ABM is a leading integrated facility services provider - the company that runs janitorial, engineering, parking, and aviation support for offices, hospitals, airports, schools, data centers, and industrial plants, roughly 113,000 people strong and now in its twelfth full year under CEO Scott Salmirs. Fiscal 2026's second quarter, ended April 30, was the strongest top-line quarter the company has reported in years, and the thesis is simple to state: the growth is real and accelerating, but it is arriving in the lower-margin corners of the business, so profits have not caught up yet. Whether they catch up in the back half is the whole investment question.
The top line was the headline. Revenue rose 8.4% to $2.29 billion, the fastest consolidated growth since the third quarter of fiscal 2022, with 6.1% organic growth underneath it and 2.3% added by the WGNSTAR acquisition in semiconductors. Management's framing is that the mix of drivers - Technical Solutions up 27% on battery storage, microgrids and data centers, Aviation up 20%, Manufacturing & Distribution up 17% - is exactly the secular story it has been trying to build. First-half new sales bookings of $1.2 billion were a record for the company, a leading indicator that growth is being contracted, not just reported.
The profit line was the qualification. GAAP net income rose just 2% to $43.1 million, or $0.73 a diluted share, and gross margin fell 72 basis points to 12.1% because the growth segments are equipment-heavy and project-weighted. Interest expense jumped 18% to $28.1 million on the debt taken on for WGNSTAR. The company's own adjusted net income fell to $52.9 million, or $0.90 a share, from $54.1 million, or $0.86, a year ago once the one-time tailwinds to profit are stripped out - the per-share figure edged up only because buybacks lowered the share count. Management calls the back half the fix: a step up in volume and mix in Technical Solutions, price escalation and cost actions compounding, and leverage set to fall back under 3x, all aimed at a full-year adjusted EPS range of $3.85 to $4.15. The shares trade around $48, or roughly 12 times that guided midpoint. The question is not whether ABM can grow revenue - it is proving that now. The question is whether it can grow margin on that revenue, and the back half is the deadline.