Earnings Call Transcript - BV Q1 2026

Operator, Operator

Good day, everyone, and welcome to today's BrightView Earnings call. Please note, this call may be recorded. I will be standing by if you should need any assistance. 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.

Chris Stoczko, Vice President of Finance and Investor Relations

Good morning, and thank you for joining BrightView's First Quarter Fiscal 2026 Earnings Call. Dale Asplund, BrightView's President and Chief Executive Officer; and Brett Urban, Chief Financial Officer, are on the call. I'll 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'll now turn the call over to Dale.

Dale Asplund, President and CEO

Thank you, Chris, and good morning, everyone. We had a strong start to 2026, as we grew total revenue 3% and delivered improvements in EBITDA while accelerating investments in our sales force, adding 80 incremental sellers in the quarter. While the needs of our customers vary geographically during the quarter based on weather, our focus on our frontline employees and delivering reliable service to our customer drove another sequential quarter of improvement in employee turnover and customer retention. Our intense focus on accelerating investments in our sales force, coupled with stronger customer retention, drove improvements in our underlying Land Contract book of business, one of the leading indicators of future revenue growth. More on this in a few minutes. Our accelerated investment in the sales force is proving effective, and we remain on track to deliver on our 2026 guidance, which represents a return to land growth in the third consecutive year of record adjusted EBITDA, as we continue to transform our business and deliver value for shareholders. We are well positioned to execute against our objectives. This quarter's progress reinforces my confidence in achieving our 2026 guidance, and our continued investment across the business positions us to deliver sustainable, profitable topline growth in both the near and long term. We have strengthened the foundation of the business, making significant strides in leveraging our size and scale, unlocking efficiencies and improving profitability over the past 2 years. Now, as we move forward, we will continue to cultivate a world-class sales organization to drive new sales to position BrightView as the investment of choice. With that, let's move to Slide 5, where we continue to see sequential improvement in our frontline turnover. Since day 1, my focus has been prioritizing our frontline crew members. And with ongoing investments, we continue our journey toward becoming the employer of choice. We have seen a considerable decline in turnover with approximately 30% improvement in just 2 short years. As an example of our continued commitment to our frontline, this quarter, we implemented advance pay, allowing our employees to access a portion of their earned wages ahead of the typical pay cycle, providing them with financial stability and flexibility. Our goal of becoming the industry's employer of choice has driven material cost savings that we've reinvested back into our frontline, and our continued improvement in employee turnover has created a more reliable workforce with consistent service levels for our customers. Turning to Slide 6. I'd like to highlight the impact that consistent service levels continue to have on retaining our customers. After reaching a low of approximately 79% in 2023, customer retention has improved by approximately 450 basis points as of Q1 2026, driven by initiatives focused on delivering consistent service levels to our customers, prioritizing our frontline employees and investing record level of capital to refresh our fleet. This is a true reflection of the exceptional service our employees deliver each day. Turning to Slide 7. We've also made significant progress across our branch network in driving retention improvements, in both the top and bottom quartiles. We have seen sequential improvement resulting in a 10% shift in both quartiles. While we are pleased with these results, we remain encouraged with the opportunities that still lie ahead. Our commitment to high-quality customer service has yielded significant improvement in customer retention. And, as we know, the longer a customer stays with us, the stronger relationship we build and ultimately results in us being able to provide a full suite of services over many years. The sequential improvement we have seen in this metric is a key contributor to now 3 consecutive quarters of positive net new sales in our Land Contract business, which I'll touch on in more details in a few moments. Turning to Slide 8. I'd like to update you on the rapid progress we've made in strengthening our sales force. During Investor Day, we outlined plans to expand our sales organization by 50%, representing approximately 500 net new hires by 2030. In the second half of fiscal 2025, we added approximately 100 new sellers, followed by about 80 additions in the first quarter of fiscal 2026, which is an increase of approximately 20% since the beginning of 2025. We are pacing ahead of our initial expectations, as this represents more than 1/3 of our progress toward the 2030 target. There are 2 categories of sellers, as shown in the bottom left, new business sellers focused on acquiring new customers and capturing a larger share of the total addressable market, while our customer-facing support team manages existing relationships and drives ancillary sales on top of contracted services. As new business sellers ramp their productivity and add new contracts, our customer-facing support team will further expand ancillary sales, helping to drive overall growth. Hiring is pacing ahead of our original expectations, and we plan to continue to ramp our sales organization through 2026. Expanding our sales force is critical to driving growth. And with structured training and enhanced technology tools in place, we are encouraged by the early momentum we are seeing in new sales. Turning to Slide 9. Now, I'd like to build on the topic of new sales and talk about a metric that's critical to Land Maintenance growth. This chart shows the improvement we made in our Land Contract book from Q2 2025, underpinned by a sequential improvement in our net new sales, a metric that factors in both customer retention and new sales. Ultimately, a growing contract book is an indicator of future Land Contract revenue growth. In my first year, we have realigned the sales and ops structure and changed the incentive plan to reward sellers for driving profitable new sales. This resulted in our branch managers and sellers working in tandem to align on new sales and equip them with the appropriate go-to-market tools. As we solidify the foundation of our business through reductions in employee turnover and improvements in customer retention, we began ramping the sales force in the back half of 2025. Since then, we have increased our sales force by approximately 180, or approximately 20%, and continue to see sequential improvements in customer retention, 2 key metrics needed to drive growth in our Land business. In Q3 2025, the momentum drove positive net new results, and we have seen 3 consecutive quarters of increased net new contract sales and growth in our Land Contract book of business of approximately 2%. This sustained momentum in improving customer retention and new sales growth gives me confidence that we will return to sustainable topline growth in the back half of fiscal 2026. Moving now to Slide 10. I want to remind everyone of the progress we've made in solidifying the foundation of our business and our focus for 2026 and beyond. In my first 2 years, my focus was on investing in and prioritizing our frontline employees, delivering consistent and reliable service to our customers and unlocking our size and scale as the industry's largest commercial landscaper. This has resulted in sequential improvement in employee turnover, customer retention and margin expansion, all key catalysts to help solidify the foundation of our business. Going forward, we will continue delivering in these key areas while also focusing on driving profitable topline growth in 2026 and beyond. As I mentioned a few moments ago, accelerating investments in our sales force will allow us to capture a greater share of the market. Through new sales and a sustained commitment to quality service, we expect sustained growth in our contract book, allowing our customer-facing support teams to layer in additional ancillary sales. By continuing to solidify the foundation of our business and by making strategic investments in our sales organizations, we are well positioned to accelerate contract growth and deliver sustainable, profitable topline growth. Before I turn it over to Brett, I want to express my appreciation to our more than 18,000 employees for their unwavering commitment to delivering consistent service and strengthening BrightView's position as the provider of choice. A recent example of this, although not an impact to the first quarter, was the team's readiness during the recent winter storms to safely and reliably service our customers. It is events like these that set us apart from other landscapers in the nation. Our ability to provide dependable service to our key customers was highlighted over the past few weeks. Once again, thank you to all our employees for putting the customer at the center of everything we do. With that, I will now turn it over to Brett.

