Financial Performance - Net revenues for Q3 2025 were $2,085 million, an increase of $259 million or 14.2% compared to $1,826 million in Q3 2024[186]. - Gross profit for Q3 2025 was $652 million, up $85 million or 15.0% from $567 million in Q3 2024, with a gross margin of 31.3%[188]. - Operating income for Q3 2025 was $163 million, reflecting a $21 million or 14.8% increase from $142 million in Q3 2024[186]. - Income before income taxes rose to $130 million in Q3 2025, a $30 million or 30.0% increase compared to $100 million in Q3 2024[186]. - Net income for Q3 2025 was $93 million, an increase of $24 million from $69 million in Q3 2024[186]. - Adjusted EBITDA for Q3 2025 was $281 million, up 14.7% from $245 million in Q3 2024[196]. - Net income for the nine months ended September 30, 2025 was $205 million, a 12.0% increase from $183 million in the same period of 2024[210]. - Gross profit for the nine months ended September 30, 2025 was $1,809 million, a 12.9% increase from $1,603 million in the same period of 2024[204]. Expenses - Selling, general, and administrative (SG&A) expenses increased to $489 million in Q3 2025, a rise of $64 million or 15.1% from $425 million in Q3 2024[190]. - SG&A expenses as a percentage of net revenues were 23.5% in Q3 2025, slightly up from 23.3% in Q3 2024[190]. - SG&A expenses for the nine months ended September 30, 2025 were $1,419 million, a 14.9% increase from $1,235 million in the same period of 2024[206]. Revenue Segmentation - The company experienced strong growth in inspection, service, and monitoring revenues, along with project revenues and pricing improvements[187]. - Safety Services net revenues increased by $187 million or 15.4% in Q3 2025 compared to Q3 2024[198]. - Specialty Services net revenues rose by $71 million or 11.6% in Q3 2025 compared to Q3 2024[201]. - Safety Services net revenues increased by $523 million or 14.9% to $4,032 million for the nine months ended September 30, 2025, compared to $3,509 million in 2024[213]. - Specialty Services net revenues rose by $112 million or 6.8% to $1,765 million for the nine months ended September 30, 2025, compared to $1,653 million in 2024[216]. Cash Flow and Liquidity - Net cash provided by operating activities was $377 million for the nine months ended September 30, 2025, up from $337 million in 2024[234]. - Net cash used in investing activities decreased to $231 million for the nine months ended September 30, 2025, compared to $680 million in 2024, primarily due to reduced acquisition consideration[235]. - Total liquidity as of September 30, 2025, was $1,299 million, consisting of $555 million in cash and cash equivalents and $744 million available under the Revolving Credit Facility[226]. Shareholder Actions - The company repurchased 3,095,573 shares of common stock for approximately $75 million during the nine months ended September 30, 2025[232]. - The Series B Preferred Stock Conversion resulted in approximately 49,205,279 shares of common stock being issued, with the company repurchasing half for $600 million[251]. Debt and Financing - The company completed the Eighth Amendment to its credit agreement, increasing the Revolving Credit Facility from $500 million to $750 million[230]. - As of September 30, 2025, the 2021 Term Loan had a remaining principal amount of $2,157 million, with no amounts outstanding under the Revolving Credit Facility, which had $744 million available[245]. - The interest rate applicable to the 2021 Term Loan is either a base rate plus an applicable margin of 0.75% or a Term SOFR rate plus an applicable margin of 1.75%[242]. Tax and Effective Rates - The effective tax rate for Q3 2025 was 28.2%, down from 30.9% in Q3 2024[194]. Internal Controls and Compliance - The management evaluated the effectiveness of disclosure controls and procedures as of September 30, 2025, concluding they were effective[264]. - Internal control over financial reporting was also deemed effective as of September 30, 2025, based on the 2013 Framework guidelines[266]. - There were no changes in internal control over financial reporting during the quarter ended September 30, 2025, that materially affected its effectiveness[267]. - No material changes to risk factors were reported since the last Form 10-K for the year ended December 31, 2024[268]. Other Information - The HVAC business was realigned from Safety Services to Specialty Services effective January 2025, impacting segment reporting[166]. - The company has concluded its multi-year Chubb restructuring program as of June 30, 2025, with no additional expenses expected[171]. - Revenues from foreign operations represented approximately 35% of consolidated net revenues for the three and nine months ended September 30, 2025[256]. - The company has a $720 million interest rate swap maturing in October 2026, exchanging one-month SOFR for a fixed rate of 3.59%[255]. - As of September 30, 2025, the company had $337 million of 4.125% Senior Notes and $277 million of 4.750% Senior Notes outstanding[246][247]. - The first lien net leverage ratio as of September 30, 2025, was 1.4:1.0, well below the covenant limit of 4.00 to 1.00[244]. - The company did not purchase any equity securities during the three months ended September 30, 2025[269]. - No officers or directors adopted or terminated any Rule 10b5-1 trading arrangements during the quarter ended September 30, 2025[271].

