Company: ABM
Filing Date: 2025-09-05
Form Type: 10-Q
Source: 0000771497-25-000022
Chunk: 7

Company: ABM INDUSTRIES INC /DE/
Filing Date: 2025-09-05
Form: 10-Q
Item: Part I, Item 2
Chunk 7
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 2025, as compared to the prior year period. Gross margin increased by 16 bps to 12.5% in the nine months ended July 31, 2025, from 12.3% in the nine months ended July 31, 2024. The increase in gross margin was primarily driven by operational efficiencies within Aviation and Education and a decrease in prior year insurance adjustment, partially offset by strategic pricing decisions for contract rebids and proactive extensions combined with managing contract escalation timing to maintain and expand certain customer accounts within B& I and strategic pricing on select new wins within M& D.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by $4.6 million, or 0.9%, to $521.7 million during the nine months ended July 31, 2025, as compared to the nine months ended July 31, 2024. The decrease in selling, general and administrative expenses was primarily attributable to:

• an absence of an adjustment to the contingent consideration related to the RavenVolt Acquisition as compared to a $36.0 million fair value adjustment to increase the contingent consideration recorded during the three months ended July 31, 2024.

The decrease was partially offset by:

• a $24.8 million increase in compensation and related expenses primarily due to higher salaries, certain incentive plans, headcount expansion from recent acquisitions, and ongoing business growth; and

• a $6.4 million increase in costs associated with systems’ go-live.

Amortization of Intangible Assets

Amortization of intangible assets decreased by $2.3 million, or 5.5%, to $39.9 million during the nine months ended July 31, 2025, as compared to the nine months ended July 31, 2024. This decrease was due to lower amortization of intangibles, primarily intangibles acquired as part of the Able and GCA acquisitions, partially offset by amortization of intangibles from the Quality Uptime and LMC acquisitions.

Interest Expense

Interest expense increased by $9.0 million to $72.1 million during the nine months ended July 31, 2025, as compared to the nine months ended July 31, 2024. The increase was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.

Income Taxes from Operations

Our effective tax rates on income from operations for the nine months ended July 31, 2025, and