10q10k10q10k.net

What changed in ACUITY INC. (DE)'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of ACUITY INC. (DE)'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+211 added−202 removedSource: 10-K (2025-10-27) vs 10-K (2024-10-28)

Top changes in ACUITY INC. (DE)'s 2025 10-K

211 paragraphs added · 202 removed · 166 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

41 edited+13 added−15 removed12 unchanged
Biggest changePrincipal customers of ABL include electrical distributors, retail home improvement centers, electric utilities, corporate accounts, original equipment manufacturer (“OEM”) customers, digital retailers, lighting showrooms, and energy service companies. Our customers are located in North America and select international markets that serve new construction, renovation and retrofit, and maintenance and repair applications.
Biggest changeCustomers 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.
Research and Development Research and development (“R&D”) is defined as the critical investigation aimed at discovery of new knowledge and the conversion of that knowledge into the design of a new product service or significant improvement to an existing product or service.
Research and Development Research and development (“R&D”) is defined as the critical investigation aimed at discovery of new knowledge and the conversion of that knowledge into the design of a new product or service or significant improvement to an existing product or service.
These laws and regulations include but are not limited to, the Clean Air Act and the Toxic Substances Control Act; the Clean Water Act; the Safe Harbor data privacy program between the U.S. and European Union; the United States-Mexico-Canada-Free Trade Agreement (“USMCA”); regulations from the Occupational Safety and Health Administration agency; the European Union’s General Data Protection Regulation; California’s Consumer Privacy Act and Connected Device Privacy Act; the Civil Rights Act of 1964 and other federal and state labor and employment laws and regulations; the U.S.
These laws and regulations include but are not limited to, the Clean Air Act and the Toxic Substances Control Act; the Clean Water Act; the Safe Harbor data privacy program between the U.S. and the European Union; the United States-Mexico-Canada-Free Trade Agreement (“USMCA”); regulations from the Occupational Safety and Health Administration agency; the European Union’s General Data Protection Regulation; California’s Consumer Privacy Act and Connected Device Privacy Act; the Civil Rights Act of 1964 and other federal and state labor and employment laws and regulations; the U.S.
Foreign Corrupt Practices Act (the “FCPA”); and the U.K. Bribery Act. On an ongoing basis, we allocate resources, including investments in capital and operating costs, to comply with laws and regulations. We do not currently believe that the costs of complying with government regulations have a material impact on our financial condition, results of operations, or cash flows.
Foreign Corrupt Practices Act (“FCPA”); and the U.K. Bribery Act. On an ongoing basis, we allocate resources, including investments in capital and operating costs, to comply with laws and regulations. We do not currently believe that the costs of complying with government regulations have a material impact on our financial condition, results of operations, or cash flows.
Compensation and Benefits We review our compensation and benefit plans annually to ensure that we are providing competitive, contemporary, and inclusive programs so we can attract and retain the best people and support the health and well-being of our employees and their families.
We review our compensation and benefit plans annually to ensure that we are providing competitive, contemporary, and inclusive programs so we can attract and retain the best people and support the health and well-being of our employees and their families.
This evolution includes: the development of new or improved lighting technologies, including solid-state lighting, electronic drivers, embedded lighting controls, and more effective optical designs and lamps; federal, state, and local requirements for updated energy codes; design strategies and technologies addressing sustainability and facilitating intelligent buildings; and incentives by federal, state, and local municipal authorities, as well as utility companies, for using more energy-efficient lighting and building technology solutions.
This evolution includes: the development of new or improved lighting technologies, including solid-state lighting, electronic drivers, embedded lighting controls, and more effective optical designs and lamps; federal, state, and local requirements for updated energy codes; design strategies and technologies addressing intelligent buildings, occupancy experience, and sustainability; and incentives by federal, state, and local municipal authorities, as well as utility companies, for using more energy-efficient lighting and building technology solutions.
Additionally, the charters for our Audit Committee, Compensation and Management Development Committee, and Governance Committee are available free of charge through the “Committee Charters & Governance Documents” link under the “Governance” heading within the "For Investors" section on our website.
Additionally, the charters for our Audit Committee, Compensation and Management Development Committee, and Governance Committee are available free of charge through the “Committee Charters & Governance Documents” link under the “Governance” heading within the “Investors” section on our website.
We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (and all amendments to these reports) and proxy statements, together with all reports filed pursuant to Section 16 of the Securities Exchange Act of 1934 by our officers, directors, and beneficial owners of 10% or more of our common stock, available free of charge through the “SEC Filings” link under the “Financials” heading within the “For Investors” section on our website, located at www.acuitybrands.com , as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission.
We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (and all amendments to these reports), and proxy statements, together with all reports filed pursuant to Section 16 of the Securities Exchange Act of 1934 by our officers, directors, and beneficial owners of 10% or more of our common stock, available free of charge through the “SEC Filings” link under the “Financials” heading within the “Investors” section on our website, located at www.acuityinc.com , as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission.
We operate in highly competitive industries that are affected by a number of general business and economic factors, such as, but not limited to, gross domestic product growth, population growth, government stimulus, employment levels, credit availability, interest rates and inflation, building costs, freight, construction-related labor availability and costs, building occupancy rates, imports and trade, energy costs, freight costs, tariffs, commodity costs, and commodity availability.
We operate in highly competitive industries that are affected by a number of general business and economic factors, such as, but not limited to, gross domestic product growth, population growth, government stimulus, employment levels, credit availability, interest rates and inflation, building costs, non-residential fixed investment, freight, construction-related labor availability and costs, building occupancy rates, imports and trade, energy costs, freight costs, tariffs, commodity costs, and commodity availability.
See the Supplemental Disaggregated Information footnote of the Notes to Consolidated Financial Statements for additional information regarding the geographic distribution of net sales, operating profit, and long-lived assets.
See the Supplemental Disaggregated Information footnote of the Notes to Consolidated Financial Statements for additional information regarding the geographic distribution of net sales and long-lived assets.
Industry Overview Our addressable market includes non-portable luminaires as defined by the National Electrical Manufacturers Association; poles for outdoor lighting; emergency lighting fixtures and lighting equipment; lighting controls; HVAC controls; refrigeration controls; and building technology controls, software, and systems.
Industry Overview Our addressable market includes non-portable luminaires as defined by the National Electrical Manufacturers Association; poles for outdoor lighting; emergency lighting fixtures and lighting equipment; lighting controls; HVAC controls; refrigeration controls; audio-video hardware, software, and systems; and building technology controls, software, and systems.
ABL's portfolio of products includes but is not limited to the following brands: A-Light TM , Aculux TM , American Electric Lighting ® , Cyclone TM , Dark to Light ® , eldoLED ® , Eureka ® , Gotham ® , Healthcare Lighting ® , Holophane ® , Hydrel ® , IOTA ® , Juno ® , Lithonia Lighting ® , Luminaire LED TM , Luminis ® , Mark Architectural Lighting TM , nLight ® , OPTOTRONIC ® , Peerless ® , RELOC ® Wiring Solutions, and SensorSwitch TM .
ABL's portfolio of products includes, but is not limited to the following brands: Aculux TM , American Electric Lighting ® , Cyclone TM , Dark to Light ® , eldoLED ® , Eureka ® , Fresco TM , Gotham ® , Healthcare Lighting ® , Holophane ® , Hydrel ® , IOTA ® , Juno ® , Lithonia Lighting ® , Luminaire LED TM , Luminis ® , Mark Architectural Lighting TM , Nightingale TM , nLight ® , Peerless ® , RELOC ® Wiring Solutions, and SensorSwitch TM .
While these items are generally available from multiple sources, the cost of products sold may be affected by changes in the market price of materials, freight, tariffs, and duties on certain materials, particularly imports from Asia, as well as disruptions in availability of raw materials, components, and sourced finished goods.
While these items are generally available from multiple sources, the cost of products sold may be affected by changes in the market price of materials, freight, tariffs, and duties on certain materials, particularly imports from outside North America, as well as disruptions in availability of raw materials, components, and sourced finished goods.
The Code of Ethics and Business Conduct as well as our Corporate Governance Guidelines are available free of charge through the “Committee Charters and Governance Documents” link under the “Governance” heading within the “For Investors” section on our website.
The Code of Ethics and Business Conduct as well as our Corporate Governance Guidelines are available free of charge through the “Committee Charters and Governance Documents” link under the “Governance” heading within the “Investors” section on our website.
We are a leading provider of integrated lighting and building technology solutions that utilize internally developed, licensed, or acquired intellectual property. 2 Table of Contents Competition We experience competition based on numerous factors, including product vitality, service capabilities, price, brand name recognition, product quality, product and system design, energy efficiency, and customer relationships.
We are a leading provider of integrated lighting, audio-video, and building technology solutions that utilize internally developed, licensed, or acquired intellectual property. Competition We experience competition based on numerous factors, including product vitality, service capabilities, price, brand name recognition, product quality, product and system design, energy efficiency, and customer relationships.
