What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-12-19 compared with 2024-12-19 · 108 added, 138 removed, 331 unchanged (43% of the section changed)

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Developments and Trends

Macro-Economic Environment in Commercial Real Estate and Other

On an ongoing basis, we monitor changes to the macro-economic environment and their potential impacts on demand for our services and on our financial condition.

One such monitored change is the strength or softness of the commercial real estate industry, especially multi-tenant and owner-occupied commercial office buildings.

The recent softness in the market is primarily attributable to the lingering effects of the Pandemic, especially the normalization of hybrid work, which has resulted in higher office vacancy rates.

Given that Class A and high-quality commercial office buildings are a key end market for us, we have experienced modest declines in demand for janitorial services and work orders in these markets.

We expect the occupancy rates of Class A and high-quality buildings and back-to office trends to improve throughout 2025 .

A large M&D client completed its rebalancing of a portion of its work needs as part of its normal procurement process.

We expect M&D’s financial results to be adversely impacted in the near-term.

Insurance Reserves

We use a combination of insured and self-insurance programs to cover workers’ compensation, general liability, automobile liability, property damage, and other insurable risks.

Insurance claim liabilities represent our estimate of retained risks without regard to insurance coverage.

We retain a substantial portion of the risk related to certain workers’ compensation and medical claims.

Liabilities associated with these losses include estimates of both filed claims and incurred but not reported claims (“IBNR Claims”).

With the assistance of third-party actuaries, we review our estimate of ultimate losses for IBNR Claims on a quarterly basis and adjust our required self-insurance reserves as appropriate.

As part of this evaluation, we review the status of existing and new claim reserves as established by third-party claims administrators.

The third-party claims administrators establish the case reserves based upon known factors related to the type and severity of the claims, demographic factors, legislative matters, and case law, as appropriate.

We compare actual trends to expected trends and monitor claims developments.

The specific case reserves estimated by the third-party administrators are provided to the actuary who assists us in projecting an actuarial estimate of the overall ultimate losses for our self-insured or high deductible programs, which includes the case reserves plus an actuarial estimate of reserves required for additional developments, such as IBNR Claims.

We utilize the results of actuarial studies to estimate our insurance rates and insurance reserves for future periods and to adjust reserves, if appropriate, for prior years.

Based on the results of the actuarial reviews performed during 2024, which included analyzing recent loss development patterns, comparing the loss development against benchmarks, and applying actuarial projection methods to determine the estimate of ultimate losses, we increased our total reserves related to prior years for known claims as well as our estimate of the loss amounts associated with IBNR Claims by $20.3 million in 2024.

In 2023, we decreased our total reserves related to prior year claims by $14.8 million.

Restructuring Program

In the fourth quarter of 2025, we launched a restructuring program to further streamline our operations and improve the efficiency of our support functions.

This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives.

Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings.

During the fourth quarter of 2025, we recorded $13.4 million in restructuring charges related to these actions and expect to record additional $2.0 - $3.0 million in 2026.

We will continue to review our overhead and cost structure for efficiency opportunities under this program.

Key Financial Highlights

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Revenue growth was comprised of organic growth of 3.8% and acquisition growth of 0.8%.

The organic revenue growth was due to the higher project revenues due to the timing of certain microgrid systems design and installation projects within Technical Solutions, and net new business and expansion of business with existing customers within Aviation, M&D, and Education.

The increase in revenues was partially offset by attrition of engineering customers and soft commercial office market conditions within B&I, and the expected rebalancing of the scope of work with an existing customer within M&D.

Acquisition growth of $26.3 million was driven by the Quality Uptime Acquisition, completed in the third quarter of 2024.

• Operating profit decreased by $197.5 million to $212.0 million during 2024, as compared to 2023.

The decrease in operating profit was attributable to:

• an increase in the fair value of the contingent consideration related to the RavenVolt Acquisition;

• an increase in other Corporate expenses, primarily costs associated with various systems’ go-live and other investments in technology;

• an unfavorable self-insurance reserve adjustment related to prior year claims from actuarial evaluations completed in 2024, as compared to a favorable adjustment in 2023;

• an absence of employee retention credits received as compared to 2023;

• $11.4 million in revenue recognized for an Aviation parking project during 2023, whereby all the direct labor and related costs for such project were recognized prior to 2023.

