Acuity Inc.

Good morning, and welcome to the ACQUITY Fiscal 2025 Third Quarter Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, the company will conduct a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations. Charlotte, please go ahead.

Thank you, Operator. Good morning and welcome to the ACQUITY Fiscal 2025 Third Quarter Earnings Call. On the call with me this morning are Neil Ash, our Chairman, President and Chief Executive Officer, and Karen Holcomb, our Senior Vice President and Chief Financial Officer. Today's call will include updates on our strategic progress and on our Fiscal 2025 Third Quarter performance. There will be an opportunity for Q&A at the end of the call. As a reminder, some of our comments today may be forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as detailed on slide two of the accompanying presentation. Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2025 Third Quarter Earnings Release and Supplemental presentation. both of which are available on our Investor Relations website at www.investors.acuityinc.com. Thank you for your interest in Acuity. I will now turn the call over to Neil Ash.

Thank you, Charlotte, and thank you all for joining us today. We delivered strong performance in the third quarter of fiscal 2025. We grew net sales, expanded our adjusted operating profit and adjusted operating profit margin, and we increased our adjusted diluted earnings per share. We generated strong cash flow and allocated capital effectively. In ABL, we took aggressive actions to get in front of the evolving tariff policy. We have a dynamic and resilient worldwide supply chain Over the last several years, we have diversified our supplier options and locations. During the quarter, we leveraged these options to move away from higher tariff environments. We also took strategic pricing actions intended to cover the dollar impact of the tariffs while remaining competitive in the marketplace. Partially as a result of these actions, we received accelerated orders in the third quarter that built backlogs. We began to ship this backlog in the third quarter and will continue to ship it in the fourth quarter. And finally, where we could, we accelerated productivity efforts to reduce expenses. Karen will talk more about the specifics of this later in the call. Now, moving on to some recent highlights in our electronics portfolio. As we said last quarter, our electronics portfolio is a unique offering in the marketplace, extending from the drivers that power our luminaires to the sensors, controls, and software that control light in a space and connect with the cloud seamlessly through our Atrius Data Lab. Recently, we rolled out two significant controls products. The new wireless SensorSwitch Air product line simplifies lighting control with app-less pairing, out-of-the-box operation, and broad compatibility. The product line features wireless sensors, wall switches, and embedded sensors that can be used with select Lithonia products. SensorSwitch Air is available as part of Contractor Select and is designed to save contractors time and money, upgrading any project to a connected project with minimal effort and cost. The second product is the Animate Controller by Enlite, a single user interface that simplifies installation, programming, and operation of dynamic lightscapes. Installers are able to define their projects, sketch their required outcomes, and see their design come to life, with the ability to dynamically alter color settings and movement in real time. As part of our ABL growth algorithm, we continue to make investments for future growth, prioritizing verticals where we have not historically competed or where we are under-penetrated. This quarter, we accelerated our product vitality efforts through the acquisition of M3 Innovation and launched M3 by Lithonia and HoloBeam by HoloFane. This strengthens our floodlight portfolio and has product applications in sports lighting and other industrial and infrastructure settings. These products enhance our offering in multiple verticals where we had gaps in our product portfolio, including education, municipalities, and infrastructure. These solutions incorporate multiple innovations designed to reduce total installation costs and enhance the user experience. Our products continue to be recognized by the industry for their design and performance. At Leducation this year, several of our products were identified by Edison Report as must-see. including the Nightingale Embrace, an overbed luminaire used in healthcare facilities that offers multifunctional modes designed to improve patient experience and optimize patient outcomes. And in April, we won several Red Dot product design awards, most notably for Pelican by Luminous, an outdoor luminaire that delivers soft, uniform, and gradual illumination in plazas and pathways. It can be networked using our N-Lite air controls, making it easier to specify, install, and operate. And Valencia by Cyclone, a unique V-shaped outdoor luminaire that mixes a minimalist aesthetic with advanced optics to meet municipal requirements and reduce costs. Now, switching to Acuity Intelligence Bases, which had an impressive quarter, delivering strong sales growth and margin expansion. Through Atrius, Distech, and QSC, we have unique and disruptive technologies that are driving productivity for people experiencing spaces and for the people providing those spaces. Atrius and Distech control the management of the space, and QSC manages the experiences in that space. Over time, we will use data from both to enhance productivity outcomes through data interoperability. The integration of QSC is going well, as evidenced by their strong performance, accelerated revenue growth and expanded margins. QSC is building the industry's most innovative full-stack AV platform that unifies data, devices and a cloud-first architecture to deliver real-time action, experiences and insights. During the quarter, we released a number of new Q-SYS product enhancements. These included new processing options, next generation automation tools, smarter design workflows, and enhanced data visibility. I'd like to highlight a few of those here. The new class of Q-SYS core processors are faster and have more capacity to support in-room processing and cloud networking. Our Q-SYS Vision Suite connects physical spaces to digital AV intelligence. It uses 3D visualization tools to plan and prepare spaces to maximize the effectiveness of live broadcast or hybrid meetings. The new technology rollout uses speaker and presenter spotlight technology powered by AI cameras and microphones to dynamically frame meeting participants. And finally, we enhance the capabilities of Q-SYS Reflect. Reflect is our cloud-based remote analytics platform. It supports real-time system health monitoring, remote setup and configuration, and centralized control. I'm pleased with QSC's performance. They are differentiated in the marketplace, they are operating their business successfully, and they are demonstrating productivity and benefiting from the adoption of our better, smarter, faster operating system. Now, moving on to DISTEC. We are focused on where we compete and what we can control to expand our addressable market. This quarter, DISTEC had strong sales growth. The continued strength of DISTEC is largely a result of the popularity of our DISTEC Eclipse portfolio. DISTEC Eclipse is a strategic differentiator. It is a comprehensive building automation platform that unifies hardware and software into a cohesive ecosystem for intelligent building management. The portfolio includes hardware devices used to manage how a building operates, controlling HVAC, lighting, refrigeration, and other systems. Eclipse devices are modular and scalable and allow for flexible configurations tailored to the specific needs of a space. Devices include building controls, in-room controls, sensors, and interfaces, including the Eclipse Apex Controller and the Eclipse Display. Eclipse Facilities is the software that optimizes how a building operates. It is the operating system that enables monitoring, remote management, and scalability. Together, Eclipse's hardware and software enhance building performance by minimizing owner costs and maximizing user experience. Now, looking ahead. In both lighting and intelligence spaces, we have taken aggressive actions to manage our outcomes given the uncertainty in the marketplace that has resulted from the evolution of the tariff policy and other geopolitical instability. It is likely those actions have resulted in accelerated ordering that has positively affected the third quarter. Our expectation is that the combination of our third and fourth quarter performance will yield the results we expected for the second half of fiscal 2025. We will continue to focus on factors within our control. In ABL, we are focused on product vitality, elevating service levels, using technology to improve and differentiate both our products and how we operate the business, and driving productivity. Our growth algorithm is clear. We will grow with the market, we will take share, and we will enter new verticals. In intelligent spaces, we are making spaces smarter, safer, and greener by controlling how a built space operates and the experiences that happen within that space. We have unique and disruptive technologies that are driving productivity for people experiencing spaces and for the people providing those spaces. Our focus will continue to be on growth, and we have the opportunity to expand margins. We have demonstrated that we have dexterity in how we operate, enabling us to continue to execute in dynamic market conditions. and we have demonstrated that we can deliver value to our market and drive margins in our business. Now, I'll turn the call over to Karen, who will update you on our third quarter performance.