APi recently released its 10-Q report. APi Group Corporation provides fire and life safety, security, elevator and escalator, and specialty contracting services across North America, Europe, Asia-Pacific, and other markets. The company operates through two reportable segments, Safety Services and Specialty Services, and serves end markets including high tech, advanced manufacturing, healthcare, fulfillment and distribution, and critical infrastructure.
In Item 2, management says the MD&A should be read alongside the interim condensed consolidated financial statements, the 2025 audited annual financial statements, and the 2025 Form 10-K. APi says it prepares its statements under GAAP and uses EBITDA as a non-GAAP measure to supplement results, with a reconciliation to GAAP provided in the report.
APi describes itself as a business services company with more than 600 locations in over 20 countries. Within Safety Services, it provides fire and life safety solutions, electronic security systems, and elevator and escalator services, including design, installation, inspection, service, and monitoring. Specialty Services covers specialty contracting, fabrication and distribution, and infrastructure and utility services, with a focus on high tech services, healthcare, and critical infrastructure.
Management points to several factors that can affect results, including economic and market conditions, tariffs on imported goods, labor costs, supply chain disruptions, and foreign currency movements. APi says higher tariffs can raise the cost of materials used in projects and reduce project activity, while competition for skilled labor can pressure margins and service delivery. It also notes that its businesses are seasonal and cyclical, with net revenues typically lower in the first and second quarters because of weather-related delays in North America.
For the three months ended June 30, 2026, net revenues rose to $2.254 billion from $1.990 billion a year earlier, up $264 million, or 13.3%. APi said the increase came from stronger inspection, service and monitoring revenue, robust project revenue growth, acquisitions completed in the prior 12 months, and pricing improvements.
Gross profit increased to $703 million from $615 million, up $88 million, or 14.3%. Gross margin improved to 31.2% from 30.9%, a gain of 30 basis points, with management citing disciplined customer and project selection and pricing improvements, partially offset by project and business mix.
SG&A expenses rose to $528 million from $472 million, an increase of $56 million, but fell to 23.4% of net revenues from 23.7%. Excluding amortization, SG&A was $461 million, or 20.5% of net revenues, versus $417 million, or 21.0% a year earlier. APi said the higher SG&A was driven by acquisitions, intangible asset amortization, non-recurring systems and business enablement expenses, and growth investments.
Operating income increased to $175 million from $143 million, up $32 million, or 22.4%. Income before taxes rose to $138 million from $108 million, and net income increased to $99 million from $77 million. Interest expense, net was $36 million, down slightly from $37 million, reflecting lower floating rates and derivative benefits, partly offset by higher debt balances. Following these announcements, the company's shares moved 1.08%, and are now trading at a price of $38.865. For more information, read the company's full 10-Q submission here.
