Aramark Raises Revenue Outlook on Hyperscaler Win and Broad-Based Growth
The food services giant boosted its fiscal 2026 organic revenue growth forecast to 9-10% after securing major data center contracts and posting record client retention.
Strong Quarter Drives Revised Guidance
Aramark elevated its fiscal 2026 organic revenue growth outlook to 9-10%, up from prior expectations, as the facilities services company reported third-quarter results that exceeded internal projections across all major segments (earnings call, 2026-08-11).
The Philadelphia-based company posted organic revenue growth of 9% to $5 billion in the quarter ended in early August, with CEO John Zillmer noting that growth would have reached approximately 11% excluding a calendar shift that particularly impacted the education segment (earnings call, 2026-08-11). The calendar headwind is expected to reverse in the fourth quarter.
Adjusted earnings per share climbed nearly 30% to $0.52, and would have increased approximately 45% without the calendar impact, CFO Jim Tarangelo said on the call.
Hyperscaler and Data Center Push
A key driver of the upgraded outlook is Aramark's expansion into providing hospitality services for technology infrastructure clients through its Aramark Nexus platform. The company began operations at its first site supporting "a top global hyperscaler" in Texas during the quarter, with the scope of work across two locations now expected to increase by approximately 40% from original estimates (earnings call, 2026-08-11).
Zillmer said the company is "currently mobilizing a second site for this client," and that the hyperscaler "has indicated we should anticipate supporting additional sites as new locations come online" (earnings call, 2026-08-11).
Aramark also announced a new multiyear engagement with an AI data center colocation provider to deliver hospitality services across multiple locations in Wyoming and Texas, with the first site scheduled to launch in the first half of fiscal 2027.
Record Retention and New Business
The company reported industry-leading client retention at approximately 98%, which Zillmer characterized as "record levels" (earnings call, 2026-08-11). New client wins totaled more than $1.6 billion fiscal year-to-date, representing a 51% increase over the comparable prior-year period.
Domestic food and support services organic revenue grew 8% to $3.5 billion, with growth exceeding 10% when adjusted for the calendar shift. The sports and entertainment division benefited from an expanded client portfolio and what the company described as record per capita spending during 15 FIFA World Cup matches hosted at Aramark-served stadiums (earnings call, 2026-08-11).
The international segment delivered 11% organic revenue growth to $1.5 billion, with broad-based gains across Spain, Canada, the U.K., and Germany.
Margin Expansion and Cash Flow
Adjusted operating income increased 13% to $261 million, with margins expanding nearly 20 basis points. Excluding the calendar shift, AOI growth would have reached approximately 21% with margin expansion of nearly 50 basis points on a constant currency basis, according to Tarangelo.
Free cash flow improved by $42 million in the quarter. The company repaid $100 million of term loans after quarter end and remains committed to achieving a leverage ratio below 3x by fiscal year-end (earnings call, 2026-08-11).
Aramark reaffirmed its fiscal 2026 expectations for adjusted operating income growth of 12-17% and adjusted EPS growth of 20-25%.
This article was generated by MarginX from the earnings call on 2026-08-11. It is not investment advice.