Janus International Group - Q4 2025

Executive Summary

• Q4 2025 results were not yet reported as of November 20, 2025; management guided that Q4 revenue will be “largely aligned with the third quarter” and margins will be lower due to geographic/product mix, with FY25 revenue guidance narrowed to $870–$880M and Adjusted EBITDA lowered to $164–$170M (midpoint ~19.1% margin).
• Q3 2025 revenue declined 4.7% YoY to $219.3M, but Adjusted EBITDA rose 1.2% to $43.6M with a 19.9% margin; international strength (+32.9% YoY) offset North America softness and Commercial & Other declines (TMC project timing, LTL weakness).
• Q2 2025 revenue fell 8.2% YoY to $228.1M; Adjusted EBITDA was $49.0M (21.5% margin), with Commercial & Other up 6.7% (partial TMC contribution), while Self‑Storage was weak amid macro/interest rates.
• Strategic catalysts: continued Nokē adoption (installed units rose to 439k, +35.9% YoY), cost-savings at ~70% of $10–$12M run-rate, and ample liquidity/net leverage at ~2.3x supporting buybacks/M&A.
• Near-term stock reaction likely hinges on Q4 mix/margin print, clarity on TMC timing into 2026, and confirmation of FCF conversion above target range despite margin compression.

What Went Well and What Went Wrong

What Went Well

• International strength: International revenue rose to $28.3M in Q3 (+32.9% YoY), driven by new construction recovery; margins in international have improved as volumes return.
• Nokē adoption and product expansion: Installed units reached 439k (+35.9% YoY) in Q3; Nokē Ion has “been well received” with institutional interest; Betco expanded metal decking; redesigned Nokē web portal launched.
• Cost actions and balance sheet: ~70% of $10–$12M annual cost savings realized by Q3; liquidity $256.2M including $178.9M cash; net leverage ~2.3x; S&P credit upgraded to BB– stable.

Selected quotes:

• “We are narrowing the range for our full‑year 2025 revenue and updating our Adjusted EBITDA outlook…confident in solid fundamentals” – CEO.
• “We expect revenues…largely aligned with the third quarter…now anticipate EBITDA margins to come down…driven by geographic and product mix” – CFO.
• “Adoption of our Nokē Smart Entry system continues to progress” – CEO.

What Went Wrong

• Commercial & Other softness: Q3 Commercial & Other revenue fell 20.1%; ~70% of decline was TMC timing and LTL industry weakness; Q4 recovery timeline now partially pushed into 2026.
• R3 slower-than-expected: Q3 R3 growth (+0.7%) lagged internal hopes; institutional/REIT demand conversion delayed, though pipeline/backlog remain stable.
• Margin pressure into Q4: FY EBITDA margin outlook cut to ~19.1% midpoint; Q4 margins expected down from original guide on international mix and product mix.

Transcript

Speaker 3

Good morning, everyone. Welcome to the Janus International Group fourth quarter and full year 2025 earnings conference call. Currently, all participants are in the listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference today, you may press star then zero on your telephone. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Sara Macias, Senior Director, Investor Relations of Janus. Please go ahead, ma'am.

Speaker 7

Thank you, operator. Thank you all for joining our earnings conference call. I am joined today by our Chief Executive Officer, Ramey Jackson, and our Chief Financial Officer, Anselm Wong. We hope that you have seen our earnings release issued last night. We have also posted a presentation in support of this call, which can be found in the Investors section of our website at janusintl.com. Before we begin, I would like to remind you that today's call may include forward-looking statements. Any statements made describing our beliefs, plans, strategies, expectations, projections, and assumptions are forward-looking statements. The company's actual results may differ from those anticipated by such forward-looking statements for a variety of reasons, including, but not limited to tariffs, interest rates, and other macroeconomic factors, many of which are beyond our control.

Please see our recent filings with the Securities and Exchange Commission, which identify the principal risks and uncertainties that could affect our business, prospects, and future results. We assume no obligation to update publicly any forward-looking statements, and any forward-looking statement made by us during this call is based only on information currently available to us and speaks only as of the date when it is made. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS, and net leverage. Please see our release and filings for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measure. On today's call, Ramey will provide an overview of our business.

