Key Highlights

  • Adjusted diluted EPS of USD 0.50 beat the consensus estimate of USD 0.47 and rose 22% from a year earlier.
  • Net revenues of USD 2.55 billion rose 22.5%, topping the consensus estimate of USD 2.40 billion, on 15.7% organic growth.
  • Adjusted EBITDA margin widened 20 basis points to 13.7%, marking the sixteenth consecutive quarter of margin expansion.
  • Full year net revenue guidance was lifted to USD 9.20 billion to USD 9.25 billion, the third increase this year.

APi Group Corporation (NYSE:APG) reported third quarter 2026 adjusted diluted earnings per share of USD 0.50, above a consensus estimate of USD 0.47 and up USD 0.09 from a year earlier. GAAP diluted earnings per share were USD 0.24 compared with USD 0.20. Net revenues reached USD 2.55 billion, ahead of a consensus estimate of USD 2.40 billion and 22.5% higher than USD 2.09 billion in the prior year period, while net income rose to USD 114 million from USD 93 million.

Specialty Services Surge Offsets Gross Margin Pressure

Specialty Services net revenues grew 30.7% to USD 893 million, with organic growth of 29.9%, and segment earnings margin widened 60 basis points to 12.5%. Safety Services revenues rose 18.5% to USD 1.66 billion on organic growth of 8.8%, and segment earnings margin edged up 10 basis points to 16.9%. Chief Executive Officer Russ Becker pointed to data centers, semiconductors, advanced manufacturing and healthcare as sources of project demand, and said International Safety returned to organic growth.

Adjusted gross margin fell 120 basis points to 30.3%, which the chief financial officer tied to project and business mix along with higher material, fuel and other costs. Adjusted EBITDA increased 24.6%. Operating income was USD 202 million, up from USD 163 million, while net interest expense rose to USD 45 million from USD 34 million.

Raised Guidance and Capital Deployment

The company projects full year net revenues of USD 9.20 billion to USD 9.25 billion, up from USD 8.875 billion to USD 9.025 billion, and adjusted EBITDA of USD 1.235 billion to USD 1.255 billion, up from USD 1.205 billion to USD 1.245 billion. The midpoint implies an adjusted EBITDA margin of 13.5%. Guidance includes foreign exchange headwinds of USD 30 million to revenue and USD 5 million to adjusted EBITDA versus the prior outlook. Adjusted free cash flow conversion is projected near 110% of adjusted net income.

Nine month adjusted free cash flow was USD 468 million, up USD 34 million, and net leverage stood at 2.4x against a long term target range of 2.5x to 3x. The company deployed USD 1.7 billion of capital in the first nine months, and it repurchased USD 252 million of shares through the third quarter and a further USD 143 million in the fourth quarter. About USD 607 million remains under the repurchase authorization.

Signposts for the Fourth Quarter and 2027

Management described backlog as exceeding USD 5 billion for the first time and up double digits year over year. The company closed 13 transactions year to date and targets USD 250 million of bolt-on spending in 2026, with capacity being built toward USD 350 million of annual bolt-on spend. Management said 2026 acquisitions add well over USD 500 million of annualized revenue, with only partial year contributions this year.

Several dated items define the next reading. Full year 2027 guidance is scheduled for February. The company also cited a 2028 adjusted EBITDA margin target of 16% against 13.7% in the quarter, and a fourth quarter margin that management said typically improves sequentially. Interest expense of USD 155 million and an adjusted share count of 437 million are part of the 2026 framework.