One of the world's largest facility services companies, ABM keeps offices, schools, airports, sports venues, and hospitals running by handling janitorial work, engineering, parking, and energy solutions for clients across the country. It began in 1909 when founder Morris Rosenberg spent a few dollars on a bucket and mop and walked San Francisco's Fillmore Street washing shop windows. During the 9/11 attacks, an ABM window washer used his squeegee to cut through drywall and free himself and others from a trapped elevator, and that squeegee now sits in the Smithsonian.
Operating cash flow swung to a $128M six-month inflow from a $74M outflow a year ago as ERP billing delays eased.
Cash flow normalized. rose 8.4% to $2.29 billion and increased 5.6% to $86.9 million, but contracted 0.7 points to 12.1% as contract mix and acquisition costs weighed on profitability. The WGNSTAR acquisition closed, adding debt and revenue, while the restructuring program began to deliver savings.
Key takeaways
rose 8.4% to $2.29 billion, with 6.1% led by Aviation and Technical Solutions and 2.3% from the WGNSTAR and LMC acquisitions.
contracted 0.7 points to 12.1%, driven by unfavorable contract and service mix in Business & Industry, Manufacturing & Distribution, and Aviation, partially offset by restructuring efficiencies.
increased 5.6% to $86.9 million, as growth and a $5.4 million decline in ELEVATE transformation costs were partially offset by $3.1 million in new restructuring charges and acquisition integration costs.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 8.4% to $2.29B on organic growth in Aviation and Technical Solutions, while gross margin fell 72 bps on mix.
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Consolidated Q2 grew 8.4% to $2.29B, with 6.1% led by Aviation and Technical Solutions (energy/microgrid projects) and 2.3% from WGNSTAR and LMC acquisitions.
contracted 72 to 12.1%, driven by unfavorable contract and service mix in B&I, M&D, and Aviation, partially offset by restructuring efficiencies.
Net swung to a $128.2 million inflow for the first six months from a $73.9 million outflow a year ago, driven by improved , collections, and payment timing as the ERP-related billing delays eased.
Total outstanding borrowings rose to $1.9 billion, up from $1.5 billion a year ago, to fund the WGNSTAR acquisition; rose 17.6% on the higher debt load.
The company recorded $3.1 million in restructuring charges during the quarter tied to a program expected to deliver $35 million in annualized savings once fully implemented.
What changed
The ERP-related billing delays that depressed through the first nine months of fiscal 2025 have eased: six-month operating cash flow swung to a $128.2 million inflow from a $73.9 million outflow a year ago, confirming the Q4 2025 recovery.
The WGNSTAR acquisition, flagged as pending in the first half of 2026, closed during the quarter, contributing 2.3 percentage points to growth and adding to , which rose to $1.82 billion.
The $35 million restructuring program launched in Q4 2025 began to show results: SG&A fell 2.3% as ELEVATE transformation costs dropped $5.4 million, though $3.1 million in new restructuring charges partially offset the savings.
continued to decline, falling to 12.1% from 12.3% a year ago, as the strategic pricing on B&I and M&D contract rebids flagged in prior quarters remained the primary pressure.
What to watch
Whether stabilizes near 12.1% or continues to decline as the WGNSTAR acquisition's contract mix flows through and strategic pricing on B&I and M&D rebids persists.
Whether the $35 million in annualized restructuring savings materializes on schedule and offsets the margin pressure, and whether total charges extend beyond the $13.4 million already recorded.
The trajectory of with $1.9 billion in borrowings, and whether the WGNSTAR acquisition's contribution to covers the higher debt service costs.
Whether Technical Solutions' recovers as weather-delayed microgrid projects resume, or whether the adverse service mix represents a structural shift in profitability.
fell 2.3% to $171.1M, helped by a $5.4M drop in ELEVATE transformation costs and lower legal accruals, partially offset by higher compensation and acquisition integration costs.
rose 5.5% to $86.9M; the increase was partially offset by $3.1M in new restructuring charges tied to a program expected to deliver $35M in annualized savings.
Net swung to a $128.2M inflow for the six-month period from a $73.9M outflow last year, driven by improved , collections, and payment timing.
Total outstanding borrowings were $1.9B with $518.9M in remaining capacity; rose 17.6% on higher debt to fund the WGNSTAR acquisition.
A discussion of material developments in our litigation matters occurring in the period covered by this report is found in Note 11, “Commitments and Contingencies,” to the unaudited Consolidated Financial Statements in this Form 10-Q.
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A discussion of material developments in our litigation matters occurring in the period covered by this report is found in Note 11, “Commitments and Contingencies,” to the unaudited Consolidated Financial Statements in this Form 10-Q.
There have been no material changes to the risk factors identified in our Annual Report on Form 10-K for the year ended October 31, 2025, in response to Item 1A., “Risk Factors,” of Part I of the Annual Report.
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There have been no material changes to the risk factors identified in our Annual Report on Form 10-K for the year ended October 31, 2025, in response to Item 1A., “Risk Factors,” of Part I of the Annual Report.