AZEK’s first quarter delivered results that surpassed Wall Street’s revenue and profit expectations, with management pointing to strong residential segment growth and continued traction from new product launches. CEO Jesse Singh credited mid-single-digit sell-through in the residential channel and expansion across the TimberTech and Versatex brands as key contributors. The company also emphasized that disciplined inventory management and targeted investments in merchandising and displays supported channel growth, while margin resilience reflected ongoing recycling and cost initiatives.
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AZEK (AZEK) Q1 CY2025 Highlights:
- Revenue: $452.2 million vs analyst estimates of $443.6 million (8.1% year-on-year growth, 1.9% beat)
- Adjusted EPS: $0.45 vs analyst estimates of $0.44 (2.9% beat)
- Adjusted EBITDA: $124.4 million vs analyst estimates of $119.6 million (27.5% margin, 4% beat)
- The company reconfirmed its revenue guidance for the full year of $1.54 billion at the midpoint
- EBITDA guidance for the full year is $410.5 million at the midpoint, below analyst estimates of $414.8 million
- Operating Margin: 17.6%, in line with the same quarter last year
- Organic Revenue rose 8.1% year on year (15.9% in the same quarter last year)
- Market Capitalization: $7.62 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions AZEK’s Q1 Earnings Call
- Keith Hughes (Truist) asked about segment expectations for the second half and the impact of cost inflation. CEO Jesse Singh indicated Deck, Rail & Accessories is outpacing Exteriors, and said cost inflation remains modest and is being offset by targeted pricing.
- Andrew Azzi (JPMorgan) sought details on sales synergies and recycling strategy post-merger. Singh emphasized stability in sales organizations and ongoing investments in regional recycling capacity, with material cost benefits expected from 2026 onward.
- Elizabeth Langan (Barclays) probed demand trends across pro and retail channels and regional differences. President Jonathan Skelly noted growth in both channels, with Pro outpacing retail slightly; weather-related softness in the Northeast was offset by rebounds as conditions improved.
- Tim Wojs (Baird) questioned the rationale behind more cautious sell-through guidance. Singh clarified the company is not seeing current weakness but is building flexibility into guidance to reflect macro uncertainty.
- Charles Perron-Piche (Goldman Sachs) asked about channel inventory levels and long-term growth confidence. Skelly reaffirmed conservative inventory management, while Singh pointed to new product success and strategic initiatives as reasons for confidence even in a flat market.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of adoption for newly launched TimberTech and Versatex products, (2) progress on regional recycling capacity and realization of planned cost savings, and (3) developments in the integration process with James Hardie, including updates on sales force alignment and synergy capture. Persistent macroeconomic uncertainty and inventory discipline will also be key markers of execution.
AZEK currently trades at $52.95, up from $49.62 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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