BrightView: The Turnaround Continues

Listening to the recent BrightView earnings call brought back memories of my days in business turnaround situations.  Once you develop the strategy and begin implementing it, you are looking for signs that the strategy is working – that you will accomplish your mission.  After you see a few data points that may indicate progress, you want to see those data points develop into trends to prove that progress.

During the call, BrightView’s management emphasized that they do not just have data points, they now have trends.  Management is pleased that their strategy is delivering results.

As you read some of the statistics below, you might be tempted to wonder whether such anemic numbers are worth celebrating.  If so, then you have forgotten the first rule of being stuck in a hole – stop digging.  BrightView has clearly stopped digging and appears to be building momentum in getting out of the hole.

As one landscape CEO told me, part of the reason a BrightView turnaround takes so much time is that it is not one turnaround but dozens of turnarounds.  For example, the number of branches with contract retention less than 85% was approximately 120 at September 30, 2024.  At June 30, 2026, it had declined to approximately 90 – that is still quite a few turnarounds to accomplish.

Before we get to some numbers, here is a recap of BrightView’s strategy:

Fix retention of crew level employees so that lower crew turnover would lead to better quality and contract retention.  With crew turnover down and customer retention rising, invest in the sales force – adding 500 incremental sellers, both business development for new contracts and account managers for existing contracts, over multiple years.

That strategy is solid and can be adopted by any landscape company.

Now, here are the results as of June 30, 2026:

• Crew turnover fell about 7 percentage points year over year and appears to be approximately 60%-65%, which is down from nearly 100% at September 30, 2023.
• Customer contract retention improved by 2.5 percentage points year over year to 84.6%.
• BrightView’s total book of contracts has increased for five consecutive quarters, but total growth over those five quarters is only 4%.
• Ancillary (e.g. enhancements, irrigation, etc.) sales increased 2% year over year.

Other Interesting Statistics

Despite some of the clear trends and perhaps because of the anemic numbers, the stock price declined 19% from $13.12 the day before the call to $10.60 the day after the call.  One other interesting fact is that BrightView has spent $53 million repurchasing 4.1 million shares of stock over the last 6 quarters at an average price per share of $12.92.  All of that to say: Turnarounds are difficult.

BrightView reduced its fuel consumption by 10% through better routes, less idle time, and newer, more efficient vehicles.  The net increase in fuel cost was $4 million for the quarter, approximately 0.6% of revenue.

During this quarter, BrightView recorded a $16 million charge related to self-insured insurance claims, largely incurred prior to 2024.  In business turnarounds, there are often surprises like this one.  Based on the insurance changes announced by management, it would appear that insurance claims were not managed well.

Due to the private equity activity in the landscape industry, it is prudent to review BrightView’s enterprise value as a multiple of EBITDA.  With a recent stock price of $11.45, the EBITDA multiple was approximately 7.5.  (Enterprise value is calculated as the value of equity plus outstanding debt less cash.  EBITDA is earnings before interest, taxes, depreciation and amortization.)

Income Statement Summary

In its public reports, BrightView “adjusts” its earnings before interest, taxes, depreciation, and amortization and net income for certain expenses. I have used some of these adjustments for operating income in the tables below. The idea is that these expenses are not part of ordinary operations. Historically, the adjustments included expenses associated with business transformation and integration, becoming a public company and defending shareholder lawsuits, paying some employees partially through equity-based compensation, and some other unusual expenses.

For the accounting experts: Note that I have excluded from operating income the expense related to the amortization of intangible assets that were recorded as BrightView acquired other businesses and the gain on divestiture. Since most landscape companies do not have these items, I have excluded them so that management teams can compare their numbers to BrightView’s numbers.

The sale of US Lawns and the discontinuation of BES make it more difficult to compare BrightView’s more recent financial results for landscape maintenance and snow removal with periods prior to December 31, 2023.

To see short-term trends, the following table shows operating results for each of the past five quarters:

To see long-term trends, the following table shows operating results for each of the past four years:

Greg Herring has served as a CFO of both public and private companies. Herring is the founder and CEO of The Herring Group, a professional services and data analytics firm providing outsourced financial leadership to the landscape industry using its proprietary process, the Path to 12%. The firm is on a mission to improve the profit margin of companies, the life margin of owners and executives, and the autonomy of employees. Read his blog at herring-group.com or get in touch at [email protected].