APi (APG) 2 May 242024 Q1 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to APi Group First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note, this call is being recorded. I will be standing by should you need any assistance. I will now turn the call over to Adam Fee, Vice President of Investor Relations at APi Group. Please go ahead.

you. Thank and call. joining everyone, XXXX first you conference earnings thank morning, our for quarter Good

intentions on call Vice you me Franklin we CEO; Financial Joining begin, the and and Kevin President Becker, are this Officer; like the projections Board Krumm, and expectations, Jim that our I Lillie, press on our Co-Chairs; Sir that would matters forward-looking Executive earnings facts. company's -- in the President trends performance, and our Chief historical today and Martin and are company's before events call Russ certain based remind to statements, future which statements announcement release are are or not on other regarding anticipated and

subject that and other our our those and These forward-looking uncertainties to the In expectations. and cause to could expressed risks, cause such statements. statements differ results press that risks not and our known or guarantee are from unknown materially factors a differ may future results of actual SEC, material release to future by we from detail with implied are filings performance

Our to any law. statements today, and we May statements required that as make update may except forward-looking no undertake are by as we of obligation X,

our presentation As quarter guidance of quarter for Investor reminder, and the detailing our full have a website. posted financial we page a Relations second first our performance and year on

metrics. The the release Russ. now found and It's will include be over and to and of also key non-GAAP reconciliation today pleasure turn presentation. comments operating information measures my our Our press items to regarding financial other our in can call these other

our to this you Thank for you, Thank morning. morning, Adam. taking call the time Good join everyone.

commitment leaders care first I care We a work APi. in that thank our you leaders to and hard of our summary of like unwavering effort. We taking XX,XXX leaders of with customers. to provide for grateful we their remain quarter results their results, for our our approximately believe would our Before taking

one of foundational by the which value. continue principles we is will shareholder This to enhance

of APi's Week. ninth marks Safety celebrating straight Next week year

the As #X value. said of well-being each members before, I and have safety, of remains team our our health

Our outcomes was is XXXX, X.X across the incident safety industry total of rate At below than end our commitment TRIR the significantly recordable and drives to the or average. better safety industry-leading organization. which

We continue to strive for X incidents.

making investment to our each relative we the safer of believe to We leaders' contributes work with leadership development APi along benchmarks. make to in a low our our place turnover industry

EBITDA which before, have inspection, our conversion the And following: focused free long-term above XX% of we adjusted XX% industry finally, As average; organic or and flow service more XXXX. revenue XX% in include relentlessly we margin on cash the creation growth from adjusted XX%. long-term revenues long-term of value remain long-term of targets, said monitoring. XX-XX We

us to about around our speak locations routinely help I can how on field the world. this they I'm deliver strategy when leaders our visiting

are aligned with we to intend achieve achieve leaders and Our it. want to what we how

divestitures, revenues approximately growth the lower service first and revenues, intentionally revenues growth line quarter. limiting our by were certain Net Turning by driven declining essentially XXXX revenues. project-related organic pass-through, plan, to offset X% with cost in in material from flat, organic In

HVAC planned continuing our our businesses. year, in year continued this and and project last disciplined customer selection into Beginning we international and specialty

This of long-term towards our growth in Importantly, coming net of Life progress XX% inspection, from core total our our inspection is we U.S. and goal revenues we in revenues monitoring. key service achieved goal growth as our of double-digit business. Safety

EBITDA execution margin and XX.X%, remains to first in as team improvements XXXX. executing The we more continue our see on margin towards we that XX% target margin margin gross quarter push The meaningful make to record led to performance representing initiatives, expansion points. for initiatives continues our of quarter, margin strategic strong our in of XXX with the adjusted margin strong adjusted points. gross up XXX expansion adjusted line In progress basis in building or basis EBITDA to committed

As services and revenue capture. say, and be chuck for accretive acquisition customer business include Procurement, disciplined I can the and like Services to Group service improved Elevated systems and monitoring these following: elevator we project On April we and pruning. announced as $XXX complementary selection, just adjacent a entered inspection of mix, always XX, and better. pricing, initiatives Facilities reminder, scale, And M&A the selective with escalator million. value market the

is annualized nature nondiscretionary attractive multiples. to EBITDA Elevated viewed We to due the million long an driven to and an approximately by platform margins. highly contribute business, strategy elevator Elevated elevator recurring the of driven the excellent expected $XXX and adjusted demand. services revenues service in the execute statutorily escalator M&A attractive XX% market $XX us for and our and adjacency at billion-plus believe have opportunity market escalator U.S. as bolt-on We enter approximately is

escalator a and platform term to growth. through elevator strong combination services long build expect the billion-plus We a $X organic of over

pipeline. also driven urbanization, from projects Elevated units robust A regulatory market long-term of safety cross-sell elevators elevators Elevated to and of being continuous aged transportation code safety life opportunity bringing with requirements. elevator and our vertical requirements. compliance XX the services XX% durability It by and U.S. over base from being target M&A aging quality to its escalator businesses installed of declining an years existing a and with with increased services benefits growth due benefits and safety modernization and old. demand