Brett Urban, Chief Financial Officer

Thank you, Dale, and good morning, everyone. 2026 is off to a strong start with our financial results positioning us to deliver on our guidance, which implies Land revenue returning to growth and delivering a third consecutive year of record adjusted EBITDA. The strategic decisions we have made over the past 2 years to invest in our employees and customers has paid significant dividends, as you can see in our employee turnover and customer retention metrics. And now, our strategy to add to our sales force is already showing positive signs in our selling performance. I am continually encouraged by the momentum we are building in the business to deliver long-term profitable growth. Let's turn to Slide 12 to discuss our results in the quarter. Total revenue for the first quarter was $615 million, which is a 3% increase, driven by heightened snowfall and continued improvement in underlying land metrics. Snow was a major benefit in the quarter, increasing 110% from the prior year, as we saw higher-than-average snowfall in the Mid-Atlantic, Northeast and Midwest geographies. Maintenance land revenue was impacted by weather-related factors, including the year-over-year step over from the 2 named hurricanes in prior year Q1 and increased snowfall this quarter, which limited our ability to perform core land maintenance. However, as Dale just mentioned, we're highly encouraged by the trends we're seeing in employee turnover and customer retention, and now, net new positive contract sales, which is the catalyst for land growth in the back half of 2026. In the Development segment, revenue decreased 7%, driven by timing and mix of projects. I want to be clear that the headwinds we experienced were timing related as we saw this impact start late in 2025 and should not be viewed as lost revenue over the long term. Turning now to profitability on Slide 13. We delivered another quarter of adjusted EBITDA growth, as we continue to transform our business. Higher revenue was a benefit to flow-through, as we are continuing to see advantages of refreshing our fleet, unlocking purchasing power through procurement and realizing efficiencies across the business to drive G&A savings. These benefits were partially offset by accelerated investments in our sales force, as our revenue-generating resources are up 180 employees, or 20% over last year. This investment underpins the next leg of our sustainable growth journey. Now, let's move to Slide 14 to discuss our strategic capital allocations focused on driving long-term shareholder value. Our strong balance sheet highlights this strategy, supported by ample liquidity and a favorable debt structure with no long-term maturities until 2029. We continue to accelerate our fleet strategy in 2026, which saw a significant improvement to the average age of our core mowers and production vehicles in 2025. And now on to refreshing our fleet of trailers, this refresh has provided not only P&L benefits in the form of lower rental and repair and maintenance expense, but also intangible benefits through higher employee morale and customer satisfaction, which are major contributors to the improvement we've seen in frontline turnover and customer retention. Additionally, at the start of 2026, we increased our share repurchase authorization from $100 million to $150 million, as we believe our current valuation does not fully reflect our earnings potential. This increase resulted in $14 million in share repurchases in Q1, essentially doubling the quarterly average from 2025, as we continue to see our shares as significantly undervalued. While we currently view our fleet refresh and share repurchases as an efficient use of capital, we remain poised to return to mergers and acquisitions when the time is right, and we've developed a robust pipeline focused on service line density and market expansion. Moving to Slide 15. We felt confident by the first quarter results and underlying trends we are seeing in the business, and we are reiterating our 2026 revenue, EBITDA and free cash flow guidance. This represents the third consecutive year of record-breaking EBITDA, continued margin expansion and a return to Land revenue growth. Additionally, our free cash flow guidance, coupled with ample liquidity, provides significant financial flexibility to continue to reinvest in the business. Before turning the call back over to Dale, I want to reiterate my conviction in the trajectory of BrightView and our ultimate goal, delivering sustainable, profitable topline growth while creating meaningful shareholder value. The investments we've made into our business have paid dividends, as evidenced in our employee turnover and customer retention. And now, we expect our investments into our sales force to do the same. With that, I'll turn the call back to Dale.

