Latest news with #margin expansion
Yahoo
2 days ago
- Business
- Yahoo
Can AvalonBay's Portfolio Strength Offset Development Setbacks?
AvalonBay Communities AVB is well-poised to gain from healthy renter demand for its residential properties in the high barrier-to-entry regions of the United States. The company's efforts to leverage technology to drive margin expansion seem encouraging. Strategic buyouts and development projects, backed by a healthy balance sheet position, augur well for long-term growth. However, elevated rental unit supply in select markets and high-interest expenses raise concerns. Moreover, the company is witnessing delayed development month, AvalonBay reported a second-quarter 2025 core FFO per share of $2.82, beating the Zacks Consensus Estimate of $2.80. The figure also climbed 1.8% from the prior-year quarter's tally. The quarterly performance reflected favorable same-store residential revenue and operating expense performance. AvalonBay has revised its full-year 2025 outlook, reflecting higher same-store net operating income (NOI), offset by the delayed occupancies' impact on development NOI. What Is Aiding AvalonBay Communities? AvalonBay owns high-quality assets in top U.S. markets, focusing on metro areas with strong job growth, high homeownership costs and vibrant lifestyles. This positions it to earn superior long-term risk-adjusted returns. Its well-diversified portfolio includes both urban and suburban communities. In 2025, management expects same-store residential revenues to grow between 2.3% and 3.3% year over enhance its overall portfolio quality, AvalonBay has carried out several strategic acquisitions over the years. AvalonBay expects its current 73% suburban submarket allocation to achieve the 80% target, while the current 12% expansion region allocation to reach a target of 25%. The company is also disposing of non-core assets for capital recycling. Moreover, AVB's growth over the intermediate term is likely to be supported by its increased development deliveries. In 2025, management is planning development starts of around $1.7 billion. In the next few years, the developments underway upon completion and stabilization are expected to fuel FFO and net asset value growth. AvalonBay has a healthy balance sheet with ample liquidity, positioning it well to capitalize on long-term growth opportunities. As of June 30, 2025, this residential REIT did not have any borrowings outstanding under its $2.25 billion unsecured credit facility. The company has a well-laddered debt maturity schedule with a weighted average year-to-maturity of 6.8 years. In the second quarter of 2025, its annualized net debt-to-core EBITDAre was 4.4 times, and unencumbered NOI was 95%, providing scope for tapping additional secured debt capital if required. Moreover, balance sheet flexibility is preserved for future opportunities, with around 103% match-funded on current development underway in the second quarter of 2025. The investment-grade credit ratings of 'A3' from Moody's and 'A-' from S&P render it access to the debt market at favorable dividend payouts are arguably the biggest enticement for REIT investors, and AvalonBay has consistently paid dividends each year since it went public in 1994. In February 2025, concurrent with its fourth-quarter earnings release, AVB increased its first-quarter 2025 dividend to $1.75 per share from $1.70 paid in the prior quarter. This represented a hike of 2.9% from the prior payout. Moreover, backed by healthy operating fundamentals and a solid financial position, we expect the dividend rate to be sustainable in the coming years. What Is Hurting AVB? The struggle to lure renters is likely to persist, as supply volume remains elevated in a few markets where the company operates. Moreover, the company is witnessing delays in its development deliveries, resulting in lower occupancy and higher concessions in markets like Denver and Maryland, in particular, pushing its NOI has a substantial debt burden, and its total debt was approximately $8.71 billion as of June 30, 2025. Interest expenses increased 13.5% year over year to $64.8 million in the second quarter of 2025. US Apartment Market and Residential REITs in Q2 The U.S. apartment market remained impressively resilient in the second quarter of 2025, absorbing more than 227,000 units between April and June, a robust second-quarter figure. According to RealPage data, annual absorption surpassed even the peak leasing surge of 2021 and early 2022, defying a backdrop of slowing job growth, weak business sentiment and broader economic signaled good for residential REITs like AvalonBay, Equity Residential EQR and Essex Property Trust, Inc. ESS. Elevated absorption suggests that the renter appetite for professionally managed apartments is solid