Okay. Good morning, everyone. Welcome to J.P. Morgan Industrials Conference, day two. This is Tami Shen, Sumit, JPMorgan industrials analyst, and I'm pleased to open the day with APi Group. David Jackola, Executive Vice President, Chief Financial Officer, Adam Walters, Senior Director, Investor Relations. Thank you, David and Adam. Good morning. Good morning. Thank you, Tami. Before we dive in, I'd like to share why APi Group is such a compelling addition to this year's, our conference. APi stands out as a leader in safety and specialty services with a resilient, regulatory-driven business model and a clear roadmap to $10 billion+ revenue, 60% recurring revenue, and 16%+ EBITDA margin by 2028. Their 10/16/60+ strategies and strong free cash flow make them a model of both stability and growth in the industrial sector. To kick things off, I think it would be helpful to start with the introduction to APi Group, who the company is, what you do, and also your stories. David, could you kick it off, please? All right. Good morning. Before I get started, I just wanted to take a minute to thank everybody for showing up bright and early and for your interest in APi Group. APi Group is a global market-leading business service provider of fire and life safety, security, elevator and escalator, and specialty services. We did about $8 billion of revenue in 2025, and about 54% of that revenue comes from highly recurring inspection service and monitoring revenue. We really go to market in two segments. The largest, which is about 75% of our revenue, is safety services. That part of the business provides statutorily mandated and other contracted services to a large install base of diverse customers across a wide variety of end markets. The revenue, particularly the recurring inspection service and monitoring revenue, is highly resilient because it's non-discretionary, regulatory-driven, and comes at high margins. One of the things that it differentiates our fire and life safety business in the market is our unique lead with inspection model. We've got a dedicated sales organization that each and every day is knocking on the door of the ready-built environment, selling inspections. An inspection is a $1,000-$1,500 service that we provide. It's statutorily required, where we go in and we would inspect the fire and life safety system in the building for operability. We believe that inspection then leads to on average $3-$4 of recurring follow-on service work and builds a really tight, sticky relationship that allows us to propose on projects at great margins and use the power of our customer relationship built through the inspection and service to build our business as well through project work. The other part of our business is Specialty Services. That's about a quarter of the business. It offers a diverse offering across largely counter-cyclical markets, telecom, utilities, some data center work, across the business. Really, I think what differentiates as well as the inspection-first model is also our company's culture and our focus on leadership. At APi Group, we believe that each and every one of our leaders is just that, a leader. We talk about that every day. Leadership at our company means that every single one of our teammates has the opportunity to positively influence not just themselves, but also the people around them in everything that they do. That allows us to operate and lead in a highly decentralized model, where our field leaders, our branch leaders, and our company leaders are highly entrepreneurial, have a lot of autonomy to make really good decisions and to grow their business each and every day. Thank you, David. You talk about company culture and leadership. APi Group has evolved from the positive integration story to a streamlined operator with a two-focused platform, Safety Services and Specialty Services. What have you been the most important cultural or organizational change that's driving this transformation? It's a great question. I think it's been as much an evolution as it's been a transformation. In the international business, we bought Chubb about four years ago. You know, it's largely business as usual at Chubb now. We had a significant $125 million cost savings initiative that we drove in that business. We closed that work in June of last year. Now it's really focused on growing that business organically, improving margins each and every year, largely through the same levers that we've used to grow margins in the North American safety business. We believe that in the international business, it's business as usual today, and it's really about taking now and continuing to embed our culture of leadership and our culture of autonomy and accountability into the branches and into the companies in our international business. Across North America, it's largely continuing to do more of the same. One of the things as we're moving towards 2028, and I appreciate Tami mentioning our 10/16/60 goals for 2028, is we're making a concerted effort on doubling down on leadership and development in our field leaders. L&D has been a part of APi Group's journey for the last 20-some years, and it's something that we're fiercely committed to. Just two weeks ago, we had about 100 of our leaders from all across the business together in Minnesota, where we took a time out from the day-to-day of running our businesses, and we focused solely on our own personal and leadership development. That's really unique, and it's something special. We're making a really concerted effort to provide many of those same leadership opportunities to every single one of our field leaders. You know, I'd be naive to think that all 29,500 of our teammates today