Company: ABM
Filing Date: 2025-09-05
Form Type: 10-Q
Source: 0000771497-25-000022
Chunk: 3

Company: ABM INDUSTRIES INC /DE/
Filing Date: 2025-09-05
Form: 10-Q
Item: Part I, Item 2
Chunk 3
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2%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups. The increase in revenues includes strategic pricing decisions for contract rebids within B& I and for select new wins within M& D, as well as higher project revenues due to the higher microgrid projects within Technical Solutions. Acquisition growth was driven by a $25.5 million revenue increase from the Quality Uptime and LMC acquisitions.

Operating Expenses

Operating expenses increased by $118.6 million, or 6.5%, to $1,949.6 million during the three months ended July 31, 2025, as compared to the prior year period. Gross margin decreased by 23 bps to 12.3% in the three months ended July 31, 2025, from 12.6% in the prior year period. The decrease in gross margin was primarily driven by strategic pricing decisions for contract rebids within B& I and select new wins within M& D as well as the management of contract escalation timing to maintain and expand certain customer accounts within B& I. This was partially offset by operational efficiencies within Aviation and Education and a decrease in the prior year insurance adjustment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by $34.3 million, or 16.2%, to $177.5 million during the three months ended July 31, 2025, as compared to the prior year period. 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:

• an $11.1 million increase in compensation and related expenses primarily due to higher salaries and headcount expansion from recent acquisitions.

Amortization of Intangible Assets

Amortization of intangible assets decreased by $0.6 million, or 4.2%, to $13.4 million during the three months ended July 31, 2025, as compared to the prior year period. The decrease was primarily due to the 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 $4