Snapshot
Engineering & construction (E&C) firms sell project-management and construction services to owners of large infrastructure — data centers, power plants, water systems, military bases, roads. Their product is measured in backlog: the dollar value of contracted-but-not-yet-completed work. Backlog converts to revenue over 1–5 years. Across the five firms here, combined backlog stands at roughly $117 billion (firm backlog; ~$124B including options), a record for every company except TPC. Revenue is cost-plus or lump-sum; cash comes in as milestones are hit.
~$117B
Combined firm backlog (ACM $26.2B, J $27B, FLR $25.7B, KBR $16.9B, TPC $19.8B)
~$39B
Combined market cap (ACM $9.3B, J $14.3B, FLR $7.0B, KBR $4.5B, TPC $3.8B)
$104B
US data-center construction starts, trailing 12 months through Jan 2026 (ConstructConnect)
499,000
Additional US construction workers needed in 2026 (ABC / NCCER)
To own all five firms at today’s prices you would pay roughly $39 billion for the equity. That $39B buys $117B of firm backlog — about $3 of contracted future revenue for every $1 of market cap. 92% of US contractors report difficulty filling positions, and the industry needs ~500,000 additional workers in 2026 alone.
Sources: AECOM Q2-FY2026 earnings (May 2026); Jacobs Q2-FY2026 earnings call (May 2026); Fluor Q1-2026 earnings (May 2026); KBR Q4-FY2025 earnings (Feb 2026); TPC Q1-2026 earnings (May 2026); ConstructConnect Mar 2026 data-center report; ABC workforce forecast (Mar 2026).
The product & how money is made
E&C firms sell labor hours, expertise, and project coordination. A client (a hyperscaler, utility, government agency, or industrial company) hires an E&C firm to design, procure, build, or manage a project. The firm provides engineers, project managers, construction supervisors, and trade workers.
Contract types
- Cost-reimbursable (cost-plus). The client pays actual costs plus a fixed or incentive fee. The firm carries little financial risk. Fluor’s backlog is 81% reimbursable. This is the dominant structure for large projects.
- Lump-sum (fixed-price). The firm quotes a total price upfront. Cost overruns eat into the firm’s margin; cost savings increase it. TPC’s civil segment operates largely on fixed-price contracts.
- Program management / advisory. The firm manages the client’s capital program for a fee, without taking construction risk. AECOM and Jacobs earn most of their revenue this way. Operating margins are 16–20% because the firm supplies engineering hours, not construction labor.
Money flow
Revenue is recognized as work is performed (percentage-of-completion). Cash comes in as milestones are billed, typically 30–90 days after work is done. Working capital swings can be large: AECOM’s receivables and contract assets were $4.6B at March 2026, roughly half its market cap. Free cash flow lags earnings when receivables grow (as in AECOM’s Q2-FY2026, where FCF was near zero despite $184M net income).
Sources: AECOM 10-K FY2025; Fluor Q1-2026 earnings (backlog composition); TPC 10-K FY2025.
Demand
Contracted (firm backlog)
Backlog represents signed contracts or task orders that have not yet been executed.
| Ticker | Firm backlog | YoY change | Largest segments |
|---|
| ACM | $26.2B | +8% | Americas infrastructure ($18.0B); International ($6.9B) contracted |
| J | $27.0B | +22% | I&AF $26.1B; PA Consulting $0.9B contracted |
| FLR | $25.7B | -10% | Urban Solutions, Energy Solutions, Mission Solutions contracted |
| KBR | $16.9B | -3% | MTS $12.7B; STS $4.2B contracted |
| TPC | $19.8B | +6% | Civil $10.2B; Building $7.3B; Specialty $3.1B contracted |
Jacobs’ book-to-bill has been above 1.0x for 22 consecutive quarters. AECOM’s design book-to-bill has been above 1.0x for 22 consecutive quarters.
KBR reports a separate “backlog and options” figure of $23.2B (record), which includes unfunded portions of multi-year government IDIQ contracts. The firm backlog of $16.9B counts only funded/awarded portions. contracted
Forward demand drivers est.
