ABM Industries (ABM) Q2 2026: Revenue Growth and EPS Improvement — Positive Outlook

ABM Industries (NYSE: ABM) reported its fiscal second quarter results for 2026, showcasing a solid performance with revenue growth and improved earnings per share (EPS). The company achieved a record revenue of $2.3 billion, marking an increase of $178.3 million or +8.4% year-over-year compared to $2.1 billion in the same quarter last year. This growth was driven by organic growth of 6.1% and acquisition growth of 2.3%.

Key Financial Metrics:

• Revenue: $2.3 billion, up $178.3 million or +8.4% YoY
• Net Income: $43.1 million, up $0.9 million or +2.1% YoY
• EPS: $0.73 per diluted share, up $0.06 or +9.0% YoY
• Adjusted Net Income: $52.9 million, down $1.2 million or -2.2% YoY
• Adjusted EPS: $0.90 per diluted share, up $0.04 or +4.7% YoY
• Adjusted EBITDA: $131.7 million, up $5.8 million or +4.6% YoY
• Operating Cash Flow: $66.2 million, up $33.9 million YoY
• Free Cash Flow: $22.4 million, up $7.2 million YoY

Analyst View

This quarter can be considered a positive outcome for shareholders. The revenue growth of 8.4% and the increase in net income and EPS indicate that ABM is effectively capitalizing on market demand, particularly in its Technical Solutions and Aviation segments, which grew by 27% and 20%, respectively. The company’s ability to generate strong operating cash flow and free cash flow further supports its financial health and operational efficiency.

Despite a slight decline in adjusted net income, the overall performance reflects a robust operational strategy and effective management of costs. The increase in EPS, driven by share repurchase activities, is a positive signal for investors, indicating that the company is returning value to its shareholders.

Dividend and Share Buyback

ABM's Board declared a cash dividend of $0.29 per common share, payable on August 3, 2026, to shareholders of record on July 2, 2026. This represents an increase from the previous dividend of $0.265, reflecting the company's commitment to returning capital to shareholders.

Guidance and Outlook

ABM reaffirmed its fiscal 2026 outlook, expecting organic revenue growth toward the top end of the 3% to 4% range and total revenue growth toward the top end of the 4% to 5% range. The company projects segment operating margin to be toward the low end of the 7.8% to 8.0% range, with adjusted EPS still expected to be in the range of $3.85 to $4.15.

Forward Catalyst

Investors should watch for the company’s performance in the second half of the fiscal year, particularly in the Technical Solutions and Manufacturing & Distribution segments, which are expected to see increased volume and improved service mix. Additionally, the impact of ongoing cost savings and pricing initiatives will be crucial in driving further earnings and margin improvements.

In conclusion, ABM Industries has delivered a commendable quarter, with strong revenue growth and improved profitability metrics. The reaffirmation of guidance and the declared dividend enhance the positive outlook for shareholders as the company navigates through the evolving macroeconomic landscape.

ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)

(in millions)

Note: All amounts are in thousands.

	2026	2025	Increase / (Decrease)
Revenues	2,290.0	2,111.7	8.4%
Operating expenses	2,013.0	1,841.0	9.3%
Selling, general and administrative expenses	171.1	175.1	(2.3)%
Restructuring and related expenses	3.1	—	NM*
Amortization of intangible assets	15.9	13.2	20.5%
Operating profit	86.9	82.3	5.5%
Income from unconsolidated affiliates	1.0	1.4	(28.6)%
Interest expense	(28.1)	(23.9)	(17.6)%
Income before income taxes	59.7	59.8	(0.1)%
Income tax provision	(16.6)	(17.6)	5.3%
Net income	43.1	42.2	2.1%
Net income per common share
Basic	0.73	0.67	9.0%
Diluted	0.73	0.67	9.0%
Weighted-average common and equivalent shares outstanding
Basic	58.9	62.6
Diluted	59.1	62.9
Dividends declared per common share	0.290	0.265

*Not meaningful (due to variance greater than or equal to +/-100%)

ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED)

(in millions)

Note: All amounts are in thousands.

	April 30, 2026	October 31, 2025
ASSETS
Current assets
Cash and cash equivalents	94.9	104.1
Trade accounts receivable	1,517.2	1,471.1
Costs incurred in excess of amounts billed	174.7	193.7
Prepaid expenses	169.9	91.2
Other current assets	77.2	78.6
Total current assets	2,034.0	1,938.7
Other investments	30.9	48.6
Property, plant and equipment	209.7	177.2
Right-of-use assets	90.0	95.1
Other intangible assets, net of accumulated amortization	350.0	243.2
Goodwill	2,738.4	2,591.1
Other noncurrent assets	194.1	175.5
Total assets	5,269.5	5,647.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt, net	41.8	29.4
Trade accounts payable	416.5	401.2
Accrued compensation	217.0	195.0
Accrued taxes—other than income	47.9	48.1
Deferred Revenue	99.8	74.7
Insurance claims	206.8	200.8
Income taxes payable	3.8	4.0
Current portion of lease liabilities	28.3	28.2
Other accrued liabilities	329.7	324.1
Total current liabilities	1,391.6	1,305.7
Long-term debt, net	1,821.6	1,537.1
Long-term lease liabilities	78.7	83.7
Deferred income tax liability, net	71.5	39.9
Noncurrent insurance claims	472.2	459.3
Other noncurrent liabilities	59.1	54.3
Noncurrent income taxes payable	4.1	3.9
Total liabilities	3,898.7	3,483.8
Total stockholders’ equity	1,748.4	1,785.6
Total liabilities and stockholders’ equity	5,269.5	5,647.0

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