Prepared remarks
Good day, everyone, and welcome to today's BrightView Earnings Call. Please note, this call may be recorded. It is now my pleasure to turn the conference over to Mr. Chris Stoczko, Vice President of Finance and Investor Relations. Please go ahead, sir.
Good morning, and thank you for joining BrightView's Fourth Quarter and Full Year Fiscal 2025 Earnings Call. Dale Asplund, BrightView's President and Chief Executive Officer; and Brett Urban, Chief Financial Officer, are on the call. I will now refer you to Slide 2 of the presentation, which can also be found on our website and contains our safe harbor disclaimer. Our presentation includes forward-looking statements subject to risks and uncertainties. In addition, during the call, we will refer to certain non-GAAP financial measures. Please see our press release and 8-K issued yesterday for a reconciliation of these measures. With that, I will now turn the call over to Dale.
Thank you, Chris, and good morning, everyone. 2025 was another transformational year for BrightView. We have continued to prioritize our frontline employees by investing in consistent service levels and refreshing our fleet, which enables us to provide a best-in-class service experience to our customers daily. We have also made strides in expanding our sales force, hiring about 100 new sellers this year, positioning us to drive profitable top-line growth in the near term. We have managed our investments by leveraging our size and scale to achieve meaningful efficiencies within our business. These initiatives, combined with the hard work and dedication of nearly 19,000 team members, have resulted in our highest adjusted EBITDA and margin ever. Our unwavering focus on delivering world-class service continues to yield significant momentum in customer retention, which has improved by approximately 200 basis points from last year and about 400 basis points since I took on my role in October 2023.
I want to express my gratitude to our team members for their ongoing efforts to center the customer in everything we do and position us as the service provider of choice. Additionally, as part of our disciplined approach to capital allocation and commitment to enhancing shareholder value, we have increased our share repurchase authorization from $100 million to $150 million, and we are assessing the pace at which we will execute. We believe our current valuation does not reflect the tremendous progress we have made over the past two years and the significant opportunities ahead. Our strong balance sheet and growth outlook give me the confidence to expand the program and return capital to shareholders strategically and opportunistically. As we move into fiscal 2026, I want to reemphasize my primary focus on delivering sustainable and profitable top-line growth in both the near and long term.
I believe that the investments we have made and will continue to make, such as ensuring consistent service levels and expanding our sales force, have strengthened our business's foundation and will enable us to drive top-line growth in 2026, as reflected in our guidance, which Brett will discuss shortly. Our strategy remains unchanged: prioritize our front line, which reduces turnover and leads to improved customer retention—both vital elements for top-line growth and larger, more profitable branches. Coupled with ramping up our sales force and leveraging our size and scale while strategically allocating capital, we will position BrightView as a clear investment choice. Moving to Slide 5, we are seeing sequential improvements in our frontline turnover. Two years ago, this metric was nearly 100%, with the bottom quartile of our workforce turning over four to five times a year. This inconsistency created service challenges and increased costs to hire and onboard new employees.
Through continued investments in our employees, we've made significant progress. The improvements we have achieved have resulted in cost savings, which we have reinvested into our frontline to ensure more consistent service for our customers. This has been crucial in solidifying our foundation and will remain a priority as we position BrightView as the employer of choice. Turning to Slide 6, I would like to highlight the sequential improvement in customer retention over the past two years, which is now around 83%, a 400 basis point increase since the start of our transformation. This reflects the exceptional service our employees provide daily. While we have made great strides, more opportunities exist across our branch network, as our best performing branches achieve customer retention rates exceeding 90%. From day one, I have emphasized that becoming the service provider of choice starts with prioritizing our employees and delivering best-in-class service.
This approach will continue to drive retention improvements throughout our business and contribute to our growth in 2026 and beyond. Now let's move to Slide 7. As I mentioned, we've made significant progress in strengthening our business foundation and are investing to expand our sales force. At our Investor Day in February, we committed to adding about 50% to our sales force, equating to approximately 500 net new hires by 2030. In 2025, we brought on around 100 sellers, funding these investments through continued G&A savings and efficiencies. It's important to highlight that hiring for these positions was more concentrated in the latter half of the year. In 2026, we will continue using G&A savings to support our sales organization expansion. As highlighted, our current tenured sales team is relatively new due to the ongoing ramp-up. Training new sellers takes time, and we typically see productivity improvements after their first year.
