AZZ (AZZ) Q4 2025 earnings summary

Executive summary

• Achieved record fiscal 2025 sales of $1.578 billion, up 2.6% year-over-year, and record profitability, driven by strong Metal Coatings and Precoat Metals performance and disciplined growth initiatives.

• Net income before preferred dividends was $128.8 million, up 26.8%; adjusted net income increased 18.1% to $156.8 million.

• Fourth quarter sales declined 4% year-over-year to $351.9 million due to weather, but net income rose 41.7% to $20.2 million.

• Completed a secondary public offering and fully redeemed Series A Preferred Stock, including a $75.2 million redemption premium, strengthening the balance sheet.

• Infrastructure investments, urban expansion, and economic development fueled top-line growth, especially in bridge, highway, transmission, and data center construction.

Financial highlights

• Fiscal 2025 sales reached $1.578 billion, up 2.6% year-over-year; Precoat Metals sales rose 3.5% to $912.6 million, Metal Coatings up 1.4% to $665.1 million.

• Gross margin for the year was 24.3%, up 70 basis points; gross margin totaled $382.7 million.

• Net income before preferred dividends was $128.8 million, up 26.8%; adjusted EBITDA for FY2025 was $347.9 million (22.0% of sales), up 4.3%.

• Cash from operations for fiscal 2025 was $249.9 million; free cash flow after capex was $134 million.

• Q4 adjusted net income was $29.6 million, up 7.9% year-over-year; adjusted EBITDA for Q4 was $71.2 million (20.2% of sales).

Outlook and guidance

• Fiscal 2026 guidance: sales of $1.625–$1.725 billion, adjusted EBITDA of $360–$400 million, adjusted EPS of $5.50–$6.10.

• Capital expenditures expected at $60–$80 million, with a roughly 50/50 split between segments.

• Debt paydowns expected to exceed $165 million, with potential for up to $300 million depending on asset sale proceeds.

• Guidance assumes lower interest expense, a 25% effective tax rate, and excludes M&A and regulatory changes.

• Proceeds from the AVAIL transaction, expected to close in Q1 FY2026, will accelerate debt paydown.