Janus International Group, Inc. Q2 FY2025 earnings call

• Janus delivered results above expectations with resilient business model and diversified products navigating macroeconomic challenges.
• Market recovery in commercial sales channel and International segment, stable backlog and pipeline.
• Strengthened leadership team with Jason Williams as President of Janus Core.
• Invested in digital innovation, brand expansion, and structural manufacturing.
• Named 2025 Inside Self-Storage Best of Business winner in multiple categories; BETCO recognized in Best Development Consulting.
• Estimated total potential tariff expense impact for 2025 in low single-digit millions, with ongoing unmitigated annual impacts revised to $6M-$8M from $10M-$12M previously.
• Realized $2.7M in cost savings in Q2, on track to achieve $10M-$12M annual pretax savings by end of 2025.
• Repurchased 1.2 million shares for $10.1 million, with Board authorizing additional $75M share repurchase.

In the second quarter of 2025, Janus International Group reported revenue of $228.1 million, down 8.2% from the second quarter of 2024. The self-storage business saw a 14.8% decrease, with new construction down 15.2% and R3 down 14%. The International segment saw total revenues increase to $28.4 million, up 58% compared to the prior year, driven by demand normalization post-U.K. recession. The Commercial and Other segment increased by 6.7%, with 1.7% organic growth, boosted by TMC acquisition and growth in rolling steel doors, carports, and sheds. The Noke Smart Entry System had 409,000 installed units at quarter end, a 6.5% sequential and 26.6% year-over-year growth.

• Reaffirmed 2025 guidance for revenue in range of $860M-$890M and adjusted EBITDA in range of $175M-$195M.
• Back half of 2025 revenues expected to be relatively flat to first half, EBITDA margins to improve in final two quarters.
• New construction expected to remain soft for rest of year; commercial and International segments to continue recovering.
• Free cash flow conversion of adjusted net income expected to be above 2025 target range of 75%-100%.

• Tariffs: Potential expense impact from components sourced from tariff-impacted regions.
• Macroeconomic uncertainties: Including economic and interest rate environments affecting customer liquidity and capital deployment.

Q: Just within the mix of self-storage, surprised new was more resilient and R3 lighter. What's going on and expectations for second half mix?

A: Customers still prefer completing new construction projects now, though R3 pipeline and backlog are building. Expectations are based on current project timelines and customer preferences.

Q: Commercial revenue rebounded; color on drivers and participation gains. Update on Noke progress across channels?

A: Drivers include ASTA rolling steel, architectural efforts, carport/shed business, and TMC acquisition. On Noke, models and tests progress, with larger institutional customers showing interest, and Ion product's stability and price point aiding adoption.

Q: Thoughts on pricing in second half and margins in third/fourth quarter?

A: Pricing timing is improving, with commercial holding up better than self-storage. Margins improving due to pricing leverage, steel cost blending, and ongoing cost actions to reach full-year margin targets.

Q: Color on R3 replacement/renovation activity increase and Noke runway?

A: Replacement/renovation activity is a blend of consolidation activity and customers reinvesting in assets. Noke is seen as a key lever for customers to improve cost position through virtual management, with macro slowdown potentially accelerating adoption.