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Sep 30, 2025
ADS Q2 2026 Earnings Report
Advanced Drainage Systems reported strong financial results for the second quarter of fiscal year 2026, with significant increases in net sales, net income, and Adjusted EBITDA.
Key Takeaways
Advanced Drainage Systems delivered robust performance in Q2 Fiscal 2026, driven by effective sales strategies and growth in core markets. The company saw double-digit revenue increases in Infiltrator and Allied products, alongside favorable price/cost and product mix, contributing to a resilient Adjusted EBITDA margin of 33.8%. Acquisitions also played a significant role in the overall revenue growth.
Net sales increased by 8.7% to $850.4 million, compared to $782.6 million in the prior year quarter.
Net income rose by 19.3% to $156.5 million, with diluted EPS reaching $1.99, a 19.2% increase.
Adjusted EBITDA grew by 17.1% to $287.5 million, achieving a strong margin of 33.8%.
Infiltrator and Allied products segments showed double-digit revenue growth, with Infiltrator organic revenue increasing by 7.1%.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Advanced Drainage Systems has updated its financial targets for fiscal 2026, expecting net sales between $2.900 billion and $2.990 billion and Adjusted EBITDA between $900 million and $940 million. Capital expenditures are projected to be in the range of $200 million to $225 million.
Positive Outlook
- Better-than-expected results in the first half of the fiscal year led to updated, presumably higher, guidance.
- Company is well-positioned to continue executing on its value proposition.
- Focus on driving market conversion and accelerating organic and inorganic growth.
- Commitment to generating free cash flow to invest in the business and return capital to shareholders.
- Acquisition of NDS is expected to add complementary offerings, enhance go-to-market capabilities, expand addressable market, and unlock significant value creation with over $25 million in expected annual cost synergies.
Challenges Ahead
- The end market outlook for the remainder of Fiscal 2026 remains unchanged.
- Challenging macroeconomic environment due to high interest rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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