Group 1 - Acuity (AYI) is expected to report quarterly earnings of $4.31 per share, a 3.9% increase year-over-year, with revenues projected at $1.14 billion, reflecting a 17.5% year-over-year growth [1] - There has been no revision in the consensus EPS estimate for the quarter over the past 30 days, indicating that analysts have not changed their initial projections [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock price performance [3] Group 2 - Analysts predict 'Net Sales- Acuity Intelligent Spaces' will reach $240.58 million, representing a significant increase of 217.8% from the same quarter last year [5] - The estimate for 'Net Sales- Acuity Brands Lighting (ABL)' is projected at $904.15 million, indicating a modest year-over-year change of 0.6% [5] - The consensus for 'Adjusted operating profit- Acuity Intelligent Spaces' is $38.51 million, up from $17.30 million reported in the same quarter last year, while 'Adjusted operating profit- Acuity Brands Lighting' is estimated at $162.66 million, slightly above the $162.10 million reported in the previous year [6] Group 3 - Over the past month, Acuity shares have returned +5%, outperforming the Zacks S&P 500 composite, which saw a +0.5% change [6] - Acuity currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [6]

Company Overview - Acuity Inc. designs, manufactures, and distributes lighting and building management solutions across various industries [1] - The company operates through two segments: Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS) [1] - Acuity has over 13,000 employees and a current market capitalization of approximately $8.25 billion [1] Analyst Background - The analyst has a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting [1] - The analyst has over 10 years of experience in the investment arena, starting as an analyst and advancing to a management role [1] - Dividend investing is a personal interest of the analyst, who aims to share insights with the Seeking Alpha community [1]

Core Insights - The article compares two Technology Services stocks, Acuity (AYI) and Amplitude, Inc. (AMPL), to determine which is more attractive to value investors [1] Valuation Metrics - Both AYI and AMPL currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3] - AYI has a forward P/E ratio of 15.51, while AMPL has a significantly higher forward P/E of 178.74 [5] - AYI's PEG ratio is 1.55, suggesting a more favorable valuation relative to its expected earnings growth, compared to AMPL's PEG ratio of 4.31 [5] - AYI's P/B ratio stands at 3.25, while AMPL's P/B ratio is 4.37, further indicating AYI's relative undervaluation [6] Value Grades - AYI has a Value grade of B, whereas AMPL has a Value grade of F, highlighting AYI as the superior value option based on the discussed metrics [6]

Company Overview - Acuity Inc. is a market-leading industrial technology company focused on solving problems in spaces, light, and more through its two business segments: Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS) [3] - The company is headquartered in Atlanta, Georgia, and operates across North America, Europe, and Asia, employing approximately 13,000 associates [5] Financial Information - Acuity Inc. will release its fiscal 2025 third quarter results on June 26, 2025, at 6:00 a.m. ET, followed by a conference call at 8:00 a.m. ET led by CEO Neil Ashe [1] Investor Relations - The webcast, earnings release, and supplemental presentation will be accessible via the Investor Relations section of the company's website on June 26, 2025, with an online replay available for a limited time [2] Growth Strategy - The company achieves growth through the development of innovative products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform [4] - Acuity focuses on customer outcomes to drive growth and productivity, aiming to increase market share and deliver superior returns while aggressively deploying capital to enter attractive new verticals [4]

Core Insights - Acuity Brands reported revenue of $1.01 billion for the quarter ended February 2025, marking an 11.1% year-over-year increase, with EPS of $3.73 compared to $3.38 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate by 1.60%, while the EPS exceeded the consensus estimate by 1.91% [1] Financial Performance Metrics - Acuity Intelligent Spaces net sales reached $171.50 million, surpassing the average estimate of $170.15 million, reflecting a year-over-year increase of 151.8% [4] - Acuity Brands Lighting (ABL) net sales were $840.60 million, slightly below the average estimate of $859.87 million, showing a year-over-year decline of 0.3% [4] - Adjusted operating profit for Acuity Intelligent Spaces was $32 million, exceeding the average estimate of $25.60 million [4] - Adjusted operating profit for Acuity Brands Lighting was $141.30 million, below the average estimate of $148.14 million [4] Stock Performance - Acuity Brands shares have returned -3.8% over the past month, compared to a -4.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Overall Performance - Acuity Brands Lighting (AYI) achieved net sales of $1006 million in Q2'25, an increase of 11% compared to $906 million in Q2'24 [13] - Adjusted diluted EPS increased by 10% from $3.38 in Q2'24 to $3.73 in Q2'25 [13] - Adjusted operating profit increased by 16% from $140 million in Q2'24 to $163 million in Q2'25, with adjusted operating profit margin increasing by 70 basis points [13] - Year-to-date cash flow from operations decreased by 35% from $293 million in Q2'24 to $192 million in Q2'25 [13] Segment Performance - Acuity Brands Lighting (ABL) reported net sales of $841 million in Q2'25, a slight decrease of 0% compared to $844 million in Q2'24 [15] - ABL's adjusted operating profit increased by 4% from $136 million in Q2'24 to $141 million in Q2'25, with adjusted operating profit margin increasing by 60 basis points from 162% to 168% [15] - Acuity Intelligent Spaces (AIS) saw a significant increase in net sales, growing by 152% from $68 million in Q2'24 to $172 million in Q2'25 [17] - AIS's adjusted operating profit increased by 124% from $14 million in Q2'24 to $32 million in Q2'25, but adjusted operating profit margin decreased by 230 basis points from 210% to 187% [17] Fiscal Year 2025 Outlook - The company projects net sales to be in the range of $43 billion to $45 billion for fiscal year 2025 [21] - Adjusted diluted EPS is expected to be in the range of $1650 to $1800 for fiscal year 2025 [22]

