ABM INDUSTRIES INC /DE/

Previous wording

In the fourth quarter of 2025, we launched a restructuring program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in early 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We expect to record $10.0 million in restructuring charges related to these actions in the fourth quarter.

Current wording

In the fourth quarter of 2025, we launched a Restructuring Program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We recognized $17.1 million of cumulative restructuring charges under this program through the first quarter of 2026. The range of the remaining costs to be incurred related to the Restructuring Program cannot be reasonably estimated at this time.

Previous wording

M&D provides integrated facility services, engineering, janitorial and maintenance, and other specialized solutions to a variety of manufacturing, distribution, and data center facilities. We typically provide these services pursuant to monthly fixed-price, square-foot, and cost-plus, that are obtained through a competitive bid process as well as pursuant to work orders.

Current wording

M&D provides integrated facility services, engineering, janitorial and maintenance, and other specialized solutions to a variety of manufacturing, distribution, and data center facilities. We typically provide these services pursuant to monthly fixed-price, square-foot, and cost-plus arrangements, that are obtained through a competitive bid process as well as pursuant to work orders.

Previous wording

•Revenues increased by $129.8 million, or 6.2%, to $2,224.0 million during the three months ended July 31, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.0% and acquisition growth of 1.2%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups. The increase in revenues includes strategic pricing decisions for contract rebids within B&I and for select new wins within M&D, as well as higher project revenues due to the higher microgrid projects within Technical Solutions. Acquisition growth was driven by a $25.5 million revenue increase from the Quality Uptime and LMC acquisitions.

Current wording

•Revenues increased by $128.6 million, or 6.1%, to $2,243.5 million during the three months ended January 31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.5% and acquisition growth of 0.6%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups, as well as higher project and recurring services revenues associated with mission-critical infrastructure and data center solutions within Technical Solutions. Acquisition growth was driven by a $13.0 million revenue increase from the LMC Acquisition.

Previous wording

•We had an increase in operating profit of $46.0 million, to $83.4 million, during the three months ended July 31, 2025, as compared to the prior year period. The increase was primarily attributed to:

Current wording

•We had a decrease in operating profit of $2.9 million, to $74.7 million, during the three months ended January 31, 2026, as compared to the prior year period. The decrease was primarily attributed to:

Previous wording

This decrease was partially offset by:

Current wording

The decrease was partially offset by:

Previous wording

•Dividends of $49.4 million were paid to shareholders, and dividends totaling $0.795 per common share were declared during the nine months ended July 31, 2025. Additionally, in August 2025 we repurchased 0.49 million shares for $23.0 million, excluding excise taxes, making our total share purchases in 2025 1.46 million shares for $71.3 million, excluding excise taxes.

Current wording

•Dividends of $17.3 million were paid to shareholders, and dividends totaling $0.290 per common share were declared during the three months ended January 31, 2026. Additionally, we repurchased 2.1 million shares for $91.1 million, excluding excise taxes, during the three months ended January 31, 2026.

Previous wording

•At July 31, 2025, total outstanding borrowings under our Amended Credit Facility were $1.5 billion. At July 31, 2025, we had up to $621.7 million of borrowing capacity.

Current wording

•At January 31, 2026, total outstanding borrowings under our Amended Credit Facility were $1.6 billion. At January 31, 2026, we had up to $507.7 million of borrowing capacity.

Previous wording

Revenues increased by $129.8 million, or 6.2%, to $2,224.0 million during the three months ended July 31, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.0% and acquisition growth of 1.2%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups. The increase in revenues includes strategic pricing decisions for contract rebids within B&I and for select new wins within M&D, as well as higher project revenues due to the higher microgrid projects within Technical Solutions. Acquisition growth was driven by a $25.5 million revenue increase from the Quality Uptime and LMC acquisitions.

Current wording

Revenues increased by $128.6 million, or 6.1%, to $2,243.5 million during the three months ended January 31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.5% and acquisition growth of 0.6%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups, as well as higher project and recurring services revenues associated with mission-critical infrastructure and data center solutions within Technical Solutions. Acquisition growth was driven by a $13.0 million revenue increase from the LMC Acquisition.

Previous wording

Operating expenses increased by $118.6 million, or 6.5%, to $1,949.6 million during the three months ended July 31, 2025, as compared to the prior year period. Gross margin decreased by 23 bps to 12.3% in the three months ended July 31, 2025, from 12.6% in the prior year period. The decrease in gross margin was primarily driven by strategic pricing decisions for contract rebids within B&I and select new wins within M&D as well as the management of contract escalation timing to maintain and expand certain customer accounts within B&I. This was partially offset by operational efficiencies within Aviation and Education and a decrease in the prior year insurance adjustment.

Current wording

Operating expenses increased by $128.4 million, or 6.9%, to $1,983.5 million during the three months ended January 31, 2026, as compared to the prior year period. Gross margin decreased by 69 bps to 11.6% in the three months ended January 31, 2026, from 12.3% in the prior year period. The decrease in gross margin was primarily driven by strategic pricing decisions for contract rebids within B&I, service mix within M&D and Technical Solutions, and weather-related disruptions in Aviation and Technical Solutions. This was partially offset by operational efficiencies achieved through our Restructuring Program as well as positive operational impacts from weather-related disruptions within Education.

