BrightView(BV) - 2025 Q2 - Quarterly Results

Financial Highlights and Guidance Second Quarter Fiscal 2025 Summary The company reported lower Q2 revenue but achieved record Adjusted EBITDA and announced a new share repurchase program Q2 FY2025 Key Financial Metrics (YoY) | Metric | Q2 FY2025 | Change (YoY) | Note | | :--- | :--- | :--- | :--- | | Net Service Revenues | $662.6 million | -1.5% | - | | Net Income | $6.4 million | -$27.3 million | Decrease driven by a $43.9M gain on divestiture in prior year | | Adjusted EBITDA | $73.5 million | +13.4% | Record high | | Adjusted EBITDA Margin | 11.1% | +150 bps | - | YTD FY2025 Key Financial Metrics | Metric | YTD FY2025 | Change (YoY) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $151.7 million | +$42.2 million | | Adjusted Free Cash Flow | $67.0 million | -$22.5 million | - The company announced a new $100 million share repurchase program[5] Fiscal Year 2025 Guidance Update BrightView raised its full-year Adjusted EBITDA and Adjusted Free Cash Flow guidance, citing strategic success Updated Fiscal Year 2025 Guidance | Metric | Prior Guidance | Updated Guidance | | :--- | :--- | :--- | | Total Revenue | $2.750 - $2.840 billion | $2.750 - $2.840 billion (Unchanged) | | Adjusted EBITDA | $335 - $355 million | $345 - $365 million (Raised) | | Adjusted Free Cash Flow | $40 - $60 million | $50 - $70 million (Raised) | - The guidance increase is attributed to the 'One BrightView' strategy, which has improved employee turnover and customer retention, contributing to record Adjusted EBITDA and a fortified balance sheet[4] Financial Performance Total BrightView Operating Highlights Total revenue declined due to strategic divestitures, while Adjusted EBITDA and margins grew from cost management Total BrightView Financial Summary (in millions, except per share) | Metric | Q2 2025 | Q2 2024 | Change | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $662.6 | $672.9 | (1.5%) | $1,261.8 | $1,299.6 | (2.9%) | | Net Income (Loss) | $6.4 | $33.7 | (81.0%) | $(4.0) | $17.3 | (123.1%) | | Adjusted EBITDA | $73.5 | $64.8 | 13.4% | $125.6 | $111.5 | 12.6% | | Adjusted EBITDA Margin | 11.1% | 9.6% | +150 bps | 10.0% | 8.6% | +140 bps | | Adjusted EPS | $0.14 | $0.11 | 27.3% | $0.18 | $0.13 | 38.5% | - The Q2 revenue decrease was driven by a $17.1 million reduction in the commercial landscaping business, partially offset by a $7.5 million increase in development services[6] - The six-month revenue decrease was driven by a $42.8 million reduction in commercial landscaping and a $7.9 million decrease in snow removal, both primarily due to strategic reductions of non-core businesses[7] Segment Performance Maintenance Services revenue fell while profitability rose; Development Services saw growth in both revenue and profit Maintenance Services Maintenance revenue declined from strategic exits, but cost controls boosted Adjusted EBITDA and expanded margins Maintenance Services Financials (in millions) | Metric | Q2 2025 | Q2 2024 | Change | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $492.8 | $510.5 | (3.5%) | $902.1 | $952.8 | (5.3%) | | Adjusted EBITDA | $56.3 | $55.1 | 2.2% | $91.0 | $86.5 | 5.2% | | Adjusted EBITDA Margin | 11.4% | 10.8% | +60 bps | 10.1% | 9.1% | +100 bps | - The decrease in revenue was primarily driven by strategic reductions of non-core businesses, with Commercial Landscaping services decreasing by $17.1 million (5.1%) in Q2[9] - The increase in Adjusted EBITDA Margin was primarily driven by lower overhead from cost management initiatives, which was partially offset by increased landscape maintenance labor costs[10][12] Development Services Development Services revenue and Adjusted EBITDA grew significantly, driven by higher project volumes and mix Development Services Financials (in millions) | Metric | Q2 2025 | Q2 2024 | Change | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $171.9 | $164.4 | 4.6% | $363.7 | $349.7 | 4.0% | | Adjusted EBITDA | $17.2 | $9.7 | 77.3% | $34.6 | $25.0 | 38.4% | | Adjusted EBITDA Margin | 10.0% | 5.9% | +410 bps | 9.5% | 7.1% | +240 bps | - The increase in revenue for both the quarter and six-month period was driven by an increase in Development Services project volumes[14][16] - The significant increases in Adjusted EBITDA and its margin were primarily driven by the revenue growth and a shift in the timing and mix of projects[15][17] Cash Flow and Balance Sheet Operating cash flow increased, but higher capital spending reduced free cash flow while the balance sheet strengthened Cash Flow Metrics Net cash from operations grew, but a surge in capital expenditures led to a decrease in Adjusted Free Cash Flow Cash Flow Summary (Six Months Ended March 31, in millions) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $151.7 | $109.5 | 38.5% | | Capital