Financial Performance - The company's Q2 FY26 net sales reached $1.292 billion, a 34% increase[46] - Adjusted EBITDA for Q2 FY26 was $330 million, up 25%[46] - The adjusted EBITDA margin was 25.5%, a decrease of 190 basis points[46] - Year-to-date free cash flow was $58 million, a 58% decrease[46] Segment Performance - Siding & Trim (S&T) net sales were $696 million, reflecting a 3% organic decrease[55] - Deck, Rail & Accessories (DR&A) net sales were $256 million, up 6%[61] - Australia & New Zealand (ANZ) sales decreased by low-single digits (LSD%) in local currency to $148 million[63] - Europe net sales increased by low-double digits (LDD%) in local currency to $138 million[67] AZEK Integration and Synergies - The company is on track to achieve $125 million of cost synergies[37] - The company expects to exit FY26 annualizing $60 million+ of cost synergies[39] - The company anticipates over $500 million of commercial synergies through material conversion[41, 44]

Core Insights - James Hardie Industries plc reported strong preliminary second-quarter FY26 results, projecting net sales between $1.29 billion and $1.30 billion, exceeding consensus estimates of $1.19 billion [1] - The company anticipates adjusted EPS of 26 to 27 cents, significantly higher than the consensus of 16 cents [1] - Adjusted EBITDA is expected to be in the range of $326 million to $331 million, with adjusted net income projected at $151 million to $157 million [1] - As of September 30, the company's net debt was reported at $4.5 billion [1] Sales Performance - CEO Aaron Erter noted that Siding & Trim sales exceeded expectations, with only a slight year-over-year decline in organic net sales due to lower-than-anticipated inventory reductions by distributors and dealers [2] - Despite challenges in the single-family housing market, customer demand and product availability demonstrate the brand's strength and partnerships [2] Strategic Developments - The integration and synergy plans for the AZEK acquisition are progressing well, with mid-single-digit sales and sell-through growth for Deck, Rail & Accessories in the second quarter [3] - The acquisition of The AZEK Company was valued at $8.75 billion, indicating a significant strategic move for the company [3] - James Hardie is scheduled to release its detailed second-quarter results on November 18, 2025 [3] Market Reaction - Following the positive preliminary results, JHX shares increased by 14.43%, reaching $23.00 in premarket trading [4]

Core Insights - The company reported a 9% decline in total net sales to $900 million in fiscal Q1 2026, attributed to inventory normalization and softer global demand [5][53] - North American net sales fell 12%, driven by lower volumes, although there was a 3% increase in average net sales price [6][54] - Adjusted EBITDA decreased by 21% year-over-year to $226 million, with a margin of 25.1%, reflecting volume pressures and raw material inflation [3][53] Financial Performance - Adjusted EBITDA margin fell 370 basis points to 25.1% in Q1 2026, with North America adjusted EBITDA margin down 400 basis points year-over-year [3][6] - Free cash flow improved by 88% to $104 million due to better operating cash generation and reduced capital expenditures [7][53] - The company expects free cash flow of at least $200 million for fiscal 2026, with capital expenditures projected at approximately $400 million [10][63] Market Outlook - Guidance for fiscal 2026 anticipates a high single-digit decline in total market demand, influenced by homeowner affordability pressures and uncertain macro conditions [3][61] - The company expects adjusted EBITDA for fiscal 2026 to be between $1.05 billion and $1.15 billion, including a contribution of $250 million to $265 million from the AZEK acquisition [9][62] - North America fiber cement outlook predicts a low double-digit volume decline for fiscal 2026, primarily volume-driven [11] Strategic Initiatives - The completion of the AZEK acquisition has doubled the company's total addressable market and expanded its product offerings [8][19] - The company aims to achieve over $500 million in commercial synergies within five years, with benefits expected to begin in fiscal 2027 [12][50] - Management is focused on integrating operations and realizing cost synergies, with over 50% of targeted general and administrative cost synergies already actioned [8][44] Regional Performance - Asia Pacific net sales declined 10%, with a 25% volume decrease offset by a 22% rise in average selling price [7][57] - Europe experienced a 7% increase in net sales, driven by higher average selling prices, with an EBITDA margin improvement to 16% [7][59] - The company remains committed to outperforming market demand in both APAC and Europe despite challenging conditions [58][60]

Financial Performance - Q2 2025 net sales increased by 8.1% year-over-year[46] - Adjusted EBITDA Margin increased by 40 bps year-over-year to 27.5%[44, 46] - The company reaffirms FY 2025 net sales outlook between $1.52 billion and $1.55 billion, representing 5% to 8% year-over-year growth[44] - The company reaffirms Adjusted EBITDA outlook between $403 million and $418 million, representing 6% to 10% year-over-year growth[44] - Residential segment growth was at 9% year-over-year[44] Strategic Initiatives and Market Position - The company is the industry leader in outdoor living[17, 36] - The company is benefiting from long-term material conversion trends[16] - The company is targeting double-digit annual net sales growth[17] - The company is expanding Adj EBITDA margin to a target of approximately 27.5%[17] - The company estimates that wood alternative decking could reach approximately 50% of decking opportunities share over the next 10-15 years and up to 75% over time[33]