BrightView Holdings, Inc.

Good day, everyone, and welcome to today's Brightview earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing the star and 2. Please note this call may be recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. Chris Stosco, Vice President of Finance and Investor Relations. Please go ahead, sir.

Good morning, and thank you for joining Brightview's third quarter earnings call. Dale Asplund, Brightview's President and Chief Executive Officer, and Brett Irvin, Chief Financial Officer, are on call. I will now refer you to slide 2 of the presentation, which can also be found on our website and contains our Safe Harbor disclaimer. Our presentation includes forward-looking statements subject to risks and uncertainties. In addition, during the call, we refer to certain non-GAS financial measures. Please see our press release in the ETA issued yesterday for reconciliation of these measures. With that, I will now turn the call over to Dale. Thank you, Chris, and good morning,

everyone. Starting with slide 4, as our results show, we continue to make great progress executing against our One Brightview strategy as we focus on transforming this business. We delivered our highest-ever adjusted EBITDA and margin, and our trailing 12-month EBITDA is now $344 million, which is a 45 million or 15% improvement in just seven quarters. This progress is not possible without the commitment of our 19,000 team members who deliver world-class customer service on a daily basis. Our continued momentum in key metrics, including employee turnover, customer retention, and development to maintenance conversions, has us on track not only to deliver another record year of adjusted EBITDA, but also positions us to drive profitable top-line growth in both the near and long term. Our objectives remain clear. Prioritizing our frontline employees drives to lower employee turnover and leads to improved customer retention, which are key fundamentals to drive top-line growth and ultimately leads to larger, more profitable branches. This coupled with leveraging our size and scale as the number one player in our industry and strategically allocating our capital will position us as the investment of choice. As I approach my two-year anniversary, my primary focus is achieving consistent top-line profitable growth. I remain encouraged in the progress we have made in such a short period of time. By continuing to prioritize our employees and customers, we have solidified the foundation for growth, which has positioned us to make investments back into our sales force by adding additional resources to achieve top-line growth, all while realizing historic EBITDA margins. While we are still early in our transformation, I am confident that our winning formula is in motion and is the key to driving meaningful shareholder value. Moving on to slide five, we continue to see sequential improvements in frontline turnover and hiring needs. Taking care of our most valuable asset, our people, has been front and center. Our frontline employees are the ones that touch our customers every single day, and we know that lower employee turnover drives higher customer retention. We've created a workplace where employees can thrive both personally and professionally. We have a highly tenured frontline workforce of greater than four years. However, when I joined, frontline employee turnover was nearly 100%. The bottom quarter of our workforce would turn four to five times in one year, creating inconsistent service for our customers, which ultimately led to lower customer retention rates and higher costs to rehire and retrain our workforce. We have reduced our hiring needs by over 40% in just 21 months, a true testament to the This has led to savings in hiring, onboarding, and training new employees, which we have in turn invested back into more consistent service levels, newer fleet, and more robust benefits for our frontline. We continue to put our employees first and know that our success as a company depends upon our unified one bright view culture. Turning to slide six, again this quarter, we have seen improvements in customer retention, which is now approximately 82%. This is an increase of 190 basis points on a trailing 12 month basis and 300 basis points since fiscal 2023, a testament to the world class service provided by our employees. As we know, improved employee satisfaction leads to higher quality service, which in turn leads to improved customer satisfaction and ultimately higher retention rates. What's even more encouraging is that we continue to see meaningful improvements in customer retention across our branch network. Since we outlined our branch segmentation during investor day, we have seen growth of five points in both the bottom and top quartiles as we continue to prioritize our employees and customers. It's clear that our strategy is gaining traction and our employees are more focused than ever on delivering high quality service to our customers. As I have said from day one, prioritize our employees and customers continue to be the key foundation to drive sustainable top line growth. Now let's turn to slide seven. Our maintenance and development teams continue to collaborate to drive conversions of development work into reoccurring maintenance contracts, made possible by breaking down legacy silos and operating together. The previous fragmentation of our business resulted in single digit conversions. Since operating as a unified one bright view, where development and maintenance work together, we've experienced continued success in cross selling and believe we can achieve conversions of approximately 70% as we progress on our journey. A $50 million plus annual reoccurring maintenance opportunity. To further amplify this, we plan to continue leveraging the collaborative efforts by organically growing our development business in markets where maintenance already operates. In locations where we offer a full suite of services, we are able to better serve our customers, leading to higher cross selling opportunities and a better customer retention. More on that in a minute. Turning to slide eight. While we experienced development schedule delays during the quarter, I want to be clear that the headwinds were timing related. As you can see on the left, we saw our development backlog grow during the quarter by $14 million, offsetting the revenue timing impact we saw within Q3. Our backlog remains robust and we continue to sell into the back half of fiscal 2026 and beyond. Development remains the tip of the spear and we remain highly focused on our ability to enhance our market position by leveraging our existing footprint through development cold starts. We have an industry leading construction business and plan to open 10 new development branches over the next 24 months, which will increase market share and provide a runway for future growth and development. As you can see on the right, development currently operates in 20 of the 36 states where we have a maintenance presence, leaving us a considerable opportunity to organically expand in markets where we already service. This expansion will not only fuel the $1.2 billion development backlog that we expect to realize by 2030, but it will also be the foundation for future conversions that will provide reoccurring maintenance revenue. Moving on to slide nine. We have made great progress in solidifying the foundation for future growth in such a short period of time. But let me remind you, my focus is to achieve consistent, top line, profitable growth. It all starts with our employees and customers and coupled with investments in sellers and our focus on capturing more of our customer share of wallet gives me confidence that the foundation we've laid down will provide a runway for growth and meaningful shareholder value in both the near and long term. With that, I will now turn the