BrightView (NYSE: BV) grows revenue but posts Q2 2026 loss to common
BrightView Holdings, Inc. reported higher revenue but continued losses for the quarter ended March 31, 2026. Net service revenues rose to $702.9 million from $662.6 million, driven mainly by Maintenance Services and a strong snow season, while Development Services revenue declined.
Income from operations fell to $16.1 million from $22.3 million as gross profit and margins compressed. Net income was $1.7 million, but after $8.8 million of preferred dividends, common shareholders had a net loss of $7.1 million, or $(0.08) per share.
For the first six months, revenue reached $1,317.7 million and BrightView recorded a net loss of $13.5 million, or $(0.33) per share to common holders. Cash from operations was $82.3 million, but heavy capital spending of $113.5 million and share repurchases reduced cash to $10.1 million. Long-term debt stood at $823.9 million, Series A preferred equity at $507.1 million, and stockholders’ equity at $1,241.0 million.
Positive
- None.
Negative
- None.
Key Figures
Key Terms
Maintenance Services financial
Development Services financial
Segment Adjusted EBITDA financial
Series A Convertible Preferred Stock financial
cash flow hedges financial
Term SOFR financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of Registrant’s Common Stock outstanding as of April 30, 2026 was
Table of Contents
Table of Contents
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PART I. |
FINANCIAL INFORMATION |
6 |
Item 1. |
Financial Statements (Unaudited) |
6 |
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Consolidated Balance Sheets |
6 |
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Consolidated Statements of Operations |
7 |
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Consolidated Statements of Comprehensive Income (Loss) |
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Consolidated Statements of Stockholders’ Equity and Mezzanine Equity |
9 |
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Consolidated Statements of Cash Flows |
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Notes to Unaudited Consolidated Financial Statements |
11 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
42 |
Item 4. |
Controls and Procedures |
42 |
PART II. |
OTHER INFORMATION |
43 |
Item 1. |
Legal Proceedings |
43 |
Item 1A. |
Risk Factors |
43 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
43 |
Item 3. |
Defaults Upon Senior Securities |
43 |
Item 4. |
Mine Safety Disclosures |
43 |
Item 5. |
Other Information |
43 |
Item 6. |
Exhibits |
44 |
Signatures |
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2
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains “forward-looking statements” within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10¬Q, including statements concerning our plans, objectives, goals, beliefs, business outlook, business trends, expectations regarding our industry, strategy, future events, future operations, future liquidity and financial position, future revenues, projected costs, prospects, plans and objectives of management and other information, may be forward-looking statements.
Words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates,” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, or guarantees of future performance and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under the heading “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Some of the key factors that could cause actual results to differ from our expectations include risks related to:
3
Table of Contents
4
Table of Contents
We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, any change in assumptions, beliefs or expectations or any change in circumstances upon which any such forward-looking statements are based, except as required by law.
5
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
BrightView Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
(In millions, except par value and share data)
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March 31, |
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September 30, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Accounts receivable, net |
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Unbilled revenue |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Operating lease assets |
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Other assets |
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Total assets |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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Deferred revenue |
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Current portion of self-insurance reserves |
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Accrued expenses and other current liabilities |
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Current portion of operating lease liabilities |
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Total current liabilities |
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Long-term debt, net |
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Deferred tax liabilities |
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Self-insurance reserves |
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Long-term operating lease liabilities |
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Other liabilities |
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Total liabilities |
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Mezzanine equity: |
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Series A convertible preferred shares, $ |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Treasury stock, at cost; |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income (loss) |
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Total stockholders’ equity |
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Total liabilities, mezzanine equity and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
6
Table of Contents
BrightView Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
(In millions, except per share data)
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Three Months Ended |
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Six Months Ended |
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2026 |
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2025 |
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2026 |
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2025 |
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Net service revenues |
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$ |
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$ |
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$ |
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$ |
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Cost of services provided |
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Gross profit |
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Selling, general and administrative expense |
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Amortization expense |
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Income from operations |
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Other expense |
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Interest expense, net |
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Income (loss) before income taxes |
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Income tax expense (benefit) |
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Net income (loss) |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Less: Dividends on Series A convertible preferred shares |
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Net (loss) attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Earnings (loss) per share: |
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Basic and diluted (loss) per share |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
) |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
7
Table of Contents
BrightView Holdings, Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
(In millions)
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Three Months Ended |
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Six Months Ended |
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2026 |
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2025 |
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2026 |
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2025 |
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Net income (loss) |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Net derivative gains (losses) and other costs arising during the period, net of tax expense (benefit) of $ |
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Reclassification of (gains) into net income, net of tax (expense) of $( |
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( |
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( |
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( |
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( |
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Other comprehensive income (loss) |
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( |
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Comprehensive income (loss) |
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$ |
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$ |
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$ |
( |
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$ |
( |
) |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
8
Table of Contents
BrightView Holdings, Inc.
Consolidated Statements of Changes in Stockholders’ Equity and Mezzanine Equity
Three and Six Months Ended March 31, 2026 and 2025
(Unaudited)
(In millions)
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Stockholders’ Equity |
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Mezzanine Equity |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Treasury |
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Total |
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Preferred |
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Shares |
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Amount |
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Capital |
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Deficit |
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(Loss) |
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Stock |
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Equity |
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Shares |
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Amount |
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Balance, December 31, 2025 |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income, net of tax |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Capital contributions and issuance of common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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|||
Equity-based compensation |
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— |
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— |
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— |
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— |
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— |
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|
|
— |
|
|
— |
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||
Repurchase of common stock and distributions |
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— |
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— |
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— |
|
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— |
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|
— |
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|
( |
) |
|
( |
) |
|
— |
|
|
— |
|
Series A Preferred Stock dividends |
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— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
Balance, March 31, 2026 |
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
|
|
$ |
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|||||||
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|||||||||
Balance, September 30, 2025 |
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
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|
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$ |
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||||||
Net (loss) |
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— |
|
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— |
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— |
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( |
) |
|
— |
|
|
— |
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|
( |
) |
|
— |
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— |
|
Other comprehensive income, net of tax |
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— |
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— |
|
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— |
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— |
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|
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— |
|
|
|
|
— |
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|
— |
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||
Capital contributions and issuance of common stock |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
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|
— |
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|||
Equity-based compensation |
|
— |
|
|
— |
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|
|
|
— |
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|
— |
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|
— |
|
|
|
|
— |
|
|
— |
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||
Repurchase of common stock and distributions |
|
— |
|
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— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
— |
|
|
— |
|
Series A Preferred Stock dividends |
|
— |
|
|
— |
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|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
Balance, March 31, 2026 |
|
|
$ |
|
$ |
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$ |
( |
) |
$ |
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$ |
( |
) |
$ |
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$ |
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|||||||
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Stockholders’ Equity |
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Mezzanine Equity |
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|||||||||||||||||||||||
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Treasury |
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Total |
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Preferred |
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Shares |
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Amount |
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Capital |
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Deficit |
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Income |
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Stock |
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Equity |
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Shares |
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Amount |
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Balance, December 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
$ |
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$ |
( |
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$ |
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$ |
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|||||||
Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive (loss), net of tax |
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— |
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— |
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— |
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|
— |
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( |
) |
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— |
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( |
) |
|
— |
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— |
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Capital contributions and issuance of common stock |
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— |
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— |
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— |
|
|
— |
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|
— |
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— |
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— |
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— |
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Equity-based compensation |
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— |
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— |
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— |
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— |
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— |
|
|
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|
— |
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|
— |
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||
Repurchase of common stock and distributions |
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— |
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— |
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— |
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— |
|
|
— |
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( |
) |
|
( |
) |
|
— |
|
|
— |
|
Series A Preferred Stock dividends |
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— |
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— |
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( |
) |
|
— |
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|
— |
|
|
— |
|
|
( |
) |
|
— |
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|
— |
|
Balance, March 31, 2025 |
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
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$ |
( |
) |
$ |
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$ |
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|||||||
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Balance, September 30, 2024 |
|
|
$ |
|
$ |
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$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
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$ |
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||||||
Net (loss) |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
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— |
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— |
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Other comprehensive income, net of tax |
|
— |
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— |
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— |
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|
— |
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|
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— |
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— |
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— |
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||
Capital contributions and issuance of common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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|||
Equity-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Repurchase of common stock and distributions |
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— |
|
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— |
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— |
|
|
— |
|
|
— |
|
|
( |
) |
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( |
) |
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— |
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— |
|
Series A Preferred Stock dividends |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
Balance, March 31, 2025 |
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
|
|
$ |
|
|||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
9
Table of Contents
BrightView Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
|
|
Six Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net (loss) |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Amortization of financing costs and original issue discount |
|
|
|
|
|
|
||
Loss on debt extinguishment |
|
|
|
|
|
|
||
Deferred taxes |
|
|
( |
) |
|
|
( |
) |
Equity-based compensation |
|
|
|
|
|
|
||
Realized gain on hedges |
|
|
( |
) |
|
|
( |
) |
Gain on disposal of property and equipment |
|
|
( |
) |
|
|
( |
) |
Other non-cash activities |
|
|
|
|
|
|
||
Change in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
|
|
Unbilled and deferred revenue |
|
|
|
|
|
|
||
Other operating assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and other operating liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of property and equipment |
|
|
|
|
|
|
||
Other investing activities |
|
|
|
|
|
|
||
Net cash (used) by investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Repayments of finance lease obligations |
|
|
( |
) |
|
|
( |
) |
Repayments of receivables financing agreement |
|
|
( |
) |
|
|
( |
) |
Proceeds from receivables financing agreement, net of issuance costs |
|
|
|
|
|
|
||
Debt issuance and prepayment costs |
|
|
|
|
|
( |
) |
|
Series A preferred stock dividend |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of common stock, net of share issuance costs |
|
|
|
|
|
|
||
Repurchase of common stock and distributions |
|
|
( |
) |
|
|
( |
) |
Contingent business acquisition payments |
|
|
|
|
|
( |
) |
|
Increase (decrease) in book overdrafts |
|
|
|
|
|
( |
) |
|
Other financing activities |
|
|
|
|
|
|
||
Net cash (used) by financing activities |
|
|
( |
) |
|
|
( |
) |
Net change in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Supplemental Cash Flow Information: |
|
|
|
|
|
|
||
Cash paid for income taxes, net |
|
$ |
|
|
$ |
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Accrual for property and equipment |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
10
Table of Contents
BrightView Holdings, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
(In millions, except per share and share data)
1. Business
BrightView Holdings, Inc. (the “Company” and, collectively with its consolidated subsidiaries, “BrightView”) provides landscape maintenance and enhancements, landscape development, snow removal and other landscape related services for commercial customers throughout the United States. BrightView is aligned into
Basis of Presentation
These consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and are unaudited.