despite broader macro Residential reported second-quarter 2025 normalized FFO per share of 99 cents, which met the Zacks Consensus Estimate. The figure improved 2.1% from the year-ago quarter. Results reflected a rise in same-store revenues and physical occupancy on a year-over-year basis. The company increased its guidance for 2025 normalized FFO per share. Essex Property Trust Inc. reported second-quarter 2025 core FFO per share of $4.03, beating the Zacks Consensus Estimate of $3.99. The figure also improved 2.3% from the year-ago quarter. Results reflected favorable growth in same-property revenues and NOI. However, higher same-property operating expenses and interest expenses partly acted as a dampener. ESS raised its full-year 2025 guidance at the midpoint for core FFO per Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AvalonBay Communities, Inc. (AVB) : Free Stock Analysis Report Equity Residential (EQR) : Free Stock Analysis Report Essex Property Trust, Inc. (ESS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
09-08-2025
- Business
- Yahoo
Altus Group Reports Q2 2025 Financial Results
Posts steady recurring revenue growth and margin expansion TORONTO, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Altus Group Limited (ʺAltus Group' or 'the Company') (TSX: AIF), a leading provider of commercial real estate ('CRE') intelligence, announced today its financial and operating results for the second quarter ended June 30, 2025. "Altus continued to deliver steady recurring revenue and Adjusted EBITDA margin expansion across all of our business segments,' said Jim Hannon, Chief Executive Officer. 'For the second quarter in a row, we are seeing significant growth in recurring new bookings. The launch of ARGUS Intelligence is driving revenue and accelerating the adoption of asset-based pricing. In Q2 we executed the buyback of over $100M of our shares based on our conviction that we'll continue to drive growth, increase profitability, and generate strong cashflows from our operating model." Selected Q2 2025 Information C$M Q2 2025 Q2 2024 % change Revenue $131.5 $130.4 (0.8%) Constant Currency* Recurring Revenue* $100.8 $95.2 3.7% Constant Currency Profit (Loss) from continuing operations $9.3 ($8.6) 207.4% As Reported Adjusted EBITDA* $28.5 $18.0 55.7% Constant Currency Adjusted EBITDA margin* 21.7% 13.8% 790 bps Constant Currency Analytics Adjusted EBITDA margin* 29.2% 26.1% 290 bps Constant Currency Net cash provided by operating activities $27.8 $39.8 (30.3%) As Reported Free Cash Flow* $26.1 $37.5 (30.5%) As Reported Investment in share repurchases** $101.7 $0.0 n/a Funded debt to EBITDA ratio 1.26 2.11 n/a *Denotes non-GAAP financial measure, non-GAAP ratio, total of segments measure, capital management measure, and/or supplementary and other financial measures as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure ('NI 52-112'). Please refer to the 'Non-GAAP and Other Measures' section of this press release for further information. **Investment in share repurchases represents the total cash consideration of the shares purchased for cancellation during the quarter under the Company's Normal Course Issuer Bid. For comparative purposes, note that net cash provided by operating activities and Free Cash Flow in Q2 2024 included contribution from the Property Tax business which was sold in January 2025. Business Outlook The Company refined its 2025 business outlook at the mid-year mark to reflect current market expectations and introduced guidance for the third quarter – both on a Constant Currency basis: FY 2025 Q3 2025 Analytics 3-6% total Analytics revenue growth (previously 4-7%) 5-7% Recurring Revenue growth (previously 6-9%) 250-350 bps of Adjusted EBITDA margin expansion (unchanged) 3-6% total Analytics revenue growth 5-7% Recurring Revenue growth 100-200 bps of Adjusted EBITDA margin expansion Appraisals and Development Advisory Flat to low single digit revenue decline (previously low single digit growth) Adjusted EBITDA margin expansion (unchanged) Flat to low single digit revenue growth Adjusted EBITDA margin expansion Consolidated 2-4% revenue growth (previously 3-5%) 400-500 bps of Adjusted EBITDA margin expansion (previously 300-400 bps) 3-5% revenue growth 200-300 bps of Adjusted EBITDA margin expansion Note: Business Outlook presented on a Constant Currency basis over the corresponding period in 2024. Future acquisitions are not factored into this outlook. Key assumptions for the business outlook by segment: Analytics: consistency and growth in number of assets on the Valuation Management Solutions platform, continued ARGUS cloud conversions, new sales (including New Bookings converting to revenue within Management's expected timeline and uptake on new product functionality), client and software retention