ADS Boosts Dividend 11%, Signals Confidence in Growth Strategy

HILLIARD, OH – May 21, 2026 – Advanced Drainage Systems, Inc. (NYSE: WMS), a leading provider of water management solutions, announced an 11% increase in its annual cash dividend, a move that signals management's strong confidence in the company's financial health and future prospects. The decision, approved by the Board of Directors, raises the total annual dividend to $0.80 per share.

The increase reflects a consistent commitment to shareholder returns, with the company paying a quarterly dividend of $0.20 per share on June 15, 2026, to shareholders of record as of June 1, 2026. This marks the fourth consecutive year of dividend increases for the Ohio-based manufacturer.

“The 11% increase in the cash dividend is predicated on the strength of our balance sheet, formidable cash generation, and ongoing commitment to returning capital to shareholders,” said Scott Barbour, President and Chief Executive Officer of Advanced Drainage Systems, in the company's official announcement. He noted that the company's financial flexibility allows it to reward shareholders while pursuing critical investments.

This dividend hike is not just a standalone financial maneuver but the latest chapter in a story of robust performance and strategic capital allocation, painting a picture of a company capitalizing on its market leadership while preparing for future demand.

A Foundation of Financial Strength

Behind the dividend increase is a fortress-like balance sheet and impressive financial performance. Advanced Drainage Systems, known as ADS, concluded its 2026 fiscal year with significant momentum. The company reported net sales of $3.05 billion, a 5% increase over the prior year. More impressively, its Adjusted EBITDA grew by 8.3% to $962.9 million, showcasing strong profitability and operational efficiency.

The claims of a “strong balance sheet” are well-supported by the numbers. The company ended its prior fiscal year (FY2025) with over $1.1 billion in total liquidity and a conservative net debt leverage ratio of just 1.1 times. Even after strategic moves like the acquisition of NDS, liquidity remained robust at $1.6 billion as of the third quarter of fiscal 2026, with leverage at a manageable 1.5x. This financial stability provides the foundation for both shareholder returns and ambitious growth projects.

In fiscal year 2026 alone, ADS returned a substantial $155.4 million to its shareholders through a combination of dividends and share repurchases, up from $119.7 million in the previous year. This consistent return of capital is a testament to the company's ability to generate significant cash from its operations, which amounted to $581 million in fiscal 2025.

Balancing Payouts with Strategic Investments

While the dividend increase is welcome news for investors, it is the company's ability to fund these payouts while simultaneously investing heavily in its future that tells the full story. ADS is executing a carefully balanced capital allocation strategy that earmarks significant funds for innovation, capacity, and strategic acquisitions.

A cornerstone of this strategy is the company's new Engineering and Technology Center, which opened in October 2024. Described as the world's most advanced stormwater research facility, the center is the hub for material science innovation and the rapid development of new products. Recent launches, such as the EcoStream™ biofiltration product and the Arcadia™ hydrodynamic stormwater separator, are direct results of this focus on innovation, designed to meet increasingly complex water management challenges.

Investment in core operations is also a priority. Since 2020, ADS has increased its pipe production per line by over 20% through targeted investments in capacity and modernizing manufacturing lines. This drive for efficiency ensures the company can meet growing market demand profitably.

Furthermore, ADS has used strategic acquisitions to expand its market reach and product portfolio. The recent acquisition of NDS bolsters its core stormwater business, while the fiscal 2025 purchase of Orenco Systems, Inc. expanded its presence in the high-growth market for advanced onsite wastewater treatment. These moves demonstrate a clear strategy to consolidate its leadership position across the water management spectrum.

Riding the Wave of Infrastructure Modernization

ADS's financial success and strategic investments are buoyed by powerful secular tailwinds. With storm events increasing in frequency and intensity, and much of the nation's water infrastructure aging, the demand for advanced, resilient water management solutions is surging. A recent survey conducted by The Harris Poll on behalf of ADS found that 60% of Americans are concerned about the stormwater infrastructure in their communities, a nearly 10% increase from the prior year, highlighting growing public awareness and political will for action.

This creates a fertile market for ADS, which designs its products for longevity and sustainability. The company's role extends beyond just providing solutions; it is also a key player in the circular economy. As one of North America's largest plastic recycling companies, ADS keeps millions of pounds of plastic out of landfills each year by converting it into durable pipes and water management systems designed to last for decades.

This blend of financial performance and environmental stewardship makes the company an interesting case for ESG-focused investors. The company's financial health is directly linked to its ability to provide sustainable solutions for managing the world's most precious resource, water. By turning recycled plastic into critical infrastructure, ADS demonstrates that positive environmental impact and strong shareholder returns can go hand-in-hand.

For investors, the latest dividend increase is more than just a welcome cash payment. It is a clear signal from a company that has built a solid financial foundation, is executing a disciplined growth strategy, and is well-positioned to lead in the essential and growing market of water infrastructure for years to come.