line growth required margin scale driving In service. to The strong tell, same benefits inspection businesses highly to a of in has can robust free It adjusted and revenue asset-light acquisition safety APi repair the characteristics conversion a and be of plus from from approximately a strong of focus business is model flow EBITDA X,XXX accretive summary, are cash provide XX% of we to XX%, is service our on fragmented its I addition XX building can mandatory creation an continuation value immediately a I'm as expected market. about and -- profile It shareholder organic you Elevated excited great our many sure attractive framework. adjusted that Elevate. APi. represents of life

focus Its believe leadership by used business base. elevated, led an a managing and highly those in I we team team an intentionally great culture fundamentally build organization. word a are regulatory also the the organization. leading maintains demand like we developing by instead the of workforce. and to Along experienced throughout its different, leadership at aim leaders teammates loyal customer is team It driven unwavering skilled APi, is management and and lines, throughout on the APi, because

the expected occur to elevated guidance we following XXXX this expect results of close, include which year full update will We late quarter. to

contribute first approximately and quarter, the revenue. a our million During segment, on Specialty focused highly expected the work in business on lower small the we to Similar was in also energy divestiture was annual this in cyclical in margin which $XX project completed the largely divestiture quarter, closed Services fourth to sector.

delivering As we move our XX we XX, remain XXXX XX, both on financial the forward, focused targets. long-term plan

thoughtful We services about our robust look pipeline opportunities businesses to be join APi family. margin-accretive excited for elevator the security high-quality leaders continue are of to businesses and escalator will safety, we for and as life and

results guidance over call the financial hand to detail. Kevin? quarter more Kevin our in to like now would and to first discuss I

year growth decline to XX, Good were XXXX, X.X% XX% ended Organic organic a disciplined $X.XX $X.X growth Russ. QX XXXX X% X% revenues for the organic compared result of pass-through. compared prior cost driven and in this essentially selection was everyone. essentially revenue. Thanks, in organic the billion from by flat billion period. was of project services revenues to revenues. lower Reported was of morning, project customer decline The X and March This approximately of at material by in months declining offset in

with and X our the basis compared XX% offset building price XXXX, point XX.X%, period grew prior X basis gross Adjusted XX, a for investments in to by XXX a global increase basis revenues the increased ended in period, and XX, significant March months increase driven for year margin well in ended Outsized to to and as at representing across increases. currency compared higher-margin representing to both XXX services the by by primarily growth capabilities margin fixed EBITDA adjusted March as in increase margin gross months on expansion infrastructure. margins, a coming revenue segments. EBITDA project XX.X%, the the prior investment point growth the XXXX, due adjusted year partially Adjusted

detail Services Services. driven shares both by outstanding. in weighted our by results the Safety I'm more and prior increase adjusted I'll in discuss per now decreased expense, margin strong pleased year was a adjusted to report The quarter the XX% diluted that to earnings share first per period. representing $X.XX share, compared Safety and increase average diluted or partially was offset expansion share for for partially higher per Specialty $X.XX interest

by year period. the X.X% in driven growth prior services growth Services XX, growth organic inspection QX safety. monitoring our and months in Safety compared XXXX by ended and was XX% business growth growth safety and the March services Life life our led U.S. in core for and to increased billion $X.XX life $X.XX revenue to by of reported compared X revenues X% in and billion X% XXXX, in double-digit to Safety U.S. X.X% organic of Organic inspection

ended year representing margin Improved in driven and as XXX offset partially project project project for and X March revenue to a the customer revenue business. was disciplined our increases. international approximately period, planned inspection and organic significant driven XX.X%, Adjusted in X% as an well by prior attrition in service months HVAC point by our and basis compared XX, mix as was gross well XXXX, This as revenues. margin price the increase work, expansion business selection by decline monitoring from businesses customer

March now by the representing XX, fixed primarily X margins, due Specialty period. in Adjusted prior prior decreased basis XX, compared investments. year X.X% more gross growth compared XXX was million XX.X%, revenues on results partially in basis a year for will for offset point March the a our Services adjusted ended months in discuss period currency for X to to our and Specialty by EBITDA increase segment. million months increased reported XX.X% XXXX, to EBITDA $XXX the margin $XXX XXXX, adjusted the by increase ended Services to detail I the

material Organic decline of have compared revenues our the Service were project revenues disciplined in from revenues in Adjusting driven XX% growth increased flat. in lower reporting unit, by in customer Services revenue and declining declined selection to due for revenue XXXX, essentially customer by project infrastructure and and a X% exiting X.X% QX planned the utility large quarter. pass-through. one cost relationship XX% would to

