Q2 2026 Advanced Drainage Systems Inc Earnings Call Transcript
Key Points
- Advanced Drainage Systems Inc (WMS) reported a 9% increase in revenue and a 17% growth in adjusted EBITDA for the second quarter.
- The company achieved a 33.8% adjusted EBITDA margin, reflecting strong operational execution.
- Allied Products sales increased by 13%, with significant growth in key products like StormTech and water quality products.
- Infiltrator revenue rose by 25%, driven by double-digit growth in tanks and advanced products.
- The company announced an agreement to acquire NDS, a US supplier of residential storm water and irrigation products, which is expected to be accretive to adjusted earnings per share in the first year.
- The residential end market remains mixed, with interest rates affecting single-family housing starts and existing home sales.
- The agriculture market showed weakness, impacting pipe revenue growth.
- The DIY channel serviced through big box retailers continues to face challenges.
- The company remains cautious about market demand in the second half of the year due to seasonality and potential government shutdown impacts.
- Incremental transportation costs were incurred due to strong demand and network realignment actions.
Good morning, ladies and gentlemen, and welcome to Advantage Drainage Systems second quarter of fiscal year 2026 results conference call. My name is Kayla, and I will be your operator for today's call. (Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr. Mike Higgins, Vice President of Corporate Strategy and Investor Relations. Sir, you may begin.
Good morning, everyone. Thanks for joining us today. Here with me, I have Scott Barbour, our President and CEO; and Scott Cottrill, our CFO. I would also like to remind you that we will discuss forward-looking statements. Actual results may differ materially from those forward-looking statements because of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K filed with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue
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