Dale Asplund, President and CEO

Thanks, Brett. Before we turn to questions, I want to reinforce a core belief that our people are the foundation of our progress. By investing in our employees and building an employer of choice culture, our intense focus on delivering best-in-class service is at the forefront of everything we do. Now, as we continue to ramp our sales organization, we are excited about the contributions the new 180 sellers are going to make. This, combined with leveraging our size and scale and strategically allocating capital, I'm confident in our ability to achieve sustainable topline growth and position the company to deliver long-term shareholder value. With that, operator, you can open the call for questions.

Operator, Operator

We'll go first this morning to Bob Labick of CJS Securities.

Bob Labick, Analyst

Congratulations on a great start to the year. Yes, I wanted to go back to the sales force investment, obviously. You mentioned you're ahead of pace. Does this mean you're going to pause? Or do you keep your foot on the accelerator? What's the target for the year? And what's the impact on the P&L? I guess, finally, like how long does it take until new salespeople break even and add to the top and bottom line?

Dale Asplund, President and CEO

Yes, great question, Bob. We're proud of the progress we've made. Today, we are joined by our team in Homestead, Florida. We're experiencing various weather conditions, and our teams are committed to enhancing communication with our customers. In the last quarter, we added 80 full-time employees to support our growth initiatives. We are not slowing down. We are seeing positive results, which is strengthening our contract book, and we can discuss how it impacted revenue as it outpaced snowfall across the country. The transition of our sales force working directly with our branch managers is effective. Now, it's essential that as our branch managers request more resources for the market, we support them by providing additional personnel to help grow the business. The 80 new hires in this quarter, along with the 100 we added last year, signify that we are committed to continuing this growth. Initially, we aimed to add another 100 this year, with a long-term goal of reaching 500 by 2030. We are ahead of schedule, having already added 80 by the end of the year. I want to continue promoting resource additions across the network. I have confidence in the momentum we have. With the foundation we've built, our focus now is on resource expansion. We will not stop at 100; if opportunities arise and the branches can handle more, we will continue to invest in them to facilitate their growth. Brett, do you want to add anything?

Brett Urban, Chief Financial Officer

No. Bob, I would just say we're excited by it. We've made significant progress in a short period of time to ramp up our sales force. And you go back a little bit over 2 years, when Dale started as CEO, it was all about fixing the foundation, making sure we take care of our employees who in turn take care of our customers. And you look at that strategy now 2 years later, and that's paying huge dividends. Employee turnover is down significantly, over 30%, and customer retention is up significantly. Now, the next leg of our journey is to make sure we can support our branches by getting customer-facing sellers out into the markets. And we're going to do that as quickly as possible. So I'd say, yes, it was higher than expected, but we couldn't be more excited about the progress we're making with adding those sellers to the business.

Bob Labick, Analyst

Okay. Yes, that's great. And, yes, you've done a remarkable job over the last 2-plus years in building the foundation for growth. And obviously, sales force acceleration is part of it right now. You mentioned a few other things. What are the remaining steps to building this core foundation to get the flywheel fully running? And how much longer do you think that part will take until you have the foundation where you want it and you start to see the acceleration in top line?

Dale Asplund, President and CEO

Yes. Great add-on, Bob. I think we made great improvements in taking care of our existing customer base. As I said in my prepared remarks, when I joined the company, our customer retention on an annual basis was running at 79%. It is very hard to grow a business when you're losing 21% of your customer base each year. I'm proud of the progress we've made. And as we put in the deck, we're up 450 basis points over the last 27 months. So great progress. But what is the most beneficial? I'm so optimistic because we still have ample opportunity. As we put in the deck on Slide 7, you can see we've shifted from 20% of our branches being below 70% customer retention and only 20% being above 90% to just 24 months later, we're at 30% above 90% and 10% below 70%. Now, I'm not going to be happy until none of our branches are below 80% customer retention because that's our path to growth. We cannot lose our existing customer base. There's always reasons we might lose a few, but at the end of the day, we've got to make sure the service we provide our customers each and every day and support our employees that provide that service, make sure our customers recognize the value that we're trying to add to their businesses each day. So we're going to keep going, Bob. That retention is a critical number. We're going to invest in new sales, but we've got to keep chasing that retention number. We're at 83.5%, as we put in the deck. 85% is the next stop on our journey, I hope. Then, I'm not going to stop until I can say one day, we're keeping 90-plus percent of our business. But Brett, do you want to add anything?

