ABM Industries (ABM) Q2 2025 earnings summary

Executive summary

• Revenue increased 4.6% year-over-year to $2.1 billion, with 3.8% organic growth and contributions from the Quality Uptime Services acquisition.

• Adjusted net income rose to $54.1 million ($0.86/share), while net income was $42.2 million ($0.67/share), down from the prior year due to higher interest and transformation costs.

• Record $1.1 billion in new bookings in the first half, up 11% year-over-year, with strong performances in aviation and education.

• ERP implementation progressed, improving operational efficiency and sequential cash flow, though cash flow from operations was impacted by transition delays.

• Continued investments in ELEVATE strategy, technology, and workforce development.

Financial highlights

• Revenue for the quarter was $2.1 billion, with adjusted EBITDA of $125.9 million and a margin of 6.2%.

• Net income margin was 2.0%, and gross margin improved to 12.8% for the quarter.

• Free cash flow for the quarter was $15.2 million, a significant sequential improvement but down year-over-year due to ERP transition.

• Total indebtedness at quarter-end was $1.6 billion, with a leverage ratio of 2.9x and available liquidity of $657.8 million.

• Quarterly cash dividend of $0.265 per share declared, with $14.1 million paid in dividends.

Outlook and guidance

• Reaffirmed full-year adjusted EPS guidance of $3.65–$3.80 and adjusted EBITDA margin of 6.3%–6.5%.

• Normalized free cash flow for the year expected at $250–$290 million, excluding ELEVATE and integration costs.

• Interest expense forecast maintained at $80–$84 million; normalized tax rate expected at 29%–30%.

• Management anticipates normalization of operating cash flows in the second half as ERP-related invoicing delays are resolved.

• Delayed projects expected to resume in Q3, with margin improvement in ATS and constructive outlook for core markets.