- Record Quarterly Revenue: Q4 2025 revenue hit $2.3 billion, up 5.4% YoY with 4.8% organic growth.
- Strategic Acquisition: Acquired WGNSTAR for technical workforce expansion, adding 1,300+ employees and boosting semiconductor sector presence.
- 2026 Guidance: Organic revenue growth of 3-4%, adjusted EPS $3.85-$4.15, and segment operating margin of 7.8-8%.
- Share Repurchases: $73 million spent in Q4, reducing shares by 4% annually, with $681.6 million in liquidity.
- High-Margin Segment Performance: Technical Solutions revenue surged 16% to $298.7 million with 12.4% operating margin.
Segment Performance
The company's segment performance was mixed, with B&I revenue up 2% to over $1 billion, and operating profit margin at 7.7%. Aviation revenue grew 7% to $296.7 million, with an operating profit margin of 5.7%. Technical Solutions revenue increased 16% to $298.7 million, with an operating profit margin of 12.4%. Education revenue rose 2% to $233.7 million, with an operating profit margin of 8%. These results demonstrate the company's diversified revenue streams and ability to grow across various segments.
Acquisition and Growth Prospects
The acquisition of WGNSTAR, a leading provider of managed technical workforce solutions, is expected to close in the first calendar quarter of 2026 and will contribute roughly 1 additional point of revenue growth. ABM expects organic revenue growth of 3% to 4% in fiscal 2026, with adjusted EPS in the range of $3.85 to $4.15. The introduction of a new metric, segment operating margin, is expected to be between 7.8% and 8% for fiscal 2026.
Valuation and Financial Health
With a P/E Ratio of 15.97 and EV/EBITDA of 9.97, the market appears to have priced in moderate growth expectations. The company's financial health is solid, with a total debt to pro forma adjusted EBITDA ratio of 2.7x and available liquidity of $681.6 million. Analysts estimate next year's revenue growth at 4.8%, which is slightly higher than the company's guidance. The company's share repurchase program has reduced its outstanding share count by 4% in fiscal 2025.
Outlook
ABM's strong Q4 2025 results and guidance for fiscal 2026 demonstrate the company's ability to drive growth through a combination of organic initiatives and strategic acquisitions. The WGNSTAR acquisition is expected to enhance ABM's technical capabilities and strengthen its position in the semiconductor sector. With a Dividend Yield of 2.51% and a Free Cash Flow Yield of 5.9%, the stock appears to offer a relatively attractive return profile.