SEC Form 10-Q filed by Advanced Drainage Systems Inc.

2/5/26 4:11:20 PM ET

Containers/Packaging

Consumer Discretionary

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wms-20251231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36557

ADVANCED DRAINAGE SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Delaware			51-0105665
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

4024 Green Stripe Lane, Hilliard, Ohio 43026

(Address of Principal Executive Offices, Including Zip Code)

(800) 733-7473

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	WMS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of January 29, 2026, the registrant had 77,895,585 shares of common stock outstanding, which excludes 209,197 shares of unvested restricted common stock. The shares of common stock trade on the New York Stock Exchange under the ticker symbol “WMS.”

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Page

Condensed Consolidated Balance Sheets as of December 31, 2025 and March 31, 2025

Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2025 and 2024

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2025 and 2024

Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2025 and 2024

Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity for the three and nine months ended December 31, 2025 and 2024

Notes to the Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

- ii -

Forward-Looking Statements

This Form 10-Q includes forward-looking statements. Some of the forward-looking statements can be identified by the use of terms such as “believes,” “expects,” “may,” “will,” “would,” “should,” “could,” “seeks,” “predict,” “potential,” “target,” “outlook,” “continue,” “intends,” “plans,” “projects,” “estimates,” “anticipates” or other comparable terms or the negative of those terms or similar expressions. These forward-looking statements include all matters that are not related to present facts or current conditions or that are not historical facts. They appear in a number of places throughout this Form 10-Q and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our consolidated results of operations, financial condition, liquidity, prospects, growth strategies, and the industries in which we operate and include, without limitation, statements relating to our future performance.

Forward-looking statements are subject to known and unknown risks and uncertainties, many of which are beyond our control. We caution you that forward-looking statements are not guarantees of future performance and that our actual consolidated results of operations, financial condition, liquidity and industry development may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. In addition, even if our actual consolidated results of operations, financial condition, liquidity and industry development are consistent with the forward-looking statements contained in this Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors could cause actual results to differ materially from those contained in or implied by the forward-looking statements, including those reflected in forward-looking statements relating to our operations and business, the risks and uncertainties discussed in this Form 10-Q (including under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), and those described from time to time in our other filings with the SEC. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include:

•fluctuations in the price and availability of resins and other raw materials, new tariff and international trade policies and our ability to pass any increased costs of raw materials and tariffs on to our customers;

•disruption or volatility in general business, political and economic conditions in the markets in which we operate;

•cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending;

•the risks of increasing competition in our existing and future markets;

•uncertainties surrounding the integration and realization of anticipated benefits of acquisitions or doing so within the intended timeframe, including our ability to successfully integrate National Diversified Sales (“NDS”) into our business;

•risks that the acquisition of NDS may involve unexpected costs, liabilities, risks that the cost savings and synergies from the acquisition of NDS may not be fully realized;

•the effect of any claims, litigation, investigations or proceedings, including those described under “Part II - Item 1. Legal Proceedings” of this Form 10-Q;

•the effect of weather or seasonality;

•the loss of any of our significant customers;

•the risks of doing business internationally;

•the risks of conducting a portion of our operations through joint ventures;

•our ability to expand into new geographic or product markets;

•the risk associated with manufacturing processes;

•the effects of global climate change and any related regulatory responses;

•our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems;

•our ability to assess and monitor the effects of artificial intelligence, machine learning, robotics and blockchain or other new approaches to data mining on our business and operations;

•our ability to manage our supply purchasing and customer credit policies;

•our ability to control labor costs and to attract, train and retain highly qualified employees and key personnel;

•our ability to protect our intellectual property rights;

•changes in laws and regulations, including environmental laws and regulations;

•our ability to appropriately address any environmental, social or governance concerns that may arise from our activities;

•the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and

•other risks and uncertainties, including those listed under “Part I - Item 1A. Risk Factors” in the Fiscal 2025 Form 10-K.

All forward-looking statements are made only as of the date of this report and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.

