Atkore Inc. (ATKR) | The Buildout — AI Infrastructure
The Verdict
Atkore makes the electrical infrastructure that carries power through buildings — metal and plastic conduit and fittings, electrical cable, metal framing, cable-management systems and perimeter security — for non-residential and industrial construction. In the AI build-out its role is indirect: data-center halls need electrical raceway, support and cable-management products, and Atkore supplies that layer. The company does not make compute, servers, cooling or software, and it does not report how much of its revenue comes from data centers.
| Market Cap | — |
| Revenue (TTM) | $2.9B |
| Revenue Growth | +1.6% |
| EBITDA Margin (TTM) | 10.0% |
| Net Debt | $567M |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data centers are the end market management calls its highest-growth, described as 'double-digit growth,' feeding conduit, metal framing, cable management and construction services.
- The portfolio is narrower after divesting HDPE (5 plants), Belgium surface protection, Tectron and Northwest Polymers and closing three U.S. plants; the closures target $10–12M of annualized savings.
- Excluding HDPE, Electrical segment adjusted EBITDA margins would have run about 150 basis points higher in Q2 FY2026.
- Management reports growing backlogs and letters of intent in construction services and metal framing, historically short-cycle businesses.
- The balance sheet carries no required debt maturities until 2030.
- Gross margin recovered to 22.2% in Q3 FY2026 from 18.6% in Q2.
What We’re Watching
- Cable (about 17% of sales) is in 'significant spread compression'; copper and aluminum costs have not been fully passed through.
- No data-center revenue share or data-center backlog is disclosed — management declined to size it, so the AI link stays qualitative.
- Q4 FY2026 must confirm management's promise of slight sequential growth from Q3 in net sales, adjusted EBITDA and adjusted EPS.
- The Prysmian acquisition has no disclosed closing date and is drawing shareholder-law-firm investigations; a break would return Atkore to a standalone story.
- FY2026 net sales guidance ($2.9–$2.95B) was lowered once, for divested revenue only, while the profit metrics were held.
The operating thesis strengthened through fiscal 2026: revenue returned to growth, volume accelerated, pricing turned positive and margins recovered sequentially, while management reaffirmed full-year profit guidance and completed the portfolio pruning it had promised. Ownership is the new variable — a definitive agreement to be acquired by Prysmian resolved the open strategic review, but it closes on approvals that carry no disclosed date and are under investigation by shareholder-law firms. The open question is whether the data-center-linked product group converts its growing backlog and letters of intent into second-half and fiscal-2027 revenue.
Earnings Beat
Atkore reported Q3 FY2026 net sales of $794.8 million, up from $731.4 million in Q2 FY2026 and $735.0 million a year earlier. Gross margin was 22.2%, and EBITDA was $88.2 million, or 11.1% of sales. The company said net sales, adjusted EBITDA and adjusted EPS were all higher versus the prior year and sequentially higher from its second quarter.
| Metric | Q3 FY2026 | Q2 FY2026 | Q3 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $795M | $731M | $735M | +8.1% |
| Gross margin | 22.2% | 18.6% | 23.4% | -120bps |
| EBITDA | $88M | $64M | $100M | −11.7% |
| EPS | $0.02 | $-3.65 | $1.27 | −98.4% |
data centers are a big part of what we're doing global — on the global construction services side. And as we look on the back half of the year, that's going to drive a lot of the growth that we're projecting.— John Pregenzer, COO / President of Electrical, May 5, 2026
Management tone: On the most recent call in the source — Q2 FY2026, May 5, 2026 — management leaned into a 'trough passed' narrative, leading with the first year-over-year sales increase since fiscal Q4 2022 and framing the planned portfolio actions as largely executed. It was direct about negatives, walking Safety & Infrastructure margins down to 12–14% and acknowledging 'significant spread compression' in cable. It declined to size data-center revenue or put a timeline on the then-open strategic review, and the Q3 FY2026 release showed the sequential growth management had promised.
Management Guidance
For FY2026 management guides net sales of $2.9–$2.95 billion — lowered from $2.95–$3.05 billion to reflect divested businesses only — with adjusted EBITDA of $340–$360 million and adjusted diluted EPS of $5.05–$5.55, both reaffirmed. Organic volume growth is guided to the mid-single digits, and the Q3/Q4 tax rate to 22–24%. Management set a sequential cadence — Q3 up from Q2, then Q3 to Q4 slightly up — and the Q3 release showed the first leg; the Q4 leg is still to be reported.
Trajectory
Revenue slid through fiscal 2025 — from $822.4 million in Q3 FY2024 to $661.6 million in Q1 FY2025 — and EBITDA margin fell from 27.2% in Q2 FY2024 to 8.8% in Q2 FY2026. Fiscal 2026 has stabilized: net sales rose for two straight quarters to $794.8 million in Q3 FY2026, gross margin recovered to 22.2% from 18.6%, and management attributes the turn to 5% organic volume growth in Q2, pricing that turned positive (+1.5%), improved steel-conduit spreads and the exit of lower-margin HDPE.
The Model
The model projects FY+1 revenue of $3,223 million and EBITDA of $416 million, a 12.9% margin, then FY+2 revenue of $3,450 million and EBITDA of $462 million, a 13.4% margin. The near-term anchor is the FY2026 guidance range plus the completed portfolio moves, including the $10–12 million of annualized plant-closure savings management targets. FY+2 assumes data-center, solar and construction-services demand converts into revenue and margins keep expanding.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.9B | $3.2B | $3.5B |
| YoY Growth | — | +13.1% | +7.0% |
| EBITDA | $395M | $416M | $462M |
| EBITDA Margin | 13.9% | 12.9% | 13.4% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.7% below analyst consensus.