In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, including normal, recurring accruals that are necessary for a fair presentation of the Company’s operations for the periods presented in conformity with GAAP. All intercompany activity and balances have been eliminated from the consolidated financial statements. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year.
The Consolidated Balance Sheet as of September 30, 2025, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the fiscal year ended September 30, 2025, but does not include all disclosures required by GAAP, for annual financial statements. For a more complete discussion of the Company’s accounting policies and certain other information, refer to the audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2025, filed with the Securities and Exchange Commission (“SEC”).
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. On an ongoing basis, management reviews its estimates, including those related to allowances for doubtful accounts, revenue recognition, self-insurance reserves, estimates related to the Company’s assessment of goodwill for impairment, useful lives for depreciation and amortization, realizability of deferred tax assets, and litigation based on currently available information. Changes in facts and circumstances may result in revised estimates and actual results may differ from estimates.
2. Recent Accounting Pronouncements
Segment Reporting
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of reportable segment's profit or loss and assets. The purpose of the guidance is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The Company adopted the updated accounting guidance on a retrospective basis for the year ended September 30, 2025. The adoption of ASU No. 2023-07 did not have a material impact on the Company's consolidated financial statements. Refer to Note 12 "Segments" to our consolidated financial statements for related disclosures.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-03, Income Statement (Subtopic 220-40): Expense Disaggregation Disclosures. The ASU enhances disclosure of income statement expense categories to improve transparency and provide financial
11
Table of Contents
statement users with more detailed information about the nature, amount, and timing of expenses impacting financial performance. In January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of the update. The amendment is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is in the process of evaluating the impact of ASU No. 2024-03 on its consolidated financial statements.
Accounting for Software Costs
In August 2025, the FASB issued ASU No. 2025-06, Intangibles (Subtopic 350-40): Goodwill and Other Internal-Use Software. The ASU removes all reference to prescriptive and sequential software development stages and requires entities to start capitalizing software costs when both management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The amendment is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is in the process of evaluating the impact of ASU No. 2025-06 on its consolidated financial statements.
Payment-in-Kind Dividends
In April 2026, the FASB issued ASU No. 2026-01, Equity (Topic 505): Initial Measurement of Payment-in-Kind Dividends on Equity-Classified Preferred Stock. The ASU standardizes the accounting for payment-in-kind dividends on equity-classified preferred stock. The amendment is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods. The Company is in the process of evaluating the impact of ASU No. 2026-01 on its consolidated financial statements.
3. Revenue
The Company’s revenue is generated from Maintenance Services and Development Services. The Company generally recognizes revenue from the sale of services as the services are performed, typically ratably over the term of the contract(s), which the Company believes to be the best measure of progress. The Company recognizes revenues as it transfers control of products and services to its customers. The Company recognizes revenue in an amount reflecting the total consideration it expects to receive from the customer. Revenue is recognized according to the following five step model: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. The Company determined that for contracts containing multiple performance obligations, stand-alone selling price is readily determinable for each performance obligation and therefore allocation of the transaction price to multiple performance obligations is not necessary. The transaction price will include estimates of variable consideration, such as returns and provisions for doubtful accounts and sales incentives, to the extent it is probable that a significant reversal of revenue recognized will not occur. In all cases, when a sale is recorded by the Company, no significant uncertainty exists surrounding the purchaser’s obligation to pay.
Maintenance Services
The Company’s Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services. Landscape maintenance services that are primarily viewed as non-discretionary, such as lawn care, mowing, gardening, mulching, leaf removal, irrigation and tree care, are provided under recurring annual contracts, which typically range from one to three years in duration and are generally cancellable by the customer with 30-90 days’ notice. Snow removal services are provided on either fixed fee based contracts or per occurrence contracts. Both landscape maintenance services and snow removal services can also include enhancement services that represent supplemental maintenance or improvement services generally provided under contracts of short duration related to specific services. Revenue for landscape maintenance and snow removal services under fixed fee models is recognized over time using an output based method. Additionally, a portion of the Company’s recurring fixed fee landscape maintenance and snow removal services are recorded under the series guidance. The right to invoice practical expedient is generally applied to revenue related to landscape maintenance and snow removal services performed in relation to per occurrence contracts as well as enhancement services. When use of the practical expedient is not appropriate for these contracts, revenue is recognized using a cost-to-cost input method. Fees for contracted landscape maintenance services are typically billed on an equal monthly basis. Fees for fixed fee snow removal services are typically billed on an equal monthly basis during snow season, while fees for time and material or other activity-based snow removal services are typically billed as the services are performed. Fees for enhancement services are typically billed as the services are performed.
12
Table of Contents
Development Services
Development Services revenues are generated primarily through landscape architecture and development services. These revenues are primarily recognized over time using the cost-to-cost input method, measured by the percentage of cost incurred to date to the estimated total cost for each contract, which we believe to be the best measure of progress. The full amount of anticipated losses on contracts is recorded as soon as such losses can be estimated. These losses are immaterial to current and historical operations. Changes in job performance, job conditions, and estimated profitability, including final contract settlements, may result in revisions to costs and revenue and are recognized in the period in which the revisions are determined.
Disaggregation of revenue
The following table presents the Company’s reportable segment revenues, disaggregated by revenue type. The Company disaggregates revenue from contracts with customers into major services lines. The Company has determined that disaggregating revenue into these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the business segment reporting information in Note 12 “Segments”, the Company’s reportable segments are Maintenance Services and Development Services.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Landscape Maintenance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Snow Removal |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Maintenance Services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Development Services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Eliminations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net service revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Remaining Performance Obligations
Remaining performance obligations represent the estimated revenue expected to be recognized in the future related to performance obligations which are fully or partially unsatisfied at the end of the period.
As of March 31, 2026, the estimated future revenues for remaining performance obligations that are part of a contract that has an original expected duration of greater than one year was approximately $
Contract Assets and Liabilities
When a contract results in revenue being recognized in excess of the amount the Company has invoiced or has the right to invoice the customer, a contract asset is recognized. Contract assets are transferred to Accounts receivable, net when the rights to the consideration become unconditional. Contract assets are presented as Unbilled revenue on the Consolidated Balance Sheets.
There were $
Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services such that control has not passed to the customer. Contract liabilities are presented as Deferred revenue on the Consolidated Balance Sheets.
Changes in Deferred revenue for the six month period ended March 31, 2026 were as follows:
|
|
Deferred |
|
|
Balance, September 30, 2025 |
|
$ |
|
|
Recognition of revenue |
|
|
( |
) |
Deferral of revenue |
|
|
|
|
Balance, March 31, 2026 |
|
$ |
|
|
13
Table of Contents
Practical Expedients and Exemptions
The Company offers certain interest-free contracts to customers where payments are received over a period not exceeding one year. Additionally, certain Maintenance Services and Development Services customers may pay in advance for services. The Company does not adjust the promised amount of consideration for the effects of these
As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed.
4. Accounts Receivable, net
Accounts receivable of $
5. Property and Equipment, net
Property and equipment, net consists of the following:
|
|
Useful Life |
|
March 31, |
|
|
September 30, |
|
||
Land |
|
— |
|
$ |
|
|
$ |
|
||
Buildings and leasehold improvements |
|
|
|
|
|
|
|
|||
Operating equipment |
|
|
|
|
|
|
|
|||
Transportation vehicles |
|
|
|
|
|
|
|
|||
Office equipment and software |
|
|
|
|
|
|
|
|||
Construction in progress |
|
— |
|
|
|
|
|
|
||
Property and equipment |
|
|
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
Construction in progress includes costs incurred for software and other assets that have not yet been placed in service. Depreciation expense related to property and equipment was $
14
Table of Contents
6. Intangible Assets, Goodwill, Acquisitions, and Divestitures
Intangible Assets, net
Identifiable intangible assets consist of acquired customer contracts and relationships. Amortization expense related to intangible assets was $
Intangible assets, net, as of March 31, 2026 and September 30, 2025 consisted of the following:
|
|
|
|
March 31, 2026 |
|
|
September 30, 2025 |
|
||||||||||
|
|
Estimated |
|
Gross |
|
|
Accumulated |
|
|
Gross |
|
|
Accumulated |
|
||||
Customer relationships |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
Total intangible assets |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Goodwill
As of September 30, 2024, September 30, 2025, and March 31, 2026, the Company had goodwill of $
7. Long-term Debt
Long-term debt consists of the following:
|
|
March 31, |
|
|
September 30, 2025 |
|
||
Series B term loan |
|
$ |
|
|
$ |
|
||
Receivables financing agreement |
|
|
|
|
|
|
||
Financing costs, net |
|
|
( |
) |
|
|
( |
) |
Total debt, net |
|
$ |
|
|
$ |
|
||
Less: Current portion of long-term debt |
|
|
|
|
|
|
||
Long-term debt, net |
|
$ |
|
|
$ |
|
||
First Lien credit facility term loans and Series B Term Loan due 2029
On
On August 28, 2023, the Company voluntarily repaid $
On January 29, 2025, the Company entered into Amendment No. 9 to the Credit Agreement (the "Ninth Credit Agreement Amendment"). Under the Ninth Credit Agreement Amendment, the existing Series B Term Loans were amended to bear interest at a rate per annum based on a secured overnight funding rate ("Term SOFR"), plus a margin of
15
Table of Contents
Revolving credit facility
The Revolving Credit Facility matures on
On May 4, 2026, the Company entered into Amendment No. 10 to the credit agreement, under which the maturity date of loans under the Revolving Credit Facility was extended and interest rates applicable to certain loans under the Revolving Credit Facility were reduced, as described below under Note 15 "Subsequent Events".