- iii -


	December 31, 2025		March 31, 2025
ASSETS
Current assets:
Cash	$	1,008,190	$	463,319
Receivables (less allowance for doubtful accounts of $7,954 and $7,684, respectively)	237,594		333,221
Inventories	431,245		488,269
Other current assets	28,065		39,974
Total current assets	1,705,094		1,324,783
Property, plant and equipment, net	1,153,550		1,051,040
Other assets:
Goodwill	725,200		720,223
Intangible assets, net	410,286		448,060
Other assets	150,181		146,254
Total assets	$	4,144,311	$	3,690,360
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of debt obligations	$	6,458	$	9,934
Current maturities of finance lease obligations	36,664		33,143
Accounts payable	168,884		218,024
Other accrued liabilities	193,865		137,295
Accrued income taxes	7,506		—
Total current liabilities	413,377		398,396
Long-term debt obligations (less unamortized debt issuance costs of $6,415 and $7,715, respectively)	1,275,701		1,251,589
Long-term finance lease obligations	126,847		131,000
Deferred tax liabilities	216,786		190,416
Other liabilities	82,583		83,171
Total liabilities	2,115,294		2,054,572
Commitments and contingencies (see Note 10)
Mezzanine equity:
Redeemable common stock: $0.01 par value; 4,816 and 5,702 shares outstanding, respectively	78,252		92,652
Total mezzanine equity	78,252		92,652
Stockholders’ equity:
Common stock; $0.01 par value: 1,000,000 shares authorized; 85,004 and 83,750 shares issued, respectively; 73,060 and 71,864 shares outstanding, respectively	11,707		11,694
Paid-in capital	1,329,164		1,277,694
Common stock in treasury, at cost	(1,226,454)		(1,219,408)
Accumulated other comprehensive loss	(30,197)		(37,178)
Retained earnings	1,844,101		1,492,634
Total ADS stockholders’ equity	1,928,321		1,525,436
Noncontrolling interest in subsidiaries	22,444		17,700
Total stockholders’ equity	1,950,765		1,543,136
Total liabilities, mezzanine equity and stockholders’ equity	$	4,144,311	$	3,690,360


	Three Months Ended December 31,				Nine Months Ended December 31,
	2025		2024		2025		2024
Net sales	$	693,354	$	690,538	$	2,373,615	$	2,288,484
Cost of goods sold	434,202		448,944		1,443,893		1,420,495
Gross profit	259,152		241,594		929,722		867,989
Operating expenses:
Selling, general and administrative	108,742		100,778		331,927		288,962
Loss (gain) on disposal of assets and costs from exit and disposal activities	87		(477)		(8,815)		432
Intangible amortization	13,500		14,429		40,746		38,140
Income from operations	136,823		126,864		565,864		540,455
Other expense:
Interest expense	22,579		23,094		68,724		69,074
Interest income and other, net	(8,499)		(4,792)		(23,216)		(18,864)
Income before income taxes	122,743		108,562		520,356		490,245
Income tax expense	30,557		27,091		129,630		117,897
Equity in net income of unconsolidated affiliates	(1,851)		(818)		(3,902)		(3,437)
Net income	94,037		82,289		394,628		375,785
Less: net income attributable to noncontrolling interest	411		1,058		1,063		2,770
Net income attributable to ADS	$	93,626	$	81,231	$	393,565	$	373,015
Weighted average common shares outstanding:
Basic	77,815		77,540		77,736		77,541
Diluted	78,447		78,115		78,336		78,196
Net income per share:
Basic	$	1.20	$	1.05	$	5.06	$	4.81
Diluted	$	1.19	$	1.04	$	5.02	$	4.77


