ABM Industries Reports Slight EPS Miss with Fiscal Q2 Results

ABM Industries Inc. (NYSE: ABM), a major player in the facility solutions sector, has released its financial results for the second quarter of fiscal 2025. The company has reported a 4.6% increase in revenue, driven by organic growth and strategic acquisitions. Despite challenges, ABM’s performance aligns closely with market expectations, and the company remains optimistic about its future prospects.

ABM Industries Inc. Reports Mixed Results for Q2 FY’25

ABM Industries Inc. has reported a 4.6% increase in revenue for the second quarter of fiscal 2025, reaching $2.1 billion, slightly surpassing the market expectation of $2.06 billion. This growth was primarily driven by a 3.8% increase in organic revenue, complemented by a 0.8% contribution from acquisitions.

The Business & Industry and Manufacturing & Distribution segments returned to positive organic growth, with the former benefiting from improving conditions in commercial office markets and the latter from new business wins. Meanwhile, the Technical Solutions segment experienced some unfavorable timing on certain projects, which slightly impacted overall growth.

Despite these gains, ABM’s net income for the quarter was $42.2 million, or $0.67 per diluted share, falling short of the expected $0.87 per share. This represents a slight decrease from the previous year’s $43.8 million, or $0.69 per share.

The decline in net income was attributed to higher interest expenses and increased transformation and integration costs. However, adjusted net income showed improvement, rising to $54.1 million, or $0.86 per diluted share, compared to $52.3 million, or $0.82 per share, in the previous year. This growth in adjusted figures was primarily driven by higher segment earnings and reduced corporate costs, partially offset by increased interest expenses.

Adjusted EBITDA for the quarter increased to $125.9 million from $121.0 million in the previous year, maintaining a margin of 6.2%. This improvement highlights ABM’s ability to manage its operations efficiently despite the challenges faced during the quarter. The company’s focus on innovation and its essential role as a service provider contributed to securing $1.1 billion in new bookings during the first half of the year, indicating a strong market position.

Join our Telegram group and never miss a breaking digital asset story.

ABM Remains Optimistic for Second Half of Fiscal-Year 2025

Looking ahead to the second half of 2025, ABM Industries remains optimistic about its performance in core markets, including high-quality office buildings, manufacturing and distribution facilities, commercial aviation, and microgrids. The company has reaffirmed its full-year adjusted EPS outlook, expecting it to be in the range of $3.65 to $3.80.

The projected full-year adjusted EBITDA margin is anticipated to remain steady between 6.3% and 6.5%. These projections are based on the assumption that delayed projects from the second quarter will be realized in the third quarter, contributing positively to the company’s financial results.

ABM’s strategic focus on deploying its enterprise resource planning (ERP) system across key segments is expected to further streamline operations and enhance cash flow. The company reported significant sequential improvements in cash flow, with net cash provided by operating activities increasing by $138.5 million compared to the previous quarter.

This progress reflects the reduction in operational friction associated with the ERP conversion, which is pivotal for long-term growth and efficiency.

While ABM cannot provide a reconciliation of differences between non-GAAP expectations and corresponding GAAP measures for adjusted EPS in 2025 without unreasonable effort, the company emphasizes its commitment to transparency and providing meaningful financial insights.

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.