ABM Industries (ABM) 18 Dec 242024 Q4 Earnings call transcript

Greetings, and welcome to the ABM Industries, Inc. Fourth Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce Paul Goldberg, Senior Vice President of Investor Relations. Mr. begin. now may you Goldberg,

as With Good morning, Earnings I'm Fourth XXXX Executive at to Senior our Scott President and and My name welcome Chief ABM. Relations Call. Investor Officer; and XXXX fourth morning, President ABM's as Chief our we well today is Officer. and press are Vice Salmirs, Quarter Executive financial quarter note Please release and Ellis, President of our our everyone, and issued year full that me Paul the results Earl announcing outlook. XXXX Vice Financial Goldberg, earlier our this

Q&A A found But I begin, like and on and release and contain before an to be abm.com. would that statements. our estimates predictions, remind website, today presentation other a After presentation Scott can forward-looking we copy call session. of our certain remarks, and Earl's we accompanying that prepared you slide host will

are estimate, what Our identify the use of words and the future judgment these of similar holds. expect intended represent current statements, to they our expressions and

are we statements be that filings These actual presentation well are to materially. them subject to that the to cause with reasonable, as results differ these and accompanies our a SEC. in our believe slide described factors could risks slide While our uncertainties as inherently

of at end of A the tab. numbers During the information website financial presentation to is course under of the this historical company's non-GAAP reconciliation available Investor financial non-GAAP be presented. and call, will the certain GAAP on measures the

over like I call that, turn to would with And the now Scott. to

outlook. which our execution our fiscal finished were high to discuss more we quarter, results both of moderately and . I'm you & all and the as adjusted a thank year segment. ABM's We growth capital fourth also for by strong and the joining and performance the These balanced our fiscal posted revenue XXXX. in Business note in results morning, capped in double-digit driven today reflects results initiatives, EPS a Good growth year above and Technical Aviation us Paul. great and volatile our Thanks, resilience on on fourth begin continued quarter ABM revenue Solutions of Industry XXXX expectations. ELEVATE delivered positioning with positive a thrilled by X% environment. macro our of importantly, $X.XX, deployment organic highlighted ABM, for

Market making still point improvement, a company and growth business coupled to macro stronger emerged key though turbulence we've of navigating couple our as trajectory me an inflection appears markets in have clients strategic some near real growth. our last dynamic in commercial markets. We it's the over service with ability are been through early, future gives investments after enhanced returning confidence and years. to across And our the our it although estate

run me Before we few a through XXXX. accomplishments of discuss let XXXX, our fiscal important quickly in

center achieved XXXX. microgrid which by data we related results segments expansion in business. Solutions XX% story our grew Technical remarkable service organically a Aviation of First, growth in Solutions, Technical The rapid was our complemented big line in and our in

complex schedule, full in Our an fantastic segment Raven This no project a which year a on team earnings. did drive increase growth strong very executing job helped shows of abating. signs microgrid

we in offering, service benefited also travel clean. differentiated grew aviation Our ABM business XX% as from and truly XXXX our from markets healthy

in position is our the we the Class the our market. down solution, Organically, and pleased and headed of into of which with XXXX expectations in revenue with. service penetration the client than for mix, leading our the Our strategy supporting intelligence-based excess X% broader differentiated was of outperformed less offering year. from coupled a A technology diverse was higher-performing benefiting market segment service B&I's significantly aviation also market. I growth with results, artificial more comprehensive

including the diversification, contributed continual geographic to and results. the our growth focus driving Additionally, on our also U.K.

more the as of productivity a the an rollout role. on optimization was was for also key One progress X% which productivity facility accomplishment Labor space. that, revenue, in has percent our made while on our offers workforce significant to identify team opportunities the archetype and broadly initiatives down fourth labor This efficiently improvements in optimization significant an there implemented to the more our factors internal that service workforce manage based enabler allows important reducing when tool. been nearly opportunities our are many XXXX. our introduction to to tool of productivity quarter, We contributed labor This across tool, usage. played

commercialized Solutions ABM ABM also further Clean Performance and year. We during the

is Clean the XXXX outcomes offering contract. portfolio Solutions and AI-based meaningful our clients allow application multiple across revenue. are multiservice for enhanced customers clients teams their our and a these from to single is under of ABM deliver that data momentum integrates gaining service our industry reminder, offerings a now a Both Performance represent technology-driven to purpose-built portion aviation utilizing for As sources our ABM our