The decrease was partially offset by:

• labor efficiencies within B&I, Aviation, and Education, as well as contract mix within Technical Solutions, Aviation, and M&D;

• a decrease in amortization of intangibles, primarily related to the RavenVolt Acquisition.

The organic revenue growth was due to the net new business and expansion of business with existing customers within Aviation, B&I, M&D, and Education and higher microgrid projects within Technical Solutions.

The increase in revenues was partially offset by strategic pricing decisions, including for contract rebids within B&I.

Acquisition growth of $68.4 million was driven by revenue from the Quality Uptime and LMC acquisitions.

• Operating profit increased by $99.7 million to $311.7 million during 2025, as compared to 2024.

The increase in operating profit was attributable to:

• respective revenue increases for all industry groups,

• operational efficiencies within Aviation and Education, and

• service mix within Technical Solutions.

The increase was partially offset by:

• strategic pricing decisions for contract rebids and proactive extensions, combined with managing the timing of contract escalations to maintain and expand certain customer accounts within B&I, and

• strategic pricing on select new wins within M&D.

• Our effective tax rate on income was 26.2% for 2025, as compared to 39.1% during 2024.

Our effective tax rate for 2024 was primarily impacted by a $95.7 million non-taxable expense related to the change in the fair value of the contingent consideration related to the RavenVolt Acquisition.

Our effective tax rate for 2023 was primarily impacted by a $45.6 million non-taxable benefit related to the change in the fair value of contingent consideration related to the RavenVolt Acquisition.

Our effective tax rate for 2024 was negatively impacted by a $95.7 million non-taxable change to increase the fair value of the contingent consideration related to the RavenVolt Acquisition.

• Net cash provided by operating activities was $234.4 million during 2025.

Our net cash provided by operating cash activities was lower than prior year, primarily due to the timing of certain working capital requirements.

Our net cash provided by operating cash activities was higher than prior year, primarily due to the timing of certain working capital requirements.

• Dividends of $65.6 million were paid to shareholders, and dividends totaling $1.06 per common share were declared during 2025.

Additionally, we repurchased 1.17 million of shares for $55.8 million, excluding excise taxes during 2024.

Additionally, we repurchased 2.6 million shares for $121.3 million, excluding excise taxes, during 2025.

• At October 31, 2025, total outstanding borrowings under our Amended Credit Facility were $1,569.0 million, and we had up to $577.5 million of borrowing capacity.

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Selling, general and administrative expenses 697.4 765.3 572.8 (67.9) (8.9)%

Restructuring and related expenses 13.4 — — 13.4 NM*

Amortization of intangible assets 52.5 56.1 76.5 (3.6) (6.4)%

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Other comprehensive (loss)/income

Interest rate swaps (22.9) (0.5) 36.7 (22.4) NM*

Interest rate swaps (9.3) (22.9) (0.5) 13.6 (59.3)%

Foreign currency translation and other 5.5 6.8 7.3 (1.3) (19.5)%

Income tax provision 6.3 0.1 (10.5) 6.2 NM*

Comprehensive income $ 71.6 $ 258.1 $ 236.9 $ (186.5) (72.3)%

Income tax provision 2.4 6.3 0.1 (3.9) (62.0)%

Comprehensive income $ 161.0 $ 71.6 $ 258.1 $ 89.4 NM*

*Not meaningful

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Revenue growth was comprised of organic growth of 3.8% and acquisition growth of 0.8%.

The increase in revenues was partially offset by attrition of engineering customers within B&I and the expected rebalancing of the scope of work with an existing customer within M&D.

Acquisition growth of $26.3 million was driven by the Quality Uptime Acquisition, completed in the third quarter of 2024.

The increase in revenues was partially offset by strategic pricing decisions on contract rebids within B&I.

Acquisition growth of $68.4 million was driven by revenue from the Quality Uptime and LMC acquisitions.

Operating Expenses

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Gross margin decreased by 7 bps to 12.3% in 2025, as compared to 12.4% in 2024.

