Earnings release
Page 1
NEWS RELEASE APi Group Reports Record Third Quarter 2026 Financial Results and Raises Full-Year 2026 Outlook 2026-10-29 -Record third quarter net revenues of $2.6 billion, representing year-over-year growth of 22.5%, 15.7% on an organic basis- -Record third quarter reported net income of $114 million up 22.6% year-over-year- -Record third quarter adjusted EBITDA of $350 million with year-over-year growth of 24.6% and adjusted EBITDA margin expansion of 20 basis points to 13.7%- -Raising full-year guidance for net revenues and adjusted EBITDA- NEW BRIGHTON, Minn.--(BUSINESS WIRE)-- APi Group Corporation (NYSE: APG) (“APi” or the “Company”) today reported its nancial results for the three and nine months ended September 30, 2026. Russ Becker, APi’s President and Chief Executive O cer, stated: “We delivered exceptional third quarter results, including double digit organic growth and adjusted EBITDA margin expansion. This performance again demonstrates the durability of our business in a dynamic operating environment. Strong demand across our inspection, service, and monitoring business, robust project activity, and disciplined execution drove momentum across both segments. We enter the fourth quarter from a position of strength, supported by a growing backlog and improving margins and we remain focused on leading with inspection and service. I am proud of our leaders for delivering another strong quarter. The strength we are carrying into 2027 gives me continued con dence in our ability to deliver on our long-term "10/16/60+" targets." 1
Page 2
Third Quarter 2026 Consolidated Results: Three Months Ended September 30, 2026 2025 Y/Y Net revenues $ 2,554$ 2,085 22.5%Organic net revenue growth(a) 15.7% GAAP Gross pro t $ 770$ 652 18.1%Gross pro t margin 30.1% 31.3% (120) bpsNet income $ 114$ 93 22.6%Diluted EPS $ 0.24$ 0.20 20.0% Adjusted non-GAAP comparison Adjusted gross pro t $ 775$ 656 18.1%Adjusted gross pro t margin 30.3% 31.5% (120) bpsAdjusted EBITDA $ 350$ 281 24.6%Adjusted EBITDA margin 13.7% 13.5% +20 bpsAdjusted net income $ 219$ 174 25.9%Adjusted diluted EPS $ 0.50$ 0.41 22.0% Notes: Amounts in millions, except per share data. Refer to non-GAAP reconciliations to the most comparable GAAP measures.(a)Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts ofmaterial acquisitions, material divestitures, and the impact of changes due to foreign currency translation. Reported net revenues increased by 22.5% (15.7% organic) driven by solid growth in inspection, service, and monitoring revenues, robust growth in project revenues, acquisitions, and pricing improvements. Reported and adjusted gross pro t margin decreased by 120 basis points compared to the prior-year period driven by project and business mix and rising material, fuel, and other expenses. Reported net income was $114 million and diluted EPS was $0.24. Adjusted net income was $219 million and adjusted diluted EPS was $0.50, representing a 22.0% increase compared to the prior-year period. The increase in adjusted diluted EPS was driven by strong revenue growth and adjusted EBITDA margin expansion, partially o set by increases in interest expense and the adjusted diluted weighted average shares outstanding. Adjusted EBITDA increased by 24.6% compared to the prior-year period and adjusted EBITDA margin increased 20 basis points to 13.7%. Growth in adjusted EBITDA margin was driven by strong revenue growth and the resulting favorable SG&A leverage, partially o set by factors impacting adjusted gross pro t margin. Third Quarter 2026 Safety Services Segment Results: Three Months Ended September 30, 2026 2025 Y/YSafety Services Net revenues $ 1,662$ 1,403 18.5%O i h() 88% 2
Page 3
Organic net revenue growth(a) 8.8% GAAP Gross pro t $ 597$ 520 14.8%Gross pro t margin 35.9% 37.1% (120) bpsSegment earnings $ 281$ 236 19.1%Segment earnings margin 16.9% 16.8% +10 bps Adjusted non-GAAP comparison Adjusted gross pro t $ 602$ 524 14.9%Adjusted gross pro t margin 36.2% 37.3% (110) bps Notes: Amounts in millions. Refer to non-GAAP reconciliations to the most comparable GAAP measures.