Lastly, in Though in quicker long-standing across of of many made through through cases We ABM, are experience differentiation allocation HR data times and we price we forward. we From a at response I've enhancements per we've as and convinced perspective, average our continued our already dividend. delivering an repurchased improved will at We of capital addition employee under mentioned, use important our artificial expanding raising investments stock these and including balanced quite $XX early were critical $XX share what an intelligence. days, see we XXXX. deal record provide investments platforms. annual mining, early move desk in on it's to opportunities RFPs some revenue million

of supply our our in We and for by earnings our dividend long-term Board increase which in us underscores In new target. power systems income in confidence center uptime simultaneously mains. adding long term the closer our our ended, uninterrupted payout data approved position the quality in invested by expands services which acquiring the battery quarter faster-growing and brings vertical Directors capabilities XX% an net fact, also adjusted after trajectory of XX% to

declined on for time With year more XXXX while a tenants downsizing the years forward leasing normalized continued Now the in and to acceleration have availability look in new several to our calendar grow and we can recent beginning end market rates let's turn as real has third detail first to activity the commercial suggests JLL The of the quarter, reflecting office the as U.S. their footprint. comfortable encouraged went markets an activity that walk slowdown a longer we with report become leasing is in supply. to through so report that research to to B&I, respect coming estate tide about the highlight term. why are and

the weekly are dynamic to According shifts towards to greater office office likely continue. continue attendance up The employers in-office to the that This has XXX office average report, same positive days. other JLL is Fortune amongst these attendance. drive to drove X.X requirement been work the broadly policy policy reported,

those For we are segment our the will soon reasons, half growth B&I of confident return XXXX. to in that back potentially

manufacturing markets a U.S. XXXX markets. U.S. healthy secular our driven center industrial the and in distribution expect economy be strong by to semiconductor data We and by growth and in

organization according research XX% report several growth center services a to in XX% statistics data And to trade annually is semiconductor grow semiconductor and years Americas world's market publication. markets expected the the in the The expects for XXXX. next

wins growth by M&D and the of previously organic year. and return trends. rebalancing and to invested mid-single-digit have We the will I further the leverage end have that these once our confident continued forecasted end important discussed have new of resources these segment am win markets targeting business to to impact large client online come the new a we of complex moderates, in

of year, amazing to airport are They healthy refresh across entities happening. Aviation projects a public mentioned, and travel aging also from these where service kinds few LAX, I projects an their and had the markets differentiated revitalize numerous work and leveraging both just are as of As and LaGuardia, country [indiscernible], private JFK, U.S. infrastructure, benefited capital offerings. examples

clients opportunities Our aligns and should of experience over multitude revenue to investment completely several emphasis facilities a next us higher they secular the This strength seek a and drive as provide refreshed which ABM's maintenance with these for traffic on years. traveler cycle at and focus. the place

indicates in grow forecasted next to in passenger growth of X.X% North a air air traffic Looking X.X% expected forecast to report after is American year, XXXX approximately XXXX. recent passenger

constructive, as exuberant quite year. this So not markets past as but remain

is our portfolio. pipeline of other tend cycles sales but healthy, be Our to parts than in longer aviation in

that half the to may expected So of back be us stable be utilized provide flow be ABM. from a the across stronger to can Education perspective. earnings for cash year a and continues is foundation of and growth

Over the past APS of revenue substantial have opportunities the afforded on more been years, our we by offering. focusing couple

client colleges we've resume. namely and types longer cycles of prospects been that building a steadily to nice school be Sales benefit larger these and universities, districts, tend from ATS, for

The value X.X%. is ATS outgrow we reflecting as to this X% in enhanced the we organic deliver the it we other us XXXX additive benefit helped margin. customer a of margin creates for and services. of for full posted year bundle and is market when delivered the business growth This approach stickiness

microgrid XXXX and Solutions, $XXX market driven to in our we conditions million. by Technical regarding healthy expect Lastly, continue will business strong the remain exceeding backlog