Ansem will continue with a discussion of our financial results and 2026 guidance before Ramey shares some closing thoughts, and we open up the call for your questions. At this point, I will turn the call over to Ramey.

Speaker 5

Thank you, Sara. Good morning, everyone. Thank you all for joining our call today. To begin, I'd like to express my appreciation for our team at Janus for their hard work and dedication. 2025 was a challenging year as our markets remained constrained due to macroeconomic concerns and sustained high interest rates. We focused on execution, operating safely, and serving our customers as we work to stabilize the business, delivering $884.2 million in revenue and $168.2 million in adjusted EBITDA for the year. Despite an unfavorable backdrop, we realized several key wins in 2025 as we worked to position the business for long-term success. On the self-storage side, Janus or Nokē products were present in 5 out of 6 facilities, earning Facility of the Year awards from Modern Storage Media.

Our BETCO business announced a comprehensive expansion of its metal decking product line and received a certification from the Steel Deck Institute, achieving an exceptional score and reinforcing our commitment to quality. We also unveiled a redesigned web portal for our Nokē Smart Entry platform. In Europe, we launched a new high security swing door. On the commercial side, our ASTA business rolled out its high-performance product offering and achieved Miami-Dade certifications, further strengthening its portfolio. From a financial standpoint, our strong liquidity and cash generation allowed us flexibility to be opportunistic with regard to our capital allocation priorities in 2025.

We completed a voluntary prepayment of $40 million on our first lien term loan in the first quarter of 2025 and repurchased 1.9 million shares for $16 million throughout the year under our share repurchase program, which had $80.5 million of remaining authorization at year-end. We were also pleased to receive an upgrade of our credit rating from S&P in October. While we anticipate market conditions will continue to be constrained, principally in new construction in North America in 2026, we will continue to execute and focus on what we can control. As a diversified solutions provider with a global network of manufacturing and installation capabilities, we are committed to executing our strategy of further penetrating the self-storage market, increasing our share in commercial market, driving adoption of access control technology, and pursuing strategic accretive acquisitions.

I'll now expand on each of these priorities. First, in the self-storage market, we have shared our strategy of increasing our content and facilities. Our acquisition of Kiwi II Construction announced in January exemplifies this approach by expanding and strengthening Janus' exterior solutions offering and design build capabilities. Kiwi II is a premier self-storage buildings provider, is well-respected within the industry for their high-quality service and engineering prowess. They have an established active base of institutional customers and a solid presence on the West Coast and in Florida. The Kiwi business is complementary to our design build business, BETCO, which has a stronger geographic presence on the East Coast and it primarily serves non-institutional customers. Kiwi also aligns well with our Janus Core business, which focuses on interior self-storage solutions, including doors and hallways. This integration will allow Kiwi to offer a full end-to-end solution for self-storage.

We're very pleased to welcome Kiwi to the Janus family. Our early integration efforts are progressing well. Another key driver of our self-storage market penetration is leveraging our differentiated R3 platform. We estimate that nearly 65% of the facilities in the U.S. are over 20 years old, supporting sustained renovation activity. Industry consolidation is further accelerating this trend as large operators invest to bring aging assets to modern standards. Janus is uniquely positioned to meet these needs as the category creator for self-storage restore, rebuild and replace services. Our international segment represents another important lever in advancing our self-storage penetration. Over the past several quarters, we have carefully refined our product offering and go-to-market strategy to better serve our customers, which has been a driver of our international revenue growth this past year.

We are committed to continuing the momentum we saw in 2025 by focusing on increasing scale in our Nokē product, as well as pursuing targeted geographic expansion into new countries that will support strategic growth moving forward. The second priority of our growth strategy is increasing our share in the market for commercial doors. The commercial door market is vast and as a smaller player in the space, we see plenty of opportunity to drive growth over time. As demand for commercial construction continues to grow, we are working to refine our offering and leveraging our manufacturing expertise to provide a robust suite of commercial door solutions. We are seeing positive results from our expanded distribution footprint as well as our multi-year efforts to secure product specifications.

