Advanced Drainage Systems, Inc. (NYSE: WMS) is a leading innovator in water management solutions, primarily focusing on the stormwater and onsite wastewater markets. The company manufactures a broad range of products including plastic pipes, fittings, and other related items utilized in construction, residential, and agricultural applications.

For the fiscal year ending March 31, 2025, Advanced Drainage Systems reported net sales of $2.9 billion, representing an increase of 1.0% compared to the previous year. The company’s performance was driven by a 3% increase in domestic construction market sales, while international sales decreased by 6.3%.

In terms of profit, net income for the year decreased by 11.8% to $452.6 million, leading to a diluted earnings per share decrease of 10.7%, reaching $5.76. Adjusted EBITDA saw a decline of 3.7% year-over-year, totalling $889.2 million, which indicates an adjusted EBITDA margin of 30.6%. This margin reflects a decrease from the previous year’s 32.1%.

In the fourth quarter of fiscal 2025, the company experienced a 5.8% decrease in net sales, amounting to $615.8 million, and a net income decline of 19.6%, resulting in $76.8 million in net profit. The diluted earnings per share in the fourth quarter were $0.99, compared to $1.21 in the same quarter of the prior year. Adjusted EBITDA for the fourth quarter fell by 7.6% to $176.7 million.

Free cash flow for the year decreased significantly by $165.6 million to $368.5 million, and cash provided by operating activities was recorded at $581.5 million, down from $717.9 million in the previous fiscal year. Capital expenditures rose to $212.9 million, an increase of 15% from the prior year.

Looking ahead, for fiscal 2026, the company has provided guidance indicating expected revenue in the range of $2.825 billion to $2.975 billion, with adjusted EBITDA forecasted between $850 million and $910 million. The adjusted EBITDA margin is anticipated to be stable at approximately 30.1% to 30.6%. Key assumptions for this guidance include expectations of low single-digit volume growth offset by low single-digit price declines.

The company’s strategic focus remains on expanding its higher-margin product offerings, particularly within its Infiltrator and Allied Products segments, which now collectively account for 44% of the overall revenue. Despite a challenging economic environment and reduced demand in some markets, ADS is deploying resources to foster growth in its innovative solutions and operational capabilities.

In terms of its financial position, the company closed the year with total liquidity of $1.1 billion and a net leverage ratio of 1.1x. Advanced Drainage Systems also announced a 13% increase in its annual dividend to $0.72 per share, underlining its commitment to returning value to shareholders while continuing to invest in growth opportunities.