	Common Stock			Paid -In Capital		Common Stock in Treasury			Accumulated Other Compre-hensive Loss		Retained Earnings		Total ADS Stockholders’ Equity		Non- controlling Interest in Subsidiaries		Total Stock- holders’ Equity		Redeemable Common Stock			Total Mezzanine Equity
	Shares	Amount				Shares	Amount												Shares	Amount
Balance at October 1, 2024	83,359	$	11,690	$	1,255,794	11,896	$	(1,219,438)	$	(30,689)	$	1,359,100	$	1,376,457	$	17,578	$	1,394,035	6,045	$	98,231	$	98,231
Net income	—	—		—		—	—		—		81,231		81,231		1,058		82,289		—	—		—
Other comprehensive loss	—	—		—		—	—		(7,689)		—		(7,689)		(532)		(8,221)		—	—		—
Common stock dividends ($0.16 per share)	—	—		—		—	—		—		(12,440)		(12,440)		—		(12,440)		—	—		—
Share repurchases	—	—		—		—	104		—		—		104		—		104		—	—		—
KSOP redeemable common stock conversion	184	2		2,979		—	—		—		—		2,981		—		2,981		(184)	(2,981)		(2,981)
Exercise of common stock options	4	1		232		—	—		—		—		233		—		233		—	—		—
Restricted stock awards	1	—		—		—	(70)		—		—		(70)		—		(70)		—	—		—
Stock-based compensation expense	—	—		7,798		—	—		—		—		7,798		—		7,798		—	—		—
ESPP Share Issuance	25	—		2,428		—	—		—		—		2,428		—		2,428		—	—		—
Other	—	—		(1)		—	—		—		—		(1)		—		(1)		—	—		—
Balance at December 31, 2024	83,573	$	11,693	$	1,269,230	11,896	$	(1,219,404)	$	(38,378)	$	1,427,891	$	1,451,032	$	18,104	$	1,469,136	5,861	$	95,250	$	95,250
Balance at April 1, 2024	82,283	$	11,679	$	1,219,834	11,415	$	(1,140,578)	$	(29,830)	$	1,092,208	$	1,153,313	$	18,802	$	1,172,115	6,682	$	108,584	$	108,584
Net income	—	—		—		—	—		—		373,015		373,015		2,770		375,785		—	—		—
Other comprehensive loss	—	—		—		—	—		(8,548)		—		(8,548)		(3,468)		(12,016)		—	—		—
Common stock dividends ($0.48 per share)	—	—		—		—	—		—		(37,332)		(37,332)		—		(37,332)		—	—		—
Share repurchases	—	—		—		420	(68,179)		—		—		(68,179)		—		(68,179)		—	—		—
KSOP redeemable common stock conversion	821	8		13,326		—	—		—		—		13,334		—		13,334		(821)	(13,334)		(13,334)
Exercise of common stock options	227	3		8,924		—	—		—		—		8,927		—		8,927		—	—		—
Restricted stock awards	99	1		—		27	(4,710)		—		—		(4,709)		—		(4,709)		—	—		—
Performance-based restricted stock units	93	1		—		34	(5,937)		—		—		(5,936)		—		(5,936)		—	—		—
Stock-based compensation expense	—	—		21,758		—	—		—		—		21,758		—		21,758		—	—		—
ESPP Share Issuance	50	1		5,391		—	—		—		—		5,392		—		5,392		—	—		—
Other	—	—		(3)		—	—		—		—		(3)		—		(3)		—	—		—
Balance at December 31, 2024	83,573	$	11,693	$	1,269,230	11,896	$	(1,219,404)	$	(38,378)	$	1,427,891	$	1,451,032	$	18,104	$	1,469,136	5,861	$	95,250	$	95,250


	Three Months Ended December 31,				Nine Months Ended December 31,
(Amounts in thousands)	2025		2024		2025		2024
Loss (gain) on disposal of assets and costs from exit and disposal activities:
Accelerated depreciation	$	—	$	—	$	1,764	$	—
Severance	—		—		1,854		—
Impairment of right-of-use assets	21		—		2,141		—
Other exit and disposal costs	69		—		1,875		—
Selling, general and administrative expenses:
Realignment expenses	1,616		—		10,038		—
Total 2026 Restructuring Plan activities	$	1,706	—		$	17,672	—


(In thousands)	2025
Accrual balance at April 1	$	—
Costs incurred	17,672
Non-cash charges	(3,905)
Expenses paid	(13,343)
Accrual balance at end of period	$	424


