# ADVANCED DRAINAGE SYSTEMS, INC. (WMS) Informational only - not investment advice. CIK: 0001604028 SIC: 3086 Plastics Foam Products SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 30](/major-group/30/) > [SIC 3086 Plastics Foam Products](/industry/3086/) Latest 10-K filed: 2026-05-21 SEC page: https://www.sec.gov/edgar/browse/?CIK=1604028 Filing source: https://www.sec.gov/Archives/edgar/data/1604028/000160402826000019/wms-20260331.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 3050376000 | USD | 2026 | 2026-05-21 | | Net income | 426465000 | USD | 2026 | 2026-05-21 | | Assets | 4505623000 | USD | 2026 | 2026-05-21 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-21. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001604028.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 1,257,261,000 | 1,330,354,000 | 1,384,733,000 | 1,673,805,000 | 1,982,780,000 | 2,769,315,000 | 3,071,121,000 | 2,874,473,000 | 2,904,245,000 | 3,050,376,000 | | Net income | 62,007,000 | 62,007,000 | 77,772,000 | -193,174,000 | 224,230,000 | 271,331,000 | 507,086,000 | 509,915,000 | 450,172,000 | 426,465,000 | | Operating income | 76,328,000 | 88,254,000 | 129,413,000 | -95,349,000 | 344,525,000 | 411,918,000 | 719,310,000 | 732,131,000 | 657,436,000 | 619,202,000 | | Gross profit | 295,810,000 | 302,481,000 | 326,967,000 | 316,479,000 | 690,082,000 | 800,384,000 | 1,118,408,000 | 1,145,949,000 | 1,094,241,000 | 1,167,386,000 | | Diluted EPS | 0.99 | 0.99 | 1.22 | -3.21 | 2.59 | 3.15 | 6.08 | 6.45 | 5.76 | 5.44 | | Assets | 1,046,285,000 | 1,043,242,000 | 1,042,159,000 | 2,369,888,000 | 2,413,832,000 | 2,649,758,000 | 2,901,125,000 | 3,268,913,000 | 3,690,360,000 | 4,505,623,000 | | Liabilities | 695,850,000 | 609,433,000 | 541,524,000 | 1,585,306,000 | 1,350,406,000 | 1,544,713,000 | 1,906,265,000 | 1,988,214,000 | 2,054,572,000 | 2,549,659,000 | | Stockholders' equity | 222,703,000 | 307,596,000 | 384,327,000 | 525,723,000 | 819,784,000 | 893,039,000 | 824,147,000 | 1,153,313,000 | 1,525,436,000 | 1,858,734,000 | | Cash and cash equivalents | 6,450,000 | 17,587,000 | 8,891,000 | 174,233,000 | 195,009,000 | 20,125,000 | 217,128,000 | 490,163,000 | 463,319,000 | 223,012,000 | | Net margin | 4.93% | 4.66% | 5.62% | -11.54% | 11.31% | 9.80% | 16.51% | 17.74% | 15.50% | 13.98% | | Operating margin | 6.07% | 6.63% | 9.35% | -5.70% | 17.38% | 14.87% | 23.42% | 25.47% | 22.64% | 20.30% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001604028.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2020-Q3 | 2019-12-31 | | | 0.28 | reported discrete quarter | | 2020-Q4 | 2020-03-31 | 370,768,000 | 2,305,000 | | derived Q4 = FY annual - nine-month YTD | | 2021-Q1 | 2020-06-30 | 508,639,000 | 70,466,000 | 0.83 | reported discrete quarter | | 2022-Q1 | 2021-06-30 | 669,300,000 | 75,987,000 | 0.87 | reported discrete quarter | | 2021-Q2 | 2021-09-30 | 706,471,000 | 75,359,000 | 0.88 | reported discrete quarter | | 2021-Q3 | 2021-12-31 | 715,357,000 | 73,678,000 | 0.86 | reported discrete quarter | | 2023-Q1 | 2022-06-30 | 914,186,000 | 187,146,000 | 2.22 | reported discrete quarter | | 2023-Q2 | 2022-09-30 | 884,209,000 | 152,007,000 | 1.80 | reported discrete quarter | | 2023-Q3 | 2023-12-31 | 662,367,000 | 105,639,000 | 1.34 | reported discrete quarter | | 2024-Q1 | 2024-06-30 | 815,336,000 | 161,402,000 | 2.06 | reported discrete quarter | | 2025-Q1 | 2025-06-30 | 829,880,000 | 143,922,000 | 1.84 | reported discrete quarter | | 2025-Q2 | 2025-09-30 | 850,381,000 | 156,017,000 | 1.99 | reported discrete quarter | | 2025-Q3 | 2025-12-31 | 693,354,000 | 93,626,000 | 1.19 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1604028/000160402826000007/wms-20251231.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-02-05 Report date: 2025-12-31 Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless the context otherwise indicates or requires, as used in this Quarterly Report on Form 10-Q (“Form 10-Q”), the terms “we,” “our,” “us,” “ADS” and the “Company” refer to Advanced Drainage Systems, Inc. and its directly- and indirectly-owned subsidiaries as a combined entity, except where it is clear that the terms mean only Advanced Drainage Systems, Inc. exclusive of its subsidiaries. We consolidate our joint ventures for purposes of GAAP, except for our South American Joint Venture. Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, references to “year” pertain to our fiscal year. For example, 2026 refers to fiscal 2026, which is the period from April 1, 2025 to March 31, 2026. The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our Condensed Consolidated Financial Statements and related footnotes included elsewhere in this Form 10-Q and with the audited Consolidated Financial Statements included in our Fiscal 2025 Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2025. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in the forward-looking statements. For more information, see the section entitled “Forward-Looking Statements.” Overview ADS is the leading manufacturer of innovative water management solutions in the stormwater and onsite septic wastewater industries, providing superior drainage solutions for use in the construction and agriculture marketplaces. Our innovative products, for which we hold many patents, are used across a broad range of end markets and applications, including non-residential, residential, infrastructure and agriculture applications. We have established a leading position in many of these end markets by leveraging our national sales and distribution platform, industry-acclaimed engineering support, overall product breadth and scale plus manufacturing excellence. Executive Summary Third Quarter Fiscal 2026 Results •Net sales increased 0.4% to $693.4 million •Net income increased 14.3% to $94.0 million •Net income per diluted share increased 14.4% to $1.19 •Adjusted EBITDA, a non-GAAP measure, increased 9.3% to $209.2 million Net sales increased $2.8 million, or 0.4%, to $693.4 million, as compared to $690.5 million in the prior year quarter. Domestic Pipe sales decreased $12.9 million, or 3.8%, to $326.7 million. Domestic Allied Products & Other sales increased $14.1 million, or 9.4%, to $164.7 million. Infiltrator sales increased $2.9 million, or 1.9%, to $152.9 million, primarily due to growth in tanks and advanced treatment products. The overall increase in domestic net sales was primarily driven by growth in the Company's core non-residential construction end market. International sales decreased $1.3 million, or 2.5%, to $49.1 million. Gross profit increased $17.6 million, or 7.3%, to $259.2 million as compared to $241.6 million in the prior year. The increase in gross profit is primarily driven by volume growth, favorable price/cost, and favorable mix of Allied Products & Other and Infiltrator. Selling, general and administrative expenses increased $8.0 million, or 7.9% to $108.7 million, as compared to $100.8 million in the prior year. As a percentage of Net sales, Selling, general and administrative expenses increased to 15.7% as compared to 14.6% in the prior year, primarily driven by transaction costs associated with the acquisition of NDS. Adjusted EBITDA, a non-GAAP measure, increased $17.7 million, or 9.3%, to $209.2 million, as compared to $191.5 million in the prior year. As a percentage of Net sales, Adjusted EBITDA was 30.2% as compared to 27.7% in the prior year. Year-to-date Fiscal 2026 Results •Net sales increased 3.7% to $2,373.6 million •Net income increased 5.0% to $394.6 million •Net income per diluted share increased 5.2% to $5.02 - 21 - Table of Contents •Adjusted EBITDA, a non-GAAP measure, increased 8.8% to $774.9 million Net sales increased $85.1 million, or 3.7%, to $2,373.6 million, as compared to $2,288.5 million in the prior year. Domestic Pipe sales decreased $17.1 million to $1,155.3 million. Domestic Allied Products & Other sales increased $40.6 million, or 7.9%, to $551.1 million. Infiltrator sales increased $70.0 million, or 15.9%, to $511.0 million. The overall increase in domestic net sales was primarily driven by growth in the core non-residential and residential construction end markets. International sales decreased $8.4 million, or 5.1%, to $156.2 million. Gross profit increased $61.7 million, or 7.1%, to $929.7 million as compared to $868.0 million in the prior year. The increase in gross profit is primarily driven by favorable volume and mix of construction market and Infiltrator sales, partially offset by unfavorable fixed cost absorption as well as the mix impact from the inclusion of Orenco. Selling, general and administrative expenses increased $43.0 million, or 14.9% to $331.9 million, as compared to $289.0 million. As a percentage of Net sales, Selling, general and administrative expense increased to 14.0% as compared to 12.6% in the prior year. The increase was primarily driven by the acquisition of Orenco, as well as realignment expenses and transaction costs associated with the acquisition of NDS. Adjusted EBITDA, a non-GAAP