actually do view themselves as leaders. If they did, and they felt empowered to make great, quick decisions at the customer site that were good for business, good for APi, and good for our customers, really the sky is the limit for where our company can go. Thank you, David. You're becoming larger and larger, and could you talk about how do you ensure the operational discipline, safety, and local leadership remain embedded across such a large decentralized branch network? Yeah, absolutely. It's a complicated question that really boils down to kind of a somewhat simple answer, and making sure that that discipline, boy, it rolls its way down to the branch level is you gotta make sure that you've got the right branch leader in each and every one of your branches. Russ talks about this all the time, and I do too. If you've got the right playbook, use a football analogy, if you've got a great playbook and a bad quarterback, you're not gonna have an awesome outcome. If you've got a bad playbook and you got a great quarterback, you're probably gonna have a great outcome. If you've got a great quarterback and a great playbook, that's really where the magic happens. Really the biggest and most important business decision that we have in driving accountability and excellence down to our branch level is to make sure that we have the right branch leader leading that operation, and if we don't, making sure that we've got a plan to find it. Talking about the field first cultures, how do you maintain consistency and accountability across over 500+ locations? That's another great question. You almost answered it for me at the beginning of the fireside when you talked about our 10/16/60 goal. I think one of the most important things in keeping consistency and accountability is making sure that everybody is aligned on what your goals and what your objectives are. When we went through our 13/60/80, which we walked out of at the end of 2025, that really served as our organization's North Star. Each and every one of our teammates knew and understood 13/60/80 and had a good picture of what their role was in helping our business to achieve those goals. As we move into 10/16/60, which is $10 billion of revenue, 16% adjusted EBITDA margin, and 60% of our revenue coming from recurring inspection sales and monitoring, that's really serving as the North Star for our team too. The first is making sure that we've all aligned up on the right goals. The second is making sure you've got the right leader. I think the third piece is providing transparency. One of the things that we do across our business is each and every month, we calculate through, and my finance guys across the world do this work, we go and we calculate the profitability of each and every one of our branches. Then we put them into a report, and we stack rank them from most profitable to least profitable. If you're above the fleet average, you get a green. If you're around the fleet average, you're yellow, and if you're below, you get a pink. Nobody wants to be red. There it just drives this certain amount of competitiveness across our branch network. Nobody wants to be at the bottom, and when they see that they might not be performing at the same level as their peers, you know, they get on the phone, and they ask for help. They step up their game. They lean in a little bit more, and that's really positive. The other thing that stack ranking our branch financials does is it gives people an understanding of the art of the possible. I remember when I spent time in the international business, we'd have branches around that thought they were crushing it, that they were doing great. You know, just an example, you know, a branch in Germany that was doing 12%, they thought they were killing it each and every day. They see branch rankings, and they never saw branch rankings underneath prior ownership, and they see that they've got branches across the international network that are north of 20% and 25%. All of a sudden, they look in the mirror, and they're not crushing it. They've got a ton of opportunity to get better, and that really drives this culture of continuous improvement. The last thing I think I'd say about the field-first culture is we talk all the time at our company about this thing called our central premise. The central premise is really a statement of, you know, kind of recognizing that as leaders, we are all part of the success. Really the success at APi Group happens when our branches and our field leaders are successful. You know, it's like I don't have a job if it isn't for the work that our field leaders are doing, and Adam doesn't have a job if it isn't for the work that they're doing, providing great service to our customers every single day of the year. Thank you. By the way, I like your podcast, focusing spotlight on those kind of leaders talk about their stories. Mm-hmm. on a podcast. Thank you. Shifting gear to growth strategy, end markets, recurring revenues. You talk about the 10/16/60+ by 2028. What are the major levers to further increase the recurring revenue and margin expansions, especially as you scale inspection and service? Yeah. Great question again. You know, the levers in our business continue to be the levers that have gotten us to where we are today. Driving mid- to high single-digit growth in our inspection service and monitoring revenue streams is really about continuing to invest in the inspection sales organization. That's kind of the tip of the spear in the inspection-first flywheel model that we run our business off of. We've got pretty ambitious goals of the number of inspection sales leaders. You know, that network and the infrastructure that you need to