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DATE

Wednesday, May 6, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Dale Asplund
  • Chief Financial Officer — Brett Urban

TAKEAWAYS

  • Total Revenue -- $703 million, a 6% increase, driven primarily by Land revenue and above-average snow activity.
  • Land Revenue -- Up $13 million, representing 4% growth, marking the first year-over-year increase in this segment since Q3 2023.
  • Adjusted EBITDA -- Record $79 million with a margin of 11.3%, an 8% increase over prior year.
  • Maintenance Segment Margins -- Expanded 110 basis points due to higher revenue flow-through and operational efficiencies.
  • Snow Revenue -- Increased $85 million, or 40%, from prior year, ending $70 million above the previous high-end guidance.
  • Development Segment Revenue -- Decreased 13% as a result of project timing delays, which management described as temporary rather than lost revenue.
  • Land Contract Book Growth -- Up 3%, reflecting four consecutive quarters of net new sales growth, signaling future recurring revenue strength.
  • Frontline Turnover -- Improved approximately 5 percentage points sequentially and 35% since inception of the One BrightView initiative.
  • Customer Retention -- Rose to nearly 85%, an increase of approximately 550 basis points since 2023, with 35% of branches now at 90%-plus retention.
  • Sales Force Expansion -- Sales team increased by roughly 200 sellers year over year, progressing toward management’s 50% growth target from the Investor Day plan.
  • 2026 Revenue Guidance -- Raised to $2.745 billion to $2.795 billion, a 4% increase at midpoint over 2025 and 3% above management’s prior guidance, assuming Maintenance Land growth of 2%-3% and updated snow revenue outlook.
  • Adjusted EBITDA Guidance -- Reaffirmed in the range of $363 million to $377 million, indicating a third consecutive record year and margin expansion at the midpoint.
  • Adjusted Free Cash Flow Guidance -- Reaffirmed at $100 million to $115 million, supporting continued investment in the business.
  • Snow Contract Structure -- Shifted to a 60% variable/40% fixed mix to mitigate revenue unpredictability and enhance year-round service stability.
  • Fuel Cost Mitigation -- Approximately 25% of the remaining fuel requirement is hedged and ancillary work is dynamically priced; enhanced route density and technology are being employed to further control costs.
  • Liquidity and Credit Facilities -- Revolving credit facility was extended post-quarter, adding $100 million in capacity and reducing pricing by 25 basis points.

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RISKS

  • Management warned of potential cost headwinds due to fuel price volatility as "60% of our fuel consumption occurs in the second half of the year" and only "approximately 1/4 of our remaining fuel consumption is hedged," with direct potential P&L impacts if prices remain elevated.
  • Development segment revenue declined 13% because of project delays, though management characterized this as timing-related and not lost business over the long term.
  • The business model’s continued reliance on variable snow contracts leads to revenue unpredictability, as highlighted by the current 60%/40% variable/fixed contract mix.

SUMMARY

BrightView (BV 1.74%) reported a key financial inflection in its Land segment, breaking a multi-year pattern of flat or declining revenue by achieving 4% growth and expanding contract backlog. Management unveiled improved operational indicators, including rapid sales force expansion and sharply rising customer retention near historical highs. The company strengthened its liquidity after quarter end by extending and improving revolving credit terms, while maintaining capital allocation priorities for continued investment in organic and M&A-driven growth. Guidance for fiscal 2026 was raised, factoring in higher snow revenue and improved expectations for Land Maintenance, despite management’s explicit caution regarding fuel price volatility and temporary softness from Development segment project delays.

  • Management explicitly stated, Total revenue guidance is now in the range of $2.745 billion to $2.795 billion, representing a 4% increase at the midpoint versus 2025 and a 3% increase versus management’s prior guidance.
  • The strategy of accelerating investments in new sales personnel was described by management as producing tangible growth, with net new sales growth driving 3% growth in the Land Contract book.
  • Management pointed to frontline turnover with an approximately 5 percentage point improvement over the previous quarter as a direct lever tied to productivity and customer stability.
  • Dale Asplund highlighted the upfront productivity ramp for new sales hires, noting, A fully matured seller has been with us roughly 18-ish months, and we target about $1.5 million of new sales.
  • Development’s leading indicators, with development bookings roughly 15% year-to-date and development cold starts launched in markets where Maintenance branches already exist, could suggest future multi-segment client penetration but were not yet reflected in the quarter’s revenue.

INDUSTRY GLOSSARY

  • Land Contract Book: The total dollar value of recurring maintenance contracts on the company’s books, serving as a leading indicator of future recurring revenue for the Land segment.
  • One BrightView Initiative: Company-wide transformation program emphasizing employee retention, operational efficiency, and integrated service delivery across Maintenance and Development segments.
  • Cold Start (Development): Launch of a new Development segment branch in a market previously served only by Maintenance, aimed at cross-selling and expanding the client base.

Full Conference Call Transcript

Dale Asplund: Thank you, Chris, and good morning, everyone. Our second quarter marked a key inflection point for BrightView as our transformation strategy centered around prioritizing our employees and putting the customer at the center of everything we do has begun to yield meaningful returns and inflect sustainable and profitable top line land growth. While this is a pivotal moment for BrightView and our ongoing transformation, our momentum is building as we continue accelerating investments in our go-to-market teams as we manage the business for the long term. Total revenue grew 6% in the quarter, highlighted by a robust 4% increase in Land revenue, reaffirming that our transformation strategy is working and positions the business for sustained momentum.

