- 2025 Financial Performance Net sales rose 12%, adjusted EBITDA grew 14%, and EBITDA margin expanded 70 bps to 35.5%–43.5%.
- Mineral Fiber Segment Growth Achieved 6% average unit value (AUV) growth, driven by pricing and product mix, despite government shutdown impacts.
- Architectural Specialties Segment Delivered 11% sales growth (9% organic), but EBITDA margin fell 50 bps to 18% due to project timing delays.
- 2026 Outlook Expects 8–10% net sales growth, 8–12% adjusted EBITDA growth, and 200 bps total EBITDA margin expansion, aided by acquisitions like Geometric and Eventscape.
- Innovation & Acquisitions Launched TEMPLOK energy-saving ceilings and DATAZONE panels for data centers; Eventscape acquisition added $30M in 2025 revenue, with 0.5 bps growth contribution expected in 2026.
Segment Performance
The Mineral Fiber segment's volume was impacted by softer home center demand and the government shutdown, while the AS segment's adjusted EBITDA margin was approximately 18%, 50 basis points below guidance due to project timing headwinds. The company's total company adjusted EBITDA margin expansion was 160 basis points in the fourth quarter.
Outlook for 2026
For 2026, Armstrong World Industries expects Mineral Fiber volume to be flat to up 1%, with AUV growth of approximately 6%. The AS segment is expected to have high single-digit organic growth, driven by contributions from recent acquisitions, including Eventscape. The company's total company net sales growth is expected to be between 8% to 10%, with adjusted EBITDA growth of 8% to 12%.
Valuation Metrics
With a P/E Ratio of 24.62 and an EV/EBITDA of 12.24, the market is pricing in a certain level of growth for Armstrong World Industries. The company's ROE of 27.78% and ROIC of 19.73% indicate a strong ability to generate returns on equity and invested capital. Analysts estimate revenue growth at 5.9% for the next year, which is lower than the company's expected net sales growth of 8% to 10% for 2026.
Innovation and Growth Initiatives
As Mark Hershey, the incoming CEO, noted, "Our innovation in energy efficiency includes an upgraded TEMPLOK energy-saving ceiling solution... We're seeing interest and adoption grow, with recent shipping of TEMPLOK for office renovation projects." The company's focus on innovation and growth initiatives is expected to drive future growth, with contributions from data centers and energy savings projects expected to add 0.5 points of growth in 2026.