XXXX $XX us. including in from In expected renewal the by organizations growth system storage demand market, electrical in fourth to grid According research the billion of was significant is systems battery and over fueled storage. manage This the due billion retailer more consumption private new for fragility looking ways and in the and approximately $XXX a over the microgrid firm orders for booked additional power to market fact, will for for new well a to big-box an quarter, to electrical which $XX the leading providing developer. next emerging energy AI grow million efficiently and to we of energy be nester, runway decade, U.S. the increasing proliferation work

the acceptance and EV X. impact, still have have new and significant in service over we center data position lines a Additionally, the we this will It's bundled mission-critical AI administration's up policies market. interest rapid demand early to of hopeful with and to our if infrastructure, what growing growth any, and say will solutions rates year a and too policy expansion expect in will general drive tick trends energy energy that or next were on regard we

grow revenue, growth ensure strong a and up, expect XXXX. All ample solutions adjusted adjusted EPS for markets see to margin our to technical about sum To in room good we and feel in XXXX. in all, it we

to such, in $X.XX EBITDA in range the be As EPS adjusted margin the X.X%. to X.X% for our and we of to adjusted of range be to expect $X.XX

be that, With turn with to I'll you walk the some through it and shortly details, back final comments. over me let to Earl

Good everyone. morning,

our review full XXXX in our and positioned growth quarter As we beyond. Scott we believe outlook, fourth for let before me XXXX pleased our quickly well get results, year and and But we fourth into with are quarter mentioned, we results. are

of our by Aviation, you Organic acquisition Education with Quality X% those earnings quarter by flat. Uptime growth with For our organic remaining to Services. was billion revenue of please Slide X%, which comprised XX%, quarter was turn Fourth third of increased and X. revenue once and presentation, grew growth following essentially along XX% Solutions of $X.X X% again Technical respectively. driven led the

segment diverse B&I Our less remained X%, service from client than our benefiting declining and resilient, base.

above only revenue expectations, Lastly, in X%. manufacturing came distribution by and declining our

of on a $XX.X to related last prior of under impact net $XX.X We $XX.X to per and our performance. This negative earnout the a per by corporate of lower primarily adjustments earnings, was fourth and the The $X.XX of Moving settlements, very investments plan. Slide million partially consideration strong The $X.XX to or offset adjustment compared adjustment XXXX income earnout. contingent X. share operating self-insurance the driven million our recorded to to million RavenVolt tax. attributable by reflects net lower or higher share result year segment legal estimate payout RavenVolt year. income loss as earnout acquisition current quarter was

in RavenVolt's greater prior $X.XX $XX.X in Adjusted minutes. few decreased respectively, I the will income detail earnings year. share net million per performance XX% of and adjusted XX%, of from a discuss and

earnings, driven well some largely $XXX million, points. as tough last in planned and EBITDA as X.X%, EBITDA lower corporate basis to down I'll segment was addition, XXX shortly a discuss which These XX% comparable decreases In increases margin costs by versus adjusted were year. adjusted decreased

share our Adjusted EPS by activity. benefited driven from lower share count repurchase

the our and X% less was Now beginning from health and by higher-performing results driven Slide including declined prove our as our X. and to This sport to diversification, to footprint, care mix Class revenue exposure continued the a of of A geographic billion on turning segment than properties. resilient. $X segment B&I markets entertainment

As Scott real commercial data leasing improving, mentioned, macro estate activity. is especially

growth sales was inflection in profit initiatives later basis XXX to along hopeful with was million of our margin to are million, points. organic approximately will the positive $XX operating We X%, a drive these and down B&I XXXX. decrease dynamics, B&I's operating $XX

These unfavorable costs. strong business. approximately from airline the grew the to an declines million were driven by travel insurance and XX% airport Aviation both impact markets of wins reserves $XXX.X discrete business year-over-year also included other new primarily adjustments $X and to side attributable to million of the million million, from to and $X revenue $X