Receivables financing agreement
On April 28, 2017, the Company, through a wholly-owned subsidiary, entered into a receivables financing agreement (the “Receivables Financing Agreement”).
On June 27, 2024, the Company, through a wholly-owned subsidiary, entered into the Fifth Amendment to the Receivables Financing Agreement (the “Fifth Amendment”). The Fifth Amendment (i) increased the borrowing capacity to $
All amounts outstanding under the Receivables Financing Agreement are collateralized by substantially all of the accounts receivable and unbilled revenue of the Company. During the six months ended March 31, 2026 the Company borrowed $
The following are the scheduled maturities of long-term debt for the remainder of fiscal 2026 and the following four fiscal years and thereafter, which do not include any estimated excess cash flow payments:
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
2031 and thereafter |
|
|
|
|
Total long-term debt |
|
|
|
|
Less: Current maturities |
|
|
|
|
Less: Original issue discount |
|
|
|
|
Less: Financing costs |
|
|
|
|
Total long-term debt, net |
|
$ |
|
The Company has estimated the fair value of its long-term debt to be approximately $
8. Fair Value Measurements and Derivative Instruments
Fair value is defined as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).
Fair Value Hierarchy
The following hierarchy for inputs used in measuring fair value should maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available:
Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates.
16
Table of Contents
Level 2 Significant observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources.
Level 3 Significant unobservable inputs the Company believes market participants would use in pricing the asset or liability based on the best information available.
The carrying amounts shown for the Company’s cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value due to the short-term maturity of those instruments. The valuation is based on settlements of similar financial instruments all of which are short-term in nature and are generally settled at or near cost.
Investments held in Rabbi Trust
A non-qualified deferred compensation plan is available to certain executives. Under this plan, participants may elect to defer up to
Derivatives
The Company’s objective in entering into derivative transactions is to manage its exposure to interest rate movements associated with its variable rate debt and changes in fuel prices. The Company recognizes derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. The fair values of the derivative financial instruments are determined using widely accepted valuation techniques including discounted cash flow analysis based on the expected cash flows of each derivative. Although the Company has determined that the significant inputs, such as interest yield curve and discount rate, used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s counterparties and its own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2026 and September 30, 2025, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
The following tables summarize the financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and September 30, 2025:
|
|
March 31, 2026 |
|
|||||||||||||
|
|
Carrying Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Other current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel derivative contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments held by Rabbi Trust |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate derivative contracts |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligation to Rabbi Trust |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
17
Table of Contents
|
|
September 30, 2025 |
|
|||||||||||||
|
|
Carrying Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Other assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments held by Rabbi Trust |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accrued expenses and other current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel derivative contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate derivative contracts |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligation to Rabbi Trust |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Hedging Activities
As of March 31, 2026 and September 30, 2025, the Company’s outstanding derivatives qualified as cash flow hedges. The Company assesses whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of the hedged forecasted transactions. Regression analysis is used for the hedge relationships and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction. The entire change in the fair value for highly effective derivatives is reported in Other comprehensive income (loss) and subsequently reclassified into Interest expense, net (in the case of interest rate contracts) and Cost of services provided (in the case of fuel hedge contracts) in the Consolidated Statements of Operations when the hedged item affects earnings. If the hedged forecasted transaction is no longer probable of occurring, then the amount recognized in Accumulated other comprehensive income (loss) is released to earnings. Cash flows from the derivatives are classified in the same category as the cash flows from the underlying hedged transaction.
Interest Rate Contracts
The Company has exposures to variability in interest rates associated with its variable interest rate debt, which includes the Series B Term Loan. As such, the Company has entered into interest rate contracts to help manage interest rate exposure by economically converting a portion of its variable-rate debt to fixed-rate debt. In January 2023, the Company entered into an interest rate swap agreement with a notional amount of $
On August 28, 2023, the Company terminated $
The notional amount of interest rate contracts was $
The effects on the consolidated financial statements of the interest rate contracts which were designated as cash flow hedges were as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Income (loss) recognized in Other comprehensive income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Net income reclassified from Accumulated other comprehensive income (loss) into Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel Contracts
The Company has exposures to variability in fuel pricing associated with its purchase and usage of fuel during the ordinary course of business operating a large fleet of vehicles and equipment. As such, the Company has entered into gasoline hedge contracts to help reduce its exposure to volatility in the fuel markets. In April 2025, the Company entered into a fuel swap agreement with a notional volume of
18
Table of Contents
swap agreement with a notional volume of
The effects on the consolidated financial statements of the fuel swap contracts which were designated as cash flow hedges were as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Income recognized in Other comprehensive income (loss) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net (loss) reclassified from Accumulated other comprehensive income (loss) into Cost of services provided |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
9. Income Taxes
The following table summarizes the Company’s income tax expense (benefit) and effective income tax rate for the three and six months ended March 31, 2026 and 2025.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Income (loss) before income taxes |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Effective income tax rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
The decrease in the effective tax rate for the three months ended March 31, 2026, when compared to the three months ended March 31, 2025, is primarily attributable to equity-based compensation shifting to a windfall position, as a result of fluctuations in the share price of the Company's common stock.
The decrease in the effective tax rate for the six months ended March 31, 2026, when compared to the six months ended March 31, 2025, is primarily attributable to equity-based compensation shifting from a windfall position to a shortfall position, as a result of recent decreases in the share price of the Company's common stock.
10. Equity-Based Compensation
Amended and Restated 2018 Omnibus Incentive Plan
On June 28, 2018 (and as amended and restated on March 10, 2020 and March 5, 2024), in connection with the IPO, the Company’s Board of Directors adopted, and its stockholders approved, the BrightView Holdings, Inc. 2018 Omnibus Incentive Plan (the “2018 Omnibus Incentive Plan”). The total number of shares of common stock that may be issued under the 2018 Omnibus Incentive Plan is
2023 Employment Inducement Incentive Award Plan
On September 11, 2023, the Company adopted the BrightView Holdings, Inc. 2023 Employment Inducement Incentive Award Plan (the “Inducement Plan”). Pursuant to the Inducement Plan, the Company may grant equity incentive compensation as a material inducement for certain individuals to commence employment with the Company. A total of
19
Table of Contents
Restricted Stock Awards
A summary of the Company’s restricted stock award activity for the six month period ended March 31, 2026 is presented in the following table:
|
|
Shares |
|
|
Weighted-Avg Distribution Price per Share |
|
||
Outstanding at September 30, 2025 |
|
|
|
|
$ |
|
||
Less: Forfeited |
|
|
|
|
$ |
|
||
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
||
Restricted Stock Units
A summary of the Company’s restricted stock unit activity for the six month period ended March 31, 2026 is presented in the following table:
|
|
Shares |
|
|
Weighted-Avg Distribution Price per Share |
|
||
Outstanding at September 30, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Less: Vested |
|
|
|
|
$ |
|
||
Less: Forfeited |
|
|
|
|
$ |
|
||
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
||
During the six month period ended March 31, 2026, the Company issued
Stock Option Awards
A summary of the Company’s stock option activity for the six month period ended March 31, 2026 is presented in the following table:
|
|
Shares |
|
|
Weighted-Avg Exercise Price per Share |
|
||
Outstanding at September 30, 2025 |
|
|
|
|
$ |
|
||
Less: Exercised |
|
|
|
|
$ |
|
||
Less: Forfeited |
|
|
|
|
$ |
|
||
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
||
Vested and exercisable at March 31, 2026 |
|
|
|
|
$ |
|
||
Expected to vest after March 31, 2026 |
|
|
|
|
$ |
|
||
Performance Stock Unit Awards
A summary of the Company’s performance stock unit activity for the six month period ended March 31, 2026 is presented in the following table:
20
Table of Contents
|
|
Shares* |
|
|
Weighted-Avg Distribution Price per Share |
|
||
Outstanding at September 30, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Less: Vested |
|
|
|
|
$ |
|
||
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
||
* Awards above presented assuming 100% attainment
During the six month period ended March 31, 2026, the Company issued
Equity-Based Compensation Expense
The Company recognizes equity-based compensation expense using the estimated fair value as of the grant date over the requisite service or performance period applicable to the grant. Estimates of future forfeitures are made at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
The Company recognized $
2018 Employee Stock Purchase Plan
The Company’s Stockholders have approved the Company’s 2018 Employee Stock Purchase Plan, (the “ESPP”). A total of
11. Commitments and Contingencies
Risk Management
The Company carries general liability, auto liability, workers’ compensation, and employee health care insurance policies. In addition, the Company carries other reasonable and customary insurance policies for a Company of our size and scope, as well as umbrella liability insurance policies to cover claims over the liability limits contained in the primary policies. The Company’s insurance programs, for workers’ compensation, general liability, auto liability and employee health care for certain employees contain self-insured retention amounts, deductibles and other coverage limits (“self-insured liability”). Claims that are not self-insured as well as claims in excess of the self-insured liability amounts are insured. The Company uses estimates in the determination of the required reserves. These estimates are based upon calculations performed by third-party actuaries, as well as examination of historical trends and industry claims experience. The Company’s reserve for unpaid and incurred but not reported claims under these programs at March 31, 2026 was $
21
Table of Contents
reported claims at March 31, 2026 includes $
Litigation Contingency
From time to time, the Company is subject to legal proceedings and claims in the ordinary course of its business, principally claims made alleging injuries (including vehicle and general liability matters as well as workers’ compensation and property casualty claims). Such claims, even if lacking merit, can result in expenditures of significant financial and managerial resources. In the ordinary course of its business, the Company is also subject to investigations or claims involving current and/or former employees and disputes involving commercial and regulatory matters. Regulatory matters include, among other things, audits and reviews of local and federal tax compliance, safety and employment practices, and environmental matters. Although the process of resolving regulatory matters and claims through litigation and other means is inherently uncertain, the Company is not aware of any such matter, legal proceeding or claim that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, and results of operations or cash flows. For all legal matters, an estimated liability is established in accordance with the loss contingencies accounting guidance. This estimated liability is included in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets.
