ayi-20251130

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

Form 10-Q

_____________________________________________


(Mark One)
☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2025.


OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .

Commission file number 001-16583.

_____________________________________________

ACUITY INC.

(Exact name of registrant as specified in its charter)

_____________________________________________


Delaware						58-2632672
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1170 Peachtree Street, N.E., Suite 1200, Atlanta, Georgia 30309

(Address of principal executive offices)

(404) 853-1400

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value per share

AYI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $0.01 par value — 30,662,621 shares as of January 5, 2026.

ACUITY INC.

Table of Contents


		Page No.
Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets -- November 30 , 2025 (Unaudited) and August 31, 2025	1
	Consolidated Statements of Comprehensive Income (Unaudited) -- Three months ended November 30, 202 5 and November 30, 2024	2
	Consolidated Statements of Cash Flows (Unaudited) -- Three months ended November 30, 202 5 and November 30, 2024	3
	Notes to Consolidated Financial Statements (Unaudited)	4
	Note 1 — Description of Business and Basis of Presentation	4
	Note 2 — Significant Accounting Policies	5
	Note 3 — Acquisitions	5
	Note 4 — New Accounting Pronouncements	6
	Note 5 — Fair Value Measurements	7
	Note 6 — Inventories	8
	Note 7 — Property, Plant, and Equipment	9
	Note 8 — Goodwill and Intangible Assets	9
	Note 9 — Other Current Liabilities	10
	Note 10 — Debt and Lines of Credit	10
	Note 11 — Commitments and Contingencies	11
	Note 12 — Changes in Stockholders' Equity	12
	Note 13 — Revenue	13
	Note 14 — Share-based Payments	14
	Note 15 — Pension Plans	14

	Note 1 6 — Other Expense	15
	Note 1 7 — Earnings Per Share	16
	Note 1 8 — Comprehensive Income	16
	Note 19 — Segment Information	17

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4.	Controls and Procedures	25

Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 5.	Other Information	26
Item 6.	Exhibits	26

INDEX TO EXHIBITS		27

SIGNATURES		28

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PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

ACUITY INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except per-share data)


	November 30, 2025		August 31, 2025
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	376.1	$	422.5
Accounts receivable, less reserve for doubtful accounts of $4.1 and $4.3, respectively	565.3		593.9
Inventories	518.1		526.7
Prepayments and other current assets	122.0		108.4
Total current assets	1,581.5		1,651.5
Property, plant, and equipment, net	345.0		343.2
Operating lease right-of-use assets	103.6		97.4
Goodwill	1,492.6		1,495.5
Intangible assets, net	1,074.8		1,099.0
Deferred income taxes	12.3		23.4
Other long-term assets	42.3		45.2
Total assets	$	4,652.1	$	4,755.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	396.2	$	454.5

Current operating lease liabilities	25.4		23.3
Accrued compensation	86.2		110.0
Other current liabilities	254.6		258.0
Total current liabilities	762.4		845.8
Long-term debt	797.0		896.8
Long-term operating lease liabilities	87.7		84.3
Accrued pension liabilities	39.6		39.2
Deferred income taxes	24.6		24.9
Other long-term liabilities	146.8		139.3
Total liabilities	1,858.1		2,030.3
Commitments and contingencies (see Commitments and Contingencies footnote)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 50.0 shares authorized; none issued	—		—
Common stock, $0.01 par value per share; 500.0 shares authorized; 55.0 and 54.9 shares issued, respectively	0.6		0.5
Paid-in capital	1,151.0		1,164.7
Retained earnings	4,401.0		4,285.8
Accumulated other comprehensive loss	(81.4)		(76.5)
Treasury stock, at cost, of 24.3 and 24.2 shares, respectively	(2,677.2)		(2,649.6)
Total stockholders’ equity	2,794.0		2,724.9
Total liabilities and stockholders’ equity	$	4,652.1	$	4,755.2

