Please note that earlier this morning, we issued our press release announcing our first quarter 2026 financial results and outlook. We delivered 5.5% organic revenue growth, generated nearly $50 million in free cash flow, and repurchased over $90 million of shares in the quarter. While margin performance in Technical Solutions was below our expectations, primarily due to project timing and mix, underlying demand and backlog trends are healthy and the fundamentals across the portfolio remain constructive. Our B&I segment grew 4% in the quarter, the highest it's been since the third quarter of 2022, reflecting strong international growth, stable client retention, and underlying steady demand.
The FAA's terminal modernization programs and large-scale capital projects across major U.S. Our Aviation segment grew double digits year-over-year, and our bid pipeline remains healthy. With the completion of our acquisition of WGNSTAR at the beginning of Q2, we have meaningfully strengthened our presence in semiconductor fabrication environments and enhanced our ability to support this strategic U.S. These trends align directly with ABM's strength in energy resiliency, engineering services, and mission-critical operations, and we expect ATS to deliver sustainable long-term growth as these markets continue to expand.
In Education, demand remains steady and resilient given the essential nature of services provided to K through 12 districts and higher education institutions. Our focus on higher education, particularly large universities and multi-campus systems, positions ABM well in a segment where scale, complexity, and compliance requirements favor sophisticated multi-service providers. The investments we've made over the last few years in sales resources, technical talent, and strategic contract positioning are clearly contributing to our growth trajectory. From a margin perspective, our first quarter shortfall was predominantly concentrated in Technical Solutions.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year FY2026 outlook | FY2026 | Unchanged; internally forecasting toward the higher end (Maintained) |
| WGNSTAR revenue contribution | FY2026 | ~$120M-$130M (New) |
| B&I revenue impact from TfL contract roll-off | FY2026 back half | ~$70M revenue impact in the year (New) |
| Leverage | Near-term post-WGNSTAR | Temporarily over 3x; targeting below 3x via free cash flow (New) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +6.1% to $2.2B | 5.5% organic growth plus modest contribution from Ireland acquisition |
| Net income | $38.8M ($0.64/sh) vs $43.6M ($0.69/sh) | Lower segment income (notably Technical Solutions) and higher tax and interest, partially offset by lower corporate costs |
| Adjusted EPS | $0.83 vs $0.87 | Lower segment income, higher tax and interest expense |
| Adjusted EBITDA | $117.8M vs $120.6M | Lower segment income, primarily Technical Solutions |
| B&I revenue | +4% to $1.1B | Higher work orders, U.K. strength, and price escalations |
| Aviation revenue | +10% to $297.7M | Healthy global travel demand and ramp of new contract wins |
| M&D revenue | +7% to $422.3M | Recent contract wins in technology sector and client expansions |
| Education revenue | +2% to $228.7M | Escalations and stable retention rates |
| Technical Solutions revenue | +14% to $229.7M | 7% organic plus 7% acquisitions; strong mission-critical and data center activity offset by lower microgrid growth from project delays |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Technical Solutions project timing | Very strong Q4 FY2025 | ~$20M weather-related microgrid project delays pushed to the right, not canceled; back-half recovery expected | Temporary setback, demand intact |
| AI and robotics | Investing in AI tools; core viewed as AI-resilient | Testing AI-enabled robotics including humanoid platforms; deploying predictive maintenance, scheduling, routing, back-office automation | Expanding adoption |
| Macro/geopolitical uncertainty | — | Cautiously optimistic; monitoring economic and geopolitical uncertainty; mitigation plans ready | Heightened caution |
| B&I client discipline | Stabilized after Q3 pricing wave | Stable; exiting large U.K. TfL contract (~$70M) due to unworkable economics | Disciplined exits, back-half moderation |
| Labor availability | — | No deterioration in applicant flow or staffing despite immigration narrative; no major wage pressure | Better than feared |