Financial Data and Key Metrics Changes - The company reported net sales of $1.2 billion for Q3 2025, an increase of $211 million or 22% year-over-year [21] - Adjusted operating profit rose to $222 million, up $55 million or 33% from the previous year, with an adjusted operating profit margin of 18.8%, an increase of 150 basis points [22] - Adjusted diluted earnings per share increased to $5.12, up $0.97 or 23% compared to the prior year [22] Business Line Data and Key Metrics Changes - ABL (Acuity Brands Lighting) generated sales of $923 million, a $25 million or 3% increase year-over-year, driven by growth in independent sales and direct sales networks [22] - Acuity Intelligent Spaces (AIS) reported sales of $264 million, an increase of $188 million, with Atrius and Distech combined growing 21% during the quarter [25] - QSC, part of AIS, grew over 20% year-over-year on a pro forma basis [25] Market Data and Key Metrics Changes - The company experienced accelerated orders in Q3 due to strategic pricing actions in response to evolving tariff policies, which contributed to building backlog [6][21] - The independent sales network and direct sales showed strong growth, while corporate accounts faced declines due to timing of renovations at a large retailer [22][24] Company Strategy and Development Direction - The company is focused on product vitality, elevating service levels, and using technology to improve operations and drive productivity [19] - Acuity is prioritizing investments in verticals where it has historically been underpenetrated, such as healthcare and sports lighting [9][100] - The strategy includes consolidating data management through Distech and Atrius, and enhancing user experiences with QSC [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage outcomes amid uncertainties from tariff policies and geopolitical instability [18][19] - The expectation is that the combination of Q3 and Q4 performance will yield the results anticipated for the second half of fiscal 2025 [18][59] - Management plans to approach future planning conservatively while remaining prepared to capitalize on market opportunities [39][90] Other Important Information - The company generated approximately $400 million in cash flow from operations year-to-date and allocated capital effectively, including a 13% increase in dividends and share repurchases [27][28] - A special charge of $30 million was taken in Q3 related to productivity efforts, which will yield benefits in future quarters [24][87] Q&A Session Summary Question: QSC margin performance - Management noted that QSC's margin improved significantly due to strong top-line growth and the adoption of productivity tools [33][35] Question: Impact of accelerated orders and pricing actions - Management confirmed that there was evidence of order acceleration in Q3, with expectations for normalized performance in Q4 [37][39] Question: Expectations for gross margin in Q4 - Management indicated that gross margin would likely be impacted by tariff costs in Q4, but they are confident in their ability to cover these costs [53][55] Question: Progress on shifting to Design Select - Management stated that progress on Design Select is strong, but it is a long-term project [71] Question: Demand environment and customer behavior - Management observed that customers are behaving rationally in response to pricing actions and tariff uncertainties, seeking stability in the marketplace [90]

Company Performance - Acuity (AYI) reported quarterly earnings of $5.12 per share, exceeding the Zacks Consensus Estimate of $4.42 per share, and up from $4.15 per share a year ago, representing an earnings surprise of +15.84% [1] - The company posted revenues of $1.18 billion for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 3.02%, compared to year-ago revenues of $968.1 million [2] - Over the last four quarters, Acuity has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Future Outlook - The sustainability of Acuity's stock price movement will depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is $4.94 on revenues of $1.22 billion, and for the current fiscal year, it is $17.02 on revenues of $4.33 billion [7] - The estimate revisions trend for Acuity was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Acuity belongs, is currently in the top 16% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Acuity's stock performance [5]

