildings. It really means that we're exposed as the trends change. There's no question that there's going to be a massive investment over the next 15 years in generating power or electricity. Are we exposed to that? Yes, right? The trends are going to vary across the world over the next decade. The beauty of our organization is we're not exposed to one of those markets. We're exposed to the right markets geographically, and we're exposed to all these various end markets.

What gives us the confidence says 20 quarters in a row.

Book to burn of onex or better.

And so we really have a platform that is sort of exposes us to participate in all of those trends and we don't see any particular trend in the future that we don't have a meaningful way to participate in nor do we say boy. If this doesn't work over the next five years for US we have a problem. We're not experts like data centers, that's what's gonna mean, that's meaningful for us.

Four quarters in a row, including entirety of FY 'twenty five of one one book to burn while delivering at the peer lead level from organic MSR growth standpoint, when we look at our capture rates there continue to be elevated when we look at our pipeline collectively at the enterprise level for our design engineering and.

Sure, it's meaningful for us, but because of our portfolio effect all of this investment infrastructure is meaningful and we have the ability to adjust.

And our program management business, they continue to be very healthy and last and not least if you look at our performance. We have delivered at that 6%. So when we looked at all of those measures. It gave us the confidence supported by especially tail in second half of 2026.

Thanks Scott.

Troy Rudd: What typically happens is those skills are a little bit transferable as you go across those end markets, right? If there's a growth in transportation, people on our buildings and places or our facilities business will start to participate, right? When you have lots of rail work, there's lots of stations. We really have a platform that sort of exposes us to participate in all of those trends. We do not see any particular trend in the future that we do not have a meaningful way to participate in, nor do we say, if this does not work over the next five years for us, we have a problem. We're not exposed. Like data centers, that's what's going to mean it. That's meaningful for us.

Got it.

For fiscal 'twenty six in terms of the organic growth rate that 6% to 8%.

Where we will be rolling out a lot of the technologies available right as a matter of now just into.

Just curious how you approached it in terms of it's obviously, a 2% window I think previous years, you've had 3%.

Introducing it to all the other different asset types and the different end markets and geographies, what we operate in.

It's going to become more and more expensive, it's going to provide a greater competitive edge to our teams across the globe, where they can now take.

Maybe that's not that big a difference how much of this is.

Is a increased level of specification because you don't have construction management in there or is that generally going to a bigger a uncertainty to factor in or is there something about this year that makes it a little more confident of a narrower range now.

Their legacy technical prowess as Troy said number one across all our end markets globally and now be argument that by with this great competitive differentiator. So combined all of those things. It gives us a lot of confidence as we step in FY 'twenty six thank you.

Good question, Steve I'll answer the last part first which is <unk> is not a contributor to that more concise range of 6% to 8% versus five to eight what we have said on an organic level.

Troy Rudd: Sure, it's meaningful for us, because of our portfolio effect, all of this investment infrastructure is meaningful, and we have the ability to adjust.

Yeah.

Thank you and just on 2020 six Troy you made a made a comment I just want to hopefully clear the deck I think you said with the government shutdowns should we be expecting a little volatility in the first quarter or two on awards is that more timing issue just wanted to kind of get a sense of that and you know obviously the rial.

What gives us the confidence says 20 quarters in a row.

Michael Feniger: Thanks. Just wanted to ask about the guidance for fiscal 2026 in terms of the organic growth rate, that 6% to 8%. Just curious how you approached it in terms of it's obviously a 2% window. I think previous years you've had 3%. Maybe that's not that big a difference. How much of this is an increased level of specification because you don't have construction management in there? Is that generally been a bigger uncertainty to factor in, or is it something about this year that makes you a little more confident to have a narrower range?

Book to burn of onex or better for quarters in a row, including entirety of FY 'twenty five of one one book to burn while delivering at the peer lead level from organic MSR growth standpoint, when we look at our capture rates there continue to be elevated when we look at our pipeline collectively at the.

<unk> is coming out next year.

How do you see or your clients start to manage this as we kind of seems like it's a little bit bumpy before we get maybe some that visibility. So that's showing up in the conversations yeah no. It's fair.

Enterprise level for our design Engineering Advisory and program management business. They continue to be very healthy and last and not least if you look at our performance. We have delivered at that 6%. So when we looked at all of those measures. It gave us the confidence supported by especially tail end.

Don't read too much.

Right now we don't have any insight.

And to what's going to happen.