We are pleased to share some of our rolling steel doors are now being specified in data centers, representing a meaningful step forward for Janus in a fast-growing segment. On the access control front, adoption of our Nokē Smart Entry system continues to progress. Our industry-leading smart security system improves efficiencies for operators by streamlining labor needs, reducing theft and increasing unit-level security. Nokē also offers operators high-value customer insights such as usage trends and other unit-level data. At the same time, the smart locking solution enhances the customer experience, allowing for a seamless access solution and features such as remote monitoring and digital key sharing that provide a competitive advantage for operators. As of year-end, we had 458,000 installed units, representing an increase of 25.5% year-over-year.

As I shared on our last earnings call, we have seen an increase in interest from large institutional customers for our Nokē products. We are encouraged by this momentum as we continue to enhance our offering and move towards scale and improve margin performance in our Nokē business this year. Finally, we will continue to pursue strategic acquisitions to build on our track record of identifying, executing and integrating acquisitions to support our growth. As we've stated, M&A is part of our DNA. We will continue to seek value-added opportunities that have a strategic fit within our organization in order to expand our product and solutions offerings. Consistent with the priorities I just outlined, we are initiating our 2026 guidance range.

We expect revenue in the range of $940 million-$980 million, which represents an 8.6% increase at the midpoint from 2025. Adjusted EBITDA is expected to be in the range of $165 million-$185 million, a 4% increase at the midpoint from 2025. As I conclude, I'd like to emphasize that our strategic priorities remain intact. Despite the near-term challenges, household utilization for self-storage continues to grow. With the sustained high occupancy rates in the industry, we believe demand will only increase when the housing market improves. While the market headwinds we are facing, particularly in new construction, may persist, we are committed to focusing on what we can control in the near term.

We are the industry leader in self-storage solutions with significant scale, financial discipline and attractive adjacencies for expansion. As we look ahead, we believe we will be well positioned in the markets we serve when macro conditions improve. With that, I'll turn the call over to Anselm for a further review of our quarterly financial results, along with more details on our initial 2026 guidance. Anselm?

Speaker 0

Thank you, Ramey, good morning, everyone. Ramey spoke to our full year results at a high level. I will focus my remarks on our financial performance in the fourth quarter, followed by a discussion of our initial 2026 guidance. For the fourth quarter, consolidated revenue of $226.3 million declined 1.9% as compared to the prior year quarter. In total, our self-storage business was down 0.4%. New construction decreased 8.1%. R3 is up 12.7% for the quarter. The decline in revenues for new construction was driven by weaker demand for development in North America from our non-institutional customers, partially offset by strength in our international segment. The increase in R3 revenue was driven by increases in door replacement and renovation activity.

In the fourth quarter, our international segment saw total revenues increase to $26 million, up $6 and a half million or 33.3% compared to the prior year, driven by growth in new construction and market share gains as well as positive foreign exchange rates. For the quarter, revenue in our commercial and other segment decreased by 5%. The decline was primarily driven by softness in demand for commercial sheet doors, partially offset by strength in rolling steel and TMC. On a consolidated basis, the impact to revenues for the quarter was roughly 90% price and 10% volume. Fourth quarter adjusted EBITDA of $37.2 million was up 7.5% compared to the fourth quarter of 2024.

This resulted in an adjusted EBITDA margin of 16.4% and an increase of approximately 140 basis points from the prior year period. The increase in margins year-over-year is primarily attributable to the prior year being negatively impacted by adjustments to our provision for credit losses and an additional warranty reserve, which was partially offset by volume declines and the impact of geographic segment and sales channel mix. We are seeing benefits from our previously announced cost reduction program, achieving the targeted $10 million annual pre-tax cost savings in 2025, and we continue to regularly evaluate opportunities to improve our efficiencies. To this end, in early 2026, we successfully completed an expansion to our facility in Surprise, Arizona.

