Advanced Drainage Systems Stock Earnings Reports

Key points for investors: ADS reported Q3 fiscal 2025 net sales of $691M, up 4% y/y (including Orenco acquisition contribution of ~$25M). This was the fifth consecutive quarter of volume growth in domestic construction markets. By end-market: non-residential sales +7% (about 45% of sales) with strength in the South/Southeast; residential sales +9% (about 35% of sales) with Infiltrator organic revenue +6% and strong traction in tanks and advanced treatment; infrastructure sales down 6% vs a very strong prior-year comp. Company continues product and geographic expansion: broke ground on a recycling facility expansion in Cordele, GA; launched EcoStream biofiltration and other new water-quality and storage products; Infiltrator rolling out ECOPOD-NX; closed Orenco acquisition to expand advanced wastewater offerings. Operational actions: consolidation of one pipe plant and two distribution yards to improve efficiency. Financials: adjusted EBITDA $191M, down 6% y/y; free cash flow YTD $374M vs $564M prior year; YTD capex $166M, now expecting ~ $225M for full-year; net debt/adjusted EBITDA ~1.0x with $489M cash and $590M revolver availability. Management reiterated fiscal 2025 revenue and adjusted EBITDA guidance unchanged. Key risks/near-term drivers: weather-driven variability in demand (can push/shift projects), geographic variability in end-market strength, close monitoring of price vs. material cost dynamics (management says pricing is sequentially stable and material costs have flattened). Company priorities remain organic growth (capex/innovation), strategic M&A, and disciplined capital allocation (dividends/repurchases). Investor Day scheduled June 26, 2025 at new engineering and technology center.