AECOM (NYSE:ACM) Q2 2024 Earnings Call Transcript

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And whether that’s retiring or choosing to do something different. They were leaving the industry, and that was happening on our client side. So while the demand for our clients was increasing, effectively the supply of the scientific ability and the management ability to provide that help on those projects was declining, and it created a perfect opportunity for us. And so as we go forward, again, we see this as a very robust long-term opportunity because of the marketplace, but also because we believe we built something that we think that at the moment has certainly a competitive advantage. There are others in the market that offer that opportunity, right? They provide program management services, but they do not have the expertise that we bring the technology expertise around engineering, and construction oversight and supervision that we bring and so it puts us in this unique position.

Michael Dudas: Thank you, Troy.

Troy Rudd: Thank you.

Operator: Your next question comes from the line of Adam Thalhimer with Thompson Davis. Please go ahead.

Adam Thalhimer: Hey good morning guys. Two questions probably both for Lara. The Canadian infrastructure program you mentioned, can you expand on like the size, timing and then which particular opportunities you guys are focused on from that? And then the – you said you had a landmark data center win. I was curious if you could give additional color on that and also the outlook for data centers?

Lara Poloni: Sure. Thanks for the question, Adam. So we’ve been talking about Canada for a few quarters now, and it is one of our core international markets for us, where we have very strong capability across all of the key segments of our business. We know that the Canadian federal government has been talking about doubling their funding for infrastructure over the next 10 years. So a very robust long-term pipeline for infrastructure projects for rail, for water. Our signature wins over the last couple of years have been in transit and also in water. So we’ve got very strong long-term coverage of those segments in particular. And I think Troy mentioned a book-to-burn this quarter of 1.6. So good – very strong from a backlog position and a long-term visibility point of view as well.

So we expect the long-term infrastructure outlook in Canada to remain very strong. With respect to your question about data centers, we have a global scale coverage and long-term relationship with all of the major hyperscalers. And the win in the quarter was a data center win with one of those clients here in the U.S. And I think the long-term positioning, again, our key client program, it includes that segment of the facilities business as well. So and all parts of the business are engaged in those opportunities, be it the building engineering, the environmental teams doing the due diligence of sites for data centers. We know that there’s a hungry appetite for more of these data centers to be built not just here in the U.S. but across the world.

So it’s certainly a segment that we have a lot of optimism about

Adam Thalhimer: And then do you guys get a – or do you have a sense for, I get a lot of questions about what are the like limiting factors for data center growth of power and permitting and those kinds of – are you seeing that as a limiting factor, like for your growth in data centers? Or is that maybe two years from now?

Lara Poloni: We see, I mean, all of the service coverage that we have, creates massive opportunity to be frank. So weakens not just with the electrical supply, I mean, often, it’s the power supply and the supporting infrastructure that is a limiting factor for many of our clients, but that’s why they come to us. I mean, from the very beginning in terms of site selection and giving them a lot of options through the work that our permitting and latest planning teams do to the transportation access for the fulfillment and logistics centers as well. So again, I think we’re well placed and our global scale, again, is the other factor why we’re winning what matters in this segment as well. So these are global clients, and they want full service capability and that global reach. So it’s a significant opportunity for us and really plays to our strength.

Adam Thalhimer: Good answer. Thanks Lara.

Lara Poloni: Thank you.

Operator: That concludes our question-and-answer session. I will now turn the conference over to Chief Executive Officer, Troy Rudd, for closing remarks.

Troy Rudd: Thank you, operator. And I’d like to end the call by thanking our teams for a very strong start to the year. We are winning more work than we have ever won before and continue to expand our margins, and we’re growing at a very high rate. And I would like to congratulate our teams again for being recognized by ENR as the number one water consulting firm and again, adding to our positions as the leader in transportation environment and facilities. Well done. Thank you very much.

Operator: This concludes today’s conference call. Thank you for your participation and you may now disconnect.

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