The decrease in gross margin was primarily driven by the increase in self-insurance adjustments related to prior year claims as a result of actuarial evaluations completed on our workers’ compensation, general liability, automobile liability, and property damage insurance plans.

In addition, the decrease in gross margin was attributable to the $11.4 million in revenue from an Aviation parking project recognized in 2023.

The decrease in gross margin was primarily driven by strategic pricing decisions within M&D and B&I as well as the management of contract escalation timing to maintain and expand certain customer accounts within B&I.

This was partially offset by operational efficiencies within Education and service mix within ATS.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $192.5 million, or 33.6%, to $765.3 million during 2024, as compared to 2023.

The increase in selling, general and administrative expenses was primarily attributable to:

• a $95.7 million fair value adjustment to increase the contingent consideration related to the RavenVolt Acquisition recorded during 2024, as compared to a $45.6 million fair value adjustment to decrease the contingent consideration recorded during 2023;

• a $24.3 million increase in costs associated with various systems’ go-live and other investments in technology;

• an absence of a $24.0 million benefit from employee retention credits received during 2023;

• an $8.8 million increase in accruals for actual and potential legal settlements;

• a $6.5 million increase in compensation and related expenses primarily due to higher compensation under certain incentive plans.

This increase was partially offset by:

• an $18.6 million decrease in certain discrete transformational costs under our ELEVATE strategy for developing the new ERP system, client-facing technology, workforce management tools, and data analytics.

Selling, general and administrative expenses decreased by $67.9 million, or 8.9%, to $697.4 million during 2025, as compared to 2024.

The decrease in selling, general and administrative expenses was primarily attributable to:

• an absence of a $95.7 million adjustment to increase the fair value of the contingent consideration related to the RavenVolt Acquisition in 2024, compared to a $1.6 million adjustment to decrease the fair value in 2025.

This decrease was partially offset by:

• an $18.9 million increase in compensation and related expenses primarily due to headcount expansion from recent acquisitions;

• a $6.6 million increase in costs associated with systems’ go-live.

Amortization of Intangible Assets

Amortization of intangible assets decreased by $3.6 million, or 6.4%, to $52.5 million during 2025, as compared to 2024.

This decrease was primarily due to the lower amortization of intangibles, primarily intangibles acquired as part of the RavenVolt Acquisition.

This decrease was due to lower amortization of intangibles, primarily intangibles acquired as part of the Able and GCA acquisitions, partially offset by amortization of intangibles from the Quality Uptime and LMC acquisitions.

Interest Expense

Interest expense increased by $2.7 million, or 3.3%, to $85.0 million during 2024, as compared to 2023, primarily driven by higher borrowings from our Amended Credit Facility to fund the Quality Uptime Acquisition.

During 2024 and 2023, we had effective tax rates of 39.1% and 24.1%, respectively, resulting in a provision for tax of $52.2 million and $79.7 million, respectively.

Our effective tax rate for 2024 was negatively impacted by a $95.7 million non-taxable expense related to the change in the fair value of the contingent consideration related to the RavenVolt Acquisition.

Our effective tax rate for 2023 was favorably impacted by a $45.6 million non-taxable benefit related to the change in the fair value of the contingent consideration related to the RavenVolt Acquisition.

Interest expense increased by $11.4 million, or 13.4%, to $96.4 million during 2025, as compared to 2024.

This increase was primarily driven by higher borrowings from our Amended Credit Facility to fund working capital requirements due to the transition to the Company’s new ERP system for our B&I and M&D segments that temporarily delayed invoicing to certain clients within these industry groups in the first half of 2025, and payment of the $75.0 million contingent consideration liability related to the RavenVolt Acquisition.

During 2025 and 2024, we had effective tax rates of 26.2% and 39.1%, respectively, resulting in an income tax provision of $57.6 million and $52.2 million, respectively.

Our effective tax rate for 2025 was benefited by a $3.1 million return to provision adjustment related to our non-U.S.

Our effective tax rate for 2024 was negatively impacted by a $95.7 million non-taxable change to increase the fair value of the contingent consideration related to the RavenVolt Acquisition, partially offset by a $7.3 million tax benefit for return to provision adjustments related to our non-U.S.

operations, and a $5.5 million benefit related to energy efficiency incentives.

