The AZEK Company Inc.

Q2 fiscal 2025 consolidated net sales were $452 million, up 8% year over year. Gross profit was $168 million and gross margin was 37.1%; adjusted gross profit was $171 million and adjusted gross margin was 37.8%. Adjusted EBITDA was $124 million, up $11 million or 10% year over year, with adjusted EBITDA margin of 27.5%, up 40 basis points. Net income was $54 million, or $0.37 per share, and adjusted diluted EPS was $0.45, up $0.06 year over year. Residential net sales were $437 million, up 9%, with residential adjusted EBITDA of $122 million and margin of 28%; commercial net sales were $15 million, down 4%. Full-year 2025 guidance was reaffirmed for consolidated net sales of $1.52 billion to $1.55 billion and adjusted EBITDA of $403 million to $418 million. Residential full-year guidance was net sales of $1.452 billion to $1.479 billion and adjusted EBITDA of $392 million to $406 million. For fiscal Q3, AZEK guided to consolidated net sales of $413 million to $429 million and residential net sales of $396 million to $410 million; consolidated adjusted EBITDA was guided to $123 million to $150 million as transcribed, with margin of 27.8% to 28.7%.

Jesse Singh struck an upbeat but measured tone, emphasizing that AZEK continues to outperform a weak repair-and-remodel backdrop through material conversion, product innovation, channel expansion, and brand building. He said recent new products are ramping well, that start-up costs should moderate in the second half, and that the company is close to its annual 27.5% adjusted EBITDA margin target ahead of the fiscal 2027 milestone. He also framed the James Hardie combination as a major strategic opportunity to accelerate growth, expand solutions for customers, and create a larger platform for wood conversion.

Ryan Lada focused on the company’s financial execution and balance sheet strength. He cited Q2 consolidated sales of $452 million, gross margin of 37.1%, adjusted EBITDA of $124 million, and adjusted diluted EPS of $0.45, and noted that margin performance was ahead of guidance and consensus. He said the company ended the quarter with $147 million of cash and cash equivalents, about $373 million available under the revolver, gross debt of $538 million, net debt of $392 million, and net leverage of 1x. He also highlighted free cash flow of $1 million in a seasonal usage quarter, capex of about $46 million including $25 million for facility purchases, and reiterated full-year capex of $110 million to $120 million and an effective tax rate of 25% to 26%.

Analysts focused on the second-half sales assumptions, tariff-related costs, channel inventory, and the merger’s sales-synergy potential. Management said the low-single-digit to mid-single-digit sell-through assumption was not because they were seeing a slowdown; rather, it was a conservative modeling assumption against a macro backdrop, and they stressed channel inventories are below historical averages with no excess inventory build. On tariffs, management quantified annualized exposure at $12 million to $15 million and said fiscal 2025 impact should be about $4 million to $6 million, which they believe has been largely offset with modest pricing. On the merger, management said it is still early but expressed growing confidence in sales synergies, particularly through stable distribution and cross-selling to contractors and builders.