Core Insights - APi reported $1.99 billion in revenue for the quarter ended June 2025, marking a year-over-year increase of 15% and a surprise of +4.59% over the Zacks Consensus Estimate of $1.9 billion [1] - The EPS for the same period was $0.39, compared to $0.33 a year ago, with an EPS surprise of +5.41% over the consensus estimate of $0.37 [1] Revenue Breakdown - Safety Services generated net revenues of $1.36 billion, slightly below the average estimate of $1.37 billion, reflecting a year-over-year change of +6.5% [4] - Specialty Services reported net revenues of $629 million, exceeding the estimated $540.05 million, representing a significant year-over-year increase of +38.9% [4] - Corporate and Eliminations showed net revenues of $-1 million, better than the average estimate of $-1.5 million, but indicating a year-over-year decline of -50% [4] Market Performance - APi's shares have returned +2.5% over the past month, compared to the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), suggesting potential outperformance against the broader market in the near term [3]

Core Insights - APi (APG) reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, and up from $0.33 per share a year ago, representing an earnings surprise of +5.41% [1] - The company achieved revenues of $1.99 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.59%, and an increase from $1.73 billion year-over-year [2] - APi shares have increased approximately 43.5% year-to-date, significantly outperforming the S&P 500's gain of 8.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $1.92 billion, and for the current fiscal year, it is $1.41 on revenues of $7.51 billion [7] - The estimate revisions trend for APi was favorable ahead of the earnings release, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Business - Services industry, to which APi belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Reported revenues for Q2 2025 were $2 billion, a 15% increase compared to $1.73 billion in the prior year period, with organic growth of 8.3% driven by strong project revenue growth and pricing improvements [18] - Adjusted EBITDA increased by 17.7% for Q2, with an adjusted EBITDA margin of 13.7%, representing a 30 basis point increase compared to the prior year [19] - Adjusted diluted earnings per share for Q2 was $0.39, an 18.2% increase compared to the prior year [19] Business Line Data and Key Metrics Changes - Safety Services segment reported revenues of $1.36 billion, a 15.8% increase year-over-year, with organic growth of 5.6% driven by pricing improvements and strong project revenues [20] - Specialty Services segment revenues grew 13.3% to $629 million, with adjusted gross margin at 18.1%, a 350 basis point decrease due to increased project starts and rising material costs [21] Market Data and Key Metrics Changes - The North American Safety business achieved double-digit inspection growth for the twentieth consecutive quarter, indicating strong market performance [13] - The international business showed high single-digit order growth, reflecting continued momentum under API's ownership [14] Company Strategy and Development Direction - The company aims for $10 billion in net revenues by 2028, with a focus on mid-single-digit organic growth and a 16% adjusted EBITDA margin [11] - Key initiatives include pricing strategies, improved revenue mix, disciplined customer selection, and selective business pruning to achieve long-term financial targets [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver against the 2025 plan, highlighting strong backlog and free cash flow generation [17] - The company remains optimistic about the inspection service and monitoring business, with expectations for continued organic growth [27] Other Important Information - The company completed six acquisitions in Q2, with a total of seven year-to-date, and plans to deploy approximately $250 million in accretive M&A this year [15][16] - The adjusted free cash flow for the first half of the year was $186 million, reflecting a significant improvement [22] Q&A Session Summary Question: What business outperformed expectations in Q2? - Management noted that the inspection service and monitoring businesses performed largely as expected, with strong contract and project activity contributing to revenue exceeding guidance [32] Question: What caused the decline in gross margins in the specialty business? - Rising material costs and increased project starts were identified as key factors impacting margins, with expectations for sequential improvement as the year progresses [36] Question: How does the company view its M&A potential? - Management indicated that there is potential to exceed the $250 million M&A target, emphasizing the importance of disciplined selection in acquisitions [42] Question: What is the outlook for the Safety Services segment? - The company expects mid to upper single-digit revenue growth in the Safety Services segment for the back half of the year [46] Question: How is the international business performing? - The international business has shown consistent organic growth, with high single-digit order growth indicating strong health in the inspection and service business [58] Question: What is the margin profile of recent acquisitions? - All recent acquisitions are expected to be accretive, with a mix of businesses in the North American safety sector and a profitable HVAC service business [51]

