NYSE$WMS

Advanced Drainage Systems Inc. · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

ADS reported first quarter fiscal year 2023 results with revenue growth driven by favorable pricing and strong volume.

ADS reported strong Q1 Fiscal 2023 results, with revenue increasing by 36.6% to $914 million and adjusted EBITDA increasing by 80% to $299 million. The company benefited from favorable pricing, strong volume in Allied Products and Infiltrator, and forward demand strength in the US and Canada.

  • Revenue increased by 36.6% due to favorable pricing and strong volume.
  • Adjusted EBITDA increased by 80% driven by favorable pricing and volume mix.
  • Demand remains strong throughout US and Canada.
  • Jet Polymer and Cultec integration activities are on plan.

Headline financials

Total Revenue

$914M

Previous: $669M+36.6%
EPS (adj)

$2.22

Previous: $0.87+155.2%
Adjusted EBITDA Margin

32.7%

No prior period
Capital Expenditures

-$36.2M

Previous: -$25.5M-41.7%
Free Cash Flow

$151M

Previous: $50.4M+199.3%
Net Income

$187M

Previous: $76M+146.3%
Operating Income

$252M

Previous: $109M+130.3%
Gross Profit

$352M

Previous: $201M+75.1%
Cash & Equivalents

$464M

Previous: $143M+224.6%
Total Assets

$3.23B

Previous: $2.47B+30.3%
Stock-Based Comp

$6.27M

Previous: $20.8M-69.9%

Revenue & EPS history

ADS · Revenue · Quarterly

$914M

Q1 2023+36.6%vs Q1 2022
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

ADS · $3.09B total across 4 segments · Q4 2026

  • Domestic Pipe
    $1.5B
  • Domestic Allied Products
    $750M
  • Wastewater
    $653M
  • International
    $188M

Forward guidance

The company provided updated fiscal year 2023 guidance with net sales expected to be in the range of $3.25 billion to $3.35 billion and adjusted EBITDA in the range of $900 million to $940 million.

Tailwinds

  • Net Sales (in Millions) $2,769 to $3,250 - $3,350 Up 17% to 21%
  • Adj. EBITDA (in Millions) $676 to $900 - $940 Up 33% to 39%
  • Adj. EBITDA Margin 24.4% to 27.7% - 28.1% +330 to +370 basis points
  • Net sales are expected to increase.
  • Adjusted EBITDA is expected to increase.

Headwinds

  • Raw material costs remain elevated.
  • Agriculture end market impacted by wet Spring.
  • Fluctuations in the price and availability of resins and other raw materials.
  • The risks related to the COVID-19 pandemic or other pandemics in the future.
  • Disruption or volatility in general business and economic conditions in the markets in which we operate.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+3.7%

Avg return

Earnings day

+4.4%

Avg return

5 days after

+4.3%

Avg return

30 days after

71%

34 / 48 earnings

Positive

+18.1%

Q4 2018

Best reaction

-26.7%

Q2 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2026+1.4%+1.0%+7.7%
Q3 2026+6.1%+9.2%-8.8%
Q2 2026+8.9%+9.7%+10.5%
Q1 2026+17.3%+20.1%+30.3%
Q4 2025-3.4%-2.7%-7.1%
Q3 2025+1.4%+9.5%-1.0%
Q2 2025-14.6%-16.3%-18.3%
Q4 2024-1.2%+1.7%-3.0%
Q3 2024+17.4%+14.4%+17.1%
Q2 2024+4.1%+3.5%+16.0%
Q1 2025+4.2%+7.2%+4.2%
Q4 2023+8.9%+8.3%+24.6%
Q3 2023-10.9%-8.4%-13.8%
Q2 2023-26.7%-25.0%-16.0%
Q1 2023+16.0%+16.0%+10.8%
Q4 2022+5.7%+7.6%-17.6%
Q3 2022+5.7%+1.9%+5.2%
Q2 2022+10.6%+18.4%+11.9%
Q1 2022-5.2%-4.2%-4.6%
Q4 2021+5.9%+8.8%-3.3%
Q3 2021+16.5%+15.0%+19.4%
Q2 2021-5.1%-7.8%+11.5%
Q1 2021+11.2%+11.5%+11.2%
Q4 2020+7.1%+6.1%+17.6%
Q3 2020+6.6%+7.6%+4.2%
Q2 2020+0.0%+1.4%+1.6%
Q1 2020+1.8%+1.7%-4.7%
Q4 2019+9.2%+6.5%+13.7%
Q3 2019-5.9%-3.7%-6.2%
Q2 2019-3.7%-8.4%-11.0%
Q1 2019+7.8%+10.8%+14.0%
Q4 2018+18.1%+15.0%+11.6%
Q3 2018+11.9%+21.7%+21.5%
Q2 2018+10.1%+11.1%+21.4%
Q1 2018+0.3%+13.1%-0.8%
Q4 2017-4.4%-8.3%-7.4%
Q3 2017+1.2%-2.5%-9.8%
Q2 2017+5.1%+1.1%+7.5%
Q1 2017-6.0%-2.5%-18.4%
Q2 2016+9.5%+7.9%+11.1%
Q4 2016+9.5%+7.9%+11.1%
Q1 2016+0.4%-1.6%+11.2%
Q3 2016+3.8%+5.6%+10.7%
Q4 2015+9.4%
Q3 2014-1.5%
Q3 2015-0.0%
Q2 2015+10.8%
Q1 2015+3.2%
Q4 2014
Q2 2014
Q1 2014
Q4 2013
Q3 2013
Q2 2013

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