consistent with 2024 levels, pricing action, improved operating leverage, as well as consistent and gradually improving economic conditions in financial and CRE markets, in particular a stronger recovery in the second half of the year. Appraisals & Development Advisory: improved client profitability and improved operating leverage. The Consolidated outlook assumes that corporate costs will remain elevated throughout 2025 consistent with 2024 levels. The change in our revenue guidance range reflects ongoing interest rate volatility and global trade uncertainty. Q2 2025 Results Conference Call & Webcast Date: Thursday, August 7, 2025 Time: 5:00 p.m. (ET) Webcast: Live Call: 1-888-660-6785 (toll-free) (Conference ID: 8366990) Replay: Altus Group Altus connects data, analytics, applications and expertise to deliver the intelligence necessary to drive optimal CRE performance. The industry's top leaders rely on our market-leading solutions and expertise to power performance and mitigate risk. Our global team of ~2,000 experts are making a lasting impact on an industry undergoing unprecedented change – helping shape the cities where we live, work, and build thriving communities. For more information about Altus (TSX: AIF) please visit Non-GAAP and Other Measures Altus Group uses certain non-GAAP financial measures, non-GAAP ratios, total of segments measures, capital management measures, and supplementary and other financial measures as defined in NI 52-112. These non-GAAP and other financial measures include Adjusted Earnings (Loss) and Constant Currency; non-GAAP ratios such as Adjusted EPS; total of segments measures such as Adjusted EBITDA; capital management measures such as Free Cash Flow; and supplementary financial and other measures such as Adjusted EBITDA margin and Recurring Revenue. Management believes that these measures may assist investors in assessing an investment in the Company's shares as they provide additional insight into the Company's performance. Readers are cautioned that they are not defined performance measures, and do not have any standardized meaning under IFRS and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable to financial measures as reported by those entities. These measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS. Refer to the 'Non-GAAP and Other Measures' section on Page 3 of the Management's Discussion & Analysis dated August 7, 2025 for the period ended June 30, 2025 (the 'MD&A'), which is incorporated by reference in this press release and which is available on SEDAR+ at for more information on each measure, including definitions and methods of calculation. A reconciliation of Adjusted EBITDA and Adjusted Earnings (Loss) to Profit (Loss) and Free Cash Flow to Net cash provided by (used in) operating activities is included at the end of this press release. Forward-looking Information Certain information in this press release may constitute 'forward-looking information' within the meaning of applicable securities legislation. All information contained in this press release, other than statements of current and historical fact, is forward-looking information. Forward-looking information includes, but is not limited to, statements relating to expected financial and other benefits of acquisitions and the closing of acquisitions (including the expected timing of closing), as well as the discussion of our business, strategies and leverage (including the commitment to increase borrowing capacity), expectations of future performance, including any guidance on financial expectations, and our expectations with respect to cash flows and liquidity. Generally, forward-looking information can be identified by use of words such as 'may', 'will', 'expect', 'believe', 'anticipate', 'estimate', 'intend', 'plan', 'would', 'could', 'should', 'continue', 'goal', 'objective', 'remain' and other similar terminology. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by us at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may not be known and may cause actual results, performance or achievements, industry results or events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that we identified and applied in drawing conclusions or making forecasts or projections set out in the forward-looking information (including sections entitled 'Business Outlook') include, but are not limited to: no significant impact on our business from changes or potential changes to trade regulations, including tariffs; engagement and product pipeline opportunities in Analytics will result in associated definitive agreements; continued adoption of cloud subscriptions by our customers; retention of material clients and bookings; sustaining our software and subscription renewals; successful execution of our business strategies; consistent