Executive Summary

APi delivered record Q2 results: net revenues $1.99B (+15.0% YoY; +8.3% organic), adjusted EBITDA $272M (+17.7% YoY, margin 13.7% +30 bps), and adjusted EPS $0.39 (+18.2% YoY). Both revenue and adjusted EPS beat S&P Global consensus; guidance was raised for FY25 revenues and adjusted EBITDA .
Guidance raised: FY25 net revenues to $7.65–$7.85B (from $7.4–$7.6B) and adjusted EBITDA to $1.005–$1.045B (from $985–$1,035M). Q3 guide: revenues $1.985–$2.035B and adjusted EBITDA $270–$280M .
What went well: Safety Services margin expansion (segment earnings margin +80 bps YoY to 17.0%), record backlog (> $4B) and 20th straight quarter of double‑digit inspection growth; accretive bolt‑on M&A ramp (7 YTD, including second elevator) .
What went wrong: Specialty Services margin compressed 350 bps YoY due to increased project starts, rising material costs, and weather; consolidated gross margin down 50 bps YoY on mix despite pricing offsets .
Stock reaction catalysts: Beat vs consensus on revenue and adjusted EPS, raised FY guide, backlog momentum, and acceleration of accretive M&A; watch tariff/material cost commentary and Specialty margin trajectory for near-term sentiment .

What Went Well and What Went Wrong

What Went Well
- Safety Services outperformed: revenue +15.8% (+5.6% organic), segment earnings +22.1%, margin up 80 bps to 17.0% on disciplined selection and pricing .
- Record backlog eclipsed $4B; double‑digit organic backlog growth driven by cross‑sell and target end markets. “Our record backlog eclipsing $4 billion for the first time in APi Group history.” .
- Recurring revenue engines strong: “North American safety business achieved double-digit inspection growth for the 20th straight quarter.” Pricing captured mid‑single‑digit in inspection, service & monitoring .
What Went Wrong
- Specialty Services margin pressure: adjusted gross margin down 350 bps to 18.1%; drivers were increased project starts (front‑loaded, more material), rising material costs, and weather; segment earnings margin down 190 bps to 11.3% .
- Consolidated gross margin mixed: down 50 bps YoY to 30.9% (adjusted 31.2%) on mix, despite pricing improvements across the business .
- Tariffs/material costs risk acknowledged; while contracts mitigate cost escalation, margin sensitivity remains on project work and weather/labor efficiency during execution .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Net Revenues ($USD Billions)	$1.73	$1.719	$1.990
Gross Margin (%)	31.4% (Adj: 31.7%)	31.5% (Adj: 31.7%)	30.9% (Adj: 31.2%)
Adjusted EBITDA ($USD Millions)	$231	$193	$272
Adjusted EBITDA Margin (%)	13.4%	11.2%	13.7%
Diluted EPS (GAAP) ($)	$0.15	$0.11	$0.16
Adjusted Diluted EPS ($)	$0.33	$0.37	$0.39

Segment	Q2 2024	Q1 2025	Q2 2025
Safety Services Net Revenues ($USD Billions)	$1.176	$1.267	$1.362
Safety Adjusted Gross Margin (%)	36.5%	37.0%	37.2%
Safety Segment Earnings ($USD Millions)	$190	$199	$232
Safety Segment Earnings Margin (%)	16.2%	15.7%	17.0%
Specialty Services Net Revenues ($USD Billions)	$0.555	$0.453	$0.629
Specialty Adjusted Gross Margin (%)	21.6%	16.8%	18.1%
Specialty Segment Earnings ($USD Millions)	$73	$29	$71
Specialty Segment Earnings Margin (%)	13.2%	6.4%	11.3%

KPI	Q2 2024	Q1 2025	Q2 2025
Organic Net Revenue Growth (%)	Consolidated 8.3% in Q2 2025; prior Q2: N/A	Consolidated +1.9%	Consolidated +8.3%; Safety +5.6%; Specialty +13.3%
Inspection Growth (North America)	N/A	19th straight quarter double‑digit	20th straight quarter double‑digit
Backlog	N/A	~$3.5B level discussed	Record >$4B
Adjusted FCF ($USD Millions)	N/A	$86	$100 (Q2); conversion 36.8%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenues ($USD Millions)	FY 2025	$7,400–$7,600	$7,650–$7,850	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$985–$1,035	$1,005–$1,045	Raised
Adjusted FCF Conversion (%)	FY 2025	~75%	~75%	Maintained
Net Revenues ($USD Millions)	Q3 2025	N/A	$1,985–$2,035	New
Adjusted EBITDA ($USD Millions)	Q3 2025	N/A	$270–$280	New
Interest Expense ($USD Millions)	FY 2025	N/A	~$145	New detail
Depreciation ($USD Millions)	FY 2025	N/A	~$90	New detail
Capex ($USD Millions)	FY 2025	N/A	~$100	New detail
Adjusted Tax Rate (%)	FY 2025	N/A	~23%	New detail
Adjusted Diluted Shares (Millions)	FY 2025	N/A	~424 (post stock split)	New detail