- Data-center construction. US data-center construction starts hit $25.2B in January 2026 alone, the highest single month on record. Trailing 12-month starts: $103.7B, averaging $8.6B/month. A pipeline of 65 projects totaling $92.1B is in preconstruction with potential starts within six months. est. Jacobs reported its data-center business grew >100% YoY in Q2-FY2026 and now represents 3–4% of total revenue, with the AI infrastructure pipeline up 400% YoY.
- Power generation. The EIA projects 86 GW of new US utility-scale generating capacity to come online in 2026, a record. est.
- Government / defense. KBR’s MTS segment backlog including options is $19.1B, driven by IDIQ contracts with DOD, NASA, and intelligence agencies.
- Water and environmental infrastructure. Jacobs reported 9% net revenue growth in critical infrastructure and continued strength in water treatment.
Sources: ConstructConnect Mar 2026 data-center report; EIA 2026 capacity additions; Jacobs Q2-FY2026 earnings call transcript; KBR Q4-FY2025 press release; AECOM Q2-FY2026 earnings.
Supply
What constrains delivery
The binding constraint is skilled labor. E&C firms sell the time of engineers, electricians, ironworkers, and project managers. When demand surges, firms cannot instantly scale because:
- 499,000 additional construction workers are needed in the US in 2026, according to ABC/NCCER. Every $1 billion in construction spending requires ~3,550 new workers. est.
- 92% of contractors report difficulty filling positions. 45% experienced project delays due to labor shortages in the past year. est.
- 41% of the current workforce will retire by 2031. One in five construction workers is over 55. Industry turnover is 68%. est.
- ~25% of construction workers are foreign-born, making the sector vulnerable to immigration policy shifts that have contracted this labor pool during peak demand. est.
- Cleanroom, data-center, and GMP-qualified trades saw 9–11% wage increases in 2025 in high-demand markets like Raleigh-Durham. est.
Capacity by firm
E&C firms expand capacity by hiring. Revenue growth beyond 6–10% organic typically requires acquisitions or subcontracting, both of which compress margins.
Jacobs expects 8–10.5% organic net revenue growth in FY2026. AECOM guides 6–8% organic NSR growth.
Sources: ABC workforce forecast (Mar 2026); CIC Construction workforce report; NCCER projections; AECOM/Jacobs FY2026 guidance.
The gap
Every company in this group reports record or near-record backlog, while the US construction industry faces a structural labor deficit that worsens each year as retirements outpace new entrants.
- Backlog-to-revenue ratio (years of work at current run-rate) ranges from 1.6x (ACM) to 3.6x (TPC). Higher ratios mean longer visibility but also longer conversion timelines.
- Pricing direction: cost-reimbursable contracts pass labor-cost inflation through to clients, so firms earn the same margin percentage on a higher cost base. Margins on new awards at Fluor are running 200 basis points higher than margins in existing backlog. AECOM’s adjusted operating margin hit a record 16.5% in Q2-FY2026, up 50 bps YoY.
- Data-center construction cost per square foot rose from $183 (2020 midpoint) to $415 (2025), a compound growth rate of ~18%/year. The 2026 projection is $488/sq ft. est.
- Book-to-bill above 1.0x at ACM, J, and KBR (Q1-2026). TPC’s Q1-2026 book-to-bill was 0.5x ($670M new awards vs. $1.39B revenue), so its backlog is converting faster than it is being replenished in the near term.
Revenue growth is capped by hiring capacity — firms cannot build what they cannot staff.
Sources: AECOM, Jacobs, Fluor, KBR, TPC filings (see above); ConstructConnect cost data.
