ABM Industries Incorporated

03/10/2026 | Press release | Distributed by Public on 03/10/2026 12:17

Quarterly Report for Quarter Ending January 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to facilitate an understanding of the results of operations and financial condition of ABM. This MD&A is provided as a supplement to, and should be read in conjunction with, our Financial Statements and our Annual Report on Form 10-K for the year ended October 31, 2025, which has been filed with the SEC. This MD&A contains forward-looking statements about our business, operations, and industry that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, and intentions. Our future results and financial condition may be materially different from those we currently anticipate. See "Forward-Looking Statements" for more information.
Throughout the MD&A, amounts and percentages may not recalculate due to rounding. Unless otherwise indicated, all information in the MD&A and references to years are based on our fiscal years, which end on October 31.
Business Overview
ABM is a leading provider of integrated facility solutions, customized by industry, with a mission to make a difference, every person, every day.
In 2021, we launched our multiyear ELEVATE transformation and systems modernization plan to strengthen our industry leadership, enhance our core service capabilities, and modernize our systems, processes, and tools - with a goal of advancing data integrity, technology enablement, and operational consistency to support long-term growth and value creation.
As this work progresses, ABM is entering a phase of turning modernization efforts into measurable performance improvements across our enterprise.
Looking ahead, ABM will continue to advance this transformation and modernization program where appropriate while optimizing systems and processes company-wide that we expect to drive performance, strengthen client trust, and create long-term value for shareholders.
Restructuring Program
In the fourth quarter of 2025, we launched a Restructuring Program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We recognized $17.1 million of cumulative restructuring charges under this program through the first quarter of 2026. The range of the remaining costs to be incurred related to the Restructuring Program cannot be reasonably estimated at this time.
We will continue to review our overhead and cost structure for efficiency opportunities under this program.
Segment Reporting
Our current reportable segments consist of B&I, M&D, Aviation, Education, and Technical Solutions, as further described below.
REPORTABLE SEGMENTS AND DESCRIPTIONS
B&I, our largest reportable segment, encompasses comprehensive facility solutions, including janitorial and maintenance, facilities engineering, and parking and transportation management to a diverse range of clients. Our expertise extends to commercial real estate properties, including corporate offices for high-tech clients, sports and entertainment venues, and both traditional hospitals and non-acute healthcare facilities. We typically provide these services pursuant to monthly fixed-price, square-foot, cost-plus, and parking arrangements (i.e., management reimbursement, leased location, or allowance) that are obtained through a competitive bid process as well as pursuant to work orders.
M&D provides integrated facility services, engineering, janitorial and maintenance, and other specialized solutions to a variety of manufacturing, distribution, and data center facilities. We typically provide these services pursuant to monthly fixed-price, square-foot, and cost-plus arrangements, that are obtained through a competitive bid process as well as pursuant to work orders.
Aviation provides comprehensive support services to airlines and airports, including parking and transportation management, janitorial and maintenance services, passenger assistance, catering logistics, aircraft cabin maintenance, and transportation solutions. We typically provide services to clients in this segment under master services agreements. These agreements are typically re-bid upon renewal and are generally structured as monthly fixed-price, square-foot, cost-plus, parking, transaction-price, and hourly arrangements.
Education delivers comprehensive facility services to public school districts, private schools, colleges, and universities. Our services include janitorial and custodial services, landscaping and grounds maintenance, facilities engineering, and parking management. These services are typically provided pursuant to monthly fixed-price, square-foot, and cost-plus arrangements that are obtained through either a competitive bid process or re-bid upon renewal as well as pursuant to work orders.
Technical Solutions specializes in comprehensive facility infrastructure services, including mechanical and electrical systems, EV charging station design, installation, and maintenance, as well as microgrid systems encompassing uninterrupted power supply ("UPS") systems and power distribution units. These offerings are strategically leveraged for cross-selling across all our industry groups, both domestically and internationally. Contracts for this segment are generally structured as electrical contracting services for energy related products such as the installation of solar solutions, battery storage, distributed generation, and other specialized electric trade.
