ABM reported record fiscal third-quarter revenue of $2.3 billion, up 4.2% year over year, as the facility, engineering and infrastructure services company delivered higher earnings and raised portions of its fiscal 2026 outlook.
Organic revenue increased 2.1%, while acquisitions contributed another 2.1% of growth. Net income increased 19% to $49.7 million, or $0.84 per diluted share, while adjusted net income rose 19% to $61.5 million, or $1.04 per diluted share. Adjusted EBITDA increased 11% to $139.6 million.
Manufacturing & Distribution revenue increased 18%, benefiting from the WGNstar acquisition, new customer wins and expansion in technology-related markets. Aviation revenue increased 12%, supported by air-travel trends and the ramp of ABM’s London Heathrow contract.
Technical Solutions revenue increased 4%, although project deferrals by a major customer held results below expectations. Business & Industry revenue declined 2.6%, reflecting the planned exit from a large UK customer and continued softness on the U.S. West Coast.
ABM generated $146.8 million of operating cash flow and $128.4 million of free cash flow in the quarter. Through the first nine months of fiscal 2026, operating cash flow reached $275 million and free cash flow increased to $199.6 million, compared with $42.4 million in the year-earlier period.
Total indebtedness stood at approximately $1.8 billion, with a leverage ratio of 2.9x. ABM had $605.8 million of available liquidity and expects additional deleveraging by fiscal year-end. The company also entered into a $300 million trade receivables financing agreement during the quarter.
ABM maintained its full-year organic revenue growth outlook of 3% to 4%, with results expected near the top of that range, while total revenue growth is expected near the top of its 4% to 5% range.
The company narrowed its adjusted EPS forecast to $3.95 to $4.10, compared with its previous $3.85 to $4.15 range, effectively raising the midpoint. ABM also increased its outlook for full-year operating cash flow to approximately $300 million and free cash flow to approximately $210 million, with the free cash flow forecast increasing by about $25 million.
KEY QUOTE:
“Our third quarter results reflected strong operational and financial performance, including record quarterly revenue, robust EPS growth and substantial cash generation. Our team executed well and delivered on our expectations despite a backdrop of macro uncertainty and adverse timing of certain projects,” said Scott Salmirs, President and Chief Executive Officer. “Aviation and Manufacturing & Distribution (“M&D”) delivered strong organic revenue growth, with M&D benefiting from healthy technology markets and further supported by our recent WGNstar acquisition. Technical Solutions (“ATS”) revenue growth was impacted by some project deferrals, while Business & Industry (“B&I”) revenue performance was largely as anticipated. We expect ATS to ramp sequentially in the fourth quarter as we execute on many of the deferred projects.”
Mr. Salmirs continued, “Disciplined working capital management drove exceptional year-to-date free cash flow, which in turn accelerated our deleveraging ahead of schedule. We also secured a $300 million accounts receivable facility at favorable rates, further strengthening our capital structure. And our focus on cost discipline resulted in a $3 million reduction in ongoing corporate costs versus the prior year. Together, these actions contributed to our third quarter results and helped keep us on track to deliver on our full-year outlook, as well as provide longer-term benefits.”
Mr. Salmirs concluded, “As we enter the fourth quarter, we are focused on finishing the year strong and executing with discipline. We are raising the midpoint of our adjusted EPS outlook and increasing our expectations for full year free cash flow based on our strong third quarter results, and are confident in our ability to achieve it.”
Scott Salmirs, President and Chief Executive Officer of ABM
