ABM Industries Q3 Revenue Rises 6.2% YoY, Profit Falls Short, Buybacks and Cash Flow Surge

ABM Industries reported Q3 2025 revenue of $2.22 billion, up 6.2% YoY, beating analyst expectations. However, adjusted net income was $51.7 million, or 82 cents per diluted share, missing the 95-cent estimate and down from $53.6 million 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, and free cash flow rose 134.3% to $150.2 million. The company repurchased approximately 0.6 million shares for $27.1 million and increased its share repurchase authorization by $150 million.

ABM Industries Incorporated (NYSE: ABM) released its third quarter 2025 earnings report on September 5, 2025. The facilities services provider reported a 6.2% year-over-year (YoY) revenue growth, reaching $2.2 billion, which exceeded analyst expectations. However, adjusted net income fell to $51.7 million, or 82 cents per diluted share, missing the 95-cent estimate and down from $53.6 million in the prior year. The company's adjusted EBITDA increased by 5% to $125.8 million, with margins remaining flat at 5.9%.

Operating cash flow surged by 120.1% to $175 million, while free cash flow rose by 134.3% to $150.2 million. ABM repurchased approximately 0.6 million shares for $27.1 million and increased its share repurchase authorization by $150 million.

The company's strong performance in the quarter was driven by robust demand for electrification-related services in its Technical Solutions segment, which grew by 19.0%. The Aviation and Manufacturing & Distribution segments also contributed to the revenue growth, with respective increases of 8.7% and 8.4%. The Business & Industry segment, which accounts for 47% of total revenue, grew by 2.8%, and the Education segment saw a 3.0% increase.

Despite the revenue growth, ABM faced margin pressures from strategic pricing actions and client retention efforts. The company announced a restructuring program expected to deliver a minimum of $35 million in annual run-rate savings. This initiative is aimed at improving profitability amid rising costs.

ABM's stock fell 5.41% in premarket trading to $45.50 following the earnings release, reflecting investor concerns about the company guiding to the lower end of its full-year outlook despite the revenue growth.

The company provided an updated outlook for fiscal year 2025, guiding to the low end of its previously announced ranges. ABM now expects adjusted net income per diluted share to be at the low end of $3.65 to $3.80 and adjusted EBITDA margin to be at the low end of 6.3% to 6.5%.

References:
[1] https://www.investing.com/news/company-news/abm-industries-q3-2025-slides-revenue-up-5-initiates-restructuring-program-93CH-4226848
[2] https://finance.yahoo.com/quote/ABM/earnings/ABM-Q3-2025-earnings_call-354047.html