We also delivered record second quarter adjusted EBITDA of $79 million with a record margin of 11.3%, underscoring the strength and scalability of our business. From day 1 of my tenure, my focus has been on solidifying the foundation of our business through improving frontline turnover, driving higher customer retention and unlocking our size and scale as the industry's largest commercial landscaper. These initiatives continue to strengthen the foundation and have allowed us to accelerate investments back into our sales force, resulting in the continued momentum in our contract book of business. Now we are seeing the expanded contract book drive revenue growth in our Land segment.

This, combined with outsized snow performance in the quarter positions us to raise our 2026 revenue guidance and reaffirm our commitment to delivering a third consecutive record EBITDA year. While the broader macroeconomic environment remains uncertain, we've built a resilient business model designed to perform through cycles. The recurring nature of our contract revenue, combined with disciplined pricing and cost management position us to continue driving sustained profitable growth in both the near and long term.

While we're enthusiastic by the progress we've made this quarter, this marks just the beginning of our journey to drive sustained, profitable top line growth in both the near and long term supported by continued investments in our frontline employees, a growing sales force and the realization of efficiencies from our size and scale, driving meaningful shareholder value and positioning BrightView as the investment of choice. Turning to Slide 5. We continue to reduce frontline turnover with an approximately 5 percentage point improvement over the previous quarter and 35% since the start of our One BrightView initiative.

Our focus remains, as it has since day 1, on prioritizing our frontline employees by creating a safe and rewarding environment, offering industry-leading benefits and providing reliable, consistent schedules. This continues to differentiate BrightView from its competition as the Employer of Choice, driving improved turnover and unlocking cost efficiencies that we're reinvesting into our frontline. Moving to Slide 6. I've said in the past, the longer we retain frontline employees, the more consistent our service delivery is. And as a result, customer retention continues to improve. Since bottoming at approximately 79% in 2023, retention has increased by approximately 550 basis points as of Q2 2026, now approaching IPO levels of 85%.

This sequential improvement reflects the commitment of our frontline teams, our focus on service quality and our continued investment in the business which together are strengthening our underlying contract book and setting the foundation for sustained land revenue growth. Over the past 2-plus years, we have strengthened relationships with our customers by delivering best-in-class service and earning their trust. In light of recent macroeconomic uncertainty and rising fuel costs, our priority remains on maintaining long-term relationships with our customers and not reacting to potential short-term headwinds. As I've said since day 1, we are managing this business for the long term and customer retention remains a top priority to delivering sustainable, profitable growth. Continuing to Slide 7.

I'd like to highlight the progress we've made in improving customer retention across our branch network with approximately 35% of our branches now achieving best-in-class 90-plus percent retention, a significant improvement since 2024. At the same time, the share of underperforming branches has declined with only 10% of our branches now under 70% retention. We know the branches with higher retention are yielding growth and our improvement reflects meaningful progress. But let me be clear, there is still plenty of runway for improvement as we continue to transform this business. Now to Slide 8, where we see the significant byproduct of our transformation continuing to materialize through accelerated momentum in our Land Contract book.

The equation is simple: improved customer retention and the accelerated ramping of our sales force are generating growth in our net new sales, a metric that factors in both customer retention and new contract sales. As previously mentioned, customer retention has improved through our ongoing initiatives. The second part of the equation has been ongoing since the back half of 2025 and really accelerated in the first quarter of 2026. Now as our increased sales force is ramping up their productivity, we are starting to realize the true momentum that has been building over the past few quarters.

The combination of these 2 metrics improving in [ unison ] has contributed to 4 consecutive quarters of net new sales growth driving 3% growth in our Land Contract book of business, a key leading indicator of future top line growth and in the recurring Land Maintenance business. Now as we move to Slide 9, we are reaching an inflection point where the momentum built in our contract book over the past year is translating into measurable results. Land Maintenance revenue grew 4% in the quarter and approximately 1% year-to-date, making the first year-over-year increase in the segment since the third quarter of 2023.

This growth has been made possible by the steps we've taken to solidify the foundation of our business by investing in and prioritizing our frontline employees delivering consistent, reliable service to our customers and unlocking our size and scale as the industry's largest commercial landscaper. These efforts have driven sequential improvement in employee turnover, customer retention and margin expansion, all of which are strengthening the core foundation of our business and will continue to be key focus areas for the future. On top of this, we will continue to focus on driving profitable top line growth through accelerated sales force investments.

This will be key to continuing contract book growth, providing a runway for heightened ancillary sales and increasing density within existing and adjacent service lines. As we grow our business organically, we continue to evaluate M&A opportunities that either complement our core business or help drive expansion in greenfield markets. Last quarter, I highlighted our expectation for Land growth in the back half of 2026. The acceleration in our contract book, along with other key underlying metrics give us the confidence to raise our 2026 Land revenue guidance, which Brett will discuss in more details in a few minutes. Before turning the call over to him, I want to express my gratitude to our nearly 18,000 employees.

During the month of April, we celebrated Employee Appreciation Week. It was great to see pictures and hear stories of how the branches celebrated their teams. Their unwavering commitment to delivering consistent, high-quality service reinforces our position as the Provider of Choice and is just the beginning of our journey ahead. It is the customer-first mindset and relentless focus on service that defines BrightView. And we thank our employees for their continued commitment to excellence. With that, I will now turn the call over to Brett.

Brett Urban: Thank you, Dale, and good morning, everyone. Our second quarter results reflect the continued momentum we are building across the business with solid execution driving another strong quarter of record financial performance, most notably in our Land Maintenance segment, where revenue grew 4%. The strategic investments we have made over the past 2-plus years in our employees, customer experience and sales force are translating into tangible results as evidenced by our improving retention, strengthening demand and encouraging results from our expanded sales efforts. We are increasingly excited about the trajectory of the business and continued momentum towards future sustainable growth.