Financial Performance - Acuity reported net sales of $1.2 billion for Q3 fiscal 2025, an increase of $210.5 million, or 21.7% year-over-year[1]. - Operating profit was $139.8 million, a decrease of $5.5 million, or 3.8% compared to the prior year, with an operating profit margin of 11.9%[3]. - Adjusted operating profit increased to $221.7 million, up $54.6 million, or 32.7% year-over-year, with an adjusted operating profit margin of 18.8%[3]. - Diluted earnings per share (EPS) was $3.12, down $0.50, or 13.8% year-over-year, while adjusted diluted EPS rose to $5.12, an increase of $0.97, or 23.4%[4]. - The company reported a net income of $98.4 million for the three months ended May 31, 2025, down from $113.9 million in the same period last year, reflecting a decrease of 13.8%[26]. - Adjusted net income (Non-GAAP) rose to $161.5 million, reflecting a 23.6% increase from $130.7 million year-over-year[32]. - The company reported a decrease in net income (GAAP) to $98.4 million for the three months ended May 31, 2025, down 13.6% from $113.9 million[32]. Segment Performance - Acuity Brands Lighting (ABL) segment generated net sales of $923.2 million, an increase of $24.7 million, or 2.7% year-over-year[6]. - Acuity Intelligent Spaces (AIS) segment saw net sales of $264.1 million, a significant increase of $188.4 million, or 248.9% year-over-year[8]. - Acuity Intelligent Spaces reported a significant increase in net sales of 248.9% for the three months ended May 31, 2025, totaling $264.1 million compared to $75.7 million in the prior year[30]. - Net sales for Acuity Brands Lighting increased to $2,649.8 million, a 1.2% rise from $2,618.4 million in the previous year[35]. - Acuity Intelligent Spaces reported a significant net sales increase to $509.1 million, up 144.8% from $208.0 million[35]. Cash Flow and Dividends - Net cash from operating activities for the first nine months of fiscal 2025 was $398.9 million, with a 13% increase in dividends to $0.17 per share[10]. - Net cash provided by operating activities for the nine months ended May 31, 2025, was $398.9 million, down from $445.1 million in the prior year[28]. - Total cash and cash equivalents at the end of the period were $371.8 million, a decrease from $699.0 million at the end of the same period last year[28]. - The company declared a dividend of $0.17 per share for the three months ended May 31, 2025, compared to $0.15 per share in the same period last year, representing a 13.3% increase[26]. - Free cash flow decreased to $355.3 million, down 12.1% from $404.1 million[35]. Acquisitions and Strategic Initiatives - The company completed the acquisition of QSC and M3 Innovation, indicating a strategy for market expansion and innovation[10]. - Acuity aims to aggressively deploy capital to grow the business and enter attractive new verticals, focusing on innovative product development[13]. Asset and Profitability Metrics - Total assets increased to $4.646 billion as of May 31, 2025, compared to $3.815 billion as of August 31, 2024[24]. - Gross profit for the nine months ended May 31, 2025, was $1,487.5 million, up from $1,293.0 million in the prior year, reflecting a year-over-year increase of 15.0%[26]. - Adjusted EBITDA (Non-GAAP) for the nine months ended May 31, 2025, was $584.5 million, an increase of 17.0% from $499.7 million[34]. - Operating profit margin (GAAP) for the nine months ended May 31, 2025, was 12.2%, a decrease of 190 basis points from 14.1%[34]. - Adjusted operating profit for Acuity Brands Lighting reached $468.7 million, reflecting a 3.6% increase from $452.3 million[35]. - Adjusted operating profit for Acuity Intelligent Spaces surged to $109.7 million, a 161.8% increase compared to $41.9 million[35]. - Operating profit for the three months ended May 31, 2025, was $139.8 million, a decrease of 3.8% from $145.3 million in the same period last year[26]. - Adjusted operating profit (Non-GAAP) reached $221.7 million, a 32.7% increase compared to $167.1 million in the prior year[32]. - Operating profit margin for Acuity Brands Lighting decreased to 15.4%, down 70 basis points from 16.1%[35]. - Adjusted operating profit margin for Acuity Intelligent Spaces improved to 21.5%, an increase of 140 basis points from 20.1%[35].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ Form 10-Q _____________________________________________ (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number 001-16583. __________ ...