Item 1. Business. Overview Acuity Brands, 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 and light.
Item 1. Business. Overview 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.
In addition, there are competitors, including Asian importers, small startup companies, and global electronics, technology, and software companies, offering competing solutions, sometimes deploying different technologies. Regulations We are subject to various federal, state, and local laws and regulations that impose increasingly complex, stringent and costly compliance activities.
In addition, there are competitors, including importers outside of North America, small startup companies, and global electronics, technology, and software companies, offering competing solutions, sometimes deploying different technologies. Regulations We are subject to various federal, state, and local laws and regulations that impose increasingly complex, stringent, and costly compliance activities.
Our management practices promote Environmental, Health & Safety (“EHS”) excellence. To achieve this standard, we have instituted an EHS Management System based on the goals and guidelines of the International Standards of Operation for Environmental Management, International Standards for Occupational Health & Safety Management, and our own guiding principles.
To achieve this standard, we have instituted an EHS Management System based on the goals and guidelines of the International Standards of Operation for Environmental Management, International Standards for Occupational Health & Safety Management, and our own guiding principles.
R&D expenses consist of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but the amounts do not include all new product development costs. For fiscal 2024, 2023, and 2022, R&D expenses totaled $102.3 million, $97.1 million, and $95.1 million, respectively.
R&D expenses consist of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but the amounts do not include all new product development costs. For fiscal 2025, 2024, and 2023, R&D expenses totaled $140.2 million, $102.3 million, and $97.1 million, respectively.
We invest in product vitality, including enhancement of existing offerings, with a focus on improving the performance-to-cost ratio and energy efficiency. We also develop software applications with a platform to enhance data analytics offerings for building performance, enterprise operations, and personal experiences.
We invest in product vitality, including enhancement of existing offerings, with a focus on improving the performance-to-cost ratio and energy efficiency. We also develop software applications that enhance building performance, enterprise operations, and personal experiences.
Additionally, the market for artificial intelligence and software solutions is active with a wide range of competitors, from existing large companies to startup organizations. Certain global and more diversified manufacturers may provide a broader product offering utilizing electrical, lighting, and building technology products and services as well as pricing benefits from the bundling of various offerings.
Additionally, the market for artificial intelligence and software solutions is active with a wide range of competitors, from existing large companies to startup organizations. Certain global and more diversified manufacturers may provide broader offerings utilizing a combination of products and services as well as pricing benefits from the bundling of various offerings.
The markets for lighting and building management solutions are competitive and continue to evolve through acquisition and consolidation activities. Existing and new entrants continue to develop capabilities and solutions that are both complementary as well as competitive to those of traditional industry participants.
Our markets are competitive and continue to evolve through acquisition and consolidation activities. Existing and new entrants continue to develop capabilities and solutions that are both complementary as well as competitive to those of traditional industry participants.
Through our two business segments, Acuity Brands Lighting and Lighting Controls (“ABL”) and the Intelligent Spaces Group (“ISG”), 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 location-aware applications.
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.
Based on this review, we offer a competitive total rewards package to our employees that includes base compensation, annual cash incentive programs, stock grants with service and/ or performance requirements, health benefits, and/or retirement benefits commensurate with an employee's position, skill set, and experience. 4 Table of Contents Health and Safety We strive to ensure our employees have a safe and collaborative work environment.
Based on this review, we offer a competitive total rewards package to our employees that includes base compensation, annual cash incentive programs, stock grants with service and/or performance requirements, health benefits, and/or retirement benefits commensurate with an employee's position, skill set, and experience.
We utilize a blend of internal and outsourced manufacturing processes and capabilities to fulfill a variety of customer needs. Our investment in our production facilities is focused primarily on improving capabilities, 1 Table of Contents product quality, and manufacturing efficiency as well as environmental, health, and safety compliance.
We utilize a blend of internal and outsourced manufacturing processes and capabilities to fulfill a variety of customer needs. Our investment in our production facilities is focused primarily on improving capabilities, product quality, and manufacturing efficiency as well as environmental, health, and safety compliance. We also utilize contract manufacturing from U.S., Asian, and European sources for certain products.
We operate seven distribution facilities, including five facilities in the United States and two in Canada. During fiscal 2024, net sales initiated outside of the U.S. represented approximately 15% of total net sales.
We operate nine distribution facilities, including six facilities in the United States, two in Canada, and one in Mexico. During fiscal 2025, net sales initiated outside of the U.S. represented approximately 14% of total net sales.
Arrangements for approximately 7,400 employees in Mexico will expire within the next fiscal year, primarily due to statutory requirements of annual negotiations of union contracts. We believe that we have strong relationships with both our unionized and non-unionized employees.
Arrangements for approximately 6,600 employees in Mexico will expire within the next fiscal year, primarily due to statutory requirements of annual negotiations of union contracts. We believe that we have strong relationships with both our unionized and non-unionized employees. A key pillar to attract, develop, and retain top talent is our focus on the growth and development of our employees.
Manufactured Purchased Total United States 15 % 9 % 24 % Mexico 53 % — % 53 % Asia — % 17 % 17 % Others 6 % — % 6 % Total 74 % 26 % 100 % We operate seven manufacturing facilities in Mexico, some of which are authorized to operate as Maquiladoras by the Ministry of Economy of Mexico.
Manufactured Purchased Total United States 16 % 7 % 23 % Mexico 55 % 2 % 57 % Asia — % 15 % 15 % Others 5 % — % 5 % Total 76 % 24 % 100 % We operate seven manufacturing facilities in Mexico, some of which are authorized to operate as Maquiladoras under the IMMEX Program, by the Ministry of Economy of Mexico.
Our performance management and other processes are intended to align employee aspirations, interests, performance, and experiences with the talent needs that enable the business. Managers and employees conduct periodic check-in discussions to encourage continuous performance feedback and improvement. These discussions also act to hold leaders accountable for creating an employee development culture.
In fiscal 2025, we remained focused on development through development plans for employees, special projects, training opportunities, and other activities. Our performance management and other processes are intended to align employee aspirations, interests, performance, and experiences with the talent needs that enable the business. Managers and employees conduct periodic check-in discussions to encourage continuous performance feedback and improvement.
Union recognition and collective bargaining arrangements in place or in process cover approximately 1,300 and 7,400 employees in the United States and Mexico, respectively. Arrangements related to approximately 700 employees in the United States will expire within the next fiscal year.
Our remaining employees were employed in other international locations including Europe, Canada, and the Asia/Pacific region. Union recognition and collective bargaining arrangements in place or in process cover approximately 1,300 and 6,700 employees in the United States and Mexico, respectively. Arrangements related to fewer than 100 employees in the United States will expire within the next fiscal year.
We currently source raw materials and components from a number of suppliers, but our ongoing efforts to improve the cost effectiveness, quality, and availability of our products and services may result in a reduction in the number of our suppliers.
We currently source raw materials and components from a number of suppliers, but our ongoing efforts to improve the cost effectiveness, quality, and availability of our products and services may result in a reduction in the number of our suppliers. 3 Table of Contents Intellectual Property We own various domestic and foreign patents, copyrights, trade secrets, trademarks, and other intellectual property, which are important factors for our businesses.
The volume of non-residential construction activity in commercial, institutional, industrial, and infrastructure projects has a material impact on the demand for our lighting and building management solutions. Demand for our residential lighting products is highly dependent on economic drivers, such as consumer spending and discretionary income, along with housing construction and home improvement spending.
The volume of non-residential construction activity in commercial, institutional, industrial, and infrastructure projects has a material impact on the demand for our lighting, audio-video, and building management solutions.
Intellectual Property We own various domestic and foreign patents, copyrights, trade secrets, trademarks, and other intellectual property, which are important factors for our businesses. We rely on patent, copyright, trade secret, and trademark laws as well as agreements, restrictive covenants, and internal processes and controls to protect these proprietary rights.
We rely on patent, copyright, trade secret, and trademark laws as well as agreements, restrictive covenants, and internal processes and controls to protect these proprietary rights. Despite these protections, unauthorized parties may take actions that infringe on our intellectual property.
We operate training and education facilities in various locations in North America and Europe designed to enhance the lighting, lighting controls, and building management systems knowledge of customers and industry professionals. Manufacturing and Distribution We operate eighteen manufacturing facilities, including seven in Mexico, six in the United States, three in Canada, and two in Europe.
We operate training and education facilities that illustrate a wide range of our solutions including lighting, lighting controls, building management systems, and audio, video, and control platforms. 1 Table of Contents Manufacturing and Distribution We operate eighteen manufacturing facilities, including seven in Mexico, six in the United States, three in Canada, and two in Europe.
Products are delivered primarily through a network of distribution centers as well as directly from our manufacturing facilities using both common carriers and an internally-managed truck fleet. ISG Segment Our ISG strategy is to make spaces smarter, safer, and greener by connecting the edge to the cloud. ISG offers building management solutions and building management software.
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.
