APi Group Corp (APG) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This filing covers the quarterly period ended March 31, 2026. APi Group Corporation is a global provider of fire and life safety, security, elevator and escalator, and specialty services. The company operates through two reportable segments: Safety Services and Specialty Services. As of April 23, 2026, there were 433,227,989 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Revenues | $1,982 million | $1,719 million |
| Gross Profit | $620 million | $542 million |
| Gross Margin | 31.3% | 31.5% |
| Operating Income | $103 million | $84 million |
| Net Income | $57 million | $35 million |
| Diluted EPS | $0.12 | $0.07 |
| Adjusted EBITDA (Non-GAAP) | $235 million | $193 million |
| Cash from Operations | $85 million | $62 million |
| Cash and Equivalents (End of Period) | $645 million | $461 million |
| Total Debt (Principal) | $2,776 million | $2,776 million |
| Total Liquidity | $1,390 million | N/A |
Note: Total liquidity as of March 31, 2026, includes $645 million in cash and $745 million available under the Revolving Credit Facility.
Material Changes vs. Prior Period
- Revenue Growth: Net revenues increased 15.3% year-over-year, driven by growth in inspection, service, and monitoring revenues, project revenues, acquisitions, and pricing improvements.
- Profitability: Operating income rose 22.6% to $103 million. Net income increased 62.9% to $57 million, aided by a lower effective tax rate (19.9% vs. 23.4%) due to windfall tax benefits on vested shares.
- Acquisitions: Significant investing cash outflow of $305 million (vs. $14 million in Q1 2025) due to the acquisition of CertaSite, LLC ($271 million consideration) and four other immaterial acquisitions ($25 million).
- Segment Performance: Safety Services revenue grew 11.7% with earnings margin expansion to 16.3%. Specialty Services revenue surged 25.6% with earnings margin improving to 6.9%.
- Debt Structure: The company completed amendments to its credit agreement in 2025, increasing the Revolving Credit Facility to $750 million and reducing interest margins on the Term Loan.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted strong revenue growth and disciplined project selection. The company continues to focus on recurring revenue streams and organic growth supported by acquisitions. No specific forward-looking financial guidance was provided in this text, but management expects sufficient liquidity to fund requirements for the next 12 months.
Subsequent Events:
- April 17, 2026: Signed agreement to acquire Wtech Fire Group (Europe) for approx. €324 million.
- April 22, 2026: Signed agreement to acquire Onyx-Fire Protection Services (Canada) for approx. C$725 million.
Risks and Contingencies:
- Market Risks: Exposure to foreign currency fluctuations (35% of revenue from foreign operations), interest rate volatility on variable debt, and supply chain disruptions (copper, steel, energy prices).
- Operational Risks: Seasonality (Q1/Q2 typically lower due to weather), labor shortages, and reliance on fixed-price contracts which carry margin risk if costs rise.
- Legal: Subject to routine litigation regarding workmanship, negligence, and product liability; management does not expect material adverse effects.
Investor Verification Checklist
- Acquisition Integration: Verify the financial impact and integration progress of the CertaSite acquisition and the two subsequent large deals (Wtech and Onyx-Fire) announced post-period.
- Debt Covenants: Confirm continued compliance with the 3.75:1.0 first lien net leverage ratio covenant (currently 1.3:1.0) given the increased acquisition activity.
- Working Capital Trends: Monitor the increase in contract assets ($538M) and contract liabilities ($773M) to ensure revenue recognition timing aligns with cash collection.
- Non-GAAP Reconciliations: Review the specific adjustments made to reach Adjusted EBITDA, particularly the $27 million in "systems and business enablement" expenses.
- Foreign Exchange Impact: Assess the sensitivity of future earnings to currency translation, given the $16 million translation loss in Q1 2026 compared to a $59 million gain in Q1 2025.