However, we continue investing in technology and training to enhance the onboarding and effectiveness of both new and experienced sellers. Moving forward, expanding our sales force, along with other key growth strategies, will be essential in driving sustainable top-line profitable growth. Turning to Slide 8, in my first two years, we have made significant progress in unifying our business, enhancing operational efficiencies, investing for the future, and continuing to prioritize our employees and customers, effectively solidifying our business foundation. Our development and maintenance teams are collaborating as a unified BrightView, focusing on cross-selling future recurring maintenance work. Additionally, with record capital spending last year, we invested in over 30 new tree trucks, which will arrive at branches in 2026. Investments like these will enhance and expand our service offerings for customers.
Leveraging our national presence enables us to service large national accounts as a single point of contact provider. These multifaceted strategies, alongside investments in our sales force, position us to achieve top-line profitable growth in 2026 and beyond and deliver value for all our stakeholders. With that, I will now turn the call over to Brett.
Thank you, Dale, and good morning, everyone. I'll start by reiterating Dale's enthusiasm for the progress we've made over the past two years as we actively transform this business. Our teams across the country continue to raise the bar, delivering exceptional service, driving operational excellence, and strengthening the culture that makes BrightView poised for success. Moving to Slide 10. We delivered another year of record adjusted EBITDA and margin, which was made possible by our streamlined operating structure and unlocking scale advantages as the #1 provider in our industry. Fiscal '25 EBITDA was $352 million at a margin of 13.2%, representing a 260 basis point improvement from fiscal '23. We have made great progress in just 24 months, taking a business with shrinking margins and stagnated EBITDA to a business that has grown EBITDA over $50 million and delivered record margins all while investing at record levels back into the long-term success of the business.
Let's now move to Slide 11 to take a look at how we were able to improve profitability in fiscal '25. Adjusted EBITDA was a record $352 million, an increase of $28 million or 8% higher than fiscal '24. Adjusted EBITDA margin of 13.2% was also a record and expanded 150 basis points year-over-year, marking another consecutive year of margin expansion. Operating efficiencies more than offset the revenue flow-through, and we saw the benefits from the record level of investments we made refreshing our fleet, centralizing procurement, and continued efficiencies in G&A. As Dale mentioned, we are actively making investments back into expanding our sales organization, which will be one of the keys to sustainable top line growth. Turning now to Slide 12. We've taken substantial overhead costs out of our business, improving SG&A expense as a percentage of revenue by 180 basis points since 2023. Our streamlined operating structure has produced meaningful cost benefits that we are using to reinvest into our employees, client satisfaction, and more recently, our sales organization.
Going forward, we expect to unlock additional efficiencies by leveraging our size and scale, which are built into our long-term plan we presented last fiscal year during Investor Day. Moving to Slide 13. We're encouraged by the progress we've made in our trajectory of land maintenance revenue over the past two years. By aligning our sales and operating structure, we've made sequential improvements in year-over-year revenue through Q2 2025. In Q3, we experienced some macro-related headwinds, but the sequential improvement we saw in Q4 gives us confidence that land revenue growth is on the near-term horizon. As Dale mentioned, we added 100 new sellers in fiscal '25. And going forward, we will continue to invest G&A savings back into our sales team that will ultimately be a driver of profitable top line growth. In fiscal '26, we expect these investments, coupled with our development conversion strategy and enhanced ancillary offerings, to deliver land revenue growth.
I'll touch further on our fiscal '26 guidance in a few minutes, but I'd first like to turn to Slide 14 to talk about our fleet management strategy, which has generated multifaceted benefits since its introduction. To start, our fleet was severely aged in 2023, given the lack of investment made previously into our core business. This led to a range of issues, including higher repair and maintenance expenses, higher rental expenses, lower residuals, frustrated employees, and unsatisfied customers. But over the past two years, we've invested over $300 million of capital to refresh our trucks, mowers, and other equipment, bringing down the average life of these assets considerably. The age of our core production vehicles has been reduced to just 5 years on average, and our core mowers to 1 year. Another focus area for 2026 will be refreshing our fleet of trailers, which are about 11 years old on average.
The investments we've made have driven significant improvements in repairs, maintenance, and equipment rental, all driving incremental margin. Additionally, we found that the refreshed fleet has improved employee morale and retention as frontline workers are able to service our customers with the confidence of having reliable equipment. In turn, our customers have been more satisfied, as evidenced through our improvement in customer retention. In total, our fleet refresh strategy has delivered both financial and operational benefits that we will continue to realize as we invest further in the years ahead. Moving to Slide 15. We remain disciplined in our strategic capital allocation focused on driving long-term shareholder value. Our strong balance sheet continues to support this approach, highlighted by ample liquidity and a favorable debt profile with no long-term maturities until 2029.