Core Viewpoint - Acuity Brands reported quarterly earnings of $3.73 per share, exceeding the Zacks Consensus Estimate of $3.66 per share, and showing an increase from $3.38 per share a year ago, indicating a positive earnings surprise of 1.91% [1] Financial Performance - The company posted revenues of $1.01 billion for the quarter ended February 2025, which was below the Zacks Consensus Estimate by 1.60%, compared to $905.9 million in the same quarter last year [2] - Over the last four quarters, Acuity Brands has surpassed consensus EPS estimates four times but has only topped consensus revenue estimates once [2] Stock Performance - Acuity Brands shares have declined approximately 8.8% since the beginning of the year, while the S&P 500 has decreased by 3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.56 on revenues of $1.16 billion, and for the current fiscal year, it is $17.19 on revenues of $4.38 billion [7] - The trend of estimate revisions for Acuity Brands is mixed, which could change following the recent earnings report [6] Industry Context - The Technology Services industry, to which Acuity Brands belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Acuity reported net sales of $1.0 billion in Q2 FY2025, an increase of $100.4 million, or 11.1% year-over-year[1]. - Operating profit was $110.2 million, a decrease of $7.9 million, or 6.7% compared to the prior year, with an operating profit margin of 11.0%[3]. - Adjusted operating profit increased to $162.9 million, up $22.8 million, or 16.3% year-over-year, with a margin of 16.2%[3]. - Diluted earnings per share (EPS) was $2.45, down $0.39, or 13.7% year-over-year, while adjusted diluted EPS rose to $3.73, an increase of $0.35, or 10.4%[4]. - Net income for the six months ended February 28, 2025, was $184.2 million, down from $189.8 million in the prior year[28]. - The diluted earnings per share (GAAP) decreased by 4.1% to $5.80 for the six months ended February 28, 2025, compared to $6.05 in the same period in 2024[35]. Segment Performance - Acuity Brands Lighting (ABL) generated net sales of $840.6 million, a decrease of $2.9 million, or 0.3% year-over-year[6]. - Acuity Intelligent Spaces (AIS) reported net sales of $171.5 million, an increase of $103.4 million, or 151.8% year-over-year, including $95.1 million from QSC performance[8]. - Acuity Intelligent Spaces segment saw a significant increase in net sales, up 151.8% to $171.5 million for the three months ended February 28, 2025[30]. - Net sales for Acuity Brands Lighting decreased by 0.3% to $840.6 million for the three months ended February 28, 2025, compared to $843.5 million for the same period in 2024[34]. - Adjusted operating profit (Non-GAAP) for Acuity Brands Lighting increased by 3.6% to $141.3 million, while Acuity Intelligent Spaces saw a 123.8% increase to $32.0 million for the three months ended February 28, 2025[34]. - Acuity Intelligent Spaces achieved an operating profit (GAAP) of $20.7 million for the six months ended February 28, 2025, reflecting a 43.8% increase from $14.4 million in the same period in 2024[36]. Cash Flow and Investments - Net cash from operating activities was $191.6 million for the first six months of FY2025, with a 13% increase in dividends to $0.17 per share[10]. - Cash flows from operating activities for the six months ended February 28, 2025, were $191.6 million, down from $292.6 million in the prior year[28]. - The company reported a net cash used for investing activities of $1,190.4 million, primarily due to the acquisition of a business[28]. - Total cash and cash equivalents at the end of the period were $397.9 million, down from $578.9 million at the end of the prior year[28]. - Free cash flow (Non-GAAP) decreased by 38.2% to $163.0 million for the six months ended February 28, 2025, down from $263.6 million in the previous year[36]. Acquisition and Debt - Acuity closed the acquisition of QSC during the quarter, contributing to the financial results[2]. - Long-term debt rose to $996.5 million, up from $496.2 million, reflecting the impact of the acquisition[24]. Assets and Growth - Total assets increased to $4.58 billion as of February 28, 2025, compared to $3.81 billion as of August 31, 2024[24]. - For the six months ended February 28, 2025, net sales increased by 6.4% to $1,957.9 million compared to $1,840.6 million in the same period in 2024[35]. - Gross profit for the same period rose by 13.5% to $468.0 million, with a gross margin of 46.5%[33].