Interest Rate Swaps

We had a loss of $22.9 million on interest rate swaps during the year ended October 31, 2024, as compared to a loss of $0.5 million during the year ended October 31, 2023, primarily due to underlying changes in the fair value of our interest rate swaps.

We had a loss of $9.3 million and $22.9 million on interest rate swaps during the years ended October 31, 2025 and October 31, 2024, respectively, primarily due to underlying changes in the fair value of our interest rate swaps.

Our interest rate swaps will mature in 2026.

Foreign Currency Translation and Other

We had a foreign currency translation gain of $7.5 million during the year ended October 31, 2024, as compared to a foreign currency translation gain of $7.3 million during the year ended October 31, 2023.

We had a foreign currency translation gain of $5.5 million and $6.8 million during the years ended October 31, 2025 and October 31, 2024, respectively.

This change was due to fluctuations in the exchange rate between the U.S.

Dollar (“USD”) and the British pound sterling (“GBP”).

Dollar (“USD”), the British pound sterling (“GBP”), and the euro (“EUR”).

Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

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Segment Information

Our current reportable segments consist of B&I, M&D, Education, Aviation, and Technical Solutions.

Our current reportable segments consist of B&I, M&D, Aviation, Education, and Technical Solutions.

Financial Information for Each Reportable Segment

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Operating profit margin 9.0 % 8.6 % 7.9 % 42 bps

Government Services — — (0.3) — NM*

Operating profit margin NM* NM* NM* NM*

Corporate (370.5) (433.1) (226.6) (62.6) 14.5%

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efficient government buildings, included in

Technical Solutions (5.5) (0.3) (0.9) (5.2) NM*

Technical Solutions (0.8) (5.5) (0.3) 4.7 84.9%

$ 311.7 $ 212.0 $ 409.5 $ 99.7 47.0%

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Operating profit margin 7.7 % 7.6 % 12 bps

B&I revenues decreased by $30.3 million, or 0.7%, to $4,059.1 million during 2024, as compared to 2023.

The revenue decrease was primarily driven by attrition of certain engineering clients and soft commercial office market conditions, partially offset by the new clients and existing client expansions both domestically and internationally.

B&I revenues increased by $66.9 million, or 1.6%, to $4,126.0 million during 2025, as compared to 2024.

The revenue increase was primarily driven by client expansions both domestic and international, partially offset by strategic pricing decisions on contract rebids and attrition of certain engineering clients.

Management reimbursement revenues for this segment totaled $291.4 million and $281.4 million during 2025 and 2024, respectively.

Operating profit decreased by $8.6 million, or 2.7%, to $307.0 million during 2024, as compared to 2023.

Operating profit margin decreased by 15 bps to 7.6% in 2024 from 7.7% in 2023.

The decrease in operating profit margin was primarily driven by a change in contract mix and higher legal, bad debt, and insurance expense.

The decrease was partially offset by labor efficiencies and lower amortization of intangible assets.

Operating profit increased by $9.9 million, or 3.2%, to $316.9 million during 2025, as compared to 2024.

Operating profit margin increased by 12 bps to 7.7% in 2025 from 7.6% in 2024.

The increase in operating profit margin was primarily driven by geographic mix and operational efficiencies achieved through our Restructuring Program.

The increase was partially offset by strategic pricing decisions on contract rebids and proactive extensions, combined with managing contract escalation timing to maintain and expand certain customer accounts.

Manufacturing & Distribution

Year Ended October 31,

($ in millions) 2024 2023 Increase

($ in millions) 2025 2024 Increase/(Decrease)

Revenues $ 1,618.6 $ 1,554.3 $ 64.3 4.1%

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M&D revenues increased by $64.3 million, or 4.1%, to $1,618.6 million during 2025, as compared to 2024.

The increase was primarily attributable to the expansion of business with existing customers, partially offset by the expected rebalancing of the scope of work with an existing customer and a loss of a certain customer.

Operating profit increased by $4.6 million, to $166.3 million during 2024, as compared to 2023.

