Advanced Drainage Systems (WMS) Q1 2027 earnings summary

Executive summary

• Net sales rose 21% year-over-year to $1,001 million, driven by strong growth in both Stormwater and Wastewater segments and the NDS acquisition, which contributed $94.7–$95 million.

• Adjusted EBITDA increased 28.8% to $358.3 million, with margin expanding 230 basis points to 35.8%, among the highest in company history.

• Net income from continuing operations rose 22.5% to $176.6 million; diluted EPS increased 22.8% to $2.26.

• Growth was supported by diversified portfolio, disciplined price-cost management, material conversion, and operational execution.

• Gross profit improved 23.5% to $408 million, reflecting favorable price/cost, manufacturing efficiencies, and NDS integration.

Financial highlights

• Stormwater sales increased 24% to $809–$809.4 million, including $94.7–$95 million from NDS; organic stormwater sales up 9.7–10%.

• Wastewater sales rose 7.5–8% to $191.7 million, led by tanks and advanced treatment.

• Free cash flow totaled $203–$203.2 million for the quarter, down from $222.4 million year-over-year.

• Adjusted EBITDA margin improved to 35.8% from 33.5% year-over-year.

• Net sales reached $1,001 million in Q1 FY27, up from $830 million in Q1 FY26.

Outlook and guidance

• Full-year/fiscal 2027 guidance: net sales of $3.35–$3.55 billion and adjusted EBITDA of $1.0–$1.05 billion.

• Adjusted EBITDA margin projected at 29.6–29.9%, down 170–200 basis points from FY26.

• Capital expenditures expected at approximately $200 million for the year.

• Management expects sufficient liquidity to meet obligations for at least the next twelve months.

• $25–$30 million in revenue was pulled forward into Q1 due to customer pre-buying ahead of price increases.