Financial Data and Key Metrics Changes - Reported revenues for Q2 2025 were $2 billion, a 15% increase compared to $1.73 billion in the prior year period, with organic growth of 8.3% driven by strong project revenue growth and pricing improvements [15][20] - Adjusted EBITDA increased by 17.7% for Q2, with an adjusted EBITDA margin of 13.7%, representing a 30 basis point increase compared to the prior year [15][20] - Adjusted diluted earnings per share for Q2 was $0.39, an 18.2% increase compared to the prior year [15] Business Line Data and Key Metrics Changes - Safety Services segment revenues increased by 15.8% to $1.36 billion, with organic growth of 5.6% driven by pricing improvements and strong growth in service and project revenues [17] - Specialty Services reported organic revenues grew 13.3% to $629 million, driven by strong project revenue growth [18] - Adjusted gross margin for Safety Services was 37.2%, a 70 basis point increase, while Specialty Services saw a decrease of 350 basis points to 18.1% due to increased project starts and rising material costs [17][18] Market Data and Key Metrics Changes - The North American safety business achieved double-digit inspection growth for the twentieth consecutive quarter, indicating strong market demand [11] - The international business delivered solid organic growth with high single-digit order growth, reflecting continued momentum under API's ownership [12][56] Company Strategy and Development Direction - The company aims to achieve over $10 billion in net revenues by 2028, with a target of 16% plus adjusted EBITDA margin and over $3 billion in cumulative adjusted free cash flow through 2028 [9][10] - Key initiatives include pricing strategies, improved revenue mix, disciplined customer selection, and selective business pruning to meet new financial targets [10][13] - The company is focused on building a strong leadership culture and investing in technology to support growth [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver against the 2025 plan, citing strong backlog and free cash flow generation [14][23] - The company anticipates continued organic growth and margin expansion, particularly in the inspection service and monitoring business [23][78] Other Important Information - The company completed six acquisitions in Q2, with a total of seven year-to-date, and plans to deploy approximately $250 million in accretive M&A this year [13][20] - The company has a strong balance sheet, with a net debt to adjusted EBITDA ratio of approximately 2.2 times [19] Q&A Session Summary Question: What businesses outperformed expectations in Q2? - Management noted that the inspection service and monitoring businesses performed largely as expected, with strong contract and project activity contributing to revenue exceeding guidance [28] Question: What caused the decline in gross margins in the specialty business? - The decline was attributed to increased project starts, rising material costs, and weather impacts, with expectations for sequential improvement in margins as the year progresses [31][32] Question: How does the guidance outlook for the base businesses look? - Management indicated that the guidance raise was driven by strong backlog and improved outlook for the second half of the year, with a third of the increase attributed to M&A [36][105] Question: What is the status of the international business? - The international business showed organic growth and high single-digit order growth, indicating strong performance and ongoing optimization efforts [56] Question: Can you elaborate on the elevator acquisition? - The elevator acquisition is performing as expected, with mid to upper single-digit organic growth, and management remains optimistic about building a billion-dollar elevator platform [46][60] Question: What are the key factors affecting backlog margin realization? - Key factors include material cost escalation, weather impacts, and labor availability, with management emphasizing the importance of execution [106][108]