With the additional capacity now available at our Arizona facility, we were able to optimize our manufacturing space by combining two of our facilities in Houston. This streamlining of our operational footprint will not affect our product offerings, quality standards, or customer service levels. For the fourth quarter, we produced adjusted net income of $15.6 million, down 15.2% compared to the prior year period and an adjusted EPS of $0.11. We generate cash from operating activities of $24.8 million and free cash flow of $19.2 million in the quarter. On a trailing 12-month basis, this represents a free cash flow conversion of adjusted net income of 137%. Capital expenditures in the quarter were $5.6 million.

We ended the quarter with $260.5 million in total liquidity, including $194.4 million of cash and equivalents on the balance sheet. Our total outstanding long-term debt at year-end was $551 million, and net leverage was 2.1 times. Following the acquisition of Kiwi II Construction, as stated in the press release, our net leverage is expected to remain within our target range of 2 to 3 times. These liquidity levels provide us optionality with regard to capital deployment, and we had $80.5 million remaining on our share repurchase authorization at year-end.

In February, we were also pleased to announce a repricing of our first lien term loan, reducing our interest rate by 50 basis points from SOFR plus 250 to SOFR plus 200, significantly lowering our cost of capital, enhancing our financial flexibility. Moving to our 2026 guidance. As Ramey mentioned, full year revenue is expected to be in the range of $940 million-$980 million. This includes approximately $90 million-$100 million in inorganic revenue from the Kiwi II Construction acquisition. Our guidance does not include any embedded assumptions of an improvement in market conditions. We expect North American organic self-storage revenue to be down mid-single digits compared to 2025, driven mostly by continued softness in new construction. In our commercial sales channel, we anticipate a return to growth in 2026, driven by our asset business.

On the international side, we expect high single-digit revenue growth. 2026 Adjusted EBIT is expected to be in the range of $165 million-$185 million. This reflects an adjusted EBITDA margin of 18.2% at the midpoint. Consolidated EBITDA margins will continue to be impacted by both geographic segment and sales channel mix. We expect that Kiwi II's EBITDA will be a drag in overall margins for 2026. Synergies from the acquisition are expected to be back-end loaded for the year. Cash flow remains robust. For 2026, we anticipate being around the higher end of the free cash flow conversion of adjusted income target range of 75%-100%. Please refer to the presentation we have posted for details on the key planning assumptions for 2026. Thank you for your time.

I will now turn the call over to Ramey for his closing remarks. Ramey?

Speaker 5

Thank you, Anson. Janus has a solid position in a great industry. We are the partner of choice for our customers through the full life cycle of their projects, from design and build-out to maintenance and facility upgrades. While we face a dynamic operating environment, we continue to focus on the factors we can control. Consistent with our growth strategy, we are optimistic about our recent acquisition of Kiwi II Construction, and we are confident in our plan to achieve our 2026 guidance of total revenue in the range of $940 million-$980 million and adjusted EBITDA in the range of $165 million-$185 million, reflecting growth of 8.6% and 4% at the midpoints, respectively. As I mentioned, household utilization for self-storage continues to grow.

This, coupled with sustained high occupancy rates in the industry, is a positive signal for increased future demand with a recovery in the housing market. Our strong balance sheet and cash flow foundation position us to further build upon our industry leadership position, expand into adjacent markets with attractive fundamentals, and support our future growth. Taken together, I remain confident in our strategy and in our ability to deliver long-term value for our stakeholders. In closing, I'd like to thank our team, customers, shareholders for your support. We appreciate your participation on today's call. Operator, we would now like to open up the lines for Q&A, please.

Speaker 3

Certainly, Mr. Jackson. Thank you, sir. Ladies and gentlemen, at this time, if you would like to ask a question, please press star one on your telephone. If you find your question has been addressed, you may remove yourself from the queue by pressing star two. Once again, that's star one for questions. We'll go first this morning to Dan Moore with CJS Securities.

Speaker 8

Good morning. This is Will in for Dan.

Speaker 5

Hey, good morning.

