ABM Industries Q2 2025: Navigating Contradictions in Cash Flow, Growth, and Market Trends

Free cash flow and cash collection expectations, organic growth in B&I business, pricing strategy in M&D segment, organic growth in M&D segment, and back-to-office trends are the key contradictions discussed in ABM Industries' latest 2025Q2 earnings call.



Revenue Growth and Segment Performance:
- ABM Industries reported $2.1 billion in revenue for Q2 2025, with 3.8% organic growth.
- The growth was driven by improvements in B&I and M&D segments returning to organic growth, along with strong performance in Technical Solutions and Aviation sectors.

New Business Winning and Expansions:
- The company secured $1.1 billion in new bookings in the first half of the year, marking a new record, including a $190 million project from a major big box retailer for microgrid build-out.
- This was supported by strategic wins in B&I and M&D segments and new projects in Technical Solutions, driven by their expertise in microgrids and energy storage systems.

Cash Flow Improvement:
- ABM's free cash flow improved by $138 million compared to Q1 2025, with a projected range of $250 million to $290 million for the full year.
- The improvement was attributed to progress in ERP conversion and expected sequential improvement in cash flow for Q3 and Q4.

Office Market Recovery:
- The B&I segment reported 3% organic growth, with prime office space in the Northeast and Midwest showing low vacancy rates.
- This recovery was driven by favorable demand trends in prime commercial office space, favoring high-quality amenities-rich buildings.