(Amounts in thousands)	Amount		Valuation Adjustments		Final Amount
Accounts receivable	$	12,117	$	—	$	12,117
Inventory	15,651		—		15,651
Other current assets	219		—		219
Property, plant and equipment	7,305		—		7,305
Goodwill	103,676		555		104,231
Intangible assets	148,000		—		148,000
Other assets	9,041		—		9,041
Accounts payable	(3,618)		—		(3,618)
Accrued expenses	(15,823)		—		(15,823)
Deferred tax liabilities	(34,531)		(1,572)		(36,103)
Other liabilities	(4,727)		—		(4,727)
Total fair value of consideration transferred	$	237,310	$	(1,017)	$	236,293


(Amounts in thousands)	Initial Amount		Valuation Adjustments		Final Amount
Accounts receivable	$	3,101	$	—	$	3,101
Inventory	3,027		—		3,027
Property, plant and equipment	6,986		—		6,986
Goodwill	4,964		(1,029)		3,935
Intangible assets	2,970		—		2,970
Other assets	75				75
Accounts payable	(1,227)		—		(1,227)
Accrued expenses	(285)		236		(49)
Other liabilities	(35)		—		(35)
Total fair value of consideration transferred	$	19,576	$	(793)	$	18,783


(Amounts in thousands)	Preliminary fair value		Preliminary Useful Lives
Customer relationships	$	2,600	10 years
Tradename	370		5 years
Total identifiable intangible assets	$	2,970


	Three Months Ended December 31,				Nine Months Ended December 31,
(In thousands, except per share data)	2025		2024		2025		2024
NET INCOME PER SHARE—BASIC:
Net income available to common stockholders – Basic	$	93,626	$	81,231	$	393,565	$	373,015
Weighted average number of common shares outstanding – Basic	77,815		77,540		77,736		77,541
Net income per common share – Basic	$	1.20	$	1.05	$	5.06	$	4.81
NET INCOME PER SHARE—DILUTED:
Net income available to common stockholders – Diluted	$	93,626	$	81,231	$	393,565	$	373,015
Weighted average number of common shares outstanding – Basic	77,815		77,540		77,736		77,541
Assumed restricted stock	70		54		48		67
Assumed exercise of stock options	433		462		424		529
Assumed performance-based restricted stock units	129		59		128		59
Weighted average number of common shares outstanding – Diluted	78,447		78,115		78,336		78,196
Net income per common share – Diluted	$	1.19	$	1.04	$	5.02	$	4.77
Potentially dilutive securities excluded as anti-dilutive	20		10		42		22


			Nine Months Ended December 31, 2025
Common stock price			$119.30
Expected stock price volatility			46.7%
Risk-free interest rate			4.2%
Weighted-average expected option life (years)			6
Dividend yield			0.60%


	Three Months Ended December 31,				Nine Months Ended December 31,
(Amounts in thousands)	2025		2024		2025		2024
International
International - Pipe	$	35,453	$	36,909	$	111,702	$	125,281
International - Allied Products & Other	15,030		16,372		48,467		49,664
Total International	$	50,483	$	53,281	$	160,169	$	174,945


(In thousands)	December 31, 2025		March 31, 2025
Contract asset - product returns	$	948	$	1,381
Refund liability	2,982		4,032


	December 31, 2025				March 31, 2025
(In thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Senior Notes due 2027	$	350,119	$	350,000	$	344,036	$	350,000
Senior Notes due 2030	511,835		500,000		500,845		500,000
Equipment Financing	3,251		3,374		6,714		5,988
Total fair value	$	865,205	$	853,374	$	851,595	$	855,988


	Three Months Ended
	December 31, 2025						December 31, 2024
(In thousands)	Net Sales		Intersegment Net Sales		Net Sales from External Customers		Net Sales		Intersegment Net Sales		Net Sales from External Customers
Pipe	$	339,175	$	(12,462)	$	326,713	$	352,236	$	(12,607)	$	339,629
Infiltrator	167,666		(14,785)		152,881		160,076		(10,063)		150,013
International	50,483		(1,392)		49,091		53,281		(2,918)		50,363
Total Reportable Segments	557,324		(28,639)		528,685		565,593		(25,588)		540,005
Allied Products & Other	168,050		(3,381)		164,669		154,295		(3,762)		150,533
Intersegment Eliminations	(32,020)		32,020		—		(29,350)		29,350		—
Total Consolidated	$	693,354	$	—	$	693,354	$	690,538	$	—	$	690,538

