Core Viewpoint - James Hardie Industries plc has experienced a 10% increase in share price following a positive quarterly update, indicating strong market confidence in the company's performance and outlook [1]. Financial Performance - The company anticipates net sales for the quarter ending September 30, 2025, to be between $1.29 billion and $1.3 billion [2]. - Adjusted EBITDA is expected to range from $326 million to $331 million, while adjusted net income is projected to be between $151 million and $157 million, with adjusted earnings per share (EPS) estimated at $0.26 to $0.27 [2]. Debt and Sales Insights - As of September 30, 2025, James Hardie's net debt stood at $4.5 billion [3]. - Although siding and trim sales exceeded expectations, organic net sales showed a low single-digit decline compared to the previous year, and inventory reductions by distributors and dealers were less than anticipated [3]. Market Conditions - The company acknowledges challenges in single-family new construction but emphasizes the commitment of customers to product availability, highlighting the strength of its brand and partnerships [4]. Management Commentary - CEO Aaron Erter expressed optimism regarding the second quarter results and noted a modest improvement in the outlook for Siding & Trim, with a full-year guidance update expected in November [5]. Integration and Growth Opportunities - The integration of AZEK and synergy capture initiatives are progressing well, with AZEK reporting mid-single-digit growth in net sales and sell-through for Deck, Rail & Accessories compared to the prior year [6]. - The upcoming fiscal third quarter is crucial for planning shelf space for the next selling season, presenting opportunities to expand James Hardie Siding & Trim into AZEK's dealer network [6][7]. Shareholder Sentiment - Shareholders are likely pleased with the recent update, although the stock remains over 40% lower than its value in March 2024, indicating potential cyclical investment opportunities [8].

Q1 FY26 Financial Performance - Net sales reached $900 million, a decrease of 9% compared to the prior year[34] - Adjusted EBITDA was $226 million, down 21% year-over-year, with an Adjusted EBITDA Margin of 251%, a decrease of 370 basis points[16, 34] - Adjusted diluted EPS was $029, a 28% decrease[34] - Free cash flow increased by 88% to $104 million[34] AZEK Acquisition and Integration - AZEK Residential quarterly net sales were $417 million with Adjusted EBITDA of $127 million and Adjusted EBITDA Margin of 304%[18] - The company reaffirms expectation to exit FY26 annualizing a third of total cost synergies, representing approximately $20 million of actual anticipated P&L benefit within FY26, concentrated in 2H FY26[27] - The company is on track to achieve $125 million in cost synergies and anticipates over $500 million in commercial synergies[26] FY26 Financial Guidance - The company issues new FY26 guidance reflecting contribution from AZEK[30] - FY26 Siding & Trim net sales are projected to be $2675 to $285 billion[51] - FY26 Deck, Rail & Accessories net sales are projected to be $775 to $800 million[51] - AZEK contribution to Adjusted EBITDA is expected to be +$250 to $265 million, with total Adjusted EBITDA between $105 to $115 billion[51] - Free cash flow is expected to be $200 million+, including approximately $315 million of incremental interest expense and transaction & integration costs related to the AZEK acquisition[51, 53]