ABM INDUSTRIES INC /DE/ has recently released its 10-Q report. ABM Industries Incorporated, through its subsidiaries, provides facility maintenance, engineering, and infrastructure services in the United States and abroad. Its five reportable segments are Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions, covering services from janitorial and parking to airline support, mechanical and electrical work, EV charging infrastructure, and microgrid systems.
In Item 2, management said the quarter reflected continued work under its ELEVATE transformation and systems modernization plan, launched in 2021, alongside a new restructuring program started in the fourth quarter of 2025. ABM said the restructuring program is expected to generate about $35.0 million in annualized cost savings once fully implemented in 2026, and it had recognized $20.1 million of cumulative restructuring charges through the second quarter of 2026.
For the three months ended April 30, 2026, revenue rose 8.4% to $2.290 billion from $2.112 billion a year earlier. Organic growth contributed 6.1 percentage points and acquisitions added 2.3 points, with management citing net new business and expansion with existing customers, especially in Aviation, plus higher battery energy storage, energy infrastructure, and microgrid projects in Technical Solutions; the WGNSTAR and LMC acquisitions added $48.5 million of revenue.
Operating profit increased to $86.9 million from $82.3 million. Gross margin narrowed to 12.1% from 12.8%, as operating expenses climbed 9.3% to $2.013 billion, while selling, general and administrative expenses fell 2.3% to $171.1 million.
Interest expense increased 17.6% to $28.1 million, driven by higher borrowings under the Amended Credit Facility, including the First Incremental Term Loan, used to fund the WGNSTAR acquisition and working capital needs. Income before taxes was essentially flat at $59.7 million versus $59.8 million, and net income rose 2.1% to $43.1 million from $42.2 million.
For the six months ended April 30, 2026, operating cash flow improved to $128.2 million from a cash outflow of $73.9 million in the prior-year period, a swing of $202.1 million. ABM said the improvement was mainly due to better working capital, including improved cash collections and payment timing.
Capital returns during the six-month period included $34.2 million of dividends paid and $0.580 per common share declared, along with repurchases of 0.1 million shares for $3.0 million, excluding excise taxes, in the second quarter. At April 30, 2026, outstanding borrowings under the Amended Credit Facility totaled $1.9 billion, and borrowing capacity was $518.9 million.
By segment, Business & Industry revenue was essentially unchanged at $1.016 billion, but operating profit fell 7.6% to $76.7 million. Manufacturing & Distribution revenue rose 16.5% to $463.8 million, Aviation revenue rose 19.5% to $310.8 million, Education revenue increased 1.9% to $232.2 million, and Technical Solutions revenue climbed 27.2% to $267.3 million. Following these announcements, the company's shares moved 7.82%, and are now trading at a price of $43.00. For the full picture, make sure to review ABM INDUSTRIES INC /DE/'s 10-Q report.