Brett Urban, Chief Financial Officer

I'll just add a little context. Obviously, you could tell the excitement in our voices over here. It starts with taking care of our employees, as Dale said, will take care of our end customers. We've improved that customer retention metric significantly. We've improved our fleet and our go-to-market significantly, just the look and brand of BrightView. And if you look at Page 9 of the deck, the strategy is starting to pay dividends. We continue to share more metrics on the business to give confidence of our ability to grow this in the back half of this year. And if you look at Page 9 of the deck, it's a new metric we're sharing, which is our Land Contract values that we have on the books at any given point in time. It's the annualized amount of these contracts. And if you look over the last 3 quarters, a big piece of this 2% growth in our contract book is coming from that customer retention, but we're now also starting to see those sellers we added back in the last June quarter, right, producing some incremental positive wins in the business and adding to that Land growth. So we couldn't be more excited about the strategy actually paying dividends into the KPIs. And if you look at Page 9, this is the leading indicator that would predict growth in the back half of the year once we get into our busy season.

Operator, Operator

We'll go next now to Tim Mulrooney of William Blair.

Timothy Mulrooney, Analyst

So Maintenance Land, let's just start there. Yes, your Maintenance Land business was down a little more than 2% in the first quarter, but you maintained your guide for 1% to 2% growth for the full year. That implies about 2.5% growth for the remaining 3 quarters. And I know January is off to a snowy start, so if there's disruption in the second quarter here, then it looks like a lot of that growth in Maintenance Land is going to have to come from those last 2 quarters of the fiscal year. Can you just help us understand where you expect that growth to come from? Help bridge that gap for us.

Dale Asplund, President and CEO

Yes, that's a great question, Tim. It's important to reflect on the quarter. As noted in our prepared remarks, snow levels were exceptionally high this quarter, nearly reaching record highs, resulting in an increase of $36 million. This allowed us to effectively serve our customers' needs in the market. Regarding our Land segment, we experienced a decrease of $8.9 million. To clarify that figure, we encountered two named storms last year from hurricanes that affected our southern markets, which accounted for about $3.5 million. The remaining $6 million decline is linked to the markets that experienced significant snow. So, if we consider that $6 million taken from our Land business is due to the inability to conduct ancillary work because of snow, we'd be looking at flat performance if not for those storms and the excessive snow. We are optimistic, Tim, believing that the business would have remained stable as we enter the winter season, and we anticipate growth of 2% to 3% during our busiest quarters in April and through the summer. What appears as a decline in land, when examined closely, is affected by the snow amount in those markets. January has indeed been busy with snow, as highlighted in the news. We will continue to prioritize our customers' needs daily. I've seen more positive feedback from customers in the last two weeks than in many months. They recognize that while anyone can discuss snow services in July, only those who truly invest in people and equipment can provide these services during periods of heavy snowfall. Therefore, we find ourselves in a strong position, Tim. We haven't altered our guidance and are confident in achieving that 1% to 2% land growth with ease. We are positioned very well. Brett, would you like to add anything?

Brett Urban, Chief Financial Officer

No, I agree with Dale. January is off to a bit of a snowy start. We still have 2 heavy snow months in front of us, in February and March, which are still part of our total snow season. So we'll see how the quarter finishes out here. It is quite cold across most of the U.S. still. So we have optimism there. But as Dale said, look, if the $6 million that we were impacted by snow in Q1, even if we see a little bit of impact in Q2, given some more snowy weather, you'd have to grow the back half of the year north of 2%, like you said, Tim. And we feel ultra confident, especially looking at the contract book growth that we show on Page 9. That is the key, right? That is the number of customers we have, the value of contracts we have, that annuity businesses within our Land business that gives us that confidence to be at that 2% plus growth in the back half of the year. And we'll update as we get through Q2. When we do finish the snow season, we get through February and March, we'll provide a full update on the guide as we enter into Q3.

Timothy Mulrooney, Analyst

All right. That's helpful color, Brett and Dale. Brett, maybe you and I can nerd out on that contract book number that you just highlighted for a second because up 2% does look promising. But honestly, we don't have much to compare this metric to. Can you help us understand what this metric looked like this time last year?