Speaker 0

Good morning.

Speaker 8

You've always described the core self-storage business as having 2 to 3 quarters of visibility. How does your visibility today compare to historic averages?

Speaker 0

Yeah. I think we still have similar visibility, from what we've seen, that 2-3 quarters based on the backlog that we have. It's been

Speaker 5

Similar in terms of visibility.

Speaker 0

Yeah, I think, you know, we reflect that in our guide, in terms of new construction. We're gonna continue to see pressure there, but certainly optimistic around R3 and some of the things that, you know, the initiatives that we're focused on, like Nokē, the R3 efforts, and just remaining super competitive and having that dominant strength in new construction and commitment to our customers. It's all reflected in the guide.

Speaker 5

Thank you. Just to follow up, what are the one or two key metrics your REIT customers are looking for that would give them confidence to start to invest and build out new capacity once again?

Speaker 0

Look, it's 100% interest rate driven. We've been very consistent in terms of the driver. The number one driver of self-storage is mobility around housing. That's on the sidelines today. When you look at how operators are performing, there's certainly some noise around pricing, but it's a very stable operating environment, lacking the largest driver, which is mobility around housing. Once people start moving around, you're gonna see a different operating environment.

Speaker 5

Thank you.

Speaker 3

Thank you. We'll go next now to Jeff Hammond of KeyBanc Capital Markets.

Speaker 1

Morning, everyone. This is David Terenzio on for Jeff.

Speaker 0

Hey, David.

Speaker 1

Maybe starting with margins, could you give us a bit more color on the degree of headwind from the higher international mix in 4Q and what you have assumed in the guide on the margin line from an organic perspective? Maybe any thoughts on how long you expect these mix headwinds to last would be helpful.

Speaker 0

Thanks for the question. I think if you saw what we printed for the quarter, you saw international continue to grow pretty strongly as it did for the full year. If you look at their EBITDA margins, obviously it's improved year-over-year, but it's still significantly down versus our North America. If you look at going into next year, you know, like Ramey said on his remarks is that we're still seeing softness in our new construction in our Janus Core Americas business, which is a meaningfully higher margin rate. You know, we can't predict when that turn is gonna be, but I think as long as we're gonna see some of that pressure on the new construction piece in Americas, we'll probably have some margin and mix headwinds from that.

Speaker 1

Just to follow up quickly there, is it fair to assume that the guide assumes that these mix headwinds persist through 2026?

Speaker 0

Correct. Yeah, definitely.

Speaker 1

Okay. Okay, great. On commercial, it seems like it weakened if you adjust for the TMC catch-up, and you called out some commercial sheet door decline. Could you give us some color on the softness here? I just wanna clarify on the guide, is it high single digits just for ASTA or what are we thinking for the whole business?

Speaker 0

Yeah. For commercial, the way we're saying is that if you include everything together, it's in that high single-digit range. Not, but not if you actually back out, you know, the TMC piece. I think it's just looking at Kiwi in there, looking at the other pieces to balance the number. I think if you look at it, the overall, if you look at the guide, we're probably mid-single digit for commercial for the full year.

Speaker 5

Just additional color. A lot of the softness in commercial is coming from commercial sheet. We're actually seeing growth in our ASTA business, which we highlighted, you know, and have been consistent in terms of the messaging around architectural specifications effort. You know, we've certainly secured some work around the data center space, which is, you know, an exciting space to be in, and we've worked really hard to get spec'd. We're excited about that and expect growth in the rolling steel business.

Speaker 1

Great. Thanks, guys.

Speaker 3

Thank you. We'll go next now to Reuben Garner of The Benchmark Company.

Speaker 6

Thanks. Good morning, guys.

Speaker 0

Morning, Reuben.

Speaker 6

I think that you're roughly implying low single-digit organic revenue declines, if we strip out an assumption for Kiwi. One, is that accurate? Two, can you break down the components of that price and volume? Then, you know, you mentioned commercial, but what about what your assumptions for new versus R3 on the self-storage side, as we sit today?

