A maker of fire-protection and safety services, it installs, inspects, and services fire alarms, sprinklers, elevators, and security systems for hospitals, factories, and data centers. It began in 1926 as an insulation arm of a St. Paul, Minnesota mechanical company, and "APi" comes from its original name, Asbestos Products Inc. It has grown by buying hundreds of smaller contractors since 2005.
Safety Services margin held at 17.0% as Specialty Services revenue rose 22.9%, driving consolidated revenue up 13.3% to $2.25B.
Safety Services margin held at 17.0%, steadying after last quarter's decline. rose 13.3% to $2.25 billion and increased 28.6% to $99 million, as Specialty Services revenue climbed 22.9% and its margin expanded. The company issued $500 million in new notes and spent $816 million on acquisitions, pushing to $3.2 billion.
Key takeaways
Safety Services earnings margin held at 17.0%, unchanged from a year ago, after falling to 14.1% in Q1 2026 — the first decline since the Chubb acquisition.
Specialty Services rose 22.9% to $773 million and its margin expanded 0.6 points to 11.9%, driven by increased project starts and .
Consolidated improved 0.3 points to 31.2%, as disciplined project selection and pricing gains offset mix headwinds.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net revenues rose 13.3% to $2,254M, with net income up 28.6% to $99M, driven by growth in both segments and margin expansion.
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Consolidated net revenues increased 13.3% to $2,254M, driven by growth in inspection, service, and monitoring, robust project revenues, acquisitions, and pricing.
improved 30 to 31.2%, as disciplined project selection and pricing gains in both project and service revenues offset mix headwinds.
SG&A expenses rose 11.9% to $528 million, but SG&A excluding as a percentage of net revenues fell to 20.5% from 21.0%, reflecting as grew faster than core overhead.
The company issued $500 million in 5.750% due 2034 and upsized its to $1 billion, while spending $816 million on acquisitions, pushing to $3.2 billion.
was $52 million, down 7.1% , as acquisition spending and investments outweighed higher earnings.
What changed
Safety Services margin stabilized: after falling to 14.1% in Q1 2026 — the first decline since the Chubb acquisition — the margin returned to 17.0% in Q2, matching the prior-year quarter and suggesting the Q1 compression was tied to acquisition-related costs and project mix rather than a structural shift.
Specialty Services margin rebounded: the margin expanded to 11.9% from 11.3% a year ago, after compressing to 10.1% for the full year 2025, as increased project starts and offset the material cost pressures flagged in prior quarters.
Acquisition spending accelerated: the company deployed $816 million on acquisitions in the first half of 2026, funded in part by a new $500 million senior note issuance, pushing to $3.2 billion — up from $2.75 billion at year-end 2025.
No activity was disclosed in the first half of 2026, after $75 million was repurchased in the first half of 2025 under the $1 billion authorization.
What to watch
Whether Safety Services margin can sustain 17.0% through the seasonally stronger second half, now that the Chubb restructuring program has concluded and no further savings from that program are expected.
The pace and integration of acquisitions after $816 million in first-half spending, and whether the resulting debt increase to $3.2 billion pressures or ratios.
Whether the $590 million in annual Series A Preferred Stock dividends — which absorbed nearly all of FY2025 — are addressed through conversion, redemption, or another transaction.
Whether recovers in the second half after the 7.1% decline in Q2, as investments to support growth weigh on cash generation.
Safety Services net revenues grew 8.8% to $1,482M with margin flat at 17.0%; Specialty Services surged 22.9% to $773M with margin expanding 60 to 11.9%.
SG&A expenses rose 11.9% to $528M, but SG&A excluding as a percent of net revenues fell to 20.5% from 21.0%, reflecting .
Liquidity remained strong at $1,565M, including $851M in cash; the company upsized its to $1B and issued $500M in 5.750% due 2034.
Net cash used in investing activities surged to $861M, primarily due to $816M in acquisition spending, while improved to $168M from $145M.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk is managed via swaps on the $2.15B term loan; foreign currency and commodity risks are noted but deemed limited.
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Variable-rate debt exposure centers on the $2,152M 2021 Term Loan, partially hedged with $1,120M in active interest rate swaps and a $720M forward-starting swap.
A $720M swap exchanging one-month for 3.59% matures October 2026, and a $400M swap at 3.41% matures January 2028; a forward swap at ~3.13% runs from October 2026 to January 2029.
Foreign operations generated ~31% of consolidated net revenues, but transaction gains/losses were immaterial ($1M loss in H1 2026) as most revenues and expenses are in local functional currencies.
Foreign currency translation losses were $(39)M in H1 2026 versus a $187M gain in H1 2025, recorded in .
Commodity risk includes copper, steel, fiber, and fuel prices; fixed-price contracts may not allow cost pass-through, and prolonged low oil/gas prices could delay or cancel projects.
From time to time, we are subject to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, wage and hour, and other claims and legal proceedings in the ordinary course of business relating to the products we install that, if adve…
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From time to time, we are subject to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, wage and hour, and other claims and legal proceedings in the ordinary course of business relating to the products we install that, if adversely determined, could adversely affect our financial condition, results of operations, and cash flows. We do not believe that the ultimate resolution of these matters will have a material adverse effect on our business, financial condition, results of operations or cash flows.
There have been no material changes to our risk factors contained in Part I, Item 1A. "Risk Factors" of our Form 10-K for the year ended December 31, 2025. 55 Table of Contents
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There have been no material changes to our risk factors contained in Part I, Item 1A. "Risk Factors" of our Form 10-K for the year ended December 31, 2025.
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