Key Financial Highlights
•Revenues increased by $128.6 million, or 6.1%, to $2,243.5 million during the three months ended January 31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.5% and acquisition growth of 0.6%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups, as well as higher project and recurring services revenues associated with mission-critical infrastructure and data center solutions within Technical Solutions. Acquisition growth was driven by a $13.0 million revenue increase from the LMC Acquisition.
•We had a decrease in operating profit of $2.9 million, to $74.7 million, during the three months ended January 31, 2026, as compared to the prior year period. The decrease was primarily attributed to:
◦restructuring charges incurred during the first quarter of 2026 under our Restructuring Program; and
◦service mix and timing of the completion of certain projects due to temporary weather related delays in Technical Solutions.
The decrease was partially offset by:
◦operational efficiencies, including cost savings realized from initiatives implemented under our Restructuring Program.
•Our effective tax rates for the three months ended January 31, 2026, and January 31, 2025, were 25.6% and 21.4%, respectively. Our effective tax rate for the three months ended January 31, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the three months ended January 31, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.
•Net cash provided by operating activities was $62.0 million for the three months ended January 31, 2026, as compared to cash used in operating activities of $106.2 million for the three months ended January 31, 2025. The $168.2 million improvement was primarily driven by favorable changes in working capital, including improved cash collections and timing of payments.
•Dividends of $17.3 million were paid to shareholders, and dividends totaling $0.290 per common share were declared during the three months ended January 31, 2026. Additionally, we repurchased 2.1 million shares for $91.1 million, excluding excise taxes, during the three months ended January 31, 2026.
•At January 31, 2026, total outstanding borrowings under our Amended Credit Facility were $1.6 billion. At January 31, 2026, we had up to $507.7 million of borrowing capacity.
Results of Operations
Three Months Ended January 31, 2026, Compared with the Three Months Ended January 31, 2025
Consolidated
Three Months Ended January 31,
(in millions, except per share amounts) 2026 2025 Increase / (Decrease)
Revenues $ 2,243.5 $ 2,114.9 $ 128.6 6.1%
Operating expenses 1,983.5 1,855.1 128.4 6.9%
Gross margin 11.6 % 12.3 % (69) bps
Selling, general and administrative expenses 169.8 169.0 0.8 0.4%
Restructuring and related expenses 3.7 - 3.7 NM*
Amortization of intangible assets 11.9 13.3 (1.4) (10.0)%
Operating profit 74.7 77.6 (2.9) (3.7)%
Income from unconsolidated affiliates 1.4 0.8 0.6 88.3%
Interest expense (24.0) (22.9) (1.1) (4.9)%
Income before income taxes 52.1 55.5 (3.4) (6.0)%
Income tax provision (13.4) (11.9) (1.5) (12.7)%
Net income 38.8 43.6 (4.8) (11.1)%
Other comprehensive income
Interest rate swaps (1.9) (1.1) (0.8) (68.0)%
Foreign currency translation and other 9.5 (7.6) 17.1 NM*
Income tax benefit 0.5 0.3 0.2 70.2%
Comprehensive income $ 46.9 $ 35.2 $ 11.7 33.5%
*Not meaningful
Revenues
Revenues increased by $128.6 million, or 6.1%, to $2,243.5 million during the three months ended January 31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 5.5% and acquisition growth of 0.6%. The organic revenue growth was due to net new business and expansion of business with existing customers among all our industry groups, as well as higher project and recurring services revenues associated with mission-critical infrastructure and data center solutions within Technical Solutions. Acquisition growth was driven by a $13.0 million revenue increase from the LMC Acquisition.
