ABM Industries Incorporated (ABM) Q3 2026 Financial Results Summary
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ABM Industries (ABM) Q3 2026: Record Revenue and Strong EPS Growth — Positive Outlook
ABM Industries (NYSE: ABM) reported its fiscal third quarter results for 2026, showcasing a robust performance that exceeded the prior year's figures. Revenue increased by $93.1 million, or 4.2%, to a record $2.3 billion, driven by both organic growth of 2.1% and acquisition-related growth of 2.1%. This growth reflects the company's successful execution in a challenging macroeconomic environment.
Key Financial Metrics
- Revenue: $2.3 billion, up $93.1 million or +4.2% YoY
- Net Income: $49.7 million, up $7.9 million or +19% YoY
- EPS: $0.84 per diluted share, up $0.17 or +25% YoY
- Adjusted Net Income: $61.5 million, up $9.8 million or +19% YoY
- Adjusted EBITDA: $139.6 million, up $13.8 million or +11% YoY
- Free Cash Flow: $128.4 million, down $21.8 million or -14.5% YoY
This quarter's results are a positive development for shareholders, as the company not only achieved record revenue but also demonstrated significant growth in net income and earnings per share (EPS). The 25% increase in EPS is particularly noteworthy, reflecting effective cost management and operational efficiencies.
Dividend and Share Buyback
ABM declared a cash dividend of $0.29 per common share, payable on November 2, 2026, to shareholders of record on October 1, 2026. This represents an increase from the previous dividend of $0.265, signaling the company's commitment to returning value to shareholders.
Guidance Update
The company raised its full-year adjusted EPS outlook to a range of $3.95 to $4.10, up from the previous range of $3.85 to $4.15. Additionally, ABM increased its expectations for full-year free cash flow to approximately $210 million, up $25 million from prior estimates. This upward revision reflects the strong performance in the third quarter and confidence in achieving a strong finish to the fiscal year.
Segment Performance
- Manufacturing & Distribution (M&D): Revenue increased by 17.6% to $481.0 million, driven by the WGNstar acquisition and strong demand in technology markets.
- Aviation: Revenue grew by 12.5% to $328.1 million, benefiting from healthy air travel trends and new contracts.
- Technical Solutions (ATS): Revenue increased by 4.2% to $259.9 million, although growth was impacted by project deferrals.
- Business & Industry (B&I): Revenue declined by 2.6% to $1.0 billion, largely due to the exit of a large UK-based client.
Operational Highlights
ABM's disciplined working capital management resulted in significant cash generation, with operating cash flow reaching $146.8 million. The company also secured a $300 million accounts receivable facility, enhancing its liquidity position. The total indebtedness stood at $1.8 billion, with a leverage ratio of 2.9x, indicating a stable financial structure.
Forward Catalysts
Looking ahead, investors should monitor ABM's execution in the fourth quarter, particularly in the Technical Solutions segment, where project deferrals are expected to ramp up. The company’s focus on operational efficiencies and cost discipline will be critical as it aims to meet its revised guidance. Additionally, the impact of the recent acquisitions on revenue growth and profitability will be a key area to watch.
In summary, ABM Industries delivered a strong third quarter, marked by record revenue and significant EPS growth. The raised guidance and dividend increase further enhance the positive outlook for shareholders as the company navigates the remainder of the fiscal year.
Note: All amounts in the following tables are in millions.