drive a pure inspection-first business is really difficult to replicate. It requires, you know, not just a great inspection service team. You know, just to give you an example, if we hire an inspection sales leader, when that inspection sales leader is ramped up and has a full book, that person is gonna require four inspectors in order to satisfy all of the needs that one sales leader is generating. Those inspections are gonna drive $3-$4 of follow-on service work every single year per $1 of inspection. If you think about it that way, one inspection sales leader needs four inspectors, and each one of those inspectors is gonna require three or four service technicians in order to keep that flywheel going. You've got the transactional back office part. Like I said earlier, an inspection is $1,000-$1,500 piece of work, so you gotta be able to invoice it quickly. You've gotta quickly turn around the deficiency report from the inspection into a service proposal. Then once you complete the work and you invoice for the work, you've gotta be out there and quickly collecting too. It takes a back office to do this that's difficult to replicate. We believe that we've got a long runway and, you know, we've got parts of our business where you know, a story that we like to share, one of our branches in Upstate New York, they thought they were crushing the market. They thought that they had it, and so we did a little work, and we did a market study, and they had 7 or 8% of the share in their market. These are highly fragmented markets, with ample opportunity for us to go out and win new customers each and every day. That actually is taking customers from our competitor as well as growing our business through price. You outlined mid-single-digit organic growth. What are the most important end markets or verticals such as data centers, healthcare, elevator security for the future growth? Yeah. Great question. We talk all the time with our leadership team around how the end markets that we do work in matters. It's absolutely true. You know, obviously, we've gotten a lot of questions following our end of year release around data centers and the role that data centers are playing in our business. You know, when we exited 2024, data centers were 5-6% of our total revenue. When we exited 2025, it was about 8%. You know, I think that we'll exit 2026 with data centers being around 10%. That's obviously an important end market, and it's a market that we're taking advantage of because it provides a great opportunity with long-standing customers at a really attractive margin profile. One of the things that we will not do is we will not become overcommitted in any one end market, and that includes data centers. Our business is gonna continue to be diversified across a variety of end markets, and we're seeing strength right now, not only in data centers, but in advanced manufacturing and pharmaceuticals, healthcare, the warehouse space, critical national infrastructure, among others. We ended the year with a strong, robust backlog, spread across a variety of end markets, all of which are performing at a high level. Could you talk about how you balance the growth in project-based work, such as like large data center you talk about or infrastructure projects, with the focus on higher margin and also recurring service revenue? Yeah. Absolutely. It’s a delicate balance, ‘cause one of the things I think that people don’t completely understand about our business is there is such a thing as having too much project work. You know, a great project requires a really good customer, a really good piece of work, a great project manager on the APi side, a great project manager on the customer side, and then really good teams who are supporting those leaders in the work that they’re doing. You know, as you get more and more project work in your portfolio, each of those becomes a little bit more difficult to find. When you hit this point where you've got too much project work, then you end up chasing it, and you end up putting your really great teams on fixing a problem. You just, the art of it is coming up to the line, but not going over the line. How do we balance it? A couple of ways is, one, not being overly committed in any one end market. I think that's really important and critical, knowing when enough is enough, but also taking advantage of the opportunity that we have in front of us. We've gotten a ton of questions, like I mentioned earlier, about data centers. Largely the work that we're doing in the data center space is built upon the strength of the relationships that we've developed through our recurring inspection service and monitoring work that we do with the hyperscalers and the general contractors in those areas. I think lastly, and this is really important, and one of the things that differentiates us from competitors as well, is we have a separate, unique inspection service and monitoring department aside from our project work. When project opportunities come, it goes into the project department of our branches, and that allows us to keep the inspection service and monitoring departments within our branch network laser-focused on going out and taking share, capturing price, and providing a really high-quality inspection, getting that deficiency report converted into a service proposal quickly, and then following up and continuing that flywheel. I think that having both of those departments working side by side and not sharing resources allows us to have the focus on continuing to drive the inspection service and monitoring work while taking advantage of the robust project environment that we're in right now. Thank you. Moving to executions, operational