ABM Industries (ABM) Reports Mixed Q4 2025 Results

ABM Industries reports its fourth-quarter fiscal 2025 results, showcasing record revenue but failing to meet EPS expectations. The company also outlines its fiscal 2026 outlook, highlighting strategic initiatives and projected growth.

Q4 Revenue Hits Record $2.3B as EPS Misses on Insurance Adjustments

ABM Industries (NYSE: ABM) reported a record fourth-quarter revenue of $2.3 billion, marking an increase of 5.4% compared to the previous year. This performance was primarily driven by a 4.8% organic growth, with significant contributions from the Technical Solutions and Manufacturing & Distribution segments. The former saw a remarkable 16% growth, largely due to increased microgrid project activity, while the latter grew by 8% as a result of new client acquisitions and expansions. Aviation also experienced a 7% growth, benefiting from robust market demand and recent contract wins.

Despite the impressive revenue figures, the company’s adjusted EPS of $0.88 fell short of the expected $1.09. This underperformance in EPS was influenced by a $(0.26) impact from prior year self-insurance adjustments. In contrast, the company had reported an EPS of $0.88 in the same quarter last year, which included a $(0.02) impact. Adjusted EBITDA for the quarter stood at $124.2 million, slightly down from $125.6 million a year ago, impacted by a $(22.2) million pre-tax effect from prior year self-insurance adjustments.

The net income for the quarter was $34.8 million, or $0.56 per diluted share, a significant improvement from a net loss of $(11.7) million, or $(0.19) per share, in the same period last year. This turnaround is largely attributed to the absence of a large contingent consideration adjustment related to the RavenVolt acquisition, which had a negative impact in the prior year. Despite the EPS miss, ABM’s revenue beat expectations, which were set at $2.28 billion, underscoring the company’s strong operational performance and strategic initiatives.

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ABM Sees 4%–5% Revenue Growth in Fiscal 2026

Looking ahead to fiscal 2026, ABM Industries projects continued growth across its key segments. The company anticipates an adjusted EPS range of $3.85 to $4.15, excluding potential impacts from prior year self-insurance adjustments. This optimistic outlook is supported by a strong backlog, record new sales bookings of $1.9 billion in fiscal 2025, and a major new Aviation contract expected to generate significant revenue in 2026.

ABM’s acquisition of WGNSTAR is expected to further bolster its position in the semiconductor market, enhancing its technical capabilities and allowing it to capitalize on the increasing trend of semiconductor onshoring in the U.S. The acquisition is projected to contribute an additional point of growth, bringing total expected revenue growth for 2026 to approximately 4% to 5%. The company also plans to maintain a focus on operational efficiencies and cost management, with a projected segment operating margin of 7.8% to 8.0%.

The company’s strategic initiatives, including investments in AI and ERP systems, are expected to enhance operational efficiency and support growth. ABM’s restructuring actions and disciplined cost management are anticipated to enhance the company’s earnings power. With these strategic moves, ABM remains confident in its ability to deliver solid performance in fiscal 2026, driven by healthy demand across its end markets, particularly within Technical Solutions, Aviation, and Manufacturing & Distribution.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.