(a)Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts ofmaterial acquisitions, material divestitures, and the impact of changes due to foreign currency translation. Reported net revenues increased by 18.5% (8.8% organic) driven by solid growth in both inspection, service, and monitoring revenues and project revenues, acquisitions, and pricing improvements. Reported and adjusted gross pro t margin decreased by 120 and 110 basis points, respectively, compared to the prior-year period. This was driven by project and business mix and rising material, fuel, and other expenses. Reported segment earnings increased by 19.1% compared to the prior-year period. Segment earnings margin was 16.9%, representing a 10 basis point increase compared to the prior-year period, driven by strong revenue growth and favorable SG&A leverage, partially o set by factors impacting adjusted gross pro t margin. Third Quarter 2026 Specialty Services Segment Results: Three Months Ended September 30, 2026 2025 Y/Y Specialty Services Net revenues $ 893$ 683 30.7%Organic net revenue growth(a) 29.9% GAAP Gross pro t $ 173$ 132 31.1%Gross pro t margin 19.4% 19.3% +10 bpsSegment earnings $ 112$ 81 38.3%Segment earnings margin 12.5% 11.9% +60 bps Adjusted non-GAAP comparison Adjusted gross pro t $ 173$ 132 31.1%Adjusted gross pro t margin 19.4% 19.3% +10 bps Notes: Amounts in millions. Refer to non-GAAP reconciliations to the most comparable GAAP measures.(a)Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts ofmaterial acquisitions, material divestitures, and the impact of changes due to foreign currency translation. Reported net revenues increased by 30.7% (29.9% organic) driven by robust growth in both project and service revenues. 3
Page 4
Reported and adjusted gross pro t margin increased by 10 basis points compared to the prior-year period. This was driven by disciplined customer and project selection and pricing improvements, partially o set by rising material, fuel, and other expenses. Reported segment earnings increased by 38.3% compared to the prior-year period. Segment earnings margin was 12.5%, representing a 60 basis point increase compared to the prior-year period, driven by adjusted gross pro t margin expansion, strong revenue growth, and favorable SG&A leverage. Guidance: APi is raising its full-year 2026 guidance for net revenues and adjusted EBITDA. Net revenues of $9,200 to $9,250 million, up from the guidance provided on July 30, 2026 of $8,875 to $9,025 million Adjusted EBITDA of $1,235 to $1,255 million, up from the guidance provided on July 30, 2026 of $1,205 to $1,245 million Adjusted free cash ow conversion of 110%, based on adjusted net income Conference Call: APi will host a webcast and conference call to discuss its nancial results at 8:30 a.m. ET on Thursday, October 29, 2026. Participants on the call will include Russell A. Becker, President and Chief Executive O cer, and David Jackola, EVP and Chief Financial O cer. The conference call can be accessed by registering online using the links below. Analysts will receive dial-in information as well as a conference ID once registered. Webcast Link: https://events.q4inc.com/attendee/894181837 Analysts Link: https://events.q4inc.com/analyst/894181837?pwd=ecOlF7Kh A replay of the webcast will be available shortly after the live event via the webcast link above. About APi: APi Group is a global, market-leading business services company providing statutorily mandated and contracted services across its Safety Services and Specialty Services segments, including re and life safety, electronic security, elevator and escalator, and infrastructure services. With more than 600 locations in over 20 countries, APi is built on a century of expertise, a people- rst culture, and its purpose of Building Great Leaders®. In 2026, APi is celebrating its 100-year anniversary and its debut on the Fortune 500. More information is available at www.apigroup.com. 4
Page 5
Forward-Looking Statements and Disclaimers This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a safe harbor for certain forward-looking statements made by or on behalf of APi Group Corporation (“APi” or the “Company”). Forward-looking statements include statements regarding the Company’s full-year 2026 outlook for net revenues, adjusted EBITDA and adjusted free cash ow conversion; anticipated future growth and margin performance; expectations regarding performance in 2027; and the Company’s ability to achieve its long-term nancial targets. Such statements may contain words such as “expect,” “anticipate,” “will,” “believe,” “intend,” “plan,” “estimate,” “predict,” “seek,” “continue,” “outlook,” “may,” “might,” “should,” “can have,” “have,” “likely,” “potential,” “target,” “indicative,” “illustrative,” and variations of such words and similar expressions. The absence of these words does not mean that a statement is not forward-looking. Such statements are based on the Company’s expectations, intentions, and projections regarding its future performance, anticipated events or trends, and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to di er materially from those expressed or implied by such forward-looking statements, including: (i) economic conditions, competition, political risks, and