This is reflected in our updated guidance, which raises total revenue and Land revenue and reaffirms a third consecutive year of record adjusted EBITDA. Let's now turn to Slide 11 to discuss profitability in the quarter. We delivered record Q2 adjusted EBITDA and margin of $79 million or 11.3%. This represented an increase of $6 million and 8% higher than prior year as we continue to realize efficiency in our business. Higher revenue in the quarter drove incremental flow-through, while fleet refresh initiatives, enhanced procurement-driven purchasing power and continued G&A savings drove efficiencies.

These benefits were partially offset by the acceleration of the investments in our sales force, which was funded by a portion of the incremental benefit from the outsized snowfall in the quarter. These revenue-generating resources underpin our growth strategy as evidenced by the 4% growth in our Land business, which was driven by our continued momentum in our Land Contract book. At the segment level, Maintenance margins grew 110 basis points, supported by the higher revenue flow-through and continued efficiencies in the business. In development, margins contracted in the quarter as a result of the timing and mix of projects.

As a reminder, the margins in this segment benefited the most over the past 2 years as we implemented our One BrightView strategy and are still significantly above pre- One BrightView. Moving to Slide 12. Revenue for the second quarter was $703 million, representing a 6% increase driven by Land revenue growth and above-average snowfall in the quarter. Land revenue was a major bright spot, growing $13 million, representing a 4% increase from the prior year. This marks the much anticipated inflection in Land revenue growth, the recurring and highly resilient revenue stream of our business, driven by the continued momentum in our growing contract book and rising demand across the segment.

We are highly encouraged that this result demonstrates the successful execution of our transformation strategy with benefits expected to continue in the back half of 2026 and beyond. These benefits are reflected in our updated Land revenue guidance, which I will discuss in a bit. Snow once again was a major benefit in the quarter, increasing 30% from the prior year as we saw higher-than-average snowfall in the Mid-Atlantic and Northeast geographies, slightly offset by lower snowfall in the Rocky Mountain and Pacific Northwest regions. In the Development segment, revenue decreased 13%, driven by project timing delays. To be clear, the headwinds we experienced here were timing related and should not be viewed as lost revenue over the long term.

Building on that, let's turn to Slide 13 to look into our growth prospects in the Development segment. The segment was unable to get some work in the ground this quarter due to adverse weather. However, our strategic initiatives provide a balanced runway for continued long-term success. As we are building our sales force in the Maintenance segment, we are doing the same in Development, where we have about 50% more sellers versus this time last year. These sellers are already contributing to the business' underlying momentum, and we've grown development bookings roughly 15% year-to-date.

This metric is the leading indicator of future development growth and drives our confidence in the long-term health of this business as we continue to sell into 2027 and beyond. At the same time, we are also enhancing our market position by leveraging our existing footprint through development cold starts with 6 currently opened and 5 more underway. These new branches located in markets where we already serve for maintenance will drive incremental development activity and result in multi-segment growth. Moving to Slide 14. I'd like to touch on snow as the winter season is now primarily behind us.

Snow was a major benefit to revenue for the first half of 2026, growing approximately $85 million or 40% from the previous year as we saw record snowfall across core snow markets. This came in $70 million above the high end of our original guidance, enabling us to fund accelerated investments into our sales force, which will further drive sustained profitable top line growth. While snow was certainly a benefit in 2026, our current contract structure leans 60-40 variable versus fixed revenue contracts, and this creates a degree of unpredictability when forecasting revenue as snowfall can vary year-to-year. Since our February 2025 Investor Day, we've made progress increasing our mix of fixed tiered contracts.

This shift towards a higher mix of fixed contracts will enhance revenue predictability, mitigate the impact of light snowfall and enable us to service our customers year-round. Turning to Slide 15. I'll provide a brief update on the strategic actions we've taken to fortify our balance sheet. Subsequent to quarter end, we extended our revolving credit facility, enhancing our liquidity position and extending our maturity profile. This transaction also includes a 25 basis point reduction in pricing and provides an additional $100 million of capacity to support future liquidity needs. This further strengthens our financial flexibility and reflects our continued proactive management of the balance sheet.

Let's turn to Slide 16 for our updated 2026 guidance, which we have provided a reconciliation on Slide 21 in the appendix of the presentation today. Our updated guide is highlighted by raising total revenue and raising Land Maintenance revenue for the year. Total revenue guidance is now in the range of $2.745 billion to $2.795 billion, representing a 4% increase at the midpoint versus 2025 and a 3% increase versus our prior guidance. This guidance assumes Maintenance Land growth of 2% to 3%, a 100 basis point increase at the midpoint of our previous guidance. This also assumes snow revenue of approximately $290 million, an increase of approximately $70 million versus the original high end of the guide.

Development guidance has also been updated to reflect timing impact of projects. Moving to adjusted EBITDA. We are reaffirming our guided range of $363 million to $377 million, which represents another year of record adjusted EBITDA and margin expansion of roughly 20 basis points at the midpoint. Included within this guidance are costs related to our accelerated investments into our sales force, which we expect to continue at a similar pace, but does not include the potential impact of fuel price volatility, which I will touch on in a minute.

It's important to note that at the midpoint of our margin guidance implies an approximate 300 basis point improvement over the last 3 years, reflecting the incredible progress made on our transformation. We are also reaffirming our adjusted free cash flow guidance of $100 million to $115 million, providing us with significant financial flexibility to continue to reinvest in the business. In total, this guidance reflects a third consecutive year of record-breaking adjusted EBITDA, continued margin expansion and the continuation of Land revenue growth. To wrap up, let's move to Slide 17 to describe the potential impact of higher fuel costs in the back half of the year and the actions we're taking to mitigate against this.

