ABM Industries Cleans Up In Q2: Revenue Soars Past Estimates On Tech, Aviation Growth

ABM Industries Inc. ABM shares are trading higher after the company reported second-quarter FY25 earnings.

Revenue grew 4.6% year over year (Y/Y) to $2.11 billion, beating the consensus of $2.06 billion. This was led by organic growth of 3.8% and a 0.8% contribution from acquisitions.

Revenue growth was driven by Technical Solutions (+19.3% Y/Y) and Aviation (+9.2% Y/Y), with Business & Industry revenue rising 2.6% Y/Y.

ABM CEO Scott Salmirs said the company secured $1.1 billion in new bookings through the first half of the year. That’s an 11% increase year over year.

Operating profit rose 1.2% Y/Y to $82.3 million in the quarter. Adjusted EBITDA rose to $125.9 million from $121.0 million a year ago quarter, with the adjusted EBITDA margin stood at 6.2% (flat Y/Y).

Adjusted EPS of 86 cents was in line with the consensus.

Notably, following discussions with SEC, the company revised its non-GAAP financial measures to include “prior year self-insurance adjustments” (net changes to prior claims reserves), which applies to second quarter 2025 results and retroactively to all periods for comparability.

Consequently, the second quarter 2024 results-adjusted financials now show $4.3 million (or $0.05/share) in unfavorable prior-year self-insurance adjustments as corporate costs; the change didn’t impact  second quarter 2025.

Net cash used in operating activities was $32.3 million, and free cash flow was $15.2 million, primarily reflecting an increase in working capital due to the transition to the new enterprise resource planning (ERP) system.

As of quarter-end, ABM held cash and cash equivalents of $58.7 million.

Dividend: ABM declared a cash dividend of $0.265 per common share, payable on August 4. Shareholders must be on record as of July 3, 2025.

FY25 Outlook: ABM reiterated the adjusted EPS outlook at $3.65 to $3.80 versus the consensus of $3.77.

The company continues to see an adjusted EBITDA margin of 6.3%- 6.5%.

Salmirs added, "We remain constructive on the outlook for our core markets, particularly high-quality office buildings, manufacturing and distribution facilities, commercial aviation, and microgrids. Further, projects delayed in the second quarter are expected to be realized in the third quarter."

Investors can gain exposure to the stock via VanEck Environmental Services ETF EVX and Listed Funds Trust Dividend Performers ETF IPDP.

Price Action: ABM shares are up 0.06% at $51.26 premarket at the last check Friday.

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