other risks that may a ect the Company’s future performance, including the impacts of in ationary pressures and other macroeconomic factors on the Company’s business, markets, supply chain, customers and workforce, on the credit and nancial markets, on the alignment of expenses and revenues and on the global economy generally; (ii) supply chain constraints and interruptions, and the resulting increases in the cost, or reductions in the supply, of the supplies and materials the Company uses in its business and for which the Company bears the risk of such increases; (iii) risks associated with the Company’s international operations, including changes in tari and trade policies, import and export restrictions, retaliatory trade measures, sanctions, and other governmental actions that may a ect the cost, timing, or viability of the Company's cross-border operations and supply chains; (iv) failure to realize the anticipated bene ts of the Company's acquisitions and its ability to successfully execute its bolt-on acquisition strategy and integrate acquired businesses into its operations; (v) failure to fully execute the Company’s inspection- rst strategy or to realize the expected service revenue from such inspections; (vi) failure to realize expected bene ts from the Company’s other business strategies, including its disciplined approach to customer and project selection and its asset-light, services-focused business model and expected impact on future capital expenditures; (vii) risks associated with the Company’s decentralized business model and participation in joint ventures; (viii) improperly managed projects, project delays or cancellations, and the timing and extent of conversion of backlog into revenues; (ix) risks associated with the implementation and maintenance of the Company's enterprise resource planning systems and cloud-based platforms, including potential disruptions to operations, cost overruns, delays, and impacts on internal controls over nancial reporting; (x) adverse developments in the credit markets which could impact the Company’s ability to secure nancing in the future; (xi) 5
Page 6
the Company’s level of indebtedness; (xii) risks associated with the Company’s contract portfolio, project and business mix, and its ability to achieve anticipated margins; (xiii) the timing of customer collections, working-capital requirements, capital expenditures, and other cash payments, which may a ect operating cash ow and cash conversion; and (xiv) other risks and uncertainties, including those discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and in subsequent reports led with the Securities and Exchange Commission. Given these risks and uncertainties, investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements included in this document speak only as of the date hereof and, except as required by applicable law, the Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or circumstances after the date of this document. Non-GAAP Financial Measures This document contains non-U.S. GAAP nancial measures within the meaning of Regulation G. Management uses these measures to evaluate the Company's performance and believes they are useful to investors because they (a) re ect the same tools management uses to assess performance and prospects, (b) facilitate peer comparison, (c) provide consistent period-to-period comparisons, and (d) in the case of adjusted EBITDA, determine certain elements of executive incentive compensation. Adjusted gross pro t, adjusted SG&A, adjusted net income, and adjusted diluted EPS exclude amortization of intangible assets, restructuring costs, contingent consideration and compensation, acquisition and divestiture related expenses, systems and business enablement expenses, business process transformation expenses, and other miscellaneous items, as further described in the reconciliation tables. These adjustments remove items management does not consider indicative of the Company's core ongoing operational performance. Adjusted EBITDA is net income before interest, taxes, depreciation, and amortization, further adjusted to exclude the same items listed above plus non-service pension cost. Adjusted EBITDA margin is adjusted EBITDA divided by net revenues. Organic net revenue growth excludes the impacts of material acquisitions, material divestitures, and foreign currency translation from year-over-year revenue comparisons. Fixed currency measures translate results at exchange rates established by management at the beginning of 2026. An acquisition or divestiture is considered material based on management's assessment of its signi cance to comparability; this threshold is applied consistently across periods. Adjusted free cash ow is cash provided by operating activities, adjusted for the cash impact of the same items excluded from adjusted EBITDA, less capital expenditures. Adjusted free cash ow conversion is adjusted free cash ow as a percentage of adjusted net income. Net leverage ratio is calculated in accordance with the Company’s debt agreements and includes pro forma 6