excellence, and technology investments data points. When I visited you in Minnesota last year, we observed a strong sense of operational discipline, safety, and empowerment at the branch levels. What other key drivers behind this on-the-ground culture, and how do you maintain it as the company grows? Also, congrats on 100-year anniversary you have. Yeah, I can take this one, Tami. It's a good question. I mean, I would say part of the ground culture is, like, we talk about how important leadership and development is for us at APi, and that's not just, like, a corporate thing. Like, a majority of our kind of leaders and teammates are not corporate teammates, back office teammates. Like, it's people in the field doing the work, making money for us. When we talk about leadership and development, that has to be at kind of all, you know, levels of the organization. We have a lot of, like, leaders or field leader development days where it's. This is not, like, technical training for our field leaders. This is the same type of learning development that we're getting, you know, at corporate that they're getting in the field. That's a key focus area for us, is, like, making sure they're getting development, getting chances to learn and grow and develop, you know, as a human being, as a leader, and not again, not like, you know, from a technical side. We have a great focus on that and a lot of good opportunities for all of our field leaders to get those, whether that's, you know, in-person courses, online trainings. There's a lot of different, you know, variety of, opportunities for them to kind of continue to grow and develop, and that, you know, obviously helps with the culture. The other thing I would just call is kind of the same thing David mentioned before, is you know on a you know kind of branch by branch basis, we have, like, the stacked ranked report that comes out every month, and you can kind of see how you're doing. That helps you see how you're doing compared to the rest of the other 500 branches. Like, you know, we talk about M&A a lot. When we acquire businesses, you know, that's where it's really eye-opening to people is they think they're doing awesome. They think like, you know, "I can't make that much higher margins," and then they get stacked up against 500 branches and they're like, "Oh, holy cow, I can. You know, I have a lot of room to kind of grow and improve." We'll do what we call kind of home and home visits. Somebody in a branch that isn't maybe performing as well as they could be can go visit another branch and see how they're running their business, what are they doing to, you know, perform at such a high level, and that just kind of helps share ideas and knowledge and, you know, helps everybody grow. Thank you. Could you talk about how technology investments such as AI tools and connected field solutions empowering your field leaders and supporting both growth and margin expansion? Yeah. This topic, I would say in general, has gotten a lot of traction the last couple of months. Like, it seemed like four or five months ago we weren't getting many questions on, you know, AI and technology, and now it's definitely a hot topic that people are asking about. Yep. We're definitely focusing on it. We see it as a good opportunity for us. We actually stood up kind of an AI team last year, and their mandate is basically go work with our field and figure out what are your pain points throughout the day, what is kind of manually intensive that's taking a lot of time, how can we kind of make your life easier on a day-to-day basis with AI or other technology tools. That's what they're doing. They're working with the teams and kind of coming up with ideas of, you know, this is a pain point. Okay, what can we kind of use AI to help you make that process more efficient? I would say we're in the early innings, but a couple examples of technology we've kind of rolled out, like, on a branch by branch basis. One is a customer attrition tool. They basically put, you know, the customer data into this AI tool, and it'll spit out based on all the different data points, these customers are at risk for attrition. And then you can go basically you know, spend time with those customers, make sure you're, you know, connecting with them, making sure they're happy with the service they're getting. Is there anything we can do to improve what we're doing? Like, that's a good tool. That's, I would say, again, in kind of the early innings. Another tool we rolled out is called APi Echo. And that tool basically is. It basically records and takes notes for the field leaders. When they're with the customer, they're not taking their gloves off to kind of jot stuff down when they're talking to them. They can just have this tool recording the conversation, recording notes, and that can help them, you know, be more efficient and focus on the interaction with the customer and then that, you know, those recorded notes can help them, like, with their inspection and deficiency reports, you know, later on. Maybe the last one I would call out is kind of similar tool. Within our kind of APi Echo tool, we've put in, like, product manuals. If you're working, you know, if there's a technician working on a fire alarm panel and, you know, there's code 54 pops up, error code 54, and they don't know what that is, instead of flipping through a product manual trying to figure out what's going on, they basically can ask, "What does error code 54 mean, and how do I resolve it?" It makes it much more efficient for what they're doing. We're kind of just... That team is basically working on, you know, just, I wouldn't say small, but like, you know, very targeted initiatives