AZEK Company Reports 8.1% Revenue Growth to $452.2 Million in Q2 FY 2025

The AZEK Company Inc. reported a notable increase in financial performance for the second quarter of fiscal year 2025, with net sales reaching $452.2 million, an 8.1% increase from $418.4 million in the same period last year. The growth was primarily driven by higher sales volume in the Residential segment, which saw an 8.6% increase, while the Commercial segment experienced a decline of 4.3%. Gross profit also rose to $167.7 million, up 6.8% from $157.1 million, although the gross profit margin slightly decreased to 37.1% from 37.5% due to increased freight costs and lower plant utilization.

In terms of profitability, net income for the quarter was $54.3 million, a 9.1% increase compared to $49.8 million in the prior year. This growth was supported by a decrease in interest expenses, which fell by 15.3% to $7.4 million, attributed to a lower principal balance and average interest rates. However, the company’s income tax expense increased by 16% to $17.8 million, driven by lower tax benefits related to stock-based compensation and higher taxable income.

Strategically, AZEK has been active in restructuring its business, including the divestiture of its Vycom business in November 2023, which allowed the company to focus on its core operations and provided approximately $131.8 million in net proceeds. Additionally, on March 23, 2025, AZEK announced a proposed merger with James Hardie Industries plc, which is expected to close in the second half of 2025, subject to regulatory approvals and shareholder consent. The merger agreement stipulates that shareholders will receive $26.45 in cash and shares of James Hardie, with AZEK's current credit facilities anticipated to be paid off upon completion.

Operationally, AZEK's total assets as of March 31, 2025, were reported at $1.5 billion, with cash and cash equivalents amounting to $146.7 million. The company’s employee headcount remained stable, and it continues to invest in product development, with research and development expenses totaling $4.0 million for the quarter. The company also reported an increase in accrued rebates, which rose to $101.4 million, reflecting its commitment to customer engagement and retention.

Looking ahead, AZEK maintains a positive outlook, expecting continued growth driven by strong consumer demand for its Residential products and strategic initiatives aimed at enhancing operational efficiency. The company anticipates that the merger with James Hardie will create significant synergies and strengthen its market position, while ongoing investments in product innovation are expected to further drive sales growth in the coming quarters.