Page 7
adjustments for acquisitions and cost savings not re ected in adjusted EBITDA; see the Company’s SEC lings for the covenant EBITDA de nition. These measures are supplemental and should not be considered a substitute for, or superior to, GAAP nancial measures, and may di er from similarly titled measures used by other companies. Reconciliations to the most directly comparable GAAP measures are included in this document. The Company is unable to provide a quantitative reconciliation of forward-looking adjusted EBITDA, organic net revenue growth, and adjusted free cash ow conversion to GAAP without unreasonable e ort, as the amounts and timing of reconciling items – including acquisition-related costs, systems and business enablement expenses, and other charges – are inherently uncertain and could be signi cant. APi Group Corporation Condensed Consolidated Statements of Operations (GAAP)(Amounts in millions, except per share data)(Unaudited) Three Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Net revenues $ 2,554$ 2,085$ 6,790$ 5,794Cost of revenues 1,784 1,433 4,697 3,985 Gross pro t 770 652 2,093 1,809Selling, general, and administrative expenses568 489 1,613 1,419 Operating income 202 163 480 390 Interest expense, net 45 34 111 109Investment expense (income) and other, net2 (1) 5 (3) Other expense, net 47 33 116 106 Income before income taxes 155 130 364 284Income tax provision 41 37 94 79 Net income 114 93 270 205Net income attributable to common shareholders:Income allocable to Series A Preferred Stock(12) (9) (28) (21) Net income attributable to common shareholders$ 102$ 84$ 242$ 184 Net income per common share: Basic $ 0.24$ 0.20$ 0.56$ 0.44Diluted 0.24 0.20 0.56 0.43 Weighted average shares outstanding: Basic 431 416 432 416Diluted 432 429 435 425 APi Group Corporation Condensed Consolidated Balance Sheets (GAAP)(Amounts in millions)(Unaudited) September30, 2026 December31, 2025Assets Current assets:Cash and cash equivalents $ 373$ 912A i bl fll 1907 1563 7
Page 8
Accounts receivable, net of allowances 1,907 1,563Inventories 182 145Contract assets 736 484Prepaid expenses and other current assets 205 125 Total current assets 3,403 3,229Property and equipment, net 451 397Operating lease right-of-use assets 297 301Goodwill 3,897 3,167Intangible assets, net 1,935 1,584Deferred tax assets 16 40Pension and post-retirement assets 129 129Other assets 153 89 Total assets $ 10,281$ 8,936 Liabilities and Shareholders’ Equity Current liabilities:Short-term and current portion of long-term debt$ 361$ 5Accounts payable 635 526Accrued liabilities 875 827Contract liabilities 902 694Operating and nance leases 101 98 Total current liabilities 2,874 2,150Long-term debt, less current portion 3,213 2,754Pension and post-retirement obligations 48 50Operating and nance leases 218 215Deferred tax liabilities 296 205Other noncurrent liabilities 144 154 Total liabilities 6,793 5,528Total shareholders’ equity 3,488 3,408 Total liabilities and shareholders’ equity$ 10,281$ 8,936 APi Group Corporation Condensed Consolidated Statements of Cash Flows (GAAP)(Amounts in millions)(Unaudited) Nine Months EndedSeptember 30, 2026 2025 Cash ows from operating activities: Net income $ 270$ 205Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 277 242Restructuring charges, net of cash paid (5) (6)Deferred taxes (3) 2Share-based compensation expense 36 31Pro t sharing expense 22 23Non-cash lease expense 91 82Net periodic pension cost 19 17Other, net (2) (1)Changes in operating assets and liabilities, net of e ects of acquisitions:(312) (218) Net cash provided by operating activities 393 377 Cash ows from investing activities: Acquisitions, net of cash acquired (1,356) (174)Purchases of property and equipment (76) (70)Proceeds from sales of property and equipment8 13 Net cash used in investing activities (1,424) (231) Cash ows from nancing activities: Net short-term debt 335 —Proceeds from long-term borrowings 795 —Payments on long-term borrowings (310) (5)Payments of debt issuance costs (16) —Repurchases of common stock (252) (75)Payments of acquisition-related consideration(14) (16)Restricted shares tendered for taxes (38) (20) Net cash provided by (used in) nancing activities500 (116)E ect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash(9) 25 Net (decrease) increase in cash, cash equivalents, and restricted cash(540) 55 Cash, cash equivalents, and restricted cash, beginning of period913 501 Cash, cash equivalents, and restricted cash, end of period$ 373$ 556 8
