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Jun 30, 2024
AZEK Q3 2024 Earnings Report
AZEK's Q3 2024 financial results were announced, highlighting above-market growth in the Residential segment, strong net profit margin, and record adjusted EBITDA margin driven by key initiatives.
Key Takeaways
AZEK reported a 12% increase in consolidated net sales to $434.4 million and a 45% increase in net income to $50.1 million. The Residential segment saw an 18% increase in net sales. The company reaffirmed its second-half fiscal 2024 outlook and raised the bottom end of its full-year fiscal 2024 outlook.
Consolidated Net Sales increased 12% year-over-year to $434.4 million; Adjusted Net Sales excluding results for Vycom increased 18% year-over-year.
Residential Segment Net Sales increased 18% year-over-year to $416.0 million.
Net Income increased 45% year-over-year to $50.1 million; Adjusted Net Income increased 38% year-over-year to $62.0 million.
Adjusted EBITDA increased 24% year-over-year to $119.4 million; Residential Segment Adjusted EBITDA increased 33% year-over-year to $117.0 million.
AZEK
AZEK
AZEK Revenue by Segment
Revenue by Segment
Residential Segment Revenue
CapyFin.comCommercial Segment Revenue
CapyFin.com Forward Guidance
AZEK is reaffirming its outlook for the second half of fiscal 2024 and raising the bottom end of its full-year fiscal 2024 guidance. Consolidated net sales are now expected in the range of $1.422 to $1.438 billion, and Adjusted EBITDA is expected in the range of $370 to $380 million.
Positive Outlook
- Residential segment net sales are expected to grow approximately 10% to 12% year-over-year.
- The company anticipates continued outperformance relative to softer trends in the broader repair & remodel markets.
- Strong internal digital and engagement metrics suggest pent-up demand.
- Believes well positioned to win across any market scenario
- Sees substantial opportunities for material conversion to their types of low-maintenance, long-lasting materials.
Challenges Ahead
- Residential sell-through growth is expected to be in the mid-single-digits in the fiscal fourth quarter.
- The company is assuming a down market for the remainder of fiscal year 2024.
- Channel partners are expected to end the fiscal year at or below historical inventory days on hand.
- Fiscal fourth quarter net sales will be impacted by approximately $35 million due to the timing of purchases in the prior quarter
- Some choppiness in the broader construction economy
Revenue & Expenses
Visualization of income flow from segment revenue to net income