Financial Data and Key Metrics Changes - The company generated net sales of $1 billion in Q2 2025, an increase of $100 million or 11% year-over-year, driven by growth in intelligent spaces and the inclusion of QSC sales [27] - Adjusted operating profit was $163 million, up $23 million or 16% from the previous year, with an adjusted operating profit margin of 16.2%, an increase of 70 basis points [28] - Adjusted diluted earnings per share increased by 35 cents or 10% to $3.73 [28] Business Line Data and Key Metrics Changes - Acuity Brands Lighting (ABL) reported sales of $841 million, a decrease of $3 million from the prior year, primarily due to declines in retail and corporate accounts [29] - Adjusted operating profit for ABL increased by $5 million to $141 million, with an adjusted operating profit margin of 16.8%, up 60 basis points [30] - Acuity Intelligent Spaces (AIS) achieved sales of $172 million, an increase of $103 million, with an adjusted operating profit of $32 million and an adjusted operating profit margin of 18.7% [31] Market Data and Key Metrics Changes - The company noted uncertainty in the market affecting order volumes, particularly in the lighting segment, which experienced some project freezing due to cost uncertainty [45][46] - The company has a diversified global supply chain, with approximately 18% of products sourced from Asia and about half from Mexico, which is largely USMCA compliant [40][55] Company Strategy and Development Direction - The company aims to grow through strategic pricing, product vitality, and expanding its addressable market while managing the impact of tariffs [23][22] - The integration of QSC is expected to enhance the company's intelligent spaces strategy, focusing on smarter, safer, and greener solutions [18][92] - The company is positioned to react to market changes and continue executing its strategy effectively [25][106] Management's Comments on Operating Environment and Future Outlook - Management acknowledged uncertainty in the marketplace due to tariffs and indicated that pricing actions have been taken to manage the financial impact [21][22] - The company remains confident in its ability to execute its strategy and deliver value despite market challenges [25][130] - Management emphasized the importance of maintaining a high-performing supply chain to navigate the evolving tariff landscape [40][44] Other Important Information - The company closed the acquisition of QSC during Q2 2025, financing it with $600 million of additional debt and cash on hand [26][33] - The company increased its dividend by 13% to 17 cents per share and allocated $23 million for share repurchases [33] Q&A Session Summary Question: Impact of tariffs on the company - Management views tariffs as a supply shock and is focused on managing the dollar and margin impacts while maintaining a strong supply chain [38][39] Question: Market conditions and project activity - Management noted that there was some market uncertainty affecting order volumes, particularly in the lighting segment, but they expect to see a clearer demand picture as the year progresses [47][49] Question: Competitive positioning regarding tariffs - Management believes the company is advantaged compared to competitors due to its diversified supply chain and USMCA compliance [52][55] Question: Pricing strategy in response to tariffs - The company employs strategic pricing to cover cost increases due to tariffs, evaluating pricing across different product lines [76][77] Question: Integration progress of QSC - Management expressed enthusiasm about the integration of QSC, noting that it aligns well with the company's strategy and has already shown positive marketplace performance [92][93] Question: Future acquisition plans - Management confirmed that while there are no immediate large-scale acquisitions planned, they remain open to attractive opportunities in the future [111][112] Question: Customer behavior regarding orders - Management indicated that customers often accelerate orders in response to price increases, but the overall impact of tariffs on demand remains uncertain [85][88]

Core Insights - Acuity Inc. reported net sales of $1.0 billion for Q2 fiscal 2025, marking an increase of $100.4 million or 11.1% year-over-year [1][10] - The company successfully closed the acquisition of QSC, contributing to its financial results for the quarter [2] Financial Performance - Operating profit for Q2 fiscal 2025 was $110.2 million, a decrease of $7.9 million or 6.7% compared to the previous year [3][10] - Adjusted operating profit increased to $162.9 million, up $22.8 million or 16.3% year-over-year [3][10] - Diluted earnings per share (EPS) was $2.45, down $0.39 or 13.7% from the prior year, while adjusted diluted EPS rose to $3.73, an increase of $0.35 or 10.4% [4][10] Segment Performance - Acuity Brands Lighting (ABL) generated net sales of $840.6 million, a slight decrease of $2.9 million or 0.3% compared to the prior year [5][30] - Operating profit for ABL was $130.3 million, an increase of $4.3 million or 3.4% year-over-year [6][34] - Acuity Intelligent Spaces (AIS) saw net sales of $171.5 million, a significant increase of $103.4 million or 151.8% year-over-year, largely due to the acquisition of QSC [7][30] Cash Flow and Capital Allocation - Net cash from operating activities for the first six months of fiscal 2025 was $191.6 million [11] - The company increased its dividend by 13% to $0.17 per share and repurchased approximately 68,000 shares for a total of $22.6 million [11] Company Overview - Acuity Inc. is a market-leading industrial technology company focused on innovative solutions in lighting and building management [13][14] - The company operates across North America, Europe, and Asia, employing approximately 13,000 associates [15]