measure, increased $62.4 million, or 8.8%, to $774.9 million, as compared to $712.5 million in the prior year. As a percentage of Net sales, Adjusted EBITDA was 32.6% as compared to 31.1% in the prior year. Results of Operations Comparison of the Three Months Ended December 31, 2025 to the Three Months Ended December 31, 2024 The following table summarizes our operating results as a percentage of Net sales that have been derived from our Condensed Consolidated Financial Statements for the periods presented. We believe this presentation is useful to investors in comparing historical results. Consolidated Statements of Operations data: For the Three Months Ended December 31, (In thousands) 2025 2024 Net sales $ 693,354  100.0  % $ 690,538  100.0  % Cost of goods sold 434,202  62.6  448,944  65.0  Gross profit 259,152  37.4  241,594  35.0  Selling, general and administrative 108,742  15.7  100,778  14.6  Loss (gain) on disposal of assets and costs from exit and disposal activities 87  —  (477) (0.1) Intangible amortization 13,500  1.9  14,429  2.1  Income from operations 136,823  19.7  126,864  18.4  Interest expense 22,579  3.3  23,094  3.3  Interest income and other, net (8,499) (1.2) (4,792) (0.7) Income before income taxes 122,743  17.7  108,562  15.7  Income tax expense 30,557  4.4  27,091  3.9  Equity in net income of unconsolidated affiliates (1,851) (0.3) (818) (0.1) Net income 94,037  13.6  82,289  11.9  Less: net income attributable to noncontrolling interest 411  0.1  1,058  0.2  Net income attributable to ADS $ 93,626  13.5  % $ 81,231  11.8  % Net sales - The following table presents Net sales to external customers by reportable segment for the three months ended December 31, 2025 and 2024. (Amounts in thousands) 2025 2024 $ Variance % Variance Pipe $ 326,713  $ 339,629  $ (12,916) (3.8) % Infiltrator 152,881  150,013  2,868  1.9  International 49,091  50,363  (1,272) (2.5) Allied Products & Other 164,669  150,533  14,136  9.4  Total Consolidated $ 693,354  $ 690,538  $ 2,816  0.4  % - 22 - Table of Contents Our consolidated Net sales for the three months ended December 31, 2025 increased by $2.8 million, or 0.4%, compared to the same period in fiscal 2025. The overall decrease in Domestic Pipe Net sales was primarily driven by lower volume of sales in the residential and infrastructure end markets. Net sales of Infiltrator increased due to increased demand in the residential markets, primarily from growth in tanks and advanced treatment products. Allied Products & Other increased due to growth in the residential, non-residential and infrastructure end markets. Cost of goods sold and Gross profit - The following table presents gross profit by reportable segment for the three months ended December 31, 2025 and 2024. (Amounts in thousands) 2025 2024 $ Variance % Variance Pipe $ 70,846  $ 67,655  $ 3,191  4.7  % Infiltrator 83,285  74,971  8,314  11.1  International 9,798  10,466  (668) (6.4) Allied Products & Other 96,142  86,658  9,484  10.9  Intersegment eliminations (919) 1,844  (2,763) (149.8) Total gross profit $ 259,152  $ 241,594  $ 17,558  7.3  % Our consolidated Cost of goods sold for the three months ended December 31, 2025 decreased by $14.7 million, or 3.3%, and our consolidated Gross profit increased by $17.6 million, or 7.3%, compared to the same period in fiscal 2025. The increase in gross profit for Domestic Pipe is primarily driven by favorable material costs partially offset by transportation costs. The increase in gross profit for both Infiltrator and Allied Products & Other was primarily driven by volume. Selling, general and administrative expenses Three Months Ended December 31, (Amounts in thousands) 2025 2024 Selling, general and administrative expenses $ 108,742  $ 100,778  % of Net sales 15.7  % 14.6  % Selling, general and administrative expenses for the three months ended December 31, 2025 increased $8.0 million from the same period in fiscal 2025 and as a percentage of Net sales, increased by 1.1%. The increase in Selling, general and administrative expenses was primarily due to transaction costs of $7.2 million related to the acquisition of NDS. Loss (gain) on disposal of assets and costs from exit and disposal activities - The loss on disposal in fiscal 2026 was due to exit and disposal activities. See “Note 2. Restructuring and Loss (Gain) on Disposal of Assets and Costs from Exit and Disposal Activities” for additional information. Income tax expense - The following table presents the effective tax rates for the periods presented: Three Months Ended December 31, 2025 2024 Effective tax rate 24.9  % 25.0  % See “Note 11. Income Taxes” for additional information. - 23 - Table of Contents Comparison of the Nine Months Ended December 31, 2025 to the Nine Months Ended December 31, 2024 The following table summarizes our operating results as a percentage of Net sales that have been derived from our Condensed Consolidated Financial Statements for the periods presented. We believe this presentation is useful to investors in comparing historical results. Consolidated Statements of Operations data: For the Nine Months Ended December 31, (In thousands) 2025 2024 Net sales $ 2,373,615  100.0  % $ 2,288,484  100.0  % Cost of goods sold 1,443,893  60.8  1,420,495  62.1  Gross profit 929,722  39.2  867,989  37.9  Selling, general and administrative 331,927  14.0  288,962  12.6  Loss (gain) on disposal of assets and costs from exit and disposal activities (8,815) (0.4) 432  —  Intangible amortization 40,746  1.7  38,140  1.7  Income from operations 565,864  23.8  540,455  23.6  Interest expense 68,724  2.9  69,074  3.0  Interest income and other, net (23,216) (1.0) (18,864) (0.8) Income before income taxes 520,356  21.9  490,245  21.4 [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, references to “year” pertain to our fiscal year. For example, “2026” refers to fiscal 2026, which is the period from April 1, 2025 to March 31, 2026. The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the sections titled “Item 1A. Risk Factors” and “Cautionary Statement About Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K. Please read the following discussion together with the sections titled “Item 1A. Risk Factors” and our consolidated financial statements, including the related notes, included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. Overview We are the leading manufacturer of innovative water management solutions in the stormwater and onsite wastewater industries, providing superior drainage solutions for use in the construction and agriculture marketplaces. Our innovative products, for which we hold many patents, are used across a broad range of end markets and applications, including non-residential, infrastructure and agriculture applications. We have established a leading position in many of these end markets by leveraging our national sales and distribution platform, industry-acclaimed engineering support, overall product breadth and scale plus manufacturing excellence. Key Factors Affecting Our Results of Operations Product Demand - There are numerous factors that influence demand for our products. Our businesses are cyclical in nature and sensitive to general economic conditions, primarily in the United States, Canada, Mexico and South America. The non-residential, residential, agricultural and infrastructure markets we serve are affected by the availability of credit, lending practices, interest rates and unemployment rates. Demand for new homes, farm income, commercial development and highway infrastructure spending have a direct impact on our financial condition and results of operations. Accordingly, the following factors may have a direct impact on our business in the markets in which our products are sold: •the strength of the economy; •the amount and type of non-residential and residential construction; •funding for infrastructure spending; •farm income and agricultural land values; •inventory of improved housing lots; •changes in raw material and commodity prices; •the availability and cost of credit; •non-residential occupancy rates; and •demographic factors such as population growth and household formation. Growth in Allied Products - Our Allied Products include storm and onsite wastewater chambers, PVC drainage structures, fittings, stormwater filters and water separators. These products complement our pipe products and allow us to offer a comprehensive water management solution to our customers and drive organic growth. Our leading market position in pipe products allows us to cross-sell Allied Products effectively. Our comprehensive offering of Allied Products can also increase pipe sales in certain markets. Allied Products are less sensitive to resin prices since resin prices represent a smaller percentage of the cost for Allied Products. Our leading position in the pipe market has allowed us to increase organic growth of our Allied Products, and we also expect to expand our Allied Product offerings through acquisitions, including our recent