AZZ (AZZ) Q2 2027 earnings summary

Executive summary

• Record Q2 sales of $486.9M, up 16.7% YoY, with double-digit growth in both segments and operating income up 22.4% to $83.8M.

• FY27 guidance was raised on strong H1 performance and segment momentum; Seattle Galvanizing expanded Metal Coatings’ Pacific Northwest footprint.

Financial highlights

• Q2 gross profit was $122.1M, or 25.1% of sales, up 80 bps YoY; operating income was $83.8M, or 17.2% of sales.

• GAAP net income was $58.5M and diluted EPS was $1.94, down YoY against prior-year AVAIL gains; adjusted net income was $60.1M and adjusted diluted EPS rose 29% to $2.00.

• Adjusted EBITDA was $110.9M, or 22.8% of sales, versus $88.7M and 21.3% a year earlier.

• Q2 operating cash flow was $102.8M, up 76.1% YoY; H1 operating cash flow was $140.0M.

• SG&A was $38.3M, or 7.9% of sales; excluding $2.8M in acquisition costs, it was 7.3% versus 7.9% a year earlier.

Outlook and guidance

• FY27 guidance increased to sales of $1.825B-$1.875B, adjusted EBITDA of $380M-$420M and adjusted diluted EPS of $7.00-$7.30.

• Guidance assumes a 25% annualized effective tax rate and $35M-$45M interest expense; it excludes additional M&A beyond Seattle Galvanizing and potential AVAIL equity income or loss and distributions.

• FY27 capital expenditures are expected at $80M-$100M; debt reduction is expected at $100M-$140M, lowered after the Seattle acquisition and lower-than-projected AVAIL cash proceeds.

• Washington, Missouri is on track to reach targeted anchor-customer utilization by year-end and is expected to contribute more in H2; Q4 seasonality and potential fixed-cost deleverage remain considerations.

• Q3 pricing expectations include slight Metal Coatings increases with zinc inflation and Precoat Metals pricing near current levels; both segments were expected to follow typical seasonality.