We also utilize contract manufacturing from U.S., Asian, and European sources for certain products. The following table shows the percentage of finished goods manufactured and purchased in fiscal 2024 by significant geographic region.
The following table shows the percentage of finished goods manufactured and purchased in fiscal 2025 by significant geographic region.
While patents and patent applications in the aggregate are important to our competitive position, no single patent or patent application is individually material to us. 3 Table of Contents Seasonality and Cyclicality 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.
Seasonality Both ABL and AIS exhibit some seasonality, with net sales being affected by business days, weather and seasonal demand on construction and installation programs, particularly during the winter months, and the annual budget cycles of major customers.
A variety of different metrics is averaged to determine a facility’s performance, which is used to find continuous improvement opportunities. Environmental Sustainability We save energy and help reduce carbon emissions through our lighting, lighting controls, and building management solutions by replacing older technologies, and we drive innovation and productivity across our business to minimize our impact on the environment.
A variety of different metrics is averaged to determine a facility’s performance, which is used to find continuous improvement opportunities. 4 Table of Contents Environmental Sustainability We contribute to energy savings and carbon emissions reduction primarily through replacing legacy technologies with more efficient products. Our energy data management software enables users to track and report their carbon footprint.
Investing in the development of our employees is part of our operating system and correlates to our preparedness to meet current and future strategic priorities of the business. In fiscal 2024, we continued a management effectiveness series focused on coaching to performance, which we offered through in-person events and ongoing sustainment activities.
In fiscal 2025, we continued a management effectiveness series focused on coaching to performance, which we offered through in-person events and ongoing sustainment activities. We provide on-demand, virtual, and in-person instructor led classes to help employees and customers expand their technical knowledge.
ABL Segment Our ABL strategy 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. ABL's portfolio of lighting solutions includes commercial, architectural, and specialty lighting in addition to lighting controls and components that can be combined to create integrated lighting controls systems.
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.
Human Capital We employed approximately 13,200 employees at August 31, 2024, of which approximately 3,600 were employed in the United States and approximately 8,700 were employed in Mexico. Our remaining employees were employed in other international locations including Europe, Canada, and the Asia/Pacific region.
Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of each fiscal year due to these factors. Human Capital We employed approximately 13,800 employees at August 31, 2025, of which approximately 4,300 were employed in the United States and approximately 8,200 were employed in Mexico.
Removed
We offer devices such as luminaires that predominantly utilize light emitting diode (“LED”) technology designed to optimize energy efficiency and comfort for various indoor and outdoor applications.
Added
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.
Removed
ABL's lighting and lighting controls solutions are sold primarily through a network of independent sales agencies that cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and directly to OEM customers.
Added
Our luminaires deliver performance and aesthetic appeal, while our electronics portfolio, featuring drivers and a leading controls platform, provides connectivity and functionality.
Removed
Our building management solutions include products for controlling heating, ventilation, air conditioning (“HVAC”), lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems. Our intelligent building management software enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions.
Added
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.
Removed
Through a connected and converged building system architecture, our software delivers different applications, allows clients to upgrade over time with natural refresh cycles, and deploys new capabilities. Customers of ISG primarily include system integrators as well as retail stores, airports, and enterprise campuses throughout North America and select international locations.
Added
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.
Removed
ISG products and solutions are marketed under multiple brand names, including but not limited to, Atrius ® and Distech Controls ® .
Added
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.
Removed
Despite these protections, unauthorized parties may take actions that infringe on our intellectual property. We also have licenses to certain patents and trademarks which, if not renewed, could adversely impact our business. As of August 31, 2024, we had approximately 1,600 total patent assets including issued U.S. and foreign patents as well as pending U.S. and foreign patent applications.
Added
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.
Removed
Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of our fiscal year due to these factors. Our lighting and building technology solutions are sold to customers in both the new construction as well as renovation and retrofit markets for residential and non-residential applications.
Added
Demand for our products is highly dependent on economic drivers, such as consumer spending and discretionary income, along with housing construction and home improvement spending. 2 Table of Contents Our market is influenced by evolving technologies.
Removed
The construction market is cyclical in nature and subject to changes in general economic conditions and fiscal policies. Sales volume may have an impact on our profitability. Economic downturns and the potential decline in key construction markets may have a material adverse effect on our net sales, operating income, financial position, and cash flows.
Added
Further, we conduct business in countries where our intellectual property coverage may be more limited and/or our ability to enforce intellectual property rights may be difficult or impracticable. We also have licenses to certain patents and trademarks, which, if not renewed, could adversely impact our business.
Removed
Growth, Development, and Inclusion A key pillar to attract, develop, and retain top talent is our focus on the growth and development of our employees. In fiscal 2024, we remained focused on development through development plans for employees, special projects, training opportunities, and other activities.
Added
As of August 31, 2025, we had approximately 1,700 total patent assets including issued U.S. and foreign patents as well as pending U.S. and foreign patent applications. While patents and patent applications in the aggregate are important to our competitive position, no single patent or patent application is individually material to us.
Removed
We also provide a digital platform with learning content and resources to help employees expand their knowledge, skills, and abilities through self-directed learning initiatives. We provide on demand, virtual, and in-person instructor led classes to help employees and customers expand their lighting, controls, and building management technical knowledge through Acuity Academy and other resources.
Added
These discussions also act to hold leaders accountable for creating an employee development culture. Investing in the development of our employees is part of our operating system and correlates to our preparedness to meet current and future strategic priorities of the business.
Removed
Our goal is to ensure that all employees feel valued, respected, and accepted for their contributions regardless of their race, sex, religion, ethnicity, age, gender identity, disabilities, national origin, sexual orientation, or other unique characteristics.
Added
We strive to ensure our employees have a safe and collaborative work environment through the inclusion of world class health and safety management practices in our business. Our management practices promote Environmental, Health & Safety (“EHS”) excellence.
Removed
To promote diversity in the workplace, we sponsor an Inclusion and Belonging Council that is responsible for setting our diversity strategy and initiatives, many resulting from employee feedback. Our Inclusion and Belonging Council consists of members of management as well as key human resource process leaders and leaders from our various employee resource groups.
Added
We also aim to improve raw material efficiency and operate our facilities in a more productive and environmentally responsible manner. Progress on these initiatives is communicated through our EarthLIGHT program. Available Information Acuity Inc. was incorporated in 2001 under the laws of the State of Delaware.
Removed
We currently have five employee resource groups: Mind Matters; Minorities Amplifying Growth, Inclusion, and Community (“MAGIC”); People Respecting Identity, Diversity, and Equity (“PRIDE”); the Women’s Network; and the Veterans Network. These groups are designed to embrace, celebrate, and recognize the power of diversity.
Added
Effective March 26, 2025, we changed our corporate name from Acuity Brands, Inc. to Acuity Inc.
Removed
We have extended the capabilities of our energy data management software to help enable users to track and report their carbon footprint. We also seek to use raw materials more efficiently and to operate our own facilities in a more intelligent, environmentally-friendly manner. We regularly communicate progress on our environmental commitments as part of our EarthLIGHT sustainability program.
Removed
Available Information Acuity Brands, Inc. was incorporated in 2001 under the laws of the State of Delaware.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+10 added−2 removed118 unchanged
Biggest changeCertain jurisdictions may aggressively interpret their laws, regulations, and policies in an effort to raise additional tax revenue, and international tax authorities may seek to assert extraterritorial taxing rights on our transactions or operations. 14 Table of Contents We have previously been subject to domestic and international tax audits by taxing authorities of the jurisdictions in which we operate, and we may be subject to additional such audits in the future.
Biggest changeWe operate in several jurisdictions, including but not limited to, the United States, Mexico, Canada, Europe, and Asia. Certain jurisdictions may aggressively interpret their laws, regulations, and policies in an effort to raise additional tax revenue, and international tax authorities may seek to assert extraterritorial taxing rights on our transactions or operations.
It is uncertain what laws will be enacted, and therefore we cannot predict the potential impact of such laws on our future financial condition, results of operations, and cash flows.
It is uncertain what laws will be enacted, and therefore we cannot predict the potential impact of such laws on our future financial condition, results of operations, and cash flows.
Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, or biased, we could be subject to competitive risks, potential legal liability, and reputational harm, and our business, financial condition, and results of operations may be adversely affected. The use of AI capabilities may also result in cybersecurity incidents.
If the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, or biased, we could be subject to competitive risks, potential legal liability, and reputational harm, and our business, financial condition, and results of operations may be adversely affected. The use of AI capabilities may also result in cybersecurity incidents.
Additionally, new products and solutions may not achieve the same profit margins as expected or as compared to our historic products and solutions. Conversely, market adoption of new products may impact the sales of other products and may expose on-hand inventories to future write-downs. Accordingly, we cannot fully predict the ultimate effect of new product introductions on our business.
Additionally, new products and solutions may not achieve the same profit margins as expected or as compared to our historic products and solutions. Market adoption of new products may impact the sales of other products and may expose on-hand inventories to future write-downs. Accordingly, we cannot fully predict the ultimate effect of new product introductions on our business.
