Executive Summary

Q1 FY25 revenue rose 67.3% YoY to $400.0M on the addition of Tyman; GAAP EPS was $(0.32) vs $0.19 prior-year, while Adjusted EPS was $0.19 (vs $0.25), with consolidated gross margin at 23.1% and Adjusted EBITDA of $38.5M (9.6% margin) .
Management reaffirmed FY25 guidance introduced at Feb 6 Investor Day: net sales ~$1.84–$1.86B and Adjusted EBITDA $270–$280M; they also guided Q2 revenue up 9–11% QoQ with 350–400 bps QoQ adjusted EBITDA margin expansion, framing seasonality and synergy capture as key drivers .
Tyman integration tracking to $30M run-rate synergies by end of year 2; margin cadence expected to improve as PPA inventory step-up amortization that pressured gross margin in Q4 and Q1 runs off, per call commentary .
Liquidity stood at $301.5M; total debt $764.3M (Net Debt/LTM Adj. EBITDA 3.6x). The company repaid ~$12M debt in Q1 (cumulative ~$65M since close) and repurchased ~150k shares for ~$3.7M (avg $24.66) .
Consensus (S&P Global) estimates for Q1 and prior quarters were not retrievable at time of analysis; estimate comparisons are therefore not provided (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well
- Consolidated margin expansion YoY despite soft legacy demand; Adjusted EBITDA roughly doubled YoY to $38.5M, driven by Tyman contribution and cost synergies .
- Integration momentum: management remains “confident” in delivering $30M synergy target, with re-segmentation to Hardware Solutions, Extruded Solutions and Custom Solutions to drive scale and best-practice sharing .
- Balance sheet flexibility preserved: liquidity $301.5M; covenant leverage 2.2x; continued debt paydown (~$65M since close) alongside buybacks, providing capital allocation optionality .
What Went Wrong
- Legacy volume softness: excluding Tyman, net sales declined 6.2% YoY, with North American Fenestration down 9.2% and Cabinets profit still negative on reduced operating leverage .
- Free cash flow seasonally negative at $(24.1)M, pressured by integration costs and working capital dynamics as Tyman’s make-to-stock model layers in .
- Gross margin still below historical levels in Q1 (23.1%) owing in part to acquisition accounting effects; management expects improvement through the year as PPA step-up runs off .

Financial Results

Quarterly performance vs prior quarters (oldest → newest):

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($M)	$280.3	$492.2	$400.0
GAAP Diluted EPS	$0.77	$(0.30)	$(0.32)
Adjusted Diluted EPS	$0.73	$0.61	$0.19
Gross Margin %	25.3%	23.8%	23.1%
Adjusted EBITDA ($M)	$42.0	$81.1	$38.5
Adjusted EBITDA Margin %	15.0%	16.5%	9.6%
Free Cash Flow ($M)	$40.1	$(8.2)	$(24.1)
Vs S&P Global Consensus	N/A (unavailable)	N/A (unavailable)	N/A (unavailable)

Year-over-year (Q1 2025 vs Q1 2024) key figures:

Metric	Q1 2024	Q1 2025
Net Sales ($M)	$239.2	$400.0
GAAP Diluted EPS	$0.19	$(0.32)
Adjusted Diluted EPS	$0.25	$0.19
Gross Margin %	21.5%	23.1%
Adjusted EBITDA ($M)	$19.3	$38.5

Segment breakdown (Q1 2024 → Q1 2025):

Segment	Net Sales ($M) Q1’24	Net Sales ($M) Q1’25	Adj. EBITDA ($M) Q1’24	Adj. EBITDA ($M) Q1’25	Adj. EBITDA Margin % Q1’24	Adj. EBITDA Margin % Q1’25
NA Fenestration	$148.0	$134.3	$13.717	$11.633	9.3%	8.7%
EU Fenestration	$49.4	$48.5	$9.989	$9.913	20.2%	20.5%
NA Cabinet Components	$43.1	$43.8	$(0.732)	$(0.873)	-1.7%	-2.0%
Tyman	N/A	$175.7	N/A	$18.978	N/A	10.8%
Unallocated Corp & Other	$(1.4)	$(2.2)	$(3.700)	$(1.109)	N/A	N/A

Balance sheet and cash flow KPIs (trend):

KPI	Q4 2024	Q1 2025
Total Debt ($M)	$776.9	$764.3
Net Debt ($M)	$679.2	$714.3
Net Debt / LTM Adj. EBITDA	3.7x	3.6x
Debt Covenant Leverage Ratio	2.3x	2.2x (2.1x alt calc)
Liquidity ($M)	$343.3	$301.5
Cash from Ops ($M)	$5.5	$(12.5)
Capex ($M)	$13.7	$11.6
Share Repurchases	N/A	~150k shares; ~$3.7M; $24.66 avg