Operating profit margin increased by 11 bps to 10.7% in 2024 from 10.6% in 2023.

The increase in operating profit margin was primarily attributable to the change in contract mix, partially offset by investments to hire certain technical expertise to support future growth.

The increase was primarily attributable to the expansion of business with existing clients and new business wins, including strategic pricing decisions for select new wins.

This was partially offset by the loss of a certain customer in the first quarter of 2025.

Operating profit decreased by $14.9 million, or 8.9%, to $151.4 million during 2025, as compared to 2024.

Operating profit margin decreased by 134 bps to 9.4% in 2025 from 10.7% in 2024.

The decrease in operating profit margin was primarily attributable to strategic pricing for select new wins and additional investments made in the second half of 2025 to hire certain technical expertise to support future growth.

Year Ended October 31,

($ in millions) 2024 2023 Increase / (Decrease)

($ in millions) 2025 2024 Increase

Revenues $ 1,118.7 $ 1,032.6 $ 86.1 8.3%

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Aviation revenues increased by $86.1 million, or 8.3% to $1,118.7 million, during 2025, as compared to 2024.

The increase was primarily attributable to new business and scope expansions with the existing clients as well as continuing recovery in travel volume.

In addition, in 2023, we recognized $11.4 million in revenue from an Aviation parking project, whereby all the direct labor and related costs were recognized prior to 2023.

The increase was primarily attributable to new business and scope expansions with the existing clients as well as an increase in travel volume.

Management reimbursement revenues for this segment totaled $50.2 million and $36.3 million during 2025 and 2024, respectively.

Operating profit decreased by $0.9 million, to $59.1 million during 2024, as compared to 2023.

Operating profit margin decreased by 75 bps to 5.7% in 2024, from 6.5% in 2023.

The decrease in operating profit margin was primarily attributable to the $11.4 million in revenue from an Aviation parking project recognized in 2023.

The decrease in operating profit margin was partially offset by contract mix and labor efficiencies primarily due to increases in travel volume.

Operating profit increased by $6.1 million, or 10.3%, to $65.2 million during 2025, as compared to 2024.

Operating profit margin increased by 10 bps to 5.8% in 2025, from 5.7% in 2024.

The increase in operating profit margin was primarily attributable to operational efficiencies, particularly in managing overhead costs.

Year Ended October 31,

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Education revenues increased by $18.0 million, or 2.0%, to $922.0 million during 2025, as compared to 2024.

The increase was primarily attributable to net new business wins, partially offset by a decrease in work orders.

The increase was primarily attributable to net new business wins.

Operating profit increased by $12.4 million, or 22.2% to $67.7 million during 2025, as compared to 2024.

Operating profit margin increased by 122 bps to 7.3% in 2025 from 6.1% in 2024.

The operating profit margin was positively impacted by labor efficiencies and lower amortization of intangibles, partially offset by higher bad debt expense.

The operating profit margin was primarily attributable to operational efficiencies, particularly in managing overtime, materials and supplies, and general and administrative headcount.

Technical Solutions

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Revenue growth was comprised of organic growth of 10.2% and acquisition growth of 8.5%.

The organic revenue increase was primarily driven by higher project revenues due to the timing of completions of microgrid systems and generators installation projects, partially offset by a decrease in electric vehicle charging station sales.

Acquisition growth of $26.3 million was driven by the Quality Uptime Acquisition, completed in the third quarter of 2024.

The organic revenue increase was primarily driven by higher project revenues due to higher microgrid systems projects, partially offset by a decrease in electric vehicle charging station revenues.

Acquisition growth was driven by $68.4 million of revenue from the Quality Uptime and LMC acquisitions.

Operating profit increased by $17.1 million, or 24.6%, to $86.5 million during 2025, as compared to 2024.

Operating profit margin increased by 42 bps to 9.0% in 2025 from 8.6% in 2024.

The increase in operating profit margin was primarily attributable to the contract mix and lower amortization of intangible assets.

This increase was partially offset by an expected charge to potentially settle a certain client matter.

The increase in operating profit margin was primarily attributable to the service mix, partially offset by higher amortization of intangible assets from recent acquisitions.