adjusted by ended a and and XX.X% selection, project for in margin X driving those period, to XXX XXX divestitures. flow. XXXX, increased representing the expenses, XX, basis gross March gross XX.X% driven XX, the project in prior the prior support months margin primarily service year was associated by compared increase the disciplined to our certain margin the now including months X significant in compared completed point was customer to offset XXXX, and revenue. March increases increase ended adjusted EBITDA margins the model year increase investments partially and discuss for to X.X% and a basis by Adjusted representing with Adjusted I'll and primarily due services EBITDA legal expansion point cash period,

we highlighted quarter consistently first quarter lowest the As cash past, have flow free generation. for in the our is

of For March was compared adjusted million XXXX. and to X% an quarter flow conversion the reflecting free the first cash ended free adjusted $XX cash million, flow improvement XXXX, months a X representing of XX, $XX

and on year. Adjusted track XX% free we of our priority generation the be continues flow free has adjusted APi been across cash achieve approximately for are to target cash to remain pleased we flow and conversion a

an outstanding Blackstone with quarter, Viking stock of converted agreement preferred all convertible the preferred with and Global and B their common shareholders Fund APi. to shares During Blackstone APi of Series Viking Series Tactical affiliated and B as XX.X all stock, the Equities of stock their into reached previously first shares retire Opportunities million perpetual each announced,

an issued and as launched Viking par. XX.XX APi repurchased $XXX approximately share. partnered for X.XX XX, million incremental at secondary was the stock. by Blackstone term of million a conversion facility partially transaction of we for shares aggregate per XX.X million with of or an On API's or purchase Viking $XXX price shares million XXXX, The February Blackstone public from they common offering X/X of financed

first due capital primary has was transaction end on priced before the we a activities. quarter, Services net second launched over XX.XX to and in payment $XXX eliminates partially due Earlier refinance net corporate for the $XXX of leverage loan approximately acquisition April for to XX XXXX $XXX offering revolver ratio At in remainder raising elevated. we XX, announced week, with the Elevated to As Group the our XXXX million incremental before, our this follow-on preferred the our simplifies million mentioned outstanding repay term strategy. and expected and loan funding dividend no million Facilities X.Xx for M&A million the this On impact $XX our purposes, balances term April acquisition be million of proceeds general used and structure on million quarter a we of proceeds. including adjusting shares, the of financing $XXX

targets. the and strength, robust with at of we opportunities XX,XX,XX to on financing continue execute a Following providing position specific activities, to our focus transaction M&A sheet the in accretive a flexibility attractive remain our pipeline balance to multiples

cash rest cash M&A opportunity conversion, year-end well flow reducing forward we our the value-enhancing for leverage to XXXX. ratio expect net deployment adjusted continued X.Xx us around including our look our adjusted free of planned capital grow while to campaign, we free providing approximately bolt-on improve as to flow as XXXX, As our

I the second guidance will our XXXX. now quarter discuss full for and year

$XXX to to continue to $X.XX the guidance conversion XXXX. from the February free incurred $XXX to year our adjusted been this revenue guidance include this million be year announced range Adjusted impact from cash from XX% expect million approximately for strengthening on XX, initial since We to full $X.XX the flow adjusted announced has divestiture dollars the billion to range billion. and quarter EBITDA from and elevated headwinds acquisition, not net the

full $XX foreign we exchange adjusted headwind million expect the approximately on Based on headwind and revenue approximately rates, for million current $X year. our EBITDA on

Russ mentioned, update guidance year the As following full will we elevated of the our acquisition. close

the also year. to update this quarter for announced incorporate for will impact the addition exchange full adjusting the In foreign and of on the movements we contributions elevated of divestiture guidance

project the our through remain and year, continue specialty on selection businesses. disciplined As focused and move will HVAC we to we customer

slowdown we both businesses We annualize in the second will certain accelerating expect year. half work majority against project half to XXXX. And the in the of of as the into strong for rates of planned allow cross in the growth second

$X.XX expect excluding in terms impact quarter, million divestiture In second guidance the of foreign acquisition, the elevated the to billion, net of Services $X.XX Specialty exchange from reported revenues any the reflecting represents environment. we The and completed an strong backlog in X% to organic in approximately and up and we net smaller organic lap healthier as X.X% XXXX, growth a revenue to of our as of continue build our businesses. growth specialty HVAC flat QX we but services

price see We declining of resulting projected lower lower revenues. project a also expect continuation second to material costs, quarter versus the This in pass-through XXXX. of result in will

margin continue EBITDA $XXX which EBITDA second expand million which adjusted to currency our $XXX XX% reflected points adjusted and to margin, expansion approximately and expect of of the dollars adjusted quarter XXX fixed We represents adjusted at in EBITDA basis a is growth EBITDA guide midpoint. X% million on to basis of to

interest $XX and second capital approximately elevated tax the from impact million, million XX%. $XXX adjusted approximately approximately quarter our any approximately and expense to to acquisition million. financings, be $XX be effective to Depreciation excluding rate be be XXXX, to For expenditures we anticipate

