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Aramark Earnings: Record New Business Fuels Strong FY25 Momentum

A composite image representing Aramark’s diverse hospitality services. The top-left shows a chef plating a dish in a commercial kitchen. The top-right shows a healthcare worker pushing a meal cart down a hospital hallway. The bottom-left shows students eating in a busy university dining hall. The bottom-right shows a barista serving coffee to a business professional in a corporate café. A soft red gradient overlays part of the image, with the Aramark logo displayed in the upper corner.

TLDR


• Revenue Strength: Q4 organic revenue +14% and FY25 organic +7%, powered by record net new business and strong retention.

• Margin Trends: AOI margin expanded ~25 bps in FY25; FY26 guidance calls for another 30–40 bps of improvement.

• Forward Outlook: Management expects FY26 EPS growth of 20–25% with leverage improving to under 3×.


Business Overview


Aramark (NYSE: ARMK) is a global leader in food services, facilities management, and hospitality solutions, serving:


  • Higher education, business & industry, healthcare, sports & entertainment, corrections, and iconic destinations

  • Operations in 16 countries with a diversified industry and geographic footprint

  • A hospitality-driven service model with expanding digital capabilities, AI-enabled tools, and a global supply chain purchasing network exceeding $1B in new spend added for the second year in a row 


The company’s portfolio continues to benefit from long-standing client relationships and increasingly large self-op conversions, particularly in healthcare and education.


Aramark Earnings


Revenue

  • Q4 Revenue: $5.0B, +14% (organic +14%), driven by net new business, high retention, base volume, and the 7% benefit from the 53rd week.

    • FSS U.S.: +14%

    • International: +16% (organic +14%)

  • Full-Year Revenue: $18.5B, +6%; organic revenue +7%.Growth drivers:

    • Record net new business

    • Strong base volume

    • 53rd week added approx. 2%

    • Some offset from FY24 facilities portfolio exits


CEO John Zillmer: “Fiscal 2025 represented many consequential milestones… with annualized gross new wins of $1.6 billion and the largest contract awarded in FSS U.S. history.”

Margins & Profitability

  • Q4 AOI: $289M, +6%

  • FY25 AOI: $981M, +12% (constant currency)

  • AOI Margin: Expanded nearly 25 bps YoY, led by supply chain efficiency, technology leverage, and disciplined above-unit cost management.

Key drivers:

  • Technology-driven productivity (AI-enabled supply chain tools)

  • SG&A leverage

  • 53rd-week contribution

  • Benefits more than offset $25M in incentive compensation tied to record net new business


CFO Jim Tarangelo: “We are experiencing unprecedented levels of success… providing momentum for fiscal 2026 and beyond.”

EPS

  • Q4 GAAP EPS: $0.33; Adjusted EPS: $0.57 (+6%)

  • FY25 GAAP EPS: $1.22 (+23%); Adjusted EPS: $1.82 (+19%)Impact: $0.07 reduction from incentive comp.


Forward Guidance (FY26)


  • Revenue: $19.55B–$19.95B (+7–9% organic)

  • AOI: $1.10B–$1.15B (+12–17%)

  • Adjusted EPS: $2.18–$2.28 (+20–25%)

  • Leverage Ratio: Below 3× (down from 3.25×)


CEO John Zillmer: “We enter fiscal 2026 with great confidence… already seeing success in leveraging enterprise-wide capabilities and starting operations for a record number of new clients.”

Risks & Opportunities


Risks:

  • Client onboarding timing shifts

  • FX volatility

  • Macroeconomic uncertainty

  • Labor cost pressure

  • Startup costs on large contracts


Opportunities:

  • First-time outsourcing across healthcare, corrections, and large corporate campuses

  • AI-driven productivity

  • Supply chain margin capture

  • Continued strength in international expansion

  • Large multi-year wins (e.g., Penn Medicine)


Operational Performance


Major Wins & Execution


Aramark recorded $1.6B in annualized gross new business (+12% YoY) with 96.3% retention, the highest in company history.

Key operational highlights:

  • Penn Medicine contract: Largest in FSS U.S. history; operations begin February 2026.

  • Strong onboarding pipeline with staged timing across healthcare, corrections, and workplace experience.

  • AI & Automation:

    • AI-driven patient menu platform

    • Robotics in meal prep and environmental services

    • Mobile ordering, QuickEats micro-markets

    • AWIX workforce optimization platform


Segment Performance Snapshot


FSS United States:

  • Strong Workplace Experience growth

  • Collegiate Hospitality boosted by enrollment and meal plan optimization

  • Healthcare delivered best performance in 2+ years

  • MLB playoff underperformance was a modest drag


FSS International:

  • Organic revenue +14% in Q4; broad-based across UK, Canada, Ireland, Spain, LATAM

  • Record one-day event revenue with NFL games in Europe

  • AOI +31% in Q4


Market Insights


  • Outsourcing Trend Rising: Healthcare and corrections systems increasingly evaluating self-op conversions.

  • Sports & Entertainment Momentum: NFL and collegiate programs driving premium service growth; concessions per capita +14%.

  • Education: Stronger-than-expected enrollment in key geographies supports meal plan demand.

  • Corporate Services: Workplace Experience and refreshment services seeing high retention and expanding share.


Consumer Behavior & Sentiment


While Aramark is not a consumer brand, the company sees:

  • Increased per capita spending in sports & entertainment

  • Higher student engagement through optimized meal plans and mobile ordering

  • Strong hospitality demand across travel and leisure destinations


Aramark’s AI-enabled personalization (patient menus, micro-markets, mobile ordering) is enhancing user experience and driving incremental adoption.


Strategic Initiatives


  • Digital Transformation: Enterprise-wide deployment of AI, robotics, and mobile-first tools

  • Global Supply Chain: Second straight year exceeding $1B in new purchasing spend added

  • Portfolio Optimization: Select reinvestments in Destinations (property upgrades, digital marketing)

  • International Expansion: Growth into new sports leagues, healthcare systems, mining operations

  • M&A Integration: Quantum GPO acquisition contributing accretive growth


Capital Allocation


  • Dividends: Quarterly dividend raised 14%

  • Share Buybacks: Repurchased 4M+ shares in FY25; active 10b5-1 plan continues

  • Debt: Leverage down to 3.25x, lowest in nearly 20 years

  • Cash Position: >$2.4B cash availability

  • Priorities:

    1. Invest for growth

    2. Reduce leverage below 3×

    3. Grow dividend

    4. Repurchase shares


The Bottom Line


Aramark exits FY25 with record net new business, rising margins, and a robust global pipeline across healthcare, education, sports, corrections, and workplace experience.Looking ahead:

  1. FY26 growth will be underpinned by major contract ramp-ups (e.g., Penn Medicine) and strong new business momentum.

  2. AI, robotics, and supply chain optimization will continue generating productivity and margin expansion.

  3. Balance sheet strength and capital discipline position the company for sustained EPS acceleration.



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