Advanced Drainage Systems (WMS) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 net sales reached $2.90B, up 1% year-over-year, with domestic construction market sales up 3% and Adjusted EBITDA at $889M and a margin of 30.6%.

• Infiltrator segment delivered strong growth, with revenue up 15% and advanced treatment business up 33%, expanding residential exposure to 36%.

• Q4 FY25 saw net sales decline 5.8% to $615.8M, with Adjusted EBITDA margin down 50 bps to 28.7%.

• Product and geographic diversification, innovation, and customer service investments supported profit resilience.

• Investor Day postponed due to economic uncertainty; a new date will be set when market visibility improves.

Financial highlights

• Fiscal 2025 Adjusted EBITDA margin was 30.6%, down from 32.1% prior year, with Adjusted EBITDA at $889M.

• Free cash flow for FY25 was $369M, down from $534M in FY24; operating cash flow was $581.5M.

• Capital expenditures increased to $212.9M, up 15% year-over-year.

• $121M returned to shareholders via dividends and buybacks; annual dividend increased 13% to $0.72 per share.

• Net debt as of March 31, 2025 was $962.3M, with leverage at 1.1x and total liquidity at $1.1B.

Outlook and guidance

• Fiscal 2026 net sales expected between $2.825B and $2.975B; Adjusted EBITDA projected at $850M–$910M, margin expected between 30.1% and 30.6%.

• Capital expenditures for fiscal 2026 anticipated at approximately $275M.

• Non-residential and residential markets expected flat to down; infrastructure up low single digits; agriculture and international down double digits.

• Volume up low single digits, pricing down low single digits; price/cost neutral expected for the year.

• SG&A costs targeted at 14% of revenue.