APi Group Q3 2026 Earnings: Revenue Climbs 22.5% as Full-Year Outlook Rises

APi Group (NYSE: APG) reported Q3 2026 net revenues of $2.554 billion, up 22.5% year over year, while diluted EPS increased to $0.24 from $0.20. Adjusted EBITDA rose 24.6% to $350 million and its margin expanded despite lower gross margins. Specialty Services led segment growth, and APi raised its full-year revenue and adjusted EBITDA guidance.

Core Earnings Results

Revenue growth reflected higher inspection, service, and monitoring activity, robust project revenue, acquisitions, and pricing. Organic revenue increased 15.7%, a measure that excludes material acquisitions, divestitures, and foreign-currency effects.

Gross profit grew more slowly than revenue as project and business mix and rising material, fuel, and other expenses reduced gross margin. However, operating income, net income, adjusted EBITDA, and both GAAP and adjusted EPS increased.

Business and Segment Performance

Safety Services remained APi’s larger segment, but Specialty Services delivered the faster growth rate. The gap between Safety Services’ reported and organic growth reflected a meaningful acquisition contribution, while Specialty Services’ 30.7% reported growth was almost entirely organic.

Safety Services faced lower gross margins because of project and business mix and higher material, fuel, and other expenses. Specialty Services expanded both gross and segment earnings margins, supported by customer and project selection, pricing, revenue growth, and SG&A leverage.

SG&A Leverage Offset Gross Margin Pressure

The quarter’s central profitability dynamic was the contrast between lower gross margins and better overhead leverage. Adjusted gross profit increased 18.1%, below revenue growth of 22.5%, and adjusted gross margin declined 120 basis points to 30.3%.

At the same time, adjusted SG&A fell to 17.6% of revenue from 19.3%, an improvement of 170 basis points. That leverage more than offset the gross-margin decline at the adjusted EBITDA level, allowing adjusted EBITDA margin to increase 20 basis points to 13.7%.

Cash Flow and Balance Sheet

For the nine months ended September 30, 2026, operating cash flow was $393 million, compared with $377 million in the prior-year period. Capital expenditures were $76 million, up from $70 million.

Acquisition spending increased to $1.356 billion from $174 million, while common-stock repurchases totaled $252 million. APi financed part of these uses with additional borrowings: short-term and current debt stood at $361 million and long-term debt at $3.213 billion, compared with $5 million and $2.754 billion, respectively, at the end of 2025. Cash and cash equivalents declined to $373 million from $912 million over the same period.

Full-Year 2026 Guidance

APi raised both ends of its full-year net revenue and adjusted EBITDA ranges from the outlook issued on July 30, 2026. The company also expects adjusted free cash flow conversion of 110%, measured against adjusted net income.

Management View

President and CEO Russ Becker attributed the quarter’s momentum to demand across inspection, service, and monitoring activities, robust project work, and disciplined execution in both segments. Management also pointed to a growing backlog and improving margins entering the fourth quarter while maintaining its strategic emphasis on inspection and service.

Risks Investors Need to Watch

• Gross-margin pressure: Project and business mix and higher material, fuel, and other expenses reduced consolidated gross margin by 120 basis points. Continued cost pressure or an unfavorable mix could limit further EBITDA margin expansion.
• Higher interest expense and share count: Net interest expense increased to $45 million from $34 million, while diluted weighted-average shares rose to 432 million from 429 million. Both factors partially offset the benefit of operating growth to adjusted EPS.
• Acquisition and balance-sheet execution: Nine-month acquisition spending reached $1.356 billion as debt increased and cash declined. Successful integration and cash generation will be important to supporting the expanded business and its financing needs.
• Project timing and backlog conversion: Specialty Services growth was driven by project and service revenue, while management cited robust project activity and a growing backlog. Project delays, cancellations, or slower backlog conversion could affect revenue and margins.

Summary

APi Group’s Q3 2026 results combined double-digit organic growth with higher adjusted EBITDA margins, led by rapid expansion in Specialty Services and continued growth in Safety Services. SG&A leverage offset lower gross margins, enabling profit growth to outpace revenue growth at the adjusted EBITDA level. The raised full-year outlook reflects the quarter’s operating momentum, while gross-margin pressure, acquisition integration, debt, cash conversion, and project execution remain the main areas to monitor.