turn diluted executed the We follow-on the XX. expect our now shares and approximately XX.XX taking account I'd over weighted average the offering to like count Series to million, year share adjusted Russ. be on million primary back into B $XXX the to transaction April of for call

speaks of quarter and our first Kevin. team by alignment and Thanks, leaders. its effectiveness the API's strategy of global profitability our record to execution the

and acquisition exposure demand services an moat direction competitive in the we the have heard great of and heading strengthens volatile further expansion As the driven The the into escalator we statutorily Elevated macroeconomic API's adjacent market are and from announced to business services. despite expands us, elevator confidence for environment. you've our

growth, flow above-industry service, revenue adjusted These XXXX, shareholder cash and include plus to ahead, announced targets, from margin Elevated. we our of of value monitoring XX% look sustainable creation we the XX%. by XX we organic adjusted years by are on XX-XX the believe inspection and As of of create can all XX% long-term acquisition which of average focusing by value accelerated EBITDA free

am about and to plan strategic our the turn back I the the the opportunities come. our like XXXX With years rest to to to of excited execute for on ability open I would over call that, the call for the and now in Q&A. operator

[Operator the Instructions] Your of first question from comes Kathryn Thompson line Thompson Research Group. of

growing today, Chubb. scale APG north and on with and several margins outlined strategy through times, from has you XX% as prior focused the to so inspection XX%. it's of It's up mix per --

How market into the this XX% go market. do building new fit contributing As the that that road end as end in you it strategy? company's out foresee a enter down the first with to bogey does you where outlined? you the into the [indiscernible] elevator inspection And segment,

and Kathryn. Thanks morning. participating for support this for your

systems just be again, inspected at the it and business. least like and to elevators local Fire state jurisdiction, varies safety annually, So like just Life are law and based for prior life on operability functionality required by Safety

business, at and of basically their look inspection, repair. Elevated business XX% say from you comes If plus maintenance where we

on component inside will work of the and as comes service it. installation where service the The on growth the construction in falls inspection repair focus higher goal of M&A as the revenue side than monitoring. we'll version That from the more slice independent want repair OEMs and line that actually work. dice to continue business XX% the And of to well providers side, right of side really inspection our lot their plus do organic service this our depending coming focused XX% with the long-term which probably new you modernization how of upon we'll tuck-in see that work, are that from and That and is of project-related is business. a the

down like for space. relates to about elevated that it center fits component growing the to team. the focus And piece to super business. we're continuing the of in grow excited super this the about really right So us opportunity us excited fairway for and on the also the as of We're

to priorities? you've And your fair amount particular, have that initiatives then does your at in just that. follow-up quarter. A structure on just this the reiterate, any does impact But simplifying question. it capital a on all M&A change previously? to capital Congratulations your outlined And for

as year flow say cash is stepping free this the we Kathryn, priorities our into a to would bolt-on I plan. our on of no, good focus continue M&A That in our portion and came is Kevin. short, up campaign. to tuck-in still was the

had also pay later down to planned either. has nothing debt in there some We changed year, the and

year So our same. as our plan and priorities started remains the we the

question of Kaplowitz from comes next Your Andy the line Citi. of

you color but project organic a into growth implied continue on us can you to significant 'XX focus give the half. in in second Obviously, little a your continues more in markets? safety to selection, guidance Russ, be step-up relatively core

what's up? such on drive point the expect So at And really second half? as step starts selectivity you Is are just key to to your increased there the in this data that verticals growth visibility it comp project any the really centers?

Well, centers. clearly, data

we centers the So a wins semiconductor visibility. good and in I Safety as segment backlog a healthy we Services speak, strong building as segment. we answer well Data is we're mean, as also our really see building good backlog really as -- We're we've Specialty space. And our is the contributing Services both in speak. have we

the it as So on end I markets business our that are that has to focused mean, relates leaders I anything don't today. think changed

good, right advanced with work is to we're are healthy play. centers, for project we're data bringing care, semiconductors, to inspections, that the the us leading places health still all related our in all manufacturing on books And but

into business. be think elevated $XXX revenue. under you couple little the color. And opportunities that growth the safety the years And then, Russ, do about I accretive deliver next and But a over would like synergy versus base color maybe growth it then said or cross-selling maybe of APG's million you annually the look bit of versus should core that similar? how your profile. it life to more know Appreciate growth

Yes.