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Inspection/service mix and pricing	Double‑digit inspection growth in US Life Safety; pricing improvements underpin margin expansion	20th straight quarter double‑digit North America inspection growth; continued mid‑single‑digit pricing capture	Strengthening
Tariffs/material costs	Proactive contract language to pass‑through material cost; pulled materials forward in Q1; exposure primarily project work (~15%)	Specialty margin impacted by rising material costs; reiterated mitigation; watch copper tariffs	Mixed; managed risk
Backlog and end‑markets	Backlog ~$3.5B; expect specialty to return to growth; diversified exposure (data centers, advanced manufacturing)	Record backlog >$4B; strong proposal activity in data centers, semis, advanced manufacturing	Improving
International (Chubb) performance/digital	Organic growth every quarter since acquisition; sales transformation; SOX/process improvements	Organic growth continues; high single‑digit order growth; early work on Chubb Vision/digital; AI task force forming	Positive, early digital
Systems & business enablement	Announced 3‑year investment; SG&A adjustments disclosed	Execution progressing; spend visible; intended SG&A leverage and field productivity	Ongoing build
Elevator platform	Initiated expansion in 2024; targeting $1B long‑term	Second elevator acquisition; “tweener” asset at fleet average margins; pipeline robust	Scaling
M&A and capital deployment	Target ~$250M bolt‑ons; $75M buyback; $1B authorization	6 acquisitions in Q2, 7 YTD; 1/3 of guide raise from M&A; revolver upsized to $750M	Accelerating

Management Commentary

“We enter the second half of 2025 with continued positive momentum… growing our recurring inspection, service and monitoring business, building on our record backlog, and improving our free cash flow generation.” — Russ Becker, CEO .
“Adjusted gross margin… decreased 50 bps… driven by mix… Adjusted EBITDA margin… increased 30 bps… Growth in adjusted EBITDA was driven by an increase in adjusted gross profit.” — David Jackola, CFO .
“Our record backlog eclipsing $4 billion… double‑digit organic growth in backlog includes contributions from cross‑sell… disciplined customer and project selection.” — Russ Becker .
“You can think of our EBITDA raise as a third driven by Q2 over‑delivery, a third due to M&A, and a third due to an improved second‑half outlook.” — David Jackola .
“We remain super optimistic… building out this billion‑dollar elevator and escalator platform… we’re just getting going.” — Russ Becker .

Q&A Highlights

Beat vs guidance drivers: Q2 revenues were >$60M above the high end; outperformance from strong contract/project activity and some pull‑forward of materials; inspection/service performed as expected .
Specialty margin outlook: Margin pressure from project starts/materials/weather; expected sequential improvement through H2 as projects progress .
Guidance raise composition: Approximate thirds from Q2 beat, closed M&A, and improved H2 base outlook .
Segment outlooks: Safety Services targeting ~5–6% organic growth in H2; Specialty Services high single‑digit organic growth in Q3 .
Tariffs/material costs: Contracts include pass‑through provisions; risks include weather and efficiency; leadership remains proactive on procurement and proposals .
Digital/AI: Early innings; focus on SG&A leverage and field productivity; Chubb Vision in early stages with opportunity ahead .

Estimates Context

Q2 2025 vs Wall Street consensus (S&P Global):
- Revenue: $1.99B actual vs $1.897B consensus* — beat .
- Primary EPS: $0.39 actual vs $0.374 consensus* — beat .
- EBITDA: Company adjusted EBITDA $272M vs S&P EBITDA consensus* $264.9M; S&P “actual” EBITDA* $248M appears non‑GAAP‑adjusted mismatch — company’s non‑GAAP adjusted EBITDA is higher .
  Values retrieved from S&P Global.

Metric	Q2 2025 Consensus*	Q2 2025 Actual
Revenue ($USD Billions)	1.897*	1.990
Primary EPS ($)	0.374*	0.39
EBITDA ($USD Millions)	264.9*	272 (Adjusted EBITDA)

Q3 2025 guidance vs consensus (S&P Global):
Values retrieved from S&P Global.

Metric	Q2 2025	Q3 2025 Consensus*	Q3 2025 Company Guidance
Revenue ($USD Billions)	1.990	2.009*	1.985–2.035
Primary EPS ($)	0.39	0.395*	N/A (company guides EBITDA)
Adjusted EBITDA ($USD Millions)	272	276.6*	270–280

Bold beats/misses: APi beat revenue and adjusted EPS vs consensus in Q2 (above), and guided Q3 revenue and adjusted EBITDA broadly in line with consensus ranges .

Key Takeaways for Investors

Execution solid: Safety Services is driving consolidated margin expansion; recurring inspection/service engine remains robust with 20 consecutive quarters of double‑digit inspection growth, underpinning resilience into H2 .
Specialty watch‑list: Expect sequential margin improvement as projects mature, but monitor material costs/tariffs and weather impacts; management reiterated discipline and pricing pass‑throughs .
Guidance credibility: FY25 revenue/EBITDA raised; CFO decomposed raise (Q2 beat, M&A, improved outlook), enhancing confidence in H2 trajectory and capital deployment capacity .
Backlog momentum: Record >$4B backlog across segments and end‑markets (data centers, semis, advanced manufacturing) supports sustained growth; segment outlook implies mid‑single‑digit organic for Safety, high single‑digit for Specialty near term .
M&A as upside lever: Seven acquisitions YTD (including second elevator), pipeline robust; management targets ~$250M bolt‑ons and is disciplined on larger deals; revolver expanded to $750M .
Non‑GAAP adjustments: Adjusted EPS/EBITDA exclude significant items (e.g., amortization $59M; systems enablement $18M; restructuring $11M in Q2). Recognize differences vs S&P EBITDA definitions when benchmarking .
Near‑term trading implications: Positive skew from beat-and-raise quarter and backlog strength; monitor Specialty margins, tariff headlines (copper/pipe), and AI/data‑center project mix. Medium‑term thesis benefits from 10/16/60+ framework and systems/AI efficiency initiatives .

Please see supporting citations throughout drawn from APi’s Q2 2025 8-K press release and earnings call, prior-quarter materials, and S&P Global estimates.

APi Group Corp (APG)·Q2 2025 Earnings Summary