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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ACUITY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In millions, except per-share data)


	Three Months Ended
	November 30, 2025		November 30, 2024
Net sales	$	1,143.7	$	951.6
Cost of products sold	589.9		502.3
Gross profit	553.8		449.3
Selling, distribution, and administrative expenses	393.4		316.0

Operating profit	160.4		133.3
Other expense (income):
Interest expense (income), net	8.4		(4.0)
Miscellaneous (income) expense, net	(0.6)		2.5
Total other expense (income)	7.8		(1.5)
Income before income taxes	152.6		134.8
Income tax expense	32.1		28.1
Net income	$	120.5	$	106.7

Earnings per share(1):
Basic earnings per share	$	3.92	$	3.45
Basic weighted average number of shares outstanding	30.705		30.930
Diluted earnings per share	$	3.82	$	3.35
Diluted weighted average number of shares outstanding	31.561		31.799
Dividends declared per share	$	0.17	$	0.15

Comprehensive income:
Net income	$	120.5	$	106.7
Other comprehensive (loss) income items:
Foreign currency translation adjustments	(5.1)		(17.3)
Defined benefit plans, net of tax	0.2		0.5
Other comprehensive loss items, net of tax	(4.9)		(16.8)
Comprehensive income	$	115.6	$	89.9

______________________________

(1) Earnings per share is calculated using unrounded numbers. Amounts in the table may not recalculate exactly due to rounding.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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ACUITY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)


	Three Months Ended
	November 30, 2025		November 30, 2024
Cash flows from operating activities:
Net income	$	120.5	$	106.7
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	38.3		21.6
Share-based payment expense	12.5		12.1






Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	28.0		25.2
Inventories	7.1		(5.1)
Prepayments and other current assets	(10.2)		(1.8)
Accounts payable	(51.4)		(14.5)
Other operating activities	(4.0)		(12.0)
Net cash provided by operating activities	140.8		132.2
Cash flows from investing activities:
Purchases of property, plant, and equipment	(26.0)		(18.9)



Other investing activities	(0.3)		0.5
Net cash used for investing activities	(26.3)		(18.4)
Cash flows from financing activities:


Repayments of term loan borrowings	(100.0)		—
Repurchases of common stock	(27.1)		(6.7)
Proceeds from stock option exercises and other	1.4		15.6
Payments of taxes withheld on net settlement of equity awards	(27.6)		(23.1)
Dividends paid	(5.3)		(4.5)
Other financing activities	(2.1)		—
Net cash used for financing activities	(160.7)		(18.7)
Effect of exchange rate changes on cash and cash equivalents	(0.2)		(5.3)
Net change in cash and cash equivalents	(46.4)		89.8
Cash and cash equivalents at beginning of period	422.5		845.8
Cash and cash equivalents at end of period	$	376.1	$	935.6
Supplemental cash flow information:
Income taxes paid during the period	$	6.4	$	9.6
Interest paid during the period	$	16.5	$	11.6

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1 — Description of Business and Basis of Presentation

Acuity Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) is a market-leading industrial technology company. We use technology to solve problems in spaces, light, and more things to come. Through our two business segments, Acuity Brands Lighting (“ABL”) and Acuity Intelligent Spaces (“AIS”), we design, manufacture, and bring to market products and services that make a valuable difference in people’s lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video and control platform. We focus on customer outcomes and drive growth and productivity to increase market share and deliver superior returns. We look to aggressively deploy capital to grow the business and to enter attractive new verticals.