Page 9
APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresOrganic Change in Net Revenues (non-GAAP)(Unaudited) Organic change in net revenuesThree Months Ended September 30, 2026 Net revenues change (as reported) Foreign currency translation (a) Net revenues change ( xedcurrency) (b) Acquisitionsand divestitures,net (c) Organic change in net revenues(d) Safety Services 18.5% (0.1)% 18.6% 9.8% 8.8%Specialty Services 30.7% —% 30.7% 0.8% 29.9% Consolidated 22.5% (0.1)% 22.6% 6.9% 15.7% Nine Months Ended September 30, 2026 Net revenues change (as reported) Foreign currency translation (a) Net revenues change ( xedcurrency) (b) Acquisitionsand divestitures,net (c) Organic change in net revenues(d) Safety Services 13.1% 1.9% 11.2% 4.8% 6.4%Specialty Services 26.6% —% 26.6% 0.8% 25.8% Consolidated 17.2% 1.3% 15.9% 3.7% 12.2% Notes:(a)Represents the e ect of foreign currency on reported net revenues, calculated as the di erence between reported net revenues and netrevenues at xed currencies for both periods. Fixed currency amounts are based on translation into U.S. Dollars at xed foreign currencyexchange rates established by management at the beginning of 2026.(b)Amount represents the year-over-year change after eliminating the impact of uctuations in foreign exchange rates by translating foreigncurrency denominated results at xed foreign currency rates for both periods.(c) Adjustment to exclude net revenues from material acquisitions from their respective dates of acquisition until the rst year anniversaryfrom date of acquisition and net revenues from material divestitures for all periods for businesses divested as of September 30, 2026.(d)Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts ofmaterial acquisitions, material divestitures, and the impact of changes due to foreign currency translation. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresGross Pro t and Adjusted Gross Pro t (non-GAAP)SG&A and Adjusted SG&A (non-GAAP)(Amounts in millions)(Unaudited) Adjusted gross pro tThree Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Gross pro t (as reported) $ 770$ 652$ 2,093$ 1,809Adjustments to reconcile gross pro t to adjusted gross pro t:Backlog amortization (a) 5 4 6 11Restructuring program related costs(b) — — — 1 Adjusted gross pro t $ 775$ 656$ 2,099$ 1,821 Net revenues $ 2,554$ 2,085$ 6,790$ 5,794Adjd i 303% 315% 309% 314% 9
Page 10
Adjusted gross pro t margin 30.3% 31.5% 30.9% 31.4% Adjusted SG&AThree Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Selling, general, and administrative expenses ("SG&A") (as reported)$ 568$ 489$ 1,613$ 1,419Adjustments to reconcile SG&A to adjusted SG&A:Amortization of intangible assets(c) (78) (56) (208) (168)Contingent consideration and compensation(d) 1 (1) 2 (2)Systems and business enablement(e) (30) (31) (82) (61)Business process transformation expenses(f) — — — (4)Acquisition and divestiture related expenses(g) (11) 2 (39) (12)Restructuring program related costs(b) — — — (14)Other (h) (1) (1) (8) (4) Adjusted SG&A expenses $ 449$ 402$ 1,278$ 1,154 Net revenues $ 2,554$ 2,085$ 6,790$ 5,794Adjusted SG&A as a % of net revenues17.6% 19.3% 18.8% 19.9% Notes:(a)Adjustment to re ect the elimination of amortization expense related to backlog intangible assets.(b)Adjustment to re ect the elimination of expenses associated with restructuring programs and related costs.(c)Adjustment to re ect the elimination of amortization expense.(d)Adjustment to re ect the elimination of the expense attributable to one-time deferred consideration to prior owners of acquired businesses.(e)Adjustment to re ect the elimination of non-recurring costs associated with an end-to-end business systems implementation and primarilyconsist of third-party consulting fees related to system design, deployment, integration, and change leadership across the organization.(f)Adjustment to re ect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to technology and business enhancements, including systems and process development costs.(g)Adjustment to re ect the elimination of transaction costs, integration costs, and gains and losses related to potential and completedacquisitions and divestitures.(h)Adjustment includes miscellaneous non-recurring items, such as costs associated with debt re nancing and other capital market activities,and net gains related to building sales and facility exits. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresEBITDA and Adjusted EBITDA (non-GAAP)(Amounts in millions)(Unaudited) Three Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Net income (as reported) $ 114$ 93$ 270$ 205Adjustments to reconcile net income to EBITDA:Interest expense, net 45 34 111 109Income tax provision 41 37 94 79Depreciation 21 21 63 63Amortization 83 60 214 179 EBITDA 304 245 752 635Adjustments to reconcile EBITDA to adjusted EBITDA:Contingent consideration and compensation(a) (1) 1 (2) 2Non-service pension cost (b) 5 5 15 14Systems and business enablement(c) 30 31 82 61Business process transformation expenses(d) — — — 4Acquisition and divestiture related expenses(e) 11 (2) 39 12Restructuring program related costs(f) — — — 14 Other (g) 1 1 10 4 Adjusted EBITDA $ 350$ 281$ 896$ 746 Net revenues $ 2,554$ 2,085$ 6,790$ 5,794AdjdEBITDAi 137% 135% 132% 129% 10
Page 11
Adjusted EBITDA margin 13.7% 13.5% 13.2% 12.9% Notes:(a)Adjustment to re ect the elimination of the expense attributable to one-time deferred consideration to prior owners of acquired businesses.(b)Adjustment to re ect the elimination of non-service pension cost, which consists of interest cost, expected return on plan assets andamortization of actuarial gains/losses.(c)Adjustment to re ect the elimination of non-recurring costs associated with an end-to-end business systems implementation and primarilyconsist of third-party consulting fees related to system design, deployment, integration, and change leadership across the organization.(d)Adjustment to re ect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to technology and business enhancements, including systems and process development costs.(e)Adjustment to re ect the elimination of transaction costs, integration costs, and gains and losses related to potential and completedacquisitions and divestitures.(f)Adjustment to re ect the elimination of expenses associated with restructuring programs and related costs.(g)Adjustment includes miscellaneous non-recurring items, such as costs associated with debt re nancing and other capital market activities,and net gains related to building sales and facility exits. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresIncome before Income Tax, Net Income and EPS andAdjusted Income before Income Tax, Net Income and EPS (non-GAAP)(Amounts in millions, except per share data)(Unaudited) Three Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Income before income tax provision (as reported)$ 155$ 130$ 364$ 284Adjustments to reconcile income before income tax provision to adjusted incomebefore income tax provision:Amortization of intangible assets(a) 83 60 214 179Contingent consideration and compensation(b) (1) 1 (2) 2Non-service pension cost (c) 5 5 15 14Systems and business enablement(d) 30 31 82 61Business process transformation expenses(e) — — — 4Acquisition and divestiture related expenses(f) 11 (2) 39 12Restructuring program related costs(g) — — — 14 Other (h) 1 1 10 4 Adjusted income before income tax provision$ 284$ 226$ 722$ 574 Income tax provision (as reported)$ 41$ 37$ 94$ 79Adjustments to reconcile income tax provision to adjusted income tax provision: Income tax provision adjustment(i) 24 15 72 53 Adjusted income tax provision$ 65$ 52$ 166$ 132 Adjusted income before income tax provision$ 284$ 226$ 722$ 574 Adjusted income tax provision 65 52 166 132 Adjusted net income $ 219$ 174$ 556$ 442 Diluted weighted average shares outstanding (as reported)432 429 435 425Adjustments to reconcile diluted weighted average shares outstanding to adjusteddiluted weighted average shares outstanding: Impact of Series A Preferred Stock(j) 6 (5) 4 (2) Adjusted diluted weighted average shares outstanding438 424 439 423 Adjusted diluted EPS $ 0.50$ 0.41$ 1.27$ 1.04 Notes:(a)Adjustment to re ect the elimination of amortization expense.(b)Adjustment to re ect the elimination of the expense attributable to one-time deferred consideration to prior owners of acquiredbusinesses.(c) Adjustment to re ect the elimination of non-service pension cost, which consists of interest cost, expected return on plan assets, andamortization of actuarial gains/losses.(d)Adjustment to re ect the elimination of non-recurring costs associated with an end-to-end business systems implementation and primarily i fhid li f l d di dl i i dh l d hi h i i 11
Page 12
