Janus International Group Q3 Earnings Call Highlights

Key Points

• Janus cut its 2026 outlook after Q3 revenue fell 2.8% to $213.1 million and adjusted EBITDA dropped 22% to $34 million. It now expects full-year revenue of $855 million to $865 million and adjusted EBITDA of $127 million to $133 million.
• Higher interest rates, steel costs up 58% year over year, and longer lease-up periods are delaying self-storage projects; customers are completing projects already underway but pausing plans for subsequent ones. Organic new-construction revenue fell 12.5%, and adjusted EBITDA margin declined about 390 basis points to 16%.
• Janus generated $31.5 million in quarterly free cash flow and expects $10.8 million in annualized cost savings once actions are fully implemented. Net leverage was 2.9 times, while the company repurchased about 5 million shares and prepaid $30 million on its term loan.

Janus International Group NYSE: JBI revised its 2026 outlook after third-quarter revenue fell and self-storage development remained weaker than expected, as higher interest rates and steel costs prompted customers to delay projects.

The company reported third-quarter revenue of $213.1 million, down 2.8% from a year earlier, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $34 million, down 22%. Chief Executive Officer Ramey Jackson said longer lease-up periods at existing facilities also contributed to delays in new development.

“We recognize that our third quarter performance and revised outlook are disappointing,” Jackson said. He added that the timing of development projects, particularly at Kiwi II Construction, had affected results and expectations for the year.

Revised outlook reflects weaker demand

Janus now expects full-year revenue of $855 million to $865 million and adjusted EBITDA of $127 million to $133 million. The forecast includes approximately $55 million to $60 million in inorganic revenue from Kiwi II Construction.

Chief Financial Officer Anselm Wong said the revised outlook assumes no improvement in current conditions. Although it was too early to provide specific guidance for the following year, he said the company had not seen evidence of improving demand and expected headwinds to continue.

During the question-and-answer session, Wong said Kiwi’s revenue run rate was roughly in the $60 million range. Customers were delaying decisions and stretching out projects, he said. Jackson clarified that projects already under construction were generally being completed, while planning for subsequent projects had halted.

Jackson said steel costs had increased 58% year over year and 21% quarter over quarter, reducing margins on storage deals and causing customers to pause.

Self-storage weakness weighs on margins

Third-quarter self-storage revenue fell 5% from the prior year. New construction revenue declined 1.6%, as weakness in North America offset contributions from Kiwi and strength internationally. On an organic basis, new construction revenue fell 12.5%.

Revenue in the R3 business, which includes replacement, renovation, conversion and expansion activity, declined 10.6%. Wong said real estate investment trusts and large institutions appeared relatively steady, but other customers were scrutinizing discretionary spending more closely. He said the company had not seen a change in the planned timing of upgrades associated with major facility acquisitions.

International segment revenue rose 6% to $30 million, driven by new construction growth and market share gains. Revenue in the Commercial and Other sales channel increased 2.3%, primarily because of freight terminal business contributions, partly offset by continued softness in commercial sheet doors.

Adjusted EBITDA margin fell about 390 basis points to 16%. Wong attributed the decline primarily to lower volumes and product and sales-channel mix. He said a decline in higher-margin North American self-storage business was the largest factor weighing on blended gross margin.

Adjusted net income was $10.8 million, compared with $22.6 million a year earlier. Adjusted diluted earnings per share were $0.08.

Cost savings and capital allocation

Janus expects actions taken this year to generate approximately $10.8 million in annualized cost savings once fully implemented. Wong said the company expected to realize roughly half of the announced savings this year and half next year. Lower volumes and reduced absorption of fixed costs have offset some benefits in the near term.

Wong said Janus was continuing to review its portfolio and saw opportunities for further savings in coming quarters, though it was not ready to announce additional actions.

The company generated $31.5 million in free cash flow during the quarter and ended the period with $100 million in cash and equivalents. Net leverage was 2.9 times, near the top of its target range of two to three times.

Janus repurchased about 5 million shares for $25.3 million during the quarter and voluntarily prepaid $30 million on its first-lien term loan. Wong said buybacks, debt repayment and acquisitions remained options, though leverage near the high end of the target range would influence near-term choices.

Asked about strategic alternatives, Jackson declined to comment on any specific course of action, saying the board was acting as a fiduciary and would look at all options.

Technology adoption and acquisition outlook

Janus ended the quarter with 524,000 connected devices on its Nokē Smart Entry platform, up 19.4% year over year. Jackson said the company was focused on expanding adoption and recurring revenue while improving profitability.

Asked about goodwill impairment involving Kiwi and BETCO, Wong said a meaningful reduction in Kiwi’s near-term forecast required the company to reassess the business’s valuation. He said Janus continued to view the acquisition’s long-term strategic rationale positively.

About Janus International Group (NYSE:JBI)

Janus International Group, Inc. NYSE: JBI is a global manufacturer and supplier of building products and technology solutions for the self-storage and commercial construction industries. The company provides systems designed to support the development, renovation, operation and security of storage facilities and other commercial properties. Its products and services include roll-up doors, hallway systems, relocatable storage units, facility and building components, and access-control solutions.

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