ABM 10-K & 10-Q changes, risk factors and insider trading

Investments in and changes to our businesses, operating structure, or personnel relating to our ELEVATEstrategic strategy,initiatives, including the implementation of strategic transformations, enhanced business processes, and technology initiatives, may not have the desired effects on our financial condition and results of operations.

We have made significant investments and expect to make additional investments in various initiatives intended to drive long-term profitable growth and increase operational efficiency. These investments in and changes to our business systems and processes may not create the growth, operational efficiencies, competitive advantage, or cost benefits that we expect and could result in unanticipated consequences, including disruptions to our back-office operations and service delivery. Moreover, the execution and/or benefits of our ELEVATEstrategic strategyinitiatives may not be realized on the expected timeline and/or may result in expenses in excess of what is currently forecast, which could negatively affect our financial condition.

Risks Relating to Acquisitions, including the WGNSTAR Acquisition, Divestitures, or Strategic Transactions

Any future interest rate increases would have corresponding impact to our costs of borrowing and may have an adverse impact on our ability to raise funds through the offering of our securities or through the issuance of debt due to higher debt capital costs, diminished credit availability, and less favorable equity markets. Any significant federal fund rate increases may have a material adverse effect on our business, results of operations, and financial condition, and may cause our customers to implement cost saving strategies that could reduce the demand of our services. In addition, increases in and/or elevated levels of our borrowings could adversely affect our results of operations and financial condition.

We evaluate goodwill for impairment annually, in the fourth quarter, or more often if impairment indicators exist. We also review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the fair value of one of our reporting units is less than its carrying value, or if as a result of a recoverability test we conclude that the projected undiscounted cash flows are less than the carrying amount, we would record an impairment charge related to goodwill or long-lived assets, respectively. (For example, during the second quarter of 2020, given the general deterioration in economic and market conditions arising from the COVID-19 Pandemic (“the Pandemic”), we identified a triggering event that resulted in the impairment of goodwill and intangible assets.) The assumptions used to determine impairment require significant judgment, and the amount of the impairment could have a material adverse effect on our reported financial results for the period in which the charge is taken.

•Revenues increased by $263.0$386.5 million, or 3.2%,4.6%, to $8,359.4$8,745.9 million during 2024,2025, as compared to 2023.2024. Revenue growth was comprised of organic growth of 2.9%3.8% and acquisition growth of 0.3%.0.8%. The organic revenue growth was due to the higher project revenues due to the timing of certain microgrid systems design and installation projects within Technical Solutions, and net new business and expansion of business with existing customers within Aviation, B&I, M&D, and Education.Education and higher microgrid projects within Technical Solutions. The increase in revenues was partially offset by attritionstrategic ofpricing engineeringdecisions, customersincluding andfor softcontract commercial office market conditionsrebids within B&I, and the expected rebalancing of the scope of work with an existing customer within M&D.I. Acquisition growth of $26.3$68.4 million was driven by revenue from the Quality Uptime Acquisition,and completedLMC in the third quarter of 2024.acquisitions.

•Operating profit decreasedincreased by $197.5$99.7 million to $212.0$311.7 million during 2024,2025, as compared to 2023.2024. The decreaseincrease in operating profit was attributable to:

•laboroperational efficiencies within B&I, Aviation,Aviation and Education, as well as contract mix within Technical Solutions, Aviation, and M&D; and

•Our effective tax rate on income was 39.1%26.2% for 2024,2025, as compared to 24.1%39.1% during 2023.2024. Our effective tax rate for 2024 was primarilynegatively impacted by a $95.7 million non-taxable expense relatedchange to the change inincrease the fair value of the contingent consideration related to the RavenVolt Acquisition. Our effective tax rate for 2023 was primarily impacted by a $45.6 million non-taxable benefit related to the change in the fair value of contingent consideration related to the RavenVolt Acquisition.

•Net cash provided by operating activities was $226.7$234.4 million during 2024.2025. Our net cash provided by operating cash activities was lowerhigher than prior year, primarily due to the timing of certain working capital requirements.

•Dividends of $56.5$65.6 million were paid to shareholders, and dividends totaling $0.90$1.06 per common share were declared during 2024.2025. Additionally, we repurchased 1.172.6 million of shares for $55.8$121.3 million, excluding excise taxestaxes, during 2024.2025.

Our current reportable segments consist of B&I, M&D, Aviation, Education, Aviation, and Technical Solutions.

In the fourth quarter of 2025, we launched a Restructuring Program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We recognized $20.1$28.0 million of cumulative restructuring charges under this program through the secondthird quarter of 2026. The range of the remaining costs to be incurred related to the Restructuring Program cannot be reasonably estimated at this time.