acquisition of NDS. Product Pricing - The price of our products is impacted by competitive pricing dynamics in our industry as well as by raw material costs. Our industry is highly competitive and the sales prices for our products may vary based on the sales policies of our competitors. Raw material costs represent a significant portion of the cost of goods sold for our products. We aim to increase our product selling prices in order to cover raw material price increases, including increases due to tariffs, but the inability to do so could impact our profitability. Movements in raw material, logistics or other overhead costs and resulting changes in the selling prices may also impact changes in period-to-period comparisons of net sales. Material Conversion - Our HDPE and PP pipe, plastic leachfield chambers, onsite wastewater tanks and related water management product lines compete with other manufacturers of similar products as well as manufacturers of alternative products made with traditional materials, such as concrete, steel and PVC. Our net sales are driven by market trends, including the adoption of thermoplastic corrugated pipe products as a replacement for traditional materials. Thermoplastic corrugated pipe is generally lighter, more durable, more cost effective and easier to install than comparable products made 27 Table of Contents Advanced Drainage Systems, Inc from traditional materials. We believe customers will continue to acknowledge the superior attributes and compelling value proposition of our thermoplastic products and expanded regulatory approvals allow for their use in new markets and geographies. In addition, we believe that PP pipe products will also help accelerate conversion given the additional applications for which our PP pipe products can be used. Raw Material Costs - Our raw material cost and product selling prices fluctuate with changes in the price of resins utilized in production. We actively manage our resin purchases and pass fluctuations in the cost of resin through to our customers, where possible, in order to maintain our profitability. Fluctuations in the price of crude oil and natural gas prices may impact the cost of resin. In addition, changes in and disruptions to existing capacities could also significantly increase resin prices, often within a short period of time. Our ability to pass through raw material price increases to our customers may lag the increase in our costs of goods sold. Sharp rises in raw material prices over a short period of time have historically occurred with a significant supply disruption, which may increase prices to levels that cannot be fully passed through to customers due to pricing of competing products or the anticipated length of time the raw material pricing will stay elevated. We currently purchase in excess of 1.0 billion pounds of virgin and recycled resin annually from approximately 450 suppliers in North America. As a high-volume buyer of resin, we are able to achieve economies of scale to negotiate favorable terms and pricing. Our purchasing strategies differ based on the material (virgin resin versus recycled material). The price movements of the different materials vary, resulting in the need to use a number of strategies to reduce volatility. In order to reduce the volatility of raw material costs in the future, our raw material strategies for managing our costs include the following: •increasing the use of low cost resin in place of virgin resin while meeting or exceeding industry standards; •internally processing greater amounts of our recycled resin in order to closely monitor quality and minimize costs; •managing a resin price risk program that may entail both physical fixed price and volume contracts; and •maintaining supply agreements with our major resin suppliers that provide multi-year terms and volumes that are in excess of our projected consumption. We also consume a large amount of energy and other petroleum products in our operations, including the electricity we use in our manufacturing process as well as the diesel fuel consumed in delivering a significant volume of products to our customers through our in-house fleet. As a result, our operating profit also depends upon our ability to manage the cost of the energy and fuel we require, as well as our ability to pass through increased prices or surcharges to our customers. Seasonality - Our operating results are impacted by seasonality. Historically, sales of our products have been higher in the first and second quarters of each fiscal year due to favorable weather and longer daylight conditions accelerating construction project activity during these periods while fourth quarter results are impacted by the timing of spring in the northern United States and Canada. Seasonal variations in operating results may also be significantly impacted by inclement weather conditions, which can delay projects, resulting in decreased net sales for one or more quarters, but we believe that these delayed projects generally result in increased net sales during subsequent quarters. In the non-residential, residential and infrastructure markets in the northern United States and Canada, the construction season typically begins to gain momentum in late March and lasts through November, before winter significantly slows the construction markets. In the southern and western United States, Mexico, Central America and South America, the construction markets are less seasonal. The agricultural drainage market is concentrated in the early spring just prior to planting and in the fall just after crops are harvested prior to freezing of the ground in winter. Currency Exchange Rates - Although we sell and manufacture our products in many countries, our sales and production costs are primarily denominated in U.S. dollars. We have wholly-owned facilities in Canada, the Netherlands and joint venture facilities in Mexico, Chile, Brazil, Argentina, Colombia and Peru. The functional currencies in the areas in which we have wholly-owned facilities and joint venture facilities other than the U.S. dollar are the Canadian dollar, Euro, Mexican peso, Chilean peso, Brazilian real and Colombian peso. From time to time, we use derivatives to reduce our exposure to currency fluctuations. 28 Table of Contents Advanced Drainage Systems, Inc Executive Summary of Our Fiscal 2026 Results •Net sales increased 5.0% to $3.1 billion •Net income from continuing operations decreased 5.0% to $429.9 million •Adjusted EBITDA increased 8.3% to $962.9 million •Cash provided by operating activities increased $237.6 million to $819.1 million •Free cash flow increased $200.7 million to $569.3 million Net sales increased $146.1 million, or 5.0%, to $3,050.4 million, as compared to $2,904.2 million in the prior year. Stormwater sales increased $71.0 million, or 3.1%, to $2,397.4 million. Wastewater sales increased $75.1 million, or 13.0%, to $653.0 million. Gross profit increased $73.1 million, or 6.7%, to $1,167.4 million as compared to $1,094.2 million in the prior year. The increase in gross profit is primarily driven by favorable volume, price/cost and mix of construction market and Infiltrator sales, partially offset by unfavorable fixed cost absorption as well as the mix impact from acquisitions. Adjusted EBITDA, a non-GAAP financial measure, increased $73.7 million, or 8.3%, to $962.9 million, as compared to $889.2 million in the prior year. The increase is primarily due to the factors mentioned above. As a percentage of net sales, Adjusted EBITDA was 31.6% as compared to 30.6% in the prior year. Description of our Segments Following the acquisition of NDS, the Company realigned its reportable segments to align with the manner in which the CODM assesses performance and makes resource allocation decisions. The Company’s revised reportable segments consist of Stormwater and Wastewater (formerly referred to as the “Infiltrator” reportable segment). Further, the Company changed the measure used to evaluate segment profitability from adjusted gross profit to Adjusted EBITDA. Segment results for the historical periods presented in these consolidated financial statements have been recast to reflect these changes. The Segment Realignment had no impact on our previously reported consolidated net sales, income from operations, net income attributable to ADS or earnings per share. We generate a greater portion of our net sales and Adjusted EBITDA in our Stormwater segment, which includes sales of high performance thermoplastic corrugated pipe and complementary products throughout the United States and certain international regions. We expect the percentage of total net sales and gross profit derived from the Wastewater segment to continue to increase in future periods as we continue to expand our wastewater management presence. See “Note 20. Business Segment Information” to our audited consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. Stormwater - The Stormwater segment manufactures and markets high performance