Operating Expenses
Operating expenses increased by $128.4 million, or 6.9%, to $1,983.5 million during the three months ended January 31, 2026, as compared to the prior year period. Gross margin decreased by 69 bps to 11.6% in the three months ended January 31, 2026, from 12.3% in the prior year period. The decrease in gross margin was primarily driven by strategic pricing decisions for contract rebids within B&I, service mix within M&D and Technical Solutions, and weather-related disruptions in Aviation and Technical Solutions. This was partially offset by operational efficiencies achieved through our Restructuring Program as well as positive operational impacts from weather-related disruptions within Education.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $0.8 million, or 0.4%, to $169.8 million during the three months ended January 31, 2026, as compared to the prior year period. The increase in selling, general and administrative expenses was primarily attributable to:
•a $2.5 million increase in costs associated with systems' go-live.
The increase was partially offset by:
•a $2.4 million decrease in accruals for potential legal settlements.
Amortization of Intangible Assets
Amortization of intangible assets decreased by $1.4 million, or 10.0%, to $11.9 million during the three months ended January 31, 2026, as compared to the prior year period. The decrease was primarily attributable to certain intangibles acquired as part of the Able and GCA acquisitions.
Interest Expense
Interest expense increased by $1.1 million, or 4.9%, to $24.0 million during the three months ended January 31, 2026, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.
Income Taxes from Operations
Our effective tax rates from income on operations for the three months ended January 31, 2026, and January 31, 2025, were 25.6% and 21.4%, respectively, resulting in provisions for taxes of $13.4 million and $11.9 million, respectively.
Our effective tax rate for the three months ended January 31, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the three months ended January 31, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.
The WOTC and FEZ credit are federal tax credits available to employers for hiring individuals from certain targeted groups. We have historically benefited from these credits, and they expired on December 31, 2025. As of January 31, 2026, the credits have not been renewed and our effective tax rate for the three months ended January 31, 2026, includes a benefit only for those employees who started work before December 31, 2025. Any extension or renewal of the WOTC and FEZ credit is subject to future legislative action by Congress and would occur retroactively.
Interest Rate Swaps
We had a loss of $1.9 million on interest rate swaps during the three months ended January 31, 2026, as compared to a loss of $1.1 million during the three months ended January 31, 2025, primarily due to underlying changes in the fair value of our interest rate swaps.
Foreign Currency Translation
We had a foreign currency translation gain of $9.5 million during the three months ended January 31, 2026, as compared to a foreign currency translation loss of $7.6 million during the three months ended January 31, 2025. This change was due to fluctuations in the exchange rate between the U.S. dollar ("USD") and the British pound sterling ("GBP"). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.
Segment Information
Financial Information for Each Reportable Segment
Three Months Ended January 31,
(in millions) 2026 2025 Increase / (Decrease)
Revenues
Business & Industry $ 1,065.1 $ 1,022.9 $ 42.2 4.1%
Manufacturing & Distribution 422.3 394.3 28.0 7.1%
Aviation 297.7 270.1 27.6 10.2%
Education 228.7 225.3 3.4 1.5%
Technical Solutions 229.7 202.3 27.4 13.6%
$ 2,243.5 $ 2,114.9 $ 128.6 6.1%
Operating profit
Business & Industry $ 79.7 $ 79.4 $ 0.3 0.4%
Operating profit margin 7.5 % 7.8 % (28) bps
Manufacturing & Distribution 36.3 39.4 (3.1) (7.7)%
Operating profit margin 8.6 % 10.0 % (139) bps
Aviation 12.6 12.2 0.4 2.7%
Operating profit margin 4.2 % 4.5 % (31) bps
Education 21.6 14.0 7.6 54.2%
Operating profit margin 9.4 % 6.2 % 322 bps
Technical Solutions 8.4 16.6 (8.2) (49.0)%
Operating profit margin 3.7 % 8.2 % (452) bps
Corporate (81.9) (83.2) 1.3 1.6%
Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions (1.4) (0.8) (0.6) (88.3)%
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions (0.5) - (0.5) NM*
$ 74.7 $ 77.6 $ (2.9) (3.7)%
*Not meaningful
Business & Industry
Three Months Ended January 31,
($ in millions) 2026 2025 Increase / (Decrease)
Revenues $ 1,065.1 $ 1,022.9 $ 42.2 4.1%
Operating profit 79.7 79.4 0.3 0.4%
Operating profit margin 7.5 % 7.8 % (28) bps
B&I revenues increased by $42.2 million, or 4.1%, to $1,065.1 million during the three months ended January 31, 2026, as compared to the prior year period. The revenue increase was primarily driven by client expansions domestically and new client wins internationally as well as higher volumes of work orders across all geographies. This includes strategic pricing decisions for contract rebids and proactive extensions. Management reimbursement revenues for this segment totaled $73.8 million and $71.3 million for the three months ended January 31, 2026 and 2025, respectively.