•Revenues increased by $178.3$93.1 million, or 8.4%,4.2%, to $2,290.0$2,317.1 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 6.1%2.1% and acquisition growth of 2.3%.2.1%. The organic revenue growth was due to net new business and expansion of business with existing customers, primarilyclients in Aviation,Aviation and higherM&D, batterypartially energyoffset storageby system,attrition of certain clients within B&I and relateda energydecrease infrastructure projects, as well asin microgrid projectsproject revenue due to project delays within Technical Solutions. Acquisition growth was driven by a $48.5$45.6 million revenue increase from the WGNSTAR and LMC acquisitions.

•We had an increase in operating profit of $4.6$8.1 million, to $86.9$91.5 million, during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. The increase was primarily attributed to an increase in revenues and a decrease in certain discretegeneral transformationaland costsadministrative compensation expenses, primarily due to reduced headcount as a result of the Restructuring Program. The increase was partially offset by restructuring charges incurred during the third quarter of 2026 under our ELEVATERestructuring strategy.Program.

•Our effective tax rates for the three months ended AprilJuly 30,31, 2026, and AprilJuly 30,31, 2025, were 27.9%21.3% and 29.4%, respectively, and were not impacted by any significant discrete items. Our effective tax rates for the six months ended April 30, 2026 and April 30, 2025 were 26.8% and 25.6%,29.6%, respectively. Our effective tax rate for the sixthree months ended AprilJuly 30,31, 2026, was reduced by discrete items,tax benefits, primarily share based compensation. Our effective tax rate for the six months ended April 30, 2025, was reduced by discrete items, primarily return to provision adjustments related to ourresearch non-U.S.and operations.development tax credits and enhanced WOTC.

•Net cash provided by operating activities was $128.2$275.0 million for the sixnine months ended AprilJuly 30,31, 2026, as compared to cash used in operating activities of $73.9$101.0 million for the sixnine months ended AprilJuly 30,31, 2025. The $202.1$174.0 million improvement was primarily driven by favorable working capital changes, including improved cash collectionscollections, and timing of payments.

•Dividends of $34.2$51.2 million were paid to shareholders, and dividends totaling $0.580$0.87 per common share were declared during the sixnine months ended AprilJuly 30,31, 2026. Additionally, we repurchased 0.1 million shares for $3.0 million, excluding excise taxes, during the three months ended April 30, 2026.

•At AprilJuly 30,31, 2026, total outstanding borrowings under our Amended Credit Facility were $1.9$1.8 billion. At AprilJuly 30,31, 2026, we had up to $518.9$495.3 million of borrowing capacity.

Three Months Ended AprilJuly 30,31, 2026, Compared with the Three Months Ended AprilJuly 30,31, 2025

Revenues increased by $178.3$93.1 million, or 8.4%,4.2%, to $2,290.0$2,317.1 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 6.1%2.1% and acquisition growth of 2.3%.2.1%. The organic revenue growth was due to net new business and expansion of business with existing customers, primarilyclients in Aviation,Aviation and higherM&D, batterypartially energyoffset storageby system,attrition of certain clients within B&I and relateda energydecrease infrastructure projects, as well asin microgrid projectsproject revenue due to project delays within Technical Solutions. Acquisition growth was driven by a $48.5$45.6 million revenue increase from the WGNSTAR and LMC acquisitions.

Operating expenses increased by $172.0$81.4 million, or 9.3%,4.2%, to $2,013.0$2,031.0 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. GrossThe margin decreased by 72 bps to 12.1%increase in theoperating threeexpenses monthswas ended April 30, 2026, from 12.8%generally in theline priorwith yearrevenue period.growth, The decreaseresulting in gross margin wasremaining primarilyconsistent drivenat by12.3% contract and service mix in B&I,M&D, and Aviation. This was partially offset by operational efficiencies achieved through our Restructuring Program.year-over-year.

Selling, general and administrative expenses decreased by $4.0$6.2 million, or 2.3%,3.5%, to $171.1$171.3 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. The decrease in selling, general and administrative expenses was primarily attributable to:

•a $5.4$4.8 million decrease in certain discrete transformational costs under our ELEVATE strategy for developing the new ERP system, client-facing technology, workforce management tools, and data analytics; andanalytics.

•a $2.2$4.2 million increase in acquisitioncosts andassociated integrationwith costs.systems’ go-live.

Amortization of intangible assets increased by $2.7$2.1 million, or 20.5%,15.8%, to $15.9$15.5 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. The increase was primarily attributable to the amortization of intangibles acquired as part of the WGNSTAR Acquisition.

Interest expense increased by $4.2 million, or 17.6%,16.6%, to $28.1$29.5 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility, including the First Incremental Term Loan, to fund the WGNSTAR Acquisition and working capital requirements.

Our effective tax rates from income on operations for the three months ended AprilJuly 30,31, 2026, and AprilJuly 30,31, 2025, were 27.9%21.3% and 29.4%,29.6%, respectively, resulting in provisions for taxes of $16.6$13.5 million and $17.6 million, respectively.

