ABM Industries Incorporated (ABM) Q4 2025 Earnings Call Transcript
Quarterly Revenue $2.3 billion, a 5.4% year-over-year increase driven by 4.8% organic growth and a modest contribution from a recent acquisition in Ireland.
Annual Revenue $8.7 billion, a 5% increase over last year, attributed to strong volume, favorable mix, disciplined cost management, and restructuring benefits.
New Sales Bookings $1.9 billion, a 12% increase over 2024, diversified across the business.
Adjusted EPS (Q4) $0.88, flat year-over-year but would have been significantly higher excluding a $0.26 headwind from prior year self-insurance adjustments.
Adjusted EBITDA (Q4) $124.2 million, slightly down from $125.6 million last year, with a 5.6% margin compared to 6% last year. The decline was due to a $22.2 million negative impact from prior year self-insurance adjustments.
Net Income (Q4) $34.8 million or $0.56 per diluted share, compared to a loss of $11.7 million or $0.19 per share last year. The improvement was due to the absence of a large contingent consideration adjustment and higher segment operating earnings.
Free Cash Flow (Q4) $112.7 million, a significant improvement from $15.5 million last year, driven by ERP conversion progress and tight working capital management.
B&I Revenue (Q4) $1 billion, a 2% year-over-year increase driven by higher work orders, client expansions, and strength in the U.K.
Aviation Revenue (Q4) $296.7 million, a 7% year-over-year increase supported by positive travel trends and new wins.
M&D Revenue (Q4) $417.4 million, an 8% year-over-year increase driven by contract wins in the technology sector and client expansions.
Education Revenue (Q4) $233.7 million, a 2% year-over-year increase supported by escalations and stable retention rates.
Technical Solutions Revenue (Q4) $298.7 million, a 16% year-over-year increase driven by robust demand for microgrids and acquisitions.
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Goodman Financial Exits ABM Industries with $13.07 Million Transaction
- Position Change: Goodman Financial fully exited its position in ABM Industries by selling 283,456 shares for approximately $13.07 million, indicating a reassessment of the company's future performance potential.
- Market Performance: ABM Industries shares are priced at $44.12, down 13% over the past year, significantly underperforming the S&P 500's approximately 17% gain during the same period, reflecting a lack of market confidence in its defensive services.
- Financial Health: Despite market challenges, ABM achieved a record revenue of $8.7 billion in fiscal 2025, up 4.6% year-over-year, with adjusted EBITDA reaching $496.6 million, demonstrating strong fundamentals.
- Capital Allocation: Goodman Financial's portfolio is shifting towards broad equity ETFs and short-duration bond funds, suggesting a strategic move to allocate capital to potentially more productive investment opportunities rather than maintaining its stake in ABM.