Brett Urban, Chief Financial Officer

Yes, last year we were focused on strengthening our foundation and ensuring we prioritized our employees and customers. If you look back a year, this particular metric was new to us and you wouldn’t have seen an increase. We were addressing prior challenges and working towards significantly boosting customer retention. Now, as I mentioned earlier, the sales team additions we made nine months ago are beginning to show productivity. Typically, new sellers take about six months to ramp up to a semi-productive level, and within a 6 to 12-month timeframe, they become fully productive. This is why we are optimistic about the new hires in Q1, as their impact will become more evident later this year and especially into 2027. We are committed to investing in future growth. Looking at our Land business, we generated approximately $1.7 billion in revenue, with two-thirds coming from our contract business and one-third from ancillary services. Therefore, around $1.15 billion represents our contract value. A year ago, this figure was lower since the business was not growing. However, in the last three quarters, as our business has expanded, the contract value has increased by about 2%, translating to roughly $22 million to $23 million. This trend gives us confidence as we approach the busy season, where two-thirds of our Land revenue occurs from April to September, serving as a strong indicator of what to expect in the latter half of the year.

Operator, Operator

We'll go next now to Greg Palm of Craig-Hallum.

Greg Palm, Analyst

I wanted to maybe hit on the weather stuff a little bit more just given some of the recent events. So can you talk about kind of what you've seen quarter-to-date in terms of impacts, both positive and negative? And I guess, as I'm thinking about it, just given this elevated amount of snow in certain markets, are you using that as a way to maybe onboard new customers that you can maybe convert to annual Land Maintenance contracts as well?

Dale Asplund, President and CEO

Yes, that's a great question, Greg. I'll start, and then Brett can provide additional insights. As you saw in our release, snow conditions were very positive in the first quarter. We've received many inquiries about why we haven't raised our snow revenue expectations from our initial guidance of $190 million to $220 million. As I've mentioned before, I believe in delivering only positive updates regarding snow. To provide more context, January has been strong with storms affecting areas from Texas to the Northeast, and we had favorable weather this past weekend in the Carolinas and Virginia. Typically, in Q2, combined revenues from February and March have ranged from $60 million to $160 million. While it's still early, we're optimistic about our snow revenue. After doing some quick calculations, last year we had $173 million in revenue during Q2, and so far this year, we've seen $68.4 million. If we don't experience significant warming, we're likely to exceed the upper end of our range for snow. We'll keep everyone updated at the end of Q2 when we have clearer visibility. We will also determine how much of the snow revenue can be reinvested back into the business. Overall, we’re confident that snow will provide positive results for us. We don't anticipate it creating long-term challenges in our summer months, which account for two-thirds of our Land revenue, and we are on track to achieve our promised growth for land.

Brett Urban, Chief Financial Officer

Yes. I'd just add to it, Greg. Look, Dale said it several times here in the last probably month or so. Any competitor and/or landscaper can say they can do snow in July. But when the flakes start flying and snow is hitting the ground, we've actually seen that be quite different. And we've had customers in our markets, especially the southeastern part of the United States in Texas through Georgia, the Carolinas, come to us and say, "Hey, guys, we need help. Can you guys help us in snow"? And we've had a lot of customer outreach to the point of your second question of, is this going to lead to new customer acquisition? Yes, potentially. We're taking care of our customers first. We want to make sure the customers who have us for both land and snow and signed us up early in the season, that we're taking care of those customers first. But where we can and we have capacity, we're starting to pick up additional customers for snow, and now, having conversations with them about picking up their land contract, right? So if they're seeing some struggles from their incumbent landscaper on snow, they'll probably see the same struggles when it comes to landscaping. So that's creating an opportunity for us in the future to create more customer acquisition.

Dale Asplund, President and CEO

Greg, I want to provide some additional insights. This metric can be challenging because our snow pricing is based on time and materials, and we can't predict how much snow will fall. We have tiered pricing for our fixed contracts. My team has been diligently working over the past four months and has shared some preliminary figures with me. We estimate that we could achieve around $5 million in incremental annual contract value for snow as customers seek our support. Additionally, we anticipate similar emergency needs for servicing customers whose current providers may have failed. However, these projections are contingent on the volume of snowfall. This situation demonstrates the increasing demand for our additional services. It is crucial that our team is prepared with the necessary materials, equipment, and readiness to meet our customers' needs. We have observed this commitment year-to-date, and we are confident that it will eventually lead to increased land business. It's easy to discuss snow services in July, but when substantial snowfall occurs, it is essential to have the right equipment and personnel available around the clock to manage the properties effectively.

Greg Palm, Analyst

You answered two of my follow-up questions already, so I'll pivot to something a bit different. Reflecting on the overall discretionary spending environment from about six to nine months ago, what are you observing now compared to that time last year? I'm considering how this might influence some of the ancillary trends moving forward.

