Aramark

Third-quarter organic revenue increased 9% to $5 billion. FSS U.S. organic revenue grew 8% to $3.5 billion, and International organic revenue rose 11% to $1.5 billion. Operating income increased 18% to $216 million, adjusted operating income increased 13% to $261 million, and AOI margins expanded nearly 20 basis points. GAAP EPS was $0.36 and adjusted EPS was $0.52, up nearly 30% and almost 45%, respectively, excluding the calendar shift. The calendar shift reduced AOI by an estimated $20 million. For fiscal 2026, management raised organic revenue growth outlook to 9%–10% and reaffirmed AOI growth of 12%–17% and adjusted EPS growth of 20%–25%.

John Zillmer emphasized broad-based strength across the portfolio, record client retention, and momentum in new business, saying the company is entering Q4 with significant momentum. He highlighted core growth drivers such as collegiate hospitality, healthcare, workplace experience, sports, and international, while also pointing to Nexus and supply chain as important longer-term growth engines. His tone was confident and upbeat, but he repeatedly framed Nexus as a market being built over time rather than a near-term fully ramped business.

Jim Tarangelo focused on the quarter’s profit leverage and cash generation: AOI grew 13% to $261 million, margins expanded nearly 20 basis points, and without the calendar shift AOI would have been up about 21% with nearly 50 basis points of margin expansion on a constant-currency basis. He said net cash from operations rose $41 million, free cash flow increased $42 million, and the company repaid $100 million of term loans after quarter end. He also noted over $1.4 billion in cash availability, a leverage target below 3x by fiscal year-end, free cash flow conversion around 40% of AOI, capex around 3.5%, and potential for more share repurchases while remaining disciplined on M&A.

Analysts pressed on Nexus economics, sizing, timing, TAM, and whether regulatory issues in Texas could slow development. Management said the initial hyperscaler contract was about $100 million annualized per site, with the first site now around $140 million per year after a 40% scope increase and the second site around $160 million per year; they also said the first three active sites represent roughly $400 million to $500 million of annualized revenue that should ramp through fiscal 2027 and 2028. On questions about 2026 growth sustainability, management pointed to record new business, 98% retention, and underlying Q3 organic growth of 10%–11% excluding the calendar shift. They also said Nexus is not fully ramped yet, will contribute only about 1% in Q4, and that any Texas regulatory changes would mainly affect the hyperscaler, not Aramark’s service role.