Core Insights - APi reported revenue of $2.09 billion for the quarter ended September 2025, reflecting a year-over-year increase of 14.2% [1] - Earnings per share (EPS) for the quarter was $0.41, up from $0.34 in the same quarter last year, indicating a positive trend in profitability [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.99 billion by 4.98%, and the EPS also surpassed the consensus estimate of $0.39 by 5.13% [1] Revenue Breakdown - Safety Services generated net revenues of $1.4 billion, exceeding the average estimate of $1.35 billion by analysts, with a year-over-year increase of 5.1% [4] - Specialty Services reported net revenues of $683 million, surpassing the average estimate of $664.32 million, marking a significant year-over-year increase of 38.5% [4] - Corporate and Eliminations segment reported net revenues of -$1 million, slightly better than the average estimate of -$1.5 million, but reflecting a substantial year-over-year decline of 50% [4] Stock Performance - Over the past month, APi's shares returned +0.2%, underperforming the Zacks S&P 500 composite, which saw a +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Insights - APi reported quarterly earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, and showing an increase from $0.34 per share a year ago, resulting in an earnings surprise of +5.13% [1] - The company achieved revenues of $2.09 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.98%, and up from $1.83 billion year-over-year [2] - APi shares have increased approximately 43.7% year-to-date, significantly outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of APi's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $2 billion, and for the current fiscal year, it is $1.42 on revenues of $7.67 billion [7] Industry Context - The Business - Services industry, to which APi belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that tracking these revisions is crucial for investors [5]

Financial Data and Key Metrics Changes - Reported revenues for Q3 2025 were $2.1 billion, a 14.2% increase compared to $1.83 billion in the prior year period, with organic growth of approximately 10% [14] - Adjusted gross margin for Q3 2025 was 31.5%, representing a 50 basis point increase compared to the prior year [14] - Adjusted EBITDA increased by 14.7% for Q3 2025, with an adjusted EBITDA margin of 13.5%, a 10 basis point increase year-over-year [14] - Adjusted diluted earnings per share for Q3 2025 was $0.41, a 20.6% increase compared to the prior year [15] Business Line Data and Key Metrics Changes - Safety Services segment reported revenues of $1.4 billion, a 15.4% increase compared to $1.2 billion in the prior year, with organic growth of 8.7% [15] - Specialty Services segment reported organic revenues of $683 million, an increase of 11.6% compared to $612 million in the prior year [16] - Adjusted gross margin for Safety Services was 37.3%, an 80 basis point increase, while Specialty Services had a gross margin of 19.3%, a 60 basis point decrease [16][17] Market Data and Key Metrics Changes - North American safety business continued to show double-digit inspection revenue growth, contributing to the overall strong performance in the Safety Services segment [15] - The company is experiencing robust activity in various sectors, including data centers, semiconductor manufacturing, aviation, and healthcare, which are driving growth [29] Company Strategy and Development Direction - The company aims to achieve $10 billion in net revenues by 2028, with consistent mid-single-digit organic growth and a target of 16% plus adjusted EBITDA margin [8] - Investments in technology, including AI and market-leading systems, are intended to empower field leaders and improve operational efficiency [6][8] - The company is focused on disciplined customer and project selection, pricing, and selective business pruning to enhance margins and growth [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver on 2025 targets, citing strong momentum in inspection, service, and monitoring business [12][23] - The company anticipates continued strong free cash flow generation and a robust pipeline for M&A activity, with a focus on North America [11][12] - Management acknowledged the challenges of balancing growth with margin expansion but remains optimistic about achieving long-term margin goals [48][49] Other Important Information - The company completed four bolt-on acquisitions in Q3 2025, bringing the total for the year to 11, with plans to deploy approximately $250 million in M&A at attractive multiples [11][12] - The adjusted free cash flow for Q3 2025 was $248 million, representing a conversion rate of 88% [18] Q&A Session Summary Question: Can you provide more detail on the organic growth in Safety Services? - Management noted robust activity in the data center space and other sectors, with data centers expected to account for 9-10% of total revenue [28][29] Question: How is the M&A pipeline progressing? - Management stated they are on track with M&A activity, focusing on North America, particularly in fire protection and electronic security [31][32] Question: What is the current status of the elevator and escalator segment? - The elevator business is experiencing high single-digit organic growth, with positive cross-selling opportunities developing [74] Question: How do you balance growth with margin expansion? - Management emphasized the importance of project size and complexity in driving margins, indicating a focus on maintaining a balance between growth and profitability [48][49] Question: What is the expected contribution from M&A to revenue next year? - Management indicated that approximately $1 of purchase price translates to about $1 in revenue over a 12-month period, with expectations for accretive contributions from acquisitions [81]