Q2 2025 Performance - Net revenues reached $199 billion, a 150% increase compared to Q2 2024, with 83% organic growth[16, 20] - Adjusted EBITDA was $272 million, up 177% from Q2 2024, with adjusted EBITDA margin increasing by 30 basis points to 137%[16, 20] - Adjusted diluted earnings per share increased by 182% to $039 compared to Q2 2024[16, 20] - Year-to-date adjusted free cash flow was $186 million, a 388% increase year-over-year, representing 400% conversion[16] Segment Performance - Safety Services net revenues were $1362 billion, a 158% increase compared to Q2 2024, with 56% organic growth[22] - Specialty Services net revenues were $629 million, a 133% increase compared to Q2 2024, with 133% organic growth[22] - Safety Services adjusted gross profit was $506 million, a 179% increase, with adjusted gross margin at 372%[22] - Specialty Services adjusted gross profit was $114 million, a (50)% decrease, with adjusted gross margin at 181%[22] Guidance and Capitalization - The company projects net revenues of $7650 to $7850 million and adjusted EBITDA of $1005 to $1045 million for FY 2025[25, 26] - Q3 2025 net revenues are expected to be $1985 to $2035 million, with organic growth of 5%-7% and adjusted EBITDA of $270 to $280 million[26]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) APi Group achieved record Q2 2025 financial results with strong revenue and EBITDA growth, though segment performance showed mixed margin trends [Q2 2025 Consolidated Financial Results](index=1&type=section&id=Q2%202025%20Consolidated%20Financial%20Results) APi Group reported record Q2 2025 results, with net revenues up 15.0% to **$2.0 billion** and Adjusted EBITDA growing 17.7% Q2 2025 Consolidated Financial Results (in millions) | Metric | Q2 2025 | Q2 2024 | Y/Y Growth | | :--- | :--- | :--- | :--- | | **Net Revenues** | $1,990 M | $1,730 M | 15.0% | | Organic Net Revenue Growth | - | - | 8.3% | | **Net Income** | $77 M | $69 M | 11.6% | | Diluted EPS | $0.16 | $0.15 | 6.7% | | **Adjusted EBITDA** | $272 M | $231 M | 17.7% | | Adjusted EBITDA Margin | 13.7% | 13.4% | +30 bps | | **Adjusted Net Income** | $164 M | $136 M | 20.6% | | Adjusted Diluted EPS | $0.39 | $0.33 | 18.2% | - Revenue growth was driven by a combination of acquisitions, strong project revenue growth, pricing improvements, and an increase in inspection, service, and monitoring revenues[6](index=6&type=chunk) - The CEO highlighted continued positive momentum, accelerating organic growth, margin expansion, and improved free cash flow generation, expressing confidence in achieving the new 10/16/60+ long-term financial targets[2](index=2&type=chunk) [Q2 2025 Segment Performance](index=2&type=section&id=Q2%202025%20Segment%20Performance) The company's two segments showed divergent Q2 2025 margin performance, with Safety Services expanding and Specialty Services contracting [Safety Services](index=2&type=section&id=Safety%20Services) Safety Services net revenues grew 15.8% to **$1.36 billion** with 5.6% organic growth, achieving margin expansion Safety Services Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $1,362 M | $1,176 M | +15.8% | | Organic Net Revenue Growth | - | - | 5.6% | | **Gross Margin** | 36.8% | 36.1% | +70 bps | | **Segment Earnings** | $232 M | $190 M | +22.1% | | Segment Earnings Margin | 17.0% | 16.2% | +80 bps | - Margin expansion was driven by disciplined customer and project selection along with pricing improvements in both service and project revenues[7](index=7&type=chunk) [Specialty Services](index=3&type=section&id=Specialty%20Services) Specialty Services achieved 13.3% organic revenue growth to **$629 million**, but experienced margin contraction from project mix and rising costs Specialty Services Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $629 M | $555 M | +13.3% | | Organic Net Revenue Growth | - | - | 13.3% | | **Gross Margin** | 18.1% | 21.6% | -350 bps | | **Segment Earnings** | $71 M | $73 M | -2.7% | | Segment Earnings Margin | 11.3% | 13.2% | -190 bps | - The decline in gross and segment earnings margins was primarily driven by increased project starts, rising material costs, and weather impacts[15](index=15&type=chunk) [Outlook and Corporate Actions](index=3&type=section&id=Outlook%20and%20Corporate%20Actions) APi Group raised full-year 2025 guidance after strong Q2 results and completed a three-for-two stock split [Full-Year and Q3 2025 Guidance](index=3&type=section&id=Full-Year%20and%20Q3%202025%20Guidance) APi Group raised full-year 2025 guidance for net revenues and Adjusted EBITDA, while also issuing Q3 2025 projections Full-Year 2025 Guidance (in millions) | Full-Year 2025 Guidance | New Guidance | Previous Guidance | | :--- | :--- | :--- | | **Net Revenues** | $7,650 - $7,850 M | $7,400 - $7,600 M | | **Adjusted EBITDA** | $1,005 - $1,045 M | $985 - $1,035 M | | **Adjusted FCF Conversion** | ~75% | (not specified) | Q3 2025 Guidance (in millions) | Q3 2025 Guidance | Projected Range | | :--- | :--- | | **Net Revenues** | $1,985 - $2,035 M | | **Adjusted EBITDA** | $270 - $280 M | [Corporate Actions and Events](index=3&type=section&id=Corporate%20Actions%20and%20Events) APi Group executed a three-for-two stock split on June 30, 2025, and scheduled a Q2 earnings call for July 31, 2025 - On June 30, 2025, the company executed a three-for-two stock split via a stock dividend, with the par value remaining at **$0.0001 per share**[12](index=12&type=chunk) - A conference call to discuss financial results was scheduled for 8:30 a.m. (Eastern Time) on Thursday, July 31, 2025[13](index=13&type=chunk) [Financial Statements (GAAP)](index=8&type=section&id=Financial%20Statements%20(GAAP)) This section presents APi Group's GAAP statements of operations, balance sheets, and cash flows for Q2 and year-to-date 2025 [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) APi reported Q2 2025 net income of **$77 million** on **$1,990 million** net revenues, with six-month net income at **$112 million** Condensed Consolidated Statements of Operations (in millions) | (In millions) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **Net Revenues** | $1,990 | $3,709 | | Gross Profit | $615 | $1,157 | | Operating Income | $143 | $227 | | **Net Income** | $77 | $112 | | Diluted EPS | $0.16 | $0.24 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **$8.54 billion**, driven by goodwill and receivables, with total liabilities at **$5.37 billion** Condensed Consolidated Balance Sheets (in millions) | (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,798 | $2,658 | | Goodwill | $3,126 | $2,894 | | **Total Assets** | $8,539 | $8,152 | | **Total Current Liabilities** | $1,933 | $1,885 | | Long-term Debt | $2,751 | $2,749 | | **Total Liabilities** | $5,368 | $5,199 | | **Total Shareholders' Equity** | $3,171 | $2,953 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was **$145 million** for H1 2025, with **$140 million** used in investing and **$101 million** in financing Condensed Consolidated Statements of Cash Flows (in millions) | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $145 | $117 | | Net cash used in investing activities | $(140) | $(623) | | Net cash (used in) provided by financing activities | $(101) | $357 | | **Net decrease in cash** | $(68) | $(154) | [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) This section details reconciliations of GAAP to non-GAAP financial measures, including organic revenue, EBITDA, net income, and free cash flow [Reconciliation of Organic Change in Net Revenues](index=11&type=section&id=Reconciliation%20of%20Organic%20Change%20in%20Net%20Revenues) Q2 2025 reported revenue growth of 15.0% is reconciled to an **8.3% organic growth rate** after adjusting for currency and acquisitions Reconciliation of Organic Change in Net Revenues | Q2 2025 vs Q2 2024 | Net Revenues Change (as reported) | Foreign Currency Translation | Acquisitions & Divestitures | Organic Change | | :--- | :--- | :--- | :--- | :--- | | **Consolidated** | 15.0% | 0.8% | 5.9% | 8.3% | | Safety Services | 15.8% | 1.4% | 8.8% | 5.6% | | Specialty Services | 13.3% | 0.0% | 0.0% | 13.3% | [Reconciliation of Gross Profit and SG&A](index=12&type=section&id=Reconciliation%20of%20Gross%20Profit%20and%20SG%26A) Q2 2025 GAAP Gross Profit of **$615 million** is adjusted to **$620 million**, and GAAP SG&A of **$472 million** is adjusted to **$376 million** - For Q2 2025, Adjusted Gross Profit was **$620 million** (**31.2% margin**) compared to GAAP Gross Profit of **$615 million** (**30.9% margin**)[39](index=39&type=chunk) - For Q2 2025, Adjusted SG&A was **$376 million** (**18.9% of net revenues**) compared to GAAP SG&A of **$472 million** (**23.7% of net revenues**), with key adjustments including amortization of intangible assets (**$55 million**) and systems/business enablement costs (**$18 million**)[39](index=39&type=chunk) [Reconciliation of EBITDA](index=13&type=section&id=Reconciliation%20of%20EBITDA) Q2 2025 GAAP Net Income of **$77 million** is reconciled to **Adjusted EBITDA of $272 million** by adding back non-cash and specific operational adjustments Reconciliation of EBITDA (in millions) | Reconciliation (In millions) | Three Months Ended June 30, 2025 | | :--- | :--- | | **Net Income (as reported)** | $77 | | Interest expense, net | $37 | | Income tax provision | $31 | | Depreciation and amortization | $81 | | **EBITDA** | $226 | | Adjustments (Systems, Acquisition, Restructuring, etc.) | $46 | | **Adjusted EBITDA** | $272 | [Reconciliation of Net Income and EPS](index=14&type=section&id=Reconciliation%20of%20Net%20Income%20and%20EPS) Q2 2025 GAAP Income Before Tax of **$108 million** is adjusted to **$213 million**, yielding **Adjusted Net Income of $164 million** and **Adjusted Diluted EPS of $0.39** Reconciliation of Net Income and EPS (in millions, except per share) | Reconciliation (In millions, except per share) | Three Months Ended June 30, 2025 | | :--- | :--- | | **Income before income tax (as reported)** | $108 | | Total Adjustments (Amortization, Systems, etc.) | $105 | | **Adjusted income before income tax** | $213 | | Adjusted income tax provision | $49 | | **Adjusted net income** | $164 | | **Adjusted