	Nine Months Ended
	December 31, 2025						December 31, 2024
(In thousands)	Net Sales		Intersegment Net Sales		Net Sales from External Customers		Net Sales		Intersegment Net Sales		Net Sales from External Customers
Pipe	$	1,194,801	$	(39,501)	$	1,155,300	$	1,214,367	$	(41,972)	$	1,172,395
Infiltrator	558,996		(48,046)		510,950		481,739		(40,826)		440,913
International	160,169		(3,930)		156,239		174,945		(10,324)		164,621
Total Reportable Segments	1,913,966		(91,477)		1,822,489		1,871,051		(93,122)		1,777,929
Allied Products & Other	562,071		(10,945)		551,126		522,939		(12,384)		510,555
Intersegment Eliminations	(102,422)		102,422		—		(105,506)		105,506		—
Total Consolidated	$	2,373,615	$	—	$	2,373,615	$	2,288,484	$	—	$	2,288,484


	Three Months Ended December 31, 2025
(Amounts in thousands)	Net Sales		Cost of Goods Sold		Depreciation, Amortization and Other (a)		Adjusted Gross Profit
Pipe	$	339,175	$	268,329	$	(26,254)	$	97,100
Infiltrator	167,666		84,381		(6,493)		89,778
International	50,483		40,685		(1,831)		11,629
Total Reportable Segments	557,324		393,395		(34,578)		198,507
Allied Products & Other	168,050		71,908		(2,377)		98,519
Intersegment Eliminations	(32,020)		(31,101)		—		(919)
Total Consolidated	$	693,354	$	434,202	$	(36,955)	$	296,107


	Three Months Ended December 31, 2024
(Amounts in thousands)	Net Sales		Cost of Goods Sold		Depreciation, Amortization and Other (a)		Adjusted Gross Profit
Pipe	$	352,236	$	284,581	$	(21,565)	$	89,220
Infiltrator	160,076		85,105		(8,842)		83,813
International	53,281		42,815		(1,605)		12,071
Total Reportable Segments	565,593		412,501		(32,012)		185,104
Allied Products & Other	154,295		67,637		(2,337)		88,995
Intersegment Eliminations	(29,350)		(31,194)		—		1,844
Total Consolidated	$	690,538	$	448,944	$	(34,349)	$	275,943


	Nine Months Ended December 31, 2024
(Amounts in thousands)	Net Sales		Cost of Goods Sold		Depreciation, Amortization and Other (a)		Adjusted Gross Profit
Pipe	$	1,214,367	$	934,654	$	(63,079)	$	342,792
Infiltrator	481,739		234,452		(21,427)		268,714
International	174,945		130,311		(4,545)		49,179
Total Reportable Segments	1,871,051		1,299,417		(89,051)		660,685
Allied Products & Other	522,939		226,818		(5,842)		301,963
Intersegment Eliminations	(105,506)		(105,740)		—		234
Total Consolidated	$	2,288,484	$	1,420,495	$	(94,893)	$	962,882


Consolidated Statements of Operations data:	For the Three Months Ended December 31,
(In thousands)	2025				2024
Net sales	$	693,354	100.0	%	$	690,538	100.0	%
Cost of goods sold	434,202		62.6		448,944		65.0
Gross profit	259,152		37.4		241,594		35.0
Selling, general and administrative	108,742		15.7		100,778		14.6
Loss (gain) on disposal of assets and costs from exit and disposal activities	87		—		(477)		(0.1)
Intangible amortization	13,500		1.9		14,429		2.1
Income from operations	136,823		19.7		126,864		18.4
Interest expense	22,579		3.3		23,094		3.3
Interest income and other, net	(8,499)		(1.2)		(4,792)		(0.7)
Income before income taxes	122,743		17.7		108,562		15.7
Income tax expense	30,557		4.4		27,091		3.9
Equity in net income of unconsolidated affiliates	(1,851)		(0.3)		(818)		(0.1)
Net income	94,037		13.6		82,289		11.9
Less: net income attributable to noncontrolling interest	411		0.1		1,058		0.2
Net income attributable to ADS	$	93,626	13.5	%	$	81,231	11.8	%


