Advanced Drainage Systems, Inc. (WMS) Business Profile

What it does

Advanced Drainage Systems makes products that move, store and treat stormwater and manage wastewater. Its customers use them in residential and commercial construction, infrastructure and agriculture. The company is headquartered in Hilliard, Ohio, and Scott Barbour is its president and chief executive officer.

Its stormwater products include plastic pipe, underground storage chambers, drains, fittings and filters. Together, these products can collect rainwater, carry it away, store it and remove pollutants before the water returns to the environment. For example, a catch basin can collect runoff from a yard or driveway and direct it into an underground pipe.

The wastewater business makes products for properties and communities without access to centralized sewers. These include leachfield chambers, tanks and treatment systems that process and disperse wastewater onsite. Applications range from homes to schools, churches and small commercial developments.

Advanced Drainage Systems sells most of its products through distributors, as well as retailers, buying groups and cooperatives. Its sales and engineering teams also work with designers, contractors and public agencies before projects are built, seeking to have its products included in project specifications. The company had 6,425 employees at March 31, 2026.

How it makes money

Advanced Drainage Systems earns revenue by manufacturing and selling drainage and wastewater products. Its two reporting segments are Stormwater and Wastewater. Following its acquisition of National Diversified Sales (NDS), the company realigned its segments and measures segment profitability using Adjusted EBITDA.

Stormwater sells corrugated plastic pipe and related products, including storage chambers, drainage structures, fittings and water-quality equipment. The company seeks to sell these as a package for a project: chambers, for example, can be installed with its pipe, fittings and water-quality units. NDS adds residential products such as channel drains, catch basins and access boxes, sold through professional and consumer channels.

Wastewater, which includes Infiltrator Water Technologies, sells plastic leachfield chambers and systems, tanks, treatment equipment and accessories. Its products serve residential and decentralized commercial wastewater applications. The company also distributes some complementary construction fabrics and other products purchased from third parties.

Product prices reflect competition and raw-material costs. The company seeks to raise selling prices when material costs rise, though increases can lag its costs and may not always be fully passed through. Sales are tied to construction and agricultural activity and have historically been higher in the first and second fiscal quarters. The supplied information does not describe a material recurring subscription or service revenue stream.

Fiscal 2026 net sales were $3,050.4 million and Adjusted EBITDA was $962.9 million; second-quarter fiscal 2027 revenue was $889 million and Adjusted EBITDA was $287 million. Adjusted EBITDA is a non-GAAP measure.

Customers and how it sells

The company serves residential and non-residential construction, infrastructure and agricultural markets. It had approximately 16,000 customers in fiscal 2026. Ferguson Enterprises accounted for 13.1% of fiscal 2026 net sales, and Core & Main accounted for 12.8%.

Most sales go through distributors, including national and independent waterworks distributors and smaller distributors across the United States. The company also sells through major retailers, buying groups and cooperatives serving plumbing, hardware, irrigation and landscaping markets. Those channels reach contractors and homeowners as well as other buyers.

NDS uses wholesale landscape and irrigation distributors, home-improvement retailers and online channels. Its customers include landscape contractors, irrigation installers, builders, engineers and do-it-yourself consumers. Advanced Drainage Systems also works directly with engineers, architects and public agencies to influence product choices during project design and bidding.

The company serves the United States, Canada, Mexico and other countries. It owns manufacturing facilities in Canada and uses joint ventures with local partners in Mexico and South America. Subsidiaries also distribute pipe and related products in Europe and the Middle East. Wastewater products are used in onsite treatment systems in the United States and Canada.

Suppliers and costs

Plastic resin is a principal raw material. The company purchases more than 1.0 billion pounds of virgin and recycled resin annually from approximately 450 suppliers. Virgin polyethylene and polypropylene are derived from materials connected to natural gas liquids or crude oil. The company also obtains post-consumer and post-industrial recycled plastics and processes recycled material for use in its products.

Its network includes 64 manufacturing plants and 41 distribution centers, including facilities owned or leased by joint ventures. Pipe is made using a continuous extrusion process; other products are made using processes including injection molding. The company operates its own truck fleet and also uses third-party carriers for some deliveries.