Acuity Brands Lighting Segment

Our mission at ABL is to provide sustainable and intelligent lighting solutions that enrich communities where people live, learn, work, and play. We bring this mission to life through our strategy, which is to increase product vitality, elevate service levels, use technology to improve and differentiate both our products and how we operate the business, and drive productivity. At ABL, our offering combines luminaires with advanced electronics. Our luminaires deliver performance and aesthetic appeal, while our electronics portfolio, featuring drivers and a leading controls platform, provides connectivity and functionality. ABL's portfolio of products includes, but is not limited to the following brands: AculuxTM, American Electric Lighting®, CycloneTM, Dark to Light®, eldoLED®, Eureka®, FrescoTM, Gotham®, Healthcare Lighting®, Holophane®, Hydrel®, IOTA®, Juno®, Lithonia Lighting®, Luminaire LEDTM, Luminis®, Mark Architectural LightingTM, NightingaleTM, nLight®, Peerless®, RELOC® Wiring Solutions, and SensorSwitchTM.

Customers of ABL are located in North America and select international markets that serve new construction, renovation and retrofit, and maintenance and repair applications. Our lighting solutions are sold primarily through a network of independent sales agencies, by internal sales representatives, through electrical distributors and consumer retailers, directly to large corporate accounts, and directly to original equipment manufacturer (“OEM”) customers. Products are delivered directly from our manufacturing facilities or through a network of distribution centers.

Acuity Intelligent Spaces Segment

Our mission at AIS is to make spaces smarter, safer, and greener through our strategy of connecting the edge with the cloud using disruptive technologies. Through Atrius®, Distech Controls®, and QSC®, we are driving productivity for people who own and manage a space and for the people who utilize a space. Atrius makes data in a space accessible, usable, and actionable. Our data platform and cloud applications for building performance and spatial intelligence aim to maximize occupant and owner experiences. Our Distech Controls intelligent Building Management Systems (“BMS”) provide management of a space through controls, sensors, and software. Our open technology includes products for heating, ventilation, and air conditioning (“HVAC”), refrigeration, lighting, shades, and building access that prioritize end-user outcomes. Q-SYS, our full-stack audio, video, and control platform, unifies data, devices, and a cloud-first architecture to deliver real-time action, experiences, and insights. QSC Audio includes audio technology that enhances experiences for live entertainers and sound reinforcement professionals.

AIS goes to market primarily through system integrators. Key customer verticals include retail stores, airports, universities, enterprise campuses, sports venues, themed entertainment, and hospitality, among many other broad applications throughout North America, Europe, and other select international locations.

Basis of Presentation

We have prepared the Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) to present the financial position, results of operations, and cash flows of Acuity Inc. and its wholly-owned subsidiaries.

These unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of November 30, 2025, our consolidated comprehensive income for the three months ended November 30, 2025 and November 30, 2024, and our consolidated cash flows for the three months ended November 30, 2025 and November 30, 2024. Certain information and footnote disclosures normally included in our annual financial statements prepared in

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

accordance with U.S. GAAP have been condensed or omitted. However, we believe that the disclosures included herein are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the three years in the period ended August 31, 2025 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 27, 2025 (“Form 10-K”).

Our business exhibits some seasonality, with net sales being affected by weather and seasonal demand on construction and installation programs, particularly during the winter months, as well as the annual budget cycles of major customers. Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of each fiscal year due to these factors.

Note 2 — Significant Accounting Policies

Use of Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.

Reclassifications

We may reclassify certain prior period amounts to conform to the current year presentation. No material reclassifications occurred during the current period.

Note 3 — Acquisitions

QSC, LLC

On January 1, 2025, we acquired all of the equity interests of QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion in cash. This acquisition expanded AIS into a cloud-manageable audio, video, and control platform that includes controls, sensors, and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare, and transportation. We funded the transaction using cash on hand and proceeds from our indebtedness. See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for further details on our outstanding borrowings.

We accounted for the acquisition of QSC in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). Acquired assets and liabilities were recorded at their estimated acquisition-date fair values. Acquisition-related professional fees were expensed as incurred in fiscal 2025 for $23.8 million, of which $4.6 million was incurred during the three months ended November 30, 2024. These costs were recorded in Selling, distribution, and administrative expenses on the Consolidated Statements of Comprehensive Income and were reflected in our unallocated corporate amounts.