life very we I change. that grown we for to organically, spaces. business that strong would high just the see and continue really we don't like a So bolt-on for see accelerate We can. has to space. safety us M&A reason market, single possibly in similar, highly any like opportunity It's the mean, the to fragmented digits, Obviously, if fire

so business. continue growth see to speak, that we So for to to opportunity there some nonorganic complement

is we cross-selling what really, like we The opportunity, had actually how and scheduled for the conversation elevated to team way some close do even cross-selling started branch and people not quarter, had And integration had sitting actually best and offices until can transaction next potentially the though on conversations looks to that us the to locations each and later around but we get branch align the -- in yesterday. other. on to is around some campus

you And going we our time. we've idea develop real and that out is can But off. to a getting little a a faster But group leader national us of footprint got easier a and do good leaders facilitate view business our us take to to kick know the to into mapped branch to going of where the get from accounts where so speak, consolidated is have But time sort a from more that the our to met for that take overlap, relationships, with good perspective. we and opportunities. obviously elevated each cross-selling bit process and other business for the yesterday to really little get estate that bit that. out team

and feel And we're to I going something that's but about. take to so in relationships. good. opportunities that really customer excited of their and is journey, the be some mean, for same right everybody's advantage attitude the mean we to I take it us way. everybody is place going it's -- thinking it's -- that's about kind we're some of time there's And a

Andy Wittmann the Your of of Baird. next comes question from line

I guess about I growth. services ask wanted the to

the quarter. X% remarks prepared the on mentioned you that in it think was I

mentioned is the business inspection digit. growing that also double You U.S.

the back? behind feels you are international X% or expectations a have Russ U.S. in little perhaps than held some business bit just is the higher exits there over Were decompose okay. larger could color guess, But give the is time, rate. I -- X% your business Because I well, and like that. pretty customer growth doing think that Kevin, certainly, but So that it

Andy, I'll this that shot number Kevin. on take a is The APi at first. X% total services. growth was

specialty fact business. includes on commentary, HVAC referenced price includes that that in customer increase. the the specialty, I we So also services take significant in that believe the the of wasn't my side I walked to away from a willing

that's was and That contract drag. continue to of a number, markets, to rest our on those aside, revenue largely HVAC. of as end actually think our service set a the of was on sets that down we them growth HVAC those was business Similarly, was you through service pull And X I and north the in going believe. the on business, also service X%, be those the customer side

sort the on sort driving And inspection so is of life the that on of service. core pull-through really, safety still

The only the work we year generally, to predominantly, saw U.S. a related other other service is, thing I'll type work. have in significant do And we quarter in last amount Life of of freezes. Safety say there

Russ it that to where up highly service is so still or it's freeze But North confident that versus the continues our business, to and that in grow, grow double-digit growth, of we're well we XX% referenced. America North especially still, inspections was America, to against track in correlated we wanted where happening Sort that. and underlying

Europe follow-up, of Okay. Asia how support seeing parts helpful. just out That's expansion particular. Are your pricing up little you if there. you just to as in holding what in Life about business, bit super the talk I maybe in you of where a seeing a growth the international you're compete and could thought economy and Safety your

Yes.

in business So first the grew international quarter. the modestly

growth quarter-by-quarter off again, comp. organic to see we've tough a continue since a the business, So we basis owned on good coming

the XX% or they of think that, last had quarter XX% Andy. I like something growth or year organic in first at

-- grow but we -- this did did first modestly show year. the So in of we quarter

And And team focused the the on on in is I that focusing a kind of end focus said but as you have And on kind team inspection continues really of we general, to is if markets. through hold mindset, I word. to continue fronts, through and to business, But don't focused today, X I to think right business and could the end new first. -- that the markets. think couple have our kind know right up really end that's in the right of going ago, years on don't force selling a I we're sales bring team I is transformation. of that know the an the effort international markets. sales going leader we're right really he service we a that

price environment and takes a going force. sales that that of change But and little or shift resource, mind was there, in bit seen and built market into we're where business even where and a smart international already top that It's backlog on make some minus. our take through different we're just over about it so to plus with the decisions is right inspection as important a sell service continue basically concept we're attrition most customer a our first that of like but sitting taking making year that's sure to And the ago, our we people. our we're we've deploying going

about where at value really business continue that capture and to through efforts. feel the they good the So momentum is they gain their as go I really

Barclays. line the comes Mitchell of of from Julian Your question next

And pipeline Mitchell. we the on of is did Couche How Could elevate rest it? M&A the valuations? is environment how You for is in expect the Jack This terms Julian over overall? XXXX? active of M&A

for I robust. focus is strong, good, us, we stuff. to pipeline continue you really to our the market, M&A would tell that right on need

our and or we're a needs path geographically be at margin we see the have the business M&A to our it complementary expansion our to needs the It clear the that or business that's As provides. goals existing that looking and types complementary be goals. being offerings, to services to to whether either of expansion complementary market, to to margin

we from leadership that's need Kentucky. perspective. team -- job the a culture you'll There an it. an to fantastic progress. say to and significant And business needs as small are we job. make opportunities, values align look team the fit disciplined be continue doing is And opportunities, continue whether to to that see of those at us elevated doesn't in Paducah, or And and a and and many amazing good a family-owned I'd vetting our

we intent bolt-on it's our the roughly that we our we with to -- think over sheet, to with course last flexibility with accelerate on the tuck-in strategy. of M&A we we flexibility have I have the the elevated And balance spent our year. bolt-on -- that. on feel said million we've that that $XXX still acquisition, we the doing accelerate even -- And