Dale Asplund, President and CEO

Yes. Look, it's still early, Greg, in the year. And obviously, if we get a lot more weather across those southern markets, especially in the HOA communities, you could feel some headwind on the Land side just because people end up spending a lot more money on snow removal. Nothing we're alarmed of. I would go the opposite way and tell you, we've seen a lot of damage from ice, whether it's plant material dying or whether it's tree damage across the country. We've dispatched tree crews out to many markets to try to make sure we can service our customers who have tree damage. So I would say there's always the possibility of headwinds, but we're seeing existing tailwinds. So I would say it's still too early to say are we going to see any noise from that. Once we get to the end of the second quarter, and we know exactly how much snow we had and where it was, we'll update everybody. But the good news is the commitment we made to take care of our customers and get higher retention and create that relationship continues to promote them to turn to us to actually do more and more of their services. So Greg, we are positioned so well, still too early to say if there's going to be some noise, but I have no worry even if we have some noise, like Brett said earlier, we're going to hit our Land forecast that we gave you in November of growing 1% to 2%.

Operator, Operator

Gentlemen, we'll go next now to Andy Wittmann of Baird.

Andrew J. Wittmann, Analyst

The contract book of business is up 2% over the last three quarters, which is great. However, I'm curious if you can provide some context considering we are currently in winter. You mentioned that your selling season has become more of a year-round process, but for seasonal markets, I believe some of your customers are still contemplating their plans for the upcoming growing season. Do you think the 2% increase will look better in the next quarter after those customers in seasonal markets make their decisions for the year? I'm trying to determine if this figure is actually conservative or if I'm overthinking it.

Dale Asplund, President and CEO

No. I think, Andy, it's a great question. I don't think it's conservative because it's historic. So we're just giving you the facts of where we're at. You bring up a great question. We're starting to sell in our northern markets, even though it's a little bit of a challenge when you're getting as much snow as you're getting right now, but our customers are thinking about their April through October Land business. So absolutely, we sell Land contracts all year long. And I will tell you, even to Greg's question a minute ago, when we get additional needs for snow, it gives us the foot in the door to get those Land contracts, as we go into the summer. So Andy, to answer it a different way to say it's not conservative, we feel that momentum will continue to show on this slide. Our goal is not to say we've grown our book 2%. We think with the additional 80 resources we added in sales, we think of the 180 we've added over the past year, we feel great that we're going to continue to see momentum in this metric. Our goal is to keep adding resources to drive new contract book, and then, drive those customer-facing roles to drive all those ancillary services that those customers are going to need. So the teams in the field are very excited. Managing salespeople was a new thing to them a year ago, but now, they're all seeing the power of getting people out there, getting us new business so we can grow our business. And it's been a great journey, and I think 2026 will continue to show that momentum. Brett?

Brett Urban, Chief Financial Officer

I would just add, we continue to manage this business for the long term. The quicker we can get these sellers added, like we showed on Page 8 of the presentation, the more inflection we'll have on Page 9, the contract book. And we're starting to see those 60 sellers we added last April, May, June, starting to produce and be productive here in Q1 of 2026. So it takes a little bit of time. But as you think about the business, you think about the way we're managing it. The strategy really is, Andy, based on that long-term view of the business. And that's why we went as far as to put our 2030 goals back into this earnings presentation to show we're committed to getting there as quickly as possible. So yes, I agree with you. I couldn't be more excited about the progress we made on Page 9. Whether it's 2% or something north of 2%, we'll continue to kind of share that metric just to show the progression in that underlying contract annuity business that makes BrightView such an attractive investment.

Operator, Operator

I think at this point, Dale, can we discuss the IT tools? There have been significant investments in this area. Two of the most notable ones relate to your HR IT system. I believe you have recently gone live with a new system, which I think is Workday. I'd like to know how that has gone and if there were any disruptions or growing pains during the transition. More importantly, I understand you're also in the process of rolling out your field management software, which provides tools for your teams in the field for various tasks. Could you share how that's progressing and whether the field software has been disruptive or not?

Dale Asplund, President and CEO

Yes. I think it's a great question. I would say, first, let's start with the HRIS system. Our employees are our #1 asset, and we've got to make sure we've got visibility and ways to manage them. I think what that tool has given us is added benefit for all of our leaders and made their jobs easier. So from a transition, as we've started to migrate to that for visibility, and we'll continue to have phases, Andy, as we add different modules on to get away from the litany of IT systems we had and put it all in one system. But the field has embraced it. It continues to show benefit, and we'll continue to leverage the different modules as we go forward. On the field service side, that's one that is really starting to take way. We've seen continued progress. We have over 1/3 of our branches on it. Our initial goal was sometime late March, early April was to get all of our branches on field service. The branches that have been on it for 30 to 60 days are seeing benefit in creating capacity with their labor. So that's a positive thing that the teams that are using it to help route and define how many hours for each job it's creating capacity. And that's key for us because I want to use not it as a labor savings tool. I want to use it to create capacity. So as we're growing this business this summer, we have the ability to service customers with the resources we have today. Now, I would say this, Andy, we had a couple of branch managers send me an e-mail, and I'm always there to help them. Obviously, when you get as much snow in a couple of these markets and you have training scheduled, we pushed a couple of branches out because I recognize we've got to service our customers, and we just moved the training out for a few weeks, and we get our team to reassign a date. But we are making wonderful progress on both of those initiatives. And like we said, our IT investments were behind schedule several years ago. These are the first 2 in a litany of different technologies we can help grow our business. So we're enabling our field. We're giving them tools, and our goal is to long term help them be more efficient and spend more time with their customers.