Expenditures | $92.3 | $22.7 | 306.6% | | Adjusted Free Cash Flow | $67.0 | $89.4 | (25.1%) | - The decrease in Adjusted Free Cash Flow was due to a significant increase in cash used for capital expenditures, which was only partially offset by the increase in net cash from operations[19] Balance Sheet Metrics The company reduced its Total Net Financial Debt and improved its net debt to Adjusted EBITDA leverage ratio Key Balance Sheet Ratios | Metric (in millions, except ratio) | Mar 31, 2025 | Sep 30, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Total Financial Debt | $859.9 | $877.3 | $931.2 | | Total Net Financial Debt | $718.6 | $736.9 | $753.9 | | Total Net Financial Debt to Adjusted EBITDA ratio | 2.1x | 2.3x | 2.4x | - Total Net Financial Debt decreased by $18.3 million from September 30, 2024, to March 31, 2025[22] Financial Statements Consolidated Balance Sheets Total assets and liabilities decreased slightly, with stable stockholders' equity at $1.26 billion Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $141.3 | $140.4 | | Total current assets | $715.5 | $780.1 | | Total assets | $3,324.8 | $3,391.8 | | Liabilities & Equity | | | | Total current liabilities | $504.8 | $543.3 | | Long-term debt, net | $798.9 | $802.5 | | Total liabilities | $1,556.4 | $1,609.4 | | Total stockholders' equity | $1,261.3 | $1,275.3 | Consolidated Statements of Operations Q2 net income fell sharply to $6.4 million due to a prior-year gain on divestiture Consolidated Statement of Operations (in millions) | Line Item | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net service revenues | $662.6 | $672.9 | $1,261.8 | $1,299.6 | | Gross profit | $147.5 | $152.0 | $274.3 | $285.9 | | Income from operations | $22.3 | $62.2 | $21.7 | $56.0 | | Gain on divestiture | - | $(43.9) | - | $(43.9) | | Net income (loss) | $6.4 | $33.7 | $(4.0) | $17.3 | Consolidated Statements of Cash Flows Operating cash flow rose, but higher investing outflows significantly reduced the net increase in cash Consolidated Statement of Cash Flows (Six Months Ended March 31, in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $151.7 | $109.5 | | Net cash (used) provided by investing activities | $(83.4) | $32.3 | | Net cash (used) by financing activities | $(67.4) | $(31.5) | | Net change in cash and cash equivalents | $0.9 | $110.3 | Supplemental Information Reconciliation of GAAP to Non-GAAP Financial Measures This section details adjustments from GAAP Net Income to non-GAAP metrics like Adjusted EBITDA and Adjusted EPS Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, in millions) | Description | Amount | | :--- | :--- | | Net income | $6.4 | | Income tax expense | $2.3 | | Interest expense, net | $12.8 | | Depreciation expense | $31.8 | | Amortization expense | $7.1 | | Business transformation costs | $7.8 | | Equity-based compensation | $4.6 | | Debt extinguishment | $0.7 | | Adjusted EBITDA | $73.5 | Reconciliation of Cash Flow to Adjusted Free Cash Flow (Six Months 2025, in millions) | Description | Amount | | :--- | :--- | | Cash flows provided by operating activities | $151.7 | | Minus: Capital expenditures | $(92.3) | | Plus: Proceeds from sale of property and equipment | $7.6 | | Adjusted Free Cash Flow | $67.0 | Non-GAAP Financial Measures Definitions The company defines non-GAAP metrics used to evaluate core operating performance, excluding certain items - Adjusted EBITDA: Net income before interest, taxes, depreciation, and amortization, further adjusted for non-cash, non-recurring, and other items[32] - Adjusted Net Income: Net income excluding amortization and other items used to calculate Adjusted EBITDA, adjusted for the tax effect of these exclusions[33] - Adjusted Free Cash Flow: Cash flows from operating activities minus capital expenditures, net of proceeds from the sale of property and equipment[35] Forward-Looking Statements This release contains forward-looking statements subject to risks like competition, weather, and economic conditions - Statements are based on current expectations and are not guarantees of future performance[27] - Key risks include: competitive pressures, customer relationships, weather conditions, supply chain issues, labor retention, and economic conditions[27][28] - Additional risk factors are detailed in the company's Form 10-K for the fiscal year ended September 30, 2024[29] Conference Call Information A conference call to discuss Q2 results is scheduled for May 8, 2025, with webcast and replay details provided - A conference call is scheduled for May 8, 2025, at 8:30 a.m. EST[23] - A live audio webcast and presentation materials will be accessible on the investor website: https://investor.brightview.com[23](index=23&type=chunk) - A replay will be available until May 22, 2025, by dialing (800) 839-3735 with access code 27525[24]