Through the first half of the year, fuel prices were relatively consistent with prior year. But amid recent macroeconomic uncertainty, prices have moved higher and are fluctuating daily. Given that roughly 60% of our fuel consumption occurs in the second half of the year, continually higher prices has the potential to create cost headwinds. While approximately 1/4 of our remaining fuel consumption is hedged, the unhedged portion remains exposed to market volatility. Given the volatility in the price of oil, this could mean varying impacts based on how long prices remain elevated. That said, there are mitigating factors within our control that will help us offset a portion of this impact as the year progresses.

Pricing power remains a key lever for us. Ancillary work, representing approximately 1/3 of our total land revenue is priced daily and adjust in real time to reflect cost increases. Additionally, all new bids and annual contract renewals incorporate these higher costs. Alongside pricing, we are working on our own efficiencies on reducing fuel consumption through improved route density, minimizing idle time and leveraging technology to identify the most cost-effective fuel options. Before turning the call back over to Dale, I want to underscore my confidence in the momentum of the business and the ability to deliver sustainable, profitable top line growth.

Our investments continue to drive measured improvements in employee turnover and customer retention and are now powering top line growth in the Land Maintenance segment, a trend we expect to build upon in both the near and long term to deliver meaningful value for our shareholders. With that, I'll turn the call back to Dale.

Dale Asplund: Thanks, Brett. Before we turn to questions, I want to express my enthusiasm for the trajectory of our business, underpinned by the inflection of Land Maintenance revenue in the quarter, continued growth in our contract book and sequential improvement in our core KPIs as we execute upon our strategic objectives. This progress has been made possible by our people who are at the center of everything we do and the driving force behind our transformation. While we're encouraged by these results, this marks just the beginning of our journey to deliver sustainable, profitable top line growth and create meaningful long-term shareholder value. With that, operator, you can open the call up for questions.

Operator: [Operator Instructions] We'll go first this morning to Tim Mulrooney with William Blair.

Timothy Mulrooney: It be hard to limit myself to one question here, but I'll do my best. I guess I want to ask about the Land Maintenance growth because it feels like we've been -- what we've all been waiting for is finally here, inflecting in a positive territory here and a positive 4% at that, which was well above our expectations. We were actually expecting organic revenues to decline a little bit in the quarter and that's a pretty big variance relative to our expectations. So was some of this just weather related?

Or how would you characterize the main drivers of this result so that we can get comfortable with underwriting, I don't know, a similar level of growth in the second half here?

Dale Asplund: Yes. Thanks, Tim. I'll start off and I'll let Brett add. 30 months. 30 months, we've been waiting for this inflection point, Tim. And you are right. We have done everything right to build the foundation for getting us ready for growth. And even though last quarter, we had some headwinds from weather where we actually reported a slight decline in Land. We were able to actually see some of that come back. We had said roughly $6 million of Q1's decline was just temporary. We saw some of that benefit return in Q2. And then even with the weather that we saw in Q2, the outsized snow, we still saw our Land business show growth.

Some of that was our ancillary revenue. But I think the big important topic in answering the second half of your question is what we see that builds momentum. When you look at everything we talked about in Q1, where we talked about our book of business being up 2%, we just reiterated that by saying at the end of Q2, now we're up 3%. Just let me do some math for everybody on the call. Our book of business is roughly $1.15 billion. If we have a 3% growth in that book of business, that means we're growing our contract book by roughly $35 million. 60% of our Land revenue will occur over the next 6 months.

So that means we have $20 million of tailwind built into our updated guide going from 1% to 2% Land growth to 2% to 3% Land growth. And on top of that, the most exciting part is with our continued momentum in retention getting up to almost pre-IPO levels at 84.5% roughly. That means the longer we keep customers, the more they're willing to work with us on ancillary services. So we are very confident. We saw this coming. We tried to give a little signal to that as we went through Q1's earnings. But now I think everybody sees the inflection point is behind us.

And Brett and I, I think both said the term several times, our focus is on sustained long-term profitable growth. And our Land business is key to that initiative. So Tim, great question. It's probably the one thing Brett and I are the most proud of. We've done it the right way. We've stayed focused on getting the business to be able to start growing organically the right way. And then, look, you heard me mention. I've said to all of our team, you have to earn the right to do M&A. I think our quarter here on Land shows people are starting to earn the right for us to consider M&A again.

But Brett, do you want to add anything?

Brett Urban: No, Tim, we're excited. Look, the inflection is here. I think we've been saying it's coming. They all said 30 months. You go back 2.5 years ago and investing in our employees, who invest in our customers and can drive that customer retention higher, the strategy is working. And now the strategy has evolved to investing in our sales force. We started that last year. We invested $6 million in our sales force in Q1, another $6 million in Q2. And I said it in the script, we're going to invest another $6 million probably in Q3 and another $6 million in Q4, because it's working.

The strategy we laid out on paper 30 months ago is now inflected growth in the Land business. If you look at the kind of the first half of the year, as Dale mentioned, it's about a 1% growth in the Land business, but we're entering into our busy season. We raised revenue guidance in Land. And the back half of the year implies a 3% to 4% growth in that Land business. So we couldn't be more excited, Tim, about the inflection being here.

Operator: We go next now to Greg Palm with Craig-Hallum.

Greg Palm: Congrats again on the solid results. Can you maybe just talk about the competitive environment a little bit? Just -- I don't know, it seems like a lot of factors that are now coming together that would support at least the potential for not just share gains, but maybe significant share gains. So maybe you can talk about what your thoughts on that are.