And it. technicians? showing decent Gross wage is margins a are APG well follow-up. increase. coping service How so quick a with inflation its Got among

is on take on I'll that the that. this look margin service Kevin. No, pricing of been pricing campaign we day, consistently business. the a at side expansive to say take we the we've end So of the decade. for the And last

to on labor which continue of Our is a price of to job good really that elements businesses that do of all staying price side service front we one. the need and for in through,

team I in -- work it's muscle and they to just a our would it's a So say developed, has continue [indiscernible]

line next comes Your Jefferies. of Stephanie from the of Moore question

actually question. on the I wanted power to up follow

kind to raise. and recent it how equity for ongoing So further, maybe also with the step of you possible that matches frame take your strategy M&A a then that to is

then elevated appetite a your again So verticals. going safety and we legacy how outside expand elevated? forward the should that potential fire and is after do And there infer then even larger now to of to with deals

So there great. be an update would

Yes. I about of of your think escalator that folks the now kind we to I most But answer safety, and Kevin we've and adjacency, space have escalator don't going say, the really to to capability outside to Street think and -- we're life and the got around first. too mean, you're the execute like flexibility of balance to -- a half investors any us I and can and the our know, going -- don't fire see then latter space, I'm elevator curious get add straight really recent the mean, going see that don't and elevator the you're us our going question we Stephanie, before he'd space. the we sheet I there. strain of, we're show in color outside this I security

think of that's part been I from And we've that our pretty standpoint. disciplined always

fit we've to we disciplined million the got I we've stay bigger and to But life be really have $XXX-plus family. that But increase I'd don't have -- opportunities have so we're -- some space not revenue that. good not to would if wouldn't the I right opportunities we good Fire got is would vertical into speed looking our a that tuck-in. we've in Chubb we the at say the say that than that looking capacity do I I looking interesting we'll brought at we're new looking show or it. capability anything we I APi -- that that a ask, the that Nothing that to And need that inside that safety -- flexibility. so things you put I this and we've it don't leverage. think we're at. execute a that's some interesting on And and mean know And so are know at. some got way we're that business we're put think

advantage with around we've us and with think and balance I the our Series moves going and made if everything to sheet flexibility and to present we're opportunities just and we're you continue color? as great with smart, the disciplined, And term. mean, we've the even themselves. any to just be going going to we're I that raise and for just of the take now good add the long loan, the gives be they optionality the B term that business Kevin, make want to decisions to equity choices

there's it ones said about When the well. bolt-on No, think there's there's Chubb. like sort bit. just larger then we and M&A, both I and of think that Russ middle platform little a

we actually that finance there, I we'll up. tuck-in XX he sure As think in remain need we what over mid-level was do cash to out flex next well, we there said flows, are we months. that bolt-on ongoing forward it enough these, anything And we looking can the something to if make do nimble fund to through

sheet We have easily. balance do the to pretty it

be get the possible. and we as that And to pay to we're that think have I quickly. to down history levels pretty sort how allow opportunistic things of of our manage targeted as back us into that's And to kind going

maybe to follow-up, congratulations a And of business. opportunities just be here. and again, to the I deal. just fantastic then elevated cross-selling ask a on seemed the on as medium- Understood. long-term this wanted to It fit

over -- the a of If fire little and kind the from ability cross-sell could your the talk time too. to and and then obviously legacy [indiscernible] elevated force you legacy side on about safety bit then the within opportunities with services, sales

Yes.

My me taken little acquainted would mean, each to their taken It cross-selling your closed, introducing on relationships for though And take hasn't real. to people even by their getting time again, just one opportunity to the say want it's other. you us and sales So experience this significant. execute one cross-selling is I with we've people step strategy. the a really because we've will funny peers. is I leaders of transaction step up open bit customer tells this that And forward

customer their peer difficult if relationship. And to know that and open more really don't them they really up it's don't peer, their they for trust

to the relates as we'll this really momentum bring be me But for able cohabitate, branch do you easy it more we it's to should operations or so we do achieve this the anything like say And or together cross-selling. to that. should faster our in

cohabitates sell here business. customer close. getting Do transaction we our in take that's the really effort inspections our can us going think energy have do. a fire towards I really in opportunity we the develop elevator that work services sales and think and next our and that kind to as into educate of safety couple months Nebraska life that great to one space the and the business specialty there's sales of for fire some And example have that real-life over office, walk inspections, our a of a and cell with to plan branch safety but -- life a I I business force, we us I've leader got Omaha, great a for

that branches him And absolutely guys has any And by hey, me other with the no, thrived work our do on we've really it's like start -- that in each this quarters the do they sites roof. same that's it's really Elevated's to the idea people got of work those you under kind it's businesses and space ABC. the living of and because accelerated same in of safety we real come customer drag same of working And and and and and business need our with that. to estate the leaders for they're in life each like, customer to and same the living -- execute