and stable economic conditions or conditions in the financial markets including stable interest rates and credit availability for CRE; consistent and stable legislation in the various countries in which we operate; consistent and stable foreign exchange conditions; no disruptive changes in the technology environment; opportunity to acquire accretive businesses and the absence of negative financial and other impacts resulting from strategic investments or acquisitions on short term results; successful integration of acquired businesses; and continued availability of qualified professionals. Inherent in the forward-looking information are known and unknown risks, uncertainties and other factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking information. Those risks include, but are not limited to: the CRE market conditions; the general state of the economy; our financial performance; our financial targets; our international operations; acquisitions, joint ventures and strategic investments; business interruption events; third party information and data; cybersecurity; industry competition; professional talent; our subscription renewals; our sales pipeline; client concentration and loss of material clients; product enhancements and new product introductions; technology strategy; our use of technology; intellectual property; compliance with laws and regulations; privacy and data protection; artificial intelligence; our leverage and financial covenants; interest rates; inflation; our brand and reputation; our cloud transition; fixed price engagements; currency fluctuations; credit; tax matters; our contractual obligations; legal proceedings; regulatory review; health and safety hazards; our insurance limits; dividend payments; our share price; share repurchase programs; our capital investments; equity and debt financings; our internal and disclosure controls; and environmental, social and governance ('ESG') matters and climate change, as well as those described in our annual publicly filed documents, including the Annual Information Form for the year ended December 31, 2024 (which are available on SEDAR+ at Investors should not place undue reliance on forward-looking information as a prediction of actual results. The forward-looking information reflects management's current expectations and beliefs regarding future events and operating performance and is based on information currently available to management. Although we have attempted to identify important factors that could cause actual results to differ materially from the forward-looking information contained herein, there are other factors that could cause results not to be as anticipated, estimated or intended. The forward-looking information contained herein is current as of the date of this press release and, except as required under applicable law, we do not undertake to update or revise it to reflect new events or circumstances. Additionally, we undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of Altus Group, our financial or operating results, or our securities. Certain information in this press release, including sections entitled 'Business Outlook', may be considered as 'financial outlook' within the meaning of applicable securities legislation. The purpose of this financial outlook is to provide readers with disclosure regarding Altus Group's reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes. FOR FURTHER INFORMATION PLEASE CONTACT: Camilla Bartosiewicz Chief Communications Officer, Altus Group (416) 641-9773 Martin Miasko Sr. Director, Investor Relations and Strategy, Altus Group (416) 204-5136 Condensed Consolidated Statements of Comprehensive Income (Loss)For the Three and Six Months Ended June 30, 2025 and 2024(Unaudited)(Expressed in Thousands of Canadian Dollars, Except for Per Share Amounts) Three months endedJune 30 Six months endedJune 30 2025 2024 (1) 2025 2024 (1) Revenues $ 131,453 $ 130,389 $ 260,618 $ 255,807 Expenses Employee compensation 82,815 87,236 171,121 175,346 Occupancy 1,379 1,146 2,875 2,362 Other operating 23,505 27,171 49,369 50,967 Depreciation of right-of-use assets 1,934 2,194 4,028 4,254 Depreciation of property, plant and equipment 980 732 1,928 1,683 Amortization of intangibles 7,392 8,131 14,741 16,541 Acquisition and related transition costs (income) 48 5,373 66 8,869 Share of (profit) loss of joint venture (352) (664) (121) (506) Restructuring costs (recovery) 920 1,929 7,137 7,105 (Gain) loss on investments (132) 55 6 241 Finance costs (income), net – leases 354 195 599 359 Finance costs (income), net – other (184) 4,534 (1,696) 8,660 Profit (loss) before income taxes from continuing operations 12,794 (7,643) 10,565 (20,074) Income tax expense (recovery) 3,517 991 7,711 712 Profit (loss) from continuing operations, net