Facility services provider ABM Industries (NYSE: ABM) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 4.2% year on year to $2.32 billion. Its non-GAAP profit of $1.04 per share was 2.6% above analysts’ consensus estimates.

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"Our third quarter results reflected strong operational and financial performance, including record quarterly revenue, robust EPS growth and substantial cash generation. Our team executed well and delivered on our expectations despite a backdrop of macro uncertainty and adverse timing of certain projects," said Scott Salmirs, President and Chief Executive Officer. "Aviation and Manufacturing & Distribution ("M&D") delivered strong organic revenue growth, with M&D benefiting from healthy technology markets and further supported by our recent WGNstar acquisition. Technical Solutions ("ATS") revenue growth was impacted by some project deferrals, while Business & Industry ("B&I") revenue performance was largely as anticipated. We expect ATS to ramp sequentially in the fourth quarter as we execute on many of the deferred projects."

Company Overview

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE: ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $9.15 billion in revenue over the past 12 months, ABM is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, ABM’s sales grew at a solid 8.7% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ABM’s annualized revenue growth of 5.1% over the last two years is below its five-year trend, but we still think the results were respectable.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, ABM’s organic revenue averaged 4% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, ABM grew its revenue by 4.2% year on year, and its $2.32 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 3.3% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will face some demand challenges.

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Adjusted Operating Margin

ABM’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 4.6% over the last five years. This profitability was lousy for a business services business and caused by its suboptimal cost structure.

Analyzing the trend in its profitability, ABM’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, ABM generated an adjusted operating margin profit margin of 3.9%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

ABM’s EPS grew at a weak 1.3% compounded annual growth rate over the last five years, lower than its 8.7% annualized revenue growth. However, its adjusted operating margin didn’t change during this time, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For ABM, EPS didn’t budge over the last two years, a regression from its five-year trend. We hope it can revert to earnings growth in the coming years.

In Q2, ABM reported adjusted EPS of $1.04, up from $0.82 in the same quarter last year. This print beat analysts’ estimates by 2.6%. Over the next 12 months, Wall Street expects ABM’s full-year EPS to grow 17% from $3.65 to $4.27.

Key Takeaways from ABM’s Q2 Results

It was good to see ABM narrowly top analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $46.69 immediately after reporting.

Is ABM an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).