APi Group Raises Full-Year Outlook After Record Quarter
Third-quarter net revenues hit a record $2.55 billion, up 22.5%, and the company lifted 2026 revenue guidance to as much as $9.25 billion.
APi Group Corporation (APG) reported record third-quarter net revenues of $2.55 billion, up 22.5% from a year earlier, as organic growth accelerated to 15.7% from 10.1% in the second quarter.
The global business-services company, which provides fire and life safety, electronic security, elevator and escalator, and infrastructure services, also posted record reported net income of $114 million, up 22.6%, and record adjusted EBITDA of $350 million, up 24.6%. Adjusted EBITDA margin expanded 20 basis points to 13.7%.
Reported revenue growth had been 13.3% in the second quarter and 15.3% in the first. Adjusted EBITDA growth had been 14.3% and 21.8% in those periods.
The company said reported net revenues increased on solid growth in inspection, service, and monitoring revenues, robust growth in project revenues, acquisitions, and pricing improvements. Reported and adjusted gross profit margins fell 120 basis points year over year to 30.1% and 30.3%, which the company attributed to project and business mix and rising material, fuel, and other expenses. That reversed a 30-basis-point reported gross-margin expansion in the second quarter.
Adjusted net income was $219 million and adjusted diluted EPS was $0.50, up 25.9% and 22.0%. The company said the increase in adjusted diluted EPS was driven by strong revenue growth and adjusted EBITDA margin expansion, partially offset by higher interest expense and more adjusted diluted shares outstanding.
Safety Services, the larger of the two reportable segments, generated net revenues of $1.66 billion, up 18.5% reported and 8.8% organic, accelerating from 8.8% reported and 4.7% organic growth in the second quarter. Segment earnings were $281 million, up 19.1%, with a 16.9% earnings margin, up 10 basis points. Safety Services reported and adjusted gross profit margins declined 120 and 110 basis points to 35.9% and 36.2%, after 60 and 20 basis point expansions in the second quarter. The company cited the same mix and input-cost factors.
Specialty Services net revenues were $893 million, up 30.7% reported and 29.9% organic. Reported and adjusted gross profit margins rose 10 basis points to 19.4%, which the company attributed to disciplined customer and project selection and pricing improvements, partially offset by rising material, fuel, and other expenses. Segment earnings were $112 million, up 38.3%, with a 12.5% earnings margin, up 60 basis points.
President and Chief Executive Officer Russ Becker said strong demand across inspection, service, and monitoring, robust project activity, and disciplined execution drove momentum across both segments. He said the company enters the fourth quarter from a position of strength, supported by a growing backlog and improving margins.
APi is raising full-year 2026 guidance for net revenues to $9.20 billion to $9.25 billion from $8.875 billion to $9.025 billion, and for adjusted EBITDA to $1.235 billion to $1.255 billion from $1.205 billion to $1.245 billion. That follows a similar raise on July 30. The company also cited adjusted free cash flow conversion of 110% based on adjusted net income.
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