Core Insights - Acuity Inc. reported net sales of $1.2 billion for Q3 fiscal 2025, marking a 21.7% increase year-over-year, driven by strong performance across its segments [1][9][36] - The company experienced a decrease in operating profit to $139.8 million, down 3.8% from the previous year, while adjusted operating profit rose to $221.7 million, an increase of 32.7% [3][9][36] - Diluted earnings per share (EPS) decreased to $3.12, a 13.8% decline, while adjusted diluted EPS increased to $5.12, up 23.4% from the prior year [4][9][36] Financial Performance - Net sales for Acuity Brands Lighting (ABL) reached $923.2 million, a 2.7% increase compared to the prior year [5][36] - Acuity Intelligent Spaces (AIS) saw significant growth, with net sales of $264.1 million, representing a 248.9% increase year-over-year [7][36] - Operating profit for ABL was $134.0 million, down 11.6%, while adjusted operating profit increased to $173.9 million, up 7.3% [6][36] Earnings and Cash Flow - The company generated strong cash flow with net cash from operating activities amounting to $398.9 million for the first nine months of fiscal 2025 [10] - Acuity increased its dividend by 13% to $0.17 per share and repurchased approximately 344,000 shares for a total of $91.3 million [10] Segment Analysis - ABL's operating profit margin decreased to 14.5%, down 240 basis points, while AIS's operating profit margin was 10.4%, a decrease of 610 basis points [6][8][36] - Adjusted operating profit margin for ABL improved to 18.8%, an increase of 80 basis points, while AIS's adjusted operating profit margin rose to 23.6%, up 70 basis points [6][8][36] Market Position and Strategy - Acuity Inc. continues to focus on innovative product development and effective capital allocation to drive growth and enhance market share [12][13] - The company aims to enter attractive new verticals and leverage technology to solve industry challenges [12][13]

Group 1 - Acuity Inc. is set to release its third-quarter earnings results on June 26, with expected earnings of $4.43 per share, a significant increase from $0.62 per share in the same period last year [1] - The company projects quarterly revenue of $1.15 billion, a decrease from $6.81 billion a year earlier [1] Group 2 - In the fiscal second quarter of 2025, Acuity Brands reported net sales growth of 11.1% year over year, totaling $1.01 billion, which fell short of the analyst consensus estimate of $1.03 billion [2] - Following the earnings report, Acuity shares increased by 1.3%, closing at $284.44 [2] Group 3 - Analyst Timothy Wojs from Baird maintained a Neutral rating and raised the price target from $295 to $315 [5] - Wells Fargo analyst Joseph O'Dea kept an Equal-Weight rating and increased the price target from $275 to $285 [5] - Oppenheimer analyst Christopher Glynn maintained an Outperform rating and raised the price target from $370 to $380 [5]

Core Insights - Acuity (AYI) has a strong track record of exceeding earnings estimates, particularly in the last two quarters, with an average surprise of 1.98% [1][2] - The company reported earnings of $3.73 per share for the most recent quarter, surpassing the expected $3.66, resulting in a surprise of 1.91% [2] - For the previous quarter, Acuity's earnings were $3.97 per share against an expectation of $3.89, yielding a surprise of 2.06% [2] Earnings Estimates and Predictions - Estimates for Acuity have been increasing, driven by its history of earnings surprises, and it currently has a positive Zacks Earnings ESP of +5.20% [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a high likelihood of another earnings beat, with historical data showing that nearly 70% of stocks with this combination exceed consensus estimates [6][8] - The next earnings report for Acuity is anticipated to be released on June 26, 2025 [8] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7] - A negative Earnings ESP can diminish predictive power but does not necessarily indicate an earnings miss [9] - It is crucial for investors to check a company's Earnings ESP prior to quarterly releases to enhance the chances of successful investment decisions [10]

Group 1 - Acuity is expected to announce earnings on June 26, 2025, with projected revenue growth of 18% year-over-year to $1.15 billion and earnings per share of approximately $4.39, up from $4.15 in the same quarter last year [2] - The company's revenue for the past twelve months totaled $4.0 billion, with operating profits of $546 million and net income of $417 million [3] - Acuity's current market capitalization stands at $8.6 billion, and it sources a significant portion of its lighting products from Asia and Mexico [3] Group 2 - Historical data shows that Acuity has recorded 20 earnings data points over the last five years, with 13 positive and 7 negative one-day returns, resulting in a positive return rate of approximately 65% [5] - The positive return percentage increases to 75% when analyzing data from the last three years, with a median positive return of 4.9% and a median negative return of -5.8% [5] - A correlation exists between one-day post-earnings returns and subsequent five-day returns, suggesting a potential trading strategy based on these historical patterns [4][6]

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]