of tax $ 9,277 $ (8,634) $ 2,854 $ (20,786) Profit (loss) from discontinued operations, net of tax (513) 10,918 381,694 22,917 Profit (loss) for the period $ 8,764 $ 2,284 $ 384,548 $ 2,131 Other comprehensive income (loss): Items that may be reclassified to profit or loss in subsequent periods: Currency translation differences (20,355) 4,444 (17,126) 9,943 Items that are not reclassified to profit or loss in subsequent periods: Changes in investments measured at fair value through other comprehensive income, net of tax - (556) - (556) Other comprehensive income (loss), net of tax (20,355) 3,888 (17,126) 9,387 Total comprehensive income (loss) for the period, net of tax $ (11,591) $ 6,172 $ 367,422 $ 11,518 Earnings (loss) per share attributable to the shareholders of the Company during the period Basic earnings (loss) per share: Continuing operations $0.21 $(0.19) $0.06 $(0.46) Discontinued operations $(0.01) $0.24 $8.52 $0.50 Diluted earnings (loss) per share: Continuing operations $0.21 $(0.19) $0.06 $(0.46) Discontinued operations $(0.01) $0.24 $8.44 $0.50 (1) Comparative figures have been restated to reflect discontinued operations. Interim Condensed Consolidated Balance SheetsAs at June 30, 2025 and December 31, 2024(Unaudited)(Expressed in Thousands of Canadian Dollars) June 30, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 382,714 $ 41,876 Trade receivables and other 143,754 144,812 Income taxes recoverable 3,682 5,099 Derivative financial instruments 1,321 8,928 531,471 200,715 Assets held for sale - 282,233 Total current assets 531,471 482,948 Non-current assets Trade receivables and other 8,078 9,620 Derivative financial instruments 10,286 9,984 Investments 14,272 14,580 Investment in joint venture 20,529 25,605 Deferred tax assets 20,823 56,797 Right-of-use assets 24,292 19,420 Property, plant and equipment 13,222 13,217 Intangibles 199,764 214,614 Goodwill 399,129 404,176 Total non-current assets 710,395 768,013 Total assets $ 1,241,866 $ 1,250,961 Liabilities Current liabilities Trade payables and other $ 164,746 $ 216,390 Income taxes payable 23,419 3,017 Lease liabilities 11,439 11,009 199,604 230,416 Liabilities directly associated with assets held for sale - 57,680 Total current liabilities 199,604 288,096 Non-current liabilities Trade payables and other 19,981 19,828 Lease liabilities 32,928 26,751 Borrowings 155,914 281,887 Deferred tax liabilities 20,733 17,179 Total non-current liabilities 229,556 345,645 Total liabilities 429,160 633,741 Shareholders' equity Share capital 639,354 798,087 Contributed surplus 38,851 21,394 Accumulated other comprehensive income (loss) 39,117 56,243 Retained earnings (deficit) 95,384 (275,935) Reserves of assets held for sale - 17,431 Total shareholders' equity 812,706 617,220 Total liabilities and shareholders' equity $ 1,241,866 $ 1,250,961Interim Condensed Consolidated Statements of Cash FlowsFor the Six Months Ended June 30, 2025 and 2024(Unaudited)(Expressed in Thousands of Canadian Dollars) Six months ended June 30 2025 2024 Cash flows from operating activities Profit (loss) before income taxes from continuing operations $ 10,565 $ (20,074) Profit (loss) before income taxes from discontinued operations 454,026 26,584 Profit (loss) before income taxes $ 464,591 $ 6,510 Adjustments for: Depreciation of right-of-use assets 4,028 5,677 Depreciation of property, plant and equipment 1,928 2,534 Amortization of intangibles 14,741 20,423 Finance costs (income), net – leases 599 578 Finance costs (income), net – other (1,696) 8,674 Share-based compensation 7,916 11,430 Unrealized foreign exchange (gain) loss (1,162) (1,866) (Gain) loss on investments 6 241 (Gain) loss on disposal of right-of-use assets, property, plant and equipment and intangibles 27 2,042 (Gain) loss on disposal of assets (457,757) - (Gain) loss on equity derivatives 5,407 (5,119) Share of (profit) loss of joint venture (121) (506) Impairment of right-of-use assets, net of (gain) loss on sub-leases 3,534 (322) Net changes in: Operating working capital (7,472) (2,114) Liabilities for cash-settled share-based compensation (5,691) 5,501 Deferred consideration payables - (1,674) Net cash generated by (used in) operations 28,878 52,009 Interest paid on borrowings (3,374) (9,659) Interest paid on leases (599) (578) Interest received 7,280 - Income taxes paid (4,305) (5,149) Income taxes refunded 580 217 Net cash provided by (used in) operating activities 28,460 36,840 Cash flows from financing activities Proceeds from exercise of options 11,984 6,455 Financing fees paid (763) (50) Proceeds from borrowings 50,590 20,000 Repayment of borrowings (177,615) (27,184) Payments of principal on lease liabilities (6,025) (7,853) Dividends paid (12,354) (12,254) Treasury shares purchased for share-based compensation (11,241) (3,563) Cancellation of shares (177,998) - Net cash provided by (used in) financing activities (323,422) (24,449) Cash flows from investing activities Purchase of investments (352) (282) Purchase of intangibles (806) (4,562) Purchase of property, plant and equipment (2,173) (425) Proceeds from investments 5,197 2 Proceeds from sale of discontinued operations, net of cash disposed 655,811 - Income taxes paid on disposal of discontinued operations (20,027) - Net cash provided by (used in) investing activities 637,650 (5,267) Effect of foreign currency translation (10,566) 456 Net increase (decrease) in cash and cash equivalents 332,122 7,580 Cash and cash equivalents, beginning of period 50,592 41,892 Cash and cash equivalents, end of period $ 382,714 $ 49,472 Reconciliation of Profit (Loss) to Adjusted EBITDA and Adjusted Earnings (Loss) The following table provides a reconciliation of Profit (Loss) to Adjusted EBITDA and Adjusted Earnings (Loss): Three months ended June 30, Six months ended June 30, In thousands of dollars, except for per share amounts 2025 2024 (1) 2025 2024 (1) Profit (loss) for the period $ 8,764 $ 2,284 $ 384,548 $ 2,131 (Profit) loss from discontinued operations, net of tax 513 (10,918) (381,694) (22,917) Occupancy costs calculated on a similar basis prior to the adoption of IFRS 16 (2) (2,218) (2,775) (4,431) (5,218) Depreciation of right-of-use assets 1,934 2,194 4,028 4,254 Depreciation of property, plant and equipment and amortization of intangibles (8) 8,372 8,863 16,669 18,224 Acquisition and related transition costs (income) 48 5,373 66 8,869 Unrealized foreign exchange (gain) loss (3) 664 (475) (1,162) (1,746) (Gain) loss on disposal of right-of-use assets, property, plant and equipment and intangibles (3) 15 1,056 27 1,571 Share of (profit) loss of joint venture (352) (664) (121) (506) Non-cash share-based compensation costs (4) 3,807 3,353 6,279 6,886 (Gain) loss on equity derivatives net of mark-to-market adjustments on related RSUs and DSUs (4) 98 417 2,664 (2,174) Restructuring costs (recovery) 920 1,929 7,137 7,105 (Gain) loss on investments (5) (132) 55 6 241 Other non-operating and/or non-recurring (income) costs (6) 2,395 1,573 3,628 2,456 Finance costs (income), net – leases 354 195 599 359 Finance costs (income), net – other (9) (184) 4,534 (1,696) 8,660 Income tax expense (recovery) (10) 3,517 991 7,711 712 Adjusted EBITDA $ 28,515 $ 17,985 $ 44,258 $ 28,907 Depreciation of property, plant and equipment and amortization of intangibles of non-acquired businesses (8) (1,811) (1,494) (2,758) (3,211) Finance (costs) income, net – other (9) 184 (4,534) 1,696 (8,660) (Gain) loss on hedging transactions, including currency forward contracts and interest expense (income) on swaps (9) 1,179 (78) 2,029 (975) Tax effect of adjusted earnings (loss) adjustments (10) (6,176) (5,553) (14,481) (10,092) Adjusted earnings (loss)* $ 21,891 $ 6,326 $ 30,744 $ 5,969 Weighted average number of shares – basic 43,841,362 45,782,032 44,824,199 45,657,634 Weighted average number of restricted shares 91,003 331,672 91,697 375,090 Weighted average number of shares – adjusted 43,932,365 46,113,704 44,915,896 46,032,724 Adjusted earnings (loss) per share (7) $0.50 $0.14 $0.68 $0.13 (1) Comparative figures have been restated to reflect discontinued operations. (2) Management uses the non-GAAP occupancy costs calculated on a similar basis prior to the adoption of IFRS 16 when analyzing financial and operating performance. (3) Included in other operating expenses in the interim condensed consolidated statements of comprehensive income (loss).(4) Included in employee compensation expenses in the interim condensed consolidated statements of comprehensive income (loss).(5) (Gain) loss on investments relates to changes in the fair value of investments in partnerships. (6) Other non-operating and/or non-recurring (income) costs for the three and six months ended June 30, 2025 relate to legal, advisory, consulting, and other professional fees related to organizational and strategic initiatives. These are included in other operating expenses in the interim condensed consolidated statements of comprehensive income (loss).(7) Refer to page 4 of the MD&A for the definition of Adjusted EPS.(8) For the purposes of reconciling to Adjusted Earnings (Loss), the amortization of intangibles of acquired businesses is adjusted from Profit (loss) for the period. Per the quantitative reconciliation above, we have added back depreciation of property, plant and equipment and amortization of intangibles and then deducted the depreciation of property, plant and equipment and amortization of intangibles of non-acquired businesses to arrive at the amortization of intangibles of acquired businesses.