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table outlines the preliminary fair values of the assets and liabilities obtained in connection with the QSC acquisition as of January 1, 2025 (in millions):






	Purchase Price Allocation
Consideration transferred:
Cash consideration	$	1,240.7
Identifiable assets:
Intangible assets	713.9
Inventories	101.9
Property, plant, and equipment	28.4
Operating lease right-of-use assets	24.2
Accounts receivable	55.7
Cash and cash equivalents	51.3
Other assets	45.8
Total identifiable assets	1,021.2
Liabilities assumed:
Accounts payable	32.6
Operating lease liabilities	24.2
Deferred tax liabilities	17.6
Other liabilities	100.7
Total liabilities assumed	175.1
Total identifiable net assets	846.1
Goodwill	$	394.6

The estimated fair values and estimated useful lives of identifiable intangible assets as of January 1, 2025 are as follows:


	Weighted Average Useful Life (Years)	Fair Value (in millions)
Developed technology and patents(1)	10	$	434.0
Customer relationships	19	145.0
Trademarks	18	133.0
Other	1	1.9
Total identifiable intangible assets	13	$	713.9

____________________________________

(1) Substantially all of the the developed technology intangible assets relates to Q-SYS, an audio, video, and control platform.

Assets and liabilities for QSC have been reflected in the Consolidated Balance Sheets since the acquisition date. The preliminary goodwill is recorded in the AIS segment, and it is primarily comprised of benefits related to the expansion of AIS’ technology and audio, video, and control solution product portfolios. Approximately $350.0 million of the preliminary goodwill is expected to be deductible for tax purposes.

Amounts recorded for acquired assets and liabilities are deemed to be provisional until disclosed otherwise, as we continue to gather information related to the identification and valuation of acquired assets and liabilities. These amounts may change as we finalize the allocation. The primary areas of the preliminary acquisition accounting that are not yet finalized relate to income taxes and residual goodwill. The final determination of acquisition-date fair values will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under U.S. GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined. No measurement period adjustments were recorded during the first quarter of fiscal 2026.

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 4 — New Accounting Pronouncements

Accounting Standards Yet to Be Adopted

Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”)

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, which requires public entities to disaggregate specific types of expenses, including disclosures for purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses. Annual disclosures are required for fiscal years beginning after December 15, 2026, or our fiscal 2028. Interim disclosures are required for periods within fiscal years beginning after December 15, 2027, or our fiscal 2029. Prospective application is required, and retrospective application is permitted. Early adoption is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”)

In December 2023, the FASB issued ASU 2023-09, which expands income tax disclosure requirements to include additional information related to the rate reconciliation of our effective tax rates to statutory rates as well as additional disaggregation of taxes paid. The amendments in the ASU also remove disclosures related to certain unrecognized tax benefits and deferred taxes. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. We will adopt the standard as required in our annual disclosures for fiscal 2026.

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

Note 5 — Fair Value Measurements

We determine fair value measurements based on the assumptions a market participant would use in pricing an asset or liability. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three-level hierarchy that distinguishes between market participant assumptions based on (i) unadjusted quoted prices for identical assets or liabilities in an active market (Level 1), (ii) quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (Level 2), and (iii) prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (Level 3).

We utilize valuation methodologies to determine the fair values of our financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC 820. All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during the current period. No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. We may from time to time be required to remeasure the carrying value of certain assets and liabilities to fair value on a nonrecurring basis. Such adjustments typically arise if we determine that certain of our assets are impaired.

