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GI

GIBRALTAR INDUSTRIES, INC. (ROCK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 continuing operations: Net sales $309.5M (+13.1% y/y) and adjusted EPS $1.13 (+10.8% y/y); adjusted EPS modestly beat the $1.12 consensus*, while revenue was materially below the $377.1M consensus* .
  • Management recast FY25 guidance to continuing operations: net sales $1.15–$1.20B, adjusted EPS $4.20–$4.45, adjusted operating margin 14.6–14.9%, adjusted EBITDA margin 17.5–17.7%, and FCF ≈10% of sales .
  • Strategic portfolio shift: Renewables reclassified as discontinued operations; sale process “active” with a goal to close by year-end, sharpening focus on Residential, Agtech, and Infrastructure .
  • Mix highlights: Residential outperformed weak end markets via building accessories share gains and contributions from metal roofing acquisitions; Agtech grew on Lane Supply but had CEA project delays; Infrastructure margins expanded 300 bps on execution and mix .

What Went Well and What Went Wrong

  • What Went Well
    • Adjusted net sales +14% and adjusted EPS +11%; generated $44M operating cash flow and increased project-based backlog 43% y/y (“to $278M”) .
    • Residential: building accessories +2.3% organically despite roofing market down ~4–5%; metal roofing acquisitions “on track” .
    • Infrastructure: operating margin +300 bps y/y on execution, supply chain management, and mix; backlog +3% .
    • Management: “We executed well in the second quarter with adjusted net sales up 14% and adjusted EPS up 11%…” (Bill Bosway) .
  • What Went Wrong
    • Revenue missed consensus materially: $309.5M vs $377.1M*; EBITDA of ~$55.1M vs ~$56.4M* consensus .
    • Agtech: delays in starts for three larger CEA projects pressured margins (GAAP op loss on integration costs; adjusted op margin 5.6% vs 6.6% y/y) .
    • Residential margin contraction y/y on mix (mail & package softness); adjusted segment margin 19.5% vs 20.4% y/y .

Financial Results

MetricQ2 2024Q1 2025Q2 2025 ActualQ2 2025 Consensus
Revenue ($M)$273.6 $290.0 $309.5 $377.1*
GAAP Diluted EPS ($)$1.01 $0.69 $0.99
Adjusted Diluted EPS ($)$1.02 $0.95 $1.13 $1.12*
Adjusted Operating Margin (%)15.0% 12.3% 14.5%
Adjusted EBITDA ($M)$49.0 $46.2 $55.1 $56.4*
Cash from Operations ($M)$47.1 $13.7 $43.5
Free Cash Flow ($M)$43.1 $2.3 $25.3
  • EPS beat: Adjusted EPS $1.13 vs $1.12 consensus*; Revenue miss: $309.5M vs $377.1M*. Adjusted EBITDA slightly below consensus* .
  • Estimates marked with * are Values retrieved from S&P Global.

Segment performance (Adjusted)

SegmentMetricQ2 2024Q1 2025Q2 2025
ResidentialAdjusted Net Sales ($M)$211.5 $180.0 $230.3
Adjusted Operating Margin (%)20.4% 18.0% 19.5%
AgtechAdjusted Net Sales ($M)$34.5 $45.0 $54.1
Adjusted Operating Margin (%)6.6% 10.8% 5.6%
InfrastructureAdjusted Net Sales ($M)$24.8 $21.3 $25.2
Adjusted Operating Margin (%)25.1% 24.7% 28.1%