Net leverage remained at 2.3x. We accelerated our fleet strategy in fiscal '25, and we'll continue to execute this strategy in fiscal '26 as I previously discussed. And as Dale mentioned, we have increased our share repurchase authorization from $100 million to $150 million. We believe there is a significant disconnect in our current valuation versus our earnings potential. The profits and margins we've generated since 2023 have been exceptional. We remain confident in our long-term growth strategy, and coupled with our shares trading at an attractive multiple, believe that repurchases represent an accretive and efficient use of capital. The proactive management of our strong balance sheet reinforces our ability to reinvest in the business, support profitable growth, and create meaningful long-term value for shareholders. Now let's turn to Slide 16, where we outline our guidance for fiscal '26, which is underpinned by a return to revenue growth in land maintenance and translates to yet another record adjusted EBITDA and continued margin expansion.
We expect to deliver revenue in a range of $2.67 billion to $2.73 billion, adjusted EBITDA in the range of $363 million to $377 million, and adjusted free cash flow in the range of $100 million to $115 million. The revenue guidance assumes the following: for maintenance land, we expect revenue to increase by 1% to 2% as we begin to realize the benefits of our growing sales force, the continued improvement in customer retention, expanding our ancillary offerings, and higher development to maintenance conversions. For development, we expect revenue growth to be in the range of flat to positive 2%, reflecting a combination of a healthy backlog as well as the benefits from cold starts, partially offset by project delays early in the fiscal year. For snow, we are anticipating revenue to be in the range of $190 million to $220 million, reflecting a midpoint at our 5-year average and the shift to more fixed fee contracts.
Moving to adjusted EBITDA, we expect margins in the Maintenance segment to expand by 50 to 70 basis points and margins in the Development segment to expand by 20 to 40 basis points. In total, we expect adjusted EBITDA margins to increase by 40 to 60 basis points, reflecting continued momentum in the multiple initiatives we've undertaken to drive profitable growth. Important to note, the midpoint of our margin guidance would imply a 310 basis point improvement over the last three years, reinforcing our commitment from Investor Day to expanding margins on average 100 basis points per year. Before turning the call back over to Dale, I would like to remind you of the incredible progress we've made in just 24 months and the tremendous opportunity we have ahead as we continue to transform this business for long-term success. Also, I would like to express my gratitude to all of our committed team members. Without their unwavering focus and dedication, none of this would be possible. With that, I'll turn the call back to Dale.
Thanks, Brett. Before we open the call for questions, I'd like to reemphasize what I've said from day one: transforming this business would not be possible without the commitment and dedication of our employees. By investing in our people and becoming the employer of choice, we will continue providing world-class service and become a better partner to our customers. This, coupled with the ramp of our sales force, unlocking our size and scale, strategically allocating capital, and returning our business to top line growth will make BrightView the investment of choice. With that, operator, you may now open the call for questions.
Questions and answers
Certainly. We go first this morning to Tim Mulrooney of William Blair.
This is Luke McFadden on for Tim. So coming out of the third quarter, I think you felt like the worst was largely behind you in terms of tariff-related disruptions in your land maintenance business. I'm curious how performance in some of those more discretionary areas of land maintenance trended as you moved through the fourth quarter and how you're feeling about the setup for land maintenance sitting here today several weeks into the first quarter?
Yes, great question, Luke. I'll start off and Brett can add. First of all, we sit here today in our branch in San Francisco, a little early, and I've got a little cold, so pardon my voice. But I would tell you that the progress we saw as we went through the quarter showed optimism that discretionary spend of ancillary could definitely see a return. And probably more positive for me, as I stood at the gate yesterday during gate check and watched all the new fleet that Brett just talked about roll out and the cultural change it has on our frontline workers. When we talk to them about the work they're going out to do, the feeling of our customers once again looking to return to those ancillary projects that were delayed when Liberation Day happened was very positive. So look, it's going to be a daily grind. We had last year some two named storms that hit us, one at the end of September, one in October.
The one at the end of September, as many people remember, was right from the Panhandle of Florida all the way up through the Carolinas. So we're going to have to step over that, but we feel like the progress we saw right through Q4 is an indication of why we said we're going to grow this business as we go through 2026. Now just to remind everybody, these are our seasonal months; the next six months or two quarters, we could have some noise from the seasonality of the business. But like I used in my opening, I'd like to remind everybody that everything we've done has created a foundation that positions us to grow this business and where we feel when we get to our stronger months for the land revenue business in Q3 and Q4, we will be positioned right where we thought we would be to grow this business in the back half of the year. But we felt good, Luke. We're seeing some positive momentum as we went through the quarter. And most of that, as everybody heard in our Q3 call, was discretionary related. Brett, do you want to add anything?