But what we did notice is that we noticed at the end of the fourth quarter.

Steven Fisher: No, good question, Steve. I'll answer the last part first, which is CM is not a contributor to that more concise range of 6% to 8% versus 5% to 8%, what we have said on an organic level. What gives us the confidence is 20 quarters in a row of book to burn of 1x or better, four quarters in a row, including entirety of FY25, of 1.1x book to burn while delivering at the peer lead level from an organic NSR growth standpoint. When we look at our capture rates, they continue to be elevated. When we look at our pipeline collectively at the enterprise level for our design, engineering, advisory, and program management business, they continue to be very healthy. Last but not least, if you look at our performance, we have delivered at that 6%.

In anticipation of a shutdown that we didn't see the level of awards that we typically again I'm talking U S. Federal Government awards nothing else, we didn't see the level of awards that we typically see in the fourth quarter. So yeah. It had a muted impact and we expect that those awards would come over the next couple of quarters because that work is.

Second half of 2026, where we will be rolling out a lot of these technologies available right. It's a matter of now just <unk>.

Introducing it to all the other different asset types and the different end markets and geographies, what we operate in.

It's going to become more and more expensive, it's going to provide a greater competitive edge to our teams across the globe, where they can now pick.

Part of the agenda it needs to be done for the U S Federal government.

If there is another shutdown.

Their legacy technical prowess as Troy said number one across all our end markets globally and now be augmented by what this great competitive differentiator. So combined all of those things. It gives us a lot of confidence as we step in FY 'twenty six thank you.

In.

February of this year.

Yeah that might have an impact but again.

We can't predict that and so you know that's why ultimately remember that so that's why we give a range.

Because there are things that we can anticipate.

To the positive and negative during the course of the year you know when we build up our plan for the year, we sort of look at it start with from the bottoms up right starting with.

Yeah.

Thank you and just on 2020 six Troy you made a made a comment I just want to hopefully clear the deck I think you said it well.

Steven Fisher: When we looked at all of those measures, it gave us the confidence supported by especially tail end, second half of 2026, where we will be rolling out a lot of these. I mean, the technology is available, right? It's a matter of now just introducing it to all the other different asset types in the different end markets and geographies that we operate in. It's going to become more and more expansive. It's going to provide a greater competitive edge to our teams across the globe, where they can now take their legacy technical prowess, as Troy said, number one across all our end markets globally, and now be augmented by this great competitive differentiator. Combined, all those things give us a lot of confidence as we step in FY26.

The work that we're seeing in the pipe that we have our confidence around when do we kind of buildup to come up with a confidence around that that particular range, but that's why we give a range because there'll be speed bumps throughout the year.

The government shutdowns should we be expecting a little volatility in the first quarter or two on awards is that more timing issue just wanted to kind of get a sense of that and.

Obviously, the reauthorization is coming up next year, just how do you see or your clients start to manage this as we kind of seems like you're a little bit bumpy before we get maybe some that visibility. So that's showing up in the conversations yes, no. It's fair so don't read too much.

Hi, Nathan Italia associates on any cap with the team at Citi just.

Just curious about your advisory business I know, we talked a lot about it but could you see it evolving more into let's say SaaS like characteristics or offerings for our clients and our digital twins or anything of that nature, now, where we're not getting into the SaaS business.

Right.

We don't have any insight.

Into what's going to happen.

But what we did notice is that we noticed at the end of the fourth quarter and that's sort of in anticipation of a shutdown that we didn't see the level of awards that we typically again I'm talking U S. Federal Government awards nothing else, we didnt see the landlords that we typically see in the fourth quarter. So yeah. It had a muted impact and we expect.

Yeah. It's just we we we went through a period of experimentation years ago.

Troy Rudd: Thank you.

We did try it and what we found is that in our industry.

Michael Feniger: Thank you. Just on 2026, Troy, you made a comment. I just want to hopefully clear the deck. I think you said with the government shutdowns, should we be expecting a little volatility in the first quarter to honor boards? Is that more a timing issue? Just wanted to kind of get a sense of that. Obviously, the reauthorization is coming up next year. Just how do you see your clients start to manage this as we kind of seem like a little bit bumpy before we get maybe some of that visibility? That's showing up in the conversations out there.

We're just not equipped to be successful, we might be able to build tools and we even built some tools that are powered by AI that we tried to take it to our clients and we just uncovered that we don't have the sales force. We don't have the ability to kind of follow up would support it with our clients of our customers and so it's it's not something that works in history, and we discovered that.

