ABM INDUSTRIES INC /DE/ has recently released its 10-Q report. ABM Industries Incorporated, through its subsidiaries, provides facility maintenance, engineering, infrastructure, janitorial, parking, and related support services in the United States and abroad. Its five reportable segments are Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions, and the company is headquartered in New York, New York.
In Item 2, Management’s Discussion and Analysis said ABM’s multiyear ELEVATE transformation and systems modernization plan, launched in 2021, is now being used to turn modernization work into operating gains. The company also launched a Restructuring Program in the fourth quarter of 2025 aimed at streamlining support functions and aligning costs with growth objectives; ABM said the program is expected to produce about $35.0 million in annualized cost savings once fully implemented in 2026, and it had recognized $28.0 million of cumulative restructuring charges through the third quarter of 2026.
For the three months ended July 31, 2026, revenue rose 4.2% to $2.317 billion from $2.224 billion a year earlier. ABM said the increase reflected 2.1% organic growth and 2.1% acquisition growth, with a $45.6 million contribution from the WGNSTAR and LMC acquisitions; the organic gain came from new business and expanded work in Aviation and Manufacturing & Distribution, partly offset by client attrition in Business & Industry and lower microgrid project revenue in Technical Solutions.
Operating profit increased 9.6% to $91.5 million from $83.4 million. Gross margin was unchanged at 12.3%, while selling, general and administrative expenses fell 3.5% to $171.3 million, helped by a $7.3 million drop in compensation and related costs tied to reduced headcount from the Restructuring Program and a $4.8 million decline in discrete transformational costs, partly offset by $4.2 million of systems go-live costs. Amortization of intangible assets rose 15.8% to $15.5 million, mainly from intangibles acquired in the WGNSTAR deal, and interest expense climbed 16.6% to $29.5 million because of higher borrowings under the amended credit facility, including the First Incremental Term Loan, used to fund the acquisition and working capital.
Net income rose 18.9% to $49.7 million from $41.8 million. The effective tax rate fell to 21.3% from 29.6%, with ABM citing discrete tax benefits, mainly research and development credits and enhanced WOTC. Other comprehensive income included a $2.5 million gain on interest rate swaps and a $2.3 million foreign currency translation loss.
For the nine months ended July 31, 2026, operating cash flow improved to $275.0 million from $101.0 million a year earlier, a gain of $174.0 million. ABM said the improvement was driven mainly by better working capital, including improved collections and timing of payments. During the period, the company paid $51.2 million in dividends and declared dividends totaling $0.87 per common share. At July 31, 2026, total outstanding borrowings were $1.8 billion, and ABM said it had up to $495.3 million of borrowing capacity.
By segment, Business & Industry revenue fell 2.6% to $1.012 billion, but operating profit rose 1.5% to $75.0 million and margin improved to 7.4% from 7.1%. Manufacturing & Distribution revenue climbed 17.6% to $481.0 million and operating profit rose 11.4% to $40.5 million, though margin slipped to 8.4% from 8.9%. Aviation revenue increased 12.5% to $328.1 million, while operating profit declined 6.9% to $18.4 million and margin fell to 5.6% from 6.8%. Education revenue was essentially flat at $235.8 million, with operating profit up 8.7% to $23.0 million. Technical Solutions revenue rose 4.2% to $259.9 million, and operating profit increased 10.8% to $21.5 million. The market has reacted to these announcements by moving the company's shares 7.33% to a price of $50.50. If you want to know more, read the company's complete 10-Q report here.