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Financial Instruments Recorded at Fair Value

The following table summarizes balances and the fair value hierarchy level of our financial instruments recorded at fair value on a recurring basis as of the dates presented (in millions):


	November 30, 2025								August 31, 2025
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	376.1	$	—	$	—	$	376.1	$	422.5	$	—	$	—	$	422.5

Assets in fair value hierarchy	376.1		—		—		376.1		422.5		—		—		422.5
Other investments(1)							6.1								5.1
Total assets at fair value	$	376.1	$	—	$	—	$	382.2	$	422.5	$	—	$	—	$	427.6

____________________________________

(1) Includes strategic investments in privately-held entities over which we do not exercise significant influence or control and without readily determinable fair values. Amounts are recorded at cost less any impairment adjusted for observable price changes, if any.

Disclosures of Fair Value of Financial Instruments

Disclosures of fair value information about financial instruments, for which it is practicable to estimate that value, are required each reporting period in addition to any financial instruments carried at fair value on a recurring basis as prescribed by ASC Topic 825, Financial Instruments (“ASC 825”). In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.

Fair value for our senior unsecured public notes is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2). Our senior unsecured public notes are carried at the outstanding balance, net of unamortized bond discount and deferred costs, as of the end of the reporting period. The estimated fair value of our senior unsecured public notes was $452.9 million and $446.7 million as of November 30, 2025 and August 31, 2025, respectively.

We had $300.0 million and $400.0 million of borrowings outstanding under our Term Loan Facility (as defined herein) as of November 30, 2025 and August 31, 2025, respectively. Such borrowings are variable-rate instruments that reset on a frequent short-term basis; therefore, we estimate that any outstanding carrying values of these instruments, which are equal to their face amounts, approximate their fair values. See Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for further details on our outstanding borrowings.

ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value to us. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments. In evaluating our management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.

Note 6 — Inventories

Inventories include materials, direct labor, inbound freight, customs, duties, tariffs, and related manufacturing overhead. Inventories are stated on a first-in, first-out basis at the lower of cost and net realizable value and consist of the following as of the dates presented (in millions):


	November 30, 2025		August 31, 2025
Raw materials, supplies, and work in process (1)	$	256.1	$	246.8
Finished goods	291.4		306.7
Inventories excluding reserves	547.5		553.5
Less: Reserves	(29.4)		(26.8)
Total inventories	$	518.1	$	526.7

_______________________________________

(1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information.

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

We review inventory quantities on hand and record a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. Although our historical experience related to demand and market conditions have been within expectations, a significant change in customer demand, market conditions, or technology could render certain inventory obsolete and thus could have a material adverse impact on our operating results in the period the change occurs.

Note 7 — Property, Plant, and Equipment

Property, plant, and equipment consist of the following as of the dates presented (in millions):


	November 30, 2025		August 31, 2025
Land	$	22.3	$	22.2
Buildings and leasehold improvements	238.2		235.3
Machinery, equipment, and information technology	852.8		839.4
Total property, plant, and equipment, at cost	1,113.3		1,096.9
Less: Accumulated depreciation and amortization	(768.3)		(753.7)
Property, plant, and equipment, net	$	345.0	$	343.2

In the third quarter of fiscal 2025, one of our assets, with a carrying value of $5.5 million, met the criteria to be classified as held for sale. This asset is reflected within Prepayments and other current assets on our Consolidated Balance Sheets. It is expected to be sold within one year.

Note 8 — Goodwill and Intangible Assets

Through multiple acquisitions, we acquired definite-lived intangible assets consisting primarily of customer relationships, developed technology and patents, distribution networks, and trademarks and trade names associated with specific products, which are amortized over their estimated useful lives. Indefinite-lived intangible assets consist of trade names that are expected to generate cash flows indefinitely.

We recorded amortization expense for definite-lived intangible assets of $23.4 million and $8.7 million during the three months ended November 30, 2025 and November 30, 2024, respectively.

