Apogee’s first quarter results were met with a significantly negative market reaction, reflecting investor concern over the company’s 4.5% year-over-year revenue decline and margin compression. Management attributed the performance to operational disruptions in its Metals segment, including production delays and higher costs from a new standardized product line, as well as softer demand in nonresidential construction. CEO Ty Silberhorn described the quarter as a period of “operational disruption” particularly in metals, while also highlighting ongoing productivity initiatives. The company’s actions to accelerate production ahead of new tariffs provided a temporary boost to service segment revenues, but underlying demand remained challenged.
Is now the time to buy APOG? Find out in our full research report (it’s free).
Apogee (APOG) Q1 CY2025 Highlights:
- Revenue: $345.7 million vs analyst estimates of $331.8 million (4.5% year-on-year decline, 4.2% beat)
- Adjusted EPS: $0.89 vs analyst estimates of $0.87 (2.3% beat)
- Adjusted EBITDA: $41.11 million vs analyst estimates of $37.46 million (11.9% margin, 9.7% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $3.83 at the midpoint, missing analyst estimates by 10.5%
- Operating Margin: 5.6%, down from 9.5% in the same quarter last year
- Market Capitalization: $810.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Apogee’s Q1 Earnings Call
- Julio Romero (Sidoti & Company LLC) asked for detail on the EPS impact of tariffs and customer acceptance of mitigation efforts. CFO Matt Osberg explained that most tariff costs are direct and front-loaded, with mitigation actions expected to reduce the impact in the second half.
- Julio Romero (Sidoti & Company LLC) inquired about the UW Solutions integration and tariff exposure. CEO Ty Silberhorn noted minimal tariff exposure for UW Solutions and described the acquisition as on track, with integration largely complete and double-digit growth targeted in key segments.
- Jon Braatz (D.A. Davidson) questioned how tariffs and soft market conditions are affecting customer decision-making. Silberhorn responded that uncertainty is leading to project delays and some market forecasters now expect a slight decline in nonresidential construction.
- Jon Braatz (D.A. Davidson) asked if strong margins in the glass segment are sustainable. Osberg said margins are moderating but should remain within long-term target ranges despite volume headwinds.
- Gowshi Sriharan (Singular Research) asked about competitive dynamics and pricing power. Silberhorn said private equity-owned competitors are focused on margins and Apogee is maintaining pricing discipline, with glass segment exploring opportunities to win projects from international suppliers affected by tariffs.
Catalysts in Upcoming Quarters
In upcoming quarters, our analyst team will be looking for (1) evidence that tariff mitigation strategies are reducing cost pressures in the second half of the year, (2) successful execution of Project Fortify’s cost-saving initiatives, and (3) sustained growth contributions from UW Solutions and the performance surfaces segment. Additionally, progress in regaining operational momentum in the metals segment and any signs of demand stabilization in nonresidential construction will be important for tracking Apogee’s recovery.
Apogee currently trades at $37.91, down from $45.86 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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