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
Three Months Ended July 31, (in millions, except per share amounts)
| 2026 | 2025 | Increase / (Decrease) | |
|---|---|---|---|
| Revenues | $ 2,317.1 | $ 2,224.0 | 4.2 % |
| Operating expenses | 2,031.0 | 1,949.6 | 4.2 % |
| Selling, general and administrative expenses | 171.3 | 177.5 | (3.5) % |
| Restructuring and related expenses | 7.8 | — | NM* |
| Amortization of intangible assets | 15.5 | 13.4 | 15.8 % |
| Operating profit | 91.5 | 83.4 | 9.6 % |
| Income from unconsolidated affiliates | 1.2 | 1.3 | (2.1) % |
| Interest expense | -29.5 | -25.3 | (16.6) % |
| Income before income taxes | 63.2 | 59.4 | 6.4 % |
| Income tax provision | -13.5 | -17.6 | 23.3 % |
| Net income | $ 49.7 | $ 41.8 | 18.9 % |
| Net income per common share | Basic: $ 0.84 | Basic: $ 0.67 | 25.4 % |
| Diluted: $ 0.84 | Diluted: $ 0.67 | 25.4 % | |
| Weighted-average common shares outstanding | Basic: 58.9 | Basic: 62.5 | |
| Diluted: 59.3 | Diluted: 62.8 | ||
| Dividends declared per common share | $ 0.290 | $ 0.265 |
Nine Months Ended July 31, (in millions, except per share amounts)
| 2026 | 2025 | Increase / (Decrease) | |
|---|---|---|---|
| Revenues | $ 6,850.6 | $ 6,450.5 | 6.2 % |
| Operating expenses | 6,027.5 | 5,645.7 | 6.8 % |
| Selling, general and administrative expenses | 512.2 | 521.7 | (1.8) % |
| Restructuring and related expenses | 14.6 | — | NM* |
| Amortization of intangible assets | 43.4 | 39.9 | 8.8 % |
| Operating profit | 253.0 | 243.3 | 4.0 % |
| Income from unconsolidated affiliates | 3.6 | 3.4 | 7.2 % |
| Interest expense | -81.6 | -72.1 | (13.2) % |
| Income before income taxes | 175.0 | 174.6 | 0.2 % |
| Income tax provision | -43.5 | -47.0 | 7.5 % |
| Net income | $ 131.6 | $ 127.6 | 3.1 % |
| Net income per common share | Basic: $ 2.22 | Basic: $ 2.04 | 8.8 % |
| Diluted: $ 2.20 | Diluted: $ 2.03 | 8.4 % | |
| Weighted-average common shares outstanding | Basic: 59.4 | Basic: 62.6 | |
| Diluted: 59.7 | Diluted: 63.0 | ||
| Dividends declared per common share | $ 0.870 | $ 0.795 |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED)
| July 31, 2026 | October 31, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $ 110.5 | $ 104.1 |
| Trade accounts receivable | 1,478.8 | 1,471.1 |
| Costs incurred in excess of amounts billed | 209.8 | 193.7 |
| Prepaid expenses | 111.3 | 91.2 |
| Other current assets | 82.0 | 78.6 |
| Total current assets | 1,992.4 | 1,938.7 |
| Other investments | 32.1 | 48.6 |
| Property, plant and equipment | 211.9 | 177.2 |
| Right-of-use assets | 91.8 | 95.1 |
| Other intangible assets, net of accumulated amortization | 328.5 | 243.2 |
| Goodwill | 2,741.2 | 2,591.1 |
| Other noncurrent assets | 203.0 | 175.5 |
| Total assets | $ 5,269.5 | $ 5,601.0 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities | ||
| Current portion of long-term debt, net | $ 41.8 | $ 29.4 |
| Trade accounts payable | 430.8 | 401.2 |
| Accrued compensation | 190.5 | 195.0 |
| Accrued taxes—other than income | 44.6 | 48.1 |
| Deferred Revenue | 153.4 | 74.7 |
| Insurance claims | 204.5 | 200.8 |
| Income taxes payable | 3.8 | 4.0 |
| Current portion of lease liabilities | 27.7 | 28.2 |
| Other accrued liabilities | 304.7 | 324.1 |
| Total current liabilities | 1,401.8 | 1,305.7 |
| Long-term debt, net | 1,732.2 | 1,537.1 |
| Long-term lease liabilities | 80.4 | 83.7 |
| Deferred income tax liability, net | 69.0 | 39.9 |
| Noncurrent insurance claims | 470.2 | 459.3 |
| Other noncurrent liabilities | 53.1 | 54.3 |
| Noncurrent income taxes payable | 4.1 | 3.9 |
| Total liabilities | 3,810.8 | 3,483.8 |
| Total stockholders’ equity | 1,790.2 | 1,785.6 |
| Total liabilities and stockholders’ equity | $ 5,269.5 | $ 5,601.0 |
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