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Jun 30
ADS Q1 2026 Earnings Report
Advanced Drainage Systems announced its financial results for the first quarter of fiscal year 2026, reporting an increase in net sales but a decrease in net income and EPS.
Key Takeaways
Advanced Drainage Systems delivered strong results in the fiscal first quarter, with net sales increasing by 1.8% to $829.9 million. However, net income decreased by 11.2% to $144.1 million, and diluted EPS fell by 10.7% to $1.84. Adjusted EBITDA saw a modest increase of 1.0% to $278.2 million, with an Adjusted EBITDA margin of 33.5%. The company noted challenges from wet weather and elevated interest rates but highlighted strong execution by its teams, strategic investments, and the acquisition of River Valley Pipe.
Net sales increased by 1.8% to $829.9 million, driven by acquisitions and growth in non-residential and residential construction.
Net income decreased by 11.2% to $144.1 million, and diluted EPS fell by 10.7% to $1.84.
Adjusted EBITDA increased by 1.0% to $278.2 million, maintaining a strong margin of 33.5%.
The company made strategic investments in engineering, customer service, capacity, and logistics, and acquired River Valley Pipe to strengthen its market presence.
ADS
ADS
ADS Revenue by Segment
ADS Revenue by Geographic Location
Revenue by Segment
Pipe Revenue
CapyFin.comInfiltrator Revenue
CapyFin.comInternational Pipe Revenue
CapyFin.comInternational Allied Products & Other Revenue
CapyFin.comAllied Products & Other Revenue
CapyFin.comRevenue by Geographic Location
Domestic Markets Revenue
CapyFin.comInternational Revenue
CapyFin.com Forward Guidance
For fiscal year 2026, Advanced Drainage Systems is confirming its previously issued financial targets, expecting net sales between $2.825 billion and $2.975 billion, and Adjusted EBITDA between $850 million and $910 million. Capital expenditures are projected to be in the range of $200 million to $225 million.
Positive Outlook
- Confirmation of strong net sales guidance for fiscal 2026, ranging from $2.825 billion to $2.975 billion.
- Confirmation of robust Adjusted EBITDA guidance for fiscal 2026, ranging from $850 million to $910 million.
- Continued focus on long-term growth and profitability through investments in engineering, customer service, capacity, productivity, and logistics.
- Development and launch of innovative new product offerings, such as the Arcadia stormwater separator.
- Meaningful progress in scaling advanced treatment platform solutions at Orenco, enhancing the Infiltrator segment's capabilities.
Challenges Ahead
- Wet weather conditions in May and June continued to delay project installations, potentially impacting short-term revenue recognition.
- Elevated interest rates remain a headwind, which could affect construction activity and customer demand.
- The macroeconomic environment is challenging, requiring the company to focus on controllable levers.
- Cyclical, short-term pressures are acknowledged despite resilient business fundamentals.
- No specific negative revisions to guidance were mentioned, but the confirmed guidance implies no upward adjustment despite some positive Q1 performance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income