total there's a And it. willingness to do

already. have the think also that there's we in branches open basically case to shops that footprints especially up We of an existing elevated opportunity, organically some in the

it's but not overnight. it's going some going -- So effort, to happen take and to

energy setting to realistic about for to And sure being with about everyone it's really just to on want that. make -- I that us going the to so execute have expectations take we we're

next CJS from Securities. of question comes Tanwanteng of Your the line John

on margins potential there to there color the if core Do elevator see sale more for is assets could acquisitions. market into wondering what be appreciated. unique multiples escalator and down little would the business frequently? come at ESS? Or a any was ones asset models the Are of business? similar in Are that a longer-term you I to the drill similar the up bit more your to there you've you more more and seen the

security life multiples should the before away and it's say thank similar. And I to you to think good textbook be for like carried and morning, participating going But similar the very think I very, it's I get fire, John. safety space, think I here. I are

Life just think and we've life executed their I be right to safety space. in fragmented home for the space. just going the business as sellers looking for Fire as how Safety security It's are the the like Fire

versus call a think Other that So to elevator alarm, you up same. the I it an like and think fire got I it's brush than it

one know will And the -- so be I perspective, team they the players of that culturally and elevated know M&A be talking especially And us. aligned the And reality But in market. advantage the leaders think from something think the I market. has to senior escalator They in we'll Like it to run. boutique team those of -- come space. able think just bankers yesterday that I of the is is, They on elevator we'll that's to space. there's is be from the every brokers it and take able know with relationships. who that, the the an that

know market very well. the they very, So

play have in couple outside and their fragmented, of XX%. is -- highly it's a that, Yes. may markets is that market robust targets. that they same, a The pipeline They're be a There's add only thing I still there the would us in the range. market lot they where X% But makeup -- they leader the and the with highly fragmented. of come to

you wondering but you I And about QX the QX, updated guidance, the was formally your in know in if performed expectations earnings before. an all you looks talk just core strong. you you could business. on your expect it. business haven't I should level if for just I'm wondering half Got your second factors formally well guidance guidance upside mentioned update when core organic the for we do just your

in and nontraditional appreciate the material on sort the May guidance we have turn but on I'll about acquisition then X. a just X. spot we're May tackle I'll on here and Well, where to and John, too, here, half, -- I We're We're elevated guidance, I'll close this of say looking question. here the talk back

of the update sort looking to quarter, the in material to and year. for believe it be we said, a it close we're As we

in We FX close to like. noting back we're with and But to also through. what year We closing that had half take rolling our bring looks transaction. work and their better of team the understand that a want of time that to history

FX element. we'll that, we in to and sort bring And the so of intend do

back that year, the guide at communicated is QX. should of on when half the this in see changes say to significant business we be look trying as look at beyond we're thing today we And base there expecting half we're to no you organic the year. other the of the back the accelerated But growth.

to where business first up year. service want in of growth half them held our we have service rates the Our the

-- business continue the the X% would project low that growth expect on expect those HVAC of work on start then to to are of in work of mid-single-digit in the of to that projects going year. have X be And half sort against teams the so show that in international We great the doing side, the together delivering annualize sort year. X% the have businesses what's to specialty, the project that been been we the those the business the the through, back to organic to back half side of

everybody, this So Stephanie, whole John, add bullet point going about I'm to just a cross-selling.

at the a evening. had read elevated sent while team dinner invited we call, campus them on had about he was call dinner. to were sitting business of note leaders the leaders together So a And the other leaders on the night, And the the attend elevated with local point earnings mentioned and the we this and I getting that from yesterday, chance to I of we something here of our previous course dinner one many morning, me connect to the during Tuesday. with the

Regional first our this we of Leaders for invited Ohio the in bullet Service who being fired, Ben, Summit Indianapolis join is out a As VP elevated Columbus, June. to

want I they already and companies, business in people investment they our our the curious of on. business one like generally leaders cross these of newly And leadership We're acquired are in that's going pollinated. getting So on and people mean I beauties people them. there's this to development focus of surround work kind mean,

good else -- of idea whole this to the how And of fruition. bring them opportunities this just example a the knowledge going and warmly and sharing into everything that's is cross-selling come and And to business.