Dale Asplund: Yes. Great question, Greg. I think we have said from day 1, customers require quality service and your commitment to putting the customer at the center of everything you do is what's going to drive our path forward. We have to take care of what we can take care of in our control, and we've done that. When I joined in the end of '23, our customer retention was a dismal 79%. We were never going to outrun that type of loss on an annual basis. So we did that foundational work to get our branches focused on quality service to the customer, making sure the customers we had, we kept.

And now after 2.5 years, we're amplifying that by bringing in more sellers. So you keep your customers you have and you grow the new sales because the environment out there, a lot of people might be getting reactionary with what's going on in the overall economy with fuel. And we just remain focused on we're going to take care of our business for the long term. We're partnering with our customers. We're working with them to look at where we want to be over the next several years.

At our Investor Day last February, we made a commitment that we're going to grow this business and the targeted mid-single digits for our Land business, and we are still committed to that. And I think the trajectory that we'll exit 2026 and go into 2027 with puts us on a path for that. So we couldn't be excited about what we've done. Now what we've got to do, Greg, is continue to listen to customers. We've done great with snow this year, everybody saw. We had a big snow year, and we had a lot of customers turn to us to ask us if we can bail them out when we had a lot of snow coming down.

That creates relationships and gives us the opportunity to partner with customers all year round. We want to take care of the customers we have. And when new customers come in, we want to do what we promise we're going to do. That's what's key. We've got to make sure whatever we commit to, that's what we do. But Brett, do you want to add anything for Greg?

Brett Urban: No, Greg, I would just say market share, the market grows about 1% to 2% a year. This year, implied in our guide, we're going to grow at 2% to 3% a year. So yes, you're saying we're taking market share. And look, it starts with the strategy. It starts with taking care of our employees, which the minute Dale stepped in here for all 18,000 employees in this company. We put them front and center, especially the folks that service our customers. And that's driven customer retention. Now it's time to invest in our sales force, which we've been doing, which is resulting in higher growth than the market.

And look, you go out into our operations, Dale mentioned we had Employee Appreciation Week not too long ago, and you see our employees with new boots, new safety equipment, new vests, new high vis safety gear. You see them with new trucks and trailers, just the business has drastically improved over the last 2.5 years. And obviously, our customers are seeing that with the result in customer retention. And now it's our time to take share, Greg, as you just said.

Operator: We go next now to Stephanie Moore with Jefferies.

Stephanie Benjamin Moore: I wanted to segue off of that last question, but I might ask it to be more specific here. So I mean, definitely really appreciate what you just outlined and certainly the color on improved labor and customer retention. But could you maybe talk about how you think about your long-term strategy while also navigating this heightened fuel environment? And maybe it would be helpful if you could kind of compare and contrast to 2022 and the strategy at that time, which was the last time fuel really spiked and how it's different from what you guys have outlined today?

Dale Asplund: Yes. Thanks, Stephanie. It's a great topic because, obviously, a lot of people, including some of our vendors, the initial reaction is try to pass on any fuel headwinds they get to their customers. The last time BrightView did that back in 2022 when we started the year with 83% customer retention, and by doing a haphazard fuel surcharge that we just pushed out blindly across the board, it resulted in exiting the year down 300 basis points with a customer retention level at 80%. So we are going to make sure we put in the long-term view with our customers. We're going to communicate. Brett went through a litany of items we're doing to mitigate fuel.

Let me give you some statistics of what we're doing that's in our control and not trying to pass along our challenges to our customers at a very volatile time. And for those of the people I'm sure that watch the news every morning, there was new news out this morning that has oil coming right back down at a rapid pace. But let's talk about what we can control. First, Brett mentioned some of this stuff. I'll give you some statistics. We have made a considerable investment in our fleet, in our route density for our employees.

What else is a byproduct of that is we anticipate and what we've seen year-to-date is our consumption of fuel is down across our network between 5% and 8% in our branches. All that new investments we made are helping us use less fuel. We have to reduce idle time. We have to reduce -- we have to increase route density and reduce wasted time to make sure we're being as efficient as we can using fuel. Brett said it, we have ancillary services we're pricing every day. And this is a balance between us making sure we're still growing our ancillary business for our customers and showing them we respect them, yet pricing it at a fair level.

So we have built in some fuel opportunity into our ancillary pricing. And in the back half of the year, we have roughly $300 million of ancillary work of roughly half of that, we have an opportunity to do spot pricing on. So we'll get some recovery with that. When you look at the things we've done to mitigate, in the full year, we used 20 million gallons of fuel at BrightView. We're halfway through the year, just over 7 months now for BrightView. Roughly 60% of our fuel is used across the next 2 quarters.

So if you do the math on that, that's 12 million gallons of fuel that we're coming into the season with that we're going to consume. Of that 12 million gallons, we've already hedged fuel at about 25% of that. So that takes us down to 9 million gallons. If you take the improvement we've seen in fuel, that takes us down to 8.5 million gallons that we think we are potentially trying to find out how we're going to make sure, we find an offset for. In the month of April, we saw roughly $1 increase per gallon for that month, creating about $1.5 million headwind for us.

But we believe we will see some recovery as we work through all the initiatives I mentioned and continue to focus on making sure as fuel prices come down, we don't damage customers long term. We are 100% focused, not on the next 90 days, but on the next several years. Our project to get to 2030 goals is still our North Star, and it's not the third or fourth quarter. Brett, do you want to add?