The following table summarizes the changes in the carrying amount of goodwill by segment during the periods presented (in millions):


	ABL		AIS		Total
Balance at August 31, 2025	$	1,016.0	$	479.5	$	1,495.5



Foreign currency translation adjustments	(1.6)		(1.3)		(2.9)
Balance at November 30, 2025	$	1,014.4	$	478.2	$	1,492.6


	ABL		AIS		Total
Balance at August 31, 2024	$	1,015.1	$	83.6	$	1,098.7



Foreign currency translation adjustments	(4.9)		(2.0)		(6.9)
Balance at November 30, 2024	$	1,010.2	$	81.6	$	1,091.8

Further discussion of goodwill and intangible assets is included within the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 9 — Other Current Liabilities

Other current liabilities consist of the following as of the dates presented (in millions):


	November 30, 2025		August 31, 2025
Customer incentive programs(1)	$	50.0	$	46.5
Refunds to customers(1)	29.7		31.7
Current deferred revenues(1)	22.4		21.4
Sales commissions	25.1		30.8
Freight costs	11.0		13.3
Product warranty costs(2)	28.5		29.4
Tax-related items(3)	27.0		25.3
Interest on debt(4)	6.0		3.8
Other	54.9		55.8
Total other current liabilities	$	254.6	$	258.0

____________________________________

(1) Refer to the Revenue Recognition footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional information.

(2) Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information.

(3) Includes accruals for income, property, sales and use, and value-added taxes.

(4) Refer to the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for additional information.

Note 10 — Debt and Lines of Credit

Unsecured Notes

On November 10, 2020, Acuity Brands Lighting, Inc., a wholly-owned operating subsidiary of Acuity Inc., issued $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”) at a price equal to 99.737% of their face value. Interest on the Unsecured Notes is paid semi-annually in arrears on June 15 and December 15 of each year. At issuance we recorded $4.8 million of deferred issuance costs related to the Unsecured Notes as a direct deduction from the face amount of the Unsecured Notes. These issuance costs are amortized over the 10-year term of the Unsecured Notes.

The Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Inc. and ABL IP Holding LLC, a wholly-owned subsidiary of Acuity Inc.

Lines of Credit

On June 30, 2022, we entered into a credit agreement (the “Credit Agreement”) with a syndicate of banks that provides us with a $600.0 million five-year unsecured revolving credit facility (the “Revolving Credit Facility”) with the ability to request an additional $400.0 million of borrowing capacity. We had no short-term borrowings outstanding under the Revolving Credit Facility at November 30, 2025 and August 31, 2025.

On November 25, 2024, we entered into an amendment to the Credit Agreement that, among other things, provided for a delayed draw term loan facility of up to $600.0 million (the “Term Loan Facility”), which could be drawn in a single borrowing at any time, subject to certain conditions. In connection with the acquisition of QSC, we incurred an aggregate $600.0 million in indebtedness under the Term Loan Facility. In fiscal 2025, we voluntarily repaid $200.0 million of the outstanding obligation. In the first quarter of fiscal 2026, we voluntarily repaid an additional $100.0 million of the outstanding obligation. We had borrowings outstanding under the Term Loan Facility of $300.0 million and $400.0 million at November 30, 2025 and August 31, 2025, respectively.

The Term Loan Facility will mature on June 30, 2027, which is the maturity date of the revolving loans and commitments under the existing Credit Agreement. Borrowings under the Term Loan Facility bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”), adjusted daily simple SOFR rate, or base rate, at the Company’s option, plus an applicable margin. The applicable margin is based on, at our option, the Company’s leverage ratio or ratings level, each as defined in the Credit Agreement, and ranges from 0.875% to 1.375% (for

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SOFR-based loans) and from 0.0% to 0.375% (for base rate loans).

The covenants and events of default that apply to the revolving loans and commitments under the Credit Agreement also apply to the Term Loan Facility, and borrowings under the Term Loan Facility are guaranteed by the Company and the subsidiaries of the Company that guarantee the revolving loans and commitments.

We were in compliance with all financial covenants under the Credit Agreement as of the periods presented. At November 30, 2025, we had additional borrowing capacity under the Credit Agreement of $593.0 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less outstanding letters of credit of $7.0 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance policies.