Previous wording

Selling, general and administrative expenses decreased by $34.3 million, or 16.2%, to $177.5 million during the three months ended July 31, 2025, as compared to the prior year period. The decrease in selling, general and administrative expenses was primarily attributable to:

Current wording

Selling, general and administrative expenses increased by $0.8 million, or 0.4%, to $169.8 million during the three months ended January 31, 2026, as compared to the prior year period. The increase in selling, general and administrative expenses was primarily attributable to:

Previous wording

•a $6.4 million increase in costs associated with systems’ go-live.

Current wording

•a $2.5 million increase in costs associated with systems’ go-live.

Previous wording

Amortization of intangible assets decreased by $0.6 million, or 4.2%, to $13.4 million during the three months ended July 31, 2025, as compared to the prior year period. The decrease was primarily due to the lower amortization of intangibles, primarily intangibles acquired as part of the Able and GCA acquisitions, partially offset by amortization of intangibles from the Quality Uptime and LMC acquisitions.

Current wording

Amortization of intangible assets decreased by $1.4 million, or 10.0%, to $11.9 million during the three months ended January 31, 2026, as compared to the prior year period. The decrease was primarily attributable to certain intangibles acquired as part of the Able and GCA acquisitions.

Previous wording

Interest expense increased by $9.0 million to $72.1 million during the nine months ended July 31, 2025, as compared to the nine months ended July 31, 2024. The increase was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.

Current wording

Interest expense increased by $1.1 million, or 4.9%, to $24.0 million during the three months ended January 31, 2026, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.

Previous wording

Our effective tax rates from income on operations for the three months ended July 31, 2025, and July 31, 2024, were 29.6% and 74.0%, respectively, resulting in provisions for taxes of $17.6 million and $13.3 million, respectively.

Current wording

Our effective tax rates from income on operations for the three months ended January 31, 2026, and January 31, 2025, were 25.6% and 21.4%, respectively, resulting in provisions for taxes of $13.4 million and $11.9 million, respectively.

Previous wording

Our effective tax rate for the nine months ended July 31, 2025, benefited from discrete items, primarily from a return to provision adjustments related to our non-U.S. operations. Our effective tax rate for the nine months ended July 31, 2024, was impacted by discrete items, primarily from a change for uncertain tax positions, energy efficiency incentives, a return to provision adjustment related to our non-U.S. operations, a benefit for share-based compensation, and the non-taxable change in fair value of the contingent consideration related to the RavenVolt Acquisition.

Current wording

Our effective tax rate for the three months ended January 31, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the three months ended January 31, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.

Previous wording

We had a gain of $0.8 million on interest rate swaps during the three months ended July 31, 2025, as compared to a loss of $12.4 million during the three months ended July 31, 2024, primarily due to underlying changes in the fair value of our interest rate swaps.

Current wording

We had a loss of $1.9 million on interest rate swaps during the three months ended January 31, 2026, as compared to a loss of $1.1 million during the three months ended January 31, 2025, primarily due to underlying changes in the fair value of our interest rate swaps.

Previous wording

We had a foreign currency translation loss of $1.5 million during the three months ended July 31, 2025, as compared to a foreign currency translation gain of $2.7 million during the three months ended July 31, 2024. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

Current wording

We had a foreign currency translation gain of $9.5 million during the three months ended January 31, 2026, as compared to a foreign currency translation loss of $7.6 million during the three months ended January 31, 2025. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

Previous wording

B&I revenues increased by $28.1 million, or 2.8%, to $1,038.7 million during the three months ended July 31, 2025, as compared to the prior year period. The revenue increase was primarily driven by client expansions both domestic and international. This includes strategic pricing decisions for contract rebids and proactive extensions, as well as higher volumes in our sports and entertainment business. Management reimbursement revenues for this segment totaled $75.4 million and $69.9 million for the three months ended July 31, 2025 and 2024, respectively.

Current wording

B&I revenues increased by $42.2 million, or 4.1%, to $1,065.1 million during the three months ended January 31, 2026, as compared to the prior year period. The revenue increase was primarily driven by client expansions domestically and new client wins internationally as well as higher volumes of work orders across all geographies. This includes strategic pricing decisions for contract rebids and proactive extensions. Management reimbursement revenues for this segment totaled $73.8 million and $71.3 million for the three months ended January 31, 2026 and 2025, respectively.

Previous wording

Operating profit decreased by $10.3 million, or 8.1%, to $115.6 million during the nine months ended July 31, 2025, as compared to the prior year period. Operating profit margin decreased by 116 bps to 9.6% in the nine months ended July 31, 2025, from 10.8% in the nine months ended July 31, 2024. The decrease in operating profit margin was primarily attributable to strategic pricing on select new wins and investments made in the fourth quarter of 2024 to hire certain technical expertise to support future growth.