Yes, I believe Dale is right. We are observing a sequential improvement, as demonstrated in Q4. We do need to navigate a couple of named storms from last year that impacted Q1. However, Q1 and Q2 are typically not our peak land revenue seasons, with around one-third of our land revenue generated in the first half of the year. We are actively working to enhance our sales force and investing in it to ensure we are well-prepared, particularly as we approach our peak season in the latter half of the year.
That's really helpful color. And as my follow-up, I wanted to dig in a bit more on some of these investments you're making on the selling side. Maybe just how should we think about the productivity ramp on some of those new sales hires? I know you gave some context around the numbers in your prepared remarks, but maybe how that ramp fits in the context of your segment level organic growth outlook that you provided for 2026?
Let me break it down into three parts. Typically, the first six months for new sellers involve a learning curve where they focus on understanding the business, which limits their productivity as they build relationships and seek work opportunities. In the second six months, we generally see an increase in their productivity. After a year, their performance aligns more closely with that of our experienced sales representatives. Once they reach 18 months, they are usually on track to meet our target of around $1.5 million in annual sales for seasoned sellers. It takes some time to develop these sellers, and we've made significant additions this year that we believe will pay off as we see new business opportunities arise into 2026. We plan to continue investing throughout 2026, which will add to our costs as reflected in our EBITDA forecast. We anticipate adding a similar number of resources as we progress through 2026. Brett, would you like to add anything?
Yes, I would just add, Luke, the transformation of this business under Dale's leadership in such a short period of time has been nothing short of exceptional. And as you look at our trend over the last two years from a profitability standpoint and EBITDA and a quality of earnings standpoint and margin, and you look at what we're able to produce to the balance sheet with cash to invest in the business, that's the beauty of where we are standing right now. That's why we're so excited. We have the ability to invest in the business. And you can see in our EBITDA bridge in '25, we invested about $7 million into the sales force, really starting in the April through June quarter. But we're going to continue to invest in the sales force as now the foundation of the business, as you see in some of the KPIs that we presented is solidified and significantly improved from just 24 short months ago. Our employee retention has improved significantly, and our customer retention has improved significantly. So now that that foundation is set, that's why we're putting the gas pedal down right now so hard on adding to the sales force. And Dale talked to the timing of that and ramping those sellers up. It does take time, but we have the ability and the fortunate situation where we continue to grow earnings and have cash to invest back into the business.
We'll go next now to Bob Labick at CJS Securities.
I wanted to begin by discussing some other key performance indicators. Clearly, you have performed very well, and you continue to make progress in prioritizing your employees. There are several positive indicators on that slide. My question is about where this can lead. How advanced are you in your efforts to improve employee retention, and what additional progress can be made? Also, how does this relate to customer retention? Can you connect the two while focusing on employee retention goals and their potential outcomes?
Yes. Look, we've made progress and the blue checks that we're still working on to make us a better employer for our frontline workers. We're going to keep looking at new opportunities, Bob. Those aren't the final steps. Our goal is to make sure, by far, our #1 most important asset that touches our customers every day feels that they work for the best landscape company in the industry. We have improved that line. From the day I arrived, I said we have to do a better job of prioritizing those employees. We have improved that statistic over 3,000 basis points since the end of 2022, which is an absolutely amazing statistic when you think about it. I think, Bob, there's another, call it, 2,000 to 3,000 basis points that we can get to get to a more normalized level for that type of high churn workforce. But those people are so critical in driving our overall customer retention that we just have to keep thinking of new ways to make sure that they understand their importance. And that starts with yesterday, me standing at the gate, handing out doughnuts and coffee, and thanking them for what they do. And it makes me feel good when they thank me for the new vehicle they have. So I fully believe, Bob, they are the key to keep driving that customer retention. And I feel like we're only halfway on our journey of what we can accomplish with frontline turnover.
Okay, that's great. And then you talked, I think, about the $300 million of investment in fleet earlier on the call. Can you talk about how the new tax bill influences the rate of investment that you're going after? And how many more years will it take to get to a kind of normalized range for your capital investment? Because obviously, you're getting rid of fully depreciated assets. At some point, you'll get something back for those assets as you get further down through your road map.
Absolutely, Bob. This is Brett. I'll take that one. So yes, we were, again, excited that we have the opportunity to invest in our fleet, invest in our people, as Dale just mentioned. So yes, you did see us in 2025, we benefited from the One Big Beautiful Bill where we did not pay any federal taxes. And we took that money for cash savings and accelerated our fleet refresh, as you can see in the capital we spent in 2025. So we're excited we're able to do that. We have our mowers in a spot now where it's exactly where we want to be for the long term, an average of 1-year-old mowers, which is fantastic. We have our trucks right around 5 years old, our core production trucks. We probably have one more year to go to continue to refresh our trucks to bring that age down just a little bit further. And then in 2026 and even into 2027, we're going to really invest in refreshing our trailers, which we have about 4,500 trailers across the fleet.
