$WMS · ADVANCED DRAINAGE SYSTEMS, INC.
ADS reported Q2 FY2027 (ended Sept 30, 2026) net sales of $889.4M, up 4.6% YoY, with adjusted EPS of $1.88 and GAAP diluted EPS from continuing operations of $1.77 (down from $1.99). Net income from continuing operations fell 14.6% to $133.6M. The company cut FY2027 net sales guidance to $3.300B–$3.400B while keeping Adjusted EBITDA guidance at $1.000B–$1.030B. It also announced a proposed acquisition of StormTrap and a $0.20/share dividend.
- Q2 net sales rose 4.6% to $889.4M, including $77.3M from the NDS acquisition.
- Organic Stormwater sales fell 5.3% in the quarter.
- FY2027 net sales guidance cut to $3.300B–$3.400B on softer demand.
- Adjusted EBITDA guidance held at $1.000B–$1.030B; Q2 Adjusted EBITDA margin was 32.2%.
- Repurchased $375.1M of stock; $677.3M remains authorized.
Extended-hours last trade of $130.72 is down 9.33% versus the $144.18 regular close, signaling a negative reaction to the guidance cut despite the in-line quarter.
A guidance cut on softening construction demand, paired with a new acquisition, reshapes ADS's near-term growth story despite record first-half profitability.
ADS cites higher interest rates and geopolitical uncertainty as softening non-residential and residential construction demand, a headwind shared across building-products peers.
Softer demand from higher rates and geopolitical uncertainty drove the revenue outlook cut; StormTrap integration and NDS synergy realization carry execution risk.