BrightView Holdings, Inc.

Good day, everyone, and welcome to today's Brightview earnings call. At this time, all participants are in the 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 Stosko, Vice President of Finance and Investor Relations. Please go ahead, sir.

Good morning, and thank you for joining Brightview's fourth quarter and full year fiscal 2025 earnings call. Dale Asplund, Brightview's President and Chief Executive Officer, and Brett Urban, Chief Financial Officer, are on the call. I'll now refer you to slide two 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 will refer to certain non-GAAP financial measures. Please see our press release in 8K 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. 2025 was another transformational year here at Brightview. We continue prioritizing our frontline employees by investing in consistent service levels and refreshing our fleet. enabling a best-in-class service experience to our customers each and every day. We have also made progress in expanding our sales force, hiring about 100 new sellers in the year, which positions us to drive top-line profitable growth in the near term. We offset the investments by continuing to leverage our size and scale and drive meaningful efficiencies within our business. These initiatives, as well as the hard work and dedication of our nearly 19,000 team members resulted in the highest ever adjusted EBITDA and margin. Our unwavering focus on delivering world-class service to our customers continues to yield meaningful momentum in customer retention, improving about 200 basis points from the prior year and about 400 basis points since the beginning of my tenure in October of 2023. I want to thank our team members for their continued efforts to put the customer at the center of everything we do and position ourselves as the service provider of choice. Additionally, as part of our disciplined approach to capital allocation and commitment to driving shareholder value, we have increased our share repurchase authorization from $100 million to $150 million, and we are evaluating the pace at which we will execute. We believe Our current valuation is dislocated from the tremendous progress we have made over the past two years and the significant opportunities that lie ahead. Our strong balance sheet and growth outlook gives me the confidence to expand the program and return capital to shareholders in a strategic and opportunistic way. As we turn the corner into fiscal 2026, I want to reemphasize my primary focus of delivering sustainable and profitable top-line growth in the near and long term. I believe the investments we've made and will continue to make, such as consistent service levels and expanding our sales force, have strengthened the foundation of our business and will position us to inflect top-line growth in 2026, as reflected in our guidance, which Brett will touch on in a bit. Our formula remains the same. prioritize our frontline, which, in turn, reduces turnover and leads to improved customer retention. All key fundamentals to top-line growth and larger, more profitable branches. This, coupled with ramping up our sales force and unlocking our size and scale, while strategically allocating capital, will position Brightview as a clear investment of choice. Moving to slide five. We continue to see sequential improvements in our frontline turnover. Two years ago, this metric was nearly 100% with the bottom quartile of our workforce turning over four to five times per year. This created inconsistent levels of service and required additional costs to hire and onboard new employees. Through continued investments in our employees, we've been able to drive meaningful improvement. The progress we've made continues to deliver cost savings And we've reinvested into our frontline as well as more consistent service levels to our customers. This has been the key to solidifying our foundation and will continue to be a priority moving forward as we position Brightview as the employer of choice. Turning to slide six, I'd like to highlight the sequential improvement we've made in customer retention over the past two years, which is now approximately 83%. 400 basis point improvement since the start of our transformation two years ago. This is a reflection of the exceptional service our employees deliver every day. Although we have seen great improvement, there is even more opportunity across our branch network, as best in class branches sit at 90 plus percent customer retention. As I said from day one, becoming the service provider of choice begins with prioritizing our employees and providing best-in-class service. This formula will continue to drive retention improvements across our business and contribute to our growth in 2026 and beyond. Now let's move to slide seven. As I just outlined, we made significant progress in solidifying the foundation of our business and are making investments to expand our sales force. At our investor day in February, we committed to adding approximately 50% to our sales force, equating to about 500 net new hires through 2030. In 2025, we added roughly 100 sellers to the business, and we have been able to fund the investments through continued G&A savings and efficiencies. It's important to note that the hiring of these sellers was more heavily weighted to the back half of the year. In 2026, we will continue to leverage savings in G&A to fund the investment into our sales organization. In the bottom right, you can see that our current tenure is relatively new, merely a function of ramping our sales force. Training of our new sellers takes time, and we typically see improved productivity after their first year. However, we continue to invest in technology and training to help onboard and speed up the effectiveness of both our new and tenured sellers. As we move forward, expanding our sales force along with other key growth levers, which I will touch on on the next slide, will be key to driving sustainable, top-line, profitable growth. Moving on to slide eight. In my first two years, we've made significant strides in unifying our business, enhancing operational efficiencies, investing for the future, and continuing to prioritize our employees and customers. effectively solidifying the foundation of our business. Our development and maintenance teams are working together as a unified One Brightview, focused on cross-selling into future reoccurring maintenance work. Additionally, with our record capital spend last year was an investment in over 30 new tree trucks, with more landing at branches in 2026. Investments like these will help bolster and expand our service offering to our customers. Also, by leveraging our national presence, we can effectively service large national accounts as a single point of contact provider. These multifaceted levers, along with the investments we are making in our sales force, have positioned us to deliver top-line profitable growth in 2026 and beyond and deliver value for all our stakeholders.