For FY2026 management guides net sales of $2.9–$2.95 billion — lowered from $2.95–$3.05 billion to reflect divested businesses only — with adjusted EBITDA of $340–$360 million and adjusted diluted EPS of $5.05–$5.55, both reaffirmed. Organic volume growth is guided to the mid-single digits, and the Q3/Q4 tax rate to 22–24%. Management set a sequential cadence — Q3 up from Q2, then Q3 to Q4 slightly up — and the Q3 release showed the first leg; the Q4 leg is still to be reported.
What Could Go Right — and Wrong
- Data-center construction keeps compounding at double digits and Atkore's conduit, metal framing and cable-management products capture rising share, lifting organic volume above the mid-single-digit guide.
- The data-center and construction-services group converts its growing backlogs and letters of intent into revenue in the second half and into FY2027.
- Cable's copper and aluminum spread compression eases as pricing catches up, removing a drag on roughly 17% of sales.
- Plant-closure savings land in full at the $10–12 million annualized target, with the slight upside management flagged.
- Ex-HDPE, the Electrical segment's roughly 150 bps margin lift shows up in reported results.
- Data-center or broader construction spending pauses; the business is short-cycle and revenue can fall quickly.
- Copper, aluminum, steel or PVC resin costs keep rising faster than price, holding consolidated margins near the low end of guidance.
- PVC conduit imports keep gaining share and hold back pricing in the plastic pipe and conduit category.
- A large distributor destocks or shifts share; the top ten customers are about 40% of net sales.
- The remaining PVC antitrust punitive class or the shareholder-law-firm investigations add cost and uncertainty.
Looking Ahead
Over the next twelve months the operating story and the ownership story run in parallel. Operationally, management has to deliver Q4 FY2026 sequential growth and the reaffirmed FY2026 targets, then show the data-center and solar businesses accelerating into fiscal 2027. On ownership, the Prysmian transaction still has to clear its approvals, and shareholder-law firms are investigating the deal. The source material gives no closing date and no stated regulatory conditions.
- H2 FY2026Data-center and solar ramp — Management expects these to drive second-half growth.
- Q4 FY2026Q4 FY2026 results — Tests promised Q3-to-Q4 sequential growth and FY2026 targets.
- FY2026Plant-closure savings — $10–12M annualized target, with possible slight upside.
- No date disclosedPrysmian acquisition closes — Subject to approvals; shareholder-law firms investigating.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $3.2B | $2.9B | $2.9B | -11.0% |
| Gross Margin | 31.9% | 23.5% | 19.6% | 843bps |
| EBITDA | $776M | $395M | $294M | -49.0% |
| EBITDA Margin | 24.2% | 13.9% | 10.0% | 1,036bps |
| Net Income | $473M | −$15M | −$163M | -103.2% |
| Free Cash Flow | $399M | $296M | $57M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)19.6%
- EBITDA Margin (TTM)10.0%
- Net Margin (TTM)-5.5%
- ROIC5.8%
- FCF Conversion19.5%
- SBC / Revenue0.9%
The Company
The 10-K describes Atkore as 'a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets, as well as residential markets, and Safety & Infrastructure products for the construction and industrial markets.' Its Electrical segment makes metal and plastic conduit and fittings, electrical cable and flexible conduit, and international cable-management systems — the raceway and wiring infrastructure that carries power through a building. The Safety & Infrastructure segment makes metal framing, mechanical tube (including solar torque tubes), construction services and perimeter security. Management says the company holds #1 or #2 U.S. positions by net sales in a significant number of its products.
Atkore manufactures in owned plants rather than outsourcing. Its headquarters and largest plant are in Harvey, Illinois (owned, serving both segments), with an owned New Bedford, Massachusetts facility primarily in Electrical and named sites that include the Hobart solar torque-tube facility. The company has spent recent quarters narrowing its footprint toward electrical infrastructure — divesting HDPE, the Belgium surface-protection/powder-coating business, Tectron mechanical tube and Northwest Polymers, and closing three U.S. plants — while reallocating capacity toward electrical conduit under its 80/20 initiative.
Business Segments
Competitive Landscape
The 10-K names competitors in both segments: Zekelman Industries, Mitsubishi Corporation, Nucor, Southwire, Dura-Line and Prysmian in Electrical, and Zekelman, Eaton, ABB, Hubbell, nVent and Haydon in Safety & Infrastructure. Management describes Atkore as holding #1 or #2 U.S. positions by net sales in a significant number of its products. In steel conduit, imports from Mexico have fallen to 'high teens to mid-teens' share from a low-to-mid-20s level, which management associates with domestic pricing support; in PVC conduit, imports keep growing and limit pricing power. The raw-material base is shared with competitors — Atkore's disclosed steel suppliers include a named competitor.
- Zekelman IndustriesNamed in the 10-K as a competitor in both the Electrical and Safety & Infrastructure segments.
- PrysmianNamed in the 10-K as an Electrical-segment competitor; now the announced acquirer of Atkore.
- Named as an Electrical-segment competitor and also listed among Atkore's primary steel suppliers.
- Southwire CompanyNamed in filings as an Electrical-segment competitor; not discussed.
- Named in filings as a Safety & Infrastructure competitor; not discussed.
Supply Chain
Atkore buys steel, copper, PVC resin and HDPE resin from named suppliers and sells largely through electrical distributors to contractors. Its disclosed steel suppliers include a named competitor, and the supplied material shows no downstream customer naming Atkore by name.