ABM

Equifax's EFX third-quarter 2026 earnings and revenues beat the Zacks Consensus Estimate. EFX's adjusted earnings were $2.26 per share, up 10.8% year over year. The figure topped the Zacks Consensus Estimate of $2.19 by 3.2%. Revenues increased 9.6% year over year to $1.69 billion, beating the consensus estimate by a slight margin. Growth in U.S. Information Solutions ("USIS"), verification services and international operations supported the results despite mortgage market weakness. Diversified Markets revenues advanced 8%, while the new-product Vitality Index exceeded 17%. Equifax, Inc. price-consensus-eps-surprise-chart | Equifax, Inc. Quote Workforce Solutions revenues increased 7% year over year to $693.9 million. Verification Services revenues advanced 9% to $603.2 million, supported by diversified market demand. Employer Services revenues declined 5% to $90.7 million. Diversified Markets revenues grew 9%, led by a 13% increase in Verification Services. Talent Solutions revenues climbed more than 20%, while Consumer Lending recorded high-double-digit growth. Government revenues advanced in the mid-single digits. However, Workforce Solutions mortgage revenues remained flat amid weaker market conditions. The segment's operating margin expanded to 44.1% from 43.8% a year earlier. Adjusted EBITDA margin improved to 51.4% from 51.2%, reflecting modest profitability gains. USIS revenues increased 13% year over year to $599.1 million. Online Information Solutions revenues rose 13% to $529.7 million, while Financial Marketing Services revenues climbed 11% to $69.4 million. USIS mortgage revenues jumped 28% despite challenging market conditions. Diversified Markets revenues advanced 6%, supported by Financial Institutions and Auto. Total U.S. mortgage revenues increased 15%, highlighting growth despite a weaker market environment. The segment's operating margin improved to 24.3% from 23.2% in the year-ago quarter. Adjusted EBITDA margin increased to 35.4% from 35.2%, indicating improved operating profitability alongside revenue expansion. International revenues rose 9% on a reported basis and 7% in local currency to $399.5 million. Asia Pacific delivered the strongest reported growth, with revenues increasing 20% to $107.7 million. Local-currency growth was 12%, supported by double-digit growth in Australia. Latin America revenues increased 12% on a reported basis and 8% in local currency to $114.1 million. Europe revenues advanced 3% to $105.5 million, with local-currency growth of 4%. Canada revenues grew 2% to $72.2 million, representing 4% growth in local currency. The segment's operating margin remained unchanged at 15.8%. However, adjusted EBITDA margin contracted to 30.9% from 31.3%, indicating that revenue growth did not translate into higher adjusted profitability margins. Adjusted EBITDA increased 11% year over year to $560.2 million. Adjusted EBITDA margin expanded to 33.1% from 32.7%, reflecting improved consolidated profitability. Operating income climbed to $355.3 million from $264.3 million. Total operating expenses jumped to $1.34 billion from $1.28 billion. The cost of services rose to $752.4 million from $663.2 million, while selling, general and administrative expenses declined to $390.4 million from $434.1 million. Net income attributable to Equifax increased 32% to $211.7 million. GAAP earnings improved to $1.79 per share from $1.29, benefiting from higher profitability and a lower share count. Equifax continued deploying EFX.AI across product development and internal operations to support innovation and productivity improvements. Management reiterated its $150-million AI productivity goal, emphasizing operating efficiencies and cost optimization. The company returned $158 million to shareholders during the quarter, comprising $92 million in repurchases of 0.5 million shares and $66 million in dividends. Cash and cash equivalents totaled $192.9 million at September-end compared with $180.8 million at 2025-end. Cash provided by operating activities totaled $1.14 billion during the first nine months of 2026, while capital expenditures amounted to $378.9 million. Equifax also expects its acquisition of Mexico-based Círculo de Crédito to close in the fourth quarter. For the fourth quarter of 2026, management expects revenues between $1.605 billion and $1.635 billion, indicating growth of 3.5-5.4%. The Zacks Consensus Estimate is pinned at $1.69 billion. Adjusted earnings are projected between $2.07 and $2.17 per share. The Zacks Consensus Estimate is pinned at $2.19 billion. Equifax lowered its full-year revenue guidance midpoint to $6.661 billion, with revenues now projected between $6.646 billion and $6.676 billion. The Zacks Consensus Estimate is pinned at $6.73 billion. The revised outlook implies growth of 9.4-9.9%, reflecting weaker U.S. mortgage demand. Adjusted earnings are expected to be $8.45 to $8.55 per share, with the midpoint down 4 cents to $8.50. The Zacks Consensus Estimate meets the midpoint of the guided range. Management maintained its high-single-digit Diversified Markets revenue growth outlook and expects AI-driven efficiencies and expense management to help offset mortgage-related pressures. EFX carries a Zacks Rank #4 (Sell) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. ABM ABM reported better-than-expected third-quarter fiscal 2026 results. ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Fiserv FISV posted second-quarter 2026 adjusted earnings of $1.84 per share, missing the Zacks Consensus Estimate of $1.89 by 2.6%. Adjusted earnings declined 26% from the year-ago quarter as profitability contracted sharply. GAAP revenues of $5.29 billion topped the consensus mark of $5.05 billion by 4.8% but decreased 4% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Equifax, Inc. (EFX) : Free Stock Analysis Report Fiserv, Inc. (FISV) : Free Stock Analysis Report ABM Industries Incorporated (ABM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

A month has gone by since the last earnings report for ABM Industries (ABM). Shares have lost about 2% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is ABM Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. ABM reported better-than-expected third-quarter fiscal 2026 results. ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Higher segment operating profit, lower tax expense and reduced ongoing corporate costs supported the bottom line. Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Growth was led by M&D and Aviation. Semiconductor, microgrid and data center-related revenues reached nearly $775 million through nine months, rising 26% organically. M&D revenues climbed 17.6% year over year to $481 million, including 7.8% organic growth and 9.9% growth from acquisitions. The increase reflected client expansions and the WGNSTAR acquisition. Aviation revenues rose 12.5% to $328.1 million, supported by healthy travel demand and the continued ramp of the Heathrow Airport contract. Business & Industry revenues declined 2.6% to $1.01 billion, reflecting the exit of a large U.K.-based client and West Coast softness. Education revenues were nearly flat, up 0.3% to $235.8 million. Technical Solutions revenues increased 4.2% to $259.9 million, with organic growth of 2.1% and acquisitions adding another 2.1%. Strong HVAC and battery energy storage system activity was partly offset by microgrid project delays tied to an important client. The segment generated operating profit of $21.5 million, up 10.8%, while margin improved to 8.3% from 7.8% on favorable service mix. Management said about $15 million of projects were deferred in the quarter, with nearly all expected to land in the fourth quarter and a small portion in the first quarter of fiscal 2027. Semiconductor revenues reached about $300 million through the first nine months of fiscal 2026 and grew 65% organically. Microgrid revenues were about $300 million, up 17% organically, while data center revenues totaled roughly $175 million and advanced 8% organically. Together, these markets represented more than 11% of company revenues and carried double-digit blended operating margins. Management said WGNSTAR is tracking well above its earlier $120-$130 million annualized revenue expectation. ABM reported two or three cross-sells across the combined semiconductor client base. The data center pipeline is also a multiple of its year-ago level, while a roughly $20 million Army Corps of Engineers microgrid project is expected to be executed in 2027. On a GAAP basis, net income increased 18.9% to $49.7 million, or 84 cents per share, from $41.8 million, or 67 cents. Selling, general and administrative expenses declined 3.5% to $171.3 million. Adjusted EBITDA increased 11% to $139.6 million. Segment operating margin was 7.7%, flat year over year but up 40 basis points sequentially. Business & Industry margin expanded to 7.4% from 7.1% and Education margin improved to 9.7% from 9%. Aviation margin fell to 5.6% from 6.8% as airline customers sought cost relief amid higher jet fuel costs. M&D margin declined to 8.4% from 8.9%, reflecting growth investments and nearly $4 million of incremental WGNSTAR amortization. Excluding that amortization, the segment margin was 9.2%. Third-quarter operating cash flow was $146.8 million and free cash flow was $128.4 million. Through nine months, operating cash flow increased to $275 million from $101 million, while free cash flow rose to $199.6 million from $42.4 million, supported by working-capital management and ERP stabilization. Total indebtedness ended the quarter at $1.8 billion, while leverage improved to 2.9X from 3.2X in the previous quarter. Available liquidity was $605.8 million, including $110.5 million of cash and equivalents. ABM also established a $300 million accounts receivable financing facility. ABM raised its adjusted earnings outlook to $3.95-$4.10 per share from $3.85-$4.15, increasing the midpoint. Organic revenue growth is still expected toward the high end of 3-4%, with total revenue growth toward the high end of 4-5%. Segment operating margin is now projected to be in the band of 7.7-7.8% compared with the prior 7.8-8% range. The company lifted its full-year operating cash flow expectation to about $300 million and free cash flow to about $210 million, up $25 million from the prior free cash flow outlook. Interest expense is still expected to be $110 million and the normalized tax rate remains at 29-30%. Since the earnings release, investors have witnessed a flat trend in fresh estimates. At this time, ABM Industries has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. ABM Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ABM Industries Incorporated (ABM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Accenture plc ACN is scheduled to release fourth-quarter fiscal 2026 results on Oct. 1, before market open. ACN has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 3.1%. Accenture PLC price-eps-surprise | Accenture PLC Quote The Zacks Consensus Estimate for the top line is pinned at $18 billion, hinting at a 5.6% increase from that reported in the fourth quarter of fiscal 2026. The consensus estimate for Consulting revenues is pegged at $8.8 billion, suggesting marginal year-over-year growth. Consulting revenues are likely to have benefited from booking growth across four consecutive quarters, recovery in Accenture Federal Services and surging consulting content within large transformation and managed-services engagements. For the Managed Services segment, the consensus mark for revenues is pinned at $9.2 billion, indicating a 4.7% rise from the year-ago quarter's reported number. Clients increasingly seeking AI and consulting capabilities within managed services engagements is expected to have supported this segment's performance. The Zacks Consensus Estimate for the Products segment's revenues is $5.5 billion, indicating a 2.5% uptick from the year-ago quarter's actual. Escalating demand for digital manufacturing, AI, cloud, cybersecurity and efficiency-related transformation initiatives is anticipated to have benefited this segment. The consensus mark for the Health & Public Services segment's revenues is at $3.7 billion, suggesting a 2.5% rise from the year-ago quarter's actual. This segment is expected to have benefited from the normalization of Accenture's U.S. federal business. For Financial Services, the consensus estimate for revenues is $3.4 billion, implying a 2.5% hike from the year-ago quarter's actual. This segment's growth is likely to have been reinforced by continued investment in data, AI implementation and technology modernization. The consensus mark for the Resources segment revenues is kept at $2.4 billion, indicating 2.5% year-over-year growth. This rally is likely to have been attributed to the rising demand for cybersecurity, infrastructure modernization, AI and operational technology. Geographically, the Zacks Consensus Estimate for revenues from the Americas is at $9.4 billion, suggesting 7.5% growth from the year-ago quarter's actual. The region is anticipated to have benefited from Accenture's U.S. federal business recovery, coupled with continued demand across technology-centric industries. The consensus estimate for revenues from the EMEA region is set at $6.7 billion, indicating a 7.5% increase from that reported in the same quarter last year. AI-backed transformation programs, including BT engagement and the Alfahealth buyout, are anticipated to have supported this region. The consensus mark for revenues from the Asia Pacific is pinned at $1.9 billion, implying a 26.4% year-over-year fall. The Zacks Consensus Estimate for the bottom line is set at $3.19 per share, suggesting a 5.3% increase from the year-ago quarter's reported number. Top-line growth and operating margin expansion are expected to have translated into solid bottom-line improvement. Our model predicts an earnings beat for Accenture this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter. ACN has an Earnings ESP of +0.31% and a Zacks Rank of 3 at present. You can see the complete list of today's Zacks #1 Rank stocks here. Paychex PAYX reported an impressive first-quarter fiscal 2027. PAYX registered adjusted earnings of $1.34 per share, rising 9.8% year over year and beating the Zacks Consensus Estimate of $1.33 by a slight margin. Total revenues rose 5.9% to $1.63 billion, topping the consensus mark of $1.62 billion by a small margin. ABM Industries Incorporated ABM reported better-than-expected third-quarter fiscal 2026 results. ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Accenture PLC (ACN) : Free Stock Analysis Report Paychex, Inc. (PAYX) : Free Stock Analysis Report ABM Industries Incorporated (ABM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Paychex PAYX has reported an impressive first-quarter fiscal 2027, wherein earnings and revenues beat the Zacks Consensus Estimate. PAYX has registered adjusted earnings of $1.34 per share, rising 9.8% year over year and beating the Zacks Consensus Estimate of $1.33 by a slight margin. Total revenues rose 5.9% to $1.63 billion, topping the consensus mark of $1.62 billion by a small margin. Paychex, Inc. price-consensus-eps-surprise-chart | Paychex, Inc. Quote The quarter benefited from higher revenue per client, stronger PEO worksite employee growth and increased PEO insurance volumes. PEO and Insurance Solutions remained the standout growth area, while the adjusted operating margin also expanded from the year-ago period. Management Solutions revenues increased 4% year over year to $1.21 billion in the fiscal first quarter. Growth was driven by higher revenues per client, reflecting price realization and greater product penetration. The business remained Paychex's largest revenue contributor. Total service revenues advanced 6% year over year to $1.58 billion, supported by growth across Management Solutions and PEO and Insurance Solutions. Professional Employer Organization and Insurance Solutions revenues climbed 12% year over year to $367.6 million. Growth primarily reflected an increase in average PEO worksite employees and higher PEO insurance volumes. Interest on funds held for clients increased 5% year over year to $49.8 million, aided by higher average interest rates. The improvement provided another source of revenue growth, alongside the company's payroll, human resources and benefit offerings. Total expenses increased 1% year over year to $1.01 billion, slower than revenue growth. Cost of service revenues rose 4% to $430.1 million, while selling, general and administrative expenses declined 1% to $581.2 million. Operating income increased 14% to $619.2 million, lifting the operating margin to 38% from 35.2%. Adjusted operating income rose 9% to $684.7 million, while the adjusted operating margin improved to 42% from 40.7%. Net income advanced 12% year over year to $429.7 million, while GAAP earnings increased 14% to $1.21 per share. Adjusted net income grew 9% to $479.2 million. Acquisition-related costs declined to $65.5 million from $84.8 million a year earlier. The latest-quarter amount included $56.9 million of amortization tied to the Paycor acquisition, $8.5 million of acquisition and integration compensation costs, and $0.1 million of other acquisition-related costs. Cash flow from operations declined 42.4% year over year to $413.5 million. Paychex paid out $424.1 million in dividends, or $1.19 per share, during the fiscal first quarter. As of Aug. 31, 2026, cash, restricted cash and total corporate investments stood at $1 billion. Long-term borrowings, net of debt issuance costs, were $4.6 billion, while total assets were $15.66 billion. PAYX continued to expand its WISE artificial intelligence platform and launched WISE Hire, an agentic recruiting solution. The company is embedding AI-enabled automation and insights across its human capital management platforms to support productivity and client outcomes. Management also highlighted efforts to make WISE capabilities available within Microsoft business applications, wherein clients already work. The company views the broader deployment as part of its strategy to combine technology with advisory expertise across payroll, human resources and benefits. For fiscal 2027, Paychex continues to expect total revenue growth of 5-6% and Management Solutions revenue growth of 5-6%. It also maintained its adjusted operating margin forecast of about 44% and adjusted earnings growth outlook of 7-9%. Management raised its PEO and Insurance Solutions revenue growth forecast to 7-8% from 6-7%. Interest on funds held for clients is expected to be $200-$210 million, up from the prior mentioned $195-$205 million. The effective income tax rate forecast remains about 24%. PAYX carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. ABM ABM reported better-than-expected third-quarter fiscal 2026 results. ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Fiserv FISV posted second-quarter 2026 adjusted earnings of $1.84 per share, missing the Zacks Consensus Estimate of $1.89 by 2.6%. Adjusted earnings declined 26% from the year-ago quarter as profitability contracted sharply. GAAP revenues of $5.29 billion beat the consensus mark of $5.05 billion by 4.8% but decreased 4% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paychex, Inc. (PAYX) : Free Stock Analysis Report Fiserv, Inc. (FISV) : Free Stock Analysis Report ABM Industries Incorporated (ABM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ABM Industries recently reported past third-quarter 2026 results, with sales of US$2,317.1 million and net income of US$49.7 million, while also confirming its fiscal 2026 revenue growth outlook and maintaining a quarterly dividend of US$0.29 per share. The completion of a multi-year buyback totaling 11,720,000 shares for US$512.79 million, combined with improving earnings per share, highlights ABM’s focus on shareholder returns alongside operational execution. Next, we’ll examine how ABM’s confirmed 2026 revenue growth outlook reshapes its existing investment narrative and medium-term expectations. Invest in the nuclear renaissance through our list of 19 elite nuclear energy infrastructure plays powering the global AI revolution. To own ABM Industries, you need to believe in its ability to turn modest revenue growth into healthier margins while managing contract pressure in challenged office markets. The latest quarter’s solid earnings and confirmed 2026 revenue growth outlook support that narrative, but they do not materially change the key near term swing factor: whether pricing concessions and contract renewals in softer regions keep squeezing profitability more than expected. Among the recent announcements, the completion of ABM’s multi year, US$512.79 million buyback program stands out. Retiring 11,720,000 shares while earnings per share have been improving ties directly into the near term catalyst of earnings quality and resilience. It also sits against the main risk that rising margin and cost pressures, along with restructuring expenses, could limit how much of that EPS progress ultimately translates into stronger, more stable long term returns. Yet beneath the steady dividend and confirmed growth outlook, investors should be aware that ABM’s exposure to concentrated contract renewals in weaker markets could... Read the full narrative on ABM Industries (it's free!) ABM Industries' narrative projects $10.1 billion revenue and $272.9 million earnings by 2029. This requires 3.3% yearly revenue growth and a $106.5 million earnings increase from $166.4 million today. Uncover how ABM Industries' forecasts yield a $55.36 fair value, a 11% upside to its current price. Before this report, the most optimistic analysts were assuming ABM could reach around US$10.0 billion in revenue and US$284.8 million in earnings by 2029, which is far more upbeat than the baseline view. When you set those expectations against today’s guidance and the ongoing risk of higher leverage and rising interest costs, it shows how differently you and other investors might interpret the same news and why those narratives may still evolve. Explore 2 other fair value estimates on ABM Industries - why the stock might be worth just $55.36! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your ABM Industries research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision. Our free ABM Industries research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ABM Industries' overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: Outshine the giants: these 19 early-stage AI stocks could fund your retirement. Uncover the next big thing with 8 elite penny stocks that balance risk and reward. We've uncovered the 7 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ABM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Paychex, Inc. PAYX is set to release first-quarter fiscal 2027 results on Sept. 23, 2026, before market open. PAYX’s earnings beat the Zacks Consensus Estimate in four preceding quarters, with an average earnings surprise of 1.3%. Paychex, Inc. price-eps-surprise | Paychex, Inc. Quote The consensus estimate for Paychex’s first-quarter fiscal 2027 revenues is set at $1.6 billion, suggesting a 5.1% uptick from the year-ago quarter. Paychex’s sales bookings improved consistently over the past few quarters. Assuming this momentum continued, we expect the top line to have benefited from the booking uptick. Further gains are expected to have come from Paycor-related cross-selling and revenue synergies, as mentioned by Robert Schrader, the CFO, during the fourth-quarter fiscal 2026 earnings call. The company said it is motivated to raise the top line by increasing revenue per client rather than relying heavily on client-base expansion. The top line is anticipated to have moved up, compounding on pricing and greater share of wallet, making price realization and product penetration vital top line drivers. We also expect PEO momentum to have been the fuel to Paychex’s revenue engine, supported by strong worksite employee growth, double-digit demand and record retention. We are also bullish on medical-plan attachment and enrollment to have supported the PEO growth as well. Alongside these drivers, we are betting on Paychex’s AI and WISE capabilities. The company is already generating revenues from WISE-related offerings and has identified intelligent timekeeping and other AI offerings as upsell opportunities. This factor is expected to be an emerging driver rather than a major one. The Zacks Consensus Estimate for earnings is pinned at $1.33 per share, indicating a 9% gain from the year-ago quarter’s reported figure. The bottom line is expected to have escalated on the back of operating margin expansion driven by productivity gains from WISE and AI. Paycor cost synergies are another factor that is anticipated to have improved EPS as well. Our proven model does not conclusively predict an earnings beat for Paychex this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. PAYX has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. ABM ABM reported better-than-expected third-quarter fiscal 2026 results. ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Republic Services RSG reported better-than-expected second-quarter 2026 results. RSG’s adjusted earnings of $1.85 per share grew 4.5% year over year and surpassed the Zacks Consensus Estimate of $1.81 by 2.2%. Revenues increased 4.6% to $4.43 billion and beat the consensus mark of $4.36 billion by 1.5%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paychex, Inc. (PAYX) : Free Stock Analysis Report Republic Services, Inc. (RSG) : Free Stock Analysis Report ABM Industries Incorporated (ABM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ABM ABM reported better-than-expected third-quarter fiscal 2026 results. The earnings beat and raised EPS guidance impressed investors as the stock jumped 5.7% since the company released results on Sept. 8. ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Higher segment operating profit, lower tax expense and reduced ongoing corporate costs supported the bottom line. Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Growth was led by Manufacturing & Distribution and Aviation. Semiconductor, microgrid and data center-related revenues reached nearly $775 million through nine months, rising 26% organically. ABM Industries Incorporated price-consensus-eps-surprise-chart | ABM Industries Incorporated Quote Manufacturing & Distribution revenues climbed 17.6% year over year to $481 million, including 7.8% organic growth and 9.9% growth from acquisitions. The increase reflected client expansions and the WGNSTAR acquisition. Aviation revenues rose 12.5% to $328.1 million, supported by healthy travel demand and the continued ramp of the Heathrow Airport contract. Business & Industry revenues declined 2.6% to $1.01 billion, reflecting the exit of a large U.K.-based client and West Coast softness. Education revenues were nearly flat, up 0.3% to $235.8 million. Technical Solutions revenues increased 4.2% to $259.9 million, with organic growth of 2.1% and acquisitions adding another 2.1%. Strong HVAC and battery energy storage system activity was partly offset by microgrid project delays tied to an important client. The segment generated operating profit of $21.5 million, up 10.8%, while margin improved to 8.3% from 7.8% on favorable service mix. Management said about $15 million of projects were deferred in the quarter, with nearly all expected to land in the fourth quarter and a small portion in the first quarter of fiscal 2027. Semiconductor revenues reached about $300 million through the first nine months of fiscal 2026 and grew 65% organically. Microgrid revenues were about $300 million, up 17% organically, while data center revenues totaled roughly $175 million and advanced 8% organically. Together, these markets represented more than 11% of company revenues and carried double-digit blended operating margins. Management said WGNSTAR is tracking well above its earlier $120-$130 million annualized revenue expectation. ABM reported two or three cross-sells across the combined semiconductor client base. The data center pipeline is also a multiple of its year-ago level, while a roughly $20 million Army Corps of Engineers microgrid project is expected to be executed in 2027. On a GAAP basis, net income increased 18.9% to $49.7 million, or 84 cents per share, from $41.8 million, or 67 cents. Selling, general and administrative expenses declined 3.5% to $171.3 million. Adjusted EBITDA increased 11% to $139.6 million. Segment operating margin was 7.7%, flat year over year but up 40 basis points sequentially. Business & Industry margin expanded to 7.4% from 7.1%, and Education margin improved to 9.7% from 9%. Aviation margin fell to 5.6% from 6.8% as airline customers sought cost relief amid higher jet fuel costs. Manufacturing & Distribution margin declined to 8.4% from 8.9%, reflecting growth investments and nearly $4 million of incremental WGNSTAR amortization. Excluding that amortization, the segment margin was 9.2%. Third-quarter operating cash flow was $146.8 million and free cash flow was $128.4 million. Through nine months, operating cash flow increased to $275 million from $101 million, while free cash flow rose to $199.6 million from $42.4 million, supported by working-capital management and ERP stabilization. Total indebtedness ended the quarter at $1.8 billion, while leverage improved to 2.9X from 3.2X in the previous quarter. Available liquidity was $605.8 million, including $110.5 million of cash and equivalents. ABM also established a $300 million accounts receivable financing facility. ABM raised its adjusted earnings outlook to $3.95-$4.10 per share from $3.85-$4.15, increasing the midpoint. The midpoint ($4.02) of the guided range is higher than the Zacks Consensus Estimate of $3.97. Organic revenue growth is still expected toward the high end of 3-4%, with total revenue growth toward the high end of 4-5%. Segment operating margin is now projected to be in the band of 7.7-7.8% compared with the prior 7.8-8% range. The company lifted its full-year operating cash flow expectation to about $300 million and free cash flow to about $210 million, up $25 million from the prior free cash flow outlook. Interest expense is still expected to be $110 million, and the normalized tax rate remains at 29-30%. ABM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Fiserv, Inc. FISV reported second-quarter 2026 adjusted earnings of $1.84 per share, missing the Zacks Consensus Estimate of $1.89 by 2.6%. Adjusted earnings declined 26% from the year-ago quarter as profitability contracted sharply. GAAP revenues of $5.29 billion beat the consensus mark of $5.05 billion by 4.8% but decreased 4% year over year. Republic Services, Inc. RSG reported better-than-expected second-quarter 2026 results. RSG’s adjusted earnings of $1.85 per share grew 4.5% year over year and surpassed the Zacks Consensus Estimate of $1.81 by 2.2%. Revenues increased 4.6% to $4.43 billion and beat the consensus mark of $4.36 billion by 1.5%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ABM Industries Incorporated (ABM) : Free Stock Analysis Report Fiserv, Inc. (FISV) : Free Stock Analysis Report Republic Services, Inc. (RSG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Sept. 8, 2026 at 8:30 a.m. ET Senior Vice President, Investor Relations - Paul E. Goldberg President and Chief Executive Officer - Scott Salmirs Executive Vice President and Chief Financial Officer - David Orr Operator: Greetings. Welcome to ABM Industries Third Quarter 26 Earnings Call. At this time, all participants will be in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference is being recorded. At this time, I will turn the conference over to Paul E. Goldberg, Senior Vice President, Investor Relations. Thank you. You may now begin. Paul E. Goldberg: Good morning, everyone, and welcome to ABM's third Quarter 26 Earnings Call. My name is Paul E. Goldberg, and I am the Senior Vice President of Investor Relations at ABM. With me today are Scott Salmirs, our president and chief executive officer and David Orr, our executive vice president and chief financial officer. Please note that earlier this morning, we issued our press release announcing our third quarter 26 financial results and outlook. A copy of that release and an accompanying slide presentation can be found on our website abm.com. After Scott and David's prepared remarks, we will host a Q&A session. But before we begin, I would like to remind you that our call and presentation today contains predictions estimates, and other forward looking statements. Our use of the words estimate, expect, and similar expressions are intended to identify these statements and they represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are inherently subject to risks and uncertainties, that could cause our actual results to differ materially. These factors are described in a slide that accompanies our presentation, as well as our filings with the SEC. During the course of this call, certain non GAAP financial information will be presented. A reconciliation of historical non GAAP numbers to GAAP financial measures is available at the end of the presentation and on the company's web under the Investor tab. With that, I would like to now turn the call over to Scott. Scott Salmirs: Good morning, everyone, and thank you for joining us. We had a strong third quarter. Particularly when you consider some of the puts and takes across the business. We delivered record quarterly revenue, 27% adjusted EPS growth and exceptional year to date cash flow despite project timing and Technical Solutions and the anticipated impact of client exits in B&I. I think the quarter demonstrates both the resilience of our portfolio and our ability to execute operationally even when individual parts of the business do not move in a straight line. On the revenue side, most of the business performed largely as we expected. Aviation and Manufacturing and Distribution continued to deliver strong growth. Education performed as expected, while B&I reflected the client exits we have discussed over the last several quarters. Technical Solutions was the 1 area where revenue came in below our expectations, driven by certain project deferrals from an important client. Based on our discussions with that client, we believe this is principally a timing issue rather than a change in the underlying demand environment. And we expect a meaningful portion of that activity to move into the fourth quarter. What we are particularly pleased with this quarter is our execution on profitability and cash flow. The cost actions we have been driving throughout the year combined with disciplined working capital management, resulted in 27% adjusted EPS growth 40 basis points of sequential segment margin improvement, and an increase of over $150 million in year to date free cash flow. Cash generation has historically been an important strength of ABM Following the disruption associated with our ERP implementation, we have been very focused on restoring that performance And the progress is increasingly visible in our results Given our performance through the first 9 months we are raising our full year free cash flow outlook. I want to spend a few minutes on the part of the ABM story that I think is becoming increasingly important. Our position in semiconductor, microgrids, and data centers. Because some of these businesses are project oriented and can be lumpy quarter to quarter, I think the year to date numbers provide the best perspective. Through the first 9 months, these businesses generated nearly $775 million of revenue growing 26% organically and approximately 40% when including WGNSTAR. Together, they now represent more than 11% of ABM's revenue and carry a double digit blended operating margin. So these businesses have become meaningful within ABM, and we believe they have significant runway ahead In semiconductor, we made a strategic decision several years ago to invest ahead of what we believe would be a significant expansion of advanced manufacturing capacity. We invested in industry expertise, developed relationships with many of the leading manufacturers, and established a strong position supporting semiconductor facilities. WGNSTAR significantly expands that opportunity. 1 way to think about it is to picture the FAB as the bull's eye in a semiconductor facility. Historically, ABM has operated around the bull's eye. Providing a broad range of services with WGNSTAR, we now have the highly specialized technical capabilities to operate inside the bull's eye as well. That significantly expands our addressable opportunity and allows us to provide a much broader range of services to semiconductor clients. The results so far have been really encouraging. Semiconductor revenue grew 65% organically during the first 9 months and more than doubled when including almost 2 quarters of WGNSTAR. And we are still early in realizing the opportunities across the combined client portfolio. In microgrids, including battery energy storage systems, we have approximately quadrupled the size of the business since entering the market in 2022. Through the first 9 months, revenue grew 17% organically. The underlying demand drivers remain compelling as clients increasingly invest in power, resiliency, and redundancy We are also focused on broadening the client base and increasing the recurring component of the business over time. To highlight our progress on diversification, in the coming days, we expect to finalize a contract to build a microgrid for primary backup power for the Army Corps of Engineers as part of a joint venture with a strategic partner The total value to ABM is approximately $20 million and we expect the project will be executed in calendar 27 and finally, data centers. Year to date, revenue grew 8% organically, But we believe the opportunity ahead is considerably larger than what is reflected in current growth rate. Our pipeline and backlog continue to build, including work with many colocation customers And we expect a meaningful portion of that activity to convert into revenue in fiscal 2027 and into 2028. Taken together, these businesses represent an important evolution in ABM's portfolio. We have a large resilient core business that generates significant cash flow, while at the same time, building meaningful positions in markets benefiting from powerful long term investment trends. We believe that combination can contribute meaningfully to ABM's growth and margin profile over time. Let me step back and briefly talk about what we are seeing across our markets as we move into the fourth quarter. Within Business and Industry, the trends we discussed last quarter remain largely intact. The Northeast continues to be our strongest commercial real estate market while the West Coast particularly Northern California, remains challenging. We continue to be disciplined in how we pursue and retain business, Our objective is not simply to maximize revenue. We want client relationships where we see a credible path to attractive returns over time. Looking ahead, we expect B&I to return to organic growth around the middle of fiscal 2027 as we lap the large UK client exit we have previously discussed. In manufacturing and distribution, the environment remains very constructive Technology continues to lead the way, particularly semiconductor, And we are also seeing healthy activity in e commerce, pharma, and broader industrial manufacturing. Based on what we see today, we believe M&D is positioned to sustain strong organic growth into fiscal 2027 and beyond. In 60% of aviation revenue and provide greater