Financial Data and Key Metrics Changes - The company reported a 30.2% adjusted EBITDA margin, marking one of the most profitable third quarters in its history [5] - Adjusted EBITDA increased by 9% despite flat revenue, resulting in a 250 basis points increase in the adjusted EBITDA margin [8] - Year-to-date cash flow from operations reached $779 million, a 44% increase year-over-year, converting more than 100% of adjusted EBITDA into cash [13][15] Business Line Data and Key Metrics Changes - Allied product sales increased by 8%, driven by key products such as StormTech storage chambers and water quality products [5] - Infiltrator revenue grew by 2%, with strong activity in the Southeast and South [5] - Pipe revenue saw a slight decline, with HP Pipe growth offset by weaker sales in residential and infrastructure markets [6] Market Data and Key Metrics Changes - Sales in the core non-residential market increased by 5%, particularly in the Southeast, Midwest, and Northeast [6] - Residential market sales were down slightly, but the Infiltrator core residential business outperformed the market due to new products [7] - The company updated its in-market demand forecast for the non-residential market to a decline in low to mid-single digits [6] Company Strategy and Development Direction - The company continues to prioritize higher growth, higher margin allied and Infiltrator products to strengthen profitability [4] - The recent acquisition of NDS is expected to enhance the company's stormwater capture portfolio and improve offerings in distribution and retail channels [9] - The company plans to focus on organic growth and innovation while maintaining a disciplined approach to capital allocation [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the business, supported by strong secular tailwinds driving demand for water management solutions [12] - The company acknowledged the challenges posed by a mixed demand environment but highlighted strong execution and operational initiatives as key to current performance [11] - Management remains committed to investing in capabilities that will position the company for future success [12] Other Important Information - The company announced a new $1 billion stock repurchase authorization, bringing the total authorization to $1.148 billion [16] - The fourth quarter is expected to be variable due to weather impacts on construction, with management incorporating anticipated storm effects into updated guidance [17] Q&A Session Summary Question: Clarification on non-residential market guidance reduction - Management indicated that the guidance adjustment reflects a mark-to-market update based on performance in the first nine months, not a deterioration in the market [19][20] Question: Future product pipeline and contributions - Management noted that new products are contributing tens of millions of dollars in revenue and expect this to accelerate as commercialization improves [23][25] Question: NDS integration and cost synergies - NDS will be included in the Allied and other segments, with expected annual cost synergies of $25 million by year three [29] Question: Capital expenditures outlook - The increase in CapEx outlook is related to timing of asset service rather than specific projects [34][35] Question: Free cash flow generation and working capital - Strong working capital performance was driven by effective management across receivables, inventory, and accounts payable [75] Question: Demand trends within pipe segment - The HP Pipe segment is performing well, while the agriculture segment is facing challenges, impacting overall pipe sales [95]

Q3 Fiscal 2026 Financial Results February 5, 2026 Management Presenters Scott Barbour President and Chief Executive Officer Scott Cottrill Executive Vice President, Chief Financial Officer Craig Taylor Forward Looking Statements Certain statements in this press release may be deemed to be forward -looking statements. These statements are not historical fac ts but rather are based on the Company's current expectations, estimates and projections regarding the Company's business, operations and other factors r ...

Core Insights - Advanced Drainage Systems reported quarterly earnings of $1.27 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, and showing an increase from $1.09 per share a year ago [1] - The company achieved a revenue of $693.35 million for the quarter, surpassing the Zacks Consensus Estimate by 0.99% and slightly up from $690.54 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +14.51%, with the company having surpassed consensus EPS estimates three times in the last four quarters [2] - In the previous quarter, the company reported earnings of $1.97 per share against an expectation of $1.70, resulting in a surprise of +15.88% [2] Stock Performance - Advanced Drainage shares have increased by approximately 10.7% since the beginning of the year, significantly outperforming the S&P 500, which gained only 0.5% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.94 on revenues of $622.77 million, while for the current fiscal year, the estimate is $5.98 on revenues of $2.99 billion [8] - The estimate revisions trend for Advanced Drainage was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Industry Context - The Building Products - Miscellaneous industry, to which Advanced Drainage belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Another company in the same industry, TopBuild, is expected to report a year-over-year earnings decline of 15% in its upcoming results, indicating broader industry pressures [10]

