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GI

GIBRALTAR INDUSTRIES, INC. (ROCK)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid topline growth but a modest underperformance vs consensus: net sales of $310.9M (+12.2% YoY) and adjusted EPS of $1.14, with revenue and EPS slightly below S&P Global consensus; adjusted EBITDA was $51.4M . Estimates context below (S&P Global).
  • Strength in Residential metal roofing and Structures offset softness in centralized mail and an expected delay of a large CEA project in Agtech; backlog rose 50% to $257M as bookings remained strong .
  • 2025 guidance narrowed: net sales $1.15–$1.175B, GAAP EPS $3.67–$3.77, adjusted EPS $4.20–$4.30; adjusted operating margin 14.1–14.2%, adjusted EBITDA margin 17.1–17.2% .
  • Operating cash flow was a notable positive ($57M, +39% YoY) with free cash flow of $48.5M (15.6% of sales), reinforcing capital allocation flexibility amid ongoing Renewables divestiture efforts targeted for year-end .

What Went Well and What Went Wrong

What Went Well

  • Residential building accessories grew 2% in a roofing market down 5–10%, demonstrating participation gains and localized execution; metal roofing acquisitions tracking to plan .
  • Backlog acceleration: total backlog up 50% YoY in Q3 (Agtech backlog up 96%, organic +75%), with broad customer additions across CEA and commercial/institutional segments .
  • Cash generation: operating cash flow $57M (+39% YoY) and free cash flow $48.5M (15.6% of sales), supporting buyback optionality ($200M remaining) and M&A pipeline strength .

Management quote: “Based on our current outlook, we expect approximately 15% adjusted net sales and 10-12% adjusted EPS growth this year.” — Bill Bosway, Chairman & CEO .

What Went Wrong

  • Adjusted EPS and operating income slightly below prior year, driven by business and product mix in Residential and lower Agtech volumes due to the delayed CEA project .
  • Segment margin compression: Residential adjusted operating margin down 200 bps to 18.2%; Agtech adjusted margin down 440 bps to 5.7%, reflecting lower volumes and integration costs (Lane Supply) .
  • Infrastructure margin down 740 bps to 20.5% on supplier transition shifting revenue into Q4; backlog down 2% in the quarter (timing of project awards), expected to recover in Q4 .

Financial Results

Consolidated Performance vs Prior Quarters and Prior Year

MetricQ1 2025Q2 2025Q3 2025
Net Sales ($USD Millions)$290.0 $309.5 $310.9
Adjusted EPS ($)$0.95 $1.13 $1.14
Adjusted EBITDA ($USD Millions)$46.17 $55.06 $51.40
Operating Cash Flow ($USD Millions)$13.68 $43.55 $56.75
Free Cash Flow ($USD Millions)$2.25 $25.34 $48.53
YoY Net Sales Growth (%)-0.9% +13.1% +12.2%
YoY Adjusted EPS Growth (%)+18.8% +10.8% -0.9%

Notes: Q3 adjusted EBITDA margin 16.5%; free cash flow 15.6% of adjusted net sales .

Estimates Comparison (S&P Global)

MetricQ3 2025 EstimateQ3 2025 Actual
Revenue ($USD Millions)$317.5*$310.9
Adjusted EBITDA ($USD Millions)$56.7*$51.4
Adjusted EPS ($)$1.21*$1.14
Vs S&P Consensus—Revenue: MISS (-$6.6M); Adj EBITDA: MISS (-$5.3M); Adj EPS: MISS (-$0.07)

Values with asterisk retrieved from S&P Global.

Segment Breakdown

Segment MetricQ1 2025Q2 2025Q3 2025
Residential Net Sales ($M)$180.0 $230.3 $230.3
Residential Adjusted Op Margin (%)18.0% 19.5% 18.2%
Agtech Net Sales ($M)$45.0 $54.1 $57.6
Agtech Adjusted Op Margin (%)10.8% 5.6% 5.7%
Infrastructure Net Sales ($M)$21.3 $25.2 $23.1
Infrastructure Adjusted Op Margin (%)24.7% 28.1% 20.5%

KPIs and Backlog

KPIQ1 2025Q2 2025Q3 2025
Backlog ($USD Millions)$434, up 30% YoY $278, up 43% YoY $257, up 50% YoY
Agtech Backlog YoY+226% bookings; backlog up strongly +71% backlog; +33% organic Backlog +96% total; +75% organic
Free Cash Flow ($M)$2.25 $25.34 $48.53

Note: Q2 backlog figure of $278M referenced during the call .

Non‑GAAP Adjustments

Reconciliation Item (Q3 2025)Amount ($USD ‘000)
Restructuring Charges (PBT)$1,297
Acquisition Related Costs (PBT)($624)
Adjusted Net Income$33,954
Adjusted Diluted EPS$1.14

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($B)FY 2025$1.15–$1.20 (Q2 issue) $1.15–$1.175 Narrowed
GAAP EPS ($)FY 2025$3.67–$3.91 (Q2 issue) $3.67–$3.77 Narrowed/Lowered high end
Adjusted EPS ($)FY 2025$4.20–$4.45 (Q2 issue) $4.20–$4.30 Narrowed/Lowered high end
Adjusted Operating Margin (%)FY 202514.6–14.9 14.1–14.2 Lowered
Adjusted EBITDA Margin (%)FY 202517.5–17.7 17.1–17.2 Lowered
Free Cash Flow (% of Sales)FY 2025~10% ~10% Maintained

