Advanced Drainage Systems (WMS) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 closed with strong results, including robust Q4 performance, successful NDS acquisition integration, and realignment of segments to Stormwater and Wastewater.

• Q4 FY26 revenue rose 12% year-over-year to $677M, driven by the NDS acquisition and strong organic growth in Allied products and agriculture.

• Full-year FY26 revenue reached $3.05B, up 5% from FY25, with notable growth in stormwater and wastewater segments.

• Adjusted EBITDA for FY26 was $963M (31.6% margin), up from $889M in FY25, with margin improving 100 bps.

• Generated significant free cash flow and returned $155 million to shareholders.

Financial highlights

• Q4 revenue increased 10–12% to $677 million, including NDS impact; organic growth in Allied Products, tanks, and advanced treatment all up double digits.

• Adjusted EBITDA margin for Q4 was 27.8%; full-year adjusted EBITDA margin reached 31.6%.

• Free cash flow for FY26 was $569 million, up from $369 million prior year.

• Cash from operations totaled $819 million, representing 85% conversion of adjusted EBITDA.

• Net income from continuing operations for FY26 was $429.9M, compared to $452.6M in FY25.

Outlook and guidance

• FY27 net sales guidance: $3.35–$3.55 billion; Adjusted EBITDA targeted at $1.0–$1.05 billion.

• Adjusted EBITDA margin expected to decline to 29.6–29.9% in FY27.

• Guidance assumes significant inflationary cost pressures, offset by pricing actions.

• Expect normal seasonality, with 55% of revenue in the first half; some revenue may be pulled forward due to pre-buying ahead of price increases.

• Management remains cautious due to geopolitical and economic uncertainties, with focus on cost control and market share growth.