ABM Industries Reports 2.2% Revenue Growth to $2.11 Billion for Quarter Ended January 31, 2025

ABM Industries Incorporated reported a revenue increase of $45.3 million, or 2.2%, for the three months ended January 31, 2025, reaching $2,114.9 million compared to $2,069.6 million in the same period last year. The growth was attributed to a combination of organic growth of 1.6% and acquisition growth of 0.6%, with notable contributions from the Technical Solutions segment, which benefited from higher project revenues related to microgrid systems. However, this increase was partially offset by customer attrition in the Business & Industry (B&I) and Manufacturing & Distribution (M&D) segments.

Operating profit for the quarter rose to $77.6 million, an increase of $3.5 million from the previous year, driven by revenue growth and operational efficiencies. The gross margin improved to 12.3%, up from 11.8% in the prior year, primarily due to a favorable contract and service mix. However, the company faced increased selling, general, and administrative expenses, which rose by 9.3% to $169.0 million, largely due to higher compensation costs associated with headcount expansion and legal settlements.

ABM's effective tax rate increased to 21.4% from 17.3% year-over-year, influenced by discrete items related to non-U.S. operations. The company reported a net income of $43.6 million, down from $44.7 million in the prior year, reflecting the impact of increased expenses and a higher tax provision. Additionally, net cash used in operating activities significantly increased to $106.2 million, compared to a minimal cash usage of $0.1 million in the same quarter last year, primarily due to working capital changes linked to the implementation of a new ERP system.

Strategically, ABM completed the acquisition of Quality Uptime Services, contributing $12.7 million in revenue during the quarter. The company continues to focus on its ELEVATE strategy, which aims to enhance client and team member experiences while leveraging technology for operational improvements. As of January 31, 2025, ABM had total outstanding borrowings of $1.5 billion under its Amended Credit Facility, with a borrowing capacity of $238.0 million.

Looking ahead, ABM anticipates improvements in operating cash flows as the new ERP system stabilizes and invoicing delays are resolved. The company remains committed to its growth strategy, including potential future acquisitions, while managing its financial obligations and maintaining compliance with its credit facility covenants.