12. Segments
The operations of the Company are conducted through
Maintenance Services primarily consists of recurring landscape maintenance services and snow removal services as well as supplemental landscape enhancement services.
Development Services primarily consists of landscape architecture and development services for new construction and large scale redesign projects.
The operating segments identified above are determined based on the services provided, and they reflect the manner in which operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance. The CODM is the Company’s Chief Executive Officer.
As part of the CODM's review of operating results, the CODM considers direct costs, which include direct labor and materials, as a significant segment expense. The CODM evaluates segment performance each period against historical results factoring in macroeconomic factors such as direct labor and materials to assess segment performance.
The accounting policies of the segments are the same as those described in Note 2 “Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Eliminations represent eliminations of intersegment revenues. Intersegment revenue transactions are recorded at current market price. The Company does not currently provide asset information by segment, as this information is not used by management when allocating resources or evaluating performance.
22
Table of Contents
The following is a summary of certain financial data for each of the segments and reconciliation of Segment Adjusted EBITDA to (Loss) before income taxes:
|
|
Three Months Ended March 31, 2026 |
|
|||||||||||||
|
|
Maintenance |
|
|
Development |
|
|
Eliminations |
|
|
Total |
|
||||
Net Service Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Less segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct costs(a) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other segment items(b) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of total segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business transformation and integration costs (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation (d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
|
|
Three Months Ended March 31, 2025 |
|
|||||||||||||
|
|
Maintenance |
|
|
Development |
|
|
Eliminations |
|
|
Total |
|
||||
Net Service Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Less segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct costs(a) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other segment items(b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of total segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business transformation and integration costs (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation (d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt extinguishment (e) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
|
|
Six Months Ended March 31, 2026 |
|
|||||||||||||
|
|
Maintenance |
|
|
Development |
|
|
Eliminations |
|
|
Total |
|
||||
Net Service Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Less segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct costs(a) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other segment items(b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of total segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business transformation and integration costs (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation (d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
|||
23
Table of Contents
|
|
Six Months Ended March 31, 2025 |
|
|||||||||||||
|
|
Maintenance |
|
|
Development |
|
|
Eliminations |
|
|
Total |
|
||||
Net Service Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Less segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct costs(a) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other segment items(b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of total segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business transformation and integration costs (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation (d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt extinguishment (e) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
|||
|
|
Three Months Ended |
|
|
Six Months Ended March 31, 2026 |
|
||||||||||
Capital Expenditures |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Maintenance Services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Development Services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital Expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13. Mezzanine Equity
Series A Convertible Preferred Stock
On August 28, 2023 (the “Original Issuance Date”), BrightView Holdings, Inc. entered into an Investment Agreement with each of Birch Equity Holdings, LP, a Delaware limited partnership, and Birch-OR Equity Holdings, LLC, a Delaware limited liability company (collectively, the “Investors”), pursuant to which the Company issued and sold, in a private placement, an aggregate of
On March 12, 2026 the Company declared a cash dividend of $
24
Table of Contents
14. Earnings (Loss) Per Share of Common Stock
The Company calculates basic and diluted (loss) earnings per common share using the two-class method. The two-class method is an allocation formula that determines net (loss) income per common share for each share of common stock and Series A Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and Series A Convertible Preferred Stock based on their respective rights to receive dividends. The holders of the Series A Convertible Preferred Stock do not participate in losses. The holders of Series A Convertible Preferred Stock participate in cash dividends that the Company pays on its common stock on an as-converted basis. Diluted net (loss) income per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential common shares consist of unvested and unexercised stock compensation awards and the Series A Convertible Preferred Stock, using the more dilutive of either the two-class method or if-converted stock method.
Set forth below is a reconciliation of the numerator and denominator for basic and diluted (loss) earnings per share calculation for the periods indicated:
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Basic earnings (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
Less: Dividends on Series A convertible preferred shares |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: Earnings allocated to Convertible Preferred Shares |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss available to common shareholders |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding – basic |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic loss per share |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss available to common shareholders – diluted |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding – basic |
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of: |
|
|
|
|
|
|
|
|
|
|
|
||||
Stock compensation awards |
|
|
|
|
|
|
|
|
|
|
|
||||
Series A convertible preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Weighted average number of common shares outstanding – diluted |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted loss per share |
$ |
( |
) |
|
$ |
( |
) |
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$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
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||||
Other Information: |
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|
|
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|
|
||||
Weighted average number of anti-dilutive Series A convertible preferred shares, options and restricted stock(a) |
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|
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25
Table of Contents
15. Subsequent events
On
26
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis supplements our management’s discussion and analysis for the year ended September 30, 2025 as contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 19, 2025, and presumes that readers have read or have access to such discussion and analysis. The following discussion and analysis should also be read together with the unaudited consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that reflect our plans and strategy for our business, and involve risks and uncertainties. You should review the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as updated by subsequent filings with the Securities and Exchange Commission, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.
Overview
Our Company
We are the largest provider of commercial landscaping services in the United States, with revenues approximately 4 times those of our next largest commercial landscaping competitor. We provide commercial landscaping services ranging from landscape maintenance and enhancements to tree care and landscape development. We operate through a differentiated and integrated national service model which systematically delivers services at the local level by combining our network of over 265 branches with a qualified service partner network. Our branch delivery model underpins our position as a single-source end-to-end landscaping solution provider to our diverse customer base at the national, regional and local levels, which we believe represents a significant competitive advantage. We believe our commercial customer base understands the financial and reputational risk associated with inadequate landscape maintenance and considers our services to be essential and non-discretionary.
Our Segments
We report our results of operations through two reportable segments: Maintenance Services and Development Services. We serve a geographically diverse set of customers through our strategically located network of branches in 36 U.S. states.
Maintenance Services
Our Maintenance Services segment delivers a full suite of recurring commercial landscaping services in both evergreen and seasonal markets, ranging from mowing, gardening, mulching and snow removal, to more horticulturally advanced services, such as water management, irrigation maintenance, tree care, and golf course maintenance. In addition to contracted maintenance services, we also have a strong track record of providing value-added landscape enhancements. We primarily self-perform our maintenance services through our national branch network, which are route-based in nature. Our maintenance services customers include Fortune 500 corporate campuses and commercial properties, HOAs, public parks, leading international hotels and resorts, airport authorities, municipalities, hospitals and other healthcare facilities, educational institutions, restaurants and retail, and golf courses, among others.
Development Services
Through our Development Services segment, we provide landscape architecture and development services for new facilities and significant redesign projects. Specific services include project design and management services, landscape architecture, landscape installation, irrigation installation, tree moving and installation, pool and water features, sports field services, and specialty turf maintenance, among others. Our development services are comprised of sophisticated design, coordination and installation of landscapes at some of the most recognizable corporate, athletic and university complexes and showcase highly visible work that is paramount to our customers’ perception of our brand as a market leader.
In our Development Services business, we are typically hired by general contractors, with whom we maintain strong relationships as a result of our superior technical and project management capabilities. We believe the quality of our work is also well-regarded by our end-customers, some of whom directly request that their general contractors utilize our services when outsourcing their landscape development projects.
27
Table of Contents
Components of Our Revenues and Expenses
Net Service Revenues
Maintenance Services
Our Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services. Landscape maintenance services that are primarily viewed as non-discretionary, such as lawn care, mowing, gardening, mulching, leaf removal, irrigation and tree care, are provided under recurring annual contracts, which typically range from one to three years in duration and are generally cancellable by the customer with 30-90 days’ notice. Snow removal services are provided on either fixed fee based contracts or per occurrence contracts. Both landscape maintenance services and snow removal services can also include enhancement services that represent supplemental maintenance or improvement services generally provided under contracts of short duration related to specific services. Revenue for landscape maintenance and snow removal services under fixed fee models is recognized over time using an output based method. Additionally, a portion of our recurring fixed fee landscape maintenance and snow removal services are recorded under the series guidance. The right to invoice practical expedient, defined within Note 3 “Revenue” to our unaudited consolidated financial statements, is generally applied to revenue related to landscape maintenance and snow removal services performed in relation to per occurrence contracts as well as enhancement services. When use of the practical expedient is not appropriate for these contracts, revenue is recognized using a cost-to-cost input method. Fees for contracted landscape maintenance services are typically billed on an equal monthly basis. Fees for fixed fee snow removal services are typically billed on an equal monthly basis during snow season, while fees for time and material or other activity-based snow removal services are typically billed as the services are performed. Fees for enhancement services are typically billed as the services are performed.
Development Services
For Development Services, revenue is primarily recognized over time using the cost-to-cost input method, measured by the percentage of cost incurred to date to the estimated total cost for each contract, which we believe to be the best measure of progress. The full amount of anticipated losses on contracts is recorded as soon as such losses can be estimated. These losses have been immaterial to current and historical operations. Changes in job performance, job conditions and estimated profitability, including final contract settlements, may result in revisions to costs and revenue and are recognized in the period in which the revisions are determined.
Expenses
Cost of Services Provided
Cost of services provided is comprised of direct costs we incur associated with our operations during a period and includes employee costs, subcontractor costs, purchased materials, and operating equipment and vehicle costs. Employee costs consist of wages and other labor-related expenses, including benefits, workers compensation and healthcare costs, for those employees involved in delivering our services. Subcontractor costs consist of costs relating to our qualified service partner network in our Maintenance Services segment and subcontractors we engage from time to time in our Development Services segment. When our use of subcontractors increases, we may experience incrementally higher costs of services provided. Operating equipment and vehicle costs primarily consist of depreciation related to branch operating equipment and vehicles and related fuel expenses. A large component of our costs are variable, such as labor, subcontractor expense, fuel and materials.
Selling, General and Administrative Expense
Selling, general and administrative expense consists of costs incurred related to compensation and benefits for management, sales and administrative personnel, equity-based compensation, branch and office rent and facility operating costs, depreciation expense related to branch and office locations, as well as professional fees, software costs and other miscellaneous expenses. Corporate expenses, including corporate executive compensation, finance, legal and information technology, are included in consolidated Selling, general and administrative expense.