Year Ended October 31,

($ in millions) 2024 2023 Increase

($ in millions) 2025 2024 Decrease

Corporate expenses $ (370.5) $ (433.1) $ (62.6) 14.5%

Corporate expenses increased by $206.5 million, or 91.1%, to $433.1 million during 2024, as compared to 2023.

The increase in corporate expenses was primarily related to:

• a $20.3 million unfavorable self-insurance reserve adjustment related to prior year claims from actuarial evaluations completed during 2024, as compared to a favorable $14.8 million adjustment recorded in 2023;

• a $24.3 million increase in costs associated with various systems’ go-live and other investments in technology;

• an absence of a $24.0 million benefit from employee retention credits received during 2023.

This increase was partially offset by:

Corporate expenses decreased by $62.6 million, or 14.5%, to $370.5 million during 2025, as compared to 2024.

The decrease in corporate expenses was primarily related to:

• an absence of a $95.7 million adjustment to increase fair value of the contingent consideration related to the RavenVolt Acquisition in 2024, compared to a $1.6 million adjustment to decrease the fair value in 2025.

This decrease was partially offset by:

• a $7.5 million increase in compensation and related expenses primarily due to higher salaries and certain incentive plans;

• a $6.3 million increase in acquisition and integration costs;

• a $5.2 million increase in costs associated with systems’ go-live.

The Year Ended October 31, 2024, Compared with the Year Ended October 31, 2023

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In accordance with the terms of the Credit Facility, the revolving line of credit was reduced to $800.0 million on September 1, 2018.

On June 28, 2021, the Company amended and restated the Credit Facility (the “Second Amendment,” and the Credit Facility as amended, the “Amended Credit Facility”), extending the maturity date to June 28, 2026, and increasing the capacity of the revolving credit facility from $800.0 million to $1.3 billion and the then-remaining term loan outstanding from $620.0 million to $650.0 million.

On February 26, 2025, we amended and restated the Credit Facility (the “Amended Credit Facility”), extending the maturity date to February 26, 2030, and increasing the capacity of the revolving credit facility from $1.3 billion to $1.6 billion and the then-remaining term loan outstanding from $528.1 million to $600.0 million.

The Amended Credit Facility provides for the issuance of up to $250.0 million for standby letters of credit and the issuance of up to $100.0 million in swingline advances.

The obligations under the Amended Credit Facility are secured on a first-priority basis by a lien on substantially all of our assets and properties, subject to certain exceptions.

We may repay amounts borrowed under the Amended Credit Facility at any time without penalty.

At November 1, 2022, we amended our Amended Credit Facility pursuant to the LIBOR Transition Amendment and the Fifth Amendment to replace the benchmark rate at which U.S.-dollar-denominated borrowings bear interest from LIBOR to the forward-looking SOFR term rate administered by CME Group Benchmark Administration Limited.

As a result of these amendments, we can borrow at Term SOFR plus a credit spread adjustment of 0.10% subject to a floor of zero.

The obligations under the Amended Credit Facility are guaranteed by the material, domestic wholly owned subsidiaries of ABM and are secured by a pledge of substantially all of the existing and future property and assets of ABM and the guarantors, including a pledge of the capital stock of the wholly owned domestic subsidiaries held by ABM and the guarantors and 65% of the capital stock of the first-tier foreign subsidiaries held by ABM and the guarantors, in each case subject to exceptions.

Additionally, we may repay amounts borrowed under the Amended Credit Facility at any time without penalty.

The Amended Credit Facility contains certain covenants, including a maximum total net leverage ratio of 5.00 to 1.00, a maximum secured net leverage ratio of 4.00 to 1.00, and a minimum interest coverage ratio of 1.50 to 1.00, as well as other financial and non-financial covenants.

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growth and expansion, and we do not anticipate remitting such earnings to the United States.

federal tax expense has been recognized as a

result of the Tax Cuts and Jobs Act of 2017, no deferred tax liabilities with respect to federal and state income taxes or foreign withholding taxes have been recognized.

