Intelligent lighting and space solutions provider Acuity Brands (NYSE: AYI) met Wall Streets revenue expectations in Q4 CY2025, with sales up 20.2% year on year to $1.14 billion. Its non-GAAP profit of $4.69 per share was 2.2% above analysts’ consensus estimates.
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Acuity Brands (AYI) Q4 CY2025 Highlights:
- Revenue: $1.14 billion vs analyst estimates of $1.14 billion (20.2% year-on-year growth, in line)
- Adjusted EPS: $4.69 vs analyst estimates of $4.59 (2.2% beat)
- Adjusted EBITDA: $211.2 million vs analyst estimates of $197.8 million (18.5% margin, 6.8% beat)
- Operating Margin: 14%, in line with the same quarter last year
- Free Cash Flow Margin: 10%, down from 11.9% in the same quarter last year
- Market Capitalization: $11.25 billion
"We delivered strong performance in our first quarter of fiscal 2026," stated Neil Ashe, Chairman, President and Chief Executive Officer of Acuity Inc.
Company Overview
One of the pioneers of smart lights, Acuity (NYSE: AYI) designs and manufactures light fixtures and building management systems used in various industries.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Acuity Brands’s sales grew at a mediocre 6.7% compounded annual growth rate over the last five years. This wasn’t a great result compared to the rest of the industrials sector, but there are still things to like about Acuity Brands.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Acuity Brands’s annualized revenue growth of 8% over the last two years is above its five-year trend, suggesting some bright spots. 
This quarter, Acuity Brands’s year-on-year revenue growth of 20.2% was excellent, and its $1.14 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 6.3% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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Operating Margin
Acuity Brands’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 13% over the last five years. This profitability was top-notch for an industrials business, showing it’s an well-run company with an efficient cost structure. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Analyzing the trend in its profitability, Acuity Brands’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q4, Acuity Brands generated an operating margin profit margin of 14%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Acuity Brands’s EPS grew at an astounding 18.1% compounded annual growth rate over the last five years, higher than its 6.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Acuity Brands’s earnings quality to better understand the drivers of its performance. A five-year view shows that Acuity Brands has repurchased its stock, shrinking its share count by 16.5%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. 
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Acuity Brands, its two-year annual EPS growth of 13.7% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q4, Acuity Brands reported adjusted EPS of $4.69, up from $3.97 in the same quarter last year. This print beat analysts’ estimates by 2.2%. Over the next 12 months, Wall Street expects Acuity Brands’s full-year EPS of $18.74 to grow 9.2%.
Key Takeaways from Acuity Brands’s Q4 Results
Revenue was just in line, although EPS managed to beat. Overall, we think this was a decent quarter, the market seemed to be hoping for more, and shares traded down 4.3% to $353.80 immediately following the results.
Is Acuity Brands an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