Speaker 0

Yeah. That's about right, Reuben, is that we're looking at organic decline in the core business. The biggest piece, as we described, was really in that new construction America piece. That piece is going to continue to be a drag in terms of what we're seeing in the environment today. That's what brings down the revenue year-over-year for the organic piece.

Speaker 6

In terms of price versus volume?

Speaker 0

Yeah. Price right now, if you look at what we described, is that we had more price in the second half of 2025. That'll roll into the first half of this year. I think if you think about a price, a similar type of price range impact in the first half, barring anything that happens with steel in the back half.

Speaker 6

Okay. Then, you've talked about the margin profile a little bit of Kiwi, but can you break out what gross margin looks like for that business? Then on the synergy front, what kind of synergies, or can you go into detail on the synergies? I assume that there's some top-line potential synergies at some point as well. Can you just refresh us on the opportunities there?

Speaker 0

Yeah. We haven't disclosed any of the details on the synergies, Reuben, but I think if you think about at least EBITDA margins, we've kinda at least given a range where it'd be in that low teens range to start with because of integration costs and getting that business integrated into Janus. I think longer term, we said that it has potential to get into the high teens as a business.

Speaker 8

Okay, thanks guys, and good luck.

Speaker 5

Let me just add to that, Reuben. You know, as a standalone, I think you're asking the question as a standalone, part of the acquisition strategy was, you know, Kiwi had never gone to market with the full solution, meaning door and hallway. Now they can offer their customers end-to-end, both buildings and interiors. As you know, the Janus Core business is higher margin. We expect to see some pickup in the Janus Core sales by going to market with Kiwi. We'll experience some higher margin stuff at Core with the acquisition.

Speaker 8

Great. Very helpful. Thanks, guys.

Speaker 3

Thank you. We go next now to Philip Ng of Jefferies.

Speaker 4

Hey, guys.

Speaker 5

Good morning.

Speaker 4

I guess, I mean, the outlook, you're not assuming much of an improvement here, which, you know, seems more than reasonable. Rami, you talked about, you know, what's gonna drive volumes, perhaps reaccelerating its housing turnover, right? Housing mobility. We could look at that from an existing home sales and certainly rates coming down, all good guys. Just kinda help us unpack, you know, what's the lag if we look at that turnover inflecting, how does that impact your business where it's R3 on new construction? The other piece you guys have teased out in the past on rates was really more, you know, for your non-institutional customers, maybe credit's been more challenged into less mortgage rates. It's more, I guess, shorter term rates and maybe their ability to kinda be able to pursue more projects.

Any color on that front if the credit markets have loosened up a little bit?

Speaker 5

Look, that's a great question. I don't know that I can answer a lot of that, but what I can say from a confidence perspective, when things start to turn and things feel better, you'll see increased activity and investment. As we sit today, the mom and pops are essentially on the sideline, and that's a big, you know, that's 70% of the market. Any momentum we can get with that segment will certainly have incremental value, you know. When you think about R3, obviously acquisitions matter, and I think we're hearing from the REITs that this should be a good year for acquisitions, which should bode well for R3. Can't predict the interest rate and what's gonna get people moving around. Have no earthly idea.

You guys probably know that better than me. We're just focused on being in the right position to when this thing turns around, to take advantage of it, and just sticking to our, you know, our corporate strategy and making sure that we're lean and we're focused on being able to optimize everything and take advantage of what the market has to offer.

Speaker 4

That's great color, Ramey. Your outlook on R3 sounds a little more upbeat. I may have missed it if you quantify what you're assuming for R3. Is that just mostly M&A that you're talking about big REIT guys doing more, you know, renovation work that's driving that?

Speaker 5

Yeah.

Speaker 4

You're seeing other avenues that gives you enthusiasm on that inflection in R3? Certainly, you've had some headwinds with the retail side of things that seems to have kinda bottomed out. Just give us a little more perspective on what's driving the inflection in R3.