Operating profit increased by $0.3 million, or 0.4%, to $79.7 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 28 bps to 7.5% in the three months ended January 31, 2026, from 7.8% in the prior year period. The decrease in operating profit margin was primarily driven by strategic pricing decisions for contract rebids and proactive extensions, and investments made in the second half of 2025 to hire certain sales expertise to support future growth, partially offset by operational efficiencies achieved through our Restructuring Program.
Manufacturing & Distribution
Three Months Ended January 31,
($ in millions) 2026 2025 Increase / (Decrease)
Revenues $ 422.3 $ 394.3 $ 28.0 7.1%
Operating profit 36.3 39.4 (3.1) (7.7)%
Operating profit margin 8.6 % 10.0 % (139) bps
M&D revenues increased by $28.0 million, or 7.1%, to $422.3 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to the expansion of business with existing clients and new business wins.
Operating profit decreased by $3.1 million, or 7.7%, to $36.3 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 139 bps to 8.6% in the three months ended January 31, 2026, from 10.0% in the prior year period. The decrease in operating profit margin was primarily attributable to contract mix and investments made in the second half of 2025 to hire certain technical expertise to support future growth.
Aviation
Three Months Ended January 31,
($ in millions) 2026 2025 Increase / (Decrease)
Revenues $ 297.7 $ 270.1 $ 27.6 10.2%
Operating profit 12.6 12.2 0.4 2.7%
Operating profit margin 4.2 % 4.5 % (31) bps
Aviation revenues increased by $27.6 million, or 10.2%, to $297.7 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to new business wins in the second half of 2025 and scope expansions with existing clients both domestically and internationally. Management reimbursement revenues for this segment totaled $15.6 million and $10.6 million for the three months ended January 31, 2026 and 2025, respectively.
Operating profit increased by $0.4 million, or 2.7%, to $12.6 million for the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 31 bps to 4.2% in the three months ended January 31, 2026. The operating profit margin decreased primarily due to weather-related disruptions at airport locations.
Education
Three Months Ended January 31,
($ in millions) 2026 2025 Increase
Revenues $ 228.7 $ 225.3 $ 3.4 1.5%
Operating profit 21.6 14.0 7.6 54.2%
Operating profit margin 9.4 % 6.2 % 322 bps
Education revenues increased by $3.4 million, or 1.5%, to $228.7 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to new business wins.
Operating profit increased by $7.6 million, or 54.2%, to $21.6 million for the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin increased by 322 bps to 9.4% in the three months ended January 31, 2026, from 6.2% in the prior year period. The increase in operating profit margin was primarily attributable to operational efficiencies, partially aided by the impact of weather-related school closures on operating costs.
Technical Solutions
Three Months Ended January 31,
($ in millions) 2026 2025 Increase / (Decrease)
Revenues $ 229.7 $ 202.3 $ 27.4 13.6%
Operating profit 8.4 16.6 (8.2) (49.0)%
Operating profit margin 3.7 % 8.2 % (452) bps
Technical Solutions revenues increased by $27.4 million, or 13.6%, to $229.7 million during the three months ended January 31, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 7.1% and acquisition growth of 6.4%. The organic revenue growth was primarily driven by our Mission Critical business, reflecting higher project and recurring services revenues associated with mission-critical infrastructure and data center solutions. Acquisition growth was driven by a $13.0 million revenue increase from the LMC Acquisition.
