ABM Industries reported a 6% increase in sales for the third quarter.

ABM Industries (NYSE:ABM) announced its fiscal 2025 Q3 earnings on September 5, 2025, reporting revenue of $2.2 billion (, a 6.2% increase compared to the same period last year ), net income of $41.8 million, and adjusted EBITDA of $125.8 million (, a 5% increase from the same period last year ), with free cash flow reaching $150 million. The organic growth rate reached 5%, and the management announced a $35 million restructuring to address margin compression and support future profitability. The following highlights provide insights into the company's strategic execution, margin trends, and cost-cutting measures.

ABM Industries' organic growth rate outperforms its peers

In the first nine months of 2025, the order volume exceeded 1.5 billion Dollars, representing a 15% increase compared to the same period last year. Organic growth was achieved across all major segments, including aviation, manufacturing & distribution (M&D), and technical solutions. Despite a slow recovery in some commercial office areas in the United States, which has put pressure on profit margins, the company's core facility solutions business remained strong.

“It is important to recognize that our strategy is working. Despite some of our peers in the U.S. cleaning and maintenance industry recently reporting significant decreases in organic revenue, we achieved mid-level organic growth this quarter.”

– Scott Sarmilz, President and CEO

This performance demonstrates ABM Industries' ability to gain market share and effectively execute its strategies, enhancing long-term investment value compared to weaker competitors.

Strategic pricing leads to lower profit margins but secures contracts

Business and Industry (BNI) and M&D, among others, have experienced a decline in short-term profit margins due to price concessions and renegotiations in particularly pressured markets. The profit margin of BNI decreased from 7.7% to 7.1% year-on-year, while M&D's profit margin decreased from 10.9% to 8.9%. However, these measures have secured long-term contract extensions with key customers and provided revenue stability during market fluctuations.

“We have truly engaged deeply with our customers, resulting in long-term contracts. Similarly, we have started to walk alongside customers who consider us as strategic partners. In both cases, we have maintained our position. Both of these were significant long-term customers. We believe this is a very positive outcome for us. As those who have followed us for years know, we have always recovered our profit margins. It may be a bit painful at this moment, but when we look back a year from now, we should be very excited about where we stand in terms of profit margins.”

– Scott Salmirs, President and Chief Executive Officer

ABM Industries is building a foundation for future profit expansion by temporarily prioritizing long-term customer relationships with low profit margins, which enables escalation and operational efficiency.

Aiming for annual savings of 35 million Dollars through the restructuring program

In August 2025, the company implemented a restructuring program aimed at reducing costs by 35 million dollars annually with an initial cost of 10 million dollars. In response to rising interest expenses, pressure on profit margins, and ongoing investments, the initial focus is on the organizational structure, and further opportunities for cost reduction are being considered.

“This program is designed to align our cost structure and footprint more closely with growth priorities, initially focusing on the organizational structure. The measures implemented are expected to achieve annual savings of $35 million at a cost of approximately $10 million.”

– David Orr, Executive Vice President and Chief Financial Officer

This initiative is expected to strengthen ABM Industries' competitiveness and financial condition, support the improvement of profit margins, and enhance long-term shareholder value.

Future Outlook

The management expects that the effects of the restructuring and the strong performance of the technical solution segment (ATS) will significantly improve revenue and profit margins in the fourth quarter. For the full year, the adjusted EPS is anticipated to be at the lower end of the guidance range of $3.65 to $3.80, and the adjusted EBITDA margin ( non-GAAP) is expected to be at the lower end of the range of 6.3% to 6.5%. Capital allocation will continue to prioritize share buybacks, supported by an increased approved amount of $233 million.