The AZEK Company (AZEK) Q4 2024 earnings summary

Executive summary

• Achieved record fiscal 2024 results with 12% Residential net sales growth, 18% Deck, Rail & Accessories growth, and strong margin expansion, outperforming the R&R market for the ninth consecutive year.

• Net income rose 146% to $153 million, including a $37.7 million gain from the Vycom business sale; Adjusted EBITDA up 34% to $379 million.

• Returned $243 million to shareholders via share repurchases and invested in future manufacturing and recycling capacity.

• Launched multiple new product platforms and expanded market reach, positioning for continued growth in 2025.

• Outperformed a challenging R&R market, simplified business via Vycom divestiture, and received industry recognition for brand leadership and workplace excellence.

Financial highlights

• FY 2024 net sales rose 5.2% to $1.44 billion; Adjusted EBITDA up 34% to $379 million, with margin expanding 560 bps to 26.3%.

• Adjusted net income increased 66.7% to $177 million; Adjusted diluted EPS up 71.4% to $1.20.

• Generated $224 million in operating cash flow and $147 million in free cash flow for the year.

• Q4 2024 consolidated net sales were $348 million, with gross margin at 37.3% and adjusted gross profit margin at 38.4%.

• Ended the year with $164 million in cash, $373 million available under the revolver, and net leverage at 1.0x.

Outlook and guidance

• FY2025 guidance: consolidated net sales of $1.51–$1.54 billion (5–7% growth), Adjusted EBITDA of $400–$415 million (5–9% growth), margin 26.5–27.0%.

• Residential segment FY2025 net sales expected at $1.439–$1.466 billion, up 5–7%; Adjusted EBITDA $388–$401 million, up 6–10%.

• Q1 2025 guidance: net sales of $260–$266 million (8–11% growth), Adjusted EBITDA of $58–$60 million, margin 22.4–22.7%.

• Capital expenditures for FY2025 projected at $85–$95 million; effective tax rate of 27%.

• Channel inventories expected to remain below historical averages; $560 million remains under share repurchase authorization.