APi Group (NYSE:APG) executives highlighted record full-year results, continued mix shift toward recurring service revenue, and a step-up in margin and cash flow performance during the company’s fourth-quarter and full-year 2025 earnings call held Feb. 25. Management also outlined 2026 guidance calling for mid-single-digit organic growth at the midpoint and further margin expansion, while emphasizing an active M&A pipeline and a strong backlog supported by several end-market tailwinds.
Full-year 2025 results and progress against long-term targets
President and CEO Russ Becker said the company’s 13/60/80 value-creation framework introduced in 2021 has served as the company’s “North Star,” and he pointed to progress across revenue growth, mix shift, and profitability. Becker said revenue grew from $3.9 billion in 2021 to $7.9 billion in 2025, while the share of revenue from inspection, service, and monitoring increased from 40% to 54% over the same period.
By segment, Becker said Safety Services revenue grew organically by roughly 7%, led by inspection, service, and monitoring, while Specialty Services posted 10% organic growth for the year. He also said adjusted gross margin expanded 50 basis points for the year, which flowed through to a record adjusted EBITDA margin with 50 basis points of expansion.
Fourth-quarter performance: revenue growth, margin expansion, and cash flow
Executive Vice President and CFO David Jackola reported fourth-quarter net revenues of $2.12 billion, up 13.8% from $1.86 billion a year earlier. Organic growth of 11.1% was attributed to continued growth in inspection, service, and monitoring revenues, strong project revenue growth, and pricing improvements.
Adjusted gross margin in the quarter was 32.2%, up 110 basis points year over year, which Jackola said was driven by disciplined customer and project selection and pricing improvements, partially offset by project revenue mix. Adjusted EBITDA increased 21.9% with adjusted EBITDA margin of 13.9%, up 90 basis points.
Adjusted diluted EPS for the quarter was $0.44, up $0.10, or 29.4%, from the prior-year period. Jackola attributed the increase to revenue growth, gross margin expansion, and lower interest expense, partially offset by higher share count.
Cash flow was also a focus. Jackola said fourth-quarter adjusted free cash flow was $402 million, up $95 million versus the prior year, representing 136% conversion. For full-year 2025, adjusted free cash flow was a record $836 million, up $168 million year over year, representing 80% conversion.
Segment details: Safety Services and Specialty Services
In Safety Services, APi reported fourth-quarter net revenues of $1.42 billion, up 10.6% from $1.29 billion in the prior year. Organic growth of 6.6% was driven by inspection, service, and monitoring gains, project growth, and pricing. Adjusted gross margin increased 110 basis points to 37.7%, and segment earnings rose 18% with a segment earnings margin of 17.5%, up 110 basis points.
In Specialty Services, fourth-quarter net revenues were $695 million, up 20.7% from $576 million, driven by strong project revenue growth. Adjusted gross margin rose 190 basis points to 20.7%, which Jackola said reflected increased project opportunities aligned with disciplined selection criteria and better leverage of fixed overhead. Segment earnings increased 40.7%, and segment earnings margin was 11.9%, up 170 basis points.
Guidance for 2026 and key assumptions
For 2026, APi expects reported net revenues of $8.4 billion to $8.6 billion, with organic growth of 5% at the midpoint, based on current FX rates and acquisitions closed to date. Jackola said the company’s long-term organic growth algorithm assumes mid- to “mid-upper” single-digit growth in inspection, service, and monitoring and low- to mid-single-digit growth in project revenues.
APi guided to adjusted EBITDA of $1.14 billion to $1.2 billion, implying 8% to 13% growth on a fixed-currency basis and adjusted EBITDA margin of 13.8% at the midpoint, up 60 basis points versus 2025. For free cash flow, the company expects 2026 adjusted free cash flow conversion to be at or above 115% of adjusted net income, which management said is equivalent to roughly 75% of adjusted EBITDA, while noting first quarter is typically seasonally weakest for conversion.
For the first quarter, APi expects reported net revenues of $1.875 billion to $1.975 billion, with organic growth of 4% to 10%, and adjusted EBITDA of $225 million to $235 million, implying 12% to 17% growth on a fixed-currency basis and an adjusted EBITDA margin of 11.9% at the midpoint, up 70 basis points year over year. Jackola also provided additional 2026 expectations, including interest expense of about $130 million, depreciation of about $90 million, capital expenditures of about $105 million, and an adjusted effective tax rate of about 23%.
Backlog, end markets, M&A, and strategic priorities
Management described a strong project environment and a backlog “north of $4 billion,” with emphasis that backlog quality remains healthy. Becker cited tailwinds in data centers, advanced manufacturing, semiconductors, healthcare, and critical infrastructure. In response to a question on tariffs, Becker said the company does not expect changes to tariffs to materially impact the business, “good or bad,” and reiterated a focus on controllables such as pricing and disciplined project selection.
On data centers, Jackola said the end market represented approximately 5% of total revenue in 2024, about 8% in 2025, and is expected to be about 10% in 2026, contributing “a couple percentage points of growth” in both 2025 and 2026. He added that the margin profile for the work is “really, really strong,” citing a limited number of players able to execute at the level required.
On capital allocation, Jackola said net debt to adjusted EBITDA was about 1.6x at the end of the fourth quarter, below the company’s long-term 2.5x to 3x target range. Becker said the company continues to prioritize strategic M&A, and he indicated M&A would take precedence over share repurchases, while acknowledging the company continues to evaluate larger transactions alongside tuck-in deals.
APi completed 14 acquisitions in 2025, and Becker noted the Feb. 2, 2026 close of CertaSite, described as an “inspection-first provider” of fire and life safety services in the Midwest. He said the company remains active in fire-life safety, electronic security, elevator and escalator services, and niche specialty services. Becker also said APi will celebrate its 100-year anniversary in 2026 and reiterated a focus on the company’s updated 10/16/60+ targets, including $10 billion of net revenue by 2028, 16%+ adjusted EBITDA margin by 2028, and $3 billion of cumulative adjusted free cash flow through 2028.
About APi Group (NYSE:APG)
APi Group Corp. is a global specialty contractor that provides fire protection, security, mechanical insulation and energy services to commercial, industrial and institutional clients. Headquartered in New Brighton, Minnesota, the company designs, installs, inspects, tests, maintains and repairs a wide range of safety and infrastructure systems. Through its network of operating subsidiaries, APi Group delivers end-to-end solutions for new construction, facility renovations and ongoing maintenance requirements.
Its service portfolio spans life safety and industrial services—such as fire suppression systems, fire alarms and emergency lighting—and specialized offerings including technical insulation, access solutions, passive fire protection and energy efficiency upgrades.
