AZEK 2025 Q2 Earnings Moderate Growth as Net Income Rises 9%

AZEK(AZEK) reported its fiscal 2025 Q2 earnings on May 06th, 2025. AZEK's revenue increased 8.1% to $452.23 million, surpassing analysts' expectations. The company reaffirmed its fiscal 2025 guidance, projecting consolidated net sales between $1.52 billion and $1.55 billion, reflecting 5% to 8% year-over-year growth. Adjusted EBITDA is expected between $403 million and $418 million, indicating a 6% to 10% increase. The outlook aligns with previous estimates, maintaining a cautious stance amidst macroeconomic uncertainties.

Revenue
AZEK's revenue climbed to $452.23 million in 2025 Q2, marking an 8.1% increase from the previous year. Residential sales were strong, contributing $437.04 million, while the commercial segment added $15.19 million to the total.

Earnings/Net Income
AZEK's EPS increased by 11.8% to $0.38 in 2025 Q2, compared to $0.34 in the year prior, indicating positive earnings growth. Net income reached $54.28 million, a 9.1% rise from $49.76 million in 2024 Q2. The EPS performance highlights the company's solid financial position.

Post-Earnings Price Action Review
The strategy of purchasing AZEK shares after a revenue increase and holding them for 30 days yielded moderate returns, though it underperformed the broader market. This approach resulted in a compound annual growth rate (CAGR) of 2.36%, reflecting some risk with limited returns. The maximum drawdown reached -7.28%, pointing to potential volatility in the strategy. The Sharpe ratio was calculated at 0.30, suggesting a risk-to-return balance that may not be attractive to investors seeking higher gains. While the strategy showed some promise, it lacked the robustness to consistently outperform market benchmarks, implying the need for reassessment or adjustment to improve future investment outcomes.

CEO Commentary
Jesse Singh, President and CEO, expressed confidence in AZEK's robust performance, highlighting a 9% year-over-year growth in the residential segment. Singh emphasized strategic priorities like material conversion and channel expansion, targeting long-term growth. He remains optimistic despite macroeconomic uncertainties and is confident about the upcoming merger with James Hardie.

Guidance
AZEK reaffirmed its fiscal 2025 guidance, expecting consolidated net sales between $1.52 billion and $1.55 billion, indicating 5% to 8% growth year-over-year. Adjusted EBITDA is projected between $403 million and $418 million, reflecting a 6% to 10% increase. The company anticipates residential segment sales of $1.452 billion to $1.479 billion, representing 6% to 8% growth.

Additional News
AZEK recently announced a merger agreement with James Hardie Industries plc, anticipated to close in the second half of 2025, pending regulatory and shareholder approvals. This merger is expected to accelerate product innovation and expand solutions for contractors and customers. Additionally, AZEK has been recognized for its sustainability leadership, earning spots on Barron's 100 Most Sustainable U.S. Companies list and Green Builder Media's Sustainable Product of the Year honors for TimberTech's new Aluminum Deck Framing. These accolades underscore AZEK's commitment to sustainability and innovation in the outdoor living products industry.