Context: Q1 guidance (pre-divestiture) was $1.40–$1.45B net sales; GAAP EPS $4.25–$4.50; adjusted EPS $4.80–$5.05 . Post Renewables classification (June 30), guidance was reset/lowered in Q2, then narrowed in Q3.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Residential market and participation gainsBuilding accessories up 2.3% in Q2 vs market down ~4–5%; localized expansion; metal roofing direct-to-contractor strategy . Q1 noted trims/flashings/ventilation up 3.5% and continued localization .Accessories up 2% while market down 5–10%; acquisitions on track; inventory rightsizing in wholesale/retail channels; margin pressure from mix/integration .Mixed: share gains continue; near-term margin headwinds from mix/integration.
Agtech backlog and project cadenceQ1: backlog +226% (Lane), major retrofit (Houwelings $90M) initiated; project delays from permitting . Q2: backlog +71% (+33% organic), three CEA starts pushed to 2H .Large CEA project delayed about six months (USDA loan timing) to December; backlog +96% total (+75% organic); broader customer base across CEA/commercial/institutional .Positive backlog momentum; cadence smoothing with more, smaller projects and Lane quick turns.
Infrastructure margins and supplier transitionQ1: margins up 230 bps; backlog +11%; delays pushed shipments to Q2 . Q2: margins +300 bps; backlog +3% .Q3: margin down 740 bps due to supplier transition shifting revenue into Q4; backlog down 2% (timing) .Temporary dip; management expects normal margins return in Q4 .
Tariffs and macro managementQ1: tariff playbook; modeled 20–30%; forecast material cost impact ~5%, mitigated . Q2: minimal tariff impact YTD; index-linked contract clauses help .Tariffs remain manageable; ongoing inventory rightsizing impacts Q3 demand/mix .Stable; playbook effective; macro normalization expected into Q4/Q1-26.
Renewables divestitureQ1: Renewables outlook reduced; discussion of industry uncertainty . Q2: sale process active; target close by year-end; efficient tax expected .“Later innings” of sale process; still targeted for year-end .Progressing toward completion.
Technology/product initiativesQ2: DS Brown launched “R Seal” for shallow fiber trench sealing; sold 350 miles across 13 states .Continued promotion; expected growth tailwind; supports infrastructure margin profile longer term .Emerging product-led growth vector.

Management Commentary

  • “Our building accessories business posted 2% growth in a market that was down 5% - 10%... On adjusted net sales growth of 13%, adjusted EPS came in slightly below prior year, impacted by both business and product mix.” — Bill Bosway .
  • “Bookings and backlog continue to accelerate... average backlog up 110% over prior year, with our organic backlog up 70%.” — Management remarks on Agtech .
  • “We expect infrastructure margins to return to normal levels in Q4... accelerate bookings... and build backlog as we exit the year.” — Guidance (segment-specific) .
  • “We remain focused on execution of our growth and M&A strategy and will continue to opportunistically deploy our share repurchase program.” — CEO concluding outlook .

Q&A Highlights

  • Margin outlook and guidance: Lower 2H margins driven by Agtech volume and residential product/business mix; adjusted op margin and EBITDA margin ranges lowered accordingly .
  • Agtech mix and margin trajectory: Strategy to broaden customer base and mix among CEA, commercial/institutional, and Lane’s short-duration projects to smooth cadence and lift margins toward ~15% operating income longer term .
  • Residential geography and channel: Weakness in large states (TX, FL, CA); expansion into underserved MSAs (Carolinas, Rocky Mountain, Salt Lake City, Boise) and strengthening wholesaler relationships to drive participation gains .
  • M&A pipeline: Focused squarely in building accessories and metal roofing “swim lanes”; robust opportunities and bolt-on strategy leveraging unified systems by 2026 .
  • Renewables sale timing: Process in “later innings” of a nine-inning analogy; confidence in year-end timeline remains intact .

Estimates Context

  • Q3 2025 came in below S&P Global consensus on revenue (-$6.6M), adjusted EBITDA (-$5.3M), and adjusted EPS (-$0.07), primarily due to the expected delay of a large CEA project and residential mix dynamics impacting margins . S&P Global values noted in the table above.

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Modest miss vs consensus with a transitory supplier transition in Infrastructure and a six-month CEA delay; watch for Q4 margin recovery in Infrastructure and Agtech cadence uplift as delayed projects start .
  • Execution narrative: Ongoing share gains in Residential accessories and metal roofing (direct-to-contractor) continue to offset macro/seasonality; integration investments weigh short term but enable faster bolt-ons in 2026 .
  • Backlog as catalyst: Broad-based Agtech backlog/booking strength and customer diversification should support revenue visibility into Q4 and early 2026; monitor USDA loan funding and project starts .
  • Capital deployment: Strong cash generation (Q3 FCF 15.6% of sales) supports opportunistic buybacks ($200M remaining) and targeted M&A in core swim lanes; balance sheet remains debt-free .
  • Guidance risk/reward: Narrowed FY ranges suggest disciplined execution amid mix headwinds; upside hinges on project timing normalization and residential demand stabilization as channel inventories rightsize .
  • Structural story: Portfolio simplification (Renewables divestiture) focuses resources on building products/structures where Gibraltar has durable competitive advantages; sale remains a year-end catalyst .