consistency, broader cross selling opportunities and more stable economics. Education continues to be a consistent cash generative business The team is executing extremely well, and we expect low single digit organic growth as we move into fiscal 2027. And finally, in technical solutions, the underlying market fundamentals across energy resiliency data centers, and HVAC remain strong. As I mentioned earlier, Q3 was affected by certain project deferrals at an important client. These delays were not driven by interest rates supply chain constraints, or permitting challenges. The client made a decision to prioritize other capital projects during the quarter. We are now executing on many of those deferred projects which should translate into significant sequential improvement in ATS revenue, operating profit, and margin in Q4. More broadly, given the demand we continue to see across ATS, we expect another year of strong growth in fiscal 2027. So as we enter the fourth quarter, I will leave you with 3 things First, the majority of our end markets remain healthy. And where we do have pressure, we understand the issues and are actively managing them. Second, our operational execution continues to improve. Margins increased sequentially, cash flow has strengthened considerably, and the cost actions we have been taking are showing up in our results. And third, semiconductor, microgrids, and data centers are becoming increasingly meaningful contributors to ABM and we believe they have substantial runway ahead. We are raising the midpoint of our adjusted EPS outlook and raising our full year free cash flow outlook based on our strong third quarter results and our confidence in delivering the fourth quarter. there is still work to do, but we feel good about the position we are in and the foundation we are building as we head into fiscal 2027. And with that, I will turn it over to David. David Orr: Thanks, Scott, and good morning, everyone. Let's start on slide 7. Revenue grew 4.2% year over year to an all time quarterly record of slightly above $2.3 billion driven by 2.1% organic growth and a 2.1% contribution from acquisitions, primarily WGNSTAR. Organic growth was especially strong in aviation and M&D. Which grew 12%, 8% respectively. Education was up slightly, while Technical Solutions posted organic growth of 2%, reflecting project timing, which I will discuss shortly. B&I declined 3% as expected. I will get into the segment details in a few minutes. Turning to slide 8. As Scott mentioned, we delivered a strong earnings quarter. Net income increased 19% to $49 million or $0.84 per diluted share. Compared to $41.8 million or $0.67 per diluted share in the prior year. Adjusted net income was $61.5 million or $1.04 per diluted share, versus $51.7 million or $0.82 per diluted share last year. Reflecting increases of 19%, 27%, respectively. These significant year over year increases primarily reflect higher segment operating profit, lower tax expense, and reduced ongoing corporate cost. Partially offset by higher interest expense. Per share measures were further benefited from share repurchase activities completed earlier in the year. Adjusted EBITDA increased $13.8 million or 11% over the prior year to $139.6 million driven by higher segment operating profit, and lower corporate costs. Segment operating margin increased 40 basis points sequentially to 7.7%. On a year over year basis, segment margin was essentially flat as operational efficiencies in B&I, M&D, and education were offset by anticipated pressures in aviation and higher amortization expense related to the WGNSTAR acquisition. Excluding acquisition related amortization, margin would have been 7.8%. Now let's turn to segment performance, beginning with slide 9. B&I revenue declined 2.6% in the third quarter, as expected driven by the Q2 exit of a large UK based client and the impact of certain other client exits, particularly on the West Coast. We expect revenue trends to be similar in Q4, but we anticipate continued incremental margin improvement as our operational actions take further hold. Operating profit increased to $75 million and margin expanded 30 basis points year over year to 7.4% compared to $73.8 million and 7.1% in the prior year period. These improvements primarily reflect cost actions and operational improvements. Along with the benefit of lapping certain lower margin contracts entered into in the third quarter of last year. Aviation grew 12% to $328.1 million supported by healthy travel demand, and the continued ramp of our Heathrow contract. Operating profit was $18.4 million, with a margin of 5.6% compared to $19.7 million and 6.8% last year. Profit and margin were pressured by airline clients are reacting to elevated fuel costs by seeking cost relief from their service providers. We factored this into our outlook and are actively managing the pressure through operational efficiencies. Turning to slide 10. M&D generated $481 million in revenue, an 18% increase year over year. Including organic growth of 8%, 10% growth from the WGNSTAR acquisition. The strong organic growth was driven by continued client expansions across the segment. Operating profit was $40.5 million with a margin of 8.4%, compared to $36.4 million and 8.9% last year. On a year over year basis, the margin change primarily reflects ongoing investments in sales and industry expertise talent to support our long term growth strategy. As well as nearly $4 million in incremental amortization expense connected with the WGNSTAR acquisition. Excluding incremental amortization, margin was 9.2%, which we view as a solid base from which to expand as we outgrow the amortization and continue to cross sell higher value solutions to our semiconductor, and technology clients. Education revenue rose slightly to $235.8 million and delivered excellent operating performance in the quarter. Which is the seasonally strongest for profit and margin. Operating profit increased 9% to $23 million and margin expanded 70 basis points to 9.7%. This improvement was driven by enhanced labor efficiency in the effective escalation management. Technical solutions third quarter revenue of $259.9 million up 4% year over year including 2% organic growth, and 2% from acquisitions. Organic growth reflected strong HVAC and battery energy storage system activity, partially offset by certain project delays in our microgrid business driven by an important client. These delays were compounded by a difficult comparison against a very strong third quarter last year. Operating profit was $21.5 million with margin at 8.3%, compared to $19.4 million and 7.8% last year. The increase in operating profit and margin was mainly driven by positive service mix partially offset by impacts in our microgrid business due to project delays. Looking to the fourth quarter, we expect significant sequential increases in revenue operating profit and margin on higher microgrid activity as projects that shifted out of the third quarter move forward. As we discussed earlier in the year, the back half of the fiscal year and specifically the fourth quarter has historically been the strongest operating quarter of the year for Technical Solutions. This year will be no different. Now turning to slide 11. We ended the quarter with total indebtedness of $1.8 billion including $22 million in standby letters of credit. Our total debt to pro form a adjusted EBITDA ratio was 2.9 times. We achieved our goal of leveraging below 3 times a quarter earlier than originally planned. Reflecting strong sequential progress driven by our robust cash flow. We expect to drive leverage even lower by year end. Available liquidity stood at $606 million including $110 million in cash, and cash equivalents. During the quarter, we closed on a $300 million accounts receivable facility. This diversifies our funding sources and reduces our marginal cost of borrowing relative to our existing revolving credit facility. And also represents a meaningful enhancement to our overall capital structure. As Scott mentioned, we had a very strong cash generation quarter, which has long been a hallmark of ABM. Third quarter cash from operations was $146.8 million and free cash flow was $128.4 million For the first 9 months, cash from operations was $275 million and free cash flow was $199.6 million versus cash from operations of $101 million and free cash flow $42.4 million in the prior year period. This represents an improvement of over $150 million in free cash flow during the first 9 months. Driven by strong working capital management and ERP stabilization. As a result of our progress on cash generation year to date, we are raising our full year free cash flow expectations, which I will discuss in a moment. Interest expense in the quarter was $29.5 million, up $4.2 million from last year. Reflecting larger average debt balances driven by our WGNSTAR acquisition. This was partially offset at the net income level and lower tax expense which was $4.1 million below last year. Reflecting certain discrete tax benefits recognized in the quarter. Turning to our fiscal 2026 outlook on slide 12. As Scott noted, we are encouraged by the relative health of our end markets, while remaining mindful of the broader economic uncertainty. As such, we are raising the midpoint of our fiscal 2026 adjusted EPS range, which is now expected to be $3.95 to $4.10. This raise reflects our strong third quarter performance and our confidence in delivering on our fourth quarter expectations. As a reminder, our full year organic revenue growth outlook is 3% to 4%. And we continue to expect to be toward the higher end of that range. Aviation, M&D, and Technical Solutions are expected to grow above that range, while B&I and education are projected to be below that range. The WGNSTAR acquisition is expected to deliver approximately 1 point of additional revenue growth bringing total growth to the high end of our 4% to 5% range. We are modestly updating our segment operating margin outlook to 7.7% to 7.8% for fiscal 2026. Reflecting year to date performance and slightly higher intangible amortization for WGNSTAR. Which, in aggregate, accounts for 10 basis points of operating profit margin impact for the full year. That said, fourth quarter margin is projected to be meaningfully above the high end of that range, reflecting the anticipated seasonal improvements in ATS mix, and the continued benefit of our operational actions across the portfolio. Forecast for interest expense remains at approximately $110 million and our normalized tax rates before any discrete items including the possible extension of the work opportunity tax credit program is still expected to be 29% to 30%. As I mentioned earlier, we are encouraged by our progress generating cash, and are raising our full year expectations. We now expect normalized free cash flow of approximately $285 million in fiscal 2026 before the impact of transformation and integration costs. Final RavenVault earnout, and any incremental restructuring. On a reported basis, free cash flow is expected to be approximately $210 million versus our prior forecast of $185 million, a $25 million improvement reflects the strong working capital performance we have delivered through the first 9 months of the year. Also want to take a moment to recognize the efforts of our operators, our finance and treasury teams who drove outstanding third quarter cash flow. These results are a product of discipline and focus on the fundamentals of working capital management. With that, Scott, I will turn it back to you for closing remarks. Scott Salmirs: Thanks, David. Let me close with a couple of thoughts. We feel good about where ABM stands today. Our core business remains resilient. Cash flow has improved significantly, and we are making progress on margins and operating efficiency At the same time, the investments we have made in semiconductor, microgrids, and data centers have created meaningful growth platforms and markets where we believe demand will remain strong for years. As we move towards fiscal 27, our priorities are straightforward. Finish this year strong execute on the opportunities already in front of us, continue improving margins and cash flow, and allocate capital with discipline. And finally, I wanna thank our team More than 100 thousand people show up every day and deliver for our clients. Ultimately, the results we are discussing today come from their execution, expertise, and the trust they build with our clients. We look forward to sharing our fiscal 27 outlook when we report fourth quarter results. With that, we will open up the line for questions. Operator: Thank you. We will now be conducting a question and answer session. In the interest of time, please limit yourself to 1 question and 1 follow-up. For participant choosing speaker equipment, it may be necessary to pick up your handset before pressing the star keys. You. And our first question is from the line of Timothy Mulrooney with William Blair. Please proceed with your questions. Tim Mulrooney: Yes. Thank you, and good morning. Scott, I am gonna start off here with your high-tech business, your semiconductors, data centers, microgrids, they are 11% of your business today. But I am