Please note that earlier this morning, we issued our press release announcing our second quarter 2026 financial results and outlook. Organic revenue growth came in at 6.1%, and I'm especially pleased to report that our first half new sales bookings reached $1.2 billion, a new record for ABM. Margins improved sequentially, and free cash flow was up significantly in the first half compared to last year, which I'm very pleased with. We expect volume to ramp meaningfully in both ATS and M&D, and service mix within ATS in particular should improve as the project pipeline matures and our backlog execution ramps sequentially.
Taken together, we expect these drivers to produce a significant step up in both earnings and margin as we move through the back half of the year. When taken together with the strong operating culture we have in place, ABM is well-positioned to capture the long-term growth opportunities ahead. New supply remains extremely limited, with the construction pipeline nearly 90% below its 2020 peak. Turning to M&D, the semiconductor build-out may turn out to be one of the most compelling growth stories in American manufacturing in 21st century.
The WGNSTAR acquisition has significantly strengthened our presence in semiconductor fabrication environments, and the benefits are already becoming evident. During the second quarter, we secured tens of millions of dollars in new business and delivered high double-digit organic revenue growth across our semiconductor market. Beyond semiconductors, e-commerce growth and US manufacturing reshoring continue to support healthy demand across the segment, which will continue to benefit us. TSA throughput is running close to 3 million passengers per day, and leisure demand remains robust.
| Metric | Period | Current guidance |
|---|---|---|
| Organic revenue growth | FY2026 | Raised toward high end of 3%-4% (Raised slightly) |
| B&I full-year growth | FY2026 | Flat to slightly positive (New) |
| Adjusted EPS guidance treatment of self-insurance | FY2026 | Now includes prior-year self-insurance adjustments within $3.85-$4.15 guide (Changed; Q4 de-risked) |
| Normalized free cash flow | FY2026 | ~$250M (excludes ~$65M of one-time items) (Maintained) |
| Leverage | End of FY2026 | 3.2x currently; expect below 3x by year-end (Reiterated) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +8.4% to $2.3B (Q2 record) | 6.1% organic growth plus 2.3% from acquisitions, primarily WGNSTAR |
| Net income | $43.1M ($0.73/sh) vs $42.2M ($0.67/sh) | Higher interest and amortization expense, offset by lower tax expense and corporate costs |
| Adjusted EPS | $0.90 vs $0.86 | Boosted by share repurchase activity despite higher interest and amortization |
| Adjusted EBITDA | +$5.8M to $131.7M | Volume growth across segments |
| B&I revenue | Essentially flat at $1B | U.K. strength offset by mid-quarter TfL exit and West Coast client exits |
| Aviation revenue | +20% to $310.8M | Healthy travel demand and ramp of new wins, particularly Heathrow |
| M&D revenue | +17% to $463.8M | 7% organic plus 9% from WGNSTAR; technology-sector wins and client expansions |
| Education revenue | +2% to $232.2M | Primarily escalations |
| Technical Solutions revenue | +27% to $267.3M | 22% organic plus 6% acquisitions; data center, battery storage, and HVAC project activity |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Technical Solutions mix | Q1 hit by weather delays and adverse microgrid mix | Strong volume but mix weighted to equipment-intensive turn-the-wrench work; design/engineering mix expected to improve in back half | Recovering, margin ramp expected |
| Semiconductor / WGNSTAR integration | Just-closed acquisition | Integration going well; doubled semiconductor growth year-over-year; over 60 clients, 300+ sites, in 75% of U.S./European fab capacity clients | Strong momentum |
| B&I client exits / West Coast | TfL roll-off flagged in Q1 | TfL exit plus West Coast exits (LA, SF, Seattle) where competitor pricing fell below ABM thresholds; ~300 bps back-half growth impact from TfL | Disciplined exits, margin accretive |
| Prior-year self-insurance | Excluded from FY2026 guidance | Now baked into guidance after program investments improved predictability; management says Q4 is de-risked | De-risked |
| AI on escalations | Early AI initiatives | AI initiative scans contracts and generates escalation letters, maturing as a margin lever | Maturing |