Brett Urban: I would just add, Stephanie, we are going to be better partners to our clients than that. And that's what we're demonstrating right now. This short-term headwind that you see in the market is very dynamic. It changes every day. There was articles out this morning that drove fuel down over 10%. But we are not going to manage this business for the short term. We've said that continuously now for the last 10 quarters. And we're going to stay on that long-term focus. And back to the piggybacking on Greg's question, that's how we're going to be better partners to our customers. That's how we're going to gain market share. And I'll take one step further.

If we see in our regional areas where other service providers are passing along fuel increases, we'll pick up that business without the fuel increase. So we are going to be better than that to our customers. We're going to continue to drive customer retention. We're going to continue to sell more business through our expanded sales force, and we're not going to manage this business for the short term. The best long-term decision is going to be taking care of those customers now. So 6 months from now, a year from now when this all blows over, that's what's going to be remembered that's going to continue to drive that customer retention and that Land revenue growth even higher.

Operator: We go next now to Bob Labick at CJS Securities.

Bob Labick: On the quarter. We're viewing it as a beat and reinvest. And kind of with that team, you've talked about it a little bit. Can you talk about the decision to keep your foot on the pedal with the hiring of the salespeople? What have you learned so far from the recent hires that keeps you so encouraged? And where do you stand in your plan? I think you outlined a plan to increase the sales force 50% or so.

Dale Asplund: Yes. Yes. Great question, Bob, because it's what gives us the enthusiasm to keep looking at how much opportunity this business has. So it's a tough -- when you look at the investment to make in the sellers, we invested $6 million more year-over-year in Q1. We invested $6 million more year-over-year in Q2 in just the frontline sellers of our business. Now the way I look at those new sellers, Bob, the first 6 months, they relatively produce very little. Some of them don't produce hardly any sales as they start making customer relationships. Between 6 and 12 months, their annual run rate is closer to $500,000 to $600,000.

And once they get to a year plus, that's when they're starting to produce somewhere around $1 million. A fully matured seller has been with us roughly 18-ish months, and we target about $1.5 million of new sales. Here's the exciting part. We've been able to cover that $12 million that we invested year-to-date. And we're seeing that net new growth every quarter, 4 consecutive quarters now. We started to add sellers in the back half of '25, and we really stepped on the gas pedal in Q1, and we continued it in Q2. So what gives me the confidence is it's working. We just put up 4% Land growth.

We just raised our guide from 1% to 2% of Land for the year that on the last call, people questioned if we were going to be able to deliver to 2% to 3% growth. And we are optimistic that as we get into 2027, we can even do better than that. So we are not going to pause. This is our future. Growing this business is how we're going to make BrightView the Investment of Choice for our investors.

Long-term profitable growth is the key for us, and that's what we have to do by making sure we're bringing in new customers and getting our arms around our existing customers and keeping them as long as we can as a great partner. Brett, do you want to add?

Brett Urban: Yes, Bob, I only add the strategy is working. We're not going to slow down something that's showing positive signs and working for us. And we said during Investor Day around 15 months ago that we'd add 50% to our sales force, which is the starting point was about 1,000 in total sellers. We're well ahead of that pace. We've added just under 200 year-over-year right now. So call it, we're up to about 20% add of that 50% or 40% of the way there. So we are making significant progress much sooner than anticipated. Dale mentioned, we had the benefit of heightened snowfall, which allowed us to move quicker and pay for them.

But I would just say that the strategy is working, and we are going to go as quickly as possible to get these sellers on board, ramped up and productive.

Operator: We go next now to Greg Parrish with Morgan Stanley.

Yehuda Silverman: This is Yehuda Silverman on for Greg. Just have a quick question on the development cold starts that are opened and the 5 more underway. Just curious how bookings have been early on and how long you expect it will take to get to a normalized backlog book there? And what gives you confidence to have success in those regions?

Dale Asplund: Yes. Yes. It's great question, Yehuda. So look, I think one thing I've seen, we have -- and I've said this since the day I started, I met our teams in our development business, we have hands down some of the most talented development people in this industry. Our Development business is the largest in the industry. The jobs we do just amaze me. So our team in Development, while it's a choppy business, they do unbelievable work. And the one thing I can assure you, where we have the ability to do quality development installations and long-term maintenance service, we are a better provider, a better partner to our customers. And our customers see that.

So a year ago, I said what we have to do is take those markets that we're so strong in that we have great Development and great Maintenance teams working side-by-side under our One BrightView initiative, and we have to make that in every market we can service. So we announced we're going to open 10. What we need to do to open a Development branch, we usually have real estate with our Maintenance branches. We try to get a branch manager, we get a seller into that market, and we go up. What you see as us saying we have 6 that are open, it's because we have booked backlog. They vary.

Some branches have gotten big jobs, but I will assure you, every branch has a nice pipeline of open quotes that they're trying to land. The 5 that we still say are in process of opening. We've hired people. We have sellers. We have them starting to work. We haven't closed any deals there yet, but we anticipate over the next several months, we will see those go to fully open branches. We believe we need to have a Development resource helping our branches in every market that we service. And there's still so much open space for us to expand into through either M&A on the Maintenance side or through organic opportunities.

So look, I think we're happy with the progress we've seen. The business of Development is choppy, to say the least, especially with some of the weather that we just saw in Q2, you can get movement between quarter-to-quarter, but we're anticipating growth in the back half of the year in that business. And our teams are focused on continuing to go after the customers every day, and we're working with our partners. So the backlog is a little bit choppy in those, but every branch that we set are now open for those 6 have now booked orders. Brett, do you want to add detail?

