BLUE BELL, PA — BrightView Holdings, Inc. (NYSE: BV) reported its unaudited financial results for the third quarter ended June 30, 2024, with notable improvements in net income and EBITDA despite a drop in revenue.
The landscaping services firm saw total revenue decrease 3.6% year-over-year to $738.8 million. This drop was mainly due to a $39.2 million decline in its commercial landscaping business, partially offset by an $11.6 million increase in development services revenue.
Net income, however, rose 39.9% to $23.5 million, with net income margins expanding by 100 basis points. Adjusted EBITDA increased 6% to $107.9 million, reflecting a 130 basis point gain in EBITDA margins.
“Third quarter served as another milestone as we continue to progress with our One BrightView initiatives and delivered margin improvement across all segments,” said BrightView President and CEO Dale Asplund. “Our relentless pursuit to drive transformational change remains in the early innings.”
For the nine months ended June 30, 2024, revenue decreased by 1.6% to $2.04 billion. The company’s commercial landscaping business faced a $79.5 million decline, offset by gains in development services and snow removal revenue.
BrightView’s Maintenance Services segment saw a 7.1% revenue drop for the quarter, driven by reductions in non-core businesses and ancillary services. Despite this, the segment’s EBITDA margin improved by 40 basis points due to effective cost management.
On the other hand, Development Services enjoyed a 5.7% revenue increase, driven by higher project volumes. EBITDA for this segment rose $7 million, with a 270 basis point margin improvement.
Free Cash Flow for the first nine months surged to $120.2 million, an $82 million increase from the prior year. This was attributed to higher net cash from operating activities and reduced capital expenditures.
The company’s total net financial debt stood at $769.4 million as of June 30, 2024, down from $870.5 million on September 30, 2023, thanks to a voluntary debt repayment.
A Balancing Act for Investors
BrightView’s mixed performance leaves investors with a tough decision. The company’s ability to boost net income and EBITDA while managing costs shows resilience. However, declining revenues in core segments raise concerns.
The stock’s future hinges on the success of BrightView’s strategic initiatives and cost management. Given the current landscape, BrightView Holdings appears to be a Hold. Investors should monitor the company’s progress in reversing revenue declines and sustaining cost efficiencies.
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