Raw materials represent a significant portion of product costs. Electricity and diesel are also important operating inputs. Resin prices can move quickly, and the company’s selling-price increases may lag or fail to cover the full increase. The company reported that second-quarter fiscal 2027 margin compression reflected volume pulled into the first quarter, material inflation, and higher diesel and third-party logistics costs. Its pricing actions outpaced material and transportation inflation in the first half.

Competitive position

Advanced Drainage Systems competes with producers of concrete, corrugated steel and PVC pipe, as well as other plastic-pipe manufacturers. The stormwater industry is fragmented, with specialty, regional and local competitors. The supplied information does not name individual competing companies.

Competition involves product availability, range, price, technical knowledge, customer relationships and delivery. The company also seeks to replace traditional materials: its plastic pipe competes with concrete pipe in drainage and storm-sewer applications, while wastewater products compete with traditional stone, pipe and concrete alternatives.

Our reading: The manufacturing and distribution network is a meaningful competitive source because proximity and the company’s fleet can help it deliver bulky products, but regional suppliers also compete in those markets. Our reading: Engineering relationships and regulatory approvals provide another source of differentiation because products must be specified or approved for many applications; those advantages do not eliminate competition on price or service.

Our reading: The broad product range can support sales of multiple components on a project, although each component still faces alternatives. The company believes it is the only corrugated HDPE pipe producer with a national footprint; it does not state a numerical market share.

Growth opportunities

The company estimates an approximately $16 billion combined addressable market, comprising an approximately $14 billion annual stormwater industry, including landscape irrigation, and a roughly $2 billion onsite wastewater market. It estimates that approximately 30% of new North American single-family homes use onsite wastewater systems.

Growth initiatives include replacing traditional materials with plastic pipe, expanding sales of complementary products alongside pipe, introducing new products and obtaining regulatory approvals. Advanced Drainage Systems expects expanded approvals to allow its products into additional applications and geographies. It also seeks to expand its wastewater presence and product offerings through acquisitions.

The company acquired NDS in February 2026, adding residential stormwater and drainage products and access to retail and distributor channels. It began cross-selling with NDS in the second fiscal quarter of 2027, although the effort had not yet produced a material amount of orders. The company said NDS synergies were tracking ahead of its first-year plan.

Advanced Drainage Systems has also agreed to acquire StormTrap, which provides engineered stormwater solutions for large-volume, space-constrained applications. The company expects the transaction to close in the fourth quarter of calendar 2026. Its purchase price is approximately $530 million, or approximately $450 million after expected tax benefits. The company expects opportunities to sell additional products through the combined customer and engineering relationships.

Structural risks

• Resin and transportation costs: Resin prices and availability can fluctuate, and tariffs or supply disruptions can raise costs. Selling-price increases may lag cost increases or may not fully cover them. The company also uses substantial electricity and diesel in manufacturing and delivery.
• Cyclical demand and weather: Construction and agricultural demand are sensitive to credit availability, interest rates, infrastructure funding and farm income. Cold or wet weather can delay projects, and sales have historically been seasonal. The residential market weakened as fiscal 2027 progressed.
• Acquisition integration: NDS integration could disrupt operations or divert management attention. The company may incur unforeseen expenses or fail to realize the anticipated benefits within the intended timeframe.
• Debt obligations: Indebtedness can require cash that would otherwise fund operations and investments. It can also reduce flexibility, increase exposure to interest-rate changes and constrain additional borrowing under debt covenants.
• Regulation and environmental obligations: Building codes affect which products customers can use, and onsite wastewater systems require regulatory approval before sale. The company is also subject to environmental, health and safety laws and faces an inherent risk of contamination or environmental damage in its operations.

Bottom line

Our reading

Advanced Drainage Systems is a product and distribution business built around water management projects, with a broad range of plastic products and engineering relationships that can support sales across a project. Its results remain exposed to construction and agricultural cycles, resin and freight costs, and the ability to pass those costs into prices. NDS and the proposed StormTrap acquisition extend its offerings, while adding integration and execution demands.