consist of third-party consulting fees related to system design, deployment, integration, and change leadership across the organization.(e)Adjustment to re ect the elimination of expenses associated with the integration and reorganization of newly acquired businesses andnon-operational costs related to technology and business enhancements, including systems and process development costs.(f) Adjustment to re ect the elimination of transaction costs, integration costs, and gains and losses related to potential and completedacquisitions and divestitures.(g)Adjustment to re ect the elimination of expenses associated with restructuring programs and related costs.(h)Adjustment includes miscellaneous non-recurring items, such as costs associated with debt re nancing and other capital market activities,and net gains related to building sales and facility exits.(i) Adjustment to re ect an adjusted e ective tax rate of 23% which re ects the Company's estimated expectations for taxes to be paid on itsadjusted non-GAAP earnings.(j) Adjustment re ects the addition of the dilutive impact of six million shares associated with the deemed conversion of Series A PreferredStock, when adjusted for the stock split, o set by the adjustment of the assumed dividend payable to the Series A Preferred Stock holdersat year-end. APi Group Corporation Adjusted Segment Financial Information (non-GAAP)(Amounts in millions)(Unaudited) Three Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026 (a)2025 (a)2026 (a)2025 (a)Safety Services Net revenues $ 1,662$ 1,403$ 4,559$ 4,032Adjusted gross pro t 602 524 1,684 1,499Segment earnings 281 236 763 667Adjusted gross pro t margin 36.2% 37.3% 36.9% 37.2%Segment earnings margin 16.9% 16.8% 16.7% 16.5% Specialty Services Net revenues $ 893$ 683$ 2,235$ 1,765Adjusted gross pro t 173 132 415 322Segment earnings 112 81 243 181Adjusted gross pro t margin 19.4% 19.3% 18.6% 18.2%Segment earnings margin 12.5% 11.9% 10.9% 10.3%Total net revenues before corporate and eliminations(b)$ 2,555$ 2,086$ 6,794$ 5,797Total segment earnings before corporate and eliminations(b) 393 317 1,006 848Segment earnings margin before corporate and eliminations(b) 15.4% 15.2% 14.8% 14.6% Corporate and Eliminations Net revenues $ (1) $ (1) $ (4) $ (3)Adjusted EBITDA (43) (36) (110) (102) Total Consolidated Net revenues $ 2,554$ 2,085$ 6,790$ 5,794Adjusted gross pro t 775 656 2,099 1,821Adjusted EBITDA 350 281 896 746Adjusted gross pro t margin 30.3% 31.5% 30.9% 31.4%Adjusted EBITDA margin 13.7% 13.5% 13.2% 12.9% Notes:(a)Information derived from non-GAAP reconciliations included elsewhere in this document.(b)Calculated from results of the Company's reportable segments shown above, excluding Corporate and Eliminations. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresAdjusted Segment Financial Information (non-GAAP)(Amounts in millions)(Unaudited) Three Months Ended September 30, 2026Three Months Ended September 30, 2025 As ReportedAdjustmentsAs AdjustedAs ReportedAdjustmentsAs AdjustedSafety Services Net revenues $ 1,662$ —$ 1,662$ 1,403$ —$ 1,403Cost of revenues 1,065 (5)(a) 1,060 883 (4)(a) 879 $ 597$ 5 $ 602$ 520$ 4 $ 524 12
Page 13
Gross pro t $ 597$ 5 $ 602$ 520$ 4 $ 524 Gross pro t margin35.9% 36.2% 37.1% 37.3% Specialty Services Net revenues $ 893$ —$ 893$ 683$ —$ 683Cost of revenues 720 — 720 551 — 551 Gross pro t $ 173$ —$ 173$ 132$ —$ 132 Gross pro t margin19.4% 19.4% 19.3% 19.3% Corporate and Eliminations Net revenues $ (1) $ —$ (1) $ (1) $ —$ (1)Cost of revenues (1) — (1) (1) — (1) Total Consolidated Net revenues $ 2,554$ —$ 2,554$ 2,085$ —$ 2,085 Cost of revenues 1,784 (5)(a) 1,779 1,433 (4)(a) 1,429 Gross pro t $ 770$ 5 $ 775$ 652$ 4 $ 656 Gross pro t margin30.1% 30.3% 31.3% 31.5% Notes:(a)Adjustment to re ect the elimination of amortization expense related to backlog intangible assets. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresAdjusted Segment Financial Information (non-GAAP)(Amounts in millions)(Unaudited) Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025 As ReportedAdjustmentsAs AdjustedAs ReportedAdjustmentsAs AdjustedSafety Services Net revenues $ 4,559$ —$ 4,559$ 4,032$ — $ 4,032Cost of revenues 2,881 (6)(a) 2,875 2,545 (11)(a) 2,533(1)(b) Gross pro t $ 1,678$ 6 $ 1,684$ 1,487$ 12$ 1,499 Gross pro t margin36.8% 36.9% 36.9% 37.2% Specialty Services Net revenues $ 2,235$ —$ 2,235$ 1,765$ — $ 1,765 Cost of revenues 1,820 — 1,820 1,443 — 1,443 Gross pro t $ 415$ —$ 415$ 322$ — $ 322 Gross pro t margin18.6% 18.6% 18.2% 18.2% Corporate and Eliminations Net revenues $ (4) $ —$ (4) $ (3) $ — $ (3)Cost of revenues (4) — (4) (3) — (3) Total Consolidated Net revenues $ 6,790$ —$ 6,790$ 5,794$ — $ 5,794Cost of revenues 4,697 (6)(a) 4,691 3,985 (11)(a) 3,973(1)(b) Gross pro t $ 2,093$ 6 $ 2,099$ 1,809$ 12$ 1,821 Gross pro t margin30.8% 30.9% 31.2% 31.4% Notes:(a)Adjustment to re ect the elimination of amortization expense related to backlog intangible assets.(b)Adjustment to re ect the elimination of expenses associated with restructuring programs and related costs. 13
Page 14
APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresAdjusted Segment Financial Information (non-GAAP)(Amounts in millions)(Unaudited) Three Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Corporate and EliminationsIncome before income taxes $ (91) $ (88) $ (273) $ (248)Interest expense, net 27 24 73 82Depreciation 2 2 6 4Amortization 1 1 3 3Systems and business enablement(a) 13 18 42 39Business process transformation expenses(b) — — — 3Acquisition and divestiture related expenses(c) 4 3 29 10 Other (d) 1 4 10 5 Corporate and Eliminations adjusted EBITDA$ (43) $ (36) $ (110) $ (102) Notes:(a)Adjustment to re ect the elimination of non-recurring costs associated with an end-to-end business systems implementation and primarilyconsist of third-party consulting fees related to system design, deployment, integration, and change leadership across the organization.(b)Adjustment to re ect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to technology and business enhancements, including systems and process development costs.(c)Adjustment to re ect the elimination of transaction costs, integration costs, and gains and losses related to potential and completedacquisitions and divestitures.(d)Adjustment includes miscellaneous non-recurring items, such as costs associated with debt re nancing and other capital market activities,and net gains related to building sales and facility exits. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresChange in Segment Earnings (non-GAAP)(Unaudited) Change in Segment earningsThree Months Ended September 30, 2026 Change in Segmentearnings (public rates) Foreign currency translation (a) Change in Segmentearnings ( xed currency)(b) Safety Services 19.1% —% 19.1%Specialty Services 38.3% —% 38.3% Consolidated 24.6% —% 24.6% Nine Months Ended September 30, 2026 Change in Segmentearnings (public rates) Foreign currency translation (a) Change in Segmentearnings ( xed currency)(b) Safety Services 14.4% 1.3% 13.1%Specialty Services 34.3% —% 34.3% Consolidated 20.1% 1.2% 18.9% 14
Page 15
Notes:(a)Represents the e ect of foreign currency on reported segment earnings, calculated as the di erence between reported segment earningsand segment earnings at xed currencies for both periods. Fixed currency amounts are based on translation into U.S. Dollars at xed foreigncurrency exchange rates established by management at the beginning of 2026.(b)Amount represents the year-over-year change after eliminating the impact of uctuations in foreign exchange rates by translating foreigncurrency denominated results at xed foreign currency rates for both periods. APi Group Corporation Reconciliations of GAAP to Non-GAAP Financial MeasuresFree Cash Flow and Adjusted Free Cash Flow and Conversion (non-GAAP)(Amounts in millions)(Unaudited) Three Months EndedSeptember 30,Nine Months EndedSeptember 30, 2026202520262025 Net cash provided by operating activities (as reported)$ 225$ 232$ 393$ 377 Less: Purchases of property and equipment(27) (31) (76) (70) Free cash ow 198 201 317 307Add: Cash payments related to following items:Contingent compensation (a) — — 1 1Systems and business enablement(b) 31 37 97 79Business process transformation expenses(c) — — — 4Acquisition and divestiture related expenses(d) 11 — 38 10Restructuring program related payments(e) (1) 5 5 17Other (f) 1 5 10 16 Adjusted free cash ow $ 240$ 248$ 468$ 434 Adjusted net income $ 219$ 174$ 556$ 442Adjusted free cash ow as a % of adjusted net income109.6% 142.5% 84.2% 98.2% Notes:(a)Adjustment to re ect the elimination of expense attributable to one-time deferred consideration to prior owners of acquired businesses.(b)Adjustment to re ect the elimination of non-recurring costs associated with an end-to-end business systems implementation and primarilyconsist of third-party consulting fees related to system design, deployment, integration, and change leadership across the organization.(c)Adjustment to re ect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to technology and business enhancements, including systems and process development costs.(d)Adjustment to re ect the elimination of transaction costs, integration costs, and gains and losses related to potential and completedacquisitions and divestitures.(e)Adjustment to re ect payments made for restructuring programs and related costs.(f)Adjustment includes miscellaneous non-recurring items, such as costs associated with debt re nancing and other capital market activities, andnet gains related to building sales and facility exits. Investor Relations and Media Inquiries: Adam Walters Senior Director of Investor Relations Tel: +1 920-419-5432 Email: investorrelations@apigroupinc.us Source: APi Group Corporation 15