Amortization Expense
Amortization expense consists of the periodic amortization of intangible assets, customer relationships. The corresponding intangible assets were originally recognized in connection with the KKR and ValleyCrest acquisitions, as well as from subsequent acquisitions.
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Table of Contents
Other Expense
Other expense consists primarily of investment gains and losses related to investments held in Rabbi Trust.
Interest Expense, Net
Interest expense, net consists primarily of interest expense related to our long-term debt as well as interest income related to our cash and cash equivalents. See Note 7 “Long-term Debt” in the unaudited consolidated financial statements included under Part I, Item 1, “Financial Statements”.
Income Tax Expense (Benefit)
Income tax expense (benefit) includes U.S. federal, state and local income taxes. Our effective tax rate differs from the statutory U.S. income tax rate due to the effect of state and local income taxes, tax credits and certain nondeductible expenses. Our effective tax rate may vary from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical distribution of our pre-tax earnings, changes in the tax rates of different jurisdictions, the availability of tax credits and nondeductible items. Changes in judgment due to the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the period of the change.
Trends and Other Factors Affecting Our Business
Various trends and other factors affect or have affected our operating results, including:
Seasonality
Our services, particularly in our Maintenance Services segment, have seasonal variability such as increased mulching, flower planting and intensive mowing in the spring, leaf removal and cleanup work in the fall, snow removal services in the winter and potentially minimal mowing during drier summer months. This can drive fluctuations in revenue, costs and cash flows for interim periods.
We have a significant presence in geographies that have a year-round growing season, which we refer to as our evergreen markets. Such markets require landscape maintenance services twelve months per year. In markets that do not have a year-round growing season, which we refer to as our seasonal markets, the demand for our landscape maintenance services decreases during the winter months. Typically, our revenues and net income have been higher in the spring and summer seasons, which correspond with our third and fourth fiscal quarters of our fiscal year ending September 30. The lower level of activity in seasonal markets during our first and second fiscal quarters is partially offset by revenue from our snow removal services. Such seasonality causes our results of operations to vary from quarter to quarter.
One BrightView Initiative
In fiscal year 2024, the Company launched its One BrightView initiative. The One BrightView initiative represents a cultural change and encapsulates the Company’s effort to refocus our core service lines and position ourselves for long-term profitable growth by streamlining our operating structure, leveraging our size and scale, and becoming the employer of choice. As part of the initiative, the Company introduced transformational changes designed to unite the organization as one comprehensive team and drive a renewed focus on the Company's profitable core businesses. Transformation costs associated with the implementation of the One BrightView initiative are reflected in the fiscal 2025 results. The actions taken under the One BrightView initiative have resulted in improved customer and employee retention and contributed to sustainable improved profitability.
Weather Conditions
Weather may impact the timing of performance of landscape maintenance and enhancement services and progress on development projects from quarter to quarter. For example, snow events in the winter, hurricane-related cleanup in the summer and fall, and the effects of abnormally high rainfall or drought in a given market may impact our services. These less predictable weather patterns can impact both our revenues and our costs, especially from quarter to quarter, but also from year to year in some cases. Extreme weather events such as hurricanes and tropical storms can result in a positive impact to our business in the form of increased enhancement services revenues related to cleanup and other services. However, such weather events may also negatively impact our ability to deliver our contracted services or impact the timing of performance. In our seasonal markets, the performance of our snow removal services is correlated with the amount of snowfall and number of snowfall events in a given season.
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Table of Contents
Acquisitions
In addition to our organic growth, we have grown, and expect to continue to grow, our business through acquisitions in an effort to better service our existing customers and attract new customers. These acquisitions focused on increasing our density and leadership positions in existing local markets, entering into attractive new geographic markets and expanding our portfolio of landscape enhancement services and improving technical capabilities in specialized services.
As we move forward, we will selectively pursue accretive acquisitions that will focus on increasing market density to build upon our existing footprint in strategic markets, entering new attractive geographies (i.e. ‘greenfield’), and increasing service line density and entering adjacent service lines to provide a robust and consistent suite of services to our customers. Under this renewed strategy, we believe we are the acquirer of choice in the highly fragmented commercial landscaping industry because we offer the ability to leverage our significant size and scale to drive accretive acquisitions, quickly and seamlessly integrate new businesses into ours and provide stable and potentially expanding career opportunities for employees of acquired businesses.
In accordance with GAAP, the results of the acquisitions we have completed are reflected in our consolidated financial statements from the date of acquisition. We incur transaction costs in connection with identifying and completing acquisitions and ongoing integration costs as we integrate acquired companies and seek to achieve synergies. Integration costs vary based on factors specific to each acquisition, such costs are primarily comprised of one-time employee retention costs, employee onboarding and training costs, and fleet and uniform rebranding costs. We typically anticipate integration costs to represent approximately 7%-9% of the acquisition price, and to be incurred within 12 months of acquisition completion.
Goodwill
Goodwill represents the excess of the purchase price over the fair values of the underlying net assets acquired in an acquisition. Goodwill is not amortized, but rather is tested annually for impairment, or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. We test goodwill for impairment annually in the fourth quarter of each year using data as of July 1 of that year.
Goodwill is allocated to, and evaluated for impairment at our two identified reporting units. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. We may elect not to perform the qualitative assessment for some or all reporting units and perform the quantitative impairment test. The quantitative goodwill impairment test requires us to compare the carrying value of the reporting unit’s net assets to the fair value of the reporting unit. The Company determined fair values of each of the reporting units using a combination of the income and market multiple approaches. The estimates used in each approach include significant management assumptions, including valuation multiples of selected guideline public companies, long-term future growth rates, operating margins, and discount rates.
If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. If the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess of the carrying value over the fair value is recorded as an impairment loss, the amount of which would not exceed the total amount of goodwill allocated to the reporting unit.
Our methodology for estimating the fair value of our reporting units utilizes a combination of the market and income approaches. The market approach is based on the guideline public company method, which measures the value of the reporting unit through applying valuation multiples of selected guideline public companies to the reporting unit’s key operating metrics. The income approach is based on the Discounted Cash Flow (“DCF”) method, which is based on the present value of future cash flows. The principal assumptions utilized in the DCF methodology include long-term future growth rates, operating margins, and discount rates. There can be no assurance that our estimates and assumptions regarding forecasted cash flow, long-term future growth rates and operating margins made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. We believe the current assumptions and estimates utilized under each approach are both reasonable and appropriate.
Based on our most recent annual analysis as of July 1, 2025, the fair values for all identified reporting units exceeded the carrying values, and therefore no indicators of impairment existed for the reporting units; however, the fair value of the Maintenance reporting unit exceeded the carrying value by 15.4%. Since the Maintenance reporting unit fair value did not substantially exceed the carrying value, we may be at risk for an impairment loss in the future if interest rates and market conditions continue to trend unfavorably or if our forecasts assumed in the fair value calculation are not realized. As of March 31, 2026, there was $1,797.7 million of goodwill recorded related to the Maintenance reporting unit.
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Table of Contents
Industry and Economic Conditions
We believe the non-discretionary nature of our landscape maintenance services provides us with a fairly predictable recurring revenue model. The perennial nature of the landscape maintenance service sector, as well as its wide range of end users, minimizes the impact of a broad or sector-specific downturn. However, in connection with our enhancement services and development services, when demand for commercial construction declines, demand for landscape enhancement services and development projects may decline. When commercial construction activity rises, demand for landscape enhancement services to maintain green space may also increase. This is especially true for new developments in which green space tends to play an increasingly important role. Economic conditions, including rising inflation and fuel prices, as well as rising interest rates and tariffs, have impacted and may further impact our costs and expenses. Additionally, fluctuations in labor markets, may impact our ability to identify, hire and retain employees.
Regulatory Impacts
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”) that includes tax reform provisions that amend, eliminate and extend tax rules under the Inflation Reduction Act and Tax Cuts and Jobs Act. The most significant impact to the Company of the OBBBA at this time is the permanent reinstatement of bonus depreciation on qualified property and modifications to the calculation for excess business interest expense limitation under 163(j). The impact defers the payment of a significant portion of our current federal tax liability for several years. However, because our tax provision is based on both the current and deferred tax, the overall impact to our income statement is immaterial.
Results of Operations
The following tables summarize key components of our results of operations for the periods indicated.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net service revenues |
|
$ |
702.9 |
|
|
$ |
662.6 |
|
|
$ |
1,317.7 |
|
|
$ |
1,261.8 |
|
Cost of services provided |
|
|
565.2 |
|
|
|
515.1 |
|
|
|
1,065.7 |
|
|
|
987.5 |
|
Gross profit |
|
|
137.7 |
|
|
|
147.5 |
|
|
|
252.0 |
|
|
|
274.3 |
|
Selling, general and administrative expense |
|
|
116.3 |
|
|
|
118.1 |
|
|
|
231.4 |
|
|
|
237.4 |
|
Amortization expense |
|
|
5.3 |
|
|
|
7.1 |
|
|
|
11.5 |
|
|
|
15.2 |
|
Income from operations |
|
|
16.1 |
|
|
|
22.3 |
|
|
|
9.1 |
|
|
|
21.7 |
|
Other expense |
|
|
0.1 |
|
|
|
0.8 |
|
|
|
— |
|
|
|
0.7 |
|
Interest expense, net |
|
|
13.7 |
|
|
|
12.8 |
|
|
|
27.2 |
|
|
|
26.9 |
|
Income (loss) before income taxes |
|
|
2.3 |
|
|
|
8.7 |
|
|
|
(18.1 |
) |
|
|
(5.9 |
) |
Income tax expense (benefit) |
|
|
0.6 |
|
|
|
2.3 |
|
|
|
(4.6 |
) |
|
|
(1.9 |
) |
Net income (loss) |
|
$ |
1.7 |
|
|
$ |
6.4 |
|
|
$ |
(13.5 |
) |
|
$ |
(4.0 |
) |
Earnings per Share |
|
$ |
(0.08 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.23 |
) |
Adjusted EBITDA(1) |
|
$ |
79.1 |
|
|
$ |
73.5 |
|
|
$ |
132.5 |
|
|
$ |
125.6 |
|
Adjusted Net Income(1) |
|
$ |
13.3 |
|
|
$ |
21.5 |
|
|
$ |
11.1 |
|
|
$ |
27.1 |
|
Cash flows from operating activities |
|
$ |
46.2 |
|
|
$ |
91.3 |
|
|
$ |
82.3 |
|
|
$ |
151.7 |
|
Adjusted Free Cash Flow(1) |
|
$ |
(9.0 |
) |
|
$ |
62.7 |
|
|
$ |
(24.5 |
) |
|
$ |
67.0 |
|
(1) See the “Non-GAAP Financial Measures” section included below for a reconciliation to the most directly comparable GAAP measure.
