Detailed Narrative
Financial Results & Profitability
Revenue grew 8.4% YoY to a Q2-record $2.3B, comprising 6.1% organic growth and 2.3% from acquisitions (primarily WGNSTAR). GAAP net income was $43.1M, or $0.73 per diluted share, up from $42.2M and $0.67 a year ago, with per-share results boosted by recent share repurchases. Adjusted net income was $52.9M ($0.90 per diluted share) versus $54.1M ($0.86) last year, the decline reflecting higher interest and amortization expense partly offset by lower tax and corporate costs. Adjusted EBITDA rose $5.8M to $131.7M. Segment operating margin was 7.3%, up 20bps sequentially but down 60bps YoY, pressured by contracts that came online last year in M&D and B&I and by WGNSTAR-related amortization.
Business & Industry and the West Coast / Office Recovery
B&I revenue was essentially flat at $1.0B, with U.K. strength offset by the mid-quarter exit of a large U.K.-based client (TfL) and other client exits, particularly on the West Coast. Management framed the West Coast weakness — vacancy rates in L.A., San Francisco and Seattle running '2 or 3x worse than New York City' — as episodic and tied to competitors making uneconomic pricing decisions ABM won't match. Nationally, U.S. office leasing is approaching 2019 levels, net absorption turned significantly positive (strongest since 2020), and the construction pipeline is nearly 90% below its 2020 peak, favoring the prime assets where ABM concentrates. Recent wins include the new headquarters of the nation's largest bank and a facilities contract with another leading commercial bank.
Semiconductor / M&D and the WGNSTAR Integration
M&D grew 17% to $463.8M (7% organic plus 9% from WGNSTAR), driven by technology-sector wins and client expansions. Management cited over $645B of announced U.S. semiconductor investment across 140-plus projects since 2020. WGNSTAR extends ABM from outside-the-fab services into inside-the-fab work; combined, semiconductor revenue doubled YoY with high double-digit organic growth in Q2 and tens of millions of dollars of new business secured. ABM now serves 60+ semiconductor clients across 300+ sites, is in 75% of U.S./European fab makers, and works with 7 of the ~10 large OEMs. Semiconductors plus data centers together represent about 7% of total ABM revenue.
Technical Solutions — Energy, Microgrids and Data Centers
ATS revenue rose 27% to $267.3M (22% organic, 6% acquisitions), on robust data-center activity and strong battery energy storage and HVAC project work; U.S. battery-storage installations were up 52% in 2025 and AI is accelerating data-center construction at a double-digit pace. Q2 mix skewed toward equipment-intensive infrastructure projects (the lower-margin 'turning the wrenches' phase) rather than higher-margin design/engineering, holding margin at 6.3% versus 6.4% despite profit rising to $16.8M from $13.4M. A significant new microgrid contract with a major big-box retailer supports a stronger, better-mixed second half, and management sees a multiyear growth cycle across energy resiliency, electrification and AI infrastructure.
Aviation, Education and Cash / Balance Sheet
Aviation revenue grew 20% to $310.8M on healthy travel demand (TSA throughput near 3M passengers/day) and the new Heathrow contract, though margin fell to 5.3% from 6.3% on weather costs, TSA-driven disruptions, scope changes and Heathrow ramp costs; wins at Orlando, Miami and LaGuardia Terminal B build the pipeline. Education rose 2% to $232.2M with operating profit up 19% and margin up 100bps to 7% on labor efficiency and escalation management, aided by a $25M Detroit Public Schools ABM Performance Solutions contract (fully online in Q4) and a University of Miami expansion. The balance sheet showed total indebtedness of $1.9B (including $23M standby letters of credit), 3.2x leverage, and $614M liquidity (including $95M cash); H1 free cash flow swung to positive $71.2M from negative $107.8M, a ~$180M improvement on working-capital management and ERP stabilization.