Financial Data and Key Metrics Changes - Reported revenues for Q3 2025 were $2.1 billion, a 14.2% increase from $1.83 billion in the prior year period, with organic growth of approximately 10% [13] - Adjusted gross margin for Q3 2025 was 31.5%, a 50 basis point increase compared to the prior year, driven by disciplined customer and project selection [13] - Adjusted EBITDA increased by 14.7% for Q3 2025, with an adjusted EBITDA margin of 13.5%, representing a 10 basis point increase year-over-year [13][14] - Adjusted diluted earnings per share for Q3 was $0.41, a 20.6% increase compared to the prior year [14] Business Line Data and Key Metrics Changes - Safety Services segment reported revenues of $1.4 billion, a 15.4% increase compared to $1.2 billion in the prior year, with organic growth of 8.7% [14][15] - Specialty Services segment reported organic revenues of $683 million, an increase of 11.6% compared to $612 million in the prior year [15][16] - Adjusted gross margin for Safety Services was 37.3%, an 80 basis point increase, while Specialty Services saw a gross margin of 19.3%, a 60 basis point decrease [15][16] Market Data and Key Metrics Changes - The company experienced double-digit inspection revenue growth in North America for the 21st consecutive quarter [9] - The backlog remains at record highs across both segments, indicating strong future revenue potential [12][71] Company Strategy and Development Direction - The company aims to grow into a $10 billion entity by 2028, with targets of mid-single-digit organic growth and 16%+ adjusted EBITDA margin [6][8] - Investments in technology, including AI and market-leading systems, are intended to empower field leaders and improve operational efficiency [6][8] - The company is focused on disciplined customer and project selection, pricing, and selective business pruning to achieve its financial targets [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver on 2025 targets, citing strong momentum in inspection, service, and monitoring business [12][21] - The company anticipates continued strong performance in the project environment, with expectations for mid to upper single-digit organic growth in the long term [51][72] Other Important Information - The company completed four bolt-on acquisitions in the quarter, bringing the total for the year to 11, with a target of approximately $250 million in M&A activity [11][12] - Free cash flow for Q3 was $248 million, representing an adjusted free cash flow conversion of 88% [16][17] Q&A Session Summary Question: Can you provide more detail on the organic growth in Safety Services? - Management noted robust activity in the data center space, with expectations for data centers to account for 9%-10% of total revenue, alongside strong growth in semiconductor and healthcare sectors [26] Question: How is the M&A pipeline progressing? - Management indicated they are on track with M&A plans, with a focus on North America in fire and security, and noted ongoing activity in the international business [29][30] Question: What is the current status of the elevator and escalator segment? - The elevator segment is experiencing high single-digit organic growth, with positive cross-selling opportunities developing [67] Question: How do you balance growth priorities with M&A? - Management stated they are able to pursue both growth in inspection services and consolidation in the elevator segment simultaneously, leveraging their geographic footprint [36] Question: What are the expectations for incremental margins going forward? - Management indicated that while project work impacts margins, they expect margins to improve as projects progress towards completion [90]

Financial Data and Key Metrics Changes - Reported revenues for Q3 2025 were $2.1 billion, a 14.2% increase compared to $1.83 billion in the prior year period, with organic growth of approximately 10% [13] - Adjusted gross margin for Q3 2025 was 31.5%, representing a 50 basis point increase compared to the prior year period [13] - Adjusted EBITDA increased by 14.7% for Q3 2025, with an adjusted EBITDA margin of 13.5%, a 10 basis point increase compared to the prior year [13] - Adjusted diluted earnings per share for Q3 2025 was $0.41, a 20.6% increase compared to the prior year [14] Business Line Data and Key Metrics Changes - In the Safety Services segment, revenues for Q3 2025 were $1.4 billion, a 15.4% increase compared to $1.2 billion in the prior year, with organic growth of 8.7% [15] - Adjusted gross margin for Safety Services was 37.3%, an 80 basis point increase compared to the prior year [16] - Specialty Services reported organic revenues of $683 million, an increase of 11.6% compared to $612 million in the prior year [16] - Adjusted gross margin