31
Table of Contents
Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025
Net Service Revenues
Net service revenues for the three months ended March 31, 2026 increased $40.3 million, or 6.1%, to $702.9 million, from $662.6 million in the 2025 period. The increase was driven by an increase in Maintenance Services revenues of $61.8 million, partially offset by a decrease in Development Services revenues of $22.3 million.
Gross Profit
Gross profit for the three months ended March 31, 2026 decreased $9.8 million, or 6.6%, to $137.7 million, from $147.5 million in the 2025 period. Gross margin decreased 270 basis points, to 19.6%, in the three months ended March 31, 2026, from 22.3% in the comparable 2025 period. The decreases in gross profit and gross margin were primarily driven by increased subcontractor costs and depreciation expense, largely offset by increases in net service revenues and decreases in materials costs.
Selling, General and Administrative Expense
Selling, general and administrative expense for the three months ended March 31, 2026 decreased $1.8 million, or 1.5%, to $116.3 million, from $118.1 million in the 2025 period. As a percentage of revenue, Selling, general and administrative expense decreased 130 basis points for the three months ended March 31, 2026 to 16.5% from 17.8% in the 2025 period. The decrease was primarily driven by a decrease in business transformation and integration costs combined with increased efficiencies as a result of the Company's cost management initiatives, partially offset by increased selling costs driven by the company’s investment in new sellers.
Amortization Expense
Amortization expense for the three months ended March 31, 2026 decreased $1.8 million, or 25.4%, to $5.3 million from $7.1 million in the 2025 period. The decrease was principally due the decrease in the amortization of intangible assets, based on the pattern consistent with expected future cash flows calculated at the time the assets were acquired.
Other Expense
Other expense was $0.1 million for the three months ended March 31, 2026 compared to expense of $0.8 million in the 2025 period. The decrease of $0.7 was driven principally by costs associated with the repricing of the Company's term loan in fiscal 2025.
Interest Expense, Net
Interest expense, net for the three months ended March 31, 2026 increased $0.9 million, or 7.0%, to $13.7 million from $12.8 million in the 2025 period. The increase was driven by a decrease in interest income associated with the decrease in the Company's cash and cash equivalents balance combined with increases in interest expense due to the impact of interest rate derivative contracts and an increase in the Company's outstanding debt balance. These were partially offset by lower interest expense caused by the decrease in interest rates as a result of the repricing of our Series B Term Loans in fiscal 2025.
Income Tax Expense
For the three months ended March 31, 2026, Income tax expense was $0.6 million compared to $2.3 million in the 2025 period. The decrease was primarily attributable to the change in Income before income taxes.
Net Income
For the three months ended March 31, 2026, Net income was $1.7 million compared to a Net income of $6.4 million in the 2025 period due to the changes noted above. Net loss as a percentage of revenue was 0.2% for the three months ended March 31, 2026 compared to 1.0% for the three months ended March 31, 2025.
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Table of Contents
Adjusted EBITDA
Adjusted EBITDA increased $5.6 million for the three months ended March 31, 2026, to $79.1 million, from $73.5 million in the 2025 period. Adjusted EBITDA as a percentage of revenue was 11.3% and 11.1% for the three months ended March 31, 2026 and 2025, respectively. The increase in Adjusted EBITDA was primarily driven by an increase of $13.2 million, or 23.4%, in Maintenance Services Segment Adjusted EBITDA, partially offset by a decrease of $7.6 million, or 44.2%, in Development Services Segment Adjusted EBITDA, as discussed further below in Segment Results.
Adjusted Net Income
Adjusted Net Income for the three months ended March 31, 2026 decreased $8.2 million to $13.3 million, from $21.5 million in the 2025 period due to the changes noted above.
Six Months Ended March 31, 2026 compared to Six Months Ended March 31, 2025
Net Service Revenues
Net service revenues for the six months ended March 31, 2026 increased $55.9 million, or 4.4%, to $1,317.7 million, from $1,261.8 million in the 2025 period. The increase was driven by an increase in Maintenance Services revenues of $88.9 million, partially offset by a decrease in Development Services revenues of $34.9 million.
Gross Profit
Gross profit for the six months ended March 31, 2026 decreased $22.3 million, or 8.1%, to $252.0 million, from $274.3 million in the 2025 period. Gross margin decreased 260 basis points, to 19.1%, in the six months ended March 31, 2026, from 21.7% in the comparable 2025 period. The decreases in gross profit and gross margin were primarily driven by increased depreciation expense.
Selling, General and Administrative Expense
Selling, general and administrative expense for the six months ended March 31, 2026 decreased $6.0 million, or 2.5%, to $231.4 million, from $237.4 million in the 2025 period. As a percentage of revenue, Selling, general and administrative expense decreased 120 basis points for the six months ended March 31, 2026 to 17.6% from 18.8% in the 2025 period. The decrease was primarily driven by a decrease in business transformation and integration costs combined with increased efficiencies as a result of the Company's cost management initiatives, partially offset by increased selling costs driven by the Company’s investment in new sellers.
Amortization Expense
Amortization expense for the six months ended March 31, 2026 decreased $3.7 million, or 24.3%, to $11.5 million from $15.2 million in the 2025 period. The decrease was principally due to the decrease in the amortization of intangible assets, based on the pattern consistent with expected future cash flows calculated at the time the assets were acquired.
Other Expense
There was no other expense for the six months ended March 31, 2026 compared to an expense of $0.7 million in the 2025 period. The expense in the 2025 period of $0.7 was driven principally by costs associated with the repricing of the Company's term loan in fiscal 2025.
Interest Expense, Net
Interest expense, net for the six months ended March 31, 2026 increased $0.3 million, or 1.1%, to $27.2 million from $26.9 million in the 2025 period. The increase was driven by a decrease in interest income associated with the decrease in the Company's cash and cash equivalents balance combined with an increase in interest expense due to the impact of interest rate derivative contracts and an increase in the Company's outstanding debt balance. These were partially offset by lower interest expense caused by the decrease in interest rates as a result of the repricing of our Series B Term Loans in fiscal 2025.
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Table of Contents
Income Tax (Benefit)
For the six months ended March 31, 2026, Income tax benefit was $4.6 million compared to $1.9 million in the 2025 period. The increase was primarily attributable to the change in Loss before income taxes.
Net loss
For the six months ended March 31, 2026, Net loss was $13.5 million compared to a Net loss of $4.0 million in the 2025 period due to the changes noted above. Net loss as a percentage of revenue was 1.0% for the six months ended March 31, 2026 compared to 0.3% for the six months ended March 31, 2025.
Adjusted EBITDA
Adjusted EBITDA increased $6.9 million for the six months ended March 31, 2026, to $132.5 million, from $125.6 million in the 2025 period. Adjusted EBITDA as a percentage of revenue was 10.1% and 10.0% for the six months ended March 31, 2026 and 2025, respectively. The increase in Adjusted EBITDA was primarily driven by an increase of $14.0 million, or $105.0, in Maintenance Services Segment Adjusted EBITDA, partially offset by a decrease of $7.1 million, or $27.5, in Development Services Segment Adjusted EBITDA, as discussed further below in Segment Results.
Adjusted Net Income
Adjusted Net Income for the six months ended March 31, 2026 decreased $16.0 million to $11.1 million, from $27.1 million in the 2025 period due to the changes noted above.
Non-GAAP Financial Measures
In addition to our GAAP financial measures, we review various non-GAAP financial measures including Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Share (“Adjusted EPS”) and Adjusted Free Cash Flow.
We believe that Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuations from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. Adjusted Net Income is defined as net income (loss) including interest and depreciation and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions and the removal of the discrete tax items. Adjusted EPS is defined as Adjusted Net Income divided by the (i) weighted average number of common shares outstanding used in the calculation of basic earnings per share plus (ii) shares of common stock related to the Series A Preferred Stock on an as-converted basis, assumed to be converted for the entire period. We believe that the adjustments applied in presenting Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future.
We believe Adjusted Free Cash Flow is a helpful supplemental measure to assist us and investors in evaluating our liquidity. Adjusted Free Cash Flow represents cash flows from operating activities less capital expenditures, net of proceeds from the sale of property and equipment. We believe Adjusted Free Cash Flow is useful to provide additional information to assess our ability to pursue business opportunities and investments and to service our debt. Adjusted Free Cash Flow has limitations as an analytical tool, including that it does not account for our future contractual commitments and excludes investments made to acquire assets under finance leases and required debt service payments.
Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Free Cash Flow are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to the same or other similarly titled measures of other companies and can differ significantly from company to company.
