Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 28, 2026 · Beat 5 of last 7 quarters
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Armstrong's expanding data center product portfolio, including structural grid and containment solutions from its WAVE joint venture, positions it to capture more share in the AI infrastructure buildout. The company reported data center wins up more than 50% year-to-date and is investing in go-to-market resources to serve hyperscalers and colocation providers. This represents a growing addressable vertical that could contribute incremental volume and AUV growth.
Armstrong delivered record second-quarter net sales and adjusted EBITDA, with total company sales up 11% and adjusted EBITDA up 8%. Mineral Fiber sales grew 8% on 6% AUV and 2% volume, with adjusted EBITDA margin of 44.7%. Architectural Specialties sales grew 17% (9% organic), with adjusted EBITDA margin of 20.4% (21.4% organic). The company continued to see strong order intake in AS, with double-digit growth for the fourth consecutive quarter. Management highlighted progress in growth initiatives including Kanopi, PROJECTWORKS, TEMPLOK, and data center solutions, with data center wins up more than 50% year-to-date.
Management raised full-year guidance midpoints across all key metrics, citing strong first-half execution and a consistent back-half outlook. Total company net sales growth is now expected at 9% to 11% (up from 8% to 10%), with Mineral Fiber sales growth of approximately 7% (AUV ~6%, volume ~1%) and AS sales growth of 15% to 17%. Adjusted EBITDA growth guidance was raised to 9% to 12% (from 8% to 12%), and adjusted diluted EPS growth to 12% to 15% (from 10% to 14%). Adjusted free cash flow growth guidance was also raised to 10% to 14%. Management expects Mineral Fiber adjusted EBITDA margin of approximately 44% for the full year and AS margin of approximately 19% (20% on an organic basis). They noted continued flattish market conditions but highlighted pockets of strength in transportation, data centers, and healthcare. The tone was confident, underscored by an $800 million increase to the share repurchase authorization.
“Put simply, the core premise of Kanopi is proving out. That latent demand exists for a specific portion of the installed ceiling space. Which can be reached by a tailored and efficient path to purchase.”
on Digital growth initiatives
“And as we have scaled and optimized Canopy, we are increasingly pleased with its profitability performance.”
on Kanopi profitability
“This quarter marked the fourth quarter out of the last 5, which we generated volume growth. And represented the highest quarterly growth rate since early 2023.”
on Mineral Fiber volume growth
Can you give us some more details on the strength in order rates across the various verticals and what that means for the second half and beyond?
Mark Hershey noted that the double-digit intake in AS was the fourth consecutive quarter, supporting the pipeline and outlook for the second half and providing early visibility into 2027. The pipeline is broad-based across new construction and renovation, across verticals including transportation, office, healthcare, and education, and across all AS categories.
On Mineral Fiber, your fiscal year assumptions imply 1% volume growth. Given volumes were up in both Q1 and Q2, would you expect volumes to accelerate or decelerate in the second half?
Mark Hershey said the company expects consistent volume performance in the back half, driven by commercial distribution channel traction and strength in the high-end portfolio. He reiterated that volume growth is a priority and they expect to continue demonstrating it.
Can you talk about the drivers to the revenue guidance increases? How much came from Q2 being better versus the second half?
Mark Hershey said the increase is largely due to Q2 performance, with a consistent back-half outlook. Christopher Calzaretta added that the $20 million increase in sales at the midpoint is about two-thirds from AS and one-third from Mineral Fiber, driven by Q2 performance versus expectations.