Acuity Brands(AYI) - 2025 Q4 - Annual Results

Executive Summary & Financial Highlights Fiscal Q4 2025 Performance Overview Acuity Inc. reported strong Q4 FY2025 net sales and adjusted profit growth, with GAAP EPS declining due to special items | Metric | Q4 FY2025 | Q4 FY2024 | Change | % Change | | :-------------------------- | :-------- | :-------- | :------- | :------- | | Net Sales | $1.2 billion | $1.0323 billion | $176.8 million | 17.1 % | | Operating Profit (GAAP) | $180.6 million | $157.0 million | $23.6 million | 15.0 % | | Operating Profit Margin (GAAP) | 14.9 % | 15.2 % | (30) bps | | | Adjusted Operating Profit | $225.3 million | $178.5 million | $46.8 million | 26.2 % | | Adjusted Operating Profit Margin | 18.6 % | 17.3 % | 130 bps | | | Diluted EPS (GAAP) | $3.61 | $3.77 | $(0.16) | (4.2)% | | Adjusted Diluted EPS | $5.20 | $4.30 | $0.90 | 20.9 % | - Incurred a non-cash pension-settlement charge of $30.9 million and recognized a one-time tax benefit of $8.2 million during the fourth quarter[4] Fiscal Full-Year 2025 Performance Overview Acuity Inc. achieved substantial FY2025 net sales and adjusted profit growth, despite a GAAP EPS decline | Metric | FY2025 | FY2024 | Change | % Change | | :-------------------------- | :------- | :------- | :------- | :------- | | Net Sales | $4.3 billion | $3.8 billion | $504.6 million | 13.1 % | | Operating Profit (GAAP) | $563.9 million | $553.3 million | $10.6 million | 1.9 % | | Operating Profit Margin (GAAP) | 13.0 % | 14.4 % | (140) bps | | | Adjusted Operating Profit | $768.6 million | $639.6 million | $129.0 million | 20.2 % | | Adjusted Operating Profit Margin | 17.7 % | 16.7 % | 100 bps | | | Diluted EPS (GAAP) | $12.53 | $13.44 | $(0.91) | (6.8)% | | Adjusted Diluted EPS | $18.01 | $15.56 | $2.45 | 15.7 % | - Generated $601 million in cash flow from operations in Fiscal 2025[3] Segment Performance Analysis Acuity Brands Lighting (ABL) ABL reported modest Q4 and FY2025 net sales growth, improving GAAP and adjusted operating profit margins ABL Fourth-Quarter Results | Metric | Q4 FY2025 | Q4 FY2024 | Change | % Change | | :-------------------------- | :-------- | :-------- | :------- | :------- | | Net Sales | $962.4 million | $955.0 million | $7.4 million | 0.8 % | | Operating Profit (GAAP) | $183.0 million | $161.5 million | $21.5 million | 13.3 % | | Operating Profit Margin (GAAP) | 19.0 % | 16.9 % | 210 bps | | | Adjusted Operating Profit | $193.6 million | $171.9 million | $21.7 million | 12.6 % | | Adjusted Operating Profit Margin | 20.1 % | 18.0 % | 210 bps | | ABL Full-Year Results | Metric | FY2025 | FY2024 | Change | % Change | | :-------------------------- | :------- | :------- | :------- | :------- | | Net Sales | $3.6 billion | $3.5734 billion | $38.8 million | 1.1 % | | Operating Profit (GAAP) | $590.6 million | $582.8 million | $7.8 million | 1.3 % | | Operating Profit Margin (GAAP) | 16.4 % | 16.3 % | 10 bps | | | Adjusted Operating Profit | $662.3 million | $624.2 million | $38.1 million | 6.1 % | | Adjusted Operating Profit Margin | 18.3 % | 17.5 % | 80 bps | | Acuity Intelligent Spaces (AIS) AIS showed exceptional Q4 and FY2025 growth, with net sales doubling and substantial profit increases AIS Fourth-Quarter Results | Metric | Q4 FY2025 | Q4 FY2024 | Change | % Change | | :-------------------------- | :-------- | :-------- | :------- | :------- | | Net Sales | $255.2 million | $83.9 million | $171.3 million | 204.2 % | | Operating Profit (GAAP) | $28.0 million | $16.7 million | $11.3 million | 67.7 % | | Operating Profit Margin (GAAP) | 11.0 % | 19.9 % | (890) bps | | | Adjusted Operating Profit | $54.6 million | $21.5 million | $33.1 million | 154.0 % | | Adjusted Operating Profit Margin | 21.4 % | 25.6 % | (420) bps | | AIS Full-Year Results | Metric | FY2025 | FY2024 | Change | % Change | | :-------------------------- | :------- | :------- | :------- | :------- |\n| Net Sales | $764.3 million | $291.9 million | $472.4 million | 161.8 % | | Operating Profit (GAAP) | $76.1 million | $43.6 million | $32.5 million | 74.5 % | | Operating Profit Margin (GAAP) | 10.0 % | 14.9 % | (490) bps | | | Adjusted Operating Profit | $164.3 million | $63.4 