Set forth below are the reconciliations of net income (loss) to Adjusted EBITDA and Adjusted Net Income, and cash flows from operating activities to Adjusted Free Cash Flow. Adjusted EPS is defined as Adjusted Net Income (shown below) divided by the
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Table of Contents
Adjusted Weighted Average Number of Common Shares Outstanding for the period used in the calculation of basic EPS which is presented in Note 14 “Earnings (Loss) Per Share of Common Stock” in the Notes to our unaudited consolidated financial statements.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
1.7 |
|
|
$ |
6.4 |
|
|
$ |
(13.5 |
) |
|
$ |
(4.0 |
) |
Income tax expense (benefit) |
|
|
0.6 |
|
|
|
2.3 |
|
|
|
(4.6 |
) |
|
|
(1.9 |
) |
Interest expense, net |
|
|
13.7 |
|
|
|
12.8 |
|
|
|
27.2 |
|
|
|
26.9 |
|
Depreciation expense |
|
|
47.4 |
|
|
|
31.8 |
|
|
|
90.3 |
|
|
|
62.3 |
|
Amortization expense |
|
|
5.3 |
|
|
|
7.1 |
|
|
|
11.5 |
|
|
|
15.2 |
|
Business transformation and integration costs (a) |
|
|
5.7 |
|
|
|
7.8 |
|
|
|
12.7 |
|
|
|
17.0 |
|
Equity-based compensation (b) |
|
|
4.7 |
|
|
|
4.6 |
|
|
|
8.9 |
|
|
|
9.4 |
|
Debt extinguishment (f) |
|
|
— |
|
|
|
0.7 |
|
|
|
— |
|
|
|
0.7 |
|
Adjusted EBITDA |
|
$ |
79.1 |
|
|
$ |
73.5 |
|
|
$ |
132.5 |
|
|
$ |
125.6 |
|
Adjusted Net (Loss) Income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
1.7 |
|
|
$ |
6.4 |
|
|
$ |
(13.5 |
) |
|
$ |
(4.0 |
) |
Amortization expense |
|
|
5.3 |
|
|
|
7.1 |
|
|
|
11.5 |
|
|
|
15.2 |
|
Business transformation and integration costs (a) |
|
|
5.7 |
|
|
|
7.8 |
|
|
|
12.7 |
|
|
|
17.0 |
|
Equity-based compensation (b) |
|
|
4.7 |
|
|
|
4.6 |
|
|
|
8.9 |
|
|
|
9.4 |
|
Debt extinguishment (f) |
|
|
— |
|
|
|
0.7 |
|
|
|
— |
|
|
|
0.7 |
|
Income tax adjustment (c) |
|
|
(4.1 |
) |
|
|
(5.1 |
) |
|
|
(8.5 |
) |
|
|
(11.2 |
) |
Adjusted Net Income |
|
$ |
13.3 |
|
|
$ |
21.5 |
|
|
$ |
11.1 |
|
|
$ |
27.1 |
|
Adjusted Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash flows provided by operating activities |
|
$ |
46.2 |
|
|
$ |
91.3 |
|
|
$ |
82.3 |
|
|
$ |
151.7 |
|
Minus: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
|
58.7 |
|
|
|
33.6 |
|
|
|
113.5 |
|
|
|
92.3 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Proceeds from sale of property and equipment |
|
|
3.5 |
|
|
|
5.0 |
|
|
|
6.7 |
|
|
|
7.6 |
|
Adjusted Free Cash Flow |
|
$ |
(9.0 |
) |
|
$ |
62.7 |
|
|
$ |
(24.5 |
) |
|
$ |
67.0 |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Severance and related costs |
|
$ |
1.0 |
|
|
$ |
0.3 |
|
|
$ |
1.0 |
|
|
$ |
(0.5 |
) |
Business integration (d) |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.3 |
|
|
|
(0.2 |
) |
IT, infrastructure, transformation, and other (e) |
|
|
4.6 |
|
|
|
7.4 |
|
|
|
11.4 |
|
|
|
17.7 |
|
Business transformation and integration costs |
|
$ |
5.7 |
|
|
$ |
7.8 |
|
|
$ |
12.7 |
|
|
$ |
17.0 |
|
35
Table of Contents
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Tax impact of pre-tax income adjustments |
|
|
4.8 |
|
|
|
5.0 |
|
|
|
9.9 |
|
|
|
10.9 |
|
Discrete tax items |
|
|
(0.7 |
) |
|
|
0.1 |
|
|
|
(1.4 |
) |
|
|
0.3 |
|
Income tax adjustment |
|
$ |
4.1 |
|
|
$ |
5.1 |
|
|
$ |
8.5 |
|
|
$ |
11.2 |
|
36
Table of Contents
Segment Results
We classify our business into two segments: Maintenance Services and Development Services. Our corporate operations are allocated to the segments on a pro rata basis, based on segment revenue.
We evaluate the performance of our segments on Net service revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Net service revenues). Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability. Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.
Segment Results for the Three Months Ended March 31, 2026 and 2025
The following tables present Net service revenues, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin for each of our segments for the three months ended March 31, 2026 and 2025. Changes in Segment Adjusted EBITDA Margin are shown in basis points, or bps.
Maintenance Services Segment Results
|
|
Three Months Ended |
|
|
Percent Change |
|
||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 vs. 2025 |
|
|||
Net Service Revenues |
|
$ |
554.6 |
|
|
$ |
492.8 |
|
|
|
12.5 |
% |
Segment Adjusted EBITDA |
|
$ |
69.5 |
|
|
$ |
56.3 |
|
|
|
23.4 |
% |
Segment Adjusted EBITDA Margin |
|
|
12.5 |
% |
|
|
11.4 |
% |
|
110 bps |
|
|
Maintenance Services Net Service Revenues
Maintenance Services net service revenues for the three months ended March 31, 2026 increased by $61.8 million, or 12.5%, from the 2025 period. Snow removal services increased by $49.2 million, or 28.5%, due to increased snowfall in the period1, and Commercial Landscaping services increased by $12.6 million, or 4.0%. The increase in Commercial landscaping services revenue was driven by increased ancillary and contract services.
Maintenance Services Segment Adjusted EBITDA
Segment Adjusted EBITDA for the three months ended March 31, 2026 increased by $13.2 million to $69.5 million from $56.3 million in the 2025 period. Segment Adjusted EBITDA Margin increased 110 basis points, to 12.5%, in the three months ended March 31, 2026, from 11.4% in the 2025 period. The increases in Segment Adjusted EBITDA and Adjusted EBITDA Margin were primarily driven by increased snow removal services and commercial landscaping revenue described above, partially offset by increased investments in our sales force and increased snow services costs.
Development Services Segment Results
|
|
Three Months Ended |
|
|
Percent Change |
|
||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 vs. 2025 |
|
|||
Net Service Revenues |
|
$ |
149.6 |
|
|
$ |
171.9 |
|
|
|
(13.0 |
)% |
Segment Adjusted EBITDA |
|
$ |
9.6 |
|
|
$ |
17.2 |
|
|
|
(44.2 |
)% |
Segment Adjusted EBITDA Margin |
|
|
6.4 |
% |
|
|
10.0 |
% |
|
(360) bps |
|
|
Development Services Net Service Revenues
Development Services net service revenues for the three months ended March 31, 2026 decreased $22.3 million, or 13.0%, compared to the 2025 period. The decrease was driven by the timing and mix of Development Services projects.
1As defined by the National Oceanic Atmospheric Administration, U.S. Department of Commerce (“NOAA”) for the Company's footprint during the respective three-month periods and six-month periods
37
Table of Contents
Development Services Segment Adjusted EBITDA
Segment Adjusted EBITDA for the three months ended March 31, 2026 decreased $7.6 million, to $9.6 million, compared to the 2025 period. Segment Adjusted EBITDA Margin decreased 360 basis points to 6.4% for the three months ended March 31, 2026, from 10.0% in the 2025 period. The decreases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were primarily driven by the change in revenue described above and to a lesser extent increased investments in our sales force.
Segment Results for the Six Months Ended March 31, 2026 and 2025
The following tables present Net service revenues, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin for each of our segments for the six months ended March 31, 2026 and 2025. Changes in Segment Adjusted EBITDA Margin are shown in basis points, or bps.
Maintenance Services Segment Results
|
|
Six Months Ended |
|
|
Percent Change |
|
||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 vs. 2025 |
|
|||
Net Service Revenues |
|
$ |
991.0 |
|
|
$ |
902.1 |
|
|
|
9.9 |
% |
Segment Adjusted EBITDA |
|
$ |
105.0 |
|
|
$ |
91.0 |
|
|
|
15.4 |
% |
Segment Adjusted EBITDA Margin |
|
|
10.6 |
% |
|
|
10.1 |
% |
|
|
50 |
bps |
Maintenance Services Net Service Revenues
Maintenance Services net service revenues for the six months ended March 31, 2026 increased by $88.9 million, or 9.9%, from the 2025 period. Snow removal services increased by $85.2 million, or 41.6%, due to increased snowfall in the period1 and Commercial Landscaping services increased by $3.7 million, or 0.5%. The increase in Commercial Landscaping services revenue was driven by increased ancillary services.
Maintenance Services Segment Adjusted EBITDA
Segment Adjusted EBITDA for the six months ended March 31, 2026 increased by $14.0 million to $105.0 million from $91.0 million in the 2025 period. Segment Adjusted EBITDA Margin increased 50 basis points, to 10.6%, in the six months ended March 31, 2026, from 10.1% in the 2025 period. The increases in Segment Adjusted EBITDA and Adjusted EBITDA Margin were primarily driven by increased snow removal services and commercial landscaping revenue described above, partially offset by increased investments in our sales force and increased snow services costs.
Development Services Segment Results
|
|
Six Months Ended |
|
|
Percent Change |
|
||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 vs. 2025 |
|
|||
Net Service Revenues |
|
$ |
328.8 |
|
|
$ |
363.7 |
|
|
|
(9.6 |
)% |
Segment Adjusted EBITDA |
|
$ |
27.5 |
|
|
$ |
34.6 |
|
|
|
(20.5 |
)% |
Segment Adjusted EBITDA Margin |
|
|
8.4 |
% |
|
|
9.5 |
% |
|
|
(110) bps |
|
Development Services Net Service Revenues
Development Services net service revenues for the six months ended March 31, 2026 decreased $34.9 million, or 9.6%, compared to the 2025 period. The decrease was driven by the timing and mix of Development Services projects.
Development Services Segment Adjusted EBITDA
Segment Adjusted EBITDA for the six months ended March 31, 2026 decreased $7.1 million, to $27.5 million, compared to the 2025 period. Segment Adjusted EBITDA Margin decreased 110 basis points to 8.4% for the six months ended March 31, 2026, from 9.5% in the 2025 period. The decreases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were primarily driven by the change in revenue described above, as well as increased investments in our sales force.