Brett Urban: I would just echo Dale's comments. We do have the best teams, the best experts that produce unbelievable work in this business. It can be a bit choppy with timing. We saw the last 2 to 3 quarters, projects push out. But if you look at our bookings year-to-date, up 15%, you look at our remaining performance obligations, which is projects greater than 1 year, that's up 6% quarter-over-quarter. So the momentum is building in that business as well. And, look, let's not discount the fact that when we have these cold starts and they open up business and sell new Development work, that's just a leading pipeline for more Maintenance Land revenue.

So converting that work also is a big opportunity for us. But we're excited about the trajectory of the business. The momentum there is building. We haven't quite got the work in the ground and the timing we anticipated, but it's coming and the leading indicators are there to show growth. And that's what's implied in our second half guidance is growth in that business.

Operator: We'll go next now to Andrew Steinerman with JPMorgan.

Alexander EM Hess: This is Alex Hess on for Andrew. I hope everybody is having a lovely day. I actually have a multi-parter, so I hope you'll bear with me on this. But just a couple of items that haven't yet been touched on. On fuel costs, I know there was some discussion about how that might impact ancillary. But just to be clear, you're not flowing any fuel benefits through on revenue that you aren't also flowing through on costs, correct? Just maybe to start with.

Dale Asplund: Correct, Alex. We have said we didn't imply any assumptions for fuel cost outs and nor have we assumed anything on the revenue side. So you are absolutely right with that assumption.

Alexander EM Hess: Understood. Then on snow, can you provide us what was the EBITDA flow-through on that snow revenue? I know it was a little muted last quarter due to some of the contract dynamics. Just trying to understand how that shift to contract -- more contract book impacts the revenue and incremental margin of snow. And that's the third one to pull out.

Dale Asplund: Yes. So last quarter, we said we were under the 20% target that we had, Alex. While we don't have a fully loaded P&L for snow, obviously, we're sharing resources. We believe that our full year flow-through is about 20% right now on EBITDA for that business. Now snow has been a great story, and I'm going to let Brett comment here in a few minutes. Snow is the markets we saw a lot of snow and the markets we didn't see any snow.

So when you really break down the snow season that we went through, obviously, everybody on the Eastern Seaboard felt the impact of weather, some way or shape through the quarter and through the first half of the year. In fact, some of our ancillary benefits that we saw in Land, we saw freezing all the way into Florida that those teams had to do work as we went through Q2 after those deep freezes. But the Eastern Seaboard, even the Carolinas, where we always have variable snow, saw a considerable amount of snow. On the opposite of that, Colorado had a very, very soft snow year as well as the Pacific Northwest.

Both of those markets are traditionally more time and material/variable snow because of the volatility in their snow, what can do a little bit of a drag on those margins. But once again, long term, our goal is to be a better partner to our customers is our continued movement to get customers on more of an annual fixed snow agreement. We want to keep pushing that, so customers know what they're going to spend for snow.

And if we get a big year like we just had, yes, maybe it's not quite as profitable, but it allows us to manage the business with them over the long term, where years where we get less snow maybe in those markets, we do a little better. So -- but Alex, to answer, it's about 20% is the way I'd look at it. I think that's a healthy margin for us and make sure we get our arms around our customers. Brett, do you want to add?

Brett Urban: No, I think the takeaway there is this is our opportunity heading into next snow season with outsized snow in the Northeast and Mid-Atlantic regions to try to move more of those contracts to fixed. We are about 2/3, 1/3 variable. Now we're about 60-40 variable, so leaning towards variable. But as we have those conversations now and renewals for next season and selling into next season, this heightened snowfall, this is the opportunity for us to become more predictable in our snow model by shifting even more of that business to fixed.

Operator: We'll go next now to Ryan Gilbert with BTIG.

Ryan Gilbert: Great to see all the work on the revenue initiatives starting to play out in the landscape maintenance business. I think last quarter, we had talked about the potential for some of your customers' budgets to be stretched potentially due to the snowfall, and it seems like that fortunately did not materialize in the quarter. But I'm wondering if you could expand on what you're hearing from customers as to their appetite and ability to pay for landscaping services. And then just a quick housekeeping. I don't think I heard the number of sellers you added this quarter. So if you could quantify that, that would be great.

Dale Asplund: Yes. What Brett had said, Ryan, is we're roughly up 200 year-over-year. We had said we're up about 180 at the end of Q1. We're saying we're up about roughly 200 on the number of sellers. So it's fluctuating every day, obviously. We continue to keep the foot on the gas as we've gone through April. So that's just your quick housekeeping. I would say what we're hearing is we talked last year as we went through Q3, some of the challenge we heard with the reactions from Liberation Day, we had heard pretty quickly from our customers how they were nervous about all the potential impact from tariffs or anything else that was coming out.

Our teams are telling us there's plenty of work out there for them right now. They feel much more optimistic as we go into this summer. We have some customers that had severe snow costs. But for the most part, take that little bit of that noise out, people are much more optimistic as they're going into this summer for that discretionary spend. A lot of people know they want their properties looking good. It's the spring time. It's the time for them to start making some investments. So I would tell you, we feel more optimistic as we sit here beginning of May 2026 than we did just 12 months ago as we were facing some headwinds.

And look, we're looking forward to your conference this week, and we're excited about some of your investors, and we'll see you in New York this week. But Brett, do you want to add anything?

Brett Urban: No, Ryan, I'd just add, that's what gave us confidence to raise our Land guidance in the back half of the year, right? If we're seeing any type of slowdown or softness, we'd be hesitant to do that. But the momentum in our contract book, that's now 3% up year-over-year, 4 sequential quarters of net new positive growth in our contract book. We're keeping customers longer, as Dale said earlier, those customers who stay with us longer, have more confidence in us to do ancillary, spend more money with us. So those things, including the ancillary outlook for the second half of the year, gave us the confidence to raise our Land guide in the back half.