We believe that our cash on hand in the United States, along with our Amended Credit Facility and future domestic cash flows, are sufficient to satisfy our domestic liquidity requirements.

federal tax expense had been recognized as a result of the Tax Cuts and Jobs Act of 2017, no deferred tax liabilities with respect to federal and state income taxes or foreign withholding taxes have been recognized.

We believe that our cash on hand in the United States, along

with our Amended Credit Facility and future domestic cash flows, are sufficient to satisfy our domestic liquidity requirements.

Share Repurchases

Effective December 13, 2023, our Board of Directors expanded our existing share repurchase program by an additional $150.0 million of our common stock.

Effective September 3, 2025, our Board of Directors expanded our existing share repurchase program by an additional $150.0 million of our common stock.

We repurchased shares under the share repurchase program during the year ended October 31, 2025, as summarized below.

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$ 121.3 $ 55.8

(1) Average price paid per share and total cash paid for share repurchases do not include any excise tax for stock repurchases as part of the Inflation Reduction Act of 2022.

Proceeds from Federal Energy Savings Performance Contracts

As part of our Technical Solutions business, we enter into energy savings performance contracts (“ESPC”) with the federal government pursuant to which we agree to develop, design, engineer, and construct a project and guarantee that the project will satisfy agreed-upon performance standards.

Proceeds from ESPC projects are generally received in advance of construction through agreements to sell the ESPC receivables to unaffiliated third parties.

We use the advances from the third parties under these agreements to finance the projects, which are recorded as cash flows from financing activities.

The use of the cash received under these arrangements to pay project costs is classified as operating cash flows.

(1) Average price paid per share and total cash paid for share repurchases do not include any excise tax for share repurchases as part of the Inflation Reduction Act of 2022.

Effect of Inflation

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the actual payments of contingent consideration made in excess of the acquisition-date fair value;

and the timing and amount of payments on insurance claims and legal

and the timing and amount of payments on insurance claims and legal settlements.

Year Ended October 31,

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Net cash used in investing activities (115.6) (171.9) (62.1)

Net cash (used in) provided by financing activities (61.5) (186.3) 235.5

Net cash used in financing activities (80.2) (61.5) (186.3)

Operating Activities

Net cash provided by operating activities increased by $7.7 million during 2025, as compared to 2024.

The increase was primarily driven by the timing of working capital requirements.

The increase was partially offset by the $75.0 million payment for contingent consideration related to the RavenVolt Acquisition, of which $16.0 million was classified as an operating cash outflow.

Net cash provided by operating activities decreased by $16.6 million during 2024, as compared to 2023.

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The decrease was partially offset by the absence of a $66.0 million payment of deferred payroll taxes done in 2023.

Net cash provided by operating activities increased by $222.9 million during 2023, as compared to 2022.

The increase was primarily driven by a $143.8 million payment made for the Bucio settlement in 2022 and the related income tax benefit.

Investing Activities

Net cash used in investing activities changed by $109.8 million during 2024, as compared to 2023.

Net cash used in investing activities decreased by $56.3 million during 2025, as compared to 2024.

The decrease was primarily related to lower cash outflows for acquisitions in 2025.

Net cash used in investing activities increased by $109.8 million during 2024, as compared to 2023.

The change was primarily related to the Quality Uptime Acquisition, completed in 2024.

Net cash used in investing activities changed by $179.5 million during 2023, as compared to 2022.

The change was primarily related to the Momentum and RavenVolt acquisitions, completed in 2022.

Financing Activities

Net cash used in financing activities was $61.5 million in 2024, as compared to net cash used in financing activities of $186.3 million in 2023.

Net cash used in financing activities was $80.2 million in 2025, as compared to $61.5 million in 2024.

The increase in net cash used was primarily related to higher share buyback repurchases and a $75.0 million payment for contingent consideration related to the RavenVolt Acquisition, of which $59.0 million was classified as a financing cash outflow.

This was partially offset by higher net borrowings from our Amended Credit Facility.

Net cash used in financing activities was $61.5 million in 2024, as compared to $186.3 million in 2023.

The decrease in net cash used was primarily related to lower share buyback repurchases in 2024 and an increase in our book cash overdrafts.

Net cash used in financing activities was $186.3 million in 2023, as compared to net cash provided by financing activities of $235.5 million in 2022.

