Advanced Drainage Systems reported second quarter fiscal 2027 results that missed analyst expectations on both the top and bottom lines. Revenue of $889.4 million increased 4.6% year-over-year but fell short of the $921.79 million consensus, while diluted EPS of $1.77 missed the $1.89 estimate. Management cited a softer demand environment driven by high interest rates and geopolitical uncertainty, leading to a downward revision of the company's full-year revenue outlook.
Key Highlights
- Organic stormwater sales decreased 5.3% in the quarter, as overall stormwater growth of 6.2% was primarily driven by the $77.3 million contribution from the NDS acquisition.
- Adjusted EBITDA reached $286.8 million with a margin of 32.2%, reflecting management's ability to maintain high profitability through price/cost management despite volume headwinds.
- The fiscal 2027 revenue outlook was lowered to a range of $3.300 billion to $3.400 billion, down from the previous guidance of $3.350 billion to $3.550 billion.
- The company announced the proposed $530 million acquisition of StormTrap, intended to expand its addressable market in highly engineered stormwater solutions.