Company: ABM
Filing Date: 2025-06-06
Form Type: 10-Q
Source: 0000771497-25-000014
Chunk: 6

Company: ABM INDUSTRIES INC /DE/
Filing Date: 2025-06-06
Form: 10-Q
Item: Part I, Item 2
Chunk 6
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 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 2.6% and acquisition growth of 0.7%. Acquisition growth was driven by a $29.3 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024. The organic revenue growth primarily driven by higher project revenues due to the higher microgrid projects within Technical Solutions and the net new business and expansion of business with existing customers within Aviation, B& I, Education, and M& D. The increase in revenues was partially offset by attrition of engineering customers within B& I and a loss of a certain customer in M& D in the first quarter of 2025.

Operating Expenses

Operating expenses increased by $106.3 million, or 3.0%, to $3,696.1 million during the six months ended April 30, 2025, as compared to the prior year period. Gross margin increased by 37 bps to 12.6% in the six months ended April 30, 2025, from 12.2% in the six months ended April 30, 2024. The increase in gross margin was primarily driven by operational efficiencies within Aviation and Education and an absence of a $9.7 million unfavorable self-insurance reserve adjustment from actuarial evaluations completed in the six months ended April 30, 2024 within Corporate. The increase in gross margin was partially offset by change in contract mix within M& D.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $29.6 million, or 9.4%, to $344.1 million during the six months ended April 30, 2025, as compared to the six months ended April 30, 2024. The increase in selling, general and administrative expenses was primarily attributable to:

• a $10.2 million increase in compensation and related expenses primarily due to higher salaries, certain incentive plans, headcount expansion from recent acquisitions, and ongoing business growth within Technical Solutions during the three months ended January 31, 2025;

• a $3.4 million increase in costs associated with systems’ go-live;

• a $3.1 million increase in acquisition and integration costs;

• a $2.3 million increase in certain discrete transformational costs under ourELEVATE strategy for developing the new ERP system, client-facing technology, workforce management tools, and data analytics; and

• a $