ABM Industries Surpasses Q2 Revenue Expectations, Reports 6.2% YoY Growth

ABM Industries reported Q2 CY2025 revenue of $2.22 billion, up 6.2% YoY, and a non-GAAP profit of $0.82 per share, 13.6% below analyst estimates. The company's operating margin was 3.8%, up from 1.8% in the same quarter last year, and free cash flow margin was 6.8%, up from 3.1% in the same quarter last year. ABM reiterated its full-year Adjusted EPS guidance of $3.72 at the midpoint.

ABM Industries (ABM) reported its Q2 CY2025 earnings, revealing a robust revenue performance that exceeded analyst expectations. The company reported revenue of $2.22 billion, representing a 6.2% year-over-year (YoY) increase, which beat the consensus estimate of $2.16 billion by 3%. However, the non-GAAP profit per share was $0.82, falling short of the analyst estimate of $0.95 by 13.6%.

Operational margins improved significantly, with the company's operating margin rising to 3.8% from 1.8% in the same quarter last year. Additionally, the free cash flow margin increased to 6.8% from 3.1% in the same quarter last year. ABM reiterated its full-year adjusted EPS guidance of $3.72 at the midpoint.

The strong revenue growth can be attributed to the company's strategic focus on high-growth verticals such as microgrids and aviation, as well as its ability to capture incremental demand through value-added services and cross-segment contract bundling. The company's segment-level execution and operational discipline have positioned it to navigate sector volatility effectively.

While the company's operating margins and free cash flow margins have improved, the non-GAAP profit per share missed analyst expectations. This could be due to the company's focus on strategic investments in innovation and technology-enabled services, which may have temporarily impacted margins. However, the company's long-term growth trajectory remains promising, with a robust backlog and improved cash flow dynamics.

ABM Industries' Q2 CY2025 results indicate that the company is well-positioned to navigate the challenges of the industrial services sector. Its focus on innovation, technology-enabled services, and ESG alignment positions it well for long-term growth, despite short-term margin pressures and cash flow challenges. Investors should monitor the company's progress in ERP-related cost normalization and the sustainability of its adjusted EBITDA margins to gauge its progress.

References:
[1] https://www.ainvest.com/news/abm-industries-q2-earnings-preview-revenue-growth-expected-industry-trends-2509/
[2] https://www.ainvest.com/news/abm-industries-navigating-sector-headwinds-strategic-resilience-q2-2025-2509/
[3] https://stockstory.org/us/stocks/nyse/abm/news/earnings/abm-nyseabm-exceeds-q2-expectations