The change was primarily related to a decrease in net borrowings from our Amended Credit Facility, as in 2022 we had higher borrowings to fund the Momentum and RavenVolt acquisitions and higher share repurchases in 2023.

On December 17, 2025, we announced a quarterly cash dividend of $0.29 per share on our common stock, payable on February 2, 2026, to shareholders of record on January 14, 2026.

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These amounts are based on expected future service and were calculated using the same assumptions used to measure our benefit obligation at October 31, 2025.

• Contingent Consideration Payable Connection with Our Acquisition of RavenVolt – At October 31, 2024, contingent consideration of up to $75.0 million in cash may be paid in calendar year 2025 if the RavenVolt business achieves certain financial targets in calendar year 2024, as defined in the merger agreement .

We expect the RavenVolt business to achieve the aforementioned financial targets for calendar year 2024, and as such, we currently expect to make a $75.0 million payment in May 2025 for calendar year 2024.

• Contingent Consideration Payable in Connection with Our Acquisition of RavenVolt and LMC – At October 31, 2025, contingent consideration related to the RavenVolt Acquisition of up to $205.0 million in cash may be paid in calendar year 2026 if the RavenVolt business achieves certain financial targets in calendar year 2025 or cumulative targets for calendar years 2023-2025, as defined in the merger agreement .

We expect the RavenVolt business to achieve the financial target that would require a $32.5 million payment for calendar year 2025, and as such, we currently expect to make this payment in May 2026.

At October 31, 2025, contingent consideration related to the LMC Acquisition of up to $5.8 million in cash may be paid in calendar year 2027 upon the retention of the top two customers.

In addition, our material cash requirements for other obligations, for which we cannot reasonably estimate future payments, include the following:

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In addition, certain of these matters may not require cash settlements due to the utilization of credits and net operating loss carryforwards as well as other offsets, including the indirect benefit from other taxing jurisdictions that may be available.

• Contingent Consideration Payable in Connection with Our Acquisition of RavenVolt – At October 31, 2024, contingent consideration of up to $205.0 million, of which $34.1 million has been accrued as of October 31, 2024, in cash may be paid in calendar year 2026 if the RavenVolt business achieves certain financial targets in calendar year 2025, as defined in the merger agreement.

Off-Balance Sheet Arrangements

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A goodwill impairment analysis was performed for each of our reporting units on August 1, 2025.

Based on these studies, the implied fair value of each of our reporting units was substantially in excess of its carrying value, with the exception of the Education reporting unit which had an excess of 25%.

Based on these studies, the implied fair value of each reporting units was substantially in excess of its carrying value.

Therefore, we concluded there were no indicators of impairment.

A 10% decrease in the estimated fair value of any of our reporting units would not have resulted in a different conclusion.

We concluded there were no indicators of impairment.

Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions

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We retain a substantial portion of the risk related to certain workers’ compensation and medical claims.

Liabilities associated with these losses include estimates of both claims filed and IBNR Claims.

Liabilities associated with these losses include estimates of both claims filed and incurred but not reported (“IBNR”) Claims.

With the assistance of third-party actuaries, we periodically review our estimate of ultimate losses for IBNR Claims and adjust our required self-insurance reserves as appropriate.

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After analyzing recent loss development patterns, comparing the loss development patterns against benchmarks, and applying actuarial projection methods to estimate the ultimate losses, we increased our total reserves related to prior years for known claims as well as our estimate of the loss amounts associated with IBNR Claims during 2025 by $23.3 million.

In 2023, we decreased our total reserves related to prior years claims by $14.8 million.

In 2024, we increased our total reserves related to prior years claims by $20.3 million.

It is possible that actual results could differ from recorded self-insurance liabilities.

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Method of Adoption

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

This ASU, issued in November 2023, improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU requires disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker, and an amount for other segment items by reportable segment, with a description of its composition.

We are currently evaluating the impact of implementing this guidance on our financial statements.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Income Taxes (Topic 740):

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This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

2025-06 Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software

This ASU, issued in September 2025, removes all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40 and requires the capitalization of software costs to begin when 1) management has authorized and committed to funding the software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended.

This ASU is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis