The AZEK Company (AZEK) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 FY2024 results with 12.1% year-over-year net sales growth to $434.4M, led by 18% growth in the residential segment and double-digit Deck, Rail & Accessories sell-through; adjusted EBITDA rose 23–24% to $119.4M, with margin expanding 260 basis points to 27.5%.

• Net income increased 44.7–45% year-over-year to $50.1M ($0.34 per share); adjusted net income was $62M ($0.42 per share), up 38%.

• Board authorized a $600M share repurchase program, with $625M remaining authorized; completed $50M accelerated share repurchase in June, retiring 1.2M shares.

• Channel expansion, new product launches, and increased brand investments are fueling above-market growth and material conversion.

• Recognized for product innovation and sustainability by multiple industry awards.

Financial highlights

• Q3 2024 consolidated net sales reached $434.4M, up 12.1% year-over-year; residential segment net sales were $416M, up 18.3%.

• Adjusted gross profit increased 23–24.6% year-over-year to $168M; adjusted gross margin up 350 basis points to 38.7%.

• Adjusted EBITDA margin expanded 260 basis points to 27.5%.

• Free cash flow for the quarter was $177.5M, up $12.5–13M year-over-year; net leverage at 0.8x.

• Diluted EPS was $0.34 (up from $0.23); adjusted diluted EPS was $0.42 (up from $0.30).

Outlook and guidance

• Fiscal 2024 consolidated net sales guidance raised to $1.422–$1.438B, implying 10–12% year-over-year growth (adjusted for Vycom sale); adjusted EBITDA guidance increased to $370–$380M.

• Residential segment expected to deliver 10–12% net sales growth and 42–45% segment-adjusted EBITDA growth for fiscal 2024.

• Q4 2024 revenue guidance is $329–$345M, with adjusted EBITDA of $82–$92M; margin 24.9–26.7%.

• Capital expenditures for FY2024 expected at $90–$95M (5–7% of revenue).

• Company expects to continue above-market growth and long-term margin expansion.