curious. What do you think that will represent? In terms of your sales mix a couple years from now? You know, I know these high-tech sectors are growing faster than the rest of your business, but I also know the microgrids can be lumpy. So I am really curious to get your, broad thoughts on that. Scott Salmirs: Yeah. So look, we are still super optimistic about that area of work. And you know, it is going to continue it is gonna continue becoming a more and more meaningful part of our business just by the fact of the mix. Right? Because it is growing double digits where some of our other segments are more of GDP or GDP plus. So it will continue to be meaningful and we also continue to invest in it because it is not only executing on the work, which you have to do, obviously, in the highest of fashion, but we are hiring experts that understand this business. We are hiring sales associates. So, this is an area that we think has, a lot of trajectory for years and years to come. Tim Mulrooney: And what okay. Thank you for that. And what did you say the how the profitability of these 3 businesses combined compares to your corporate average? Scott Salmirs: Yeah. So this is we are talking about double digit versus our average, which is typically, you know, in the, you know, low single digits. Yeah. Yeah. To me, you know, In terms of To you know where our EBITDA margins are in comparison to this. It could, in a lot of cases, be double in these markets. Yeah. Tim Mulrooney: Okay. Thank you. Appreciate that. David, I had 1 for you on the cash flow guide, and then I will hop-- I think last time you communicated about this, you said you were targeting $250 million of free cash flow less I guess, $65 million of nonrecurring cash expenses. So, really, it was, $185 million, and now you are saying $210 million, which is $25 million higher Is that right? Is all of that right? Is all of that apples to apples? David Orr: Yeah, Timothy. You got it right. So $2.10 on an as reported basis is the number we are targeting. As you said, we are really pleased with the way we landed cash flow for the quarter and our raise of guidance there. Yeah. Tim Mulrooney: No. It looks great. I just want to-- it kind of sounds like you are changing the way you are talking about it a little bit here. Before, it was, like, pre all of that stuff, and now it is just on a reported basis, $2.10. Why did you raise the free cash flow guidance? Was it due to higher operating cash flow than you were expecting before, or is it due to fewer of that $65 million bucket of nonrecurring charges than you previously thought? David Orr: I think the way to reflect on it is we had a really strong working capital quarter. Specifically, I think from my perspective, the good news is we are starting to really leverage some of the capabilities of the new system and, in doing so, in the quarter, were able to accelerate some of the collections for the quarter. So it is just it is just another step to stability on our transformation. And ultimately, that was the driver for the cash flow performance. Tim Mulrooney: Yeah. Good execution. Well, congrats on a nice quarter. Thanks, guys. Operator: Thank you. The next question is from the line of Andy Wittmann with Robert W. Baird. Please proceed with your question. Analyst: Oh, great. Thanks for taking my question. I guess I wanted to go back to the ramp in the fourth quarter and Scott, I appreciate you kind of walked through some of the moving pieces. But I guess I am curious on deferred projects. Just how much is already given that we are halfway through the quarter, how much has already started? Is there anything that needs to still start? I am just trying to understand the line of sight and the visibility on those deferrals. Scott Salmirs: Sure. And again, before I even answer that, you we do not really look at this quarter by quarter, year to date, in terms of just ATS in general, we have, you know, 10% year to date growth, and the microgrids in those projects are in that segment. But, you know, this quarter was about $15 million in deferrals and largely, almost all of those projects are going to land in Q4, a little bit in Q1 of next year. But we are already turning wrenches on those projects. So we are still not waiting to see if the deferrals are gonna be put into action. So we are actively working on them now. And I think what you are gonna see in Q4 is double digit organic growth in the ATS. Okay, that is helpful. And then just on the aviation, the margin concessions that you talked about with the fuel pressure that airlines are seeing. And I and I appreciate that color that the 60% of what you do there now is with the airports and not the airlines. But can you quantify just what impact that had on the margin in the quarter? Well, without going into too much detail, I will tell you, like just first to level set, the segment is still really strong. Demand is strong. And I guess the best way to look at this is that we feel like that pressure is stabilizing. You know, sequentially, the margins, you know, acts a little actually, this quarter, modest improvement. So we feel like a lot of that impact is behind us. And when we will start seeing us accelerating over time now, once we get a little bit of relief on fuel costs. Analyst: Okay. And then I guess my last 1, just an up-- I mean, because, you know, you are growing the you know, all the high-tech businesses so fast, the 26% organic growth year to date that you called out in the release. Obviously, the intangible amortization that is been weighing on the and distribution segment, but I guess maybe it is a question for David. But can you remind us what is the bridge, the intangible for this year? And then how much of that falls off next year given that is such a high margin segment? David Orr: Yeah. We had about $12 million allocated to this year. For the intangibles for next year. We will have some modest fall off of that next year. I think what I am most excited about ultimately about WGNSTAR is you may recall we guided to roughly $120 to $130 million of annualized revenue for WGNSTAR. They are tracking well above that. Now, and we see that kind of growth rate. Continuing into next year. So the good news is an enhanced growth rate will help us continue to outgrow the amortization expense. Scott Salmirs: Yeah. And I would I would also point out that we have already had 2 or 3 cross sells in such a short period of time, which is, you know, really part of the thesis of this. And, you heard in my prepared remarks of how inside that bull's eye of the fab and outside. And now, you know, when you think about that and you say that, well, ABM has about 50 semiconductor clients that we were dealing with. Prior to WGNSTAR. WGNSTAR has 30-plus clients. So to be able start cross selling this, we just we are just seeing the start of it, but it is it is really positive. Analyst: Yeah. Cool. Thank you very much, guys. Operator: Thank you. The next questions are from the line of Faiza Alwy with Deutsche Bank. Please proceed with your questions. Faiza Alwy: Yes. Hi. Thank you. Scott, I wanna follow-up on the high growth end markets. I know you have mentioned that there is a blend of project and recurring revenue I am curious if you could expand on that. Like, how much of your revenues are recurring And is there a way to shift more of it to recurring? I guess I am curious under what circumstances is the project based versus recurring. Scott Salmirs: Yeah. So, I mean so the goal is to make it more recurring. And kind of what that means on the most basic level is you do a project, and instead of walking away, you get a maintenance contract. Where you stay you know, a client for the long term and then hopefully only are you getting that revenue, but as other projects come up, you are you are right in the sweet spot for that. So that is a big focus of ours in the whole ATS area is how does how do we, over time, blend the mix to be more recurring revenue recurring revenue? Yeah. David Orr: And, Faiza, this is David. I would say right now, roughly 15% to 20% of that revenue is on a project basis, which is still great for us because it means we are staying really connected with the client at good margins. And as Scott mentioned, over time, we would like to return that to the recurring business. You know, longer term contracts. But, you know, make no mistake, having a line of sight into this project work and this space is really important for us. Faiza Alwy: Alright. Great. that is very helpful. And then just on the-- you have strong cash flow improvement this year. I am curious if you have I know it is early and you are not giving a 2027 guide or anything like that. But, David, as you look at kind of where we are, how should we think about, you know, cash flow in 2027? Are there any sort of big expense items or anything else that we should keep in mind? David Orr: No big expense items out of the ordinary, I would say. Obviously, as I mentioned earlier, we are very, very pleased with our performance year to date on cash flow. When I step back and think about it, you know, we have funded a roughly $250 million acquisition and within the last 9 months, you know, used $100 million of our capital to buy back shares and you know, $51 million of dividends. All the meanwhile, driving below 2.9 driving below 3 times levered at the end of the day. So we are excited about that and I do not think there would be any surprises next year relative to cash flow, but we look forward to come back to talk to you about that in December. Faiza Alwy: Alright. Sounds good. Thank you. Operator: Thank you. The next question is from the line of David Silver with Freedom Capital Markets. Please proceed with your question. David Silver: Yes. Hi, good morning. Thank you. I guess the first question I would like to go back to you know, slide 6 and your discussion of, your opportunities in technology. And in particular, I wanted to focus on the data center panel. So, in my view, that is an area where there is a tremendous amount of you know, growth or build out that is going to occur over the next you know, handful of years. You know, from your perspective, Scott, maybe 2 questions. 1 is, have you been bidding for business for data centers that are kind of under construction? Or what is the cadence on, you know, contract, your pursuit of contracts and when they get awarded. And then secondly, taking up your analogy of the bull's eye and the target and everything, Is quality uptime kind of in some sense, you know, your path to getting inside the bull's eye of you know, the more significant data center projects? And if that is the case, can you know, expand that geographically, organically, or is this the case where, you know, you are gonna be looking for maybe similar you know, service companies, in targeted geographies. Thank you. Scott Salmirs: Sure. Sure. So, you know, as it relates to the data center question first, you know, we have been doing a lot of mining in that area, and we are we are bringing on sales assets for that too. So, you know and I think I even said in my prepared remarks that the 8% organic, you know, I do not believe it is reflective of what we see over the next 2 or 3 years. In fact, our pipeline right now is a multiple of where it was at this time last year. So we are really optimistic that will, over time, be very, very healthy double digit growth. In data centers. And then with quality uptime, you know, that is largely UPS power, which, you know, I think I have said this before on the call, but, you know, think of that as the transition between the power going out and the generator starting or the microgrid starting up. Right, you would need these UPS batteries to transition through. So the way to think about quality uptime, it is just a big piece of the puzzle. it is it is a really important part as we go selling to data centers, as we go selling to big retailers, anyone who is looking for power generation is also going to be looking for UPS power for the transition. So quality of time is very, very important to the piece of the puzzle. David Orr: You know, from our perspective, it was a very good acquisition for us. And, David, I would add, from a pipeline perspective, really the colocators are our main target in the data center space. that is where we see the fastest and most robust part of our pipeline growing here in the near term. David Silver: Okay. Great. Thank you very much. I would like to, if you do not mind, I would like to swing over to some of your comments about I guess, over the last couple of quarters, but about just developments in the California market in particular, or maybe, the West Coast. But really California. I mean,, it is kind of a foundational business for your company. And then not too long ago, you did do the big, you know, Able services acquisition. And, you know, certainly, there is a lot of headlines about you know, business trends in that area in that geography. So just, you know, from a big picture perspective, Scott, I mean, you know, what are the keys to kind of, you know, optimizing what you are doing in that geography here? I mean, are the pressures more on the able the integrated services side, or is it more just standard