1As defined by the National Oceanic Atmospheric Administration, U.S. Department of Commerce (“NOAA”) for the Company's footprint during the respective three-month periods and six-month periods
38
Table of Contents
Liquidity and Capital Resources
Liquidity
Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operations and borrowings under the Credit Agreement and the Receivables Financing Agreement. Our principal uses of cash are to provide working capital, meet debt service requirements, fund capital expenditures and finance strategic plans, including acquisitions and share repurchases under the share repurchase program announced in March 2025, and updated in November 2025 to increase the authorized amount of repurchases to a total of $150 million. We may also seek to finance capital expenditures under finance leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. While we have in the past financed certain acquisitions with internally generated cash, in the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings.
Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility under the Credit Agreement and the Receivables Financing Agreement, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements and share repurchases for the next twelve months and the foreseeable future.
A substantial portion of our liquidity needs arise from debt service requirements, and from the ongoing cost of operations, working capital and capital expenditures.
(in millions) |
|
March 31, |
|
|
September 30, |
|
||
Cash and cash equivalents |
|
$ |
10.1 |
|
|
$ |
74.5 |
|
|
|
|
|
|
|
|
||
Long-term debt |
|
$ |
823.9 |
|
|
$ |
790.2 |
|
Total debt |
|
$ |
823.9 |
|
|
$ |
790.2 |
|
The Company is party to the Credit Agreement, a five-year revolving credit facility that, as amended, currently matures on April 22, 2031, subject to a springing maturity date based on earlier maturing outstanding term loan indebtedness (the “Revolving Credit Facility”) and, through a wholly-owned subsidiary, a receivables financing agreement dated April 28, 2017 (as amended, the “Receivables Financing Agreement”). Each of the Company's credit facilities bear interest based in-part on a secured overnight financing rate.
We can increase the borrowing availability under the Credit Agreement or increase the term loans outstanding under the Credit Agreement by up to $303.0 million, in the aggregate, in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans under the Credit Agreement, or in the form of other indebtedness in lieu thereof, plus an additional amount so long as we do not exceed a specified senior secured leverage ratio and, in the case of second lien indebtedness, a specified senior secured leverage ratio. We can incur such additional secured or other unsecured indebtedness under the Credit Agreement if certain specified conditions are met. Our liquidity requirements are significant primarily due to debt service requirements. See Note 7 “Long-term Debt” to our unaudited consolidated financial statements included under Part I, Item 1, “Financial Statements”.
The Company is party to the Investment Agreement dated August 28, 2023, pursuant to which the Company issued and sold, in a private placement, an aggregate of 500,000 shares of the Company’s Series A Convertible Preferred Stock, for an aggregate purchase price of $500.0 million. The Series A Convertible Preferred Stock is entitled to dividends at a rate of 7.0% per annum, compounding quarterly, paid in kind or paid in cash, at the Company’s election.
Our business may not generate sufficient cash flows from operations or future borrowings may not be available to us under our Revolving Credit Facility or the Receivables Financing Agreement in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. Our ability to do so depends on, among other factors, prevailing economic conditions, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change in control, we could be required to repay or refinance our indebtedness. We may not be able to refinance any of our indebtedness, including the Series B Term Loan under the Credit Agreement, on commercially reasonable terms or at all. Any future acquisitions, joint ventures, or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms or at all.
39
Table of Contents
Cash Flows
Information about our cash flows, by category, is presented in our statements of cash flows and is summarized below:
|
|
Six Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Operating activities |
|
$ |
82.3 |
|
|
$ |
151.7 |
|
Investing activities |
|
$ |
(106.8 |
) |
|
$ |
(83.4 |
) |
Financing activities |
|
$ |
(39.9 |
) |
|
$ |
(67.4 |
) |
Adjusted Free Cash Flow (1) |
|
$ |
(24.5 |
) |
|
$ |
67.0 |
|
(1) See “Non-GAAP Financial Measures” above for a reconciliation to the most directly comparable GAAP measure.
Cash Flows provided by Operating Activities
Net cash provided by operating activities for the six months ended March 31, 2026 decreased $69.4 million to $82.3 million, from $151.7 million in the 2025 period. This decrease was due to a decrease in cash provided by accounts receivable and unbilled and deferred revenue. The decrease was partially offset by increases in non-cash adjustments to reconcile net loss to net cash provided by operating activities combined with a decrease in cash used by accounts payable and other operating liabilities.
Cash Flows (used) by Investing Activities
Net cash used by investing activities increased $23.4 million to $106.8 million for the six months ended March 31, 2026 from $83.4 million in the 2025 period. The increase was primarily driven by a $21.2 million increase in capital expenditures in comparison to the prior period.
Cash Flows (used) by Financing Activities
Net cash flows used by financing activities of $39.9 million for the six months ended March 31, 2026 included repurchase of common stock and distributions of $33.2 million, repayments of finance lease obligations of $27.8 million, Series A preferred stock dividends of $18.1 million, and repayments under the Receivables Financing Agreement of $13.0 million. These uses of cash were partially offset by proceeds from our Receivables Financing Agreement of $45.1 million and increase in book overdrafts of $6.5 million.
Adjusted Free Cash Flow
Adjusted Free Cash Flow decreased $91.5 million to an outflow of $24.5 million for the six months ended March 31, 2026 from an inflow of $67.0 million in the 2025 period. The decrease in Adjusted Free Cash Flow was due to a decrease in net cash provided by operating activities, combined with an increase in cash used for capital expenditures, each as described above.
Working Capital
(in millions) |
|
March 31, |
|
|
September 30, |
|
||
Net Working Capital: |
|
|
|
|
|
|
||
Current assets |
|
$ |
629.6 |
|
|
$ |
666.3 |
|
Less: Current liabilities |
|
|
512.4 |
|
|
|
514.5 |
|
Net working capital |
|
$ |
117.2 |
|
|
$ |
151.8 |
|
Net working capital is defined as current assets less current liabilities. Net working capital decreased $34.6 million to $117.2 million as of March 31, 2026, from $151.8 million as of September 30, 2025, primarily driven by a decrease in cash and cash equivalents of $64.4 million, increase in deferred revenue of $26.4 million, and a decrease in unbilled revenue of $19.9 million. This was partially offset by an increase in accounts receivable, net of $38.9 million, a decrease in accrued expenses and other current liabilities of $17.1 million, a decrease in accounts payable of $13.4 million, and an increase in other current assets of $8.7 million.
40
Table of Contents
Description of Indebtedness
As of March 31, 2026, we were in compliance with all of our debt covenants and no event of default has occurred or was ongoing. See Note 7 “Long-term Debt” to our unaudited consolidated financial statements included under Part I, Item 1, “Financial Statements”.
Contractual Obligations and Commercial Commitments
As of March 31, 2026, there were no material changes outside the ordinary course of business in our contractual obligations and commercial commitments from those reported as of September 30, 2025 in our Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
Management has evaluated the accounting policies used in the preparation of the Company’s consolidated financial statements and related notes and believe those policies to be reasonable and appropriate. Certain of these accounting policies require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate. The most significant areas involving management judgments and estimates may be found in the Annual Report on Form 10-K, in the “Critical Accounting Policies and Estimates” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes to our critical accounting policies as compared to the critical accounting policies described in the Annual Report on Form 10-K for the year ended September 30, 2025.
Recently Issued Accounting Policies
The information set forth in Note 2 “Recent Accounting Pronouncements” to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” is incorporated herein by reference.
41
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes to the Company's market risk during the three months ended March 31, 2026. For quantitative and qualitative disclosures about market risk, see “Item 7A. Quantitative and Qualitative Disclosure of Market Risk” in the Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
In accordance with Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision of our CEO and our CFO, the effectiveness of disclosure controls and procedures as of March 31, 2026. Based on this evaluation, our CEO and our CFO concluded that our disclosure controls and procedures were effective as of March 31, 2026 at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There has not been any change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
42
Table of Contents
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
The information set forth in Note 11 “Commitments and Contingencies” to our Condensed Consolidated Financial Statements under Part I, Item 1, “Financial Statements,” is incorporated herein by reference.
Item 1A. Risk Factors.
There have been no material changes to the risk factors included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as filed with the SEC on November 19, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
The following table provides information about the Company's share repurchase activity during the second fiscal quarter of 2026:
Period |
(a) |
|
|
(b) |
|
|
(c) |
|
|
(d) |
|
||||
January 1, 2026 - January 31, 2026 |
|
381,157 |
|
|
$ |
13.12 |
|
|
|
381,157 |
|
|
$ |
115,327,954 |
|
February 1, 2026 - February 28, 2026 |
|
243,570 |
|
|
|
13.76 |
|
|
|
243,570 |
|
|
|
111,976,856 |
|
March 1, 2026 - March 31, 2026 |
|
474,289 |
|
|
|
12.25 |
|
|
|
474,289 |
|
|
|
106,166,723 |
|
Total |
|
1,099,016 |
|
|
$ |
12.89 |
|
|
|
1,099,016 |
|
|
$ |
106,166,723 |
|
(1) On November 19, 2025 the Company announced an increase in its share repurchase program increasing the authorized amount of repurchases to $150 million of common stock. Under the share repurchase program, any repurchases will be made at management’s discretion and may be through a variety of methods, such as open-market transactions (including pre-set trading plans), accelerated share repurchases, and other transactions in accordance with applicable securities laws. The Company anticipates repurchase activities to occur over an extended period of time. The program has no time limit. The share repurchase authorization does not obligate the Company to acquire any particular amount of common stock and can be discontinued at any time.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act)
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Table of Contents
Item 6. Exhibits.
The following is a list of all exhibits filed or furnished as part of this report:
Exhibit No. |
Description |
3.1 |
Composite Third Amended and Restated Certificate of Incorporation of the Company (as amended through March 7, 2023) (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on November 19, 2025) |
|
|
3.2 |
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on July 2, 2018) |
|
|
3.3 |
Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 28, 2023) |
|
|
31.1* |
Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
31.2* |
Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
32.1** |
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
32.2** |
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
101.INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
104 |
The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 has been formatted in Inline XBRL. |
* Filed herewith.
** Furnished herewith.
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
BrightView Holdings, Inc. |
|
|
|
|
|
Date: May 5, 2026 |
|
By: |
/s/ Brian Jackson |
|
|
|
|
|
|
|
Brian Jackson |
|
|
|
Chief Accounting Officer |
|
|
|
(Principal Accounting Officer) |
|
|
|
|
45