Earnings Recap — Q1 FY2027
CY Q3 2026 · Reported July 9, 2026 · N/A
AZZ Inc. reported Q1 FY2027 revenue of $449M, a beat of 3.2% against consensus, and EPS of $1.85, a beat of 2.8%.
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AZZ is a direct beneficiary of the AI infrastructure buildout, as data center construction and the associated grid modernization require substantial hot-dip galvanized steel for transmission towers, substations, and structural components. The company's raised guidance and capacity expansions in high-growth regions like Texas signal sustained demand from this secular cycle. Its de-verticalization model and M&A pipeline could further expand its footprint to capture incremental AI-driven infrastructure spend.
AZZ delivered record Q1 FY2027 sales of $448.5M, up 6.3% YoY, with Metal Coatings growing 12.3% and Precoat Metals up 1.5%. Adjusted EBITDA was $99.5M (22.2% of sales), and adjusted EPS was $1.85, up 3.9% YoY. The Washington, Missouri facility continued to ramp, driving a 194% surge in the Container end market. The company also commissioned a new large kettle in Crowley, Texas, doubling capacity there, and completed a de-verticalization agreement with a customer to acquire its galvanizing kettle and zinc. Net leverage remained low at 1.4x, and the dividend was raised 20%.
Management raised full-year FY2027 guidance, now expecting sales of $1.8B–$1.85B, adjusted EBITDA of $375M–$415M, and adjusted diluted EPS of $6.75–$7.15. The raise reflects confidence in continued strength across Metal Coatings, the ramp of the Washington, Missouri facility, and improved Precoat pricing dynamics. They expect to reduce debt by $130M–$170M in FY2027 and anticipate announcing an M&A deal later this month. Management highlighted a 'once in a generation infrastructure rebuild' driven by grid modernization, electrification, and data center demand, and sees these as structural, long-duration drivers.
“We are off to a strong start. For the first quarter, we delivered record sales in both segments, generated solid cash flow, maintained a strong balance sheet, announced raising our dividend, and raised our full year guidance.”
on Q1 performance and guidance raise
“Our thesis is that AZZ is well positioned to benefit from a multi-decade capital investment cycle across utility, transmission, distribution, and grid technology. Importantly, these trends are not cyclical. They are structural, long-duration drivers that are increasingly central to our customers' capital spending priorities.”
on Structural demand drivers
“We are actively evaluating a robust pipeline of high-quality acquisition targets that align with our core capabilities and meet our return thresholds. We expect to announce a deal later this month.”
on M&A pipeline
How is volatility in energy costs and tariffs affecting customer decision-making and project timing?
Tom Ferguson said Metal Coatings markets are robust with no significant headwinds; data center and grid projects are moving forward. On Precoat, tariff impacts on substrate availability have stabilized, and higher substrate prices could bring imports back, which is generally positive for customers.
What are the gating factors for M&A, and is the deal expected this month the same one mentioned last quarter?
Tom Ferguson confirmed it is the same deal, noting it has taken about six months to close, longer than the typical 45-75 days. He cited discipline and the need for urgency, and said there are more opportunities but some owners are waiting due to strong current demand.
How would greenfield galvanizing facilities be structured with customers, and what would be the CapEx cost?
Tom Ferguson said greenfield galvanizing typically relies on anchor customers rather than take-or-pay contracts, with anchor customers representing 10-25% of volume. CapEx is around $35 million including real estate, with an 18-month build-out and faster ramp-up than the Reno greenfield.