to help those, you know, help our field leaders kind of become more efficient in what they're doing, and that'll kind of continue to evolve over the next couple of years. I'm excited to kind of see, you know, in a couple of years what are all the tools that we've kind of put in their hands to make them more efficient and help them spend more time, you know, with the customer and less time kind of doing those manually intensive tasks. Yeah. The only thing I think I'd add from my perspective is, I'm really excited about AI because one, I can't envision a world where AI replaces the work that our field leaders do. This is an area where I think our scale in the marketplace serves as a real advantage, and it strengthens the competitive moat around our business because we're able to invest in the type of technology that Adam describes in a way that a lot of our competitors can't. That's not only gonna help our field leaders to be more efficient, it's gonna give them the tools that they need to wanna work at an APi company when they're going out and looking for work and plying their trade, and that, in turn, helps us to grow our business in the future too. Thank you. What are the most important KPIs or milestones you track to measure progress in safety, service quality, and operational efficiency? Yeah, great question. We've got an operational dashboard that we use with our businesses. It captures about 18 or 19 different KPIs across a number of different metrics. None of it is, like, rocket science per se, but when you talk about safety, the first thing that we do, which is, I think, really important, is we start just about every meeting at APi with acknowledgment that the safety and wellbeing of our leaders is our number one value. That provides a foundation and a benchmark that really, the most important thing that we do each and every day is making sure that our leaders go home in the same condition that they came to work, and that's really, really important. When it comes to metrics, it's metrics like TRIR and DART. We take a look at the number of claims and the dollar value of those claims. We also have some leading indicators that we look at too through our Steps platform, and that's the tool that we use to drive our safety culture across our business. That would be metrics like safe start. Do you have a safety moment before the meeting where you're setting the team up to understand the environment in which they're working so that they can be as safe as possible when they're doing that? Near misses. Near misses are events that just as easily could have been a safety incident, but not for a little bit of good luck and the grace of God. You learn from each and every one of those, about something that you did wrong that you can take a lesson of, to make sure that it doesn't happen again. Those are some of the leading indicators that we look at as well. When it comes to service quality, I don't think there's any better metric to assess the quality of the service that you're providing than your customer attrition or how many of your customers you're retaining, particularly across the inspection service and monitoring part of our business. We feel really good about that area. We're north of 90% across our business. I think that's the best metric that you've got there. If your customers are happy with the value that they're receiving for the services that we're providing, we're gonna keep them. When it comes to operational efficiency, we got a number of different metrics. The one that I think is probably underappreciated and maybe one that we don't talk about enough is in each of our branch network, there's this point where they're covering the entirety of their branch overhead from the gross margin from the inspection service and monitoring work. That really means that they've invested in that Inspection First mindset. They've built out the inspection department. They're performing inspections and the follow-on service work at a really high level, and they're covering their expenses through the year from the gross margin from that work. What that allows then is for these branches to be highly selective in the type of project work that they do, because they don't have to do project work to cover their overhead. Each and every one of those projects is kind of gravy on the top. When they hit that certain level of operational efficiency, that's when you really start to see the profitability levels of branches taking off. Thank you, David. Moving to our capital allocations and opening up the questions. Capital allocations, with net leverage below your long-term target now and strong free cash flow, how do you prioritize between organic investment, bolt-on platform M&A, and potential share repurchases, please? Yeah. Our capital allocation priorities are gonna remain largely the same. Maintaining our net leverage at or below our stated targets, accretive M&A, and then lastly, share purchase. We feel really, really good about the M&A pipeline ahead of us. We feel like we've got a long runway in the $250 million a year of bolt-on M&A. And there's plenty of opportunities that are larger than what we would call typical bolt-on M&A as well. You know, I would say we don't have any plans currently for share repurchases. We'll remain opportunistic like we were a year ago, around share repurchase, but really we're focused on growing the business organically, and feel good about the M&A pipeline in front of us. Thank you. Talking about the M&A opportunities, is there any specific geographies or service lines, fire protection, security, elevator, you're prioritizing? Yeah. I think you nailed it. You know, I'll start with elevator services. We've