(9) For the purposes of reconciling to Adjusted Earnings (Loss), the interest accretion on contingent consideration payables and (gains) losses on hedging transactions and interest expense (income) on swaps is adjusted from Profit (loss) for the period. Per the quantitative reconciliation above, we have added back finance costs (income), net – other and then deducted finance costs (income), net – other prior to adjusting for interest accretion on contingent consideration payables and (gains) losses on hedging transactions and interest expense (income) on swaps.(10) For the purposes of reconciling to Adjusted Earnings (Loss), only the tax impacts for the reconciling items noted in the definition of Adjusted Earnings (Loss) is adjusted from profit (loss) for the of Free Cash Flow Free Cash Flow Three months endedJune 30, Six months endedJune 30, In thousands of dollars 2025 2024 2025 2024 Net cash provided by (used in) operating activities $ 27,755 $ 39,809 $ 28,460 $ 36,840 Less: Capital Expenditures (1,664) (2,272) (2,979) (4,987) Free Cash Flow $ 26,091 $ 37,537 $ 25,481 $ 31,853Constant Currency Three months endedJune 30, 2025 Six months endedJune 30, 2025 As presented For Constant Currency As presented For Constant Currency Canadian Dollar 1.000 1.000 1.000 1.000 United States Dollar 1.384 1.368 1.409 1.358 Pound Sterling 1.847 1.726 1.827 1.718 Euro 1.570 1.472 1.539 1.468 Australian Dollar 0.886 0.902 0.893 0.894 Three months endedJune 30, 2024 Six months endedJune 30, 2024 As presented For Constant Currency As presented For Constant Currency Canadian Dollar 1.000 1.000 1.000 1.000 United States Dollar 1.368 1.343 1.358 1.347 Pound Sterling 1.726 1.681 1.718 1.661 Euro 1.472 1.462 1.468 1.456 Australian Dollar 0.902 0.897 0.894 0.911Sign in to access your portfolio
Globe and Mail
08-08-2025
- Business
- Globe and Mail
Can Howmet Aerospace Maintain Its EBITDA Margin Expansion Streak?
Howmet Aerospace Inc. HWM has consistently delivered margin expansion in recent quarters, reflecting its commitment to sustaining long-term profitability. The company's adjusted EBITDA margin improved from 26.5% in the third quarter of 2024 to 26.8% in the fourth quarter and further to 28.8% in the first quarter of 2025. In the second quarter of 2025, HWM reported an adjusted EBITDA margin of 28.7%, up 300 basis points year over year. In the second quarter, its cost of goods sold rose 6.1% year over year, but an 8.2% drop in SG&A expenses supported profitability. The Engine Products, Fastening Systems and Engineered Structures segments recorded adjusted EBITDA margin expansions of 200, 360 and 690 basis points, respectively, driven by manufacturing footprint optimization and an improved product mix. Robust pricing, disciplined cost management and operational efficiency continue to support Howmet Aerospace's margin performance despite higher production costs. Strong momentum in commercial and defense aerospace markets is also boosting Howmet Aerospace's performance. Robust orders for engine spares for the F-35 program and aerospace fastening systems also augur well. Driven by strength across its businesses, HWM has raised its 2025 guidance for adjusted EBITDA margin. The company now expects adjusted EBITDA margin to be between 28.5% and 28.6% in 2025 compared with 27.8-28.2% projected earlier. This raise shows HWM's confidence in keeping margins strong and delivering solid performance for the rest of the year. Margin Performance of HWM's Peers Among its major peers, RTX Corporation 's RTX total costs and expenses increased 6.4% year over year to $19.48 billion in the second quarter of 2025. RTX Corp. generated an adjusted operating profit of $2.79 billion. RTX Corp.'s Collins Aerospace segment's adjusted operating profit totaled $1.25 billion compared with $1.15 billion in the year-ago quarter. GE Aerospace 's GE cost of sales surged 22.8% year over year in the second quarter of 2025. However, GE Aerospace's adjusted operating profit increased 23% year over year. However, GE Aerospace's adjusted operating margin was down 10 basis points year over year. HWM's Price Performance, Valuation and Estimates Shares of Howmet Aerospace have surged 95.1% in the past year compared with the industry 's growth of 16%. From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 45.59X, above the industry's average of 27.64X. Howmet Aerospace carries a Value Score of F. Image Source: Zacks Investment Research The Zacks Consensus Estimate for HWM's earnings has been on the rise over the past 60 days. Image Source: Zacks Investment Research The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. See our %%CTA_TEXT%% report – free today! 7 Best Stocks for the Next 30 Days Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GE Aerospace (GE): Free Stock Analysis Report Howmet Aerospace Inc. (HWM): Free Stock Analysis Report
