The following is a summary of the APi Group Corporation (APG) Q1 2024 Earnings Call Transcript:
Financial Performance:
APi Group Corporation reported Q1 2024 revenues of $1.6 billion, remaining flat compared to the same period the previous year.
The firm saw organic growth of 3% in service revenues and a 6% organic decline in project revenues.
Adjusted gross margin improved by 390 basis points to 30.7% for Q1 2024.
Record Q1 adjusted EBITDA margin was 10.9%, an increase of 180 basis points.
Adjusted free cash flow for Q1 2024 was $12 million, an improvement of $12 million compared to Q1 2023.
The firm achieved strong free cash flow of 80% and aims to increase this going forward with a focus on cash flow conversion.
Business Progress:
APi made a significant $570 million acquisition of the Elevated Facilities Services Group, providing access to the $10 billion-plus US elevator and escalator services market. The acquisition is projected to contribute significantly to annual revenues.
The company aims to build its strategic position by focusing on margin growth and inspection and monitoring services, targeting 60% revenue from this area in the long-term.
Looking forward to the rest of 2024, APi expects to reinvest its cash primarily into bolt-on and tuck-in M&A campaigns, with potential to pay down some debt later in the year.
Expansion into the elevator end market aligns well with their inspection-first strategy and is anticipated to be a significant contributor to the company's 60% revenue goal.
The firm anticipates accelerated organic growth, specifically in the back half of the year and is preparing to close a material acquisition in Q2.
A focus remains on the health, safety, and well-being of team members, with the firm attributing their success to the dedication and support of its employees.
More details: APi Group IR
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