ABM Industries (ABM) Q2 2024 earnings summary

Executive summary

• Q2 revenue grew to $2.0–$2.02 billion, up 1.7–2% year-over-year, driven by organic growth in Aviation, Technical Solutions, Manufacturing & Distribution, and Education, while B&I remained resilient despite commercial real estate headwinds.

• Net income declined 15.7–16% to $43.8 million, with GAAP EPS at $0.69 and adjusted EPS at $0.87, mainly due to the absence of a prior-year Aviation project gain and higher corporate investments.

• Adjusted EBITDA was $125.3 million (6.5% margin), down 9% year-over-year, with declines partially offset by higher operating earnings in several segments and a lower share count.

• Record $1 billion in new business in the first half, including a $180 million microgrid project and major contracts in Aviation, B&I, and Education.

• Raised full-year adjusted EPS guidance to $3.40–$3.50, reflecting confidence in market positioning and business resilience.

Financial highlights

• Q2 revenue was $2,018.2 million (+1.7% year-over-year); adjusted net income was $55.5 million (-8%); adjusted EPS was $0.87 (-3%).

• Adjusted EBITDA margin was 6.5% (down from 7.2%); net income margin was 2.2% (down from 2.6%).

• Free cash flow in Q2 was $101–$101.4 million, up significantly year-over-year.

• Interest expense for Q2 was $20.6 million; effective tax rate 29.9%.

• Repurchased 555,000–555,461 shares at $42.84 average price, totaling $23.8 million; $186 million remains under repurchase authorization.

Outlook and guidance

• Full-year 2024 adjusted EPS guidance raised to $3.40–$3.50 (from $3.30–$3.45).

• Adjusted EBITDA margin expected between 6.2% and 6.5%.

• Interest expense forecasted at $82–$86 million; normalized tax rate at 29–30%.

• Full-year normalized free cash flow expected at $240–$270 million, likely toward the upper end.

• Adjusted EPS expected to be balanced between Q3 and Q4.