Disruptions to our operations including, but not limited to, labor disputes, strikes, workplace violence, public health crises, pandemics and epidemics, climate change, brown outs and other power outages, earthquakes, fires, floods, explosions, terrorism, adverse weather conditions, water scarcity, cyber-attacks, civil or political disruptions, or other catastrophic events such as war, insurrection, or natural disasters, leading to production interruptions in our or one or more of our suppliers’ facilities could adversely affect us.
Disruptions to our operations including, but not limited to, labor disputes, strikes, workplace violence, public health crises, pandemics and epidemics, climate change, brown outs and other power outages, earthquakes, fires, floods, extreme precipitation, explosions, terrorism, adverse weather conditions, water scarcity, cyber-attacks, civil or political disruptions, or other catastrophic events such as war, insurrection, or natural disasters, leading to production interruptions in our or one or more of our suppliers’ facilities could adversely affect us.
Although no individual customer exceeded 10% of net sales during fiscal 2024, the loss of or a substantial decrease in the volume of purchases by certain larger customers could harm our business in a meaningful manner. We have relationships with channel partners such as electrical distributors, home improvement retailers, independent sales agencies, system integrators, and value-added resellers.
Although no individual customer exceeded 10% of net sales during fiscal 2025, 2024, or 2023, the loss of or a substantial decrease in the volume of purchases by certain larger customers could harm our business in a meaningful manner. We have relationships with channel partners such as electrical distributors, home improvement retailers, independent sales agencies, system integrators, and value-added resellers.
Rising interest rates could have a negative effect on overall economic activity, and could impair the ability of real estate developers, property owners, and contractors to obtain reasonable costs of capital on borrowed funds, resulting in depressed levels of construction and renovation projects and a resulting decrease in demand for our products and services.
Rising interest rates could have a negative effect on overall economic activity, and could impair the ability of real estate developers, property owners, contractors, and system integrators to obtain reasonable costs of capital on borrowed funds, resulting in depressed levels of construction and renovation projects and a resulting decrease in demand for our products and services.
A material network breach in the security of these systems could include the theft of intellectual property, the unauthorized release, gathering, monitoring, misuse, loss, change, or destruction of our or our customers', suppliers', or other third-party's confidential, proprietary or personally identifying information, other disruptions of our customers' or other third parties' business operations.
A material network breach in the security of these systems could include the theft of intellectual property, the unauthorized release, gathering, monitoring, misuse, loss, change, or destruction of our or our customers', suppliers', or other third-party's confidential, proprietary or personally identifiable information, other disruptions of our customers' or other third parties' business operations.
Further, statements about our ESG initiatives, targets, and goals, and progress against those targets and goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, as well as assumptions, estimates and climate scenarios that are subject to change in the future.
Further, statements about our ESG initiatives, targets, and goals, and progress against those targets and goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions, estimates, and climate scenarios that are subject to change in the future.
We have begun to incorporate artificial intelligence capabilities in our product offerings and operations, and challenges with properly managing the use of artificial intelligence and machine learning could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations, financial condition, and/or cash flows.
We have begun to incorporate artificial intelligence (“AI”) capabilities in our product offerings and operations, and challenges with properly managing the use of AI and machine learning could result in reputational harm, competitive harm, and legal liability and adversely affect our results of operations, financial condition, and/or cash flows.
Approximately 53% of our finished products are manufactured in Mexico, a country that periodically experiences heightened civil unrest or may experience trade disputes with the U.S., both of which could cause a disruption of the supply of products to or from these facilities.
Approximately 55% of our finished products are manufactured in Mexico, a country that periodically experiences heightened civil unrest or may experience trade disputes with the U.S., both of which could cause a disruption of the supply of products to or from these facilities.
As our defined benefit plan assets and liabilities are marked-to-market on an annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year. In accordance with United States generally accepted accounting principles, the income or expense for the plans is calculated using actuarial valuations.
As our defined benefit plan assets and liabilities are marked-to-market on an 15 Table of Contents annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year. In accordance with United States generally accepted accounting principles, the income or expense for the plans is calculated using actuarial valuations.
While there are a number of suppliers of these services, the cost to change service providers and set up new processes could be significant. Technological developments and increased competition could affect our operating profit margins and sales volume. We compete in an industry and markets where technology and innovation play major roles in the competitive landscape.
While there are a number of suppliers of these services, the cost to change service providers and set up new processes could be significant. 7 Table of Contents Technological developments and increased competition could affect our operating profit margins and sales volume. We compete in an industry and markets where technology and innovation play major roles in the competitive landscape.
The evolution of our products, complexity of our supply chain, and reliance on third-party vendors such as customs brokers and freight vendors, which may not have effective processes and controls to enable us to fully and accurately comply with such requirements, could subject us to liabilities for past, present, or future periods. Such liabilities could adversely impact our business.
The evolution of our products, the complexity of our supply chain, and our reliance on third-party vendors such as customs brokers and freight vendors, which may not have effective processes and controls to enable us to fully and accurately comply with such requirements, could subject us to liabilities for past, present, or future periods.
In addition to the risks that are common to both our domestic and 10 Table of Contents international operations, we face risks specifically related to our foreign operations and sourcing activities, including but not limited to: exposure to foreign currency fluctuations; increased inflation; unstable political, social, regulatory, economic, financial, and market conditions; laws that prohibit shipments to certain countries or restricted parties and that prohibit improper payments to government officials such as the Foreign Corrupt Practices Act and the U.K.
In addition to the risks that are common to both our domestic and international operations, we face risks specifically related to our foreign operations and sourcing activities, including but not limited to: exposure to foreign currency fluctuations; increased inflation; unstable political, social, regulatory, economic, financial, and market conditions; laws that prohibit shipments to certain countries or restricted parties and that prohibit improper payments to government officials such as the Foreign Corrupt Practices Act and the U.K.
Profitability and volume could be negatively impacted by limitations inherent within the supply chain of certain of these component parts, including competitive, governmental, and legal limitations, natural disasters, and other events that could impact both supply and price. Additionally, we are dependent on certain service providers for 7 Table of Contents key operational functions.
Profitability and volume could be negatively impacted by limitations inherent within the supply chain of certain of these component parts, including competitive, governmental, and legal limitations, natural disasters, and other events that could impact both supply and price. Additionally, we are dependent on certain service providers for key operational functions.
As customers become increasingly concerned about the environmental impact of their purchases, 12 Table of Contents if we fail to keep up with changing regulations or innovate or operate in ways that minimize the energy use of or other impacts of our products or operations, customers may choose more energy efficient or sustainable alternatives.
As customers become increasingly concerned about the environmental impact of their purchases, if we fail to keep up with changing regulations or innovate or operate in ways that minimize the energy use of or other impacts of our products or operations, customers may choose more energy efficient or sustainable alternatives.
Likewise, a customer’s failure to properly configure, update, segregate, or upgrade its own network and integrations with our technology are outside of our control and could result in a failure in functionality or security of our technology.
Likewise, a customer’s failure to properly configure, update, segregate, or upgrade its own network and integrations with our technology is outside of our control and could result in a failure in functionality or security of our technology.
A problem or issue relating to any individual component could have the effect of creating a compounded problem for an integrated solution, which could result in significant costs and losses. We have increasingly manufactured certain of those components and products in our own facilities.
A problem or issue relating to any 13 Table of Contents individual component could have the effect of creating a compounded problem for an integrated solution, which could result in significant costs and losses. We have increasingly manufactured certain of those components and products in our own facilities.
Rising interest rates could also impair our customers’ ability to repay obligations to us. Additionally, rising interest rates may increase our cost of capital, which could have material adverse effects on our financial condition and cash flows. 15 Table of Contents Item 1B. Unresolved Staff Comments. None.
Rising interest rates could also impair our customers’ ability to repay obligations to us. Additionally, rising interest rates may increase our cost of capital, which could have material adverse effects on our financial condition and cash flows. Item 1B. Unresolved Staff Comments. None.
Congress and federal and state regulatory agencies have considered other legislation and regulatory proposals to reduce emissions of GHGs, and many states and other jurisdictions have already taken legal measures to reduce emissions of GHGs, primarily through the development of GHG inventories, GHG permitting, and/or regional GHG cap-and-trade programs.
Congress and federal and state regulatory agencies have considered other legislation and regulatory proposals to reduce emissions of GHGs, and many states and other jurisdictions have already taken legal measures to reduce emissions of GHGs, primarily through the development of 12 Table of Contents GHG inventories, GHG permitting, and/or regional GHG cap-and-trade programs.
Failure to comply with such laws and regulations could result in the imposition of fines, penalties and other costs. New privacy and security laws are frequently enacted. Inconsistencies between the interpretation and the practical application of both existing and new laws are common across jurisdictions.
