Aramark

Good morning and welcome to Aramark's second quarter fiscal 2026 earnings results conference call. My name is Kevin and I'll be your operator for today's call. At this time, I'd like to inform you this conference is being recorded for rebroadcast and that all participants are on a listen-only mode. We will open the conference call for questions at the conclusion of the company's remarks. I will now turn the call over to Felice Cassell, Senior Vice President, Investor Relations and Corporate Development. Ms. Cassell, please proceed.

Thank you and welcome to Aramark's earnings conference call and webcast. This morning, we'll be hearing from our CEO, John Zillmer, as well as our CFO, Jim Tarangelo. As always, there are accompanying slides for this call that can be viewed through the webcast and are also available on the IR website for easy access. Our notice regarding forward-looking statements is scheduled in our press release. During this call, we will be making comments that are forward-looking. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties, and important factors, including those discussed in the risk factors, MD&A, and other sections of our annual report on Form 10-K and SEC filings. We will be discussing certain non-GAAP financial measures, a reconciliation of these items to US GAAP, can be found in our press release and IR website. So with that, I will now turn the call over to John.

Good morning, everyone, and welcome to our fiscal second quarter earnings call. Thank you for joining us. Our financial results underscore the continued momentum occurring at the company, driven by our unwavering focus on growth through delivering hospitality excellence. Jim and I will review the key contributors to the quarter's outperformance and our confidence in achieving the outlook for fiscal 26. We enter the second half of the year with exceptionally strong business trends, including first, a client retention rate exceeding 98% across the company. Second, organic revenue growth at record levels in both FSS U.S. and international. Third, new client wins that have already reached an unprecedented total of $1 billion this fiscal year to date. And lastly, we're very excited about our entry into the hyperscale AI data center market, where we believe Aramark is uniquely positioned to deliver an integrated suite of capabilities. As we execute on our newly awarded multi-year engagement with a top global hyperscaler to provide comprehensive hospitality and facility services across multiple AI data center locations, this client is expected to become the largest in our portfolio. We see significant runway for additional growth with this client and other hyperscalers. In the second quarter, Aramark's organic revenue grew 12% to $4.8 billion, including an estimated 3% benefit from the calendar shift. As a reminder, the calendar shift will ultimately have no bearing on the full year results. Our strong revenue performance was due to broad-based net new business and base business growth across sectors and geographies. Throughout the organization, our client-led growth strategies consistently offer a differentiated guest experience. while providing operational rigor, unparalleled supply chain capabilities, and advanced technology solutions. Moving to the business segments, FSS-US organic revenue increased 12% to $3.4 billion and would have increased approximately 8% without the calendar shift benefit, which occurred primarily in education, with collegiate hospitality also experiencing growth in residential meal plans associated with higher student enrollment. Revenue growth in the second quarter for the U.S. was additionally driven by sports and entertainment, which had a strong opening day for Major League Baseball, with increased fan attendance and record per capita spending. Sports and entertainment also participated in several marquee events, including the World Baseball Classic and the NCAA Basketball Tournament. Workplace experience sustained double-digit growth as a result of significant new business contributions, exceptionally high retention rates, and elevated catering demand. Refreshments expanded its client base, building incremental route density across several key geographic areas, including central New York, the southeast, the Pacific Northwest, while increasing the average size of new wins by 15%. and Healthcare completed the successful launch of Penn Medicine, which is now fully operational, and as reviewed on the last earnings call, the team is set to mobilize RWJBarnabas Health this summer. During the quarter, FSSUS achieved several notable client wins, including Suffolk University and the University of Wisconsin Oshkosh in Collegiate Hospitality, which will fully launch in the new academic year. Toyota and Workplace Experience, where we recently began operations at their North American headquarters, the Oklahoma Department of Corrections, an example of our expanding presence in state-run correctional facilities, and Stone Mountain and Destinations, the most visited attraction in Georgia, where we start offering food and beverage, lodging, retail, tours, and camping this month ahead of the peak summer tourist season. As hyperscale AI data center development accelerates, and demand for support services grows in tandem, we launched Aramark Nexus, a new platform delivering integrated hospitality and workforce support services in large scale, complex, and often remote operating environments where we believe to have proven expertise, where we believe we have proven expertise and an established competitive advantage. We've been selected by a top global hyperscaler to support thousands of workers in providing employee housing dining and hospitality hubs with modern lifestyle amenities, and entertainment, transportation to and from construction sites, and full housekeeping and guest services delivered through a unified management structure. Our engagement is underway and set to begin this fiscal year. We expect this new suite of services to generate margins above the company average and achieve attractive investment returns. The significant growth opportunity currently is not reflected in our fiscal 26 financial outlook, but we will provide updates as we launch, grow, and scale the business. As I mentioned earlier, we see substantial growth potential in hyperscale data and operations centers. The international segment achieved another quarter of consistent compounded growth, with organic revenue increasing 13% to $1.4 billion, inclusive of an estimated 1% benefit from the calendar shift. This exceptional revenue performance was broad-based across every region, attributed to double-digit growth in Europe and Canada and high single-digit growth in emerging markets. Business momentum was led by sports and entertainment, education, extractive services, and business and industry, highlighting the depth of our in-country expertise and strong cross-border collaboration. All countries within our international portfolio are driving favorable net new business underpinned by an extensive sales pipeline. Second quarter new client awards ranged from an increased presence in festivals such as Brockwell Live in the UK, serving hundreds of thousands of visitors, to the new T-Mobile Arena in the Czech Republic, scheduled to host its first event later this fall, and Xinhua Hospital in China, a leading institution in clinical care and medical education. Now to global supply chain. We continue to see rapid GPO expansion in multiple categories, including sizable growth in golf and spa destinations within the US and internationally across the hospitality industry. Inflation continues to track in line with our expectations throughout all regions. Aramark remains resilient amid geopolitical uncertainty, including the recent volatility occurring in the energy markets. The significant scale of our food service agreements provides efficient cost flexibility and enables us to remain proactive in managing strategic pricing and sourcing actions. Bottom line, we believe the organization is well equipped to navigate a broader macro backdrop. Before handing the call over to Jim, I want to reinforce the message we've been sharing with our teams across the country. We are executing our growth strategies with focus and discipline. Our ambitions for Aramark have never been higher. and we are consistently setting new milestones. We're proud of the performance the teams have delivered, and we remain fully committed to working together to build on this continued momentum and drive the business to even greater levels of success. Jim, I'll now turn the call over to you.