So hopefully, color. that's helpful

question JPMorgan. of next of Tusa line comes the Steve from Your

strong. execution, really Congrats on the margin

we I talk move I forward into about kind for the third as backlog think second about for sales on fourth, you on used indicators to know and some business forward half should side. and on the base like How guys the the some the trajectory Just of the of they of XQ mentioned the things stabilized you is. tell think in of in businesses. And But kind in a consistent back to the then half. Is in the it's half. normal comps kind actually a context, what that think to hard the trajectory? the And growth the the XQ? X% is steady X% bit pretty seasonality back it that like

XQ nice businesses? X a had seasonally to with have or XQ these you from does step-up step-up a You that and XQ. sequential nice How sequential typically behave

business. this Steve, in year, of has on a Life then that makes and in continued I back take anything Kevin. business, talked half look our the and Safety the backlog That frankly, sense at Russ U.S. healthier. is our to it. international life I'll up bit at we've U.S. and side, stab this say safety you to can add about held backlog a the add after. would continue when little And he become to then

half the So know think, year, I I of back into feel about and backlog side good the said projects so that's -- we as drives And the as on as really or we head you reflected. the safety may you that work, earlier, so know.

segment business, the back and continued the business the but half perform the continue is the earlier in of that specialty It a all businesses those -- the combination the a expect And the the don't say, of of a well of the is as should and been of in year business businesses said those the all year the that year. digits, very that Where year, growth but we that I'll back be growth. to as in so as well year have expected HVAC -- at should half shrinking we of the to guide I return -- half the on see smaller back in in backlog of and we side half combination getting, and backlog of and the that, and in be improvement return the those service and really single see first see what's sort level, healthier we've we in in a the will low as back driving of but half what to to will you'll well well. businesses

rates doesn't You of volumes. asked sort about seasonality much, just -- but impact that obviously more so growth

the is is and we Hemisphere lot business -- it's predominantly some we especially generally in we the a fixed third do business in sort the outside, Northern because quarter do of specialty X revenue a are growth base. and our cost of quarters our drive work What largest year in going going see a or the be on given of from any second quarter. a standpoint to that's to work

So

our generally performing QX, well. margin are of of as then And quarters a be to quarter, usually X step down we those sequentially fourth off the it going largest into related. lot weather

one. price of I holding on in love numbers. Yes, small price price is through? up back any relatively like the know is kind you're just well. that -- terms it relevant I'm running on organic, color be would not makes then of sense. on flat half, maybe -- disciplined the assume any in that in counting And like are not But but you you How earlier last these question, that if on if an one on touched I projects sure

absolutely. Yes,

think the we price about So way. following

pushed through We service side the business. have that the we on pricing of

to recurring services. around say, stream. price in the been roughly be the We number I service year, it on And would expect that as that has enhancing our X%. margin to revenue ongoing half of first relates or

respect we We as in to that down started to expect look months, in which because of continue the really that we a at should With sort that the of where significant pricing more half being that last driver the summer come we see We anticipate through pass-through. year. projects, don't annualize back price is to year.

pass-through. the through from back of So or our significant be it. a impact rate, year, negative half growth In we should be should on positive the the price there

well. on color. on deal congrats Great and as the execution Great. the Congrats

line of comes RBC. Sabadra question Ashish from of next Your the

then project for you quick follow-up or do where This you base the had the business Paige I is, the or pruning guess, is to on are just costs for the be feel I or that price how What's the -- -- to David there more one ultimately? cost, the Ashish. a just going mentioned need customer you selection following costs want on to them like be until looks And of much up tailwind more material commodity lower. the year? that you it on on raw -- I do like think

We pass-through. part up or last from a of the of pass material on relates on trying generally, to accommodate as to of the headwind don't it first, answer pricing our run to rate expect organic was and business, through. would say, growth I'll be which I the side just we're tailwind much price And project the it sort through. the really there costs

margins you if a on think So impact our growth we it going will, tailwind, to it's rates and be shouldn't either. don't

healthier HVAC to in component really and specialty more the and is go continue I seeing kind of second we're of our from some question. through of the the that But component earlier pruning mode. is back you'll backlog in can part, that -- really discipline handle most it businesses, that real a of stop. growth -- going you're especially that you Kevin's pruning tell remarks, one, of become quarter, perspective, selection of kind number your -- work the that never would for printing a I customer well, see the will that will

have customers of cleaned it that the that year to it'll through the to do take been year. see we've dealing with some will prune X-year probably third we the be of that fact the contracts Internationally, of the business through year up we of with of -- that some will -- some You'll through And customer if in had the that year of us a some continue second still those, end there some will. dealing to our owned honor, of the through of contracts we lot period like of this we've those that had this those end that half from do and that more and has be you will into contracts, we're carry should with that and legacy but some XXXX. time the and really

now turn remarks. to back session. over Q&A the our concludes will Russ Becker I the closing That for conference

of of on I Thank else would you. like our We to closing, and leaders each thank #X members foundation which is built support continued leaders our value. to appreciate that for their remains are our believe I the safety, and and business. that. dedication the In all of our team well-being our health everything

long-term would thank on we for us in I our have also appreciate look that those like as to recently APi, joined your to shareholders on as this support. the to their are and and you, well of for everybody, going Thank you the abreast company. progress investment forward updating our morning, to positive the forward joining throughout we year. our things remainder the in you of keep call that look continuing We

for today's all Thank joining. call. you That concludes

disconnect. now may You