BrightView Holdings, Inc. Q1 FY2026 earnings call

• Dale Asplund noted strong start to 2026 with 3% revenue growth, improved EBITDA, and accelerated sales force investments (added 80 incremental sellers). • Focus on frontline employees led to sequential improvement in turnover and customer retention. • Progress in branch network retention with 10% shift in top and bottom quartiles. • Rapid progress in strengthening sales force, with 80 additions in Q1 2026, pacing ahead of initial expectations. • Land Contract book improvement driven by net new sales and customer retention, indicating future revenue growth. • Continued investment in sales force to drive new sales and position BrightView as investment of choice. • Appreciation for employees' commitment to service. • Brett Urban discussed financial results, reiterating 2026 guidance with return to Land revenue growth and record adjusted EBITDA. • Highlighted strategic capital allocations including fleet refresh, share repurchases, and robust M&A pipeline.

Total revenue was $615 million, up 3%. Development segment revenue decreased 7% due to timing and mix of projects. Adjusted EBITDA grew. Land Contract book of business showed sequential improvement in net new sales, with 3 consecutive quarters of increased net new contract sales and growth of approximately 2%. Maintenance land revenue was impacted by weather but underlying trends in employee turnover and customer retention are positive.

• Reiterated 2026 revenue, EBITDA, and free cash flow guidance, representing third consecutive year of record-breaking EBITDA, continued margin expansion, and return to Land revenue growth. • Free cash flow guidance coupled with ample liquidity provides financial flexibility to reinvest in the business.

• Potential delays in Land Maintenance service due to excessive snow in certain markets. • Timing-related headwinds in the Development segment. • Uncertainty in discretionary spend environment impacting ancillary trends. • Risks associated with integration and acquisition in M&A activities if pursued.

Q: Congratulations on a great start to the year. Yes, I wanted to go back to the sales force investment, obviously. You mentioned you're ahead of pace. Does this mean you're going to pause? Or do you keep your foot on the accelerator? What's the target for the year? And what's the impact on the P&L? I guess, finally, like how long does it take until new salespeople break even and add to the top and bottom line?

A: Dale Asplund said they're not going to slow down, will keep adding resources, originally looking to add another 100 this year on goal to adding 500 before 2030, well ahead of schedule, and Brett Urban added they're excited by progress in ramping up sales force.

Q: So Maintenance Land, let's just start there. Yes, your Maintenance Land business was down a little more than 2% in the first quarter, but you maintained your guide for 1% to 2% growth for the full year. That implies about 2.5% growth for the remaining 3 quarters. And I know January is off to a snowy start, so if there's disruption in the second quarter here, then it looks like a lot of that growth in Maintenance Land is going to have to come from those last 2 quarters of the fiscal year. Can you just help us understand where you expect that growth to come from? Help bridge that gap for us.

A: Dale Asplund said snow was very high in the quarter, breaking down the $8.9 million shrinkage in Land, attributing part to prior year storms and snow, and confident of achieving 1% to 2% Land growth as business is poised to grow in busy seasons, Brett Urban added confidence in contract book growth as leading indicator of back half growth.

Q: I wanted to maybe hit on the weather stuff a little bit more just given some of the recent events. So can you talk about kind of what you've seen quarter-to-date in terms of impacts, both positive and negative? And I guess, as I'm thinking about it, just given this elevated amount of snow in certain markets, are you using that as a way to maybe onboard new customers that you can maybe convert to annual Land Maintenance contracts as well?

A: Dale Asplund talked about snow being positive in first quarter, January strong, optimistic about Q2 snow results, and Brett Urban added that elevated snow can lead to onboarding new customers for Land Maintenance contracts through customer outreach and demonstrating service capabilities.

Q: Slide 9, again, the contract book of business, 3 quarters up 2%, that's great. I just wonder like if there's some context here around like we're in the middle of winter right now. And I know that -- I guess, you guys have said that your selling season has become more of an all-year-round thing. But for those seasonal markets, I have to think that some of your customers are still thinking about what they want to do for the coming green season. So does the 2% more likely look better a quarter from now after you get through some of those people in the seasonal markets making the decision for the year? I'm just trying to understand if this is actually conservative, for lack of a better term, or if I'm making too much out of it.

A: Dale Asplund said selling happens all year round, and Brett Urban added that progress on contract book is due to sales force adds and long-term strategy, showing confidence in continued momentum.

Q: I wanted to circle back on maybe a question that was asked earlier, but I'm going to ask it a little bit differently. As you think about all of the success you've had thus far to start the year from the investment standpoint, obviously, the strong snow season, maybe just talk about the level of confidence you have in the guide, understanding it's obviously still early in the year and you need to get through your busy season? But I'm trying to understand what could maybe go wrong or in a more negative direction, which would make the guidance a little bit more difficult. So maybe downside scenarios that you guys walk through.

A: Dale Asplund said there could be timing issues due to snow, but upside from ice damage and ancillary growth, feeling upside greater than downside. Brett Urban added on capital allocation, stating share repurchases are accretive at current multiples and M&A will be pursued when right.

Q: How should we think about the cadence of development revenue growth this year after the segment was negatively impacted by project timing in the December quarter? And then, has there been any change in the timeline of the 4 to 5 large projects you're working on compared with prior expectations? Or is that in line with what you were expecting when you gave guidance last quarter?

A: Dale Asplund said development progress is swinging back, projects still hit timelines though there are timing differences, and he's not worried about development business long term.

Q: I was wondering if you could provide an update on your cold start initiative and the timeline of that this year? And then, also, with the increase you've seen in the sales force, obviously, that's mainly on the maintenance side. But have any of the new hires been on your development business as well? And how will that help with growth over the coming years?

A: Dale Asplund said 6 locations opened for development, about 10% of new sellers in quarter went to development team, and progress is being made with new locations.

Q: I'll just squeeze one in here. Maybe just help us think about snow margin, especially heading into the second quarter with how much we had, had in January, and we'll see how February, March play out. But how much of the snowfall so far is in fixed versus variable? And then, can you talk about the potential for some of these clients, as they move up in tiers, does that potentially add more margin upside in the Snow business in the second quarter?

A: Dale Asplund said a big portion of contracts are fixed tier, margin expectation on incremental snow between 20% and 25%, and they feel will be comfortably in that range as they go through Q2, with more benefit on profit as they trigger additional tiers.