Failure to comply with such laws and regulations could result in the imposition of fines, penalties, and other costs. New privacy and security laws are 9 Table of Contents frequently enacted. Inconsistencies between the interpretation and the practical application of both existing and new laws are common across jurisdictions.
Current global conflicts, such as the those between Russia and Ukraine as well as within the Middle East, have created substantial uncertainty in the global economy, including sanctions and penalties imposed on certain countries from several governments.
Current global conflicts, such as those between Russia and Ukraine as well as within the Middle East, have created substantial uncertainty in the global economy, including sanctions and penalties imposed on certain countries and persons by several governments.
Additionally, a planned termination of any of our defined retirement benefit plans may not be approved timely, or at all, by the appropriate regulatory authorities; may result in additional non-cash charges within our results of operations as well as additional administrative costs; and may not yield the desired benefits.
Additionally, planned or actioned termination or settlement activities of any of our defined retirement benefit plans may not be approved timely, or at all, by the appropriate regulatory authorities; may result in additional non-cash charges within our results of operations as well as additional administrative costs; and/or may not yield the desired benefits.
These actions could also increase costs associated with our operations, including costs for raw materials and transportation. We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our ESG claims relating to product marketing are inaccurate.
These actions could also increase costs associated with our operations, including costs for raw materials and transportation. We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our ESG claims relating to product 14 Table of Contents marketing are inaccurate.
We also provide and maintain technology to enable lighting controls and building technology systems. In addition to the risks noted above, there are other risks associated with these customer offerings.
We also provide and maintain technology to enable lighting controls, building technology systems, and audio-video platforms. In addition to the risks noted above, there are other risks associated with these customer offerings.
We have begun incorporating artificial intelligence (“AI”) capabilities into certain product offerings as well as utilizing AI as part of our operational processes. These features may become more important over time.
We have begun incorporating AI capabilities into certain product offerings as well as utilizing AI as part of our operational processes. These features may become more important over time.
Union recognition and collective bargaining agreements are in place or in process covering approximately 65% of our workforce. Collective bargaining agreements representing approximately 60% of our workforce will expire within one year, primarily due to annual negotiations with unions in Mexico.
Union recognition and collective bargaining agreements are in place or in process covering approximately 58% of our workforce. Collective bargaining agreements representing approximately 48% of our workforce will expire within one year, primarily due to annual negotiations with unions in Mexico.
While prior compromises of our security have not had, in the aggregate, a material impact on the Company’s operations and financial condition, the Company expects events of this nature to continue as cyber-attacks are becoming more sophisticated and frequent, and the techniques used in such attacks change rapidly.
While prior compromises of our security have not had, in the aggregate, a material impact on the Company’s operations and financial condition, the Company expects events of this nature to continue as cyber-attacks are becoming more sophisticated and frequent.
It is uncertain whether, when, and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted. Similarly, certain countries have adopted the Kyoto Protocol, and in February 2021, the U.S. rejoined the Paris Accord. These and other existing or potential international initiatives and regulations could affect our international operations.
It is uncertain whether, when, and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted. Similarly, certain countries have adopted the Kyoto Protocol and joined the Paris Accord. These and other existing or potential international initiatives and regulations could affect our international operations.
In addition, we act as a general contractor in certain relationships with third parties, and as such are subject to risks applicable to general contractors. We are subject to risks related to operations and suppliers outside the United States.
In addition, we act as a general contractor in certain relationships with third parties, and as such are subject to risks applicable to general contractors. 10 Table of Contents We are subject to risks related to operations and suppliers outside the United States.
In addition, we could be criticized or subject to litigation for the 11 Table of Contents scope or nature of such initiatives, targets, or goals, or for any revisions to such targets or goals.
In addition, we could be criticized or subject to litigation for the scope or nature of such initiatives, targets, or goals, or for any revisions to such targets or goals.
Changes in our relationships with employees, changes in U.S. or international employment regulations, an inability to attract and retain talented employees, or a loss of key employees could adversely impact the effectiveness of our operations. We employed approximately 13,200 people as of August 31, 2024, approximately 9,600 of whom are employed in international locations.
Changes in our relationships with employees, changes in U.S. or international employment regulations, an inability to attract and retain talented employees, or a loss of key employees could adversely impact the effectiveness of our operations. We employed approximately 13,800 people as of August 31, 2025, approximately 9,300 of whom are employed in international locations.
We are also subject to certain other laws and regulations affecting our international operations, including laws and regulations such as the United States, Mexico, Canada Free Trade Agreement (“USMCA”) which, among other things, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.
We are also subject to certain other laws and regulations affecting our international operations, including laws and regulations such as the United States-Mexico-Canada Agreement (“USMCA”), which, among other things, provide certain beneficial duties and preferential tariff treatment for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.
We are subject to various foreign and domestic federal, state, and local laws and regulations that include but are not limited to, the Clean Air Act and the Toxic Substances Control Act; the Clean Water Act; the Safe Harbor data privacy program between the U.S. and European Union; the United States-Mexico-Canada-Free Trade Agreement (“USMCA”); regulations from the Occupational Safety and Health Administration agency; the European Union’s General Data Protection Regulation; California’s Consumer Privacy Act and Connected Device Privacy Act; the Civil Rights Act of 1964 and other federal and state labor and employment laws and regulations; the U.S.
We are subject to various foreign and domestic federal, state, and local laws and regulations that include but are not limited to, the Clean Air Act and the Toxic Substances Control Act; the Clean Water Act; the Safe Harbor data privacy program between the U.S. and the European Union; the USMCA; regulations from the Occupational Safety and Health Administration agency; the European Union’s General Data Protection Regulation; California’s Consumer Privacy Act and Connected Device Privacy Act; the Civil Rights Act of 1964 and other federal and state labor and employment laws and regulations; the U.S.
Although these disruptions have subsided from their peaks, future disruptions in the supply chain and shortages could affect our ability to procure components for our products on a timely basis, or at all, or could require us to commit to increased purchases and provide longer lead times to secure critical components by entering into longer term guaranteed supply agreements.
Future disruptions in the supply chain and shortages could affect our ability to procure components for our products on a timely basis, or at all, or could require us to commit to increased purchases and provide longer lead times to secure critical components by entering into longer term guaranteed supply agreements.
It is uncertain whether, when, and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted. Similarly, certain countries have adopted the Kyoto Protocol, and in February 2021, the U.S. rejoined the Paris Agreement.
It is uncertain whether, when, and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted. Similarly, certain countries have adopted the Kyoto Protocol and joined the Paris Agreement.
Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Many known and unknown risks related to AI exist.
Our business could be negatively impacted by social impact and sustainability matters. There has been, and may continue to be, an increasing focus from U.S. and foreign government agencies, certain investors, customers, consumers, employees, and other stakeholders concerning environmental, social and governance (“ESG”) matters.
There has been, and may continue to be, an increasing focus from U.S. and foreign government agencies, certain investors, customers, consumers, employees, and other stakeholders concerning environmental, social and governance (“ESG”) matters.
As we expand our service and solutions offerings, reliance on the technical infrastructure to provide services to customers will increase. If we fail to appropriately manage and secure the technical infrastructure required, customers could experience service outages or delays in implementation of services. If we are unable to manage and mitigate these risks, we could incur liabilities and other losses.
As we expand our service and solutions offerings, reliance on the technical infrastructure to provide services to customers will increase. If we fail to appropriately manage and secure the technical infrastructure required, customers could experience service outages or delays in the implementation of services.
Additionally, if we expand our global footprint into new geographies or territories, our exposure to these risks may increase. We source certain components and approximately 17% of our finished goods from Asia, a significant portion of which are subject to import tariffs. These tariffs could increase in future periods resulting in higher costs and/or lower demand.
Additionally, if we expand our global footprint into new geographies or territories, our exposure to these risks may increase. We source certain components and finished goods from countries outside of the United States, some of which are subject to import tariffs. These tariffs could increase in future periods resulting in higher costs and/or lower demand.
Administration or foreign governments will or will not do with respect to tariffs, the USMCA, or other international trade agreements and policies.
It remains unclear what the U.S. Administration or foreign governments will or will not do with respect to tariffs, the USMCA, or other international trade agreements and policies.
We are also subject to an increasing number of evolving and uncertain data privacy and security laws and regulations that impose requirements on us and our technology prior to certain use or transfer, storing, processing, disclosure, and protection of data and prior to sale or use of certain technologies.
Changes in data privacy laws and our ability to comply with them could adversely impact our operations We are subject to an increasing number of evolving and uncertain data privacy and security laws and regulations that impose requirements on us and our technology prior to certain use or transfer, storing, processing, disclosure, and protection of data and prior to sale or use of certain technologies.
Additionally, we routinely undertake contractual obligations to comply with all applicable laws, so a violation of a data privacy or security law could result in additional contractual liability. 9 Table of Contents System failures, ineffective system implementation or disruptions, failure to comply with data privacy and security laws or regulations, or the compromise of security with respect to internal or external systems or portable electronic devices could damage our systems or infrastructure, subject us to liability claims, or regulatory fines, penalties, or intervention, harm our reputation, interrupt our operations, disrupt customer operations, and adversely affect our internal control over financial reporting, business, financial condition, results of operations, or cash flows.