Financial Performance - Net sales for Q3 Fiscal 2026 increased by $2.8 million, or 0.4%, to $693.4 million compared to $690.5 million in the prior year quarter[3] - Adjusted EBITDA margin for the quarter was 30.2%, an increase from 27.7% in the prior year, with Adjusted EBITDA rising by $17.7 million, or 9.3%, to $209.2 million[7] - Gross profit for Q3 increased by $17.6 million, or 7.3%, to $259.2 million, driven by volume growth and favorable price/cost dynamics[4] - Net income for Q3 increased by $11.7 million, or 14.3%, to $94.0 million, with net income per diluted share rising to $1.19[5] - Year-to-date net sales increased by $85.1 million, or 3.7%, to $2.3736 billion, with domestic allied products sales up by 7.9%[8] - Operating income for the three months ended December 31, 2025, was $136,823,000, up from $126,864,000 in 2024, reflecting a 7.4% increase, and for the nine months, it rose to $565,864,000 from $540,455,000, a 4.7% increase[24] - Net income attributable to ADS for the three months ended December 31, 2025, was $93,626,000, compared to $81,231,000 in 2024, marking a significant increase of 15.5%, while for the nine months, it increased to $393,565,000 from $373,015,000, a growth of 5.5%[24] Cash Flow and Dividends - Free cash flow for the year was $582.4 million, compared to $373.9 million in the prior year, reflecting strong cash generation[15] - Cash dividends declared per share increased to $0.18 for the three months ended December 31, 2025, from $0.16 in 2024, and for the nine months, it rose to $0.54 from $0.48, reflecting a growth of 12.5%[24] - The company reported a net change in cash of $541,632,000 for the nine months ended December 31, 2025, compared to a decrease of $1,095,000 in 2024[28] - Free cash flow for the nine months ended December 31, 2025, was $582.396 million, significantly higher than $373.854 million for the same period in 2024, indicating a strong cash generation capability[42] Acquisitions and Guidance - The company completed the acquisition of NDS, enhancing its stormwater capture portfolio, primarily funded by cash on hand[2] - Fiscal 2026 guidance was updated, projecting net sales between $2.990 billion and $3.040 billion and Adjusted EBITDA between $930 million and $960 million[17] Assets and Expenditures - Cash and cash equivalents as of December 31, 2025, were $1,008,190,000, a substantial increase from $463,319,000 as of March 31, 2025[26] - Total assets increased to $4,144,311,000 as of December 31, 2025, compared to $3,690,360,000 as of March 31, 2025, reflecting a growth of 12.3%[26] - Capital expenditures for the nine months ended December 31, 2025, were $196,737,000, compared to $166,410,000 in 2024, indicating an increase of 18.2%[28] Segment Performance - The Pipe segment reported net sales of $339.175 million for the three months ended December 31, 2025, down from $352.236 million in the same period of 2024, a decrease of about 3.1%[31] - The Infiltrator segment achieved net sales of $167.666 million for the three months ended December 31, 2025, compared to $160.076 million in the same period of 2024, marking an increase of approximately 4.0%[31] - Total international net sales for the three months ended December 31, 2025, were $50.483 million, down from $53.281 million in the same period of 2024, a decline of about 5.3%[31] - The Allied Products & Other segment reported net sales of $168.050 million for the three months ended December 31, 2025, up from $154.295 million in the same period of 2024, reflecting an increase of approximately 8.9%[31] Restructuring and Realignment - The company incurred restructuring and realignment expenses of $1.706 million for the three months ended December 31, 2025, which were not present in the same period of 2024[41]

Core Viewpoint - Advanced Drainage Systems, Inc. has announced a quarterly cash dividend of $0.18 per share, reflecting a 13% increase compared to the previous year's dividend amount [1] Group 1: Company Announcement - The Board of Directors of Advanced Drainage Systems has approved the dividend increase [1] - The new dividend amount is set at $0.18 per share [1] - This marks a 13% increase over the prior year’s dividend [1]

Core Viewpoint - Advanced Drainage Systems, Inc. reported a slight increase in net sales and a significant rise in net income for the fiscal third quarter ended December 31, 2025, indicating positive financial performance despite a modest sales growth [1]. Financial Performance - Net sales increased by $2.8 million, or 0.4%, reaching $693.4 million [1]. - Net income rose by $11.7 million, or 14.3%, totaling $94.0 million [1]. - Net income per diluted share increased by $0.1 [1].

Core Viewpoint - Advanced Drainage Systems, Inc. (NYSE:WMS) is experiencing a positive trend in its consensus price target, indicating favorable analyst sentiment regarding its future performance [2][3][6] Company Overview - Advanced Drainage Systems, Inc. specializes in the design and production of thermoplastic corrugated pipes and serves various sectors including non-residential, residential, agriculture, and infrastructure [1] Price Target Trends - The consensus price target for WMS has increased from $181.57 last quarter to $184 last month, reflecting growing confidence in the company's performance [2][6] - Over the past year, the price target has risen significantly from $168.08 to $184, indicating strong belief in the company's future performance [3][6] Earnings Performance - The company reported earnings per share of $1.97, exceeding the Zacks Consensus Estimate of $1.70, which supports the positive sentiment among analysts [3] Analyst Opinions - Despite the overall positive outlook, analysts from Robert W. Baird have set a lower price target of $137 for WMS, suggesting differing views on the company's future performance or market conditions [4][6] - The company's strong fundamentals and history of earnings growth suggest it is well-positioned for continued success despite the lower target from some analysts [4][6] Strategic Insights - The recent Q2 2026 earnings call highlighted the company's achievements and future plans, reinforcing the optimistic outlook for Advanced Drainage Systems, Inc. [5]

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Core Viewpoint - Analysts project that Advanced Drainage Systems (WMS) will report quarterly earnings of $1.11 per share, reflecting a year-over-year increase of 1.8%, while revenues are expected to decline by 0.6% to $686.55 million [1] Earnings Projections - The consensus EPS estimate for the quarter has been revised upward by 0.7% over the past 30 days, indicating a collective reassessment by analysts [2] - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3] Key Metrics Forecast - Analysts estimate 'Adjusted Gross Profit- Pipe' at $96.85 million, up from $90.90 million in the same quarter last year [5] - The forecast for 'Adjusted Gross Profit- International' is $11.40 million, down from $12.07 million year-over-year [5] - 'Adjusted Gross Profit- Allied Products & Other' is expected to be $94.15 million, compared to $92.94 million in the previous year [6] - 'Adjusted Gross Profit- Infiltrator' is projected at $80.65 million, an increase from $78.29 million in the same quarter last year [6] Stock Performance - Shares of Advanced Drainage have returned +4.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a +0.9% change [6] - With a Zacks Rank 3 (Hold), WMS is anticipated to reflect overall market performance in the near future [6]

HILLIARD, Ohio--(BUSINESS WIRE)--Advanced Drainage Systems, Inc. (NYSE: WMS) ("ADS†or the "Company†), a leading provider of innovative water management solutions in the stormwater and onsite wastewater industries today announced that it has completed the previously disclosed acquisition of the water management business of Norma Group SE (DAX: NOEJ), known as National Diversified Sales ("NDS†). About the Company Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite waste ...