Water management solutions provider Advanced Drainage Systems issued its financial performance guidance for fiscal year 2027 on May 21, projecting full-year revenue to be in the range of $3.35 billion to $3.55 billion. Adjusted EBITDA is forecasted to be between $1.0 billion and $1.5 billion. The midpoint of the revenue guidance, approximately $3.45 billion, is about 14% higher than the analyst consensus estimate of $3.03 billion.

The company's President and Chief Executive Officer, Scott Barbour, stated that overall net sales for the fourth quarter grew by 10%, primarily driven by strong performance from Allied products and contributions from the NDS acquisition.

The NDS acquisition, completed in February 2026 for a transaction value of approximately $1.0 billion, contributed about $49 million in revenue to the company's Stormwater segment for the quarter. It is projected to contribute roughly $300 million for the full year. The company anticipates achieving over $25 million in annualized cost synergies within three years, with early integration progress exceeding expectations.

Despite the strong guidance, the company's stock declined by approximately 4.5% in pre-market trading. Management expressed a cautious outlook on demand prospects, citing pressures from geopolitical uncertainties, elevated interest rates, and a slowdown in residential construction. The company indicated it plans to offset inflationary pressures through pricing actions and recovery capabilities.

Additionally, the company's board of directors approved an 11% increase in the quarterly dividend to $0.20 per share.