Metal coating and infrastructure solutions provider AZZ (NYSE:AZZ) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 5.5% year on year to $425.7 million. The company’s full-year revenue guidance of $1.66 billion at the midpoint came in 1.4% above analysts’ estimates. Its non-GAAP profit of $1.52 per share was 2.5% above analysts’ consensus estimates.
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AZZ (AZZ) Q4 CY2025 Highlights:
- Revenue: $425.7 million vs analyst estimates of $418.2 million (5.5% year-on-year growth, 1.8% beat)
- Adjusted EPS: $1.52 vs analyst estimates of $1.48 (2.5% beat)
- Adjusted EBITDA: $91.17 million vs analyst estimates of $90.37 million (21.4% margin, 0.9% beat)
- The company dropped its revenue guidance for the full year to $1.66 billion at the midpoint from $1.68 billion, a 0.7% decrease
- Management slightly raised its full-year Adjusted EPS guidance to $6.05 at the midpoint
- EBITDA guidance for the full year is $370 million at the midpoint, above analyst estimates of $365.1 million
- Operating Margin: 16.3%, up from 14.9% in the same quarter last year
- Market Capitalization: $3.49 billion
StockStory’s Take
AZZ’s fourth quarter saw a positive market response, as the company delivered results above Wall Street’s revenue and profit expectations. Management attributed the strong performance to double-digit growth in the Metal Coatings segment, which benefited from heightened demand across infrastructure, solar, and transmission projects. CEO Tom Ferguson highlighted that “higher volumes and strong demand from infrastructure projects” were key contributors, while Precoat Metals experienced mixed results due to softer construction and transportation markets. The company also saw margin improvement driven by operational efficiencies and a favorable mix of large-scale projects.
Looking forward, AZZ’s updated guidance reflects optimism around continued infrastructure spending, expansion in data center and renewable energy projects, and a full year of production at its new Washington, Missouri plant. Management pointed to secular trends such as the shift from plastics to aluminum in packaging, and the growth in metal roofing adoption, as drivers of future demand. CFO Jason Crawford noted, “the Metal Coatings segment has momentum and opportunities to have a really good finish to the year,” with expectations that weather-related disruptions will be less severe than the prior year.
Key Insights from Management’s Remarks
Management identified Metal Coatings’ strength, operational improvements, and evolving end-market demand as the primary drivers of recent results, while competitive pricing and strategic investments shaped the outlook.
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Metal Coatings momentum: The Metal Coatings segment delivered robust growth, fueled by higher volumes linked to infrastructure modernization, energy transition, and large-scale data center construction. Management noted these projects tend to be more price competitive but generate higher throughput, supporting overall sales.
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Precoat Metals mixed results: While Precoat Metals improved sequentially, it faced year-over-year declines due to ongoing softness in construction, HVAC, and transportation end markets. However, food and beverage container demand hit new highs, reflecting continued share gains and the plastics-to-aluminum shift.
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Operational efficiency gains: The company’s proprietary ERP and digital production systems enhanced margin performance through better yields, zinc utilization, and throughput, with limited incremental capital. These technology investments are expected to support sustainable returns and improve production efficiency.
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Washington, Missouri plant ramp-up: The new facility’s ramp-up provided incremental volume and positioned AZZ to capture accelerating demand for aluminum containers. Management emphasized this plant’s timing as well-suited to market trends and anticipated it will be a major contributor in the coming year.
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M&A pipeline and capital allocation: Management highlighted an active pipeline of bolt-on acquisition targets, particularly in Metal Coatings. The focus remains on disciplined integration and raising margin profiles, while debt reduction and annual dividend reviews support capital return priorities.
Drivers of Future Performance
AZZ’s outlook is anchored by infrastructure demand, secular shifts in packaging and roofing, and margin discipline, tempered by construction market uncertainty.
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Infrastructure and data center demand: Management expects continued strength from infrastructure investment, data center construction, and renewable energy projects. These sectors require specialized coatings and galvanized materials, supporting both Metal Coatings and Precoat Metals segments.
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Packaging and roofing trends: The ongoing transition from plastics to aluminum in food and beverage containers, along with growing adoption of metal roofing in residential markets, is anticipated to drive incremental volume. The Washington, Missouri facility is positioned to capitalize on these shifts as its production ramps fully.
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Margin and operational focus: Margin discipline remains a priority, with management aiming for further efficiency gains through technology investments and optimized project mix. However, they cautioned that construction demand remains subdued outside of data centers and energy, and price competition for large projects could exert some pressure on margins if market conditions shift.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of volume growth and margin expansion in Metal Coatings as infrastructure and data center projects progress, (2) the full ramp and customer onboarding at the Washington, Missouri Precoat Metals facility, and (3) progress toward strategic bolt-on acquisitions in core business lines. We will also track how quickly secular shifts in packaging and roofing translate into sustainable revenue gains.
AZZ currently trades at $117.14, up from $109.83 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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