Mueller Water Products (MWA) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 results with net sales up 18.7% to $304.3 million, driven by strong order levels, higher volumes, and resilient end-market demand across both Water Flow Solutions and Water Management Solutions segments.

• Adjusted EBITDA reached a record $63.5 million, up 41.7% year-over-year, with margin improving 340 basis points to 20.9%; adjusted net income per diluted share rose 92.3% to $0.25.

• Net income increased to $35.3 million from $14.3 million, reflecting improved operating performance and lower reorganization charges.

• Free cash flow was $42.2 million after $11.9 million in capital expenditures, reflecting disciplined capital allocation.

• Raised 2025 guidance for net sales and adjusted EBITDA, reflecting strong Q1 results and recent price actions.

Financial highlights

• Consolidated net sales increased 18.7% to $304.3 million; gross profit rose 19.4% to $103 million, with gross margin at 33.8%, up 10 basis points year-over-year; excluding foundry closure write-downs, gross margin was 34.9%, up 120 basis points.

• Adjusted operating income increased 78.2% to $52.4 million; operating income more than doubled to $47.4 million.

• Adjusted EBITDA margin improved to 20.9% from 17.5% year-over-year.

• Adjusted net income per diluted share was $0.25, up 92.3% year-over-year; diluted EPS increased to $0.22 from $0.09.

• Free cash flow as a percent of adjusted net income was 108% at Q1 end.

Outlook and guidance

• Fiscal 2025 net sales expected between $1,370 million and $1,390 million, a 4.2% to 5.7% year-over-year increase; adjusted EBITDA guidance raised to $310–315 million, up 8.9% to 10.6%, with a 22.6% margin at midpoint.

• Free cash flow expected to exceed 80% of adjusted net income; capital expenditures projected at $45–50 million.

• Second half adjusted EBITDA margin expected to be significantly higher due to seasonality and manufacturing improvements.

• Guidance excludes potential impacts from recently announced tariffs.

• Anticipates normalized seasonality, with highest sales in Q3 and lowest in Q1.