Operator: We go next now to George Tong with Goldman Sachs.

Alex Lakritz: This is Alex Lakritz on for George Tong. Can you provide an update on the conversion of Development contracts to recurring Maintenance contracts? And then how BrightView is tracking towards the 70% long-term target?

Dale Asplund: Yes. Look, I think what we're saying is Development is choppy. We saw continued momentum. Our teams are working better than they ever have. It's relatively consistent as we went from 2025 through into the first half of 2026. So we had very few projects closed here in the first half of the year, as you can see. We have a little softer development revenue. We'll see that as work gets finalized as we go through the back half of the year, we'll see more opportunity to convert that. So it's a tough metric when all you're looking at is the development revenue, Alex, because what you actually got to really focus on how many jobs close.

We had some pushouts here. We'll see those jobs close as we get into the back half of the year. And then it will create opportunity for us on the maintenance side. So we feel great about how the teams are working together. But Brett, do you want to add?

Brett Urban: Alex, I'd just say our teams are working together better than they ever have in our geographies, especially where we have Maintenance and Development branches together. Those teams are partnered at the hip now under One BrightView over the last 2.5 years, and they're working better together than they ever have. And you think about our cold start strategy, we have 6 cold starts opened with Maintenance branches, Maintenance employees, a reputation for Maintenance already in those markets. That's only going to supercharge that conversion opportunity as we open up development cold starts in those areas we already have Maintenance.

Operator: We'll go next now to Jeffrey Stevenson with Loop Capital.

Jeffrey Stevenson: Congrats on a nice quarter. You reported strong 110 basis points of maintenance margin expansion during the quarter, benefiting from the positive revenue flow-through on the landscaping side. So although you're taking Maintenance margins down due to continued accelerated pace of new sales hires during the back half of the fiscal year, do you believe the strong March quarter margin expansion shows that the One BrightView initiatives are driving improved underlying margins as landscaping demand returns positive?

Dale Asplund: Yes. Great question, Jeff. So 30 months ago, I realized we had to fix this business, and we have to get it growing. There is no question our future is about growing the top line organically, not just buying revenue, it's about organic growth for the business. And there is no question that when we can grow Land 4% through our existing branch network, that's going to create profitable margin expansion for us. Now snow didn't really hurt us. It wasn't the reason that everything happened, but we firmly believe, Jeff, that Land organic growth and the flow-through that's going to produce is our future.

And that's why we are so excited about what we're predicting for the back half of the year, increasing from 1% to 2% for full year to 3% to 4% or 2% to 3% in Land growth. Just to give you a quick reference, our updated guide suggests we will grow our Land Maintenance business over the next 2 quarters between 3% and 4.5% in the back half of the year. And that's why we're excited. That's why there is no question. I am 110% committed to investing in our frontline teams and our sales force to go after market share. We have done everything needed to get the foundation of this business in a healthy spot.

We're far from perfect. We need to keep pushing those customers -- those branches that don't have customer retention at 90-plus percent. You've seen now 35% of our branches are at 90%, which is great, and I congratulate those, but we still have 10% below 70%. We are hyper focused on taking care of those branches. I want to talk about the day we don't have branches below 80%. Taking care of our existing customers is my #1 priority. And on the backside of that, I am going to invest, invest, invest in growth. And there is not a reason that we should back off on our strategy because Brett said it, and I'll say it, it's working.

It's producing the growth that we've been waiting for. And I am so excited about what that means, not just for the back half of this year, but '27, '28, '29, future years. We have $130 billion end market, and we are just a fraction of that end market. We are going to take share. We are going to grow this business. We are 100% focused on becoming the Provider of Choice for our customers. And that's our focus. So Jeff, great question. Brett, do you want to add?

Brett Urban: Yes. I would just add quickly. Look, you think about development margins for a second over the last 3 years since One BrightView, that business has expanded EBITDA margins over 500 basis points or around 500 basis points. So huge margin expansion in Development really getting pulled into the One BrightView strategy. And you said it, Jeff, now it's time for Maintenance implied in our back half of the guide and full year guide is margin expansion and Maintenance, 30 to 50 basis points while investing in the business. We're investing $6 million a quarter into our incremental sellers and sales force. About 90% of that is maintenance related.

So even despite that investment, we are seeing the outsized benefit now start to come in Maintenance margins. and for the full year guide, still expected to expand 30 to 50 basis points.

Operator: And gentlemen, it appears we have no further questions this morning. Mr. Asplund, I'd like to turn things back to you, sir, for any closing comments.

Dale Asplund: Yes. Thank you, operator. Look, I'll close by reiterating our confidence in the path ahead. We had some great questions today, but our transformation is starting to take hold. That's what's critical for us. Over the past 2-plus years, we've built a stronger foundation at BrightView, bringing the organization together, unlocking efficiencies and achieving good financial results. Through this period, we've consistently reinvested back into the business by refreshing our fleet, supporting our frontline teams and building a stronger, deeper sales organization. Even though we're still early in our transition, the investments we've made are translating into a growing contract book, which is the driving top line growth in our Land business long term.

So once again, we said it many times, everything we've done is with one focus in long term, continued profitable top line growth across this business and make it sustainable, so we will grow this business for years to come. So we look forward to talking to everybody come Q3. Thank you again for your attention, and we hope everybody has a good day. Operator, you can now end the call.

Operator: Certainly. Thank you, Mr. Asplund, and thank you, Mr. Urban. And again, ladies and gentlemen, that concludes BrightView's earnings conference call. Again, thanks so much for joining us, everyone. We wish you all a great day. Goodbye.