So we started a little bit of that at the end of '25, but you can see in our CapEx guide still heavier than normal, I guess, in 2026. And then when we get into 2027 and really in 2028, we'll start to get back into that 3.5% range of revenue for capital. But the beauty of it is with our debt structure the way it is and our ample liquidity, we're able to invest back in the fleet. And Dale said it, in about one minute, we're going to start seeing trucks roll out of the yard we're sitting in here in San Francisco and spending time with the crews and spending time with the managers here on site. I mean the team on the ground could not be happier with some of the investments we're making into their offices, into their trucks that they drive in every day, into the fleet of mowers, the reliability they have to service their customers. So that's really where we're seeing this pay off.
We'll go next now to Andy Wittmann with Baird.
I wanted to expand on the previous question regarding capital. It seems that 2026 is expected to represent a significant portion of our revenue, and it looks like next year will surpass 3.5%. What is the difference? Recently, you mentioned that 2026 might be a normalized year. Were there unexpected increases in CapEx? Was it primarily due to inflation and tariffs, or is it a new assessment of the fleet compared to what was discussed on Analyst Day?
Yes. Andy, it's a great question. Look, I think I'll start by saying we are fortunate to have our balance sheet in a position now to continue to invest in the business and refresh our fleet. And as you look at employee retention and that metric continuing to get better, you look at customer retention, that metric continuing to get better. That's directly related to some of the fleet investments we're making so that we can service our customers with the reliability that they deserve. And then secondly, as you think about the investment moving forward, yes, we're going to spend a little bit more this year because we want to get through the refresh of our fleet. Previous to 2024, we spent a lot of cash in the company, but very little of that cash was on our core business. You guys know the story around M&A, etc. So we're now investing cash back into our core business. So we're going to continue to do that. Now you think about the P&L side of the equation, our repair, maintenance, and rental expense, which was listed in our deck here, is about $59 million a few years ago. We saw about a 15% reduction over the last 24 months, down about $51 million. We expect to see a reduction here in '26 and '27. And that number we said during Investor Day, we could probably get half into the P&L as savings, and we expect to see more of that come through '26 and '27 as we move forward.
Yes. Andy, let me add a little color to that. I think the word that I would use is today, we have flexibility that we didn't have 24 months ago. We have the ability, if we see some reason to slow down capital, our fleet is at a level today that we could operate, and customers would still see us as a great provider. We're going to continue to move that to the level that we want it to be, where we think that repair and maintenance will be at our opportunistic level. But right now, we do have flexibility. Two years ago, we didn't have that, Andy. When I arrived, we needed fleet refreshments. We needed to invest money. We were already keeping fleet way too long. Today, I feel like we have flexibility, and that's the key.
Okay. I have a two-part question for you, Dale, regarding operational aspects. There was a mention in the prepared remarks about new technology and training for sellers. Could you elaborate on how the tools they will have in 2026 differ from what has been used in the past? Additionally, Brett, you mentioned in your comments that there are upcoming efficiencies that will help fund these investments. Could you provide some concrete examples of initiatives you plan to implement that you haven't done yet, which will create this opportunity?
Yes. So I'll start with the training side. In the back half of '25, we brought in a new leader at our corporate level to drive training across our organizations, and her primary first focus is on our sales organization. We have a lot of content, Andy, that we've digitized that we're now putting out there that our employees can access via their phone. They can access it via a computer, or they can get printed materials if they want. We have to continue to invest in those materials, especially as we grow that sales force. And then, as you heard in my prepared remarks, we continue to invest in ancillary services. As an example, the tree trucks we added, we have to make sure that every one of our branches has the ability to give tree service access to our customers. And that takes making sure our sales reps understand what that service provider is and make sure that we have professionals that can work with our customers to get them the proper quotes and then we can do the work safely and efficiently.
So it's a lot of information gathering. And when you have a dispersed sales force, we have to have an easy way to make sure they can get to the content. Because what we found, Andy, when we look at it, our quickest sales rep to get up to speed to be able to produce are the ones that access that materials not just the day they join, but when they access it multiple times, and they use it as a reference. So making it visible, making it at the touch of a button is critical.
From an EBITDA perspective, we are focused on unlocking more efficiencies within the business. Our fleet strategy has already shown significant efficiencies that are yielding positive results. Additionally, we've gained advantages through centralizing our procurement function. As highlighted in our presentation, we continue to enhance our size and scale advantage as the leading player in the industry, allowing us to reinvest in the business. We are investing in our employees, our fleet, and technology. For instance, we are digitizing our field service management system, which will improve how we digitize and route our crews. This will help us add efficiency by allowing real-time updates on mobile devices, enabling us to adjust routing and provide more services to our customers moving forward. These technology investments will also contribute to enhancing our efficiency.
