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Sep 30, 2020
APi Group Q3 2020 Earnings Report
APi Group's financial results for Q3 2020 were reported, showing a revenue decline due to divestitures and COVID-19 impacts, but improved gross and operating income.
Key Takeaways
APi Group reported a decline in net revenues for Q3 2020, primarily driven by divestitures and COVID-19 impacts. However, the company saw increases in gross margin, operating income, and net income. The company is raising guidance for 2020 adjusted net revenues, adjusted EBITDA, and adjusted EPS.
Reported net revenues declined by 14.3% to $958 million compared to the prior year period.
Reported gross margin was 23.2%, a 233 basis point increase compared to the prior year.
Reported operating income was $62 million, a $49 million increase from the prior year.
Adjusted EBITDA was $115 million, relatively consistent with the prior year adjusted EBITDA margin.
Revenue by Segment
Forward Guidance
The Company announced it is increasing guidance for 2020 and believes that adjusted net revenues for the year will now range between $3,475 to $3,525 million, up from $3.4 to $3.5 billion, adjusted EBITDA will range between $360 to $370 million, up from $345 to $355 million, and adjusted EPS will range between $1.11 to $1.15, up from $0.94 to $1.00, based on an adjusted diluted share count of 176 million.
Positive Outlook
- Adjusted net revenues for the year will now range between $3,475 to $3,525 million.
- Adjusted EBITDA will range between $360 to $370 million.
- Adjusted EPS will range between $1.11 to $1.15.
- Remain focused on pre-COVID-19 objectives.
- Excited about the opportunities that lie ahead for the base business as well as the outlook for incremental opportunistic M&A activity.
Challenges Ahead
- Market conditions as a result of COVID-19 remain uncertain.
- Visibility is still somewhat limited.
- Difficult macro environment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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