APi Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net revenues for the three months ended September 30, 2026, reached a record $2.6 billion, a 22.5% year-over-year increase, with organic growth of 15.7%.
• Reported net income was $114 million, up 22.6% year-over-year from $93 million; diluted EPS was $0.24, up 20.0%.
• Adjusted EBITDA was $350 million, a 24.6% year-over-year increase, with an adjusted EBITDA margin of 13.7%, expanding 20 basis points.
• Adjusted net income was $219 million, up 25.9% year-over-year; adjusted diluted EPS was $0.50, up 22.0%.
• GAAP gross profit was $770 million (30.1% margin), down 120 basis points from the prior year period.
• Adjusted gross profit was $775 million (30.3% margin), down 120 basis points from the prior year period.
• For the nine months ended September 30, 2026, net revenues were $6.8 billion, net income was $270 million, and adjusted EBITDA was $896 million (13.2% margin).
• Cash provided by operating activities for the nine months was $393 million; free cash flow was $317 million.
• Adjusted free cash flow conversion for the nine months was 84.2% based on adjusted net income.

Guidance and Future Outlook:

• APi raised full-year 2026 net revenue guidance to $9.200 to $9.250 billion, up from the previous range of $8.875 to $9.025 billion.
• APi raised full-year 2026 adjusted EBITDA guidance to $1.235 to $1.255 billion, up from the previous range of $1.205 to $1.245 billion.
• Management expects adjusted free cash flow conversion of 110% for the full year 2026 based on adjusted net income.
• Management expressed confidence in the ability to deliver on long-term "10/16/60+" targets entering 2027.
• The company enters the fourth quarter with a growing backlog and improving margins.

Business Segments and Product Lines:

• Safety Services: Net revenues were $1.7 billion, up 18.5% year-over-year (8.8% organic). Segment earnings were $281 million, up 19.1%, with a segment earnings margin of 16.9% (up 10 basis points).
• Specialty Services: Net revenues were $893 million, up 30.7% year-over-year (29.9% organic). Segment earnings were $112 million, up 38.3%, with a segment earnings margin of 12.5% (up 60 basis points).
• Revenue growth across both segments was driven by inspection, service, and monitoring revenues, robust project activity, acquisitions, and pricing improvements.
• Specialty Services gross profit margin increased 10 basis points to 19.4%, driven by disciplined customer and project selection and pricing improvements.

Market and Competitive Landscape:

• APi operates as a global market-leading business services company with over 600 locations in more than 20 countries.
• The company celebrated its 100-year anniversary in 2026 and its debut on the Fortune 500.
• Strong demand was noted across inspection, service, and monitoring business lines.
• The company maintains a disciplined approach to customer and project selection.

Risks and Challenges:

• Reported and adjusted gross profit margins decreased due to project and business mix changes and rising material, fuel, and other expenses.
• Increased interest expense and an increase in the adjusted diluted weighted average shares outstanding partially offset EPS growth.
• Forward-looking statements cite risks including economic conditions, inflationary pressures, supply chain constraints, and geopolitical risks.
• Risks include the failure to realize benefits from acquisitions, execution of the inspection-first strategy, and potential disruptions from enterprise resource planning system implementations.
• Risks related to contract portfolio mix, project delays, and working capital requirements are also noted.

Management Commentary and Tone:

• Russell Becker, President and CEO, described the results as "exceptional," citing double-digit organic growth and margin expansion.
• Management highlighted the durability of the business in a dynamic operating environment and credited disciplined execution.
• The tone was confident, with management stating they are entering the fourth quarter from a "position of strength."
• Management emphasized a continued focus on leading with inspection and service.

Other Key Points:

• APi completed acquisitions totaling $1.4 billion in cash used for investing activities during the nine months ended September 30, 2026.
• The company repurchased $252 million of common stock during the nine months ended September 30, 2026.
• Net short-term debt increased by $335 million, and proceeds from long-term borrowings were $795 million during the nine-month period.
• The company hosts a conference call with CEO Russell Becker and CFO David Jackola to discuss results.
• Non-GAAP measures used include Adjusted EBITDA, Adjusted Free Cash Flow, and Organic Net Revenue Growth.