Operating profit decreased by $8.2 million, or 49.0%, to $8.4 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 452 bps to 3.7% in the three months ended January 31, 2026, from 8.2% in the prior year period. The decrease in operating profit margin was primarily attributable to service mix, as well as temporary weather-related delays in the completion of certain projects.
Corporate
Three Months Ended January 31,
($ in millions) 2026 2025 Decrease
Corporate expenses $ (81.9) $ (83.2) $ 1.3 1.6 %
Corporate expenses decreased by $1.3 million, or 1.6%, to $81.9 million during the three months ended January 31, 2026, as compared to the prior year period. The decrease in corporate expenses was primarily attributable to:
•a $4.8 million decrease in accruals for potential legal settlements.
The decrease was partially offset by:
•a $3.7 million increase in restructuring charges under our Restructuring Program.
Liquidity and Capital Resources
Our primary sources of liquidity are operating cash flows and borrowing capacity under our Amended Credit Facility. We assess our liquidity in terms of our ability to generate cash to fund our short- and long-term cash requirements. As such, we project our anticipated cash requirements as well as cash flows generated from operating activities to meet those needs.
In addition to normal working capital requirements, we anticipate that our short- and long-term cash requirements will include funding legal settlements, insurance claims, dividend payments, capital expenditures, share repurchases, mandatory loan repayments, contingent consideration payments from acquisitions, and systems and technology transformation initiatives under our ELEVATEstrategy. We anticipate long-term cash uses may also include strategic acquisitions. On a long-term basis, we will continue to rely on our Amended Credit Facility for any long-term funding not provided by operating cash flows.
We believe that our operating cash flows and borrowing capacity under our Amended Credit Facility are sufficient to fund our cash requirements for the next 12 months. In the event that our plans change or our cash requirements are greater than we anticipate, we may need to access the capital markets to finance future cash requirements. However, there can be no assurance that such financing will be available to us should we need it or, if available, that the terms will be satisfactory to us and not dilutive to existing shareholders.
Credit Facility
On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility, consisting of a $900.0 million revolver and an $800.0 million amortizing term loan. In accordance with terms of the Credit Facility, the revolver was reduced to $800.0 million on September 1, 2018. On February 26, 2025, we amended and restated the Credit Facility (the "Amended Credit Facility"), extending the maturity date to February 26, 2030, and increasing the capacity of the revolving credit facility from $1.3 billion to $1.6 billion and the then-remaining term loan outstanding from $528.1 million to $600.0 million. The Amended Credit Facility provides for the issuance of up to $250.0 million for standby letters of credit and the issuance of up to $100.0 million in swingline advances.
The Amended Credit Facility contains certain covenants, including a maximum total net leverage ratio of 5.00 to 1.00, a maximum secured net leverage ratio of 4.00 to 1.00, and a minimum interest coverage ratio of 1.50 to 1.00, as well as other financial and non-financial covenants. In the event of a material acquisition, as defined in the Amended Credit Facility, we may elect to increase the maximum total net leverage ratio to 5.50 to 1.00 for a total of four fiscal quarters and increase the maximum secured net leverage ratio to 4.50 to 1.00 for a total of four fiscal quarters. Our borrowing capacity is subject to, and limited by, compliance with the covenants described above. At January 31, 2026, we were in compliance with these covenants.
During the three months ended January 31, 2026, we made principal payments under the term loan of $7.5 million. At January 31, 2026, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.6 billion and $23.5 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 5.44%. At January 31, 2026, we had up to $507.7 million of borrowing capacity.
Reinvestment of Foreign Earnings
We plan to reinvest our foreign earnings to fund future non-U.S. growth and expansion, and we do not anticipate remitting such earnings to the United States.