System failures, ineffective system implementation or disruptions, failure to comply with data privacy and security laws or regulations, or the compromise of security with respect to internal or external systems or portable electronic devices could damage our systems or infrastructure, subject us to liability claims, or regulatory fines, penalties, or intervention, harm our reputation, interrupt our operations, disrupt customer operations, and adversely affect our internal control over financial reporting, business, financial condition, results of operations, or cash flows.
Certain global and more diversified electrical manufacturers as well as certain global technology and building solution providers may be able to obtain a competitive advantage, either through internal development or acquisitions, over us by offering broader and more integrated solutions utilizing electrical, lighting, controls, building automation solutions, and data analytics, and small startup companies may offer more localized product sales and support services within individual regions.
Certain global and more diversified electrical manufacturers as well as certain global technology and building solution providers may be able to obtain a competitive advantage, either through internal development or acquisitions, over us by providing broader offerings that utilize a combination of products and/or services, and small startup companies may offer more localized product sales and support services within individual regions.
We make decisions about what intellectual property to register based on these policies and processes. Formal protection for all company intellectual property is not appropriate, but even if it were, it could not be obtained without incurring significant legal expenses and adversely affecting our financial condition and results of operations.
Formal protection for all company intellectual property is not appropriate, but even if it were, it could not be obtained without incurring significant legal expenses and adversely affecting our financial condition and results of operations.
A significant product recall, warranty claim, product liability case, and/or challenges around seeking indemnity or reimbursement from our suppliers or other third parties could also result in adverse publicity, damage to our reputation, and a loss of consumer confidence in our products. 13 Table of Contents We may not be able to adequately protect our intellectual property rights and could be the target of intellectual property claims.
A significant product recall, warranty claim, product liability case, and/or challenges around seeking indemnity or reimbursement from our suppliers or other third parties could also result in adverse publicity, damage to our reputation, and a loss of consumer confidence in our products.
We continue to monitor conditions affecting our international locations, including potential changes in income from a strengthening or weakening in foreign exchange rates in relation to the U.S. dollar. Some of these risks, including but not limited to foreign exchange rates, violations of laws, and higher costs associated with changes in regulation, could adversely impact our business.
Such liabilities could adversely impact our business. We continue to monitor conditions affecting our international locations, including potential changes in income from a strengthening or weakening in foreign exchange rates in relation to the U.S. dollar.
Sales of lighting, lighting controls, and building technology solutions depend significantly on the level of activity in new construction and renovation/retrofits.
Sales of our products and services depend significantly on the level of activity in new construction and renovation/retrofits.
While we do not have operations in these locations and do not have significant 8 Table of Contents direct exposure to customers and vendors in those countries, we are unable to predict the impact that these actions will have on the global economy or on our financial condition, results of operations, and cash flows.
While we do not have operations in these locations and do not have significant direct exposure to customers and vendors in those countries, we are unable to predict the impact that these actions will have on the global economy or on our financial condition, results of operations, and cash flows. 8 Table of Contents Company operating systems, information systems, or devices have experienced, and may experience in the future, a failure or a compromise of security, which could adversely impact our operations as well as the effectiveness of internal controls over operations and financial reporting.
We cannot control the actions or performance, including product quality, of these third parties and therefore, cannot be certain that we or our end-users will be satisfied. Any future actions of or any failure to act by any third party on which our business relies could cause us to incur losses or interruptions in our operations.
Any future actions of or any failure to act by any third party on which our business relies could cause us to incur losses or interruptions to our operations.
A majority of our sales are subject to USMCA. In addition, the US government has initiated or is considering imposing tariffs on certain foreign goods, including steel and aluminum. Related to this action, certain foreign governments, including China, have instituted or are considering imposing tariffs on certain U.S. goods. It remains unclear what the U.S.
A large portion of our sales are impacted by the USMCA. In addition, the U.S. government has initiated or is considering imposing tariffs on certain foreign goods, including steel, copper, and aluminum. Increased and/or proposed tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs by China and other countries.
We own certain patents, trademarks, copyrights, trade secrets, and other intellectual property. Where appropriate, these assets are the subject of registrations or other filings with governmental entities. In addition, we have internal policies and processes that establish a strategy for protecting newly developed key company technologies.
We may not be able to adequately protect our intellectual property rights and could be the target of intellectual property claims. We own certain patents, trademarks, copyrights, trade secrets, and other intellectual property. Where appropriate, these assets are the subject of registrations or other filings with governmental entities.
We may be subject to risk in connection with third-party relationships necessary to operate our business. We utilize strategic partners and third-party relationships in order to operate and grow our business. For instance, we utilize third parties for contract manufacturing of certain products, subcontract installation and commissioning, as well as perform certain selling, distribution, and administrative functions.
If we are unable to manage and mitigate these risks, we could incur liabilities and other losses. We may be subject to risk in connection with third-party relationships necessary to operate our business. We utilize strategic partners and third-party relationships in order to operate and grow our business.
Removed
Company operating systems, information systems, or devices have experienced, and may experience in the future, a failure, a compromise of security, or a violation of data privacy laws or regulations, which could adversely impact our operations as well as the effectiveness of internal controls over operations and financial reporting.
Added
As artificial intelligence (“AI”) technologies advance, new and increasingly sophisticated attack methods are emerging, including fraud involving impersonation technologies or other forms of generative automation that enhance the scale and effectiveness of cyber threats.
Removed
We operate in several jurisdictions, including but not limited to, the United States, Mexico, Canada, and Europe.
Added
The techniques used in such attacks change rapidly, and certain vulnerabilities or attack methods may go undetected until after they are already deployed, potentially allowing them to persist within our systems for extended periods.
Added
Additionally, we routinely undertake contractual obligations to comply with all applicable laws, so a violation of a data privacy or security law could result in additional contractual liability.
Added
For instance, we utilize third parties for contract manufacturing of certain products, subcontract installation, and commissioning, as well as for performing certain selling, distribution, and administrative functions. We cannot control the actions or performance, including product quality, of these third parties and therefore, cannot be certain that we or our end-users will be satisfied.
Added
Some of these risks, including but not limited to foreign exchange rates, violations of laws, and higher costs associated with changes in regulation, could adversely impact our business. We are subject to exchange rate fluctuations, which could adversely impact our business. We are subject to fluctuations in foreign currency exchange rates.
Added
We engage in cross-border transactions through operations in multiple countries, which increases our exposure to exchange rate volatility. Significant changes in exchange rates relative to the U.S. dollar could adversely affect our pricing competitiveness, cost structure and overall financial performance. In particular, a stronger U.S. dollar could reduce the competitiveness of our products in international markets.
Added
Conversely, a weaker U.S. dollar could raise the cost of imported inventory, materially increasing the cost of goods sold, which could adversely impact our business. 11 Table of Contents Our business could be negatively impacted by social impact and sustainability matters.
Added
Currently recognized risks include issues related to accuracy, bias, toxicity, intellectual property infringement or misappropriation, data privacy and cybersecurity, and data provenance.
Added
In addition, we have internal policies and processes that establish a strategy for protecting newly developed key company technologies. We make decisions about what intellectual property to register based on these policies and processes.
Added
We have previously been subject to domestic and international tax audits by taxing authorities of the jurisdictions in which we operate, and we may be subject to additional such audits in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−0 removed16 unchanged
Biggest changeAdditionally, the Board of Directors and the Audit Committee of the Board of Directors each receive regular presentations and reports on cybersecurity risks as well as prompt and timely information regarding any cybersecurity incident identified as significant by our CISO or Chief Privacy Officer, as required by the CIRP, and ongoing updates regarding any such incident until it has been addressed. 16 Table of Contents On an annual basis, the Board of Directors and the Audit Committee of the Board of Directors discuss the Company’s approach to cybersecurity risk management, as well as our overall risk management strategy, with the members of senior leadership, which includes the Company’s CISO, Chief Executive Officer, and Chief Financial Officer.
Biggest changeAdditionally, the Board of Directors and the Audit Committee of the Board of Directors each receive regular presentations and reports on cybersecurity risks as well as prompt and timely information regarding any cybersecurity incident identified as significant by our CISO or Chief Privacy Officer, as required by the CIRP, and ongoing updates regarding any such incident until it has been addressed.
In addition to board oversight and the presence of a cybersecurity team, we provide all applicable employees and contractors with cybersecurity awareness training and testing on an annual basis. We also deliver phishing exercises to all applicable employees and select contractors, as well as targeted phishing training to select employees and contractors, on a quarterly basis.
In addition to board oversight and the presence of a cybersecurity team, we provide all applicable employees and contractors with cybersecurity awareness training and testing on an annual basis. We also deploy phishing exercises to all applicable employees and select contractors, as well as targeted phishing training to select employees and contractors, on a quarterly basis.