BNI? And, you know, where do you think the opportunities are you know, when the dust settles a little bit, from the current trends you are seeing? Thank you. Scott Salmirs: Yeah. that is a good question. I am glad you brought that up because I wanna make sure it is clear that this is not what we view as a systemic problem. You know, it is it is really now migrated to Northern California We had pressures early in the year in Southern California. that is stabilized. that is behind us now. In Northern California, you know, it is just it is part of a trend right now. Even though there is strong growth in that market from AI, you know, it is it is not a people heavy business. And as we go through those spaces, you know, there is still a lot of work from home. And what is ended up happening, which is a unique thing, right now, and it started in Southern California. Now in NorCal, which is the competitors are just, pricing at places that we are just not willing to work at. And you know, this has been a theme, David, as you know, over the last decade, about ABM not wanting to work for free. Right? And so we think we think this is not systemic. We think you will see this reverse it. If the trend of what happened in Southern California holds in NorCal, by mid next year, we think a lot of this will be behind us. And you know, the proof in the pudding on this is you look at B&I and, you know, our margins are up 30 basis points. So sequentially from quarter over quarter. So we are heading in the right direction. We are making the right decisions in you know, we talk internally about no regret decisions and this falls into it. So again, not systemic. Operator: Thank you. The next question is from the line of Brianna Camden with UBS. Please proceed with your question. Brianna Camden: Hey. Good morning, Scott and David. This is Brianna, on for Joshua Chan. Thanks for taking my questions. I guess on the outlook, can you maybe talk through why EPS midpoint is higher if margins are lower and most of the other items stay the same? David Orr: Yeah. Sure. So I think it just reflects where we are 9 months through the year. We have good line of sight on what we think the revenue is gonna be for the full year. And we have a very prescriptive approach to margins in our forecast. You know, I think you could expect margins north of 8% in the fourth quarter. That tracks to basically what we did last year at 8.2%. And as you know, for Q4 has just been historically very seasonally strong quarter for us. So it gives us that confidence. Brianna Camden: Thank you. Can you touch a bit more on confidence around the margin ramping as Q4, and then maybe, you know,, I know there is no guide for 2020 for next fiscal year, but how should that accelerate in Q4 and going forward? Thank you. David Orr: Yes. I think the biggest margin accelerator in Q4, which has been very, again, historically consistent is the ATS business. done anywhere between 10% and 11% operating profit margin. For the last 2 Q4s in 2024 and 2025. We do not see this year being any different. In fact, we are really encouraged by the health of the backlog and what we are seeing as an early start in the quarter. So that is the single biggest driver. Thank you. Operator: The next question is from the line Marc Riddick with Sidoti and Company. Please proceed with your question. Mark Riddick: Morning. Marc, I wanted to touch on, some thoughts on the pricing dynamic that you are seeing and some of the key service areas and visibility there because it seems as though there is some crystallization that is, beginning to form. But maybe talk a little bit about your comfort level as far as pricing and as well as the revenue mix benefit on that. And then I have a quick follow-up. Scott Salmirs: Yeah. We are real positive on our pricing approach. You know, we have a for medium sized to large contracts, we have a pricing council that goes through and we have hurdle rates that you have to hit. So that is been super helpful in terms of discipline. Escalations, really important part of our mix on pricing. We have to go out there every year and get wage escalations, and you know that is always been a historic strong point for ABM even in times when there was significant labor pressure. So it is a muscle strength we have built. So do not think there is anything dynamic happening in the market that is going to hurt us from a pricing standpoint. If anything, I think we have just gotten stronger and year over year after year. So feel really good about that. Mark Riddick: Great. And then shifting gears over to aviation, I am really appreciated the commentary as far as the airport airline and what is going on with the airlines. Maybe talk a little bit about that mix shift that you have accomplished over years and sort of maybe where you see that maybe settling out. What sort of a reasonable I mean, we are at 60/40, I guess, now with airports and airlines. Maybe you could talk a little bit about what might be a reasonable target or view and the kind of time frame that you might have in mind there. Scott Salmirs: Yeah. It you know, it is kinda hard to predict, to be honest with you. I know, you know, our focus is on that. And, you know, if it landed 3 to 5 years from now, it is 70/30, I think we would all be happy with that. And I think that is not it is not necessarily even a reflection that we think the airlines are gonna be weaker. I think there is gonna be so much infrastructure going on in airports. I think there is gonna be an opportunity as airports upgrade around the country that they are gonna want more enhanced services, and they are gonna want the kind of service that we perform at LaGuardia, which we have talked about. Where we are kind of it is an integrated approach. So, you know, 70/30 is not necessarily scientific. it is just kind of a sentiment that we are thinking over time, but there is a lot that can happen in that industry. But we love the way we have been heading. Mark Riddick: Great. Thank you very much. Thanks. Operator: Next questions are from the line of Tate Sullivan with Maxim Group. Please proceed with your question. Tate Sullivan: Hi. Thank you very much. A couple of follow ups. Scott, in the prepared remarks, you mentioned an award for the microgrid work for the Army Corps of Engineers. Is that a longtime customer of ABMs? Is it related to an acquisition? I think you had a previous announcement with them, but just checking, please. Scott Salmirs: Yeah. No. This is part of a-- they are not a long term client for us. Which is even more exciting, actually. it is part of a joint venture. That we went in to pitch this with another company. So we are a component part of this. But, it is really thrilling because they the provider picked us to partner with because of the work that we do in microgrids And as you can imagine with the Army Corps of Engineers, we think there is a, big addressable market within the government on these types of projects. So hopefully, this is the beginning of a really healthy future over time. Tate Sullivan: Great. Thank you. And a follow-up on aviation. You mentioned cost relief from the customers or seeking cost relief, but the revenue growth has been double digits the last 3 quarters Are you continuing to see good traffic in the airports you work in? Scott Salmirs: Yeah. The I mean, the pipeline's strong. You know, whether or not it will be double digit, we will say more when we talk to you in Q4 as we shape up and look at the pipeline. But we feel really good about that segment. it is been a good performer. And you know, we are in this mode now with fuel costs and some of the pressure on airline profitability that, you know, hopefully, what is going to inure to our benefit is that we have been really good strategic partners. And we have made the concessions that we needed to make. To kind of stabilize and hopefully grow those longer term relationships. So it is it is things that you do in the airline industry when they go through these cycles and, you know, we have all seen them before. So yeah, it is nothing again that is troubling to us over the long term. David Orr: Yeah. Tate, I would add too, obviously, a good chunk of the revenue growth in aviation is start up of the Heathrow contract. In UK, which has been very successful for us. So as Scott said, we are just really, really happy with the growth profile there. We will continue to manage the operational challenges. Tate Sullivan: Thank you. And just on that, you mentioned Heathrow Can you comment on your international mix with the U.K. post the U.K. client exit? that you mentioned? A return to organic growth in B&I with Heathrow or can you quantify the international I would say it has not actually changed a whole lot. David Orr: The loss of the TFL contract is a pretty good balance with the win of the Heathrow contract. So all in all, not a big mix change, but, you know, if you do look at The UK markets specific to itself, we are seeing some healthy growth rates over there. We are continuing to invest in that team. The team's doing a great job of driving growth and profitability, so a great market for us. Tate Sullivan: Okay. Thank you. Operator: Thank you. At this time, I will turn the floor back to Scott for final comments. Scott Salmirs: Well, thanks, everybody, for joining in. Hope you have a happy fall. And everyone's back to work now. Summer's over and we will see you in Q4 with our results and our full-year guide for 2027. But thanks, everybody. Operator: Thank you. This will conclude today's call. Before you buy stock in Abm Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Abm Industries wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,459!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of September 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Abm Industries. The Motley Fool has a disclosure policy. ABM (ABM) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed record quarterly revenue and 27% adjusted EPS growth to the resilience of the diversified portfolio, which offset project timing delays in Technical Solutions and strategic client exits in the B&I segment. A significant strategic pivot is underway toward 'high-tech' sectors—semiconductors, microgrids, and data centers—which now represent 11% of total revenue and carry double-digit blended operating margins. The acquisition of WGNSTAR has moved ABM 'inside the bull's eye' of semiconductor fabrication facilities, providing highly specialized technical capabilities that complement ABM's legacy perimeter services. Operational execution in the Business & Industry (B&I) segment remains disciplined, with management prioritizing client relationships with credible paths to attractive returns over simple revenue maximization. The Northeast remains the strongest commercial real estate market, while Northern California continues to face challenges due to work-from-home trends and a lack of 'people-heavy' business growth despite the AI boom. Aviation segment growth of 12% was driven by the successful startup of the Heathrow contract, though margins faced anticipated pressure from airline clients seeking cost relief due to fuel price volatility. Management raised the full-year free cash flow outlook to approximately $210 million on a reported basis, citing improved working capital management and ERP system stabilization. Technical Solutions (ATS) is expected to see significant sequential improvement in Q4 as deferred microgrid projects from Q3 convert into active revenue. B&I revenue trends are expected to remain similar in Q4, with a projected return to organic growth by mid-fiscal 2027 after lapping a large UK client exit. Data center revenue is expected to accelerate meaningfully in fiscal 2027 and 2028, supported by a pipeline that is currently a multiple of the prior year's levels. The company expects to finalize a $20 million microgrid contract for the Army Corps of Engineers in a joint venture, with execution slated for calendar year 2027. Management expects these sectors to become an increasingly meaningful part of the business because they are growing at double-digit rates compared to GDP-level growth in core segments. The company is actively investing in industry-specific experts and sales associates to capture the 'significant runway' in advanced manufacturing capacity. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The raise is primarily driven by strong working capital performance and the ability to leverage new ERP system capabilities to accelerate collections. Management confirmed the $210 million target is on an 'as reported' basis, reflecting a return to historical cash generation strengths. Management noted that while airlines are seeking cost relief, the pressure appears to be stabilizing with modest sequential margin improvement in the quarter. Strategic shift toward airport-direct contracts (now 60% of segment) provides a buffer against airline-specific financial volatility. ABM has already secured 2-3 cross-sells in a short period, validating the thesis of combining specialized fab services with broad facility management. There is significant white space for growth, as ABM had 50 semiconductor clients prior to the deal while WGNSTAR brought 30+ distinct clients.