IFM Insurance Company
IFM Assurance Company ("IFM") is a wholly owned captive insurance company that we formed in 2015. IFM is part of our enterprise-wide, multiyear insurance strategy that is intended to better position our risk and safety programs and provide us with increased flexibility in the end-to-end management of our insurance programs. IFM began providing coverage to us as of January 1, 2015.
Share Repurchases
We repurchased shares under the share repurchase program during the three months ended January 31, 2026, as summarized below. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase program may be suspended or discontinued at any time without prior notice. At January 31, 2026, authorization for $92.0 million of repurchases remained under our share repurchase program.
(in millions, except per share amounts) Three Months Ended
January 31, 2026 		Three Months Ended January 31, 2025
Total number of shares purchased 2.07 0.42
Average price paid per share(1)
$ 44.13 $ 51.23
Total cash paid for share repurchases(1)
$ 91.1 $ 21.3
(1)Average price paid per share and total cash paid for share repurchases does not include any excise tax for share repurchases as part of the Inflation Reduction Act of 2022.
Cash Flows
In addition to revenues and operating profit, our management views operating cash flows as a good indicator of financial performance, because strong operating cash flows provide opportunities for growth both organically and through acquisitions. Operating cash flows primarily depend on: revenue levels; the quality and timing of collections of accounts receivable; the timing of payments to suppliers and other vendors; the timing and amount of income tax payments; and the timing and amount of payments on insurance claims and legal settlements.
Three Months Ended January 31,
(in millions) 2026 2025
Net cash provided by (used in) operating activities $ 62.0 $ (106.2)
Net cash used in investing activities (12.6) (14.4)
Net cash (used in) provided by financing activities (55.2) 116.9
Operating Activities
Net cash provided by operating activities was $62.0 million for the three months ended January 31, 2026, as compared to cash used in operating activities of $106.2 million for the three months ended January 31, 2025. The $168.2 million improvement was primarily driven by favorable changes in working capital, including improved cash collections and timing of payments.
Investing Activities
Net cash used in investing activities decreased by $1.8 million during the three months ended January 31, 2026, as compared to the prior year period. This decrease was primarily due to lower purchases of property, plant and equipment.
Financing Activities
Net cash used in financing activities was $55.2 million during the three months ended January 31, 2026, as compared to net cash provided by financing activities of $116.9 million during the three months ended January 31, 2025. This quarter's activity was primarily related to an increase in share repurchases and lower net borrowings from our Amended Credit Facility.
Contingencies
For disclosures on contingencies, see Note 11, "Commitments and Contingencies," of the Notes to unaudited Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.
Critical Accounting Policies and Estimates
Our Financial Statements are prepared in accordance with U.S. GAAP, which require us to make certain estimates in the application of our accounting policies based on the best assumptions, judgments, and opinions of our management. There have been no significant changes to our critical accounting policies and estimates. For a description of our critical accounting policies, see Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the year ended October 31, 2025.
Recently Issued Accounting Pronouncements
Accounting Standard Updates
Topic Summary Effective Date/
Method of Adoption
2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures This ASU, issued in December 2023, is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. We are currently evaluating the impact of implementing this guidance on our financial statements.
This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses This ASU, issued in November 2024, is intended to improve financial reporting by requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. We are currently evaluating the impact of implementing this guidance on our financial statements.
This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.
2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
This ASU, issued in September 2025, removes all references to prescriptive and sequential software development stages (referred to as "project stages") throughout Subtopic 350-40 and requires the capitalization of software costs to begin when 1) management has authorized and committed to funding the software project, and 2) it is probable that the project will be completed and the software will be used to perform the function intended.
This ASU is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.
2025-11
Interim Reporting (Topic 270): Narrow-Scope Improvements
This ASU, issued in December 2025, improves the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments also add a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. We are currently evaluating the impact of implementing this guidance on our financial statements.
This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.
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