To address cybersecurity risk, we have instituted policies, processes, and internal controls aligned with the framework established by the Secure Controls Framework, a meta-framework that reflects the standards of multiple security frameworks including those of the National Institute of Standards and Technology (NIST) and International Organization for Standardization (ISO).
To address cybersecurity risk, we have instituted policies, processes, and internal controls aligned with the framework established by the Secure Controls Framework, a meta-framework that reflects the standards of multiple security frameworks including those of the National Institute of Standards and Technology (“NIST”) and International Organization for Standardization (“ISO”).
Cybersecurity risks are identified and responded to by our cybersecurity team lead by our CISO. Cybersecurity incidents are managed, evaluated, investigated, and responded to in accordance with the Company’s documented Cyber Incident Response Plan (“CIRP”). The CIRP is administered by the Cyber Incident Response Team (“CIRT”), which is overseen and managed by the CISO.
Cybersecurity risks are identified and responded to by our cybersecurity team lead by our CISO. Cybersecurity incidents are managed, evaluated, investigated, and responded to in accordance with the Company’s documented 16 Table of Contents Cyber Incident Response Plan (“CIRP”). The CIRP is administered by the Cyber Incident Response Team (“CIRT”), which is overseen and managed by the CISO.
Through ongoing communications with these teams, the CISO monitors the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents in real time and reports such threats and incidents to the Audit Committee when appropriate.
Through ongoing communications with these teams, the CISO monitors the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents in real time and reports such threats and incidents to the Audit Committee of the Board of Directors when appropriate. 17 Table of Contents
Added
On an annual basis, the Board of Directors and the Audit Committee of the Board of Directors discuss the Company’s approach to cybersecurity risk management, as well as our overall risk management strategy, with the members of senior leadership, which includes the Company’s CISO, Chief Executive Officer, and Chief Financial Officer.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeThe following listing summarizes the significant facility categories by which reportable segment, Acuity Brands Lighting and Lighting Controls (“ABL”) or the Intelligent Spaces Group (“ISG”), the facility primarily benefits as of August 31, 2024: ABL ISG Corporate Total Nature of Facilities Owned Leased Owned Leased Leased Owned Leased Manufacturing facilities 10 5 2 1 — 12 6 Warehouses — 1 — — — — 1 Distribution centers 2 5 — — — 2 5 Offices 5 8 — 3 1 5 12 Total 17 19 2 4 1 19 24 The following table provides additional geographic information related to our manufacturing facilities as of August 31, 2024: United States Mexico Europe Canada Total ABL: Owned 4 5 1 — 10 Leased 1 2 — 2 5 Total 5 7 1 2 15 ISG: Owned — — 1 1 2 Leased 1 — — — 1 Total 1 — 1 1 3 17 Table of Contents We believe that our properties are well maintained and in good operating condition and that our properties are suitable and adequate for our present needs.
Biggest changeThe following listing summarizes the significant facility categories by which reportable segment, Acuity Brands Lighting (“ABL”) or Acuity Intelligent Spaces (“AIS”), the facility primarily benefits as of August 31, 2025: ABL AIS Corporate Total Nature of Facilities Owned Leased Owned Leased Leased Owned Leased Manufacturing facilities 10 5 2 1 — 12 6 Warehouses — — — 1 — — 1 Distribution centers 2 6 — 1 — 2 7 Offices 3 8 — 25 1 3 34 Total 15 19 2 28 1 17 48 The following table provides additional geographic information related to our manufacturing facilities as of August 31, 2025: United States Mexico Europe Canada Total ABL: Owned 4 5 1 — 10 Leased 1 2 — 2 5 Total 5 7 1 2 15 AIS: Owned — — 1 1 2 Leased 1 — — — 1 Total 1 — 1 1 3 We believe that our properties are well maintained and in good operating condition and that our properties are suitable and adequate for our present needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed5 unchanged
Biggest changeThere were no shares repurchased during the quarter ended August 31, 2024. 19 Table of Contents Company Stock Performance The following information in this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and it will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent specifically incorporated by reference into such filing.
Biggest changeThe following table reflects activity related to equity securities we repurchased during the three months ended August 31, 2025: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs 6/01/2025 through 6/30/2025 47,130 $ 272.58 47,130 3,384,700 7/01/2025 through 7/31/2025 32,654 $ 296.85 32,654 3,352,046 8/01/2025 through 8/31/2025 12,675 $ 315.88 12,675 3,339,371 Total 92,459 $ 287.09 92,459 3,339,371 19 Table of Contents Company Stock Performance The following information in this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and it will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent specifically incorporated by reference into such filing.
The following graph compares the cumulative total return to shareholders on our outstanding stock during the five years ended August 31, 2024, with the cumulative total returns of the Standard & Poor’s (“S&P”) Midcap 400 Index, the Dow Jones U.S. Electrical Components & Equipment Index, and the Dow Jones U.S. Building Materials & Fixtures Index.
The following graph compares the cumulative total return to shareholders on our outstanding stock during the five years ended August 31, 2025, with the cumulative total returns of the Standard & Poor’s (“S&P”) Midcap 400 Index, the Dow Jones U.S. Electrical Components & Equipment Index, and the Dow Jones U.S. Building Materials & Fixtures Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* Among Acuity Brands, Inc., the S&P Midcap 400 Index, the Dow Jones U.S. Electrical Components & Equipment Index, and the Dow Jones U.S. Building Materials & Fixtures Index *Assumes $100 invested on August 31, 2019 in stock or index, including reinvestment of dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* Among Acuity Inc., the S&P Midcap 400 Index, the Dow Jones U.S. Electrical Components & Equipment Index, and the Dow Jones U.S. Building Materials & Fixtures Index *Assumes $100 invested on August 31, 2020 in stock or index, including reinvestment of dividends.
The information required by this item with respect to equity compensation plans is included under the caption Equity Compensation Plans in our proxy statement for the annual meeting of stockholders to be held January 22, 2025, which we will file with the Securities and Exchange Commission pursuant to Regulation 14A. The proxy statement is incorporated herein by reference.
The information required by this item with respect to equity compensation plans is included under the caption Equity Compensation Plans in our proxy statement for the annual meeting of stockholders to be held January 21, 2026, which we will file with the Securities and Exchange Commission pursuant to Regulation 14A. The proxy statement is incorporated herein by reference.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange under the symbol “AYI.” At October 23, 2024, there were 1,681 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange under the symbol “AYI.” At October 23, 2025, there were 1,575 stockholders of record.
As of August 31, 2024, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 3.8 million shares.
As of August 31, 2025, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 3.3 million shares.
Building Materials & Fixtures Index 100 118 186 146 186 251 Item 6. [Reserved] 20 Table of Contents
Building Materials & Fixtures Index 100 158 124 157 213 231 Item 6. [Reserved] 20 Table of Contents
Aug-19 Aug-20 Aug-21 Aug-22 Aug-23 Aug-24 Acuity Brands, Inc. $ 100 $ 88 $ 148 $ 132 $ 131 $ 207 S&P Midcap 400 Index 100 104 151 135 150 178 Dow Jones U.S. Electrical Components & Equipment Index 100 115 167 148 180 217 Dow Jones U.S.
Aug-20 Aug-21 Aug-22 Aug-23 Aug-24 Aug-25 Acuity Inc. $ 100 $ 170 $ 151 $ 149 $ 236 $ 303 S&P Midcap 400 Index 100 145 130 144 171 182 Dow Jones U.S. Electrical Components & Equipment Index 100 145 128 155 188 272 Dow Jones U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+19 added−19 removed28 unchanged
Biggest changeSegment Results The following table sets forth information comparing the operating results of our segments, ABL and ISG, for the year ended August 31, 2024 with the year ended August 31, 2023 (in millions): Year Ended August 31, 2024 2023 Increase (Decrease) Percent Change ABL: Net sales $ 3,573.4 $ 3,722.8 $ (149.4) (4.0) % Operating profit 582.8 509.5 73.3 14.4 % Operating profit margin 16.3 % 13.7 % 260 bps ISG: Net sales $ 291.9 $ 252.7 $ 39.2 15.5 % Operating profit 43.6 32.1 $ 11.5 35.8 % Operating profit margin 14.9 % 12.7 % 220 bps ABL net sales for the year ended August 31, 2024 decreased 4.0% compared with the prior-year period due to lower net sales across all channels, excluding corporate accounts.
