The EPS miss and margin compression are tempered by strong revenue growth and reaffirmed guidance. Watch for H2 margin recovery commentary on the call — if management signals ATS/M&D volume improvement and cost savings are on track, the stock could recover. The elevated leverage (3.2x) and interest expense guidance increase ($110M vs prior $95-105M) are headwinds.
Price Chart
Executive Summary
ABM reported fiscal Q2 2026 revenue of $2.29B (+8.4% YoY, record), beating consensus of $2.21B, but adjusted EPS of $0.90 missed the $0.92 Street estimate. Net income improved to $43.1M from $42.2M, and adjusted EBITDA rose to $131.7M. The company reaffirmed its full-year adjusted EPS guidance of $3.85-$4.15 and narrowed organic/total revenue growth to the top end of prior ranges, while segment operating margin guidance was pushed to the low end. The stock will likely trade flat to slightly down on the EPS miss and margin compression, partially offset by strong top-line growth and cash flow.
Key Financial Metrics
Key Facts
- Q2 revenue of $2.29B (+8.4% YoY) was a second-quarter record and beat consensus of $2.21B
- Adjusted EPS of $0.90 missed Street consensus of $0.92 (miss of ~2.2%)
- GAAP EPS of $0.73 beat prior year $0.67 (+9.0%)
- Adjusted EBITDA rose to $131.7M from $125.9M (+4.6%)
- Segment operating margin compressed to 7.3% from 7.9% a year ago
- Record first-half new sales bookings of $1.2 billion
- FY2026 adjusted EPS guidance reaffirmed at $3.85-$4.15; organic revenue growth guided to top end of 3%-4%
- Total leverage ratio increased to 3.2x from 2.9x in Q1 due to WGNSTAR acquisition debt
- Operating cash flow of $66.2M and free cash flow of $22.4M, both improved YoY
- Quarterly dividend of $0.29 per share declared, payable August 3, 2026
Financial Impact
Revenue beat by ~$80M (+3.6% vs consensus), but adjusted EPS missed by $0.02 (-2.2%). Margin compression of 60bps YoY in segment operating margin signals ongoing cost headwinds from new contracts and ramp inefficiencies.
Risk Factors
- Segment operating margin compression from 7.9% to 7.3% YoY, with guidance at low end of 7.8%-8.0%
- Leverage ratio increased to 3.2x from 2.9x, with interest expense guidance raised to ~$110M
- B&I segment revenue flat YoY, with operating profit down 7.6%
- Adjusted net income declined YoY ($52.9M vs $54.1M) despite higher revenue
- Higher amortization ($15.9M vs $13.2M) and interest ($28.1M vs $23.9M) from WGNSTAR acquisition
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001193125-26-258367 |
| Document: abm-20260605.htm | 0001193125-26-258367 |
| Document: 0001193125-26-258367-index-headers.html | 0001193125-26-258367 |
| Document: 0001193125-26-258367-index.html | 0001193125-26-258367 |
| Document: 0001193125-26-258367.txt | 0001193125-26-258367 |
| 8-K Data (Synthetic) | 0001193125-26-258367 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 13d ago | Press Release | $50.69 | awaiting T+20 | — | $54.19 (+6.91%) |
Sep 30, 2026 26d ago | Court Ruling | $48.46 | awaiting T+20 | — | $54.19 (+11.83%) |
Sep 8, 2026 6w ago | 8-K | $50.60 $48.40 | ▼ −4.35% | ▼ −6.31% | $54.19 (+7.10%) |
Aug 4, 2026 11w ago | Institutional Cluster | $49.18 $46.41 | ▼ −5.63% | ▼ −4.39% | $54.19 (+10.20%) |
Jul 17, 2026 14w ago | Insider Cluster | $47.23 $47.72 | ▲ +1.04% | ▼ −3.08% | $54.19 (+14.75%) |
Jun 14, 2026 19w ago | Institutional Cluster | $44.00 $45.36 | ▲ +3.09% | ▲ +3.84% | $54.19 (+23.17%) |
Jun 5, 2026 20w ago | 8-K | $42.54 $44.40 | ▲ +4.37% | ▲ +2.51% | $54.19 (+27.40%) |
Jun 5, 2026 20w ago | Press Release | $42.54 $44.40 | ▲ +4.37% | ▲ +2.51% | $54.19 (+27.40%) |
May 22, 2026 22w ago | Press Release | $40.19 | awaiting T+20 | — | $54.19 (+34.85%) |
Mar 30, 2026 30w ago | Court Ruling | $37.75 $39.28 | ▲ +4.05% | ▼ −5.37% | $54.19 (+43.55%) |
US Market Status
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