for Specialty Services was 19.3%, a 60 basis point decrease compared to the prior year [17] Market Data and Key Metrics Changes - Strong growth in inspection, service, and monitoring revenues, with double-digit inspection growth in North America for the 21st consecutive quarter [9] - The company continues to see robust activity in various sectors, including data centers, semiconductor manufacturing, aviation, and healthcare [26] Company Strategy and Development Direction - The company aims to achieve $10 billion in net revenues by 2028, with consistent mid-single-digit organic growth and a 16% plus adjusted EBITDA margin [8] - Investments in technology, including AI and market-leading systems, are intended to empower field leaders and improve operational efficiency [5][6] - The company is focused on disciplined customer and project selection, pricing, and selective business pruning to enhance margins and growth [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy and deliver on its financial targets despite evolving macroeconomic conditions [21] - The company anticipates continued strong free cash flow generation and a robust pipeline for M&A activity [11][12] Other Important Information - The company completed four bolt-on acquisitions in Q3 2025, bringing the total for the year to 11, with plans to deploy approximately $250 million in M&A at attractive multiples [11] - The net debt to adjusted EBITDA ratio was approximately 2.0 times, below the long-term target, providing flexibility for capital deployment [18] Q&A Session Summary Question: Can you provide more detail on the organic growth in Safety Services? - Management noted robust activity in the data center space, with expectations for data centers to account for 9-10% of total revenue, alongside strong growth in semiconductor and healthcare sectors [26] Question: How is the M&A pipeline progressing? - Management confirmed they are on track with M&A activity, with a focus on North America in fire protection and electronic security, while also exploring international opportunities [28] Question: What is the current status of the elevator and escalator segment? - The elevator segment is experiencing high single-digit organic growth, with positive cross-selling opportunities developing [66] Question: How do you balance growth with margin expansion? - Management emphasized the importance of project size and complexity in driving margins, stating that they are confident in achieving their margin expansion goals while pursuing growth [41][42] Question: What is the expected contribution from M&A to revenue next year? - Management indicated that approximately $1 of purchase price typically translates to about $1 in revenue over a 12-month period, with expectations for deals to be accretive to margins [77]

Q3 2025 Performance - Net revenues for Q3 2025 reached $2085 billion, a 142% increase compared to Q3 2024, with organic net revenue growth of 97%[15, 17] - Adjusted gross profit totaled $656 million[15] - Adjusted gross margin increased by 50 basis points to 315%[13, 17] - Adjusted EBITDA amounted to $281 million, up 147% from Q3 2024, with an adjusted EBITDA margin of 135%, a 10 basis points increase[13, 15, 17] - Adjusted diluted earnings per share (EPS) for Q3 2025 were $041, a 206% increase year-over-year[13, 17] - Year-to-date adjusted free cash flow was $434 million, a $73 million increase from the previous year, representing a 582% conversion[13] Segment Performance - Safety Services reported net revenues of $1403 billion, a 154% increase, with organic net revenue growth of 87%[19] - Specialty Services reported net revenues of $683 million, an 116% increase, with organic net revenue growth of 116%[19] Guidance - The company projects full-year 2025 net revenues to be between $7825 billion and $7925 billion[22, 23] - Adjusted EBITDA for the full year 2025 is expected to be between $1015 billion and $1045 billion[22, 23] - The company anticipates an adjusted free cash flow conversion of approximately 75% for the full year 2025[23]

Financial Performance - Record third quarter net revenues of $2.1 billion, representing year-over-year growth of 14.2% and organic growth of 9.7%[1][4] - Reported net income of $93 million, a year-over-year increase of 34.8%, with diluted EPS of $0.20, up 33.3%[1][4][7] - Adjusted EBITDA reached $281 million, reflecting a 14.7% year-over-year growth and an adjusted EBITDA margin of 13.5%, up 10 basis points[1][4][7] - Adjusted net income was $174 million, representing a 23.4% increase year-over-year, with adjusted diluted EPS of $0.41, up 20.6%[4][7] - Net revenues for Q3 2025 reached $2,085 million, a 14.2% increase from $1,826 million in Q3 2024[27] - Gross profit for Q3 2025 was $652 million, up 15% from $567 million in Q3 2024[27] - Adjusted net income for the nine months ended September 30, 2025, was $205 million, compared to $183 million for the same period in 2024, reflecting an increase of 12%[31] - Consolidated net revenues for the nine months ended September 30, 2025, rose by 12.4%, with organic growth of 6.8%[33] - The company reported a net income of $93 million for the three months ended September 30, 2025, compared to $69 million in the same period of 2024[44] - Adjusted gross profit for Q3 2025 was $656 million, compared to $566 million in Q3 2024, reflecting a 15.9% year-over-year growth[60] Segment Performance - Safety Services segment net revenues increased by 15.4% to $1.4 billion, with organic growth of 8.7%[6][8] - Specialty Services segment net revenues grew by 11.6% to $683 million, with organic growth also at 11.6%[9][15] - Safety Services net revenues increased to $1,403 million in Q3 2025, a 15.4% rise from $1,216 million in Q3 2024[57] - Specialty Services segment net revenues grew to $683 million in Q3 2025, up from $612 million in Q3 2024, marking an 11.6% increase[60] - Safety Services segment earnings increased by 18.6% for the three months ended September 30, 2025, and 20.4% for the nine months ended September 30, 2025[72] - Specialty Services segment earnings decreased by 6.7% for the nine months ended September 30, 2025[72] - Total segment earnings before corporate and eliminations for Q3 2025 were $317 million, compared to $277 million in Q3 2024, representing a 14.5% increase[57] - Consolidated segment earnings rose by 14.7% for the three months and 14.6% for the nine months ended September 30, 2025[72] Cash Flow and Assets - Free cash flow for the nine months ended September 30, 2025, was $377 million, compared to $337 million in 2024, showing a 11.9% increase[31] - Free cash flow for the three months ended September 30, 2025, was $201 million, compared to $198 million for the same period in 2024[76] - Adjusted free cash flow for the nine months ended September 30, 2025, was $434 million, up from $361 million in 2024[76] - The company reported net cash provided by operating activities of $232 million for the three months ended September 30, 2025[76] - Total assets as of September 30, 2025, were $8,721 million, an increase from $8,152 million at the end of 2024[29] - Total liabilities increased to $5,445 million as of September 30, 2025, compared to $5,199 million at the end of 2024[29] - The company’s cash and cash equivalents increased to $555 million as of September 30, 2025, from $499 million at the end of 2024[29] Guidance and Future Outlook - Full-year 2025 guidance for net revenues raised to between $7.825 billion and $7.925 billion, and adjusted EBITDA to between $1.015 billion and $1.045 billion[11][15] - Company emphasizes a disciplined approach to capital allocation and a focus on organic growth and margin expansion[3][4] - Future outlook includes continued investment in growth and potential value-accretive M&A opportunities[3][11] Other Financial Metrics - Selling, general, and administrative expenses (SG&A) as reported for the three months ended September 30, 2025, were $489 million, up from $425 million in 2024[38] - Adjusted SG&A as a percentage of net revenues was 19.3% for the three months ended September 30, 2025, compared to 19.1% in 2024[38] - The adjusted effective tax rate for the company is estimated at 23% for its adjusted non-GAAP earnings[55] - The company reported a dilutive impact of 6 million shares associated with the deemed conversion of Series A Preferred Stock[55] - The impact of foreign currency translation on segment earnings was 1.1% for Safety Services in the three months ended September 30, 2025[72] - The company incurred $37 million in cash payments related to systems and business enablement for the three months ended September 30, 2025[76]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for APi (APG) due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.39 per share, reflecting a +14.7% year-over-year change, and revenues of $1.99 billion, which is an 8.8% increase from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 0.92% over the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +0.65% for APi, suggesting analysts have recently become more optimistic about the company's earnings prospects [12] Historical Performance - In the last reported quarter, APi exceeded the expected earnings of $0.37 per share by delivering $0.39, resulting in a surprise of +5.41% [13] - Over the last four quarters, APi has beaten consensus EPS estimates three times [14] Investment Considerations - Despite a positive Earnings ESP, APi's Zacks Rank is 4, which complicates the prediction of an earnings beat [12] - The potential for stock movement is influenced by various factors beyond earnings results, including management's discussion of business conditions [15][17]

Core Points - APi Group Corporation will release its financial results for the three and nine months ended September 30, 2025, before the market opens on October 30, 2025 [1] - A conference call to discuss the financial results will take place at 8:30 a.m. (Eastern Time) on the same day, featuring key executives [2] - The company has a strong recurring revenue base and operates over 500 locations globally, providing essential services across various industries [4] Financial Results Announcement - The financial results will be released before market opening on October 30, 2025 [1] - The conference call will include participation from the President, CEO, and other senior executives [2][3] Company Overview - APi Group is a leading provider of fire and life safety, security, elevator and escalator, and specialty services [4] - The company has a substantial recurring revenue base and serves a strong customer base across multiple industries [4]