Oct 29, 2026 earnings call — Record growth and backlog; margin expansion
APi reported Q3 net revenues of $2.55 billion, a 22.5% increase, with organic revenue growth of 15.7%.
Revenue $2.6B (est $2.4B) · EPS $0.50 (est $0.47) · Next-quarter revenue outlook $9.2B–$9.3B
Key quotes
"We enter the second half with backlog exceeding $5 billion for the first time, and it continues to grow."
"Inspection, service, and monitoring remain at the core of our business, with inspection revenue growing at a double-digit rate in Q3."
"We have closed 13 transactions year to date and remain on track to spend $250 million on bolt-on M&A in 2026."
Analyst Q&A 12
$10 billion target timing
Q (Jon Tanwanteng · CJS): He asked if parts of the long-term targets (revenue or profit) could be reached earlier given the strong quarter and backlog. He also asked about visibility into larger acquisitions beyond the $350 million tuck-in target.
A: Management said the $10 billion target becomes visible by extending current organic growth and annualizing recent acquisition run rates plus another ~$300 million of bolt-on M&A. They said the 16% EBITDA margin target still needs work but they have line of sight. On larger deals, they have good visibility and are vetting opportunities for the right cultural and shareholder fit.
"Well, without getting ahead of ourselves, Jon, and providing guidance into our 2027, you can do some math pretty quickly to see where we're standing on, say, the $10 billion revenue target." — Russ Becker (CEO)
organic growth timing clarity
Q (Jason Haas · Wells Fargo): He asked what gives confidence for the double-digit organic growth and whether the same framework applies to Q4. He also asked if the comment about double-digit growth referred to 2027.
A: Management clarified they were referring to double-digit organic revenue growth for full year 2026, and they have not issued guidance for 2027. They reiterated they have been growing double digits this year as context for 2027 commentary.
"Jason, we were just saying as we look forward to 2027, we have been growing double digits this year." — David Jackola (CFO)
Safety growth split details
Q (Jasper Bibb · Truist): He asked whether anything surprised in Safety this quarter and for a split between inspection service/monitoring versus project revenue and North America versus international.
A: Management said inspection service and monitoring (ISM) continued to grow at a mid to upper single digit pace. They noted project contract revenue ticked up and that international returned to organic growth in the quarter. They expect the ISM trend to continue into the fourth quarter and projects to remain robust.
"When you think about the breakdown between service inspection, monitoring revenue, and contract revenue, the ISM or inspection service monitoring continues to grow at that mid to upper single digit pace." — David Jackola (CFO)
converting projects into recurring work
Q (Stephanie Moore · Jefferies): She asked how specialty project work can be converted to recurring services across APi businesses after project completion. She wanted to know the medium-term potential for recurring revenue.
A: Management said most project work is won with longstanding customers who often began as inspection service and monitoring clients, so relationships already exist. They explained different services join projects at different stages and a business development leader is connecting services to win bundled, multi-service opportunities. Customers often want bundled services upfront, which creates larger, recurring opportunities across operating companies.
"For the most part, the project-based work that we are winning is with longstanding customers already." — Russ Becker (CEO)
staying selective as company grows
Q (Tomo Sano · JPMorgan): He asked how APi will maintain discipline as it gets larger and whether they are becoming more selective about customers, projects, or markets.
A: Management said customer and project selection is key and the current environment allows them to be very selective about where they place field leaders. They run large opportunities through a robust go/no-go checklist to validate customers and projects and believe they are making good choices.
"You have a really great opportunity to be super selective on where you are going to put your people to work." — Russ Becker (CEO)
Safety margin drivers
Q (Tim Mulrooney · William Blair): He asked how much of Safety's ~110 basis point margin decline was due to sales mix versus material and fuel costs, and where material cost impact shows up.
A: Management said the biggest driver was increased project mix versus service mix, and early-stage projects start at lower margins but can expand as work progresses. They said material costs are generally passed through in dollar value but not the margin value in the first year, and near-term M&A also weighed on margins before medium-term accretion.
"You nailed it when you mentioned the impact of project mix, and that's the biggest driver of the margin, I would say, margin performance versus last year." — David Jackola (CFO)
pricing and margin tailwind into 2027
Q (Curtis Nagle · BofA): He asked how much of a pricing or margin tailwind could materialize next year from improved backlog and pricing. He also asked if any end markets showed particular strength versus Q2.
A: Management expects margins to improve sequentially into the fourth quarter and to continue improving into 2027, driven in part by improved pricing in the project environment and conservative current reporting. They said end-market strength was broad and spread across the markets referenced in opening remarks.
"We expect our margins to improve sequentially as we move into the fourth quarter, which is normal for us." — Russ Becker (CEO)
managing fast Specialty growth
Q (Kathryn Thompson · Thompson Research Group): She asked how APi is managing rapid 30% growth in Specialty, especially on timing-sensitive large projects, and asked for color on structural steel fabrication and erection.
A: Management said they are selective and ensure they have the capacity and leadership before committing to projects, using a go/no-go approach to avoid overcommitting. They said structural manufacturing is a relatively small part of the business but is seeing many opportunities, including in aviation (airports and private hangars) and sports/entertainment, and they are leveraging value-added design/build delivery.
"So we're making sure that we're not getting out in front of ourselves and taking on more work than we potentially have the capacity and the capability to execute on." — Russ Becker (CEO)
Q4 margins and timing of improvements
Q (Andrew Wittmann · Robert W. Baird & Co, Incorporated): He asked why margin guidance didn't rise more despite revenue and M&A, whether material/fuel inflation is the reason, and when margins will recover as projects progress.
A: Management said the Q4 guide reflects strong ISM momentum plus project growth above their long-term algorithm, and early-stage project work carries lower margins than ISM. They acknowledged rising material costs weigh on the quarter but are being priced into proposals and expect material-cost impact to be less of an issue in 2027; M&A benefits typically take 6–12 months to fully materialize.
"As you know, early-stage project work and project work in general comes at lower margin than inspection service and monitoring." — David Jackola (CFO)
data centers converting to ISM work
Q (Josh Chan · UBS): He asked whether completed data centers are creating inspection service and monitoring (ISM) opportunities for the Safety business.
A: Management said yes and noted they often already have ISM relationships with the firms doing data center and similar projects. They said the team engages clients around 50%-60% construction completion to convert projects to ISM accounts and aims to convert as many as possible.
"Our team is engaging at the 50%-60% level of construction completion, and getting engaged with the client at a very early level." — Russ Becker (CEO)
data center revenue share and moratoriums
Q (Ashish Sabadra · RBC): He asked whether data centers will be 10%-12% of revenue this year and what percentage of bookings they represent, and whether moratoriums are causing pushback.
A: Management said data center revenue will probably be 12% or a little bit higher as they go into 2027 and exit 2026, and backlog shows good opportunities with ISM starting to bear fruit. On moratoriums they said they are watching local restrictions, being selective on locations, and engaging in community advocacy to support constructive, safe project development.
"It'll probably be 12% or a little bit higher as we go into 2027 and exit 2026." — David Jackola (CFO)
international service-first progress
Q (Andy Kaplowitz · Citi): He asked for an update on international progress under the service-first strategy and how the new leadership is affecting results.
A: Management said the international leader is a longtime APi teammate using the inspection service and monitoring first strategy and is having an impact. They have moved to a regional leadership structure to improve country-level coverage, are seeing green shoots in backlog and service orders, but said the effort is still early in the journey.
"We're getting better touches, if you will, on our country-level leadership and driving this service work strategy forward." — Russ Becker (CEO)