thermoplastic corrugated pipe and complementary products designed as an integrated, end-to-end solution set which provides a comprehensive approach to managing stormwater from the moment it hits the ground until it is cleaned and returned to its natural environment. In February 2026, the Company acquired NDS to further expand the Stormwater product offering, enhance go-to-market capabilities in retail and distributor channels, and expand the Stormwater addressable market. Stormwater products are sold and manufactured throughout the United States and certain international regions, including Company owned facilities in Canada, subsidiaries that distribute to Europe and the Middle East, and exports through the Company’s joint ventures with local partners in Mexico and South America. The Company maintains and serves these markets through product distribution relationships with many of the largest waterworks distributors, buying groups and co-ops, major retailers as well as an extensive network of hundreds of small to medium-sized distributors. Our joint venture strategy has provided us with local and regional access to new international markets. The unconsolidated sales of the South American Joint Venture were $75.6 million, $72.3 million, and $75.9 million, in fiscal 2026, 2025, and 2024, respectively. Wastewater - Wastewater (formerly “Infiltrator”) is a leading national provider of plastic leachfield chambers and systems, onsite wastewater tanks and accessories, primarily for use in residential applications. Wastewater products are used in onsite wastewater treatment systems in the United States and Canada. 29 Table of Contents Advanced Drainage Systems, Inc Results of Operations for Fiscal Year Ended March 31, 2026 Compared with Fiscal Year Ended March 31, 2025 The following table summarizes our operating results as a percentage of net sales that have been derived from our Consolidated Financial Statements for the fiscal years ended March 31, 2026 and 2025. We believe this presentation is useful to investors in comparing historical results. (Amounts in thousands) 2026 2025 Net sales $ 3,050,376  100.0  % $ 2,904,245  100.0  % Cost of goods sold 1,882,990 61.7 1,810,004  62.3 Gross profit 1,167,386 38.3 1,094,241  37.7 Selling, general and administrative expenses 469,549 15.4 380,378  13.1 Loss on disposal of assets and costs from exit and disposal activities 19,211 0.6 3,858  0.1 Intangible amortization 59,424 1.9 52,569  1.8 Income from operations 619,202 20.3 657,436  22.6 Interest expense 93,869 3.1 91,803  3.2 Interest income and other, net (34,455) (1.1) (23,832) (0.8) Income before income taxes 559,788 18.4 589,465  20.3 Income tax expense 134,988 4.4 141,063  4.9 Equity in net income of unconsolidated affiliates (5,063) (0.2) (4,171) (0.1) Net income from continuing operations 429,863 14.1 452,573  15.6 Net loss from discontinued operations, net of taxes (1,090) — —  — Net income 428,773 14.1 452,573  15.6 Less: net income attributable to the non-controlling interest 2,308 0.1 2,401  0.1 Net income attributable to ADS $ 426,465  14.0  % $ 450,172  15.5  % Net sales - The following table presents net sales to external customers by reportable segment for the fiscal years ended March 31, 2026 and 2025. (Amounts in thousands) 2026 2025 $ Variance % Variance Stormwater $ 2,397,414  $ 2,326,370  $ 71,044  3.1  % Wastewater 652,962 577,875 75,087 13.0 Total Consolidated $ 3,050,376  $ 2,904,245  $ 146,131  5.0  % Our consolidated net sales for the fiscal year ended March 31, 2026 increased by $146.1 million, or 5.0%, compared to fiscal 2025. The increase in Stormwater sales was primarily driven by NDS net sales of $48.8 million and an increase in demand for our Allied Products in the non-residential construction market. The increase in Wastewater sales was primarily driven by an increase of Orenco net sales of $52.6 million to account for a full year of sales in fiscal 2026 and an increase in demand in the construction market. Cost of goods sold and Gross profit - The following table presents gross profit by reportable segment for the fiscal years ended March 31, 2026 and 2025. (Amounts in thousands) 2026 2025 $ Variance % Variance Stormwater $ 820,710  $ 779,189  $ 41,521  5.3  % Wastewater 346,579 315,441 31,138 9.9 Intersegment eliminations 97 (389) 486 (124.9) Total gross profit $ 1,167,386  $ 1,094,241  $ 73,145  6.7  % Our consolidated Cost of goods sold for the fiscal year ended March 31, 2026 increased by $73.0 million or, 4.0%, and our consolidated Gross profit decreased by $73.1 million, or 6.7%, compared to the same period in fiscal 2025. The increase in gross profit for Stormwater is primarily due to favorable material costs and the acquisition of NDS. The increase in gross profit for Wastewater was driven by Orenco and volume. 30 Table of Contents Advanced Drainage Systems, Inc Selling, general and administrative expenses - The following table presents Selling, general and administrative expenses as a percentage of sales for the fiscal years ended March 31, 2026 and 2025. (Amounts in thousands) 2026 2025 Selling, general and administrative $ 469,549  $ 380,378  % of Net Sales 15.4  % 13.1  % Selling, general and administrative expenses for the fiscal year ended March 31, 2026 increased $89.2 million from the same period in fiscal 2025. The increase in Selling, general and administrative expenses is primarily the result of an increase in transaction costs of $31.5 million due to the acquisition of NDS, incremental operating expenses of NDS and Orenco, unfavorable incentive and stock-based compensation, and realignment expenses of $12.0 million. Loss on disposal of assets and costs from exit and disposal activities - The loss on disposal in fiscal 2026 was due to exit and disposal activities related to plant closures and asset disposals partially offset by the sale of properties held-for-sale. See “Note 3. Restructuring and Loss (Gain) on Disposal of Assets and Costs from Exit and Disposal Activities” for additional information. Intangible amortization - Intangible amortization increased by $6.9 million primarily due to the increase in intangible assets due to the NDS acquisition and the accelerated method of amortization for customer relationships. Interest expense - Interest expense increased $2.1 million for the fiscal year ended March 31, 2026 compared to the same period in fiscal 2025. The increase was primarily due to increased debt levels. Interest income and other, net - Interest income and other, net increased by $10.6 million for the fiscal year ended March 31, 2026 compared to the same period in fiscal 2025. The increase was primarily due to increased cash balances in the fiscal year and unrealized gains related to derivatives. Income tax expense - The following table presents the effective tax rates for the fiscal years presented: 2026 2025 Effective tax rate 24.1  % 23.9  % See “Note 16. Income Taxes” for additional information. Equity in net income of unconsolidated affiliates - The Equity in net income of unconsolidated affiliates increased for the fiscal year ended March 31, 2026 compared to the same period in fiscal 2025 due to the current period income at our South American Joint Venture. Net income attributable to noncontrolling interest - Net income attributable to noncontrolling interest was relatively flat for fiscal year ended March 31, 2026 compared to the same period in fiscal 2025. Net loss from discontinued operations - The loss from discontinued operations was attributable the NDS International entities classified as held for sale as of March 31, 2026. 31 Table of Contents Advanced Drainage Systems, Inc Results of Operations for Fiscal Year Ended March 31, 2025 Compared with Fiscal Year Ended March 31, 2024 The following table summarizes our operating results as a percentage of net sales that have been derived from our Consolidated Financial Statements for the fiscal years ended March 31, 2025 and 2024. We believe this presentation is useful to investors in comparing historical results. (Amounts in thousands) 2025 2024 Net sales $ 2,904,245  100.0  % $ 2,874,473  100.0  % Cost of goods sold 1,810,004 62.3 1,728,524  60.1 Gross profit 1,094,241 37.7 1,145,949  39.9 Selling, general and administrative expenses 380,378 13.1 370,714  12.9 Loss (gain) on disposal of assets and costs from exit and disposal activities 3,858 0.1 (8,365) (0.3) Intangible amortization 52,569 1.8 51,469  1.8 Income from operations 657,436 22.6 732,131  25.5 Interest expense 91,803 3.2 88,862  3.1 Interest income and other, net (23,832) (0.8) (23,484) (0.8) Income before income taxes 589,465 20.3 666,753  23.2 Income tax expense 141,063 4.9 158,998  5.5 Equity in net income of unconsolidated affiliates (4,171) (0.1) (5,536) (0.2) Net income 452,573 15.6 513,291  17.9 Less: net income attributable to the non-controlling interest 2,401 0.1 3,376  0.1 Net income attributable to ADS $ 450,172  15.5  % $ 509,915  17.7  % Net sales - The following table presents net sales to external customers by