Consolidated Statements of Operations data:	For the Nine Months Ended December 31,
(In thousands)	2025				2024
Net sales	$	2,373,615	100.0	%	$	2,288,484	100.0	%
Cost of goods sold	1,443,893		60.8		1,420,495		62.1
Gross profit	929,722		39.2		867,989		37.9
Selling, general and administrative	331,927		14.0		288,962		12.6
Loss (gain) on disposal of assets and costs from exit and disposal activities	(8,815)		(0.4)		432		—
Intangible amortization	40,746		1.7		38,140		1.7
Income from operations	565,864		23.8		540,455		23.6
Interest expense	68,724		2.9		69,074		3.0
Interest income and other, net	(23,216)		(1.0)		(18,864)		(0.8)
Income before income taxes	520,356		21.9		490,245		21.4
Income tax expense	129,630		5.5		117,897		5.2
Equity in net income of unconsolidated affiliates	(3,902)		(0.2)		(3,437)		(0.2)
Net income	394,628		16.6		375,785		16.4
Less: net income attributable to noncontrolling interest	1,063		—		2,770		0.1
Net income attributable to ADS	$	393,565	16.6	%	$	373,015	16.3	%


(Amounts in thousands)	December 31, 2025
Total debt (debt and finance lease obligations)	$	1,445,670
Cash	1,008,190
Net debt (total debt less cash)	437,480
Leverage Ratio	0.5


(Amounts in thousands)	December 31, 2025
Revolver capacity	$	600,000
Less: outstanding borrowings	—
Less: letters of credit	(10,133)
Revolver available liquidity	$	589,867


Exhibit Number						Exhibit Description

2.1						Master Share Purchase Agreement between NORMA Group SE and Advanced Drainage Systems, Inc. (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on September 23, 2025).
10.1 *						Third Amendment to Credit Agreement, by and among the Advanced Drainage Systems, Inc., the banks and other financial institutions or entities parties thereto, constituting the Required Lenders under the Credit Agreement and all the Revolving Lenders under the Credit Agreement, the Issuing Lenders party thereto, Barclays Bank PLC, as administrative agent under the Term Loan Facility and PNC Bank, National Association, as administrative agent under the Revolving Facility.
31.1*						Certification of President and Chief Executive Officer of Advanced Drainage Systems, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Executive Vice President and Chief Financial Officer of Advanced Drainage Systems, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Principal Executive Officer of Advanced Drainage Systems, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Principal Financial Officer of Advanced Drainage Systems, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*						Inline XBRL Taxonomy Extension Schema.
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase.
104						The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2025, has been formatted in Inline XBRL and contained in Exhibit 101.


ADVANCED DRAINAGE SYSTEMS, INC.

By:						/s/ D. Scott Barbour
						D. Scott Barbour
						President and Chief Executive Officer
						(Principal Executive Officer)

By:						/s/ Scott A. Cottrill
						Scott A. Cottrill
						Executive Vice President, Chief Financial Officer and Secretary
						(Principal Financial Officer)

By:						/s/ Tim A. Makowski
						Tim A. Makowski
						Vice President, Controller, and Chief Accounting Officer

Date	Price Target	Rating	Analyst
8/11/2025	$159.00	Outperform	RBC Capital Mkts
4/1/2025	$134.00	Buy	Deutsche Bank
1/8/2025	$155.00	Neutral → Buy	UBS
11/13/2024	$170.00 → $135.00	Overweight → Equal-Weight	Stephens
5/8/2024	$190.00	Buy	Northcoast
8/25/2023	$148.00	Overweight	Stephens
7/24/2023	$150.00	Overweight	KeyBanc Capital Markets
6/28/2023	$107.00 → $114.00	Overweight → Equal-Weight	Morgan Stanley

SEC Form 10-Q filed by Advanced Drainage Systems Inc.

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