AZEK 2025 Q2 Earnings Strong Performance with Net Income Up 9%

AZEK (AZEK) reported its fiscal 2025 Q2 earnings on May 07th, 2025. The company exceeded market expectations with its revenue surpassing consensus estimates, showcasing robust demand. AZEK reaffirmed its fiscal 2025 guidance, highlighting confidence in its strategic initiatives. The company's strategic focus on sustainability and innovation has been pivotal in maintaining its market leadership. AZEK anticipates continued growth, driven by strong residential demand and channel expansion.

Revenue
In the second quarter of fiscal 2025, AZEK reported a total revenue of $452.23 million, representing an 8.1% increase from the previous year. The Residential segment significantly contributed to this growth, achieving $437.04 million, while the Commercial segment recorded $15.19 million. This growth underscores AZEK's strong market position and effective expansion strategies across its business segments.

Earnings/Net Income
AZEK's earnings per share increased by 11.8% to $0.38 in Q2 2025, compared to $0.34 in the previous year, reflecting solid earnings growth. The company also reported a 9.1% rise in net income, reaching $54.28 million from $49.76 million in Q2 2024. This performance indicates a positive trajectory in profitability.

Post-Earnings Price Action Review
Following AZEK's announcement of its earnings results, the stock experienced a modest decline. However, the strategy of purchasing AZEK shares after a revenue beat and holding for 30 days yielded moderate returns, albeit below the benchmark. The compound annual growth rate (CAGR) achieved was 2.36%, with a Sharpe ratio of 0.32, suggesting a challenging risk-return balance. The maximum drawdown of -12.65% highlighted the importance of prudent risk management, particularly during volatile market conditions. These metrics emphasize the need for careful consideration in investment strategies related to AZEK shares.

CEO Commentary
“The AZEK team delivered another strong quarter, executing well in a dynamic market and once again outperforming the broader repair and remodel sector,” said Jesse Singh, CEO of The AZEK Company. “Our Residential business delivered 9% growth year-over-year, driven by positive mid-single-digit Residential sell-through growth along with continued expansion of our channel presence and new product launches. Our disciplined approach to cost savings initiatives enabled us to expand our net profit margin by 10 basis points year-over-year to 12.0% and Adjusted EBITDA margin by 40 basis points year-over-year to 27.5%. Our focus on driving growth through material conversion, product innovation, and brand expansion is enabling our success and market outperformance. We continue to see consistent contractor backlogs and dealer engagement.”

Guidance
“We expect consolidated net sales between $1.52 to $1.55 billion, representing approximately 5% to 8% year-over-year growth. Adjusted EBITDA is expected to be in the range of $403 to $418 million, representing an increase of 6% to 10% year-over-year. We are reaffirming our full-year fiscal 2025 guidance for net sales and Adjusted EBITDA growth, reflecting continued confidence in our ability to deliver above-market performance through AZEK-specific initiatives.”

Additional News
In recent developments, AZEK has entered into a merger agreement with James Hardie Industries plc, which was announced on March 23, 2025. This merger is anticipated to close in the latter half of the calendar year 2025, subject to customary closing conditions including regulatory approvals and AZEK shareholder approval. The merger aims to accelerate product innovation and share synergies across combined portfolios, promising long-term value creation for stakeholders. This strategic move marks a significant milestone in AZEK's growth ambitions, aligning with its commitment to sustainability and market expansion.