ABM Announces Fiscal Third Quarter 2025 Earnings Results And Comments On Fiscal 2025 Outlook

ABM Industries Incorporated (ABM) today announced its financial results for the recent quarter, revealing a mixed performance. The company reported earnings per share of $0.67, falling short of analysts’ expectations by $0.28, while revenue reached $2.224 billion, surpassing estimates by approximately $74 million. This divergence highlights the challenges ABM faced in meeting profitability targets despite a stronger-than-expected revenue performance.

Key Highlights

• Revenue increased by 6.2% to $2.2 billion, with organic growth of 5.0%.
• Net income rose to $41.8 million, or $0.67 per diluted share, compared to $4.7 million and $0.07 in the prior year.
• Adjusted net income was $51.7 million, or $0.82 per diluted share.
• Adjusted EBITDA increased by 5% to $125.8 million.
• Operating cash flow surged by 120.1% to $175.0 million, and free cash flow increased by 134.3% to $150.2 million.
• The Board approved a $150 million increase in share repurchase authorization.
• The company secured over $1.5 billion in new bookings, a 15% year-over-year increase.

Summary

ABM Industries reported strong financial results for its fiscal third quarter ended July 31, 2025, with revenue rising 6.2% to $2.2 billion, driven by organic growth of 5.0%. President & CEO Scott Salmirs highlighted the company’s performance, stating, “ABM’s third quarter performance was highlighted by mid-single-digit organic revenue growth and strong free cash flow.” The company secured over $1.5 billion in new bookings, positioning it for robust revenue and earnings growth in the upcoming year. However, Salmirs noted that some commercial office markets are recovering more slowly, particularly in certain metro areas.

Looking ahead, ABM anticipates adjusted EPS for the full fiscal year to be toward the lower end of its outlook range of $3.65 to $3.80. Salmirs mentioned that the company is taking decisive actions to address near-term margin challenges through labor efficiency actions and cost controls, which are expected to yield significant benefits over time. He expressed confidence in the long-term earnings trajectory and cash-generative qualities of the business, stating, “We continue to invest in AI capabilities and client-facing resources and solutions designed to drive higher growth and improved margin over time.”

ABM Industries Incorporated (ABM) has experienced a turbulent ride in the stock market, with a notable decline of 12.33% over the past year. Despite a modest uptick of 3.42% in the last month, the stock has struggled to maintain momentum, reflecting a three-month drop of 7.58%. The company’s price-to-earnings ratio stands at 17.75, suggesting that investors are paying a premium for its earnings, albeit with a concerning two-year compound annual growth rate (CAGR) of -3.99% in earnings per share. On a brighter note, ABM has managed to achieve a revenue CAGR of 3.40% over the same period, indicating some resilience in its top-line growth. However, the net profit margin of just 0.94% raises questions about the company’s efficiency and profitability. With a return on invested capital of 7.81%, ABM appears to be generating a modest return for its shareholders, but the overall financial metrics suggest that the company may need to implement strategic changes to enhance its performance and investor confidence moving forward.

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally. The company operates through Business & Industry, Technology & Manufacturing, Education, Aviation, and Technical Solutions segments. It provides janitorial, facilities engineering, parking, custodial, landscaping and ground, and mechanical and electrical services; and vehicle maintenance and other services to rental car providers. The company was incorporated in 1985 and is based in New York, New York.