APi Group Corporation

Reported net revenues were $2.25 billion for the quarter, up 13.3% from $1.99 billion a year ago; organic growth was 10.1%. Adjusted gross margin was 31.2%, unchanged year over year, adjusted EBITDA was up 14.3% with margin at 13.8% (+10 bps), and adjusted diluted EPS was $0.44, up $0.05 or 12.8%. Safety Services revenue was $1.48 billion, up 8.8% (4.7% organic), while Specialty Services revenue was $773 million, up 22.9% (22% organic). On a six-month basis, adjusted free cash flow was $228 million, up $42 million, with conversion of 68% on adjusted net income. Full-year 2026 guidance was raised to net revenues of $8.875 billion to $9.025 billion and adjusted EBITDA of $1.205 billion to $1.245 billion, implying 7% to 9% organic revenue growth and 16% to 20% adjusted EBITDA growth; midpoint adjusted EBITDA margin is 13.7%. Third-quarter guidance calls for net revenues of $2.375 billion to $2.425 billion and adjusted EBITDA of $325 million to $335 million. Other full-year guide items include interest expense of $150 million, depreciation of $90 million, CapEx of $105 million, an adjusted tax rate of 23%, corporate expenses of about $140 million, and adjusted diluted weighted average shares of 439 million.

Russ Becker struck an upbeat tone, emphasizing culture, disciplined execution, and end-market positioning. He said data centers, semiconductors, advanced manufacturing, health care, and critical infrastructure are key growth markets, and noted that APi’s inspection-first strategy is driving recurring opportunities after project completion. He also highlighted record backlog, strong project demand, and continued M&A activity as supports for the second half and beyond.

David Jackola focused on the quarter’s financial leverage and the updated outlook. He cited 13.3% revenue growth to $2.25 billion, 31.2% adjusted gross margin, 13.8% adjusted EBITDA margin, and $0.44 adjusted EPS, and said adjusted free cash flow was $228 million over the first six months with 68% conversion on adjusted net income. He also noted net leverage of 2.2x, below the 2.5x to 3x long-term target, and pointed to recent capital markets actions: $500 million of 5.75% senior unsecured notes due 2034, a larger $1 billion revolver, and an extended Term Loan B maturity to 2033.

Analysts pressed management on project sizing, backlog conversion, Specialty margin expansion, data center exposure, International Safety weakness, and M&A pace. Management said project sizes are larger now, with some fire protection/data center jobs moving from roughly $7 million to $8 million historically to around $20 million, and that larger jobs can still earn better gross margins due to complexity and pricing power. On data centers, management estimated they may be about 10% to 12% of 2026 revenue and said demand should outpace capacity through 2030, though they remain disciplined on which projects they pursue. On International Safety, management blamed a mix of macro pressure, delayed projects, and pruning lower-performing customers, but said order intake, pipeline, and global accounts are improving and the back half should be better.