We surpassing servicing by our in measure XX are leverage XXXX, in by new set of $XX.X operating increase points. XX driven basis X.X%, an a This was XX% improvements million, on billion airports. U.S. profit team. operating record and proud of supported the achieved revenue. and XX higher margin largely amazing Aviation Aviation's services, were These up fact of $X differentiated large the busiest was by offering that was

to Distribution which just by of changes largely e-commerce than Slide a originally X% hurdles, as been by sizable client initially our our from to expected X. growth million, less primarily hesitant and by at to a has make by under the meet declined client, work customer $XXX.X been clients. large choice pace rebalancing the did not impactful to to the exit due has Manufacturing rebalancing Turning and offset communicated. financial The other revenue

positions mentioned, investments margin XX a we and to end growth as path points. was and in like X.X%, drive to was number of a Operating clients sales-related and of Scott slightly the in margin to activity XX.X%, operating than was profit as $XXX operating reflects the increase target up well Education as onboarding XXXX. cost at organic points. increased mid-single-digit accounts. increased million, an clear growth to As of back centers. by principally million profit basis reduced performance $XX.X decreased see Profit million mix plus basis more markets data and revenue Education XX% slightly new semiconductors XXX offset margin $XX.X at of down

labor revenue services. to growth Organic uptime remains to while was continued and organic improved extremely efficiency was and business, including Solutions mission-critical in soft. $XXX.X This mix. solutions acquisition our Technical microgrid activity XX% and bundled activity from quality XX% attributable largely million, growth grew growth strong XX% EV and energy our by driven project of project

Our compared business phenomenal microgrid a X.Xx revenue the with and earnings both year. had to XXXX up prior

cost, $X.X XX.X%, been million, remain performance by cost past backlog operating robust, resiliency energy year. $XXX points the our remediation data XX% associated center million demand last previously with $XX million. forward, a basis over of $X.X grew which Looking XX.X%, and the excluding energy contract. markets would our from have Operating Solutions should million profit included was year-end supported XX of mentioned a Technical to margin below margin

$XXX.X of $XX.X to liquidity of result, of million the on $XX in especially was ratio QX, working cash with flow had billion, quarter Moving million to available the million, final below reflected EBITDA which cash letters This in of the total X.Xx. At month X. year. fourth total supporting to build Slide was we $XX.X including a ended company's indebtedness and related last strong of million. Free including $X.X in of standby credit, ATS the We cash resulting end the million. fourth equivalents forma capital debt adjusted year, a of fiscal pro at quarter $XXX in the growth, of

$XX generated for for in-year Cares of or integration $XXX cash $XX a million, million million. and Act employee costs in-year $XXX from which credits we receipt elevate the flow XXXX, For in million and $XX the down year integration million. of million free This $XX last cost of million after $XXX is $XX adjusted normalized flow normalizing full of cash year's of of repayment and retention is million free Elevate

expense remains generation slightly flow recent cash prior largely focus and flexible year, Interest Free was the business by a driven reflecting $XX.X asset-light our acquisition. key in higher million, XXXX, than model. our

quarter shares per cost the of of $XX at for Regarding in total over capital XXX,XXX little a a we fourth average cost an allocation, share purchased million. $XX.XX

a shares of of under capital cost year, be hallmark we program. [indiscernible] million. we share million cost repurchase repurchased $XX.XX had $XXX total to At a for our full $XX.X X.X the allocation For per share average ABM. at remaining approximately million of continues an year-end,

For million the shareholders million and $XX about the $XXX full of and on to acquisitions. share in we dividends year, returned spent form repurchases

Now let's move as on shown XX. to our XXXX fiscal outlook, on Slide

As are margin EBITDA excited plan, a to we Scott EBITDA and adjusted year-over-year grow our mentioned, basis. and revenue, adjusted about XXXX we expect on

an important growth back as market we half expect continue. recent assuming will our B&I of is X that, MND Beyond to trends the XXXX largest the year segments, in return year, and

are we XXXX Adjusted range is our to this EPS posted in such, we of XX and margin forecasting between points represents the full to X.X% XXXX. to midpoint, expected the midpoint At basis over the EPS up $X.XX year, increase the for adjusted of in $X.XX. X% at As XXXX $X.XX. versus the EBITDA be be year X.X% a adjusted X.X% full

million to incurred expense $XX is we interest XXXX. Our from $XX $XX million, down million forecast the in

