Executive Summary

Q4 2025 delivered a clean beat on revenue and EPS versus Wall Street consensus, with revenue $662.2M vs $631.5M and adjusted EPS $1.54 vs $1.515; adjusted EBITDA was in line to slight beat depending on definition, supported by 41.7% gross margin and stable segment profitability . Values retrieved from S&P Global for consensus and EBITDA estimates.
HBP remained the profit engine: Q4 HBP revenue +3% YoY to $420.3M, segment adjusted EBITDA $129.3M (≈30.8% margin), offsetting CPP weakness (-4% YoY revenue to $241.9M; adjusted EBITDA $24.4M, ≈10.1% margin) .
FY2026 guidance introduced: revenue ~$2.5B, adjusted EBITDA $580–$600M (excl. $58M unallocated), HBP margin >30%, CPP ~10%, interest expense $93M, normalized tax rate 28%, capex $60M; free cash flow expected to exceed net income .
Capital allocation remains a catalyst: dividend raised 22% to $0.22 (57th consecutive), $174M returned to shareholders in 2025, leverage reduced to 2.4x, $298M buyback authorization remaining; management reiterated confidence and a three-year $1B FCF target trajectory .

What Went Well and What Went Wrong

What Went Well

HBP resilience and innovation: “HBP continues its strong all-around performance... recognized as an innovation leader... VerdiStack Avante... Partner of the Year Award from Home Depot” .
Profitability discipline: Normalized gross margin rose 60bps YoY to 41.7% in Q4; segment EBITDA margin totaled 23.2% in Q4, consistent YoY .
Strong cash generation and deleveraging: FY2025 free cash flow of $323M; net debt/EBITDA cut to 2.4x; buybacks continued with $298M authorization remaining .

What Went Wrong

CPP top-line pressure: Q4 CPP revenue -4% YoY on -8% volume, reflecting weak U.S./UK consumer and tariff-disrupted ordering patterns; Hunter fan volume down; FX -1% .
EPS down on GAAP due to prior Q3 impairments and higher tax: Q4 GAAP diluted EPS $0.95 vs $1.29 YoY; FY2025 net income $51.1M vs $209.9M due to CPP goodwill/intangible impairments recorded in Q3 .
SG&A ratio higher YoY: Q4 adjusted SG&A 23.4% of revenue vs 22.6% YoY; CPP demand softness continues into 2026 with management expecting a year similar to 2025 .

Financial Results

Headline Results and Consensus Comparison

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD) Actual	$611.7M	$613.6M	$662.2M
Revenue Consensus Mean ($USD)	$618.2M	$650.0M	$631.5M
Diluted EPS (GAAP)	$1.21	$(2.65)	$0.95
Adjusted EPS	$1.23	$1.50	$1.54
Primary EPS Consensus Mean	1.093	1.498	1.515
Adjusted EBITDA ($USD)	$118.5M	$134.7M	$137.9M
EBITDA Consensus Mean ($USD)	$112.7M	$137.6M	$136.0M

Values retrieved from S&P Global for consensus metrics.

Margins and Profitability

Metric	Q2 2025	Q3 2025	Q4 2025
Gross Margin % (reported)	41.2%	43.2%	41.7%
Adjusted EBITDA Margin %	19.4%*	21.8%*	20.8%*

Values with asterisk retrieved/calculated from S&P Global and company data; Adjusted EBITDA margins calculated from adjusted EBITDA and revenue . Values retrieved from S&P Global.

Segment Breakdown (Q4 2025)

Segment	Revenue ($USD)	Adjusted EBITDA ($USD)	Key Drivers
Home & Building Products (HBP)	$420.3M	$129.3M	+3% YoY revenue on favorable price/mix; commercial volume up, residential down; EBITDA flat YoY due to higher material/labor/admin costs
Consumer & Professional Products (CPP)	$241.9M	$24.4M	-4% YoY revenue on -8% volume; tariff-disrupted ordering; Hunter fan demand down; Australia/Canada offset; FX -1%