reportable segment for the fiscal years ended March 31, 2025 and 2024. (Amounts in thousands) 2025 2024 $ Variance % Variance Stormwater $ 2,326,370  $ 2,361,520  $ (35,150) (1.5) % Wastewater 577,875 512,953 64,922 12.7 Total Consolidated $ 2,904,245  $ 2,874,473  $ 29,772  1.0  % Our consolidated net sales for the fiscal year ended March 31, 2025 increased by $29.8 million, or 1.0%, compared to fiscal 2024. The decrease in Net sales for Stormwater was primarily driven by unfavorable price/mix impact partially offset by higher demand in our Allied Products. The increase in Net sales for Wastewater was driven by improved price/mix and $46.4 million of net sales from Orenco. Cost of goods sold and Gross profit - The following table presents gross profit by reportable segment for the fiscal years ended March 31, 2025 and 2024. (Amounts in thousands) 2025 2024 $ Variance % Variance Stormwater $ 779,189  $ 866,343  $ (87,154) (10.1) % Wastewater 315,441 282,810 32,631 11.5 Intersegment eliminations (389) (3,204) 2,815 (87.9) Total gross profit $ 1,094,241  $ 1,145,949  $ (51,708) (4.5) % Our consolidated Cost of goods sold for the fiscal year ended March 31, 2025 increased by $81.5 million or, 4.7%, and our consolidated Gross profit decreased by $51.7 million, or 4.5%, compared to the same period in fiscal 2024. The decrease in gross profit for Stormwater is primarily due to unfavorable material cost and the decrease in Net sales in Pipe. The increase in gross profit for Wastewater was driven by improved pricing, improved material costs and the acquisition of Orenco. 32 Table of Contents Advanced Drainage Systems, Inc Selling, general and administrative expenses - The following table presents Selling, general and administrative expenses as a percentage of sales for the fiscal years ended March 31, 2025 and 2024. (Amounts in thousands) 2025 2024 Selling, general and administrative $ 380,378  $ 370,714  % of Net Sales 13.1  % 12.9  % Selling, general and administrative expenses for the fiscal year ended March 31, 2025 increased $9.7 million from the same period in fiscal 2024. The increase in Selling, general and administrative expenses is primarily the result of the operating and acquisition expenses of Orenco partially offset by favorable incentive and stock-based compensation expense. Loss (gain) on disposal of assets and costs from exit and disposal activities - The change in Loss (gain) on disposal of assets and costs from exit and disposal activities is primarily due to the closure of a plant and other asset disposals in fiscal 2025 compared to a gain on the sale of the assets of Spartan Concrete, Inc. in fiscal 2024, partially offset by the losses on the sale of the Paper Recycling business and disposal of other assets. Intangible amortization - Intangible amortization increased by $1.1 million primarily due to the increase in intangible assets due to the Orenco acquisition. Interest expense - Interest expense increased $2.9 million for the fiscal year ended March 31, 2025 compared to the same period in fiscal 2024. The increase was primarily due to an increase in interest rates. Interest income and other, net - Interest income and other, net increased by $0.3 million for the fiscal year ended March 31, 2025 compared to the same period in fiscal 2024. Income tax expense - The following table presents the effective tax rates for the fiscal years presented: 2025 2024 Effective tax rate 23.9  % 23.8  % The change in the effective tax rate was primarily related to the increase of the income tax benefit related to the stock-based compensation windfall and the increase of income tax expense related to the executive compensation limitation in fiscal year 2025. See “Note 16. Income Taxes” for additional information. Equity in net income of unconsolidated affiliates - The Equity in net income of unconsolidated affiliates decreased for the fiscal year ended March 31, 2025 compared to the same period in fiscal 2024 due to a decrease in the current period income at our South American Joint Venture. Net income attributable to noncontrolling interest - Net income attributable to noncontrolling interest decreased for the fiscal year ended March 31, 2025 due to decreased net income at our ADS Mexicana joint venture. Non-GAAP Financial Measures EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin - EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, have been presented in this Annual Report on Form 10-K as supplemental measures of financial performance that are not required by, or presented in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as alternatives to net income as measures of financial performance or any other performance measure derived in accordance with GAAP. We calculate Adjusted EBITDA as net income from continuing operations before interest, income taxes, depreciation and amortization, stock-based compensation expense, non-cash charges and certain other gains and expenses. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are included in this Annual Report on Form 10-K because they are key metrics used by management and our Board of Directors to assess our financial performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. In addition to covenant compliance and executive performance evaluations, we use EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. 33 Table of Contents Advanced Drainage Systems, Inc EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not GAAP measures of our financial performance and should not be considered as alternatives to net income as measures of financial performance or any other performance measure derived in accordance with GAAP, and it should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin contain certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as stock-based compensation expense, derivative fair value adjustments, and foreign currency transaction losses. Management compensates for these limitations by relying on our GAAP results in addition to using EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin on a supplemental basis. Our measure of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. (Amounts in thousands) 2026 2025 2024 Net income from continuing operations $ 429,863  $ 452,573  $ 513,291  Depreciation and amortization 216,261  183,281  154,903  Interest expense 93,869  91,803  88,862  Income tax expense 134,988  141,063  158,998  EBITDA 874,981  868,720  916,054  Restructuring and realignment expense(a) 48,299  —  —  (Gain) loss on disposal of assets (17,039) 3,858  (8,365) Stock-based compensation expense 32,354  26,581  31,986  Transaction costs (b) 40,805  9,291  3,444  Inventory step up related to acquisition of NDS 12,277  —  —  Interest income (25,000) (23,485) (22,047) Other adjustments (c) (3,771) 4,263  1,875  Adjusted EBITDA $ 962,906  $ 889,228  $ 922,947  Adjusted EBITDA Margin 31.6  % 30.6  % 32.1  % (a)Includes costs associated with the optimization of the Company’s production, recycling and distribution network, as well as professional fees incurred in connection with supporting enterprise-wide restructuring and realignment initiatives. Excludes gain on sale of properties previously held-for-sale and equipment. See “Note 3. Restructuring and Loss (Gain) on Disposal of Assets and Costs from Exit and Disposal Activities” for additional information. (b)Represents expenses recorded related to legal, accounting and other professional fees incurred in connection with business or asset acquisitions and dispositions. (c)Includes derivative fair value adjustments, foreign currency transaction (gains) losses, legal settlements, inventory step-up costs, the proportionate share of interest, income taxes, depreciation and amortization related to the South American Joint Venture, which is accounted for under the equity method of accounting and executive retirement expense (benefit). Liquidity and Capital Resources Historically we have funded our operations through internally generated cash flow supplemented by debt financings, equity issuance and finance and operating leases. These sources have been sufficient historically to fund our primary liquidity requirements, including working capital, capital expenditures, debt service and dividend payments. From time to time, we may explore additional financing methods and other means to raise capital. There can be no assurance that any additional financing will be available to us on acceptable terms or at all. Free Cash Flow - Free cash flow is a non-GAAP financial measure that comprises cash flow from operations less capital expenditures. Free cash flow is a measure used by management and our Board of Directors to assess our ability to generate cash. Accordingly, free cash flow has been presented in this Annual Report on Form 10-K as a supplemental measure of liquidity that is not required by, or presented in accordance with GAAP, because management believes that free cash flow provides useful information to investors and others in understanding and evaluating our ability to