Notes on non-GAAP: Adjusted metrics exclude items including PPA inventory step-up, transaction/advisory and reorg costs, restructuring/severance, intangible amortization, pension/FX items; see reconciliations in release .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY 2025	~$1.84–$1.86B (issued Feb 6, 2025 Investor Day)	~$1.84–$1.86B (reaffirmed Mar 10, 2025)	Maintained
Adjusted EBITDA	FY 2025	$270–$280M (issued Feb 6, 2025 Investor Day)	$270–$280M (reaffirmed Mar 10, 2025)	Maintained
Revenue cadence	Q2 2025 vs Q1 2025	N/A	Up ~9–11% QoQ	New intra-year color
Adj. EBITDA margin cadence	Q2 2025 vs Q1 2025	N/A	+350–400 bps QoQ	New intra-year color
Synergy target	Run-rate by end of year 2	$30M target	$30M target (on track)	Maintained
Dividend	Quarterly	$0.08 declared Dec 2024	$0.08 declared Feb 27, 2025 (payable Mar 31)	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior-2)	Q4 2024 (Prior-1)	Q1 2025 (Current)	Trend
Tyman integration & synergies	Acquisition closed Aug 1; integration underway; accretive in first full year	Integration ahead of schedule; margin expansion; debt repayment	Confidence in $30M synergies; identifying additional opportunities	Steady progress; increasing visibility
Seasonality & demand	Soft demand YoY; expect pent-up demand as rates ease	Expect softness until spring; improvement 2H on seasonality	Q2 revenue +9–11% QoQ; business highly seasonal	Seasonal uplift emphasized
Gross margin drivers	Lower YoY on volume/operating leverage	PPA step-up impacted Q4 GM; consolidated GM 23.8%	PPA step-up ran off in Q1; margins to rise through FY25	Improving as PPA impact fades
Tariffs & supply chain	Not highlighted	Not highlighted	Tariffs fluid; localized supply reduces exposure; pricing mechanisms mitigate	Risk managed; ongoing monitoring
Capital allocation	Strong FCF Q3; no Tyman yet	Repaid $53.75M in Q4	Preference for buybacks at current levels; continued debt paydown	More weighted to buybacks near-term
Resegmentation	Not highlighted	Investor Day preview (revamped structure)	Moving to Hardware, Extruded, Custom Solutions; reporting later this year	Structural shift underway

Management Commentary

Strategic focus: “Our primary objectives are to achieve or exceed the expected financial synergies from the [Tyman] transaction and to establish an organizational structure…to provide a scalable platform for future growth.”
Integration update: “We remain confident in our ability to deliver on the $30 million cost synergy target…results…were again lifted by the contribution from the Tyman acquisition and we achieved margin expansion.”
Outlook tone: “Despite the soft macro backdrop, we continue to expect an improvement in demand as we enter the spring selling season…[and] benefit from the unwinding of pent-up demand as consumer confidence improves.”
Capital allocation: “We will focus on paying down debt and repurchasing our stock in an opportunistic manner.”

Q&A Highlights

Margin cadence and PPA effects: Management attributed a significant step-up in gross margin later in FY25 to the PPA inventory step-up running off after Q1, supporting the path to full-year targets .
Demand drivers by segment: Winter weather disproportionately pressured window/door in North America; cabinets acted as a leading indicator and performed comparatively better on volume in Q1 .
Confidence in guidance: FY25 reaffirmation is based on seasonality plus synergy execution; management positioned their December stance as conservative versus peers .
Capital allocation tilt: Given valuation, buybacks could take priority over debt repayment during open windows, evaluated weekly; no 10b program in place .
Tariff sensitivity: Potential tariff impacts would be most direct in Hardware (aluminum), mitigated by index pricing/surcharges and localization .
Capacity/expansion: Jackson, GA facility enhances Southeast service, adds mixing/compounding capacity to support adjacent growth (e.g., flashing tapes, solar) .

Estimates Context

Attempts to retrieve S&P Global consensus for revenue and EPS for Q1 FY25 and prior quarters failed due to access limits; therefore, vs-consensus comparisons are not included (S&P Global data unavailable at time of analysis).
Given the reaffirmed FY25 guide and Q2 cadence, Street models may need to reflect: (a) sequential Q2 revenue +9–11% QoQ, (b) 350–400 bps QoQ expansion in adjusted EBITDA margin, and (c) higher 2H weight consistent with seasonality .

Key Takeaways for Investors

Reaffirmed FY25 guide ($1.84–$1.86B revenue; $270–$280M Adj. EBITDA) and explicit Q2 cadence (+9–11% revenue QoQ; +350–400 bps margin) provide near-term visibility despite macro/tariff noise .
Margin trajectory should improve through FY25 as PPA inventory step-up effects abate, with synergy capture supporting EBITDA conversion .
Integration execution remains the primary narrative: $30M run-rate synergies targeted by end of year 2, with resegmentation to enhance scale and best-practice sharing .
Balance sheet manageable: liquidity $301.5M; covenant leverage 2.2x; continued debt reduction alongside opportunistic buybacks (~$3.7M in Q1) .
Legacy demand remains soft near-term (NA Fenestration down 9.2% YoY), but seasonal Q2/Q3/Q4 uplift and potential pent-up demand underpin the back-half setup .
FCF negative in Q1 is typical seasonality exacerbated by integration/working capital; watch cash generation inflect in 2H per historical seasonality discussed by management .
Risk watchlist: tariff outcomes (hardware exposure), consumer confidence, and execution on resegmentation/reporting transition; mitigants include localized sourcing and pricing mechanisms .

Additional Detail: Selected Income Statement, Balance Sheet, and Reconciliations are included in the company’s Q1 FY25 8‑K/press release (non-GAAP definitions and reconciliations provided) .

Quanex Building Products CORP (NX)·Q1 2025 Earnings Summary