Additional KPIs and Cash/Capital

KPI	Q4 2025 / FY2025 Value
Free Cash Flow FY2025	$323.0M
Net Debt	$1.325B (gross debt $1.424B; cash $99.0M)
Leverage (Net Debt/EBITDA per covenant)	2.4x
Buybacks FY2025	1.9M shares; $134.7M; avg $70.99; $298M remaining authorization
Dividend	Increased to $0.22; payable Dec 16, record Nov 28 (57th consecutive)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD)	FY2026	N/A	~$2.5B	New
Adjusted EBITDA ($USD)	FY2026	N/A	$580–$600M (excl. $58M unallocated)	New
HBP EBITDA Margin	FY2026	N/A	>30%	New
CPP EBITDA Margin	FY2026	N/A	≈10%	New
Interest Expense	FY2026	N/A	$93M	New
Normalized Tax Rate	FY2026	N/A	28%	New
Capex	FY2026	N/A	$60M	New
Free Cash Flow	FY2026	N/A	> Net Income	New
Dividend	Q4 2025	$0.18 (Q3 2025)	$0.22	Raised 22%
FY2025 Revenue	FY2025	$2.6B (Q2)	$2.5B (Q3 update)	Lowered $100M due to CPP
FY2025 Segment EBITDA	FY2025	$575–$600M (Q2)	$575–$600M (reaffirmed)	Maintained
FY2025 HBP Margin	FY2025	>30% (Q2)	>31% (Q3 update)	Raised
FY2025 CPP Margin	FY2025	>9% (Q2)	~8% (Q3 update)	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025)	Trend
Tariffs & Sourcing	~1/3 of CPP revenue exposed; mitigation via supplier negotiations, inventory, pricing; diversifying lawn & garden and fans supply chain	Tariffs disrupted ordering (Hunter); CPP margin guide cut to ~8%; diversification underway; steel relatively stable	Current tariff policy embedded in FY2026 guide; alternative suppliers outside China established; ~85% of business unaffected by tariffs	Mitigation actions progressing; demand still weak
HBP Pricing/Mix & Margins	Price hikes realized; seasonality normalizing; margin >30% maintained	HBP +3% price/mix; margin >31% for FY2025	Q4 HBP +3% price index; margin >30% expected FY2026; quarterly mix drove minor sequential margin changes	Stable to improving
Consumer Demand	North America/UK weak; Australia strong; CPP margin improving	Continued weak POS; weather headwinds; CPP margins help from asset-light	CPP demand weak; customers not reloading near-term; cautious spring assumptions	Weak but stabilizing with normalization
Regional Trends	Australia strong (Pope); U.S./UK weak	Australia strong; Canada steady; U.S. tools benefiting from supply chain; Hunter fans weak	Similar pattern; normalized weather assumed for spring	Mixed
Capital Allocation	Buybacks and dividends; leverage stable; reiterated FCF > NI	$145M returned YTD; leverage 2.5x; compelling value	$174M returned FY2025; leverage 2.4x; dividend raised; $298M buyback capacity	Consistent shareholder returns
Seasonality	Q2 trough; Q4/Q1 strongest	Normal seasonality; Q4 expected stronger	FY2026 weighted slightly to H2 (+1–2% H1 decrease)	Normal

Management Commentary

“HBP continues its strong all-around performance... and by our largest customer for superior service while generating solid financial results.”
“CPP continues to realize the benefits of their successful transition to an asset-light globally sourced operating model... while realizing the benefits of improving profit margin.”
“We expect Griffon fiscal year 2026 revenue to be consistent with 2025 at $2.5 billion and adjusted EBITDA in a range of $580 million-$600 million... HBP margin... in excess of 30%, and CPP margin... approximately 10%.”
“Last year, we said we expected to generate over $1 billion of free cash flow during the next three years... During 2025, we generated $323 million of free cash flow, putting us on track.”

Q&A Highlights

HBP margins: sequential quarterly margin mix-driven, not a structural headwind; expected >30% sustained; slight H1 dip then H2 pickup consistent with seasonality .
CPP mitigation and margin bridge: leveraging global supply chain, pricing, supplier negotiations; targeting ~100bps margin improvement YoY in 2026; long-term 15% margin target when consumer recovers; 85% of business unaffected by tariffs .
Sourcing diversification: alternative suppliers outside China established; ability to pivot sourcing for lawn & garden and fans by end of calendar year; Hunter fans impacted by demand/tariffs .
Demand mix: high-end residential garage doors resilient; weakness at low-end; CPP customers cautious on load-ins; normalized weather assumption for spring .
Capital returns: raised dividend and continued buybacks while deleveraging; management views combined approach as non-conflicting “trifecta” .

Estimates Context

Q4 2025: Revenue $662.2M vs consensus $631.5M (beat); adjusted EPS $1.54 vs consensus 1.515 (beat); adjusted EBITDA $137.9M vs EBITDA consensus $136.0M (inline/slight beat depending on definition) . Values retrieved from S&P Global.
Prior quarters: Q3 revenue $613.6M vs $650.0M (miss); adjusted EPS $1.50 vs 1.498 (inline); Q2 revenue $611.7M vs $618.2M (slight miss); adjusted EPS $1.23 vs 1.093 (beat) . Values retrieved from S&P Global.
Implications: Street may need to raise HBP margin durability assumptions (>30% sustained), moderate CPP margin trajectory (~10% FY2026), and reflect FY2026 EBITDA range ($580–$600M) and tax/interest parameters in models .

Key Takeaways for Investors

HBP is structurally delivering >30% EBITDA margins, supported by price/mix, innovation (VerdiStack), and diversified channels; this underpins the FY2026 guide and supports valuation resilience .
CPP margins continue to improve despite demand softness; management sees ~10% in FY2026 and longer-term 15% target as consumer normalizes—watch tariff outcomes and spring POS .
Strong cash generation and disciplined capital allocation (higher dividend, buybacks, deleveraging) remain core to the equity story; leverage now 2.4x with $298M buyback capacity .
FY2026 guide provides visibility on interest ($93M), tax (28%), and capex ($60M) for model calibration; expect slight H1 softness and H2 pickup consistent with seasonality .
Near-term stock catalysts: dividend increase, Q4 revenue/EPS beat, recognition from Home Depot; medium-term catalysts include tariff clarity and consumer recovery aiding CPP .
Risks: sustained weak consumer demand in U.S./UK, tariff uncertainty affecting ordering patterns (esp. Hunter fans), and cost inflation pressures in HBP (material/labor/admin) .
Monitor execution on sourcing diversification for CPP and continued HBP pricing discipline; high-end residential resilience appears intact while low-end remains soft .

GRIFFON CORP (GFF)·Q4 2025 Earnings Summary