generate cash flow from operations after capital expenditures. Free cash flow is not a GAAP measure of our liquidity and should not be considered as an alternative to cash flow from operating activities as a measure of liquidity or any other liquidity measure derived in 34 Table of Contents Advanced Drainage Systems, Inc accordance with GAAP. Our measure of free cash flow is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. (Amounts in thousands) 2026 2025 2024 Cash flow from operating activities $ 819,054  $ 581,491  $ 717,928  Capital expenditures (249,766) (212,944) (183,812) Free cash flow $ 569,288  $ 368,547  $ 534,116  The following table presents key liquidity metrics utilized by management: (Amounts in thousands) March 31, 2026 Total debt (debt and finance lease obligations) $ 1,771,894  Cash 223,012 Net debt (total debt less cash) 1,548,882 Leverage ratio (Net debt/Adjusted EBITDA) 1.6 The following table summarizes our available liquidity under our Revolving Credit Facility as of March 31, 2026: (Amounts in thousands) March 31, 2026 Revolver capacity $ 750,000  Less: outstanding borrowings — Less: letters of credit 10,132 Revolver available liquidity $ 739,868  As of March 31, 2026, we had $25.7 million in cash that was held by our foreign subsidiaries, of which, $13.1 million was held by our Canadian subsidiaries. We continue to evaluate our strategy regarding foreign cash, but our earnings in foreign subsidiaries still remain indefinitely reinvested, except for Canada. See “Note 16. Income Taxes” for additional discussion of our plans to repatriate earnings from Canada. Working Capital and Cash Flows In fiscal 2026, our cash balance decreased by $235.3 million. Cash outflows from the acquisition of NDS, repayment of the term loan and Senior Notes due 2027, and capital expenditures of $249.8 million were partially offset by cash generated from operations, issuance of the Senior Notes due 2034, proceeds from the new term loan facility, changes in working capital and dispositions of assets. Our decrease of cash in fiscal 2025 was $26.6 million. Cash generated from operations, changes in working capital and dispositions of assets was offset by the acquisition of Orenco, capital expenditures of $212.9 million, $69.9 million in share repurchases and $49.7 million of dividend payments. As of March 31, 2026, we had $962.9 million in liquidity, including $223.0 million of cash and $739.9 million in borrowings available under our Revolving Credit Agreement, excluding $10.1 million of outstanding letters of credit. We believe that our cash on hand, together with the availability of borrowings under our Credit Agreement and other financing arrangements and cash generated from operations, will be sufficient to meet our working capital requirements, anticipated capital expenditures, and scheduled principal and interest payments on our indebtedness for at least the next twelve months. Working Capital - Working capital is an indication of liquidity and potential need for short-term funding. We define working capital as current assets less current liabilities. Working capital decreased to $721.4 million as of March 31, 2026, from $926.4 million as of March 31, 2025, primarily due to a decrease in cash due to the acquisition of NDS and capital expenditures, partially offset by cash flow from operations and the incremental working capital of NDS. Operating Cash Flows - During fiscal 2026, 2025 and 2024, cash provided by operating activities was $819.1 million, $581.5 million and $717.9 million, respectively. Cash flow from operating activities for all periods was primarily driven by operating income and changes in working capital. Investing Cash Flows - During fiscal 2026, cash used for investing activities was $1,211.8 million. The cash used for investing cash flows was primarily for the acquisition of NDS and capital expenditures. Capital expenditures increased in 35 Table of Contents Advanced Drainage Systems, Inc fiscal 2026 compared to fiscal 2025. Our capital expenditures in fiscal 2026 were used primarily to support facility expansions, equipment replacements, technology improvement initiatives and our corporate headquarters. During fiscal 2025, cash used for investing activities was $447.9 million. The cash used for investing cash flows was primarily from the acquisition of Orenco and capital expenditures. Capital expenditures increased in fiscal 2025 compared to fiscal 2024. Our capital expenditures in fiscal 2025 were used primarily to support new facilities, facility expansions to increase production capacity and recycling capabilities, manufacturing equipment replacements and upgrades, and technology initiatives to improve customer service. During fiscal 2024, cash used for investing activities was $155.7 million. The cash used for investing cash flows was primarily from capital expenditures offset with the disposition of assets or businesses. Our capital expenditures in fiscal 2024 were used primarily to support new facilities, facility expansions, equipment replacements and technology improvement initiatives. We currently anticipate that we will make capital expenditures of approximately $200 million in fiscal 2027 to focus on growth and productivity through increasing our manufacturing capacity and investing in automation. Such capital expenditures are expected to be financed using funds generated by operations. We had approximately $100 million of open orders through purchase commitments as of March 31, 2026. Financing Cash Flows - During fiscal 2026, cash provided by financing activities was $156.3 million. During fiscal 2026, we received proceeds from the Term Loan Facility (as defined below) and issued 2034 Notes (as defined below) of $600.0 million and $500.0 million, respectively, we repaid the Initial Term Loan Facility (as defined below) and the 2027 Notes (as defined below) of $413.3 million and $350.0 million, respectively. Additionally, we repurchased shares at a cost of $92.0 million and made dividend payments of $56.1 million. During fiscal 2025, cash used in financing activities was $157.7 million. During fiscal 2025, we repurchased shares at a cost of $69.9 million and made dividend payments of $49.7 million. During fiscal 2024, cash used in financing activities was $284.3 million. During fiscal 2024, we repurchased shares at a cost of $207.3 million and made dividend payments of $47.7 million. Debt and Capitalized Lease Obligations See “Note 7. Leases” and “Note 13. Debt” to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” for a discussion of the Company’s financing transactions, including the Secured Bank Loans, the Senior Notes and the Company’s finance lease obligations. Financing Transactions Senior Secured Credit Facility - On July 31, 2019, we entered into a credit agreement (the “Base Credit Agreement”) by and among, the Company, as borrower, Barclays Bank PLC, as administrative agent, and several lenders from time to time party thereto. Among other things, the Base Credit Agreement provided for a term loan facility in the initial aggregate principal amount of $1.3 billion (the “Initial Term Loan Facility”) and a revolving credit facility in an initial aggregate amount of up to $350 million (the “Initial Revolving Credit Facility”), which included a sub-limit for a letter of credit sub-facility in the initial aggregate amount of up to $50 million. On September 24, 2019, we entered into a First Amendment (the “First Amendment”) to the Company’s Base Credit Agreement subsequent to the common stock offering and Senior Notes due in 2027. On May 26, 2022, the Company entered into a Second Amendment (the “Second Amendment”) to the Company's Base Credit Agreement with, among others, Barclays Bank PLC, as administrative agent under the Initial Term Loan Facility, and PNC Bank, National Association, as new administrative agent under the Initial Revolving Credit Facility. Among other things, the Second Amendment (i) amended the Base Credit Agreement by increasing the Initial Revolving Credit Facility (the “Second Amended Revolving Credit Facility”) from $350.0 million to $600.0 million (including an increase of the sub-limit for the swing-line sub-facility from $50.0 million to $60.0 million) and extended the maturity date of the Revolving Credit Facility to the earlier of May 26, 2027 or the date that is six months prior to the earliest maturity date of the outstanding loans under the Initial Term Loan Facility. On November 26, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to the Company’s Base Credit Agreement. Among other things, the Third Amendment modified the termination date of the Second Amended 36 Table of Contents Advanced Drainage Systems, Inc Revolving Credit Facility to remove reference to the earliest maturity date of the loans outstanding under the Initial Term Loan Facility. On February 27, 2026, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Company’s Base Credit Agreement (the Base Credit Agreement as amended by