got, you know, commitment out there to grow a $1 billion elevator services platform. We've got a long way to go to reach that goal, but that business now is at a point where they're ready to be acquirers of bolt-on M&A. We did a deal last year, wasn't quite a bolt-on, but wasn't quite a platform either. But we've got a pipeline in the elevator services industry, and so I think that we'll be doing an elevator acquisition, at least one in the next 12 months. Our international business is also at a point now where they're ready to be going out and delivering on the bolt-on M&A strategy, and so we've got a really robust pipeline of opportunities outside of the U.S. We've got teams that are ready to integrate businesses into their companies, and we're ready to go there. I think then largely it's gonna continue to be deploying capital against the fire and life safety side of the business, and we've got opportunities to grow our alarm and our security business in North America. I think we've got opportunities to grow our fire suppression business outside of the U.S. I don't think we need another leg on the stool per se, but I think that there's ample opportunities to continue to grow our business through M&A in the work that we're doing currently. Thank you, David. I would pause here and see if anybody has any questions from the audience. Good. All right. Okay. Please go ahead. Any logical new legislation, either domestic or international, that allows you to sell further in? How do you use price as a leverage? On your annual renewals. Good question. Any new legislation in the future? Not that I'm aware of. I mean, unfortunately, like in our industry, when there's incidents involving death, and you know, there was one around New Year's in Switzerland, that's typically when codes and regulations become a little bit tighter, and that generally helps our business. Nothing on the legislative front that I'm aware of anywhere. How do we use price? You think about the inspection, and I mentioned earlier, probably twice actually, that it's about a $1,000 piece of work. If you think about $1,000 within the context of the cost that it takes to run and operate a commercial building, maybe, you know, not all that dissimilar to a hotel like this, it really is a relatively small piece of the overall budget of running a facility. But it's also like servicing a high cost of failure system. The inspection itself requires a high degree of coordination and really strong execution, both on the customer side and on APi's side. If you take all of that into account, you know, as long as we're going in and doing a really great job on our inspection, nobody's gonna bat an eye at a 5-6% price increase because the cost of going out and bringing in a potential new competitor to do the inspection, they may not understand your facility. They don't have the relationships with the facility managers. It brings up this, like, question of can they do the work at the same high quality. An inspection really is a coordination between the customer and APi. If you get one part of those right, you've created a or wrong, you've created a real disturbance with your customer that's gonna cost them a whole lot more than the $60 or $70 a year that that price increase is. We believe that as long as we go in and continue to do a really great job on the inspection, we continue to quote the follow-on service work quickly, we do a high quality job on the follow-on service, we're there for that customer if they're ever expanding or need retrofit or new project work, that there's an opportunity to capture price that reflects the value of the service that we provide, and that opportunity will be there for a long time. Right. Thank you for your questions. Lots of questions from my side, David. Are there any aspects of APi business such as your field, the first is culture, technology investments or international platform that you believe are underappreciated by investors? Great question. Great question. I think the first thing I'd say is the importance of our culture. You know, culture, I think in a service company is everything. Culture, like, you know, people ask all the time at these conferences like around tight labor market. Well, you know, labor market in our industry has been tight for the last 10 years, and it's not an excuse not to grow our business. When you have a really great culture that people wanna be a part of, like that gives you a real advantage in the marketplace because you know that you've got a great place to work and that you're working at a company that's gonna invest in you, not just as a professional in the trade that you're performing, but also as a human being. I think the strength of our culture not only allows us to bring great people into our organization, it allows us to keep great people in our organization. I also think it allows our leaders, whether they're in the field, in the branch, in the company, in a segment or at APi Group, to perform at the very best of their abilities because they truly view themselves as leaders. They feel empowered to make decisions and to do the right thing in the company. That's the first. I think the second is the amount of runway that's still left and out in front of us in our bolt-on M&A strategy. We're in highly fragmented markets, both in the U.S. and internationally. The elevator services market is a lot the same, and I think we're gonna have years and years and years ahead of us of being able to deploy capital at really high rate of return to continue to grow our branch network and to make our business better. All right. With that, thank you very much, David, Adam. Thank you everyone who joined. This is the end. Thank you.