ABM Industries (ABM) Q2 2026 earnings summary

Executive summary

• Achieved record second quarter revenue of $2.3 billion, up 8.4% year-over-year, with 6.1% organic and 2.3% acquisition-driven growth, marking the strongest organic growth since Q3 2022.

• Net income rose to $43.1 million ($0.73 per diluted share), with adjusted net income at $52.9 million ($0.90 per share); adjusted EBITDA increased to $131.7 million.

• Record first half new sales bookings of $1.2 billion, driven by strong performance in Technical Solutions and Aviation, and meaningful contribution from the WGNSTAR acquisition.

• Free cash flow and operating cash flow improved significantly year-over-year, with free cash flow for Q2 at $22.4 million and for the first half at $71.2 million.

• Large new contract wins included a $100M+ microgrid project and a $25M+ Detroit Public Schools contract.

Financial highlights

• Segment operating margin was 7.3%, down from 7.9% last year but improved sequentially; net income margin was 1.9%.

• Adjusted net income per diluted share increased to $0.90 from $0.86 year-over-year.

• Free cash flow for Q2 2026 was $22.4 million, with six-month free cash flow at $71.2 million, a $180 million improvement year-over-year.

• Total indebtedness at quarter-end was $1.9 billion, with a leverage ratio of 3.2x and available liquidity of $614 million.

• Operating cash flow for the six months was $128.2 million, a $202.1 million improvement over the prior year.

Outlook and guidance

• Fiscal 2026 organic revenue growth expected toward the top end of 3%–4%, total revenue growth toward the top end of 4%–5%, with segment operating margin projected toward the low end of 7.8%–8.0%.

• Adjusted EPS guidance reaffirmed at $3.85–$4.15 for fiscal 2026.

• Free cash flow expected to reach $250 million in 2026, excluding transformation, integration, and restructuring costs.

• Focus remains on deleveraging to below 3x by year-end, with debt repayment as a near-term priority.

• The restructuring program is expected to deliver $35 million in annualized cost savings once fully implemented in 2026.