the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment, the “Credit Agreement”) with, among others, certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as administrative agent under the Term Loan Facility (as defined below) and PNC Bank, National Association, as administrative agent under the Revolving Credit Facility (as defined below) and as successor administrative agent, Barclays Bank PLC, as predecessor administrative agent, and the several financial institutions from time to time party thereto as lenders. Among other things, the Fourth Amendment (i) increased the Amended Revolving Credit Facility from $600 million to $750 million (the “Revolving Credit Facility”), including an increase of the sub-limit for the letter of credit sub-facility from $60 million to $75 million, (ii) refinanced the outstanding amounts owing under the Initial Term Loan Facility by providing for a new term loan facility in the initial aggregate principal amount of $600 million (the “Term Loan Facility”), (iii) extended the maturity date of the Revolving Credit Facility to February 27, 2031, (iv) extended the maturity date of the Term Credit Facility to February 28, 2033, (v) revised the “applicable margin” to provide for a range of 125 basis points to 225 basis points (for Term Benchmark based loans) and 25 basis points to 125 basis points (for base rate loans), as determined based on the consolidated senior secured net leverage ratio ranging from less than 1.50 to 1.00 to greater than or equal to 3.50 to 1.00, (vi) provides for incremental facilities in the aggregate maximum amount of the greater of $350 million or 100% of consolidated EBITDA for the most recently ended four consecutive fiscal quarters, and (vii) amended certain covenant baskets under the Credit Agreement to align with the growth of the Company. At the option of the Company, borrowings under the Term Loan Facility and under the Revolving Credit Facility (subject to certain limitations) bear interest at either a base rate (as determined pursuant to the Fourth Amendment) or at a Term Benchmark rate (as defined in the Fourth Amendment), plus the applicable margin as set forth therein from time to time. In the case of the Revolving Credit Facility, the applicable margin is based on the Company's consolidated senior secured net leverage ratio (as defined in the Fourth Amendment). All borrowings under the Term Loan Facility as described above initially bear interest at the Term Benchmark rate (as defined in the Fourth Amendment). In the case of the Term Loan Facility, the applicable margin shall be, for loans bearing interest at the Term Benchmark rate, 1.625%, and for loans bearing interest at the base rate, 0.625%. The Company is also required to pay a commitment fee that is based upon the undrawn amounts of the Revolving Credit Facility at a rate per annum based upon a calculated ratio as prescribed within the Credit Agreement. As of March 31, 2026, the rate the Company was committed to paying on the undrawn portion was equal to 0.15%. The Company’s obligations under the Credit Agreement have been secured by granting a first priority lien on substantially all of the Company’s assets (subject to certain exceptions and limitations), and each of StormTech, LLC, Infiltrator Water Technologies, LLC, and Orenco Systems, Inc. (collectively the “Guarantors”) has agreed to guarantee the obligations of the Company under the Credit Agreement and to secure the obligations thereunder by granting a first priority lien in substantially all of such Guarantor's assets (subject to certain exceptions and limitations). Issuance of Senior Notes due 2027 - On September 23, 2019, we issued $350.0 million aggregate principal amount of senior notes (“2027 Notes”), pursuant to the Indenture dated September 23, 2019 (the “2027 Indenture”), among the Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank Trust Company, National Association (formerly known as U.S. Bank National Association), as Trustee (the “Trustee”). The 2027 Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act or to persons outside the United States under Regulation S of the Securities Act. We may redeem the 2027 Notes, in whole or in part, at any time on or after September 30, 2022 at established redemption prices set forth in the 2027 Indenture. On February 27, 2026, we redeemed all of our outstanding 2027 Notes in the original aggregate principal amount of $350.0 million at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, to, but excluding, the redemption date in connection with our issuance of $500.0 million aggregate principal amount of 5.375% senior notes due 2034 (the “2034 Notes”). See “Note 13. Debt” for further information on the 2027 Notes and 2034 Notes. Equipment Financing - In November 2021, we purchased material handling equipment, trucks and trailers previously leased under a master lease agreement and classified as finance leases. The purchase was funded with debt through the Master Lease Agreement and Interim Funding Schedule with Fifth Third. The assets acquired are titled to the Company and included in Property, plant and equipment, net on our Consolidated Balance Sheet. The equipment financing has a balance of $3.1 million and had an initial term of between 12 and 84 months, based on the life of the equipment. The equipment financing bears a weighted average interest of 1.8% as of March 31, 2026. Issuance of Senior Notes Due 2030 - On June 9, 2022, we issued $500.0 million aggregate principal amount of 6.375% its senior notes (the “2030 Notes”) pursuant to an Indenture, dated June 9, 2022 (the “2030 Indenture”), among the Company, 37 Table of Contents Advanced Drainage Systems, Inc the Guarantors and the Trustee. The 2030 Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to the Securities Act or to persons outside the United States under Regulation S of the Securities Act. See “Note 13. Debt” for further information on the 2030 Notes. Issuance of Senior Notes Due 2034 - On February 27, 2026, we issued $500.0 million aggregate principal amount of 5.375% senior notes due 2034 pursuant to an Indenture, dated February 27, 2026 (the “2034 Indenture”), among the Company, the Guarantors and the Trustee. The 2034 Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to the Securities Act or to persons outside the United States under Regulation S of the Securities Act. See “Note 13. Debt” for further information on the 2034 Notes. Covenant Compliance The Credit Agreement requires, if, on the last day of each fiscal quarter, the aggregate amount of outstanding exposure under the Revolving Credit Facility exceeds 35% of the aggregate maximum amount of commitments under the Revolving Credit Facility then in effect, the Company is to maintain a consolidated senior secured net leverage ratio not to exceed 4.25 to 1.00 for any four consecutive fiscal quarter periods. The Credit Agreement also includes other covenants, including negative covenants that, subject to certain exceptions, limit the Company's and its restricted subsidiaries’ (as defined in the Credit Agreement) ability to, among other things: (i) incur additional debt, including guarantees; (ii) create liens upon any of their property; (iii) enter into any merger, consolidation or amalgamation, liquidate, wind up or dissolve, or dispose of all or substantially all of their property or business; (iv) dispose of assets; (v) pay subordinated debt; (vi) make certain investments; (vii) enter into swap agreements; (viii) engage in transactions with affiliates; (ix) engage in new lines of business; (x) modify certain material contractual obligations, organizational documents, accounting policies or fiscal year; or (xi) create or permit restrictions on the ability of any subsidiary of any Loan Party (as defined in the Credit Agreement) to pay dividends or make distributions to the Company or any of its subsidiaries. The Credit Agreement also contains customary provisions requiring the following mandatory prepayments (subject to certain exceptions and limitations): (i) annual prepayments (beginning with the fiscal year ending March 31, 2027) with a percentage of excess cash flow (as defined in the Credit Agreement); (ii) 100% of the net cash proceeds from any non-ordinary course sale of assets and certain casualty or condemnation events; and (iii) 100% of the net cash proceeds of indebtedness not permitted to be incurred under the Credit Agreement. For further information, see “Note 13. Debt” to the Consolidated Financial Statements. We were in compliance with our debt covenants as of March 31, 2026. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements, with the exception of the guarantee of 50% of certain debt of our unconsolidated South American Joint Venture, as further discussed in “Note 12. Related Party Transactions” of our Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data,” of this Form 10-K. Our maximum potential obligation under this guarantee totals $5.5 million as of March 31, 2026. The maximum borrowing permitted under the South American Joint Venture’s credit agreement is $11.0 million. As of March 31, 2026, our South American Joint Venture had no outstanding debt subject to our guarantee. We do not believe that this guarantee will have a current or future effect on our financial condition, results of operations, liquidity, or capital resources. Critical Accounting Policies and Estimates Our discussion and analysis of financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of the consolidated financial statements requires management to make estimates and judgments that affect the reported amounts in our consolidated financial statements and accompanying notes. Certain of our accounting policies involve a higher degree of judgment and complexity in their application, and therefore, represent the critical accounting policies used in the preparation of our financial statements. If different assumptions or conditions were to prevail, the results could be materially different from our reported results. We believe the following accounting policies may involve a higher degree of judgment and complexity in their application and represent the critical accounting policies used in the preparation of our financial statements. For additional discussion of our significant accounting policies, see “Note 1. Background and Summary of Significant Accounting Policies” to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” included in this Form 10-K. 38 Table of Contents Advanced Drainage Systems, Inc Policy Judgments and Estimates Effect if Actual Results Differ from Assumptions Revenue Recognition - We generate revenue by selling pipe and related water management products primarily to distributors, retailers, buying groups and co-operative buying groups. Products are shipped predominately by our internal fleet, and we do not provide any additional revenue generating services after product delivery. Payment terms and conditions vary by contract. Revenue is recognized at the point in-time obligations under the terms of a contract with a customer are satisfied, which generally occurs upon the transfer of control of the promised goods. In substantially all of our contracts with customers, control is transferred to the customer upon delivery. We recognize revenue in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We estimate and allocate variable consideration, such as right of return, credits or incentives, based on numerous factors, including the customer agreements and past transaction history. If our historical experience differs from future experience, our estimates of variable consideration could differ. Goodwill - Goodwill is reviewed annually for impairment in the fourth quarter or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The fair value of goodwill is determined by considering both the income and market approach. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. In Fiscal 2026, we revised our reportable segments and allocated the goodwill balance on the former Pipe, Infiltrator, International and Allied Products reporting units to our revised reporting units. Based on the revision as of March 31, 2026, the goodwill related to Stormwater and Wastewater reportable segments is $442.6 million and $600.1 million, respectively. Estimates and assumptions include: revenue growth rates and EBITDA used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and determination of appropriate market comparables. The fair value estimates are based on assumptions management believes to be reasonable but are inherently uncertain. We performed our annual impairment test for goodwill for all reporting units in the fourth quarter of Fiscal 2026 using a quantitative approach. We determined for our goodwill that the fair value of the assets exceeded the carrying value for the fiscal year March 31, 2026. Future events and unanticipated changes to assumptions could require a provision for impairment in a future period. 39 Table of Contents Advanced Drainage Systems, Inc Policy Judgments and Estimates Effect if Actual Results Differ from Assumptions Definite-lived intangible assets -Definite-lived intangible assets are tested for recoverability whenever events or changes in circumstances indicate that carrying amounts of the asset group may not be recoverable. Asset groups are established primarily by determining the lowest level of cash flows available. If the estimated undiscounted future cash flows are less than the carrying amounts of such assets, an impairment loss is recognized to the extent the fair value of the asset less any costs of disposition is less than the carrying amount of the asset. Indefinite-lived intangible assets -Indefinite-lived intangible assets are tested for impairment annually as of March 31 or whenever events or changes in circumstances indicate the carrying value may be greater than fair value. Determining the fair value of these assets is judgmental in nature and involves the use of significant estimates and assumptions. We base our fair value estimates on assumptions we believe to be reasonable, but that are inherently uncertain. To estimate the fair value of these indefinite-lived intangible assets, we use an income approach, which utilizes a market derived rate of return to discount anticipated performance. An impairment loss is recognized when the estimated fair value of the intangible asset is less than the carrying value. Determining the fair value of the definite-lived and indefinite-lived intangible assets is judgmental in nature and involves the use of significant estimates and assumptions. We did not record any impairment charges for definite-lived intangible assets in fiscal 2026, 2025, or 2024. We performed our annual impairment test for indefinite-lived intangible assets as of March 31, 2026. We performed a qualitative impairment analysis and determined for our indefinite-lived intangible assets that it was more likely than not that the fair value of the assets exceeded carrying value for fiscal years ended March 31, 2026. Future events and unanticipated changes to assumptions could require a provision for impairment in a future period. 40 Table of Contents Advanced Drainage Systems, Inc Policy Judgments and Estimates Effect if Actual Results Differ from Assumptions Business Combinations - Acquisitions, such as the acquisition of NDS, are accounted for in accordance with ASC 805, Business Combinations. We recognize separately from goodwill the assets acquired and the liabilities assumed, at their acquisition date fair values and goodwill is defined as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. During the measurement period, which may take up to one year from the acquisition date, adjustments due to changes in the estimated fair value of assets acquired and liabilities assumed may be recorded as adjustments to the consideration transferred and related allocations. Upon the conclusion of the measurement period or the final determination of the values of assets acquired and liabilities assumed, whichever comes first, any such adjustments are charged to the consolidated statements of operations. Fair values allocated to assets acquired and liabilities assumed in business combinations require management to make significant judgments, estimates, and assumptions, especially with respect to intangible assets. Management makes estimates of fair values based upon assumptions it believes to be reasonable. These estimates are based upon historical experience, information obtained from the management of the acquired company, comparable transactions, and market and industry considerations and these estimates are inherently uncertain. The estimated fair values related to intangible assets primarily consist of customer relationships, patents and developed technology, and tradenames and trademarks. Estimates in the discounted cash flow models include, but are not limited to, certain assumptions that form the basis of the forecasted results (e.g. revenue growth rates, discount rate, royalty, customer attrition rates and EBITDA). These significant assumptions are forward looking and could be affected by future economic and market conditions. Customer Relationships - In addition to revenue growth rates, EBITDA and discount rate, a key input for customer relationships is the customer attrition rate. A higher than expected customer attrition rate could result in an impairment charge. Tradenames - The most significant driver is revenue growth rates, discount rate and royalty rate. If revenue growth rates are lower than expected, it could result in an impairment charge. Developed Technology – In addition to revenue growth rates, discount rate, royalty rate and an obsolescence factor, the timing of obsolescence of the acquired technology could result in a shorter useful life than originally determined and an acceleration of amortization expense. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see “Note 1. Background and Summary of Significant Accounting Policies” to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data.”