ABM Industries Falls Short On Profit But Beats Sales As Buybacks And Cash Flow Surge

Author: Akanksha Bakshi | September 05, 2025 09:13am

ABM Industries Inc. (NYSE:ABM) reported fiscal third-quarter 2025 revenue of $2.22 billion, up 6.2% from $2.09 billion a year earlier. Analysts expected $2.15 billion.

In addition:

• Technical Solutions revenue rose 19% on higher microgrid volume and acquisitions
• Aviation increased 9% with healthy air travel demand
• Manufacturing & Distribution gained 8% on new client wins and expansions
• Business & Industry advanced 3% on geographic diversification and retention, and
• Education grew 3%.

Adjusted net income was $51.7 million, or 82 cents per diluted share. It missed the 95-cent estimate and was down from $53.6 million, or 84 cents per diluted share, in the prior year.

Adjusted EBITDA increased 5% to $125.8 million, with margins flat at 5.9%.

Operating cash flow jumped 120.1% to $175 million from $79.5 million. Free cash flow rose 134.3% to $150.2 million from $64.1 million. The company said the improvement reflected stronger collections amid its ERP conversion.

Cash and cash equivalents ended the quarter at $69.3 million, while total indebtedness was $1.6 billion, producing a leverage ratio of 2.8x. Available liquidity was $691.0 million.

Also Read: Top Wall Street Forecasters Revamp ABM Expectations Ahead Of Q3 Earnings

During the quarter, ABM repurchased approximately 0.6 million shares for $27.1 million at an average price of $48.77 per share, and another 0.5 million shares for $23.0 million after quarter end. Year-to-date repurchases totaled about 1.5 million shares for $71.3 million.

The board also approved a $150 million increase in the company’s share repurchase authorization, leaving $233 million available. Following the quarter, ABM declared a cash dividend of 26.5 cents per share, payable Nov. 3 to shareholders of record Oct. 2.

The company launched a restructuring program in August aimed at streamlining operations and improving support function efficiency. ABM expects the program to deliver about $35 million in annualized cost savings, with benefits beginning in the fourth quarter and reaching full run rate by early fiscal 2026. Approximately $10 million in restructuring charges are expected in the fourth quarter.

“ABM’s third quarter performance was highlighted by mid-single-digit organic revenue growth and strong free cash flow,” said Scott Salmirs, president and CEO. “Each of our segments once again delivered organic growth, and we secured over $1.5 billion in new bookings through the first three quarters – a 15% increase year-over-year, positioning us for strong revenue and earnings growth in the year ahead.”

Outlook: Looking ahead, ABM narrowed its fiscal 2025 adjusted EPS outlook to $3.65, the low end of its prior $3.65 to $3.80 range and below the $3.75 analyst estimate.

The company also expects an adjusted EBITDA margin of 6.3% to 6.5%. Management said it anticipates that fourth-quarter adjusted EPS and margins will improve meaningfully from the third quarter, supported by restructuring savings and firm performance in Technical Solutions.

Price Action: At the last check on Friday, ABM shares were trading lower by 1.14% at $47.55 premarket.

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Posted In: ABM