The players
| Metric | ACM | J | FLR | KBR | TPC |
|---|
| Market cap | $9.3B | $14.3B | $7.0B | $4.5B | $3.8B |
| Stock price (Jun 3 2026) | $72.41 | $121.28 | $50.16 | $35.73 | $72.26 |
| Firm backlog | $26.2B | $27.0B | $25.7B | $16.9B | $19.8B |
| Backlog / mkt cap | 2.8x | 1.9x | 3.7x | 3.8x | 5.2x |
| FY rev (latest full yr) | $16.1B | $12.0B | $15.5B | $7.8B | $5.5B |
| Backlog / FY rev | 1.6x | 2.2x | 1.7x | 2.2x | 3.6x |
| FY net income | $638M | $313M | ($51M) | $415M | $80M |
| FY FCF | $685M | $608M | neg. | $482M | $567M |
| FCF yield | 7.4% | 4.3% | neg. | 10.6% | 14.9% |
| Total debt | $2.75B | $2.24B | $1.07B | $2.58B | $0.40B |
| Cash | $1.03B | $1.24B | $3.2B | $0.38B | $0.80B |
| Net debt (cash) | $1.72B | $1.00B | ($2.1B) | $2.20B | ($0.40B) |
| Adj. oper. margin | 16.5% | 14.1% | ~3% | 12.4% | ~4% |
| Book-to-bill (latest Q) | 1.2x | 1.2x | ~0.7x | 1.1x | 0.5x |
| FY2026 adj. EPS guide | $5.90–$6.10 | $7.10–$7.35 | $2.60–$2.80 | $3.87–$4.22 | $4.90–$5.30 |
| Shares (diluted, M) | ~130 | ~118 | ~140 | ~127 | ~54 |
| Primary exposure | Infrastructure design | Design + consulting | Energy + mission EPC | Defense + tech | Civil construction |
Key differences
- ACM and J are design-led: most revenue is engineering, consulting, and program management (capital-light, higher margin). They carry less execution risk.
- FLR is an EPC contractor with large lump-sum energy projects. It has $3.2B of cash after selling its NuScale stake (~$2.4B proceeds) but reported negative FCF in FY2025 partly due to a $643M adverse court ruling (Santos). Margins on new awards are running 200 bps above existing backlog margins.
- KBR is majority government services (~57% of revenue from US government). It is splitting into two companies in January 2027: Mission Technology Solutions (defense/government, 11.2% EBITDA margin) and the remaining Sustainable Technology Solutions (industrial technology licensing, 20.5% EBITDA margin).
- TPC is a pure construction contractor (civil infrastructure, buildings, electrical/mechanical specialty). Backlog peaked at $21.6B in Q3 2025; Q1 2026 new awards of $670M were below the $1.4B quarterly revenue run-rate, so backlog is declining from the peak. FY2024 net loss was ($164M); FY2025 net income was $80M.
Sources: Company filings and earnings releases cited above; stockanalysis.com for market data Jun 3 2026.
The price of exposure
At June 3, 2026 prices:
| Metric | ACM | J | FLR | KBR | TPC |
|---|
| P/E (FY2026 adj. EPS mid) | 12.1x | 16.8x | 18.6x | 8.8x | 14.2x |
| EV ($B) | $11.0 | $15.3 | $4.9 | $6.7 | $3.4 |
| EV / FY rev | 0.68x | 1.27x | 0.32x | 0.86x | 0.61x |
| EV / backlog | 0.42x | 0.57x | 0.19x | 0.40x | 0.17x |
| Price / FCF | 13.6x | 23.5x | neg. | 9.3x | 6.7x |
Enterprise value (EV) = market cap + net debt. For firms with net cash (FLR, TPC), EV is below market cap.
Arithmetic on the multiples
- TPC trades at 0.17x EV/backlog and 6.7x P/FCF. The discount reflects its history of fixed-price contract losses (FY2024 net loss was $164M). FY2025 was a turnaround year ($80M net income, $567M FCF, fourth consecutive year of record operating cash flow).
- KBR at 8.8x forward P/E and 10.6% FCF yield. The pending MTS spinoff (Jan 2027) separates a defense contractor (MTS, 11.2% EBITDA margin) from an industrial technology licensor (STS, 20.5% EBITDA margin).
- J carries the highest multiples (16.8x P/E, 1.27x EV/rev). It has a design-led model with 14%+ EBITDA margins, record backlog growth (+22% YoY), and 100%+ YoY data-center revenue growth.
- FLR at 0.19x EV/backlog and 0.32x EV/rev. FCF was negative in FY2025 and adjusted operating margins (~3%) are the lowest in the group. The $3.2B cash position (post-NuScale sale) and $1.4B of authorized 2026 buybacks (~20% of market cap) are notable.