We before XX% between XX%. be expect rate the discrete tax to items normalized and

to million. cash of normalized as million of million earn-out Elevate range used as flow. financing. $XX for cash the recorded be remaining Full estimated million free be forecast costs payment the year that be of of will The $XXX integration to and a from cash operating to million $XX of earnout in million cash. recorded and total use is will $XX normalized Moving an free is anticipated This $XXX to flow $XX

be flow of in As the half is normally the case, back we cash expect the stronger year. free to

turn let for comments. Scott closing back that, With to it me

a great upgrading the consistently and platform tirelessly year and, on it importantly, and well our our even transforming efforts most the Thanks, us working our our that to internal XXXX. we've been and to is our Earl. end-to-end financial to to longer-term as processes. remain congratulate I given moment investing of exceptional which in exceed we fact want to Through on throughout a more business. committed Their to goals enable data as team our strategy plans our tireless all, take technology clients our

our XXXX for Thanks already by we've made joining We're initiatives. excited call our and on the again begin about positioning today. as we several progress

let some that, with me And questions. take

first from Blair. of the [Operator Instructions] with line William question Our Tim is Mulrooney

as M&D this the wasn't what Earl, segment The we headwind expecting Can were morning. you the guess, you at this better frame because expected. I quite is help were good the bit was scenario and rebalancing case as for us? What a rebalancing than from customer initially performed expecting, originally your base point? large

Yes.

So we another still did in 'XX but us. rebalancing, better happen over to expected than phase not There's it's that's the yet. year fiscal going through for

have X that, So client to grown. we've And get we've phases that but up really addition actually in done picked well. sites actually, more as to new we the through, has

better than saying because out our not think yes, on client just we're next change, been sites. was that So And we optimistic just because we've performance. a up X get continuing calling a with the been to as we're this expected. reflection have I we opens with But phases but of we've really philosophical it grow year, it this client consistent that quite more new turned Tim, as to yet, just the not such, through

been great it's story. So a

Understood. That's to hear. good

more -- little performance truly the more the of bit me Scott. in a time? Technical from are is $X on I types And Solutions on is then like good of more just mean business. time million that expand reasonable remediation for So there X up. more not a on but charges nature happen [indiscernible] That's these to the just occurrence the energy for just future, expectation Could this through it color, it kind looking contract? . the does charge you yet, of business? a is Or this rare a Or of things

is is ever that you It let it, I'll we happens. rarely something rarely happens, Earl see. This but Tim. I rarely through an this anomaly. take

installation. a of was technical an with this Yes, one a of issue portion

was actually started of in that a actually So this installation broader part XXXX.

a a needed had to a So result Again, a a of portion But it it. we event. this mentioned, on as is actually of customer. million project. that, remediate And as we fail very Scott was $XX rare the

Baird. Andy is question the line of next Our with Wittmann from

little ask So just I wanted just the bit. clarify help to of quarter a another to couple things

you $X some think, I said the you in in talked of the give those help Earl, curious some about or addition discrete But think the some I meaning kind otherwise there could context other that to of costs million maybe quarter. I things was color segment, are what onetime that. about $X B&I Are was in the on and around of say somehow costs that you was discrete, cost. to discrete to you million

those of bad to reserve expenses, actually Thanks would just came say of as the most Andy. up up question, trued Yes, notably onetime what as that that of for Yes. the debt are legal in like discrete a settlements quarter about or kind series $XX million. things a well were I we small a handful just

results. Is -- but back the adjusted those And added Okay. correct? in that were

They the -- above Yes. in those are no, the were line. actually

So Those actually those numbers. SG&A hit . not that below-the-line above numbers actually our were line the were

so Yes, legal you add Okay. sometimes and ... settlements because back

very accrue of smaller put line. that were would actually actually series Yes. a that And would settlements basically, below for these again, ones those the legal line. the large be we'd above

a And know, impacted free I there that to I million guess don't cash flow is of right. transformation guess here $XX be $XX All then -- by I comment the in 'XX going costs. Okay. maybe was to million

a was little I hoping Elevate maybe So million think was for the to 'XX. fiscal on impact program previously, that could I $XX expand a maybe Because you looking bit?

