ABM Industries (ABM) investor relations material

Executive summary

• Revenue grew 6.2% year-over-year to $2.2 billion, with 5% organic growth and 1.2% from acquisitions, supported by broad-based segment gains.

• Net income rose to $41.8 million ($0.67 per diluted share), up from $4.7 million, mainly due to the absence of a $36 million prior-year adjustment.

• Adjusted net income was $51.7 million ($0.82 per diluted share); adjusted EBITDA increased 5% to $125.8 million, margin flat at 5.9%.

• Free cash flow surged to $150.2 million, up $135 million sequentially, driven by disciplined collections and reduced day sales outstanding.

• A restructuring program was launched, targeting $35 million in annualized cost savings, with $10 million in charges expected in Q4.

Financial highlights

• Adjusted EBITDA margin held steady at 5.9% year-over-year.

• Net income margin improved to 1.9% from 0.2% in the prior year quarter.

• Free cash flow for Q3 was $150.2 million, up from $64.1 million in Q3 2024.

• Total debt to pro forma adjusted EBITDA ratio was 2.8x; available liquidity was $691 million.

• Interest expense for the quarter was $25.3 million, up $4.1 million year over year.

Outlook and guidance

• Fiscal 2025 adjusted EPS and adjusted EBITDA margin expected at the low end of $3.65–$3.80 and 6.3%–6.5%, respectively.

• Q4 earnings and margins anticipated to improve due to restructuring and cost actions.

• Tax rate expected at 29%–30%; Q4 interest expense projected at $25 million.