- ACM at 12.1x forward P/E and 7.4% FCF yield. Highest operating margins among the design firms (16.5%) and 22 consecutive quarters of book-to-bill above 1.0x.
Sources: Market data from stockanalysis.com Jun 3 2026; EV calculated from market cap and net debt per most recent filings.
What to deep-dive next
- Data-center revenue exposure by firm. Jacobs disclosed 3–4% of revenue from data centers growing >100% YoY, with the broader AI ecosystem at 10–11%. The other four firms do not break out data-center revenue separately.
- TPC’s fixed-price risk history. TPC swung from a ($164M) net loss in FY2024 to $80M profit in FY2025. What drove the FY2024 losses (specific Specialty Contractors project write-downs) and whether similar risks sit in the current $19.8B backlog.
- KBR spinoff mechanics. MTS becomes a standalone defense company in January 2027. What does STS trade at on its own at 20.5% EBITDA margin? What does MTS trade at as a pure-play government contractor?
- Fluor’s cash deployment. FLR has $3.2B in cash and authorized $1.4B of buybacks for 2026. Execution pace and per-share impact.
- Labor cost pass-through. What percentage of each firm’s backlog is cost-reimbursable (inflation-protected) vs. fixed-price (margin risk from wage inflation)?
- Client concentration. How much of each firm’s backlog is from the top 5 clients? Hyperscaler concentration risk if any single client pauses capex.
Sources & confidence
- AECOM Q2-FY2026 earnings release (May 11, 2026) — backlog $26.2B, revenue, margins, guidance. Period ending Mar 31, 2026.
- AECOM FY2025 earnings & 10-K (Nov 2025) — full-year financials, backlog $24.8B, balance sheet as of Sep 30 2025.
- Jacobs Solutions Q2-FY2026 earnings call transcript (May 2026, Insider Monkey) — backlog $27B, data-center growth, AI pipeline, FY2026/FY2029 guidance.
- Jacobs FY2025 earnings release (Nov 2025, jacobs.com) — full-year financials, backlog $23.1B, balance sheet.
- Fluor Q1-2026 earnings (May 8, 2026, BusinessWire via intellectia.ai) — backlog $25.7B, $3.2B cash, NuScale proceeds.
- Fluor FY2025 annual results (Feb 2026, newsroom.fluor.com via finviz) — full-year financials, backlog $25.5B, Santos ruling impact, NuScale write-down.
- KBR Q4 & FY2025 earnings release (Feb 26, 2026, kbr.com) — backlog $16.9B ($23.2B w/ options), full-year financials, MTS spinoff timeline.
- KBR Q1-2026 summary (grafa.com, May 2026) — revenue $1.92B, book-to-bill 1.1x, backlog $23.2B w/ options.
- KBR balance sheet (MarketBeat, per 10-Q Q1-2026) — debt $2.58B, cash $380M.
- Tutor Perini Q4 & FY2025 results (Feb 2026, IR page) — backlog $20.6B, revenue $5.5B, OCF $748M, balance sheet.
- Tutor Perini Q1-2026 results (May 2026, finsee.ai) — backlog $19.8B, revenue $1.39B, guidance $4.90–$5.30 adj. EPS.
- ConstructConnect March 2026 Data Center Report — $25.2B Jan 2026 starts, $103.7B TTM, cost/sqft data, 65-project pipeline at $92.1B.
- ABC (Associated Builders & Contractors) workforce forecast, Mar 2026 — 349,000–499,000 workers needed.
- CIC Construction workforce report — 92% difficulty filling positions, 41% retirement by 2031, 68% turnover, 9–11% wage increases in DC trades.
- stockanalysis.com — market prices, market caps as of Jun 3, 2026.
Confidence: Backlog, revenue, and balance-sheet figures are from primary SEC filings (10-K, 10-Q) and company earnings releases. Market prices are Jun 3, 2026. Data-center construction spending is from ConstructConnect (project-level tracker). Workforce shortage figures are from ABC/NCCER (industry trade groups using BLS data). Cost-per-square-foot growth rates are ConstructConnect estimates and should be treated as directional. est.
All company figures from primary SEC filings or earnings releases. Industry figures from named, dated third-party sources.