ABM Industries Soars into Fiscal 2025 with Strong Earnings and Optimistic Outlook
In a notable conclusion to fiscal year 2024, ABM Industries, Inc. has reported remarkable fourth-quarter results, driven by double-digit revenue growth in its Technical Solutions and Aviation segments. The company's strong performance also reflects the resilience of its Business & Industry segment, which achieved 3% organic revenue growth.
Speaking at the company's recent conference call, Scott Salmirs, President and Chief Executive Officer, expressed his enthusiasm for ABM's positioning as it enters fiscal year 2025. With a strategic focus on navigating through macro turbulence, the company has emerged stronger, leveraging its commercial real estate market expertise to capitalize on an apparent inflection point.
One of the key highlights from the quarter was the remarkable growth in Technical Solutions, which surged 16% organically, driven by a rapid expansion of microgrid services complemented by growth in data center-related business. The Raven team's execution on complex microgrid projects has been particularly noteworthy, with no signs of abating.
Aviation also experienced significant growth, with a 12% increase in revenue in 2024, as ABM benefited from healthy travel markets and its differentiated service offering, ABM clean. This strategy, coupled with artificial intelligence-based technology, has supported growth exceeding the broader aviation market.
The Business & Industry segment, which had been anticipated to experience decline, surprisingly maintained organic revenue growth of less than 1% for the year, driven by a diverse client and service mix, leading market position, and penetration in the higher-performing Class A segment. Geographic diversification, including the UK, also contributed to driving results.
ABM's internal initiatives have made significant progress in 2024, with the introduction of its workforce productivity optimization tool being a notable achievement. This tool enables teams to identify opportunities for productivity improvements based on facility archetypes, leading to reduced labor usage. Labor as a percent of revenue declined nearly 1% in the fourth quarter, with the workforce optimization productivity rollout playing an important role.
"We're thrilled with ABM's positioning as we begin fiscal 2025," said Scott Salmirs. "Our commercial real estate markets are near an inflection point and returning to growth, and our strategic investments across our business give me confidence in our future growth trajectory."
