APi Group Shares Slide After Q4 Results, Clocks 27% Revenue Growth

APi Group Corp APG reported a fourth-quarter adjusted net revenue increase of 27.2% year-over-year to $1.12 billion, exceeding the consensus of $959.69 million.
Reported net revenues increased by 26.1% Y/Y and +27% on an organic basis.
Adjusted EPS decreased to $0.29 from $0.33 in 4Q20, beating the consensus of $0.26.
The adjusted gross margin contracted by 42 bps to 24.6%, and the reported gross margin expanded by 219 bps to 24.6%.
Adjusted EBITDA was $115 million, compared to $103 million in 4Q20, and margin contracted by 144 bps to 10.3%.
Adjusted net revenues by segments: Safety Services $569 million (+29.3% Y/Y), Specialty Services $481 million (+36.7% Y/Y), and Industrial Services $81 million (-6.9% Y/Y).
Adjusted SG&A as a percentage of adjusted net revenues declined by 90 bps to 15.8%.
The company reported an operating income of $50 million for Q4, compared to a loss of $(21) million a year ago, and the margin was 4.5%.
APi Group generated cash from operating activities of $182 million in FY21 versus $496 million a year ago. Adjusted free cash flow was $223 million.
"While our business is not immune to macro marketplace disruptions related to supply chain disruptions and inflationary cost pressures, we believe we have more tools to mitigate these issues than our competitors. The acquisition of Chubb has enhanced our overall competitive position and our protective moat around the business," said CEO Russ Becker.
"We begin 2022 focused on delivering our three-year plan of continued healthy top-line growth in line with our average historical trend of 6 – 7%, as we focus on driving our adjusted EBITDA margin to 13%+ by 2025," Becker added.
Price Action: APG shares are trading lower by 4.80% at $20.54 on the last check Tuesday.

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