Mueller Water Products (MWA) Q3 2025 earnings summary

Executive summary

• Achieved record third-quarter net sales of $380.3 million, up 6.6% year-over-year, with strong performance across product lines and robust operational execution despite macroeconomic and geopolitical uncertainty, tariffs, and FX headwinds.

• Gross margin improved to 38.3%, up 150 basis points year-over-year, reflecting manufacturing efficiencies, higher volumes, and targeted pricing actions.

• Adjusted EBITDA reached a record $86.4 million, up 1.4% year-over-year, with an adjusted EBITDA margin of 22.7%.

• Net income rose to $52.5 million, with adjusted net income per diluted share up 6.3% to $0.34.

• Closure of the legacy brass foundry and strategic reorganization contributed to improved results and manufacturing efficiencies.

Financial highlights

• Consolidated net sales for Q3 FY2025 were $380.3 million (+6.6% y/y); gross profit was $145.7 million (+10.9% y/y); gross margin at 38.3%.

• Adjusted EBITDA for Q3 was $86.4 million (+1.4% y/y); adjusted net income per diluted share was $0.34 (+6.3% y/y).

• Free cash flow for Q3 was $55.7 million; year-to-date free cash flow was $103.0 million.

• Operating income increased 10% to $73.7 million; SG&A expenses rose 15.4% to $71.0 million, mainly due to FX and inflation.

• Net interest expense for the quarter decreased to $1.7 million due to higher interest income.

Outlook and guidance

• Fiscal 2025 net sales guidance raised to $1,405–$1,415 million (+6.9%–7.6% y/y); adjusted EBITDA guidance increased to $318–$322 million (+11.7%–13.1% y/y).

• Adjusted EBITDA margin projected at 22.7%, a 100 basis point improvement year-over-year.

• Free cash flow expected to exceed 80% of adjusted net income in 2025; capital expenditures forecasted at $50–$52 million.

• SG&A expenses projected at $245–$247 million; net interest expense at $7.5–$8.0 million; effective tax rate 25%–26%.

• Expectation of typical seasonality and normalized demand for the remainder of fiscal 2025.