We'll go next now to Jeffrey Stevenson at Loop Capital.
So Brett, following up on your point about the field service management system. Can you talk about the timeline of the broad rollout across your branches for that? And whether you have any benefits from this baked into your second half guidance this year?
Yes. Great question, Jeff. I'll start with that one because it's a project I'm very close to. And for those of you who visited our branches, we underinvested in the past in the use of technology. And with labor being 40% of our cost, there was no greater area than the management of our frontline crews. We did it far too manually with whiteboards. We have implemented a tool that integrates into our CRM system, so we know what jobs to service every day. We have rolled that system out in every one of my geographical regions for a couple of branches in a couple of different markets to make sure that it was efficient and added value to the branches. We tweaked it. We've gone back and started rolling it out to the masses across the whole company. We will be complete with that sometime after the new year, call it, in the first quarter of the new year, or our second fiscal quarter, which is the time we want to do it in a lot of our markets where we have a little bit less land revenue, and that's the major focus is on our maintenance business.
But yes, Jeff, we are very excited about what it can do for us, what we have built into our forecast and what we tell people as we roll that tool out, that is not a savings tool. That is a capacity creation tool for us. We want our employees to be more efficient doing the work that they do every day. And when we're growing this business in the back half of the year, we want to make sure we get the flow through on that incremental revenue as we work into 2027. That's the goal of field service. It's not a savings tool; it's a capacity creation tool so we can do more work with our existing team as we grow this business.
I would just add, Jeff, that's why we sound so excited on this side of the conversation, because we've created the ability in just a short 24 months to make sure we can continue to invest in the business. The amount of EBITDA that we've generated, over $50 million since Dale has started in his chair as CEO, that we're able to use to reinvest into the business, the cash that we have on the balance sheet, we're able to use to reinvest in the business. And you hear some of it from ramping up our sales force, but technology is absolutely a big piece, and we're going to continue to invest in the business. And that's why I think we're so excited on this side of the table because we have the ability to invest and continue to invest in the business.
Got it. No, that's very helpful. And then I was wondering if you could provide an update on the large project delays in your development business and how current segment backlogs have trended over the last 90 days? And then following up on that, how should we think about the timeline of your development cold start initiative and whether you expect any benefits from this program in fiscal '26?
Yes, that's a great question, Jeff. The development business tends to show some cyclicality. The markets that performed well in the latter half of 2025 were the same ones that were weaker in the latter half of 2024. Conversely, the markets that excelled in 2024 were a bit slower in 2025. In fact, if you examine that sector closely, although Q4 appeared a bit weak, we achieved the same results in Q4 2025 as we did in Q4 2023. This is partly due to a comparison issue regarding how effectively we completed jobs last year in Q4. Regarding our cold start initiative, we mentioned we plan to initiate 10 cold starts. Currently, we are trying to open five of those at existing locations to enhance productivity as we progress through 2026. We aim to have the remaining five underway by the end of 2026, ideally with leaders and sales representatives in those markets. One of the main advantages of launching these cold starts is that it allows us to cater to a wider range of jobs without relying on a single branch to manage large projects across every market.
For instance, Denver is a strong market for us with a sizable branch, but they handle jobs throughout the entire state of Colorado. We need another branch to manage work so the Denver team can concentrate on just the local market. We've made significant strides, Jeff, which is why we are confident in our ability to return this business to growth this year. In the long run, by establishing more branches in more markets, our branches will be able to pursue more opportunities within each area rather than just focusing on the larger jobs across a vast geographic space. I hope that answers your question.
Yes. And I would definitely say if you look at kind of the trajectory of the development business, they've grown significantly, Jeff, over the last few years, credit to the development teams and the branches we operate in. And that business has grown $60 million in '23. They grew $50 million in 2024, took a small step backwards here really towards the tail end due to some of that macro. But we're definitely coming down the other end of the bell curve. And if you look at kind of where Q4 came in at an 8% reduction in revenue quarter-over-quarter, Dale mentioned last Q4 was really impressive growth. But we're definitely coming down the other end of the bell curve. We expect it to be a little bit choppy here in the first half of the year, but that's just as those delays work their way through the system, and we're starting to see that free up here a little bit. And definitely, this business will be back to growing and growing at a nice pace here in the second half of the year.