Interested in ABM Industries Incorporated? Here are five stocks we like better. Strong quarterly performance: ABM Industries reported record third-quarter revenue of more than $2.3 billion, up 4.2% year over year, while adjusted EPS rose 27% to $1.04. Raised full-year outlook: The company increased its fiscal 2026 adjusted EPS forecast to $3.95–$4.10 and lifted its reported free-cash-flow outlook to approximately $210 million. Growth platforms offset challenges: Semiconductor, microgrid and data-center businesses delivered strong growth, while Aviation margins declined and about $15 million of Technical Solutions projects were deferred primarily into the fourth quarter. Cintas’ $5.2B UniFirst Bid Ignites the Battle for Route Dominance ABM Industries (NYSE:ABM) reported record quarterly revenue and higher adjusted earnings for its third quarter of fiscal 2026, while raising the midpoint of its full-year adjusted EPS outlook and increasing its free-cash-flow forecast. Revenue rose 4.2% year over year to slightly more than $2.3 billion, including 2.1% organic growth and a 2.1% contribution from acquisitions, primarily WGNSTAR. Net income increased 19% to $49.7 million, or $0.84 per diluted share, while adjusted net income rose 19% to $61.5 million. Adjusted diluted EPS increased 27% to $1.04 from $0.82 a year earlier. → 3 Stocks With September Catalysts Investors Shouldn’t Ignore ABM Industries Stock: A Dividend King at a Discount “We had a strong third quarter,” President and Chief Executive Officer Scott Salmirs said, citing record revenue, adjusted EPS growth and improved cash flow despite project timing in Technical Solutions and previously disclosed client exits in the Business & Industry segment. Adjusted EBITDA rose 11% from the prior year to $139.6 million. Segment operating margin improved 40 basis points sequentially to 7.7%, though it was essentially flat year over year. Chief Financial Officer David Orr said operational efficiencies in Business & Industry, Manufacturing & Distribution, and Education were offset by anticipated Aviation pressure and higher amortization tied to the WGNSTAR acquisition. → Why Hewlett Packard Enterprise’s Sell-Off May Not Last Dividend King ABM Industries is on Track for New Highs Third-quarter cash from operations totaled $146.8 million and free cash flow was $128.4 million. For the first nine months, cash from operations reached $275 million and free cash flow totaled $199.6 million, compared with $101 million and $42.4 million, respectively, in the prior-year period. Orr attributed the improvement in part to working-capital management and stabilization of the company’s enterprise resource planning system. During the question-and-answer session, he said ABM used the system’s capabilities to accelerate collections during the quarter. → 3 Earnings Season Winners That Analysts Can't Stop Upgrading The company raised its fiscal 2026 adjusted EPS outlook to a range of $3.95 to $4.10 per share. It continues to expect organic revenue growth of 3% to 4%, toward the upper end of that range, with WGNSTAR expected to add about one percentage point of growth. Total revenue growth is projected at the high end of the company’s 4% to 5% range. ABM modestly updated its segment operating-margin forecast to 7.7% to 7.8%, reflecting year-to-date performance and higher WGNSTAR intangible amortization. Orr said fourth-quarter margins are expected to exceed 8%, supported principally by seasonally stronger Technical Solutions results. The company also raised its reported free-cash-flow outlook to about $210 million, from a prior forecast of $185 million. Normalized free cash flow is expected to be approximately $285 million before transformation and integration costs, the final RavenVolt earn-out and any incremental restructuring. Business & Industry: Revenue declined 2.6%, as expected, due primarily to the second-quarter exit of a large U.K.-based client and other client exits, particularly on the West Coast. Operating profit increased to $75 million from $73.8 million, while margin expanded to 7.4% from 7.1%. Salmirs said the company expects Business & Industry to return to organic growth around the middle of fiscal 2027 after lapping the U.K. client exit. Aviation: Revenue grew 12% to $328.1 million, aided by healthy travel demand and the continued ramp-up of the Heathrow contract. Operating profit fell to $18.4 million from $19.7 million, and margin declined to 5.6% from 6.8%, as airline customers sought cost relief amid higher jet fuel costs. Airports account for about 60% of Aviation revenue, according to Salmirs. Manufacturing & Distribution: Revenue rose 18% to $481 million, including 8% organic growth and a 10% contribution from WGNSTAR. Operating profit increased to $40.5 million from $36.4 million, while margin declined to 8.4% from 8.9%. The decline reflected investments in sales and industry expertise, as well as nearly $4 million in incremental WGNSTAR amortization expense. Education: Revenue increased slightly to $235.8 million. Operating profit rose 9% to $23 million and margin expanded 70 basis points to 9.7%, which Orr attributed to improved labor efficiency and escalation management. Technical Solutions: Revenue increased 4% to $259.9 million, including 2% organic growth. Operating profit rose to $21.5 million from $19.4 million, and margin increased to 8.3% from 7.8%. Technical Solutions growth was constrained by project deferrals involving an important microgrid customer. Salmirs said the client prioritized other capital projects during the third quarter, rather than delaying projects because of interest rates, supply-chain constraints or permitting issues. The company estimated that roughly $15 million of projects were deferred from the third quarter, with nearly all expected to shift into the fourth quarter and a small portion moving into the first quarter of the following fiscal year. Salmirs said ABM was already working on the deferred projects and expects double-digit organic growth in Technical Solutions in the fourth quarter, along with significant sequential improvement in revenue, operating profit and margin. ABM expects to finalize a roughly $20 million microgrid contract for primary backup power for the U.S. Army Corps of Engineers through a joint venture with a strategic partner. The project is expected to be executed in calendar 2027. Salmirs highlighted semiconductor, microgrids and data centers as increasingly meaningful businesses for ABM. Through the first nine months, the three areas generated nearly $775 million of revenue, representing 26% organic growth and about 40% growth including WGNSTAR. Together, they accounted for more than 11% of company revenue and carried a double-digit blended operating margin, according to management. Semiconductor revenue grew 65% organically during the first nine months and more than doubled including nearly two quarters of WGNSTAR. Salmirs said WGNSTAR expands ABM’s ability to provide highly specialized services inside semiconductor fabrication facilities, complementing ABM’s existing services around those facilities. Management said it has already identified several cross-selling opportunities between ABM’s semiconductor customers and WGNSTAR’s client base. Microgrid revenue grew 17% organically through the first nine months, while data center revenue rose 8% organically. Salmirs said the data-center growth rate does not yet reflect the size of ABM’s pipeline and backlog, with a meaningful portion of activity expected to convert into revenue during fiscal 2027 and 2028. Orr said co-location providers are the company’s principal near-term data-center target. Management said roughly 15% to 20% of revenue in the higher-growth technical businesses is project-based. The company aims to expand recurring revenue by converting project clients into longer-term maintenance-contract customers. At quarter-end, ABM had total indebtedness of $1.8 billion, including $22 million in standby letters of credit. Its total debt-to-pro forma adjusted EBITDA ratio was 2.9 times, below the company’s target of three times. Available liquidity totaled $606 million, including $110 million of cash and cash equivalents. During the quarter, ABM also completed a $300 million accounts receivable facility intended to diversify its funding sources and lower its marginal borrowing costs. ABM Industries Incorporated is a leading provider of integrated facility services, offering a comprehensive suite of solutions designed to support the operation, maintenance and enhancement of commercial properties. The company's core services include janitorial and custodial maintenance, HVAC and mechanical systems support, electrical and lighting solutions, and energy optimization. Additional offerings span parking management, security services, landscaping, and specialized support such as technical solutions and sustainability consulting. Serving a diverse range of markets, ABM caters to clients in commercial real estate, aviation, healthcare, manufacturing, education, government entities, and technology campuses. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ABM Industries Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

For the quarter ended July 2026, ABM Industries (ABM) reported revenue of $2.32 billion, up 4.2% over the same period last year. EPS came in at $1.04, compared to $0.82 in the year-ago quarter. The reported revenue represents a surprise of +0.71% over the Zacks Consensus Estimate of $2.3 billion. With the consensus EPS estimate being $1.01, the EPS surprise was +2.97%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how ABM Industries performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenues- Business & Industry: $1.01 billion versus $1.03 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -2.6% change. Revenues- Aviation: $328.1 million versus the two-analyst average estimate of $308.36 million. The reported number represents a year-over-year change of +12.4%. Revenues- Education: $235.8 million versus the two-analyst average estimate of $235.05 million. The reported number represents a year-over-year change of +0.3%. Revenues- Manufacturing & Distribution: $481 million compared to the $438.43 million average estimate based on two analysts. The reported number represents a change of +17.6% year over year. Revenues- Technical Solutions: $259.9 million compared to the $279.91 million average estimate based on two analysts. The reported number represents a change of +4.2% year over year. Operating profit- Business & Industry: $75 million versus $84.91 million estimated by two analysts on average. Operating profit- Aviation: $18.4 million versus $17.95 million estimated by two analysts on average. Operating profit- Manufacturing & Distribution: $40.5 million versus the two-analyst average estimate of $40.89 million. Operating profit- Technical Solutions: $21.5 million versus the two-analyst average estimate of $19.66 million. Operating profit- Education: $23 million versus the two-analyst average estimate of $19.39 million. View all Key Company Metrics for ABM Industries here>>> Shares of ABM Industries have returned -1.8% over the past month versus the Zacks S&P 500 composite's -0.4% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ABM Industries