ABM Industries (NYSE: ABM) is having a good Tuesday. The facility services company reported fiscal third-quarter 2026 results that beat Wall Street's earnings and revenue expectations, and investors are rewarding the stock with a 7% jump.

But the real story isn't just a beat. It's that ABM, traditionally known for cleaning and maintaining buildings, is quietly transforming into a player in the high-growth worlds of semiconductors, microgrids, and data centers. And the numbers suggest that transformation is starting to pay off.

Earnings Snapshot

Adjusted earnings per share came in at $1.04, up 27% year over year and ahead of the $1.01 analysts were looking for. Revenue rose 4.2% to $2.317 billion, edging past the $2.310 billion estimate. Organic growth contributed 2.1%, with acquisitions adding another 2.1%.

Adjusted EBITDA climbed 11% to $139.6 million, and segment operating margin improved 40 basis points sequentially to 7.7%. Cash generation was solid too: operating cash flow hit $146.8 million, and free cash flow reached $128.4 million.

ABM ended the quarter with $1.8 billion in debt, and its debt-to-pro forma adjusted EBITDA ratio fell to 2.9x. That's notable because it hit the company's below-3x leverage target a full quarter early.

Business Performance

Looking at the segments, Aviation revenue rose 12% to $328.1 million. Manufacturing and Distribution was the standout, with revenue jumping 18% to $481 million, helped by 8% organic growth and a 10% contribution from WGNSTAR, a recent acquisition.

Education revenue edged higher to $235.8 million, with operating profit up 9% to $23 million and margin expanding 70 basis points to 9.7%. Technical Solutions revenue increased 4% to $259.9 million, but Business & Industry revenue fell 2.6%, mainly due to client exits.

Now, here's where things get interesting. ABM's semiconductor, microgrid, and data-center businesses generated nearly $775 million in revenue through the first nine months of the fiscal year. That's up 26% organically, or about 40% including WGNSTAR. These businesses now account for more than 11% of total revenue and are generating a double-digit blended operating margin.

Semiconductor revenue, in particular, surged 65% organically. And the microgrid business has grown roughly fourfold since 2022, with organic revenue up 17% in the first nine months of fiscal 2026.

Outlook

During the earnings call, management highlighted ABM's growing exposure to data centers, noting that its pipeline is now a multiple of where it stood a year ago. That's a big deal for a company that's often seen as a slow-growth services play.

Management was careful to point out that the current 8% organic growth rate doesn't reflect the opportunity they see over the next two to three years. They expect "very, very healthy" double-digit growth in the business over time.

For the full fiscal 2026, ABM narrowed its adjusted EPS guidance to $3.95-$4.10, from $3.85-$4.15. The analyst consensus sits at $3.98.

Management also expects Technical Solutions to rebound in the fourth quarter, and Business & Industry to return to organic growth around the middle of fiscal 2027. On the project front, ABM expects to execute an approximately $20 million microgrid contract for the U.S. Army Corps of Engineers in calendar 2027.

Data-center revenue, meanwhile, grew 8% organically year to date. It's not the 65% semiconductor growth, but it's steady, and with the pipeline multiplying, the future looks brighter.

ABM Price Action: ABM Industries shares were up 7.10% at $50.39 at the time of publication on Tuesday. The stock is trading near its 52-week high of $50.12.