Brett Urban, Chief Financial Officer

And Andy, I would just add, this is why it's so exciting, we have the balance sheet, liquidity and flexibility to do all these investments, which is fantastic, not only investing in our employees, in our customers, in our fleet, in our sales force, but also invest in technology. So Dale mentioned some of the tools that are rolling out, but that's all supported by the flexibility we have on the balance sheet, so we couldn't be more excited about the ability for us to grow the business, produce higher EBITDA than the year before and continue to invest back into the business.

Operator, Operator

We'll go next now to Stephanie Moore at Jefferies.

Stephanie Benjamin Moore, Analyst

I wanted to circle back on maybe a question that was asked earlier, but I'm going to ask it a little bit differently. As you think about all of the success you've had thus far to start the year from the investment standpoint, obviously, the strong snow season, maybe just talk about the level of confidence you have in the guide, understanding it's obviously still early in the year and you need to get through your busy season? But I'm trying to understand what could maybe go wrong or in a more negative direction, which would make the guidance a little bit more difficult. So maybe downside scenarios that you guys walk through.

Dale Asplund, President and CEO

Yes, I'll break it down into a few parts. If we continue to experience the volume of snow we had in the first quarter and in January, it could delay our Land Maintenance services in the second quarter, particularly in markets facing extreme cold, even down in Florida. I was with my teams this week, and we were dealing with temperatures in the low 30s in Florida. More snow can provide added opportunities in our Snow business, but it may also lead to some delays in our maintenance and development areas. However, I believe that the storms and ice damage across the country could ultimately work in our favor. As we head into the busy summer season, increased tree work and plant damage will likely drive growth as people want their properties to look their best once winter is over. There may be some timing issues due to the significant snowfall over the past four months, but I see considerable opportunity arising from a somewhat challenging winter. Even in our development business, while we might experience some delays—as we've seen this quarter—our three major projects are located in the northern markets where snow has limited our work. Overall, I feel optimistic. While we always face risks in any environment, I believe that our potential for upside currently exceeds our risks.

Stephanie Benjamin Moore, Analyst

That's very helpful. And then, maybe switching to capital allocation priorities, obviously, you noted that the M&A pipeline remains robust, but you also have been very active in share repurchases. So maybe just talk through as you evaluate both options, what's more for the near-term priorities, when we might expect to see M&A start again. Any color there would be great.

Dale Asplund, President and CEO

Yes, that's a great question. I'll begin, and then I'll hand it over to Brett. I remind my senior leaders that we need to prove our growth before we can pursue mergers and acquisitions. They often remind me that our business is on the cusp of growth, so it's a good time to consider M&A. We recently had a strong quarter for share repurchases, buying back our equity at 7.5 times our average price in the first quarter. At that multiple, it would be challenging to acquire a quality company like BrightView. We believe we have a strong pipeline and a quality company; even smaller firms are trading at 8 to 9 times. Even if we achieve some synergies, we would still be paying a higher price than what we can buy back our own shares for. We understand the value of BrightView and recognize that we are significantly undervalued. Our Board has approved an increase in our share repurchase program, allowing us to be more aggressive. We are confident in the investments we're making. Our strategy is straightforward: invest in our people and our fleet, repurchase shares, and then pursue M&A. Brett, would you like to add anything?

Brett Urban, Chief Financial Officer

No, I would just add that we're currently levered at 2.4x, essentially flat to where we were, very favorable debt structure, no long-term maturity in 2029. And we have plenty of liquidity, right around $0.5 billion to invest in the business of liquidity. So to your question, Stephanie, and Dale's point, I think on Page 14, we've tried to lay out our priorities very clearly. And I think we're executing on those priorities. We've executed on a fleet refresh that has essentially seen all of our core mowers get to our targeted average age. Almost all of our production vehicles, by the end of this year, we feel like they'll be at the average targeted age. And we have some work to do on trailers. But this year is probably going to be our last year of elevated CapEx in the business. We're going to run about 6.5%. And then, we'll come back down more to that 3.5%, 4% normal range as we get through our trailer refresh. But Dale said it well, buying a company comes with some inherent risk of integration and acquisition. And if our stock is going to trade at 7.5x multiple, definitely an accretive use of capital to buy our own shares. And look, we feel like we should be in the 10-plus multiple trading range. So when we get there, and this business is growing, and we get there, we get a re-rate, there's absolutely a tremendous amount of opportunity to go down the acquisition trail. And I will tell you that the pipeline we're maintaining here is significant. So we have a pipeline of potential targets. When the time is right, we'll be able to pull that lever fairly quickly.

Operator, Operator

We'll go next now to Jeffrey Stevenson at Loop Capital.