Incorporated (ABM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: Record quarterly revenue of slightly above $2.3 billion, up 4.2% year-over-year, driven by 2.1% organic growth and a 2.1% contribution from acquisitions (primarily WGNSTAR). Net Income: Increased 19% to $49.7 million, or $0.84 per diluted share, compared to $41.8 million, or $0.67 per diluted share, in the prior year. Adjusted Net Income: Increased 19% to $61.5 million, or $1.04 per diluted share, versus $51.7 million, or $0.82 per diluted share, last year (a 27% increase on a per-share basis). Adjusted EBITDA: Increased 11% year-over-year to $139.6 million. Segment Operating Margin: Increased 40 basis points sequentially to 7.7%; essentially flat year-over-year, with margin at 7.8% excluding acquisition-related amortization. Cash Flow: Third-quarter cash from operations was $146.8 million, and free cash flow was $128.4 million. For the first nine months, cash from operations was $275 million, and free cash flow was $199.6 million, an improvement of over $150 million year-over-year. B&I Segment Revenue: Declined 2.6% in the third quarter, as expected, due to client exits. Operating profit increased to $75 million, with margin expanding 30 basis points year-over-year to 7.4%. Aviation Segment Revenue: Grew 12% to $328.1 million. Operating profit was $18.4 million with a margin of 5.6%, down from 6.8% last year due to airline client cost pressures. M&D Segment Revenue: Increased 18% to $481 million, including 8% organic growth and 10% from the WGNSTAR acquisition. Operating profit was $40.5 million with a margin of 8.4% (9.2% excluding incremental amortization). Education Segment Revenue: Rose slightly to $235.8 million. Operating profit increased 9% to $23 million, with margin expanding 70 basis points to 9.7%. Technical Solutions Revenue: Increased 4% to $259.9 million, including 2% organic growth. Operating profit was $21.5 million with a margin of 8.3%, up from 7.8% last year. Interest Expense: $29.5 million in the quarter, up $4.2 million from last year, reflecting larger average debt balances from the WGNSTAR acquisition. Fiscal 2026 Outlook: Raising the midpoint of adjusted EPS guidance to $3.95 to $4.10. Full-year organic revenue growth outlook remains at 3% to 4%, with total growth expected at the high end of the 4% to 5% range. Segment operating margin outlook updated to 7.7% to 7.8%. Free Cash Flow Outlook: Raising full-year reported free cash flow expectations to approximately $210 million (from $185 million), with normalized free cash flow of approximately $285 million. Warning! GuruFocus has detected 7 Warning Signs with ABM. Is ABM fairly valued? Test your thesis with our free DCF calculator. Release Date: September 08, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ABM Industries Inc (NYSE:ABM) delivered record quarterly revenue of over $2.3 billion, with 27% adjusted EPS growth and a 40 basis point sequential improvement in segment margins. The company's high-growth areassemiconductor, microgrids, and data centersgenerated nearly $775 million in revenue year-to-date, growing 26% organically and now represent over 11% of total revenue with double-digit operating margins. Free cash flow improved by over $150 million year-to-date, leading to a raised full-year free cash flow outlook to approximately $210 million on a reported basis. ABM Industries Inc (NYSE:ABM) achieved its leverage target of below 3x a quarter earlier than planned, ending the quarter at 2.9x total debt to pro forma adjusted EBITDA. The company secured a new $20 million microgrid contract with the Army Corps of Engineers, expanding its government and diversification opportunities. Aviation and Manufacturing & Distribution segments delivered strong organic growth of 12% and 8%, respectively, with continued momentum expected into fiscal 2027. Technical Solutions revenue came in below expectations due to project deferrals from an important client, impacting Q3 results despite expectations for a Q4 recovery. Aviation margins were pressured by airline clients seeking cost relief due to elevated jet fuel costs, leading to lower operating profit year-over-year. Business & Industry revenue declined 3% as expected, with continued challenges in Northern California and the impact of client exits, including a large UK-based client. Segment operating margin was essentially flat year-over-year, with pressures in Aviation and higher amortization from the WGNSTAR acquisition offsetting operational efficiencies. The company faces ongoing pricing pressure in the West Coast commercial real estate market, where competitors are bidding at levels ABM is unwilling to match. Interest expense increased by $4.2 million year-over-year due to higher average debt balances from the WGNSTAR acquisition. Q: What is the expected sales mix contribution of high-tech businesses (semiconductors, data centers, microgrids) in a couple of years, and how does their profitability compare to the corporate average? A: Scott Salmirs (CEO) stated that these high-growth areas will continue to become a more meaningful part of the business due to their double-digit growth rates compared to other segments that are closer to GDP growth. He noted that the company is investing in experts and sales associates to support this trajectory. Regarding profitability, he confirmed that these businesses carry a double-digit blended operating margin, which is significantly higher than the company's average, and in many cases, the EBITDA margins in these markets could be double the corporate average. Q: Can you provide more detail on the deferred projects in Technical Solutions, including the line of sight for the fourth quarter ramp? A: Scott Salmirs (CEO) explained that the deferrals in Q3 were approximately $15 million, driven by an important client prioritizing other capital projects. He clarified that this was a timing issue, not a demand issue, and that almost all of the deferred projects are expected to land in Q4, with a small portion moving to Q1 of next year. He confirmed that work has already begun on these projects, and the company expects double-digit organic growth in ATS for Q4. Q: Can you quantify the margin impact from airline concessions in the Aviation segment due to higher fuel costs? A: Scott Salmirs (CEO) declined to provide a specific quantification but stated that the pressure appears to be stabilizing. He noted that margins improved modestly sequentially in Q3, suggesting that a lot of the impact is behind them. He expects the segment to accelerate over time, especially once there is some relief on fuel costs. Q: What is the bridge for intangible amortization this year, and how much falls off next year, particularly related to the WGNSTAR acquisition? A: David Orr (CFO) stated that approximately $12 million of intangible amortization was allocated to this year, with a modest falloff expected next year. He highlighted that WGNSTAR is tracking well above the initial guidance of $120 million to $130 million in annualized revenue, and the enhanced growth rate will help the company outgrow the amortization expense over time. Q: How much of the high-growth end-market revenue is recurring versus project-based, and what is the strategy to shift more toward recurring? A: David Orr (CFO) stated that roughly 15% to 20% of that revenue is currently on a project basis. Scott Salmirs (CEO) explained that the goal is to convert project work into long-term maintenance contracts, which would increase the recurring revenue component. This strategy also positions the company to win future projects as clients expand. Q: Are there any large expense items or surprises to consider for cash flow in fiscal 2027? A: David Orr (CFO) indicated that there are no big expense items out of the ordinary for next year. He highlighted the company's strong cash flow performance, which has allowed it to fund the WGNSTAR acquisition, buy back $100 million in shares, and pay $51 million in dividends, all while driving leverage below 3x. He expects no surprises relative to cash flow next year. Q: What is the strategy for pursuing data center contracts, and is quality uptime the path to expanding services within these facilities? A: Scott Salmirs (CEO) stated that the company has been actively mining the data center area and adding sales resources. The pipeline is currently a multiple of where it was last year, and they expect very healthy double-digit growth over the next two to three years. He confirmed that quality uptime (UPS power) is a critical part of the puzzle for data centers and other clients seeking power generation, as it provides the transition between power outages and generator or microgrid startup. David Orr (CFO) added that co-locators are the main target in the data center space, where the pipeline is growing most robustly. Q: What are the key factors for optimizing the business in the challenging Northern California market, and is this a systemic problem? A: Scott Salmirs (CEO) clarified that this is not a systemic problem and has migrated specifically to Northern California. While Southern California pressures have stabilized, Northern California is experiencing competitors pricing at levels ABM is unwilling to match. He noted that B&I margins were up 30 basis points sequentially, indicating the company is making the right decisions. He expects the trend to reverse by mid-next year, similar to what happened in Southern California. Q: Why is the adjusted EPS midpoint being raised if the margin outlook is slightly lower? A: David Orr (CFO) explained that the raise reflects the company's strong performance through nine months and a clear line of sight on full-year revenue. He noted that the forecast includes a prescriptive approach to margins, with expectations for Q4 margins north of 8%, consistent with the historically strong seasonal performance of the fourth quarter. Q: What is the target mix between airports and airlines in the Aviation segment, and what is the timeframe? A: Scott Salmirs (CEO) stated that while it is hard to predict, a mix of 70% airports and 30% airlines in three to five years would be a positive outcome. He attributed this potential shift to significant infrastructure upgrades at airports, which will require more enhanced, integrated services similar to what ABM provides at LaGuardia. He emphasized that this is not a reflection of weakness in the airline business but rather the growth opportunities in the airport sector. Q: Is the Army Corps of Engineers microgrid award with a long-time customer, and what is the significance of this project? A: Scott Salmirs (CEO) stated that the Army Corps of Engineers is not a long-term client, making the award even more exciting. The project is part of a joint venture where ABM was selected as a partner due to its expertise in microgrids. He believes this opens up a significant addressable market within the government for similar projects, potentially marking the beginning of a healthy future in this area. Q: Is the double-digit revenue growth in Aviation continuing, and what is the outlook for the segment? A: Scott Salmirs (CEO) confirmed that the pipeline remains strong For the complete transcript of the earnings call, please refer to the full earnings call transcript.