- **Residential Growth Outperformance**: 9% YoY net sales growth driven by new products and channel expansion, vs. flat R&R market.
- **Merger Synergy Confidence**: $625M total synergies (cost + sales) with James Hardie, supported by contractor demand for combined solutions.
- **Margin Expansion Progress**: 27.5% adjusted EBITDA margin in Q2, on track to meet 27.5%+ target ahead of 2027 milestone.
- **Recycling-Driven Efficiency**: $40M+ cost savings from expanded recycling network, with 2026 benefits from NW Polymers acquisition.
- **Tariff Resilience**: Minimal direct impact on U.S.-sourced materials; pricing offsets 2025 tariff exposure.


**【CEO Opening Remarks】**
- **Residential Segment Growth**: Q2 2025 residential net sales increased 9% YoY, driven by mid-single-digit sell-through growth and new product launches (e.g., TimberTech Harvest+ decking, Reliance Rail). 
- **Material Conversion Strategy**: 75% of decking and 60% of rail sold annually are wood-based, with AZEK targeting wood replacement through innovative, low-maintenance products.
- **James Hardie Merger Synergies**: $125M cost savings and $500M incremental sales expected, with contractors expressing strong interest in combined offerings.
- **Recycling Expansion**: Acquired Northwest Polymers to expand West Coast recycling capacity, supporting 27.5% adjusted EBITDA margin target.

**【CFO Financial Highlights】**
- **Q2 2025 Results**: 
  - Consolidated net sales: $452M (+8% YoY)
  - Adjusted EBITDA: $124M (+10% YoY)
  - Adjusted EBITDA margin: 27.5% (+40bps YoY)
  - Residential segment EBITDA: $122M (+11% YoY)
- **FY25 Guidance**: 
  - Net sales: $1.52B-$1.55B (5%-8% YoY growth)
  - Adjusted EBITDA: $403M-$418M (6%-10% YoY growth)
  - Free cash flow: $1M in Q2, with $110M-$120M capex for recycling and facility expansion.
- **Tariff Impact**: $12M-$15M annualized exposure offset by pricing actions, with minimal direct impact due to U.S.-based supply chain.

**【Q&A Key Takeaways】**
- **Channel Inventory Management**: Below-historical inventory levels to maintain flexibility amid macro uncertainty.
- **Sales Synergy Potential**: Contractors see value in combined AZEK-James Hardie offerings, with siding installers expressing interest in AZEK decking.
- **Recycling Cost Savings**: $40M+ savings target from expanded recycling network, with 2026 benefits from Northwest Polymers acquisition.
- **Tariff Mitigation**: Modest price increases offset 2025 tariff impact; no material impact on U.S.-sourced raw materials.


The AZEK Company Inc. (AZEK)-6 May 25-2025 Q2 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

AZEK(Delisted)

AZEK fundamentals

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