The AZEK Company (AZEK) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 FY2025 results with consolidated net sales up 18.7%-19% to $285.4 million, driven by double-digit residential segment growth and new product launches; commercial sales declined due to the Vycom divestiture.

• Adjusted EBITDA increased 20% year-over-year to $65.9 million, with margin expanding 30 basis points to 23.1%.

• Net income for Q1 was $18.1 million, down 27.9%-28% year-over-year due to a prior-year gain on the Vycom sale; adjusted net income rose to $25.1 million.

• Launched new products including TimberTech Fulton Rail, Reliance Rail, Versatex XCEED Siding, and TrimLogic, with positive market reception and expanded stocking positions.

• Celebrated TimberTech's recognition as a 2024 Brand That Matters and the 25th anniversary of AZEK Trim.

Financial highlights

• Q1 consolidated net sales reached $285.4 million, up 18.7%-19% year-over-year, with double-digit residential sell-through growth.

• Gross profit increased to $103.6 million, with gross margin at 36.3%; adjusted gross profit margin was 37.4%, down year-over-year.

• Adjusted EBITDA was $65.9 million (up 20% YoY), with a margin of 23.1%.

• Adjusted diluted EPS increased $0.07 year-over-year to $0.17.

• Free cash flow for Q1 was $(8.0) million, a significant year-over-year improvement.

Outlook and guidance

• Fiscal 2025 consolidated net sales guidance raised to $1.52–$1.55 billion (5%-8% YoY growth); Adjusted EBITDA guidance increased to $403–$418 million (6%-10% YoY growth).

• Residential segment net sales expected at $1.452–$1.479 billion (6%-8% growth); adjusted EBITDA at $392–$405 million (7%-11% growth).

• Q2 FY2025 consolidated net sales expected at $437–$448 million (4%-7% growth); adjusted EBITDA at $115–$120 million (2%-6% growth).

• Capital expenditures for FY2025 projected at $85–$95 million; GAAP tax rate projected at 25%-26%.

• Commercial segment net sales expected to decline 2%-6% YoY; segment adjusted EBITDA to decline 8%-22%.