APi Group Corporation

Good morning, ladies and gentlemen, and welcome to API Group's fourth quarter and full year 2025 financial results conference call. All participants are now in a listen-only mode until the question and answer session. We ask that all participants limit themselves to one question during the question and answer session. Please note, this call is being recorded. I will be standing by should you need any assistance. I will now turn the call over to Adam Fee, Vice President of Investor Relations at API Group. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining our fourth quarter 2025 earnings conference call. Joining me on the call today is Russ Becker, our President and CEO, and David Giacola, our Executive Vice President and Chief Financial Officer. Before we begin, I'd like to remind you that certain statements in the company's EARNINGS PRESS RELEASE AND ON THIS CALL ARE FORWARD LOOKING STATEMENTS WHICH ARE BASED ON EXPECTATIONS, INTENTIONS, PROJECTIONS REGARDING THE COMPANY'S FUTURE PERFORMANCE, ANTICIPATED EVENTS OR TRENDS AND OTHER MATTERS THAT ARE NOT HISTORICAL FACTS. THESE STATEMENTS ARE NOT A GUARANTEE OF FUTURE PERFORMANCE AND ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS. IN OUR PRESS RELEASE AND FILINGS WITH THE SEC, We detail on material risks that may cause our future results to differ from our expectations. Our statements are as of today, February 25th, and we undertake no obligation to update any forward-looking statements we may make, except as required by law. As a reminder, we have posted a presentation detailing our fourth quarter financial performance on the investor relations page of our website. Our comments today will also include non-GAAP financial measures and other key reporting metrics. The reconciliation of and other information regarding these items can be found in our press release and our presentation. It's now my pleasure to turn the call over to Russ.

Thank you, Adam. Good morning, everyone. Thank you for taking the time to join our call this morning. I want to start by thanking Adam Fee for his leadership of our investor relations function over the last three years. Adam has done an excellent job building trust with the investment community and we are excited to announce his transition into a finance leadership role within our elevator business. With this transition, Adam Walters, who previously served on our corporate development team, will take over leadership responsibilities of investor relationships. We remain grateful for the hard work of our 29,000 leaders and their dedication to API. The safety, health, and well-being of each of our leaders is our number one value. We continue to prioritize investing in the men and the women in the field as human beings and aim to provide each of them with training, advancement opportunities, and leadership development. I'm proud to announce that API has, once again, been recognized as a military-friendly employer for 2026. We remain committed to providing opportunities for veterans and their spouses to build careers and develop as leaders. Back in 2021, we introduced our long-term 136080 shareholder value creation framework. Since then, 136080 has been our North Star, and I'm proud of our team's relentless focus and dedication to delivering on these commitments. Over the last several years, our journey has been marked by meaningful progress. We grew revenues from $3.9 billion in 2021 to $7.9 billion in 2025. We increased our percentage of revenue coming from inspection, service, and monitoring from 40% in 2021 to 54% in 2025. We established a new adjacent vertical in the highly attractive elevator and escalator service market with the acquisition of Elevated. We accelerated our bolt-on M&A strategy by deploying approximately $580 million across 33 bolt-on acquisitions from 2023 through 2025. Notably, as it relates to our 1360-80 targets, we ended the year with adjusted EBITDA margins at 13.2%. above our 13% target, and significantly above our 2021 adjusted EBITDA margin of 10.3%. Additionally, we ended 2025 with adjusted free cash flow conversion of 80%, right in line with our stated target of 80%, and well above our 2021 adjusted free cash flow conversion of 55%. Thank you to all of our teammates for helping us win and for their focus, discipline, and commitment that made these results possible. In 2021, we set ambitious financial targets, and through our collective teamwork and belief, we achieved these targets. This allowed us to set our new, ambitious, but achievable three-year long-term financial targets of 10, 16, 60 plus. I am grateful. Now I will dive into our record 2025 full year results. The business continues to build momentum, delivering robust top line growth while expanding margins. We continue to have strong growth in inspection, service, and monitoring revenues. We capitalized on a robust project environment. And finally, we continue to execute a creative bolt-on M&A at attractive multiples. For the year, Net revenues increased by 13%, approximately 8% organically, with strong growth across both segments. In our safety services segment, revenues grew organically by approximately 7%, led by growth in inspection, service, and monitoring revenues. As expected, specialty services maintained the momentum and closed the year with strong growth, delivering 10% organic growth for the year. In line with our strategic initiatives, we continue to drive improvements in adjusted gross margin, which expanded 50 basis points for the year. The strong performance in gross margin led to our record full-year 2025 adjusted EBITDA margin, representing margin expansion of 50 basis points. We expect to see continued margin expansion in 2026 and beyond. largely driven by the same initiatives that we have been executing for the past several years, which include the following. Consistent organic growth. Improved inspection service and monitoring revenue mix. Disciplined customer and project selection. Pricing. Branch and field optimization. Procurement systems and scale. Accretive M&A and selective business pruning. And as I like to say, we can always just be better. 2025 was another year of strong free cash flow with record adjusted free cash flow of $836 million, representing 80% conversion on adjusted EBITDA. Our consistent free cash flow growth and the strength of our balance sheet provides flexibility to pursue value enhancing capital deployment alternatives including accretive M&A and opportunistic share repurchases. In 2025, we continued to execute our M&A plan, completing 14 acquisitions and building on our long track record of integrating businesses and supplementing growth through M&A at attractive multiples. In addition, on February 2nd, 2026, we closed on the previously announced acquisition of CertiCite. an inspection first provider of comprehensive fire and life safety services in the Midwest. We're already pursuing the additional opportunities created by this acquisition and welcome our new CertiSight team members to the API family. Looking ahead, we are excited about the pipeline of M&A opportunities we see across fire life safety, electronic security, elevator and escalator, and niche specialty services. Our team remains hard at work prioritizing the most attractive opportunities. We will continue to focus on the quality of the business, and importantly, on the culture, value, and fit. Our value proposition as a forever home continues to resonate with sellers. I want to take a moment to recognize a significant milestone for our company. In 2026, API Group will celebrate its 100-year anniversary. marking a century of commitment to our customers and an unwavering focus on the safety, health and wellbeing of each of our leaders. As we reflect on our legacy and begin the next century of growth, we have much to be grateful for. A central part of our 100 year anniversary will be gratitude and giving back to the communities that have supported us along the way and contributed so meaningfully to our ability to win. I look forward to celebrating with our 29,000 leaders around the world. Entering 2026, we remain laser-focused on our new North Star, the 10, 16, 60-plus financial targets we introduced in May at our Investor Day. As a reminder, these targets are $10 billion in net revenues by 2028 supported by consistent mid-single-digit organic growth, 16% plus adjusted EBITDA margin by 2028, 60% plus of our revenues from inspection, service, and monitoring over the long term, and $3 billion of cumulative adjusted free cash flow through 2028. I am proud of our team and the record financial results achieved in 2025. As we begin 2026, I have great confidence in our ability to continue to deliver strong, organic growth, expand margins, and grow free cash flow by staying focused on investing in and caring about our people on a daily basis. I would now like to hand the call over to David to discuss our fourth quarter financial results and 2026 guidance in more detail. David?