We returned to organic growth in both B&I and M&D, significantly improved our cash flow compared to the first quarter and generated $1.1 billion in new bookings during the first half, marking a new record for ABM.
— Scott B. Salmirs
03Detailed Report
ABM
Company ABM
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 29, 2026
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Executive Summary
ABM delivered solid top-line momentum in Q2 2025, supported by a return to organic growth in both the Buildings & Infrastructure (B&I) and Manufacturing & Distribution (M&D) segments, alongside continued strength in Aviation and Education. Total revenue rose 4.6% year-over-year to $2.11 billion, with 3.8% organic growth and contribution from the 2024 Quality Uptime Services acquisition. The quarter featured a larger contribution from Technical Solutions and a rebound in M&D, underscored by a diversified services mix (e.g., material handling and test & balancing) that aims to deepen client relationships and improve margins over time. Management reaffirmed full-year guidance for adjusted EPS of $3.65–$3.80 and projected normalized free cash flow of $250–$290 million, signaling confidence in improving cash generation as ERP-related billing frictions unwind in the second half of the year. Backlog remains healthy at ~$700 million in the Technical Solutions pipeline, with the company reporting $1.1 billion in new bookings in the first half of 2025, a company-wide record. While near-term margin pressure persists in ATS/Microgrid due to project timing and mix, ABM expects a substantial recovery in the second half as delayed projects reaccelerate. The balance sheet shows leverage at ~2.9x debt to pro forma adjusted EBITDA, with liquidity of ~$658 million and free cash flow of $15 million in the quarter, reflecting ERP-related working capital dynamics but improving cash generation as the year progresses.
Key Performance Indicators
Revenue
Increasing
2.11B
QoQ: -0.15% | YoY: 4.63%
Gross Profit
Increasing
257.50M
12.19% margin
QoQ: -0.89% | YoY: 1.10%
Operating Income
Increasing
82.30M
QoQ: 6.06% | YoY: 1.23%
Net Income
Decreasing
42.20M
QoQ: -3.21% | YoY: -3.65%
EPS
Decreasing
0.67
QoQ: -4.29% | YoY: -2.90%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability metrics (Q2 2025 vs Q2 2024):
- Revenue: $2.1117B, up 4.6% YoY; QoQ change -0.15% (per reported metrics).
- Gross Profit: $257.5M; gross margin 12.19% (YoY +1.10%; QoQ -0.89%).
- Operating Income: $82.3M; operating margin 3.90% (YoY +1.23%; QoQ +6.06%).
- Net Income: $42.2M; net margin 1.99% (YoY -3.65%; QoQ -3.21%).
- Diluted EPS: $0.67 (YoY -2.90%; QoQ -4.29%).
- Adjusted metrics: Adjusted Net Income $54.1M, or $0.86 per share; Adjusted EBITDA $125.9M; Adjusted EBITDA margin 6.2% (flat vs prior year).
- Segment mix and growth:
• B&I revenue $1.0B, +3% YoY; op profit $83.0M; margin 8.2% (+40 bps).
• Aviation revenue $260.1M, +9% YoY; op profit $16.5M; margin 6.3% (+80 bps).
• M&D revenue $398.1M, +2% YoY; op profit $39.9M; margin 10% (−110 bps YoY).
• Education revenue $227.8M, +1% YoY; op profit $13.8M; margin 6% (+90 bps).
• Technical Solutions revenue $210.2M, +19% YoY; op profit $13.4M; margin 6.4% (−~3.2 pts vs prior year due to project mix and higher amortization).
- Balance sheet and liquidity:
• Total indebtedness: $1.6B; net debt: $1.609B; debt/Adjusted EBITDA 2.9x.
• Available liquidity: $657.8M; cash and cash equivalents $58.7M.
• Free cash flow (quarter): $15.0M; cash from operations $32.3M; capex $17.1M.
- Cash flow and guidance:
• Normalized FCF guidance for the full year: $250–$290M (excludes $30–$40M of ELEVATE and integration costs and any RavenVolt earn-out).
• ERP implementation progress improving billing and collections; management expects Q3 and Q4 sequential improvements and full-year normalization toward the $250–$290M range.
• Backlog and bookings: backlog in Technical Solutions at ~$700M; first-half new bookings of $1.1B, up 11% YoY; notable $190M new micgrogrid-related project with a major big-box retailer.
• Outlook: Adjusted EPS guidance reaffirmed at $3.65–$3.80; Adjusted EBITDA margin guidance 6.3%–6.5%; tax rate guidance 29–30%; interest expense ~$80–$84M for the year.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.11B
4.63%
-0.15%
Gross Profit
257.50M
1.10%
-0.89%
Operating Income
82.30M
1.23%
6.06%
Net Income
42.20M
-3.65%
-3.21%
EPS
0.67
-2.90%
-4.29%
Key Financial Ratios
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