Jeffrey Stevenson, Analyst

How should we think about the cadence of development revenue growth this year after the segment was negatively impacted by project timing in the December quarter? And then, has there been any change in the timeline of the 4 to 5 large projects you're working on compared with prior expectations? Or is that in line with what you were expecting when you gave guidance last quarter?

Dale Asplund, President and CEO

Yes. We feel great about the progress we saw from Q4 into Q1 for development. It's definitely swinging back. Is there timing differences? Jeff, yes, like Brett said in the script, when you've got a lot of those big projects up in the northern climates and you get the amount of snow, they still grew, but they could have grown more. We had more opportunity. Those projects will still hit our timelines. It's going to be about when we can recognize it. We feel great about what the customers are asking us to do, and we continue to work on them. So I'm not worried about the development business long term. We just got to stay on top of everything we're working on, take care of our customers, communicate to our customers and continue to keep driving forward with the development backlog, so we keep booking work each and every day.

Jeffrey Stevenson, Analyst

Great. No, that's helpful, Dale. And sticking on the development business, I was wondering if you could provide an update on your cold start initiative and the timeline of that this year? And then, also, with the increase you've seen in the sales force, obviously, that's mainly on the maintenance side. But have any of the new hires been on your development business as well? And how will that help with growth over the coming years?

Dale Asplund, President and CEO

Yes. Look, I think it's a great question. We updated everybody that our goal is to get several new locations open for development. We have now opened 6 locations across North America that we're seeing green shoots out of. Some of it is markets that we traditionally did remote work in. So we had some development teams there that could do work. But Jeff, yes, about 10% of those new sellers in the quarter, that money that we spent went to the development team because our whole goal is when we add a location, make sure we've got a development sales rep out in the market to get us more and more work. So yes, it's about 10%-90% for that $6 million that we talked about spending in the quarter on sales resources. And we've got 6 of the locations that we've gotten stand-alone P&Ls that they're operating independently versus they used to be doing work remotely. So great progress there, and we're going to continue to keep our foot on the gas and grow as fast as we can with new locations.

Operator, Operator

We'll go next now to Greg Parrish at Morgan Stanley.

Gregory Parrish, Analyst

I'll just squeeze one in here. Maybe just help us think about snow margin, especially heading into the second quarter with how much we had, had in January, and we'll see how February, March play out. But how much of the snowfall so far is in fixed versus variable? And then, can you talk about the potential for some of these clients, as they move up in tiers, does that potentially add more margin upside in the Snow business in the second quarter?

Dale Asplund, President and CEO

Yes, that's a good question, Greg. During the quarter, we reported a $3 million improvement in revenue. Breaking it down, $6 million of our incremental EBITDA came from additional snow revenue, while we experienced about $2 million in negative EBITDA from land and $1 million from development, resulting in a net benefit of around $3 million. You're correct in your assessment. A significant portion of our contracts, particularly in northern markets, have shifted to more fixed tier pricing. The Chicago market experienced three times the usual snowfall, and areas from New Jersey to Boston saw double the normal snowfall in the first quarter. With fixed tier pricing, our margins are somewhat constrained until we hit the additional tiers, which would lead to greater profitability. We typically expect our margin on extra snow to be between 20% and 25%. We believe that once we complete the year and move past Q2, we will comfortably fall within that range. Although Q1's $6 million benefit against $36 million in revenue is slightly below that target, we attribute it largely to the timing of our fixed tier contracts. We are noticing an increasing number of customers transitioning to fixed tier pricing, especially after an exceptional snow year like this one, as those in fringe markets that usually opted for more risk may now seek fixed pricing again. Overall, we feel optimistic and anticipate additional benefits as we progress through Q2, particularly in profit rather than revenue, as our focus remains on providing excellent customer service.

Operator, Operator

And ladies and gentlemen, that is all the time we have for questions this morning. At this time, I'll turn things back to Mr. Asplund for any closing comments.

Dale Asplund, President and CEO

Look, I want to thank everybody again, and I apologize. I know we still had some questions in the queue. I think it was a great discussion. And operator, thank you. But I'd like to close by reaffirming our confidence in the trajectory of the business, as we continue to work toward its transformation. Over the past 2 years, we fixed the foundation of this business, becoming a unified company and unlocking efficiencies to drive this business forward. All the while, we have started to reinvest back into our sales organization. I am beyond proud of how many resources we were able to add in the quarter, and we are going to benefit from them, not here in Q1, but throughout 2026 and position us for long-term growth. So to all the employees, thank you. Everybody continue to be safe. To all of our investors, thank you for taking the time to listen in today. Everybody, be safe, and we'll talk to you again at the end of the second quarter. You can now end the call, operator.

Operator, Operator

Thank you, Mr. Asplund, and thank you, Mr. Urban. Again, ladies and gentlemen, that will conclude today's BrightView conference call. Again, thanks so much for joining us, and we wish you all a great day. Goodbye.