APi (US:APG)2025-10-30 16:20Financial Performance - Net revenues for Q3 2025 were $2,085 million, an increase of $259 million or 14.2% compared to $1,826 million in Q3 2024[186]. - Gross profit for Q3 2025 was $652 million, up $85 million or 15.0% from $567 million in Q3 2024, with a gross margin of 31.3%[188]. - Operating income for Q3 2025 was $163 million, reflecting a $21 million or 14.8% increase from $142 million in Q3 2024[186]. - Income before income taxes rose to $130 million in Q3 2025, a $30 million or 30.0% increase compared to $100 million in Q3 2024[186]. - Net income for Q3 2025 was $93 million, an increase of $24 million from $69 million in Q3 2024[186]. - Adjusted EBITDA for Q3 2025 was $281 million, up 14.7% from $245 million in Q3 2024[196]. - Net income for the nine months ended September 30, 2025 was $205 million, a 12.0% increase from $183 million in the same period of 2024[210]. - Gross profit for the nine months ended September 30, 2025 was $1,809 million, a 12.9% increase from $1,603 million in the same period of 2024[204]. Expenses - Selling, general, and administrative (SG&A) expenses increased to $489 million in Q3 2025, a rise of $64 million or 15.1% from $425 million in Q3 2024[190]. - SG&A expenses as a percentage of net revenues were 23.5% in Q3 2025, slightly up from 23.3% in Q3 2024[190]. - SG&A expenses for the nine months ended September 30, 2025 were $1,419 million, a 14.9% increase from $1,235 million in the same period of 2024[206]. Revenue Segmentation - The company experienced strong growth in inspection, service, and monitoring revenues, along with project revenues and pricing improvements[187]. - Safety Services net revenues increased by $187 million or 15.4% in Q3 2025 compared to Q3 2024[198]. - Specialty Services net revenues rose by $71 million or 11.6% in Q3 2025 compared to Q3 2024[201]. - Safety Services net revenues increased by $523 million or 14.9% to $4,032 million for the nine months ended September 30, 2025, compared to $3,509 million in 2024[213]. - Specialty Services net revenues rose by $112 million or 6.8% to $1,765 million for the nine months ended September 30, 2025, compared to $1,653 million in 2024[216]. Cash Flow and Liquidity - Net cash provided by operating activities was $377 million for the nine months ended September 30, 2025, up from $337 million in 2024[234]. - Net cash used in investing activities decreased to $231 million for the nine months ended September 30, 2025, compared to $680 million in 2024, primarily due to reduced acquisition consideration[235]. - Total liquidity as of September 30, 2025, was $1,299 million, consisting of $555 million in cash and cash equivalents and $744 million available under the Revolving Credit Facility[226]. Shareholder Actions - The company repurchased 3,095,573 shares of common stock for approximately $75 million during the nine months ended September 30, 2025[232]. - The Series B Preferred Stock Conversion resulted in approximately 49,205,279 shares of common stock being issued, with the company repurchasing half for $600 million[251]. Debt and Financing - The company completed the Eighth Amendment to its credit agreement, increasing the Revolving Credit Facility from $500 million to $750 million[230]. - As of September 30, 2025, the 2021 Term Loan had a remaining principal amount of $2,157 million, with no amounts outstanding under the Revolving Credit Facility, which had $744 million available[245]. - The interest rate applicable to the 2021 Term Loan is either a base rate plus an applicable margin of 0.75% or a Term SOFR rate plus an applicable margin of 1.75%[242]. Tax and Effective Rates - The effective tax rate for Q3 2025 was 28.2%, down from 30.9% in Q3 2024[194]. Internal Controls and Compliance - The management evaluated the effectiveness of disclosure controls and procedures as of September 30, 2025, concluding they were effective[264]. - Internal control over financial reporting was also deemed effective as of September 30, 2025, based on the 2013 Framework guidelines[266]. - There were no changes in internal control over financial reporting during the quarter ended September 30, 2025, that materially affected its effectiveness[267]. - No material changes to risk factors were reported since the last Form 10-K for the year ended December 31, 2024[268]. Other Information - The HVAC business was realigned from Safety Services to Specialty Services effective January 2025, impacting segment reporting[166]. - The company has concluded its multi-year Chubb restructuring program as of June 30, 2025, with no additional expenses expected[171]. - Revenues from foreign operations represented approximately 35% of consolidated net revenues for the three and nine months ended September 30, 2025[256]. - The company has a $720 million interest rate swap maturing in October 2026, exchanging one-month SOFR for a fixed rate of 3.59%[255]. - As of September 30, 2025, the company had $337 million of 4.125% Senior Notes and $277 million of 4.750% Senior Notes outstanding[246][247]. - The first lien net leverage ratio as of September 30, 2025, was 1.4:1.0, well below the covenant limit of 4.00 to 1.00[244]. - The company did not purchase any equity securities during the three months ended September 30, 2025[269]. - No officers or directors adopted or terminated any Rule 10b5-1 trading arrangements during the quarter ended September 30, 2025[271].