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Introduction & Market Context
APi Group Corp (NYSE:APG) reported its first quarter 2025 financial results on May 1, showcasing continued revenue growth and margin expansion, building on the momentum from its strong 2024 performance. The company, which specializes in safety, specialty, and industrial services, saw its stock trading at $37.83 as of April 30, 2025, near the upper range of its 52-week trading band of $30.76 to $41.31.
The Q1 results reflect APi Group’s continued execution of its "13/60/80" shareholder value creation framework, which targets 13% adjusted EBITDA margins, 60% of revenue from inspection and service, and 80% free cash flow conversion. The company’s performance comes amid a market environment where safety services continue to show resilience while certain specialty segments face headwinds.
Quarterly Performance Highlights
APi Group reported net revenues of $1.7 billion for Q1 2025, representing a 7.4% increase compared to the same period in 2024. Organic net revenue growth was approximately 2% year-over-year. The company achieved adjusted EBITDA of $193 million, with margin expansion of 30 basis points to 11.2%.
As shown in the following financial highlights from the presentation:
Adjusted diluted earnings per share reached $0.37 in the first quarter, an 8.8% increase from Q1 2024. The company demonstrated significant improvement in cash flow generation, with first quarter adjusted free cash flow of $86 million, representing 44.6% conversion and a substantial $74 million increase compared to the prior year.
The company’s financial results overview clearly illustrates the segment contribution breakdown:
Safety Services dominated the company’s financial performance, contributing 74% of net revenues, 86% of adjusted gross profit, and 87% of adjusted EBITDA. This segment concentration highlights the importance of the safety business to APi Group’s overall performance.
A more detailed breakdown of key financial metrics shows consistent improvement across most performance indicators:
Segment Analysis
APi Group’s performance revealed a tale of two segments, with Safety Services showing robust growth while Specialty Services faced challenges. The Safety Services segment, which includes fire protection, security solutions, and elevator services, delivered net revenues of $1.27 billion, a 13.4% increase compared to Q1 2024, with organic growth of 5.6%.
In contrast, the Specialty Services segment experienced a 6.8% decline in net revenues to $453 million, with organic revenue falling 6.6%. This segment also saw margin compression, with adjusted gross margin declining 150 basis points to 16.8%.
The following segment breakdown provides a clear picture of this divergent performance:
The strong performance in Safety Services aligns with CEO Russ Becker’s previously stated focus on "growing inspection, service, and monitoring revenue," as mentioned in the company’s Q4 2024 earnings call. The segment’s earnings margin expanded by 90 basis points to 15.7%, demonstrating the effectiveness of the company’s margin expansion initiatives in this area.
Financial Position and Capital Allocation
APi Group maintained a solid financial position with a net leverage ratio of approximately 2.3x, well below its long-term target of around 2.5x. The company has no debt maturities until 2029 and successfully repriced its Term Loan due 2029, which is expected to save approximately $5 million in interest expense annually.
The company continued its share repurchase program, buying back approximately $75 million (2.1 million shares) during the quarter. Additionally, APi Group authorized a new $1 billion share repurchase program, signaling confidence in its financial outlook and commitment to returning value to shareholders.
2025 Guidance and Outlook
APi Group maintained a positive outlook for 2025, with slight upward revisions to its guidance due to favorable currency impacts. The company now expects net revenues of $7.4 to $7.6 billion, up from its February 2025 initial guide of $7.3 to $7.5 billion. Similarly, adjusted EBITDA guidance was raised to $985 to $1,035 million from $970 to $1,020 million.
The updated guidance is presented in the following table:
For the second quarter of 2025, APi Group expects net revenues of $1,875 to $1,925 million, representing 8-11% growth compared to Q2 2024. Organic growth is projected at 3-6% for the quarter. Adjusted EBITDA for Q2 is expected to be between $260 and $270 million, a 13-17% increase year-over-year.
The company’s full-year 2025 guidance includes:
APi Group continues to target approximately 75% adjusted free cash flow conversion for the full year 2025, demonstrating its focus on cash generation and financial discipline.
The company’s strategic framework emphasizes building great leaders, growing revenue, expanding margins, and generating free cash flow, as illustrated in its shareholder value creation model:
Looking ahead, APi Group will host its 2025 Investor Day on Wednesday, May 21, 2025, at the New York Stock Exchange, where it is expected to provide further details on its long-term strategic initiatives and financial targets.
Full presentation:
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