diluted EPS** | $0.39 | [Reconciliation of Segment Financials](index=15&type=section&id=Reconciliation%20of%20Segment%20Financials) Q2 2025 segment financials show Safety Services with **$232 million** in earnings (17.0% margin) and Specialty Services with **$71 million** (11.3% margin) Q2 2025 Segment Performance (Adjusted, in millions) | Q2 2025 Segment Performance (Adjusted) | Safety Services | Specialty Services | | :--- | :--- | :--- | | **Net Revenues** | $1,362 M | $629 M | | **Adjusted Gross Profit** | $506 M | $114 M | | Adjusted Gross Margin | 37.2% | 18.1% | | **Segment Earnings** | $232 M | $71 M | | Segment Earnings Margin | 17.0% | 11.3% | [Reconciliation of Free Cash Flow](index=20&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Q2 2025 GAAP Net Cash from Operating Activities of **$83 million** is reconciled to **Adjusted Free Cash Flow of $100 million**, representing a **36.8% conversion rate** Reconciliation of Free Cash Flow (in millions) | Reconciliation (In millions) | Three Months Ended June 30, 2025 | | :--- | :--- | | **Net cash provided by operating activities** | $83 | | Less: Purchases of property and equipment | $(27) | | **Free cash flow** | $56 | | Add: Cash payments for adjustments | $44 | | **Adjusted free cash flow** | $100 | | Adjusted EBITDA | $272 | | **Adjusted free cash flow conversion** | 36.8% |

Core Viewpoint - APi Group Corp (APG) is entering the 9th Phase of its 18-Phase Adhishthana Cycle on July 21, 2025, but concerns arise regarding the timing of its recent breakout, suggesting the rally may not be sustainable [1]. Group 1: Cycle Analysis - APG's stock has formed a Cakra pattern between Phases 4 and 8, with an ideal breakout expected in Phase 9, which sets the stage for a subsequent powerful formation [2]. - The breakout for APG occurred towards the end of Phase 8, rather than in Phase 9 as ideally expected, raising concerns about the potential for a significant decline towards the Nirvana level [3]. Group 2: Monthly Chart Insights - On the monthly chart, APG is currently in Phase 2, which is traditionally a dual-phase characterized by an initial bearish trend followed by a bullish trend towards the end [7]. - APG has rallied nearly 200% from its Phase 2 lows during the bearish Sankhya Move, which is atypical and suggests that such premature bullish moves rarely sustain [8]. Group 3: Investor Outlook - Despite a recent upgrade from JPMorgan to Overweight, the Adhishthana Principles indicate that the current setup may be deceptive, as premature rallies often lead to swift corrections [9]. - The illiquid options market for APG limits retail investors' ability to hedge, warranting caution and close monitoring of the stock's performance [9].

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the strategy of "buying high, hoping to sell even higher" [1] - The Zacks Momentum Style Score helps investors identify which metrics are effective for assessing momentum in stocks [2] Group 2: APi (APG) Performance - APi currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - Over the past week, APG shares increased by 0.23%, while the Zacks Business - Services industry remained flat [6] - In the last month, APG shares rose by 6.12%, outperforming the industry's 0.9% [6] - Over the past quarter, APG shares increased by 44.25%, and over the last year, they gained 42.35%, compared to the S&P 500's 19.12% and 11.85% respectively [7] Group 3: Trading Volume and Earnings Outlook - APG's average 20-day trading volume is 5,972,496 shares, indicating a bullish sign with rising stock prices [8] - In the past two months, one earnings estimate for APG increased, raising the consensus estimate from $1.36 to $1.41 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions [10] Group 4: Conclusion - Given the positive performance metrics and earnings outlook, APG is positioned as a strong momentum pick with a 2 (Buy) rating and a Momentum Score of B [12]

Core Viewpoint - Growth investors seek stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - APi (APG) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 14.4%, with projected EPS growth of 11.7% this year, surpassing the industry average of 10.9% [5] Group 2: Financial Metrics - APi's year-over-year cash flow growth stands at 120.9%, significantly higher than the industry average of 3.4% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 76.5%, compared to the industry average of 7.1% [7] Group 3: Earnings Estimates - The current-year earnings estimates for APi have been revised upward, with the Zacks Consensus Estimate increasing by 0.5% over the past month [9] - APi has earned a Growth Score of B and carries a Zacks Rank 2 due to positive earnings estimate revisions, indicating potential for outperformance [11]

Group 1 - The article does not provide any specific company or industry analysis, focusing instead on the author's qualifications and disclosures [1][2][3]