None of our existing debt instruments include provisions that would require an acceleration of repayments based solely on changes in our credit ratings. Borrowings and repayments on our Revolving Credit Facility with terms of three months or less are reported on a net basis on our Consolidated Statements of Cash Flows.

Note 11 — Commitments and Contingencies

In the normal course of business, we are subject to the effects of certain contractual stipulations, events, transactions, and laws and regulations that may, at times, require the recognition of liabilities, such as those related to self-insurance estimated liabilities and claims, legal and contractual issues, environmental laws and regulations, guarantees, and indemnities. We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated. For the period ended November 30, 2025, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees, and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

Product Warranty Costs

Our products generally have a standard warranty term of five years or less that assures our products comply with agreed upon specifications. We record an accrual for the estimated amount of future warranty costs in accordance with ASC Topic 450, Contingencies (“ASC 450”) when the related revenue is recognized and when costs are deemed to be probable and can be reasonably estimated. Liabilities related to product warranty costs are subject to uncertainty because they require estimates of future costs. Estimated future warranty costs are primarily based on historical experience, including the number and costs of identified warranty claims as well as the period of time between the shipment of products and our settlement of related claims. Any estimated or actual loss recoveries that offset our costs and payments are reflected as assets and included within Other current assets or Other long-term assets based on the timing of receipt of recovery. Recoveries are recorded net of allowances for credit losses.

Although we assume that historical experience will continue to be the best indicator of future warranty costs, we cannot assure that future warranty costs will not exceed historical amounts, and/or loss recoveries will not be fully collectible. If actual future warranty costs exceed recorded amounts, or recoveries are no longer collectible, adjustments to our accruals and/or receivables may be warranted, which could have a material adverse impact on our results of operations and cash flows.

Estimated liabilities for product warranty costs are included in Other accrued liabilities or Other long-term liabilities on the Consolidated Balance Sheets based upon when we expect to settle the incurred warranty. The following table summarizes changes in the estimated liabilities for product warranty costs, excluding any estimated or actual lost recoveries, during the periods presented (in millions):


	Three Months Ended
	November 30, 2025		November 30, 2024
Beginning balance	$	44.1	$	37.5
Product warranty costs	7.1		6.3
Payments and other deductions	(8.2)		(9.3)


Ending balance	$	43.0	$	34.5

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ACUITY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Litigation

We are subject to various other legal claims arising in the normal course of business, including patent infringement, employment matters, and product liability claims. Based on information currently available, it is the opinion of management that the ultimate resolution of pending and threatened legal proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of any such matters, if unfavorable, could have a material adverse effect on our financial condition, results of operations, or cash flows in future periods. We establish estimated liabilities for legal claims when associated costs become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher than the amounts accrued for such claims. However, we cannot make a meaningful estimate of actual costs to be incurred that could possibly be higher or lower than the accrued amounts.

Note 12 — Changes in Stockholders' Equity

The following tables summarize changes in the components of stockholders' equity for the periods presented (in millions):


	Common Stock Outstanding
	Shares(1)		Amount		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock, at cost		Total
Balance, August 31, 2025	30.7		$	0.5	$	1,164.7	$	4,285.8	$	(76.5)	$	(2,649.6)	$	2,724.9
Net income	—		—		—		120.5		—		—		120.5
Other comprehensive loss	—		—		—		—		(4.9)		—		(4.9)


Share-based payment amortization, issuances, and cancellations	0.1		0.1		(15.1)		—		—		—		(15.0)
Stock options exercised and other	—	*	—		1.4		—		—		—		1.4
Cash dividends of $0.17 per share paid on common stock	—		—		—		(5.3)		—		—		(5.3)
Repurchases of common stock	(0.1)		—		—		—		—		(27.6)		(27.6)
Balance, November 30, 2025	30.7

SEC Form 10-Q filed by Acuity Inc.