The WOTC and FEZ credit are federal tax credits available to employers for hiring individuals from certain targeted groups. We have historically benefited from these credits, and they expired on December 31, 2025. As of AprilJuly 30,31, 2026, the credits have not been renewed and our effective tax rate for the three months ended AprilJuly 30,31, 2026, includes a benefit only for those employees who started work before December 31, 2025.

We had a lossgain of $1.6$2.5 million on interest rate swaps during the three months ended AprilJuly 30,31, 2026, as compared to a lossgain of $5.4$0.8 million during the three months ended AprilJuly 30,31, 2025, primarily due to underlying changes in the fair value of our interest rate swaps.

We had a foreign currency translation loss of $3.8$2.3 million during the three months ended AprilJuly 30,31, 2026, as compared to a foreign currency translation gainloss of $14.3$1.5 million during the three months ended AprilJuly 30,31, 2025. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

B&I revenues increaseddecreased by $0.3$26.5 million, or 0.03%,2.6%, to $1,015.8$1,012.2 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. The revenue increasedecrease was primarily driven by new client wins internationally partially offset by attrition of certain domestic clients inand thea U.S.large U.K.-based transportation client. Management reimbursement revenues for this segment totaled $74.1$76.4 million and $71.8$75.4 million for the three months ended AprilJuly 30,31, 2026 and 2025, respectively.

Operating profit increased by $3.4$1.2 million, or 25.0%,1.5%, to $16.8$75.0 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. Operating profit margin decreasedincreased by 1130 bps to 6.3%7.4% in the three months ended AprilJuly 30,31, 2026, from 6.4%7.1% in the prior year period. The decreaseincrease in operating profit margin was primarily attributabledriven toby servicelabor mix.efficiencies.

CorporateM&D expensesrevenues decreasedincreased by $3.9$72.1 million, or 4.7%,17.6%, to $79.0$481.0 million during the three months ended AprilJuly 30,31, 2026, as compared to the prior year period. Revenue growth was comprised of acquisition growth of 9.9% and organic growth of 7.8%. Acquisition growth was driven by a $40.4 million revenue increase from the WGNSTAR Acquisition. The decreaseincrease in corporateorganic expensesrevenue was primarily attributable to: expansion of business with existing clients and new business wins primarily within the semiconductor industry.

•a $3.2$7.5 million decrease in compensation and related expenses primarily due to lowerreduced expensesheadcount underas certaina incentiveresult plans.of the Restructuring Program; and

SixNine Months Ended AprilJuly 30,31, 2026, Compared with the SixNine Months Ended AprilJuly 30,31, 2025

Revenues increased by $306.9$400.1 million, or 7.3%,6.2%, to $4,533.5$6,850.6 million during the sixnine months ended AprilJuly 30,31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.8%4.5% and acquisition growth of 1.5%.1.7%. The organic revenue growth was primarily driven by net new business and expansion of business with existing customers,clients primarily within Aviation and M&D, as well as higher project revenues for batteryin energy storageand systempower solutions and relatedHVAC energy infrastructure projects, and microgrid projectsservices within Technical Solutions. Acquisition growth was driven by a $61.5$107.1 million revenue increase from the WGNSTAR and LMC acquisitions.

Operating expenses increased by $300.4$381.8 million, or 8.1%,6.8%, to $3,996.5$6,027.5 million during the sixnine months ended AprilJuly 30,31, 2026, as compared to the prior year period. Gross margin decreased by 7146 bps to 11.8%12.0% in the sixnine months ended AprilJuly 30,31, 2026, from 12.6%12.5% in the sixnine months ended AprilJuly 30,31, 2025. The decrease in gross margin was primarily driven by contract and service mix within B&I, M&D, and Aviation, and weather-related impacts in Aviation and Technical Solutions, partially offset by favorable pricing and operational efficiencies, particularly in managing overtime, inwithin Education.

Selling, general and administrative expenses decreased by $3.2$9.5 million, or 1.0%,1.8%, to $340.9$512.2 million during the sixnine months ended AprilJuly 30,31, 2026, as compared to the sixnine months ended AprilJuly 30,31, 2025. The decrease in selling, general and administrative expenses was primarily attributable to:

•a $4.7$9.5 million decrease in certain discrete transformational costs under our ELEVATE strategy for developing the new ERP system, client-facing technology, workforce management tools, and data analytics.analytics;

•a $5.3$9.5 million increase in costs associated with systems’ go-live; andgo-live.

Amortization of intangible assets increased by $1.4$3.5 million, or 5.2%,8.8%, to $27.9$43.4 million during the sixnine months ended AprilJuly 30,31, 2026, as compared to the sixnine months ended AprilJuly 30,31, 2025. This increase was due to the amortization of intangibles acquired as part of the WGNSTAR Acquisition.