ABM announced financial results for its fiscal first quarter ended January 31, 2026.

ABM (NYSE: ABM), a leading provider of facility, engineering and infrastructure solutions, today announced financial results for its fiscal first quarter ended January 31, 2026.

"ABM is off to a solid start to fiscal 2026, delivering strong organic revenue growth of 5.5% and meaningful improvement in operating cash flow and free cash flow," said Scott Salmirs, President and Chief Executive Officer. "Growth was broad-based across our portfolio, reflecting healthy demand in our end markets and our team's continued success in expanding client relationships. This performance reinforces our confidence in the strength and resiliency of our business."

Mr. Salmirs continued, "From a margin perspective, results were below our expectations, driven primarily by Technical Solutions, which as we've noted in the past, is inherently project-driven and can vary quarter to quarter. This period was impacted by project timing, including temporary weather-related delays, as well as service mix, resulting in approximately $0.05 of EPS pressure relative to our internal plan. Business & Industry and Manufacturing & Distribution, however, performed in line with our expectations reflecting the impact of the new and amended contracts we discussed on our third quarter call, and Education delivered another quarter of strong results."

Mr. Salmirs added, "We are excited to have closed the WGNSTAR acquisition at the beginning of the second quarter. This transaction strengthens our position in the fast-growing semiconductor market and enhances our technical capabilities in fabrication environments. We believe WGNSTAR will contribute to growth and mix improvement as we integrate the business and leverage its strong client relationships."

Mr. Salmirs concluded, "While we remain encouraged by constructive demand trends across our end markets, we continue to approach the broader macroeconomic environment with discipline. Our fiscal 2026 outlook remains unchanged. We expect margin performance to improve as project timing in ATS normalizes and as we continue executing on operational and cost initiatives across the enterprise."

First Quarter Fiscal 2026 Results

Revenue increased 6.1% year over year to $2.2 billion, including 5.5% organic growth and an additional contribution from acquisitions. Revenue growth was broad-based across the portfolio, led by Technical Solutions ("ATS") and Aviation, which grew 14% and 10%, respectively. ATS continued to benefit from strong demand for mission critical and datacenter-related services, as well as contributions from its recent acquisition, while Aviation's growth reflected healthy air travel trends and the continued ramp of new contracts. Manufacturing & Distribution ("M&D") increased 7%, driven by client wins that came online last year and ongoing expansions. Business & Industry ("B&I") grew 4%, supported by strong growth in its UK operations and stable conditions in the U.S. prime office space market. Education delivered growth of 2%, benefiting from strong retention.

Net income was $38.8 million, or $0.64 per diluted share, compared to $43.6 million, or $0.69 per diluted share, in the prior year period. The change in net income primarily reflects lower segment income, most notably in ATS, and higher interest and tax expense, partially offset by lower corporate costs. Net income margin was 1.7% versus 2.1% in the prior year.

Segment operating margin was 7.1% compared to 7.6% last year. The change in segment operating margin was driven mainly by unfavorable project timing and service mix within ATS, as well as by the margin impact of newer contracts that came online last year in M&D and B&I. These items were partially offset by strong execution and margin expansion in Education.

Adjusted net income was $50.4 million, or $0.83 per diluted share, compared to $55.3 million, or $0.87 per diluted share in the prior year period. Adjusted EBITDA was $117.8 million versus $120.6 million last year. These year-over-year changes were largely attributable to the previously discussed factors.

Adjusted results exclude items impacting comparability. A description of items impacting comparability can be found in the "Reconciliation of Non-GAAP Financial Measures" table.

Net cash provided by operating activities was $62.0 million, and free cash flow was $48.9 million, compared to a cash usage of $106.2 million and negative free cash flow of $122.9 million, respectively, in the prior year period. The improvement year over year primarily reflects strong working capital management and ongoing advancements in the Company's enterprise resource planning ("ERP") implementation during the quarter. A reconciliation of net cash provided by (used in) operating activities to free cash flow can be found in the "Reconciliation of Non-GAAP Financial Measures" table.

Liquidity, Capital Structure & Share Repurchases

At the end of the first quarter, the Company's total indebtedness stood at $1.7 billion, including $23.5 million in standby letters of credit, resulting in a total leverage ratio of 2.9X, as defined by the Company's credit facility. Available liquidity was $608.1 million, including $100.4 million in cash and cash equivalents.

During the first quarter, ABM repurchased approximately 2.1 million shares of its common stock for $91.1 million, at an average price of $44.13 per share. At quarter-end, $92.0 million remained available under the Company's share repurchase program.

Quarterly Cash Dividend

After the quarter's close, the Board declared a cash dividend of $0.29 per common share, payable on May 4, 2026, to shareholders of record on April 2, 2026.

Outlook

The Company's fiscal 2026 outlook remains unchanged. The Company continues to expect organic revenue growth of 3% to 4% and total revenue growth of 4% to 5%. Segment operating margin, defined as total segment operating profit divided by total revenue, is projected to be between 7.8% and 8.0%, and adjusted EPS is expected to be in the range of $3.85 to $4.15, before any impact from prior-year self-insurance adjustments.

Interest expense is forecast to be between $95 million and $105 million, and the normalized tax rate is expected to be between 29% and 30%, excluding discrete and non-taxable items.

The Company cannot provide a reconciliation of forward-looking non-GAAP segment operating margin or adjusted EPS to the corresponding GAAP measure without unreasonable effort due to the uncertainty of timing and the magnitude of items such as acquisition and integration related costs, legal costs and other settlements. These items are inherently difficult to forecast and may result in a GAAP range that is too large and variable to be meaningful.

http://www.datamonitor.com
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall 
not be liable for errors or delays in the content, or for any actions 
taken in reliance thereon
COMTEX_478974296/2227/2026-05-12T02:22:43