That those awards would come over the next couple of quarters, because that work is still part of the agenda that needs to be gone for the U S Federal government.

If there is another shutdown.

In.

February of this year.

That might have an impact but again.

It didn't work for us so we've turned our attention to making sure that we build an organization that can deliver the same outcomes. What our clients are asking us to do for them, but we just do it a different way.

We can't predict that and so you know that's why ultimately remember that so that's why we give a range.

Because there.

Anticipate that.

Troy Rudd: Yeah. No, it's fair. Don't read too much, right? We don't have any insight into what's going to happen. What we did notice is that we noticed at the end of the fourth quarter, sort of in anticipation of a shutdown, that we didn't see the level of awards that we typically, again, I'm talking US federal government awards, nothing else, we didn't see the level of awards that we typically see in the fourth quarter. It had a muted impact. We expect that those awards would come over the next couple of quarters because that work is still part of the agenda that needs to be done for the US federal government. If there is another shutdown in February of this year, yeah, that might have an impact. Again, we can't predict it.

The positive and negative during the course of the year you know when we build up our plan for the year, we sort of look at it and start with from the bottoms up right starting with the work that we're seeing the pipe then we have our confidence around when we kind of buildup to come up with a confidence around that that particular range, but that's why we give a range because there'll be speed bumps throughout the year.

Yeah.

Oh, great and it seems like we have no more questions.

So again I say, thank you to everybody for spending your morning with US we do appreciate the conversation and the questions and I would imagine that we have given you a lot to digest and we'll continue to have this conversation over the coming months as we continue to see the benefit of what we're doing across our business. So thank you all for coming.

Hi, Nathan Italia Associates on handicap with his team at Citi. Just curious about your advisor and AI business I know, we talked a lot about it but could you see it evolving more into.

<unk>, let's say SaaS like characteristics or offerings for your clients or digital twins or anything of that nature, now, where we're not getting into the SaaS business.

Troy Rudd: That's why ultimately, remember this, that's why we give a range, because there are things that we can anticipate to the positive and to the negative during the course of the year. When we build up our plan for the year, we sort of look at it and start from the bottoms up, right? Starting with the work that we're seeing, the pipeline we have, our confidence around when we kind of build up to come up with a confidence around that particular range. That's why we give a range, because there'll be speed bumps throughout the year.

Yeah.

We we we went through a period of experimentation years ago.

We try.

And we found is that in our industry.

Could you spell equipped to be successful so we might have.

And we even built some tools.

Et cetera.

And we've just been covered.

We don't have the sales force, we don't have the ability to kind of follow which supported with our clients or our customers and so it's it's not something that works in history, and we discovered that it didn't work for us. So we've turned our attention to making sure that we build an organization that can deliver the same outcomes. What our clients are asking us to do for them, but we just do it a different way.

Troy Rudd: Hi. Name's Natalia. I'm associate on Andy Kaplowitz's team at Citi. Just curious about your advisory and AI business. I know we talked a lot about it, but could you see it evolving more into, let's say, SaaS-like characteristics or offerings for your clients, or digital twins, or anything of that nature?

Well, great. It seems like we have no more questions.

So again I say, thank you to everybody for spending your morning with US we do appreciate the conversation and the questions and I would imagine that we have given you a lot to digest and we will continue to have this conversation over the coming months as we continue to see the benefit of what we're doing across our business.

Troy Rudd: No. We're not getting into the SaaS business. Yeah. We went through a period of experimentation years ago, and we did try. What we found is that in our industry, we're just not equipped to be successful. We might be able to build tools, and we even built some tools that were powered by AI that we tried to take to our clients. We just uncovered that we don't have the salesforce. We don't have the ability to kind of follow up and support it with our clients or our customers. It's not something that works in industry. We discovered that it didn't work for us. We've turned our attention to making sure that we build an organization that can deliver the same outcomes what our clients are asking us to do for them, but we just do it a different way. Well, great.

Thank you all for coming.

Right.

[laughter].

Yeah.

Yeah.

Yes.

Okay.

[music].

Troy Rudd: It seems like we have no more questions. Again, I say thank you to everybody for spending your morning with us. We do appreciate the conversation and the questions. I would imagine that we have given you a lot to digest, and we'll continue to have this conversation over the coming months as we continue to see the benefit of what we're doing across our business. Thank you all for coming.