So bit it's it looks little like bigger. a

doing? the cost what more if you're the same you're if more and cost is for wondering doing is like So -- you're I or was estimate just this the if new this doing

$XXX taken will $XXX to million $XXX mean We've million. had you about Yes. I million we for cost since to recall, be about the the $XXX be originally, actually estimate same. that No, to this new said million. that up if would Elevate

total. And you're the seeing costs. spent of probably actually reflects we've that XX% again, higher near what So

XX what over seeing So months. the residual next literally actually wind you're is XX the to down

you points And line back? Okay. the that with that top you, Or as are out implied thinking that of that up expand costs the the you're maybe, the That's is are other pure your -- the Or primarily holding there XX get that beyond annual anticipating of feel expansion growth you're you -- the basis in feel getting that in margin points that then of way margin annual helpful. be going XX and that's for platform, finish really do maybe Scott, 'XX can right for to for the and you like about basis SG&A expansion? remainder 'XX? do just leverage of Elevate you investments expansion X

Yes, building do getting largely We target and it And platforms believe on margins. updated of But an we're to tools EBITDA part expand. can right? aspirational on X we top think on your part a you that. data all is is X% remember, if but then us, put The beginning, the out benefit is path Because we ELEVATE just And upgraded. is the X we do. spend behind of that.

the So solutioning. the get insights people in can and out field

beginning. more there's to fair benefits of number So already, we've a gotten that's but just come. And

Bibb is the Our next Truth Josh of with question from line Securities.

grow in expecting And total you Beon. 'XX. remarks, mentioned revenue then Jasper Actually to fiscal prior in

overall, a the and sounds stronger you first you put a it be year, cadence on like through what but point Just rate kind little great. but of like that cited perspective it's from going some bit half a might of growth factors just detail half, hoping the back than more would the there finer to a be could a look

at a to year. we're growth just markets, going white optimistic end great it is you seeing mean, look I Yes. we're that be When space. our

fact big I think is are But that in prepared my hoping GDP, were remarks, one be impact probably signs growth, for year all terms in we'll meaningful X% positive, inflection that Because and question be to back of and a which growth. pointing turning X%, you range. the is see could to still grows to right? that's heard a in that talked that deal down start in of we back when always us, we about at when the half which the versus I B&I, a the segment will GDP that's that X% is that right,

So we're hope but to in in story flattish And hoping 'XX. going year-over-year this growth is back and meaningfully is QX, that's then to trajectory. but M&D return to an upward year really be a the

is aviation strong. XXXX. be double-digit So going had to We in growth

we're think And ATS Educational have solid to will in that steady I confident have 'XX. again to in growth growth going is double-digit very very 'XX. keep going ATS, grower. being

about And the in by So sales really platform. achieved new optimistic cap growth would $X.X I XXXX. it off in billion we saying

year record-breaking I think sales. it's of our sixth or seventh consecutive

a growth excited really the platform So from trajectory. about

be moving to platform then fiscal And the was just segments savings update for on could of like looks 'XX when new expectations associated targets? in there your the the our will I hoping you remaining elevated for and part what us cost on the ERP road as map

thanks question. No, the for Yes.

group, new deployed as system just So we industry the actually M&D. B&I largest for as well our

So up. the now have of actually IGs wrapped we

will ones a over out of as in part should And have anticipate kind course roll the next And I place, XX to the of to next FY so months. everything XX we that, of 'XX. would the middle like beginning the of say, we by result

one me. Last you. for Got

you're seeing what's inflation outline labor what this and hoping point. guess, I rate relative norms? historical you considered on to, at could cost Just recovery

Yes.

labor think moderated. costs have I

arrangements. half that talking you come of so positive union 'XX. those down And where remember, settled in And of XX revenues from from points months. XXX definitely through think thing our we on about or collective basis were been the to in is, the I agreements step consistent 'XX were if in bargaining virtually, XX we've agreements all last for us

through actually high inflation. without we 'XX predictability and 'XX necessarily when So that we costs from where high in and beyond, rates labor had really believe all at of were and we are clients recoverable have in not 'XX, labor 'XX 'XX we lot on it's a irritation,

a labor from like inflation we're good we place So in standpoint. feel . a really

with Our line next of Chan from is Josh the question UBS.

to inflation that in XX picking margin that much positive improvement. of off on contribute continue one the driver does points theme. that of And labor Is expect? basis XXXX? Does productivity to your how Maybe be more meaningful you that

to start thought, is Yes. proficient to more the expenses vast are for elevated we accelerate. the we're majority which benefit in we one to the workforce tailwinds and out, think good the Because tool, of starting right? productivity I us, on get roll see is get starting that. I our optimization look, labor, investments mean, more just right, our we're have our So we of

So see chain EBITDA moving it's labor . those going from take we when optimistic tools, up to really largely completely about the to seeing. us to just and months on we're out -- what to on but it's come XX XX efficient another being margin, roll you going