One other part of your question, Jeff, you asked about project delays. Let me just add this: This week for Pittsburgh Airport, which has been a very big project for us, actually switched to the new terminal. We're not done with our work there, but we're proud of the work that we did do. But where you see those things accelerate, where we did have delays, Jeff, we have other projects that haven't even started yet that we were counting on in Q3 and Q4. So there's always going to be give and take. There's a lot of noise out there, but there's plenty of work for our guys to go get. So we're motivating our development team: Let's get some new branches open. Let's all get more salespeople out there. Let's go get more work because there's plenty of work for that team, and the quality they do is second to none. So we're in great shape as we enter this year. We guided to 0% to 2% increase as we work through 2026 again. But great questions.
We'll go next now to Greg Palm of Craig-Hallum.
Maybe just dovetailing on the last question. I don't know if we can spend a minute on labor and any impacts from sort of the changing immigration policy. But have you seen any direct or maybe indirect impacts there? And I guess if the industry is seeing some impact, at some point, are you able to use this to your advantage to maybe accelerate share gains if some of your competitors are having issues?
Yes. Great question, Greg. Let me try to take that. So I believe that investing in our frontline people drives long-term customer retention and the quality of service that we deliver. But if I went back two years ago and I thought the challenges in the labor markets due to immigration were going to be as hard as they are today, I would have made those same investments because today, the employees we have feel that BrightView cares more about them than ever. So I would tell you, as I talk to my operations team, what in the past was reactionary behavior every time somebody came to try to take one of our employees, our employees have seen the benefits, and we cover that on the trend that we showed of the improvement in turnover. Things that we put in this past year like PTO have been a huge benefit for our employees when we get rain days or when there's a sick day they need to take. So I would tell you, Greg, we are so well positioned with where we're at.
And yes, I do believe some of what we're seeing with our new sales that we're starting to see every month is because other providers are struggling to provide the level of service because of limited availability. As everybody knows, we e-verify our employees. We are very proud of that to make sure we can provide a good company to work for, for properly documented employees in the United States, and we don't have a fear about all the noise that's going around in some of these markets with some of the immigration challenges, but we feel great. And we think it's going to be a tailwind, not just where we felt so far, but as we work through '26, Greg.
Thank you for the insight. Dale, as you consider 2026 and the emphasis on growth, what do you see as the most significant immediate factors, compared to other elements that may have a slower impact and be more significant in the years to come?
Yes. Look, we talked about at our Investor Day talking about how we're going to get growth between now and 2030. It's the same levers, Greg. I am so proud of how far we've come on customer retention. We were up 400 basis points, granted from 79% to 83%. We are not done with that. Maybe the 200 basis points we've seen over the last couple of years, maybe it slows down a little, but there's somewhere between 100 and 200 basis points each year over the next several years. We have moved, this is the key, the underperforming branches. When we were at our Investor Day last February, 20% of our branches had customer retention below 70%. As of the end of the year, only 10% of our branches were below 70%. That's still roughly 20 branches that are below 70% that we have to improve. What we said and what we know, when branches are in the mid-80s, they are growing. We also have a litany of ancillary services.
I talked about adding 30 tree trucks. We have a lot more tree trucks on order because what I want to do is be a full service provider to our customers. There's other ancillary work that we're working with our branches to go get. Today, a lot of the flowers and mulch and install work we do is with our existing customer base; we can do it for anybody, and our branches are starting to get more creative to go out and bid on work outside of their existing contract work to get more ancillary. So look, we have a lot of levers to pull here, and that's why we're confident to say we're going to grow in 2026. Yes, we're always going to have a little noise. It's time for us to really put the foot down and get the accelerator going because this is our time for growth. So I hope that gives you an idea. I think adding sales resources, keeping that customer retention, driving ancillary, and let's go. I'm sick of talking about things in the past that create noise like a storm. We should be able to step over that stuff without any problem as we grow this business to mid-single digits annually.
We'll go next now to Stephanie Moore with Jefferies.
This is Harold Antor on for Stephanie Moore. I guess just one question for me. Capital allocation, you talked about your fleet investments. Just wanted to get any sense for your views on M&A. How have those conversations gone through the quarter? What are multiples looking at? Anything there would be helpful.
Yes. Let's discuss M&A. I believe that what I initially mentioned and what Brett referred to regarding our share repurchase program sends a clear message. If we were to acquire a quality company, those companies are easily trading at 8 to 10 times their value. In contrast, our company is significantly undervalued, trading around 7 times. With our new EBITDA guidance, we are actually below that. Therefore, I intend to take advantage of this opportunity. In fact, the increase in our share repurchase program wasn't just approved by our Board; they encouraged it. They are supportive because we have made significant progress, not only in our financials but also in our culture. The fleet we have today is markedly different from what it was 24 months ago. Our business has transformed completely in the last two years. Given the opportunity to buy back our stock at these depressed levels, we plan to use our cash until our stock trades at a more normalized level.
