Executive Summary
James Hardie delivered QQ3 2025 results that underscore robust cash generation and a solid balance sheet amidst a modest year-over-year top-line decline. Revenue reached $953.3 million, down 3.35% year over year and 0.78% quarter over quarter, while gross profit was $362.4 million for a gross margin of 38.01%. The company posted operating income of $206.1 million (operating margin 21.62%) and net income of $141.7 million (net margin 14.86%), supported by EBITDA of $261.3 million. Free cash flow totaled $185.3 million, aided by operating cash flow of $293.1 million and capital expenditures of $107.8 million. The balance sheet remains healthy with $539.1 million in cash and equivalents and a net debt position of $649.0 million, yielding a strong liquidity profile (current ratio 2.18, quick ratio 1.67, cash ratio 0.79). Valuation indicators show the stock trading at a premium relative to some peers (P/E ~21.3x, P/B ~5.7x), reflecting a quality cash-generation profile but cycling exposure tied to construction activity. Near-term visibility remains tied to North American housing demand, input-cost dynamics, and potential increases in renovation activity across key geographies. Overall, the QQ3 print supports a prudent, income-oriented stance with a tilt toward stock-selective gains driven by margin discipline and cash-flow efficiency.
Key Performance Indicators
QoQ: -2.82% | YoY:-10.29%
QoQ: 35.33% | YoY:-12.86%
Key Insights
Revenue: $953.3m; YoY -3.35%, QoQ -0.78%. Gross Profit: $362.4m; YoY -10.29%, QoQ -2.82%; Gross Margin: 38.01%; Operating Income: $206.1m; YoY -12.86%, QoQ +35.33% (operating margin 21.62%). Net Income: $141.7m; YoY -2.34%, QoQ +69.90% (net margin 14.86%). EBITDA: $261.3m; EBITDA Margin: 27.41% (EBITDA ratio 0.2741). EPS: $0.33; YoY 0.00%, QoQ +73.68%. Key cash flow: Operating cash flow $293.1m; Capex $-107.8m; Free Cash Flow $185.3m. Balance sheet: Cash and equivalents $539.1m; Total assets $4,...
Financial Highlights
Revenue: $953.3m; YoY -3.35%, QoQ -0.78%. Gross Profit: $362.4m; YoY -10.29%, QoQ -2.82%; Gross Margin: 38.01%; Operating Income: $206.1m; YoY -12.86%, QoQ +35.33% (operating margin 21.62%). Net Income: $141.7m; YoY -2.34%, QoQ +69.90% (net margin 14.86%). EBITDA: $261.3m; EBITDA Margin: 27.41% (EBITDA ratio 0.2741). EPS: $0.33; YoY 0.00%, QoQ +73.68%. Key cash flow: Operating cash flow $293.1m; Capex $-107.8m; Free Cash Flow $185.3m. Balance sheet: Cash and equivalents $539.1m; Total assets $4,908.2m; Total debt $1,188.1m; Net debt $649.0m. Liquidity: Current ratio 2.18; Quick ratio 1.66; Cash ratio 0.79. Leverage and coverage: Debt to capitalization 36.1%; Long-term debt to capitalization 34.3%; Debt ratio 24.2%; Interest coverage non-applicable (negative or not disclosed in this period); ROA 2.89%; ROE 6.75%; ROCE 4.88%. Efficiency: DSO 26.01 days; DIO 53.31 days; DPO 59.57 days; CCC 79.32 days. Valuation (proximate, USD): P/E 21.25x; P/B 5.73x; P/S 12.63x; EV/EBITDA 48.57x; FCF Yield (per share) ~0.43; FCF/Revenue ~19.4%. Dividend yield: 0% (no dividend declared in the period).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
953.30M |
-3.35% |
-0.78% |
| Gross Profit |
362.40M |
-10.29% |
-2.82% |
| Operating Income |
206.10M |
-12.86% |
35.33% |
| Net Income |
141.70M |
-2.34% |
69.90% |
| EPS |
0.33 |
0.00% |
73.68% |
Key Financial Ratios
operatingProfitMargin
21.6%
operatingCashFlowPerShare
$0.68
freeCashFlowPerShare
$0.43
Management Commentary
Note: Earnings call transcript for QQ3 2025 has not been provided in the data set. Consequently, management quotes and call themes could not be extracted or quoted. Analysts’ questions, organic growth drivers, and commentary on cost inflation containment or mix-shift dynamics are not available for inclusion.
Forward Guidance
There was no formal forward guidance released with the QQ3 2025 results in the provided materials. Given the mid-teens margin profile and strong FCF generation alongside cyclicality in construction demand, the baseline view is conservatively constructive for James Hardie if housing activity in North America stabilizes and renovation activity remains resilient. Key factors to watch include: (1) North American housing starts and new-build demand, (2) input cost trends for cement and fiber cement raw materials, (3) mix and pricing tolerance across geographic segments (North America Fiber Cement, Asia Pacific Fiber Cement, Europe Building Products), and (4) working capital dynamics in a higher-rate environment. If demand holds and cost discipline persists, a modest margin recovery could be plausible in subsequent quarters, supported by cash-flow efficiency and capex discipline.