And the Great. quarter-to-quarter been ACS, this whole on margins have year. different very

in so know a you're of ramping acquisition got that And you an there. big I product

could just talk within the going normalized you to trajectory ATS So to what is XXXX? expected maybe or margin

margins But that actually margins. ATS margin with seen the are that if by mix at actually a normalized probably of out, you'd microgrids the you as were at and have obviously, of that say looking you've you volatility look mentioned actually to Yes. driven really -- margins pick up. higher I single-digit high usually would are be business business, more going

Alwy Bank. Our questions Deutsche are with of line from . the Faiza next

aviation. on Alwy. behalf to Sharma is start on Avi This Faiza Wanted of

you thoughts have your So market about is several seen business? opportunity? the sustainable the rate share, obviously office that market growth over talk around what an vision any Can quarters. last the for what is And growth

if in airports how And through the feel is XXX that going top really majority that offering the the we is the country. business. And I sales were much remember, a strong so on about at moderate which, we'd around operating have Yes, of trajectory. us, our going integrated key ATS of good many offering, ahead I'd as really infrastructure such amazing 'XX, the The on And be we're single-digit is We white for we of really them markets feel high our so we into grew is Airport, in LaGuardia of airports in the we but offering. contract. are predictions, world. vast going you much little our predicting, double with in And us say right have -- a And good based an fact in like We are of our now. the had what retrofits to digit first space in all, about growth some bit which 'XX. here.

where the last this dispatches is the have to And app-based to the which we've ABM right over thing we XX one be. going now. out our on I'd around called predictability tool rolled that And point employees traffic Clean, airports our based at airport tool of is mention, that this different

mention it for longer we're cycle bundles bigger aviation is just bundled But a So contracts, definitely larger going I it's and bigger sales will beginning. because just in solutions.

So term it little again, really long segment. aviation prospects about But a bit growth takes our for longer. excited the

about think and And then And split should just capital how organic M&A? around between priorities for allocation XXXX? buybacks allocation, capital we on thoughts investments, updated any

Yes.

fund foremost, it And to leverage. So to, actually and allocation. no flexibility as first in at offers around we buybacks. in Xx is pleased low What right our us to range X.Xx, significant to continue dividend you dividend M&A continue our our approach as recently in the our a We're strategic will really to feel the share of which and continued target increase our be relatively growth about of strategy change X.X part saw plan, capital comes opportunistic well plan when plan. M&A,

questions are CL the from Our next Silver King. of with David line

like step end maybe range? I positive a product did mean growth to guess 'XX. that down large low what what guidance thinking the to end you talked in of for of some potential to X% me, low -- than your range low X% less end the and the year And you've what to a cloudy EPS distribution the in I thinking guess, this have the environment, But limit to of earnings for bigger Yes. uncertain would X%, guidance about your or I what back that I'm a virtually lines. into range, every trends improvement But fiscal record particular, customer. happen -- adjusted goes adjusted of the of growth. in EPS was, would from more range go the to I one or about about particular. a much very mean, I much or just maybe your other

new coming pressure question, for hasn't little growth, put there's Thanks us environment we that macro or on year and the potential on range. think of growth the no heavy policy rests of the new end they this back And yet cannot but years estate the real in, happens, much can every growth, this because Yes. settled bit a comes so have not of trajectory. a And that administration Right? David. mean X could have in. predicting I still changes. I the happen, commercial We are question when the administration frankly, that for some

watch carefully So right we to that now. have

that's generally on us. think optimistic. that speaking, the could pressure I So stuff we're But put

opportunities this kind down -- where or regards believe about Okay. I for then your case away the a talked Is know walking this was $XXX,XXX philosophy or pandemic, seeking mix and have lot upgrading the moving thinking, primarily employees or is like it weren't renewing $XXX,XXX ago some don't a of labor. returns right maybe or and what your I about you I'm not business case opportunities contracts your Scott, around And be of guess some the where targeting acceptable. it employee quarter cetera. growth next the Heading maybe moment, the existing see white where more Or you're you question less operate. white and to the more to recently of just to with capturing is more. upgrading or workforce your which Is growth in you this share going areas business? space portfolio growth, talked but space the and you you're count in on your focus into more around is broadly going philosophy more et is your about maybe this you I was

do excluding, what might employee And growing . see go, employee your count So would where you philosophy count I guess, meaningfully be employee your for where your roles excluding the going? M&A. But