million | $100.9 million | 159.1 % | | Adjusted Operating Profit Margin | 21.5 % | 21.7 % | (20) bps | | Consolidated Financial Statements Condensed Consolidated Balance Sheets Total assets increased, driven by long-term assets, with corresponding increases in liabilities and equity | ASSETS (in millions) | Aug 31, 2025 | Aug 31, 2024 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $422.5 | $845.8 | $(423.3) | | Accounts receivable, net | $593.9 | $563.0 | $30.9 | | Inventories | $526.7 | $387.6 | $139.1 | | Prepayments and other current assets | $108.4 | $75.1 | $33.3 | | Total current assets | $1,651.5 | $1,871.5 | $(220.0) | | Property, plant, and equipment, net | $343.2 | $303.9 | $39.3 | | Other long-term assets | $2,760.5 | $1,639.2 | $1,121.3 | | Total assets | $4,755.2 | $3,814.6 | $940.6 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in millions) | | | | | Accounts payable | $454.5 | $352.3 | $102.2 | | Other current liabilities | $391.3 | $335.6 | $55.7 | | Total current liabilities | $845.8 | $687.9 | $157.9 | | Long-term debt | $896.8 | $496.2 | $400.6 | | Other long-term liabilities | $287.7 | $251.7 | $36.0 | | Total stockholders' equity | $2,724.9 | $2,378.8 | $346.1 | | Total liabilities and stockholders' equity | $4,755.2 | $3,814.6 | $940.6 | Condensed Statements of Income FY2025 net sales and gross profit rose, but net income fell due to higher expenses and special charges | (In millions, except per-share data) | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--------------------------------- | :-------- | :-------- | :----- | :----- | | Net sales | $1,209.1 | $1,032.3 | $4,345.6 | $3,841.0 | | Cost of products sold | $618.1 | $543.6 | $2,267.1 | $2,059.3 | | Gross profit | $591.0 | $488.7 | $2,078.5 | $1,781.7 | | Selling, distribution, and administrative expenses | $410.4 | $331.7 | $1,484.9 | $1,228.4 | | Special charges | — | — | $29.7 | — | | Operating profit | $180.6 | $157.0 | $563.9 | $553.3 | | Other expense: Interest expense (income), net | $7.0 | $(3.5) | $22.0 | $(4.5) | | Other expense: Miscellaneous expense, net | $35.9 | $8.0 | $41.7 | $9.2 | | Total other expense | $42.9 | $4.5 | $63.7 | $4.7 | | Income before income taxes | $137.7 | $152.5 | $500.2 | $548.6 | | Income tax expense | $23.7 | $33.6 | $103.6 | $126.0 | | Net income | $114.0 | $118.9 | $396.6 | $422.6 | | Diluted earnings per share | $3.61 | $3.77 | $12.53 | $13.44 | | Dividends declared per share | $0.17 | $0.15 | $0.66 | $0.58 | Condensed Consolidated Statements of Cash Flows FY2025 net cash from operations decreased, investing activities rose due to acquisitions, and financing shifted | (In millions) | FY2025 | FY2024 | | :------------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $601.4 | $619.2 | | Net cash used for investing activities | $(1,280.7) | $(65.1) | | Net cash provided by (used for) financing activities | $255.4 | $(104.5) | | Net change in cash and cash equivalents | $(423.3) | $447.9 | | Cash and cash equivalents at end of year | $422.5 | $845.8 | - Capital allocation activities included closing the QSC acquisition, acquiring M3 Innovation, increasing the dividend by 13% to $0.17 per share, repurchasing approximately $118.5 million of common stock, and repaying $200.0 million of term-loan borrowings[17] Disaggregated Net Sales by Channel AIS drove Q4 and FY2025 net sales growth with triple-digit increases; ABL channels showed mixed modest growth | Net Sales by Channel (in millions) | Q4 FY2025 | Q4 FY2024 | Increase (Decrease) | Percent Change | | :--------------------------------- | :-------- | :-------- | :------------------ | :------------- | | Acuity Brands Lighting: | | | | | | Independent sales network | $702.4 | $677.1 | $25.3 | 3.7 % | | Direct sales network | $105.3 | $109.6 | $(4.3) | (3.9)% | | Retail sales | $43.4 | $42.6 | $0.8 | 1.9 % | | Corporate accounts | $52.9 | $65.8 | $(12.9) | (19.6)% | | Original equipment manufacturer and other | $58.4 | $59.9 | $(1.5) | (2.5)% | | Total Acuity Brands Lighting | $962.4 | $955.0 | $7.4 | 0.8 % | | Acuity Intelligent Spaces | $255.2 | $83.9 | $171.3 | 204.2 % | | Eliminations | $(8.5) | $(6.6) | $(1.9) | 28.8 % | | Total | $1,209.1 | $1,032.3 | $176.8 | 17.1 % | | Net Sales by Channel (in millions) | FY2025 | FY2024 | Increase (Decrease) | Percent Change | | :--------------------------------- | :----- | :----- | :------------------ | :------------- | | Acuity Brands Lighting: | | | | | | Independent sales network | $2,646.8 | $2,551.7 | $95.1 | 3.7 % | | Direct sales network | $411.4 | $397.0 | $14.4 | 3.6 % | | Retail sales | $170.7 | $190.3 | $(19.6) | (10.3)% | | Corporate accounts | $156.7 | $205.9 | $(49.2) | (23.9)% | | Original equipment manufacturer and other | $226.6 | $228.5 | $(1.9) | (0.8)% | | Total Acuity Brands Lighting | $3,612.2 | $3,573.4 | $38.8 | 1.1 % | | Acuity Intelligent Spaces | $764.3 | $291.9 | $472.4 | 161.8 % | | Eliminations | $(30.9) | $(24.3) | $(6.6) | 27.2 % | | Total | $4,345.6 | $3,841.0 | $504.6 | 13.1 % | Non-GAAP Financial Measures & Reconciliations Non-GAAP Measures Explanation Acuity Inc. uses non-GAAP measures (adjusted profit, EPS, FCF) to clarify performance, excluding specific items - Non-GAAP financial measures include adjusted gross profit/margin, adjusted operating profit/margin, adjusted net income, adjusted diluted EPS, EBITDA/margin, and adjusted EBITDA/margin[23] - Adjustments typically exclude amortization of acquired intangible assets, share-based payment expense, acquired profit in inventory, and acquisition-related items[23] - Free cash flow (FCF) is defined as net cash provided by operating activities less purchases of property, plant, and equipment[24][27] - These measures are used for internal performance reviews, comparative operational analysis, and decision-making, aiming for greater comparability with peers, especially technology and software companies. They should be considered in addition to, not as a substitute for, GAAP results[25][28] Company-wide Reconciliation (Q4 Fiscal 2025) This section reconciles GAAP to non-GAAP Q4 FY2025 financial measures, detailing adjustments for special items | (In millions except per share data) | Q4 FY2025 | Q4 FY2024 | Increase (Decrease) | Percent Change | | :---------------------------------- | :-------- | :-------- | :------------------ | :------------- | | Operating profit (GAAP) | $180.6 | $157.0 | $23.6 | 15.0 % | | Adjusted operating profit (Non-GAAP) | $225.3 | $178.5 | $46.8 | 26.2 % | | Net income (GAAP) | $114.0 | $118.9 | $(4.9) | (4.1)% | | Adjusted net income (Non-GAAP) | $164.0 | $135.5 | $28.5 | 21.0 % | | Diluted earnings per share (GAAP) | $3.61 | $3.77 | $(0.16) | (4.2)% | | Adjusted diluted earnings per share (Non-GAAP) | $5.20 | $4.30 | $0.90 | 20.9 % | | EBITDA (Non-GAAP) | $191.1 | $171.6 | $19.5 | 11.4 % | | Adjusted EBITDA (Non-GAAP) | $240.7 | $191.3 | $49.4 | 25.8 % | Segment Reconciliation (Q4 Fiscal 2025) This section reconciles GAAP to non-GAAP operating and gross profit for ABL and AIS in Q4 FY2025 | (In millions) | ABL Q4 FY2025 | ABL Q4 FY2024 | Increase (Decrease) | Percent Change | | :-------------------------- | :------------- | :------------- | :------------------ | :------------- | | Operating profit (GAAP) | $183.0 | $161.5 | $21.5 | 13.3 % | | Adjusted operating profit (Non-GAAP) | $193.6 | $171.9 | $21.7 | 12.6 % | | (In millions) | AIS Q4 FY2025 | AIS Q4 FY2024 | Increase (Decrease) | Percent Change | | :-------------------------- | :------------- | :------------- | :------------------ | :------------- | | Operating profit (GAAP) | $28.0 | $16.7 | $11.3 | 67.7 % | | Adjusted operating profit (Non-GAAP) | $54.6 | $21.5 | $33.1 | 154.0 % | Company-wide Reconciliation (Full-Year Fiscal 2025) This section reconciles GAAP to non-GAAP FY2025 financial measures, detailing various adjustments | (In millions, except per share data) | FY2025 | FY2024 | Increase (Decrease) | Percent Change | | :----------------------------------- | :----- | :----- | :------------------ | :------------- | | Gross profit (GAAP) | $2,078.5 | $1,781.7 | $296.8 | 16.7 % | | Adjusted gross profit (Non-GAAP) | $2,108.1 | $1,781.7 | $326.4 | 18.3 % | | Operating profit (GAAP) | $563.9 | $553.3 | $10.6 | 1.9 % | | Adjusted operating profit (Non-GAAP) | $768.6 | $639.6 | $129.0 | 20.2 % | | Net income (GAAP) | $396.6 | $422.6 | $(26.0) | (6.2)% | | Adjusted net income (Non-GAAP) | $569.8 | $489.1 | $80.7 | 16.5 % | | Diluted earnings per share (GAAP) | $12.53 | $13.44 | $(0.91) | (6.8)% | | Adjusted diluted earnings per share (Non-GAAP) | $18.01 | $15.56 | $2.45 | 15.7 % | | EBITDA (Non-GAAP) | $655.3 | $635.2 | $20.1 | 3.2 % | | Adjusted EBITDA (Non-GAAP) | $825.2 | $691.0 | $134.2 | 19.4 % | Segment Reconciliation (Full-Year Fiscal 2025) This section reconciles GAAP to non-GAAP FY2025 gross and operating profit for ABL and AIS | (In millions) | ABL FY2025 | ABL FY2024 | Increase (Decrease) | Percent Change | | :-------------------------- | :--------- | :--------- | :------------------ | :------------- | | Gross profit (GAAP) | $1,654.5 | $1,612.5 | $42.0 | 2.6 % | | Operating profit (GAAP) | $590.6 | $582.8 | $7.8 | 1.3 % | | Adjusted operating profit (Non-GAAP) | $662.3 | $624.2 | $38.1 | 6.1 % | | (In millions) | AIS FY2025 | AIS FY2024 | Increase (Decrease) | Percent Change | | :-------------------------- | :--------- | :--------- | :------------------ | :------------- | | Gross profit (GAAP) | $424.0 | $169.2 | $254.8 | 150.6 % | | Adjusted gross profit (Non-GAAP) | $453.6 | $169.2 | $284.4 | 168.1 % | | Operating profit (GAAP) | $76.1 | $43.6 | $32.5 | 74.5 % | | Adjusted operating profit (Non-GAAP) | $164.3 | $63.4 | $100.9 | 159.1 % | Free Cash Flow Reconciliation (Full-Year Fiscal 2025) Free cash flow for FY2025 decreased slightly, primarily due to lower net cash provided by operating activities | (In millions) | FY2025 | FY2024 | Increase (Decrease) | Percent Change | | :------------------------------------------ | :----- | :----- | :------------------ | :------------- | | Net cash provided by operating activities (GAAP) | $601.4 | $619.2 | $(17.8) | (2.9)% | | Less: Purchases of property, plant, and equipment | $(68.4) | $(64.0) | | | | Free cash flow (Non-GAAP) | $533.0 | $555.2 | $(22.2) | (4.0)% | Company Information & Legal Disclosures About Acuity Inc. Acuity Inc. is a market-leading industrial technology company focused on solving problems in spaces and light - Acuity Inc. is a market-leading industrial technology company that uses technology to solve problems in spaces, light, and more[20] - Operates through two business segments: Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS)[20] - Strategy focuses on developing innovative new products and services, customer outcomes, driving growth and productivity to increase market share, delivering superior returns, and aggressively deploying capital[21] - Headquartered in Atlanta, Georgia, with operations across North America, Europe, and Asia, powered by approximately 13,000 associates[22] Form 10-K Filing Status The financial results in this earnings release are preliminary, pending audit completion and Form 10-K filing - Financial results reported in this earnings release are preliminary[18] - The independent registered public accounting firm's audit report will be issued upon the filing of the annual report on Form 10-K[18] Investor Conference Call Details Acuity Inc. hosted a conference call on October 1, 2025, to discuss results, available on its Investor Relations website - A conference call was hosted on October 1, 2025, at 8:00 a.m. (ET) by Neil Ashe, Chairman, President and CEO[19] - The conference call and earnings release are accessible via the Investor Relations section of www.investors.acuityinc.com, with a replay available for a limited time[19] Forward-Looking Information Disclaimer This press release contains forward-looking statements subject to risks, and actual results may differ materially - This press release contains "forward-looking statements" under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[29] - Forward-looking statements describe plans, initiatives, projections, expectations, and financial outlook, identified by words like "expect," "believe," "intend," etc[29][30] - These statements are not guarantees of future performance and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially[30] - Readers are cautioned not to place undue reliance on forward-looking statements, and the company undertakes no obligation to publicly update or revise them[30]