APi Group Raises 2026 Outlook as Q3 Revenue Rises 22.5%

APi Group Corporation (NYSE: APG) increased its full-year 2026 revenue and adjusted EBITDA guidance after third-quarter sales rose 22.5%, supported by double-digit organic growth and particularly strong performance in Specialty Services.

For the three months ended September 30, net revenue reached $2.55 billion, up from $2.09 billion a year earlier. Organic net revenue growth, which excludes material acquisitions, divestitures and foreign-currency translation, was 15.7%.

Adjusted EBITDA increased 24.6% to $350 million, while the adjusted EBITDA margin expanded 20 basis points to 13.7%. Adjusted net income rose 25.9% to $219 million, and adjusted diluted earnings per share increased 22% to $0.50. On a GAAP basis, net income was $114 million, compared with $93 million in the prior-year quarter.

Adjusted gross profit increased 18.1% to $775 million, but its margin declined 120 basis points to 30.3%. The margin contraction contrasted with the improvement in adjusted EBITDA margin, as adjusted selling, general and administrative expenses fell to 17.6% of revenue from 19.3%.

Specialty Services leads segment growth

Specialty Services generated revenue of $893 million, an increase of 30.7%, including 29.9% organic growth. Segment earnings rose 38.3% to $112 million, and the segment earnings margin increased 60 basis points to 12.5%. Adjusted gross margin edged up 10 basis points to 19.4%.

Safety Services, APi’s larger segment, reported revenue of $1.66 billion, up 18.5%, with organic growth of 8.8%. Segment earnings increased 19.1% to $281 million, and the earnings margin rose 10 basis points to 16.9%. Its adjusted gross margin declined 110 basis points to 36.2%.

Safety Services accounted for about 65% of third-quarter revenue and 72% of segment adjusted EBITDA, excluding corporate items and eliminations. Specialty Services represented approximately 35% of revenue and 28% of segment adjusted EBITDA.

Full-year outlook increased

APi now expects 2026 revenue of $9.20 billion to $9.25 billion, compared with its July forecast of $8.88 billion to $9.03 billion. The company attributed the change at the midpoint to $305 million of underlying business performance, including the partial-year contribution from the Evergreen Fire and Security acquisition, partly offset by a $30 million foreign-exchange impact.

Full-year adjusted EBITDA is expected to be between $1.24 billion and $1.26 billion, versus the previous range of $1.21 billion to $1.25 billion. APi’s guidance bridge showed a $25 million benefit from underlying business performance and a $5 million foreign-currency headwind at the midpoint.

The company expects full-year reported revenue growth of 16% to 17%, organic growth of 11% to 12%, and adjusted EBITDA growth of 19% to 21%. Adjusted EBITDA growth at fixed currencies is projected at 18% to 20%, while adjusted free cash flow conversion is expected to be approximately 110%.

For the fourth quarter, APi forecasts revenue of $2.41 billion to $2.46 billion, representing reported growth of 14% to 16% and organic growth of 7% to 9%. Adjusted EBITDA is projected at $339 million to $359 million, up 15% to 22% year over year.

Cash flow and capital deployment

Third-quarter operating cash flow declined 3% to $225 million, while adjusted free cash flow fell 3.2% to $240 million. Adjusted free cash flow conversion was 109.6%, down from 142.5% a year earlier.

For the first nine months, adjusted free cash flow rose by $34 million to $468 million, equivalent to 84.2% of adjusted net income, compared with 98.2% in the prior-year period.

APi said it deployed $1.7 billion of capital through the third quarter across acquisitions, shareholder returns and organic growth investments. It completed 13 acquisitions during the first nine months, including Evergreen Fire and Security, which expanded its electronic security capabilities and North American footprint.

The company repurchased $250 million of common shares through the third quarter and another $143 million during the fourth quarter, leaving $607 million available under its existing authorization. APi ended September with a net leverage ratio of 2.4 times, close to its stated target range of 2.5 to 3.0 times.

The outlook remains subject to risks including inflation and macroeconomic conditions, supply-chain constraints, tariff and trade-policy changes, acquisition integration, project delays or cancellations, backlog conversion, customer collections and working-capital requirements. APi also identified its ability to execute its inspection-first strategy, manage its debt and achieve anticipated contract and project margins as factors that could affect future results.