Yes.

we revenue and and give services employee count, more we tell X side, do have growth. relative solutions I look, our you, So dollar. you think our obviously, look I'll technical it's of engineering, David. the on count, to like the employee terms less But I you at always hard in would because absolute commentaries, and technical it more One, people revenue per don't

come efficient hard dollar So with organization the revenue reality. more at revenue if, fact, ends as per in more entire is you'll per the bodies of kind we our labor, employees optimization, what happening of portfolio. towards secondly, move for get with we see that's services, And workforce more mix the the the less and down managing up the then dollar

say being or we're it's revenue don't meaningful we would But services. more X to based going of until we're hard So least at to the commit it net-net, going more want get fact I I'm going that efficient, the to I points. sure get we from and move overly ratio now, proof years . until be get dollars meaningful to employees to not proof more to moderate overly towards should on more points

Riddick Marc & comes Company. question Our from Sidoti with final

more talk could prepared about a on wondering you was margin drive about those -- segments? AI benefits. sort you're I initially, see maybe Or benefits where to whether you those your it's toward that little broad-based seeing helping in Maybe on the a the particular talked how expand if you So goals? segment you in a see little maybe bit, how wise? that And remarks, throughout you bit how could being other of you then

right? and for that I about office say less field. true we've out every in versus solutioning spoken would and savings And in to look, -- every It's Yes. it's in company early back everyone it's maybe the think industry segment, efficiency days, the about I think days, just it's early

So around one solution tool, predict We ABM problems efficiently We have we get X us more the good and weren't that actually app clean ago. which, our AI-based lets can again, and deploy reduce to example way years today. airport, didn't able people quicker. to will is that an labor

And the AI labor and more Mark, like and have a the in that's same Chicago has that's the differences efficiency. makeup application things that look in office going about a is labor the are different one square labor to more foot predictability we're on And in using get So certain may Los that [indiscernible] Angeles of the in a and ratio, about ratio. building for same and at one we'll phone that we've past, one field office building the are in XXX,XXX on we'll size be what and we an talked has predictability. people and the talking and

to be predictions So able without those of kinds we wouldn't do it.

AI journey, already and that type predictability say over hire but an the coming not coming job, AI, greater platform, in going a or door we're whether that with of thousands years, that I'll give on turnover great stay back the be not And of I going and be on phenomenal. to of the candidate they're the going and be there we with opportunities quite that is the we're to able tens that more to through people and thing be tens generate efficient And are in annual it's we the come opportunity helping of space have yet, to the significant X-year X it. about on predictability AI office, candidates believe portion exploring will on the think we're not trajectory. to, -- a just then but the our basis RFP the years, there's through us HR And responses, we about better then of RFP think at through an to HR over responses next last the next

then back I to this part. wanted And Great. the last thing circle for Okay. me, on

you're number in act or maybe far I seeing are versus on the seen as to follow touched the willingness of you've think you're now out of attractive thoughts targets what sellers to as in much if maybe way changes sort currently X that acquisition of just much there, months far ago so? the as what opportunities thoughts usage. seeing of get briefly pipeline up for you cash on I on on wanted as your potential

Yes.

pause to formulated, be to a high bit, being middle be if on flow, we 'XX more bit a honest, acquisitions our was said program and 'XX you because the little a the igniting and of level, taking seeing we our were system. large ELEVATE little were of a but that kind remember, we're of in fact we in ERP think Marc, going I

So more we The in for potential that to like the XXXX. about to opportunity are talking there's talk activity. we believe increased all bankers that

us, big We for about we the passing transformation little we'll time get point getting about at ERP through we super need But we're just scale. So acquisition. where again, talking to . a excited nicely more start hurdle our acquisitions, a see. could before spend bit

we At this session. our the reach of question-and-answer end time,

remarks. the hand Scott back I'll floor to Salmirs for closing Now

here interest to results but you time we're holiday I I be to at back and And be just your thank answers. QX wish just and And want everybody a being quickly taking we'll everybody family for for all happy really call want just you the about with hope season. safe and the our questions on I with and XXXX have ABM. out there. enjoyed in excited to

So . everybody. take care,

for teleconference. participation. does you you. your today's conclude thank We Thank This

this at time. You disconnect now may your lines