Zurn Elkay Water Solutions (ZWS) Q3 2025 earnings summary

Executive summary

• Q3 2025 net sales rose 11% year-over-year to $455.4 million, with core sales growth across all product categories and adjusted EBITDA up 16% to $122 million, expanding margin by 120 basis points to 26.8%.

• Net income for Q3 2025 was $61.8 million, up from $43.5 million in Q3 2024; diluted EPS increased to $0.36 from $0.25, and adjusted EPS rose 26% to $0.43.

• Free cash flow for Q3 was $94 million, supporting $25 million in share repurchases and a year-to-date total of $135 million.

• Dividend was raised by 22% to $0.44 per share, and share buyback authorization increased to $500 million.

• U.S. pension plan termination completed, eliminating $200 million in liabilities and resulting in a $10 million pre-tax gain.

Financial highlights

• Q3 2025 net sales: $455.4 million, up 11% year-over-year; adjusted EBITDA: $122 million (26.8% margin), up 16%.

• Year-to-date net sales reached $1.29 billion, up 8%, and adjusted EBITDA was $338 million.

• Income from operations for Q3 2025 was $77.5 million (17.0% of net sales), up 10.4% year-over-year.

• Free cash flow for Q3 was $94 million; year-to-date free cash flow reached $234 million.

• Net debt leverage declined to 0.6x, the lowest as a public company.

Outlook and guidance

• Full-year 2025 adjusted EBITDA outlook raised to $437–$440 million, with free cash flow expected to exceed $300 million.

• Q4 2025 core sales growth expected in the high single digits; adjusted EBITDA guidance of $99–$102 million.

• Tariff costs for 2025 expected to be ~$50 million, higher than previous guidance.

• 2026 market growth expected to mirror 2025, with low market growth but continued outperformance from internal initiatives.

• Management expects to continue restructuring initiatives to optimize margin and manufacturing footprint.