Is there a pipeline for M&A? Absolutely. We may consider acquisitions in related areas such as tree businesses or aquatic businesses if the right opportunity arises, but we’re not going to pursue deals just for the sake of it. Our Board is supportive of our current strategy, given the current dislocation in our stock price, and we will take advantage of this to accelerate our program. There are opportunities out there, but to acquire the companies that fit well with BrightView, the multiples are higher than we are willing to pay right now considering our stock price.
We'll go next now to Toni Kaplan of Morgan Stanley.
This is Yehuda Silverman on for Toni Kaplan. Just had a quick question on the snow side. So you mentioned that you're working towards getting to a customer contract base that's more fixed than variable. Heading into the upcoming snow season and looking into 2026, can you talk about the improvement in that area so far? And how this shift is expected to impact the business compared to a more variable-heavy tactic?
Yes. Look, I mean there's always markets, Yehuda, that are going to be very hard to switch to fix, take the Carolinas or Atlanta, where we saw some weather last year. So those will always be variable. But I would tell you, we focused on two things with our snow business. First, trying to get the majority of the customers that do land with us that need snow services to use us and limit us just providing snow removal services. We want to make sure we offer a full year service to our customers. And then go away from that riskier time and material. We've definitely seen an increase, which gave us the confidence to guide to that $180 million to $210 million, or $205 million midpoint that we guided to. We feel like we're in a great spot, and we continue to push. Here's what I would tell you: This is why I can't really give you the exact number. In many markets, it hasn't snowed yet. And some people don't like to refresh those snow deals until the flakes start to fly.
So we've got a lot of paper out there that people will finally commit to once they know the storms are coming. We saw a little weather across the Midwest, but we have opportunities yet across Colorado and the Northeast where we've yet to see weather. But our strategy is working. We feel like we're making it a much more predictable business. And we feel like as we go through '26, once again, there's going to be no excuses because of snow. We told you guys what we believe is there. We think we can deliver on that. And if we can't deliver on it, it's not going to be a reason that we lower EBITDA. So we're committed to delivering this business and the forecast we put out there. And if snow is a little softer, we still think we can deliver the bottom line.
We'll go next now to George Tong of Goldman Sachs.
In your landscape maintenance business, can you provide some additional color on how your contracts have performed relative to ancillary, especially the per occurrence side of contracted revenues?
Yes. Great question, George. I think we feel great about where we're at with our book of business. When I look every day at where we're at for the month of adding and losing because I track it every day, and I send it to my direct reports, and they'll tell you that I can run the reports now. So it's great data for me to look at, and I track that contract because it should be very, very, very predictable. I would tell you, I think some of the areas where we saw some of that discretionary per occurrence were areas we saw some of that snow, like the Carolinas, like Georgia, we feel like a lot of that noise is behind us. We feel good about what we're feeling with contract revenue and expect that to continue to be a tailwind for us as we go through 2026. Ancillary, like I started the conversation off with, we've come a long way. And it's not just what we're seeing in the numbers. It's really what the people in the branches are saying.
I'm out here in San Francisco, and I had one of the local branch managers come to me yesterday and give me great news that he has signed two deals, and I said that's great, keep going. Let's keep the team motivated and keep going, get it and let me know what I can get you from fleet or personnel to make sure you can keep getting that work. So I would tell you we've come a long way. Yes, there's still some noise, but 2026 is our year to grow. Contract revenue will be up. Ancillary, we firmly believe will be up, and the investments we made in additional ancillary type assets like the tree will help us even drive that work. So we're positioned well, George. Great question. I would tell you, contract, where we felt some of that discretionary per occurrence, that's behind us now. We feel great as we enter 2026.
And gentlemen, we have no further questions this morning. Mr. Asplund, I'd like to turn things back to you, sir, for any closing comments.
Thank you, operator. Guys, as I complete my second year with BrightView, I want to take a moment to thank all of our employees on the incredible progress we've made together. Over the past two years, we've strengthened our culture, sharpened our execution, and advanced our transformation. Together, we built a more efficient, stronger, and significantly better foundational business to service our customers. My focus now is squarely on delivering consistent, profitable top line growth both in '26 and for years to come. So once again, operator, I want to thank everybody for joining us today. Thank you for your interest in BrightView. We look forward to giving you our progress as we work through 2026, which is a year we are very, very excited about. And the team, as we just left our annual meeting, feels like there's so much upside based on the foundation we've built. So thank you, operator, and we'll talk to everybody in February.
Thank you, Mr. Asplund, and thank you, Mr. Urban. Again, ladies and gentlemen, that will conclude today's BrightView earnings conference call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.