CMC’s Q4 Margins and Cash Flow Strengthen on Record Emerging Businesses Performance and Margin Recovery

Margin Expansion and Core Profitability Define the Quarter

Commercial Metals Company (NYSE: CMC) closed fiscal 2025 on a high note, posting fourth quarter net earnings of $151.8 million, or $1.35 per diluted share, and adjusted earnings of $155 million ($1.37 per diluted share). Core EBITDA reached $291.4 million with a margin of 13.8%—both up sequentially and year-over-year—showing significant operating strength across CMC's business lines.

This improvement was underpinned by a steady recovery in North American steel product margins and an outstanding showing from CMC’s Emerging Businesses Group (EBG), which delivered its best quarterly performance to date, driven primarily by record results from the Tensar business. These factors contributed to positive cash generation, positioning CMC for a strong start to fiscal 2026 and reinforcing its investment thesis for both growth and resilience.

Business Segments Show Broad-Based Improvement

All major business segments delivered either strong sequential improvement or sharp reversals versus the prior year. In North America, shipments of finished steel products grew 3% over the prior year, with steel product metal margins expanding $69 per ton sequentially. The average selling price for steel products rose $23 per ton quarter-over-quarter, while scrap costs fell $46 per ton—bolstering margins further.

The EBG’s record results were propelled by ongoing strength in Tensar and other businesses such as CMC Construction Services and Performance Reinforcing Steel. Adjusted EBITDA margin of 22.8% marked a new high, fueled by solid demand and effective cost control. In Europe, improved economic conditions in Poland and a sharp decline in scrap costs led to a return to segment profitability, with adjusted EBITDA rising from a year-ago loss to $39.1 million.

Liquidity and Shareholder Returns Remain Strong

CMC finished the fiscal year with cash and cash equivalents of $1.04 billion and total liquidity nearing $1.9 billion. The balance sheet provides flexibility for continued investment and shareholder return initiatives. During the quarter, the company repurchased 974,462 shares for $50 million, with $205 million still authorized for future buybacks.

The quarterly dividend was held steady at $0.18 per share, marking CMC’s 244th consecutive payout—a clear sign of balance sheet strength and long-term capital allocation discipline.

Outlook: Operating Initiatives and Acquisitions Set the Stage for 2026

CMC anticipates consolidated results in Q1 fiscal 2026 will be broadly consistent with the just-completed quarter, supported by continued strength in steel product margins. Management is optimistic that the recently initiated Fed interest rate reductions may help unlock pent-up construction demand, translating healthy bid pipelines into new activity as the year unfolds.

The company also highlighted the impact of its TAG (Transform, Advance, and Grow) program, which exceeded expectations in fiscal 2025. Operational initiatives—including scrap cost and yield optimization, logistics improvements, and selective bidding discipline—have helped drive profit recovery and position the company to capitalize on favorable construction trends. Looking forward, CMC expects pending acquisitions of Foley Products and Concrete Pipe & Precast will add a new dimension to growth, further broadening its commercial portfolio and long-term opportunity set.

Key Q4 2025 and Full-Year 2025 Metrics

*FY25 net earnings include a $274 million after-tax charge related to litigation.

Takeaway: Resilient Margins and Solid Execution Set the Tone for Fiscal 2026

CMC enters the new fiscal year with expanding margins, record segment performance, and a liquidity position that allows both organic investment and acquisition-led growth. The execution of its TAG program, recovery in steel margins, and continued payout to shareholders mark a business firing on multiple cylinders. Investors may want to watch for the integration and early performance of the pending acquisitions and the extent to which rate-driven demand unlocks new project volume in coming quarters.

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