Current wording

Operating profit increased by $0.3 million, or 0.4%, to $79.7 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 28 bps to 7.5% in the three months ended January 31, 2026, from 7.8% in the prior year period. The decrease in operating profit margin was primarily driven by strategic pricing decisions for contract rebids and proactive extensions, and investments made in the second half of 2025 to hire certain sales expertise to support future growth, partially offset by operational efficiencies achieved through our Restructuring Program.

Previous wording

M&D revenues increased by $31.8 million, or 8.4%, to $408.9 million during the three months ended July 31, 2025, as compared to the prior year period. The increase was primarily attributable to the expansion of business with existing clients and new business wins, including strategic pricing decisions for select new wins. This was partially offset by a loss of a certain customer in the first quarter of 2025.

Current wording

M&D revenues increased by $28.0 million, or 7.1%, to $422.3 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to the expansion of business with existing clients and new business wins.

Previous wording

Operating profit decreased by $4.5 million, or 11.1%, to $36.4 million during the three months ended July 31, 2025, as compared to the prior year period. Operating profit margin decreased by 196 bps to 8.9% in the three months ended July 31, 2025, from 10.9% in the prior year period. The decrease in operating profit margin was primarily attributable to strategic pricing on select new wins, and investments made in the fourth quarter of 2024 to hire certain technical expertise to support future growth.

Current wording

Operating profit decreased by $3.1 million, or 7.7%, to $36.3 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 139 bps to 8.6% in the three months ended January 31, 2026, from 10.0% in the prior year period. The decrease in operating profit margin was primarily attributable to contract mix and investments made in the second half of 2025 to hire certain technical expertise to support future growth.

Previous wording

Aviation revenues increased by $23.4 million, or 8.7%, to $291.8 million during the three months ended July 31, 2025, as compared to the prior year period. The increase was primarily attributable to new business and scope expansions with the existing clients both domestically and internationally. Management reimbursement revenues for this segment totaled $13.3 million and $9.6 million for the three months ended July 31, 2025 and 2024, respectively.

Current wording

Aviation revenues increased by $27.6 million, or 10.2%, to $297.7 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to new business wins in the second half of 2025 and scope expansions with existing clients both domestically and internationally. Management reimbursement revenues for this segment totaled $15.6 million and $10.6 million for the three months ended January 31, 2026 and 2025, respectively.

Previous wording

Corporate expenses decreased by $44.9 million, or 34.4%, to $85.7 million during the three months ended July 31, 2025, as compared to the prior year period. The decrease in corporate expenses was primarily attributable to:

Current wording

Corporate expenses decreased by $1.3 million, or 1.6%, to $81.9 million during the three months ended January 31, 2026, as compared to the prior year period. The decrease in corporate expenses was primarily attributable to:

Previous wording

During the three and nine months ended July 31, 2025, we made principal payments under the term loan of $7.5 million and $15.6 million, respectively. At July 31, 2025, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.5 billion and $29.7 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 6.09%. At July 31, 2025, we had up to $621.7 million of borrowing capacity.

Current wording

During the three months ended January 31, 2026, we made principal payments under the term loan of $7.5 million. At January 31, 2026, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.6 billion and $23.5 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 5.44%. At January 31, 2026, we had up to $507.7 million of borrowing capacity.

Previous wording

We repurchased shares under the share repurchase program during the three and nine months ended July 31, 2025, as summarized below. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase program may be suspended or discontinued at any time without prior notice. At July 31, 2025, authorization for $106.1 million of repurchases remained under our share repurchase program.

Current wording

We repurchased shares under the share repurchase program during the three months ended January 31, 2026, as summarized below. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase program may be suspended or discontinued at any time without prior notice. At January 31, 2026, authorization for $92.0 million of repurchases remained under our share repurchase program.

Previous wording

Net cash used in investing activities decreased by $83.1 million during the nine months ended July 31, 2025, as compared to the prior year period. This quarter’s activity was primarily related to purchases of property, plant and equipment and payment for the LMC Acquisition.

Current wording

Net cash used in investing activities decreased by $1.8 million during the three months ended January 31, 2026, as compared to the prior year period. This decrease was primarily due to lower purchases of property, plant and equipment.

Previous wording

Net cash used in financing activities was $22.5 million and $23.0 million during the nine months ended July 31, 2025, and July 31, 2024, respectively. This quarter’s activity was primarily related to an increase in share repurchases and a $75.0 million payment for contingent consideration related to the RavenVolt Acquisition, of which $59.0 million was classified as a financing cash outflow during the nine months ended July 31, 2025. This was partially offset by higher net borrowings from our Amended Credit Facility.

Current wording

Net cash used in financing activities was $55.2 million during the three months ended January 31, 2026, as compared to net cash provided by financing activities of $116.9 million during the three months ended January 31, 2025. This quarter’s activity was primarily related to an increase in share repurchases and lower net borrowings from our Amended Credit Facility.