Acuity Brands Inc (AYI) Q1 2026 Earnings Report

Revenue and Profitability
- Total net sales: $1.1437 billion in QQ1 2026, up 20% year over year, aided by three months of QSC within AIS. QoQ change was -2.96% (per income metrics framework).
- Gross profit: $553.8 million; gross margin 48.4% (vs. prior year and seasonality dynamics). YoY gross profit grew ~13.32% while QoQ declined ~2.88% as expected given mix and pricing actions.
- Operating income: $160.4 million; operating margin 14.02% (YoY +2.17%; QoQ +14.74%).
- Net income and earnings: net income $120.5 million; net margin 10.54%. EPS: $3.92; diluted EPS $3.82. YoY EPS (adjusted) growth ~1.6%; QoQ growth ~22.9%.
- EBITDA: $160.4 million; EBITDA margin ~14.0%.

Segment Performance
- Acuity Brands Lighting (ABL): $895 million in QQ1 2026 revenue, up 1% year over year. Adjusted operating profit $160 million, margin 17.9% (up 60 bps vs. prior year). Higher backlog from 2025 price actions contributed to profitability by enabling cost control and mix optimization; backlogs supported near-term volumes but are expected to normalize as seasonality resumes.
- Acuity Intelligent Spaces (AIS): $257 million in QQ1 2026 revenue, up from the prior year due to the inclusion of QSC. AIS adjusted operating profit $57 million, margin 22% (up 100 bps). Mid-teens growth for Atrius/Distech/QSC was driven by cross-sell and the integration of QSYS capabilities, with backlog collaborations contributing to current-quarter strength.

Cash Flow and Balance Sheet
- Cash flow from operations: $141 million in the first three months of FY2026, up $9 million versus the prior year. Free cash flow: $114.8 million.
- Capital allocation: $28 million repurchased over 77,000 shares at an average price around $357; $100 million debt repayment reducing the term loan related to QSC financing; total net debt approximately $534 million vs. total debt of $910.1 million.
- Balance sheet health: Total assets $4.652 billion; total liabilities $1.858 billion; total stockholders’ equity $2.794 billion. Cash and cash equivalents $376.1 million; goodwill and intangible assets totaling $2.,567.9 million combined (goodwill $1.4926B; intangible assets $1.0748B). Net debt to EBITDA remains a consideration given the AIS integration and leverage from the QSC acquisition, with management emphasizing continued strong cash generation to support deleveraging over time.

Backlog and Market Dynamics
- Elevated backlog across both segments was noted, driven by orders accelerated in 2025 in anticipation of price increases. Management indicated that first-half 2026 seasonality is expected to be more representative of typical patterns, with Q2 potentially showing modest weakness relative to historical norms due to backlog unwinding and ongoing market caution in lighting. The presence of the integrated QSC pipeline within AIS contributed to backlog strength and high-margin contribution in the quarter.

Guidance and Outlook
- Management reported that guidance presented in the prior quarter remains in effect; there were no changes to the full-year outlook. The company remains focused on sustaining margin improvement (targetting 50–100 bps of operating margin expansion per year in ABL) and leveraging AIS cross-sell opportunities and productivity improvements to drive earnings growth. Tariff-related volatility and macro policy clarity were cited as ongoing market headwinds, but management remains confident in the long-term trajectory of both the Lighting and AIS businesses.