Selected KPIs

KPIQ2 2024Q1 2025Q2 2025
Project-based backlog (Agtech+Infrastructure)$278M; +43% y/y
Agtech backlog growth+226% bookings y/y (Q1) +71% y/y; +33% organic
Infrastructure backlog growth+11% y/y (Q1) +3% y/y
Cash & RevolverCash $25M; Revolver $395M (Q1) Cash $43M; Revolver $395M; debt-free (Q2)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2025$1.40–$1.45B (total company) $1.15–$1.20B (continuing ops) Recast to continuing ops (lower absolute)
GAAP EPSFY 2025$4.25–$4.50 (total company) $3.67–$3.91 Recast to continuing ops (lower)
Adjusted EPSFY 2025$4.80–$5.05 (total company) $4.20–$4.45 Recast to continuing ops (lower)
Adjusted Operating MarginFY 202513.9–14.2% (total) 14.6–14.9% Raised on a like-for-like basis
Adjusted EBITDA MarginFY 202516.7–17.0% (total) 17.5–17.7% Raised on a like-for-like basis
Free Cash Flow (% sales)FY 2025≈10% 10% Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Portfolio focus / RenewablesRenewables pressured; ops improvements; bookings poised to recover Bookings +33% y/y; cautious H1/H2 cadence Renewables reclassified as discontinued; sale process active; aim to close by YE Decisive exit; capital reallocation
Residential end-market & share gainsSoft market; focus on local expansions and new products Participation gains; adding metal roofing locations Building accessories +2.3% in market down 4–5%; metal roofing on plan Outgrowing market via share gains
Tariffs / supply chainPlaybook from 2021–22; planning for tariffs Tariff impact ~5% material cost; mitigation in place Minimal impact YTD; managing with contracts/indexing Well-managed; limited headwind
Agtech project timingBacklog down in Q4; large projects to ramp in 2025 Organic starts pushed; bookings +226%; Lane added cadence 3 CEA projects delayed to H2; backlog +71%; USDA-funded retrofit set to start in Sep H2-weighted ramp
Infrastructure funding/marginsRobust quoting; margin expansion Backlog +11%; margin +230 bps Margin +300 bps; backlog +3%; solid demand Sustained strength
M&A & capital allocationAcquired Lane Supply; active pipeline Two metal roofing deals; $0.15 EPS accretion; new $200M buyback Further local expansions (Gideon) and active M&A pipeline; $200M buyback capacity remaining Continued tuck-ins/direct-to-contractor buildout

Management Commentary

  • “We executed well in the second quarter with adjusted net sales up 14% and adjusted EPS up 11%, and we generated $44 million of operating cash flow…” — Bill Bosway, CEO .
  • “Backlog increased 43%… Based on our first half results… we expect to deliver growth, solid margins, and strong cash flow in 2025 from continuing operations.” — Bill Bosway .
  • “The sale process is active… our plan is to try to close [Renewables] before the end of the year.” — Bill Bosway .
  • “At June 30, we had cash on hand of $43M and $395M available on our revolver… we remain debt free.” — Joe Lovechio, CFO .

Q&A Highlights

  • Residential organic cadence: Residential was “down less than 1% organically,” with growth driven by metal roofing; building accessories +2.3%, mail/package −7% .
  • Renewables divestiture: Process viewed as tax efficient; limited stranded costs expected; transition services to manage through separation .
  • Tariffs: Limited impact so far; robust tracking and contract indexing mitigate; environment far easier than 2021–22 .
  • Agtech CEA timing: 90-acre retrofit funded by USDA loan expected to kick off around Sep 1; plus two Pomos projects signed post-Q2 and slated to start in Oct .
  • Seasonality: Expect normal residential seasonality; Agtech skew to Q4 due to project shifts in 2025 .

Estimates Context

  • Q2 2025 vs Consensus: Adjusted EPS $1.13 vs $1.12* (beat); Revenue $309.5M vs $377.1M* (miss); Adjusted EBITDA $55.1M vs $56.4M* (slight miss) .
  • Forward setup: Management guided higher margins (adjusted operating 14.6–14.9%, adjusted EBITDA 17.5–17.7%) on the continuing-ops perimeter, supported by backlog and portfolio focus despite macro/tariff noise .
  • Estimates marked with * are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mixed print: EPS beat driven by execution and M&A synergy, but a large top-line miss vs consensus; margin quality and cash generation remained solid .
  • Portfolio catalyst: Renewables exit by year-end could simplify the story, lift structural margins, and re-rate on a building-products/structures multiple .
  • Share gains in a down market: Residential building accessories outgrew end-market declines; metal roofing direct-to-contractor strategy scaling via tuck-ins .
  • H2 skew: Agtech backlog, USDA-funded retrofit, and project starts set up a stronger back half; Infrastructure steady with margin expansion .
  • Balance sheet optionality: $395M of revolver availability and no debt underpin continued M&A and buybacks ($200M authorization remaining) .
  • Guidance reset improves margin profile: Despite recast lower absolute sales/EPS, continuing-ops margins guided higher, supporting earnings quality .
  • Watch list: Execution on Agtech project timing, Renewables sale timing/terms, and continued Residential share gains in mail/package softness .