Speaker 5

Yeah, you hit it. It has a lot to do with acquisition. Obviously, you know, some of the big names we all know, we kinda track that activity and that's been a big driver. You know, what we're finding with our Nokē product line is folks that are interested in adopting Nokē, they're taking advantage of that opportunity to disrupt the unit, disrupt the tenants, and doing full door replacement. That's kind of a newer use case that's driving the R3 kinda renovation door replacement. Keep in mind, the fact of the matter is 60% of the install base is over 25 years old.

There's still a meaningful replacement cycle that exists, and we just have to continue to put ourself in position to take advantage of that.

Speaker 4

Okay. Rami, since you brought up, Nokē.

Speaker 5

Yeah.

Speaker 4

You know, good milestone this past year, up quite a bit. I believe we're not far away from that break-even threshold of 500,000 units.

Speaker 5

You got it.

Speaker 4

I believe it swings to a much bigger kicker to your profitability.

Speaker 5

Yeah.

Speaker 4

What are you assuming this year, I guess, in terms of Nokē contribution and any big ones you wanna call out in terms of some of these bigger REITs that have perhaps adopted or committed to, you know, more Nokē units for this year?

Speaker 5

Yeah, I'll let Anselm talk about kind of the metrics. Look, we remain super optimistic with Nokē. Nokē is addressing a few industry issues right now. A lot of the customers are experiencing kind of increased operating costs. Our Nokē customers are actually watching those operating costs go down. There's an issue in the industry around theft and security. Our Nokē customers are addressing that and eliminating that element. It's really resonating and building out, you know, additional use cases. I'm not gonna mention names at this point in terms of the larger folks who are working with the solution, it continues to increase. You know, we are in a much better place in terms of enterprise-grade software. The team has done a phenomenal job on uptime, stability.

You know, we plan on rolling out additional products this year. We're excited and you hit the nail on the head. We're gonna hit 500,000 units at the, you know, this year in that scale. Anything past that we're gonna start it's gonna help improve the bottom line. Even more optimistic today than I was in the past.

Speaker 4

Okay.

Speaker 3

Thank you. We'll go next now to John Lovallo of UBS.

Speaker 2

Thanks, guys. This is Matt Johnson actually on for John. I appreciate the time.

Speaker 5

Yeah.

Speaker 2

I guess first off, I guess sales in the quarter were a bit stronger than we were expecting. I think they're above the top end of the outlook as well. While EBITDA was, you know, closer to the midpoint, margin was a bit lower than we were expecting, I guess. I think you mentioned it a little bit in the prepared remarks, were there any mix impacts to call out, particularly on the gross margin side? Kinda how should we think about the trajectory of gross margin as we move into 2026?

Speaker 5

Yeah. As we said earlier, I think it's just the trend of the mix of, you know, the North American business being down a bit more than the other BUs that we have. As you know, the margin rate is a lot different. These international, like I said earlier, continue to be strong in the quarter, and obviously, their margin rate is lower than the Americas. That's really that trend that we saw, and that's what we had indicated that's going into 2026 as in our guide.

Speaker 2

That makes sense. I guess if I could also just follow up there. I guess within the context of the 2026 outlook, how should we think about sales and EBITDA in the first quarter, and how impactful was adverse weather in January?

Speaker 5

Yeah. I think if you look at the trend, obviously the trend we've talked about continues into Q1, where new construction in the Americas is a bit softer. Obviously, there's a little weather impact that we've seen as well. I would expect, you know, a slower start for the year.

Speaker 2

Thanks, guys.

Speaker 5

Thank you.

Speaker 3

Thank you. Gentlemen, it appears we have no further questions today. Mr. Jackson, I'd like to turn the things back to you, sir, for any closing comments.

Speaker 5

Okay. Thank you all for joining us today. We appreciate your support of Janus and look forward to updating you on our progress. Have a great day.

Speaker 3

Thank you, Mr. Jackson. Thank you, Mr. Wong. Again, ladies and gentlemen, that will conclude the Janus International Group fourth quarter and full year 2025 earnings call. Again, thanks so much for joining us, everyone. We wish you all a great day. Goodbye.