Biggest changeThis decrease reflects lower net income as well as higher outstanding diluted shares. 25 Table of Contents Segment Results The following table sets forth information comparing the operating results of our segments, ABL and AIS, for the year ended August 31, 2025 with the year ended August 31, 2024 (in millions): Year Ended August 31, 2025 2024 Increase (Decrease) Percent Change ABL: Net sales $ 3,612.2 $ 3,573.4 $ 38.8 1.1 % Gross profit 1,654.5 1,612.5 42.0 2.6 % Operating profit 590.6 582.8 7.8 1.3 % Gross profit margin 45.8 % 45.1 % 70 bps Operating profit margin 16.4 % 16.3 % 10 bps AIS: Net sales $ 764.3 $ 291.9 $ 472.4 161.8 % Gross profit 424.0 169.2 254.8 150.6 % Operating profit 76.1 43.6 $ 32.5 74.5 % Gross profit margin 55.5 % 58.0 % (250) bps Operating profit margin 10.0 % 14.9 % (490) bps ABL net sales for the year ended August 31, 2025 increased 1.1% compared with the prior-year period due primarily to higher net sales in our independent and direct sales networks, partially offset by a decline in corporate accounts due primarily to the timing of renovation activities for a large customer and a decline in the retail sales channel.
Generally, these provisions are recorded as reductions of revenue and are estimated based on customer agreements, historical trends, expected demand, or specific notification of pending returns. Although historical experience has generally been within expectations, there can be no assurance that future rebates, sales incentives, product returns, discounts, marketing and trade-promotion programs will not exceed historical amounts.
Generally, these provisions are recorded as reductions of revenue and are estimated based on customer agreements, historical trends, expected demand, or specific notification of pending returns. Although historical experience has generally been within expectations, there can be no assurance that future rebates, sales incentives, product returns, discounts, and marketing and trade-promotion programs will not exceed historical amounts.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Brands, Inc.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Inc.
As discussed in the Description of Business and Basis of Presentation footnote of the Notes to Consolidated Financial Statements , the preparation of financial statements in conformity with U.S.
GAAP”). As discussed in the Description of Business and Basis of Presentation footnote of the Notes to Consolidated Financial Statements , the preparation of financial statements in conformity with U.S.
(referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries for the fiscal years ended August 31, 2024 and 2023. The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included within this report.
(referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries for the fiscal years ended August 31, 2025 and 2024. The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included within this report.
Such charges could have a material adverse effect on our results of operations and financial position but not our cash flows from operations. Goodwill As of June 1, 2024, the current fiscal year testing date, we performed a qualitative analysis to assess goodwill for impairment.
Such charges could have a material adverse effect on our results of operations and financial position but not our cash flows from operations. Goodwill As of June 1, 2025, the current fiscal year testing date, we performed a qualitative analysis to assess goodwill for impairment.
We last performed a quantitative analysis in fiscal 2023 for these seven trade names and concluded that any reasonably likely change in the assumptions used in those analyses, including revenue growth rates, discount rates, long-term growth rates, or implied royalty rates would not result in an impairment.
We last performed a quantitative analysis in fiscal 2023 for the trade names and concluded that any reasonably likely change in the assumptions used in those analyses, including revenue growth rates, discount rates, long-term growth rates, or implied royalty rates would not result in an impairment.
Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for seven of the indefinite-lived intangible assets, and no quantitative test for these assets was required.
Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for all of the indefinite-lived intangible assets, and no quantitative test for these assets was required.
Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this quarterly report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events, or otherwise. 28 Table of Contents
Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this quarterly report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events, or otherwise.
Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for each of our three reporting units. Thus, no quantitative test was required for our $1.1 billion of goodwill.
Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for each of our four reporting units. Thus, no quantitative test was required for our $1.5 billion of goodwill.
Although our historical experience related to demand and market conditions has been within expectations, a significant change in customer demand, market conditions, or technology 26 Table of Contents could render certain inventory obsolete and thus could have a material adverse impact on our operating results in the period the change occurs.
Although our historical experience related to demand and market conditions has 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.
A discussion of our fiscal 2023 results of operations compared to fiscal 2022 can be found within Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our fiscal 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 26, 2023.
A discussion of our fiscal 2024 results of operations compared to fiscal 2023 can be found within Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our fiscal 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 28, 2024.
The Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Brands, Inc. and ABL IP Holding LLC, a wholly-owned subsidiary of Acuity Brands, Inc.
The Unsecured Notes were issued by Acuity Brands Lighting, Inc., a wholly-owned subsidiary of Acuity Inc. 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.
All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly in light of our financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Board deems relevant.
All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly with consideration of our financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Board deems relevant.
Miscellaneous Expense, net Miscellaneous expense, net consists of gains and losses associated with foreign currency-related transactions, non-operating gains and losses, and non-service components of net periodic pension cost. We reported net miscellaneous expense of $9.2 million in fiscal 2024 compared with $7.8 million in fiscal 2023.
Miscellaneous Expense, net Miscellaneous expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses. We reported net miscellaneous expense of $41.7 million in fiscal 2025 compared with $9.2 million in fiscal 2024.
The increase in operating profit was due primarily to higher gross profit and nonrecurring fiscal 2023 special charges, partially offset by higher SD&A expenses. Interest (Income) Expense, net We reported net interest income of $4.5 million and net interest expense of $18.9 million for the years ended August 31, 2024 and 2023, respectively.
The increase in operating profit was due primarily to higher gross profit, partially offset by higher SD&A expenses and nonrecurring fiscal 2025 special charges. Interest Expense (Income), net We reported net interest expense of $22.0 million and net interest income of $4.5 million for the years ended August 31, 2025 and 2024, respectively.
Investments in Current Business for Growth We invested $64.0 million and $66.7 million in property, plant, and equipment in fiscal 2024 and 2023, respectively. We invested primarily in new and enhanced information technology, tooling, machinery, and facility improvements in fiscal 2024. Strategic Acquisitions, Investments, and Divestitures We seek opportunities to strategically expand and enhance our portfolio of solutions.
Investments in Current Business for Growth We invested $68.4 million and $64.0 million in property, plant, and equipment in fiscal 2025 and 2024, respectively. We invested primarily in new and enhanced information technology, equipment, tooling, and facility improvements in fiscal 2025. Strategic Acquisitions, Investments, and Divestitures We seek opportunities to strategically expand and enhance our portfolio of solutions.
Please refer to the Special Charges footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for further details. Operating profit for the year ended August 31, 2024 was $553.3 million (14.4% of net sales) compared with $473.4 million (12.0% of net sales) for the prior fiscal year, an increase of $79.9 million, or 16.9%.
Please refer to the Special Charges footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for further details. Operating profit for the year ended August 31, 2025 was $563.9 million (13.0% of net sales) compared with $553.3 million (14.4% of net sales) for the prior fiscal year, an increase of $10.6 million, or 1.9%.
A discussion of the year ended August 31, 2023 compared to the year ended August 31, 2022 can be found within Part II, Item 7. Management's Discussion and Analysis within our fiscal 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 26, 2023. Overview Company We are a market-leading industrial technology company.
A discussion of the year ended August 31, 2024 compared to the year ended August 31, 2023 can be found within Part II, Item 7. Management's Discussion and Analysis within our fiscal 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 28, 2024. Overview Company Acuity Inc.
See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information. Indefinite-Lived Intangible Assets As of June 1, 2024, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $135.5 million. For fiscal 2024, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment.
See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information. 28 Table of Contents Indefinite-Lived Intangible Assets As of June 1, 2025, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $132.5 million.
Share Repurchases During fiscal 2024, we repurchased 0.5 million shares of our outstanding common stock for $87.8 million. Total cash outflows for share repurchases during fiscal 2024 were $88.7 million. During fiscal 2023, we repurchased 1.6 million shares of our outstanding common stock for $269.3 million. Total cash outflows for share repurchases during fiscal 2023 were $266.6 million.
Share Repurchases During fiscal 2025, we repurchased approximately 0.4 million shares of our outstanding common stock for $117.1 million. Total cash outflows for share repurchases during fiscal 2025 were $118.5 million. During fiscal 2024, we repurchased 0.5 million shares of our outstanding common stock for $87.8 million. Total cash outflows for share repurchases during fiscal 2024 were $88.7 million.
At August 31, 2024, our outstanding debt balance was $496.2 million, which consisted solely of our Unsecured Notes, compared to our cash position of $845.8 million. We were in compliance with all covenants under our financing arrangements as of August 31, 2024.
At August 31, 2025, our outstanding debt balance was $896.8 million, which consisted of our Unsecured Notes and borrowings on our Term Loan Facility, compared to our cash position of $422.5 million. We were in compliance with all covenants under our financing arrangements as of August 31, 2025.
At August 31, 2024, we had additional borrowing capacity under the Revolving Credit Facility of $596.2 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 $3.8 million issued under the facility.
At August 31, 2025, we had additional borrowing capacity under the Credit Agreement of $595.8 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 $4.2 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance premiums.
Any reasonably likely change in the assumptions used in the analysis for the trade name would not be material to our financial conditions or results of operations. See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for further details regarding the assumptions used and results of our annual impairment tests for the periods presented.
See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for further details regarding the assumptions used and results of our annual impairment tests for the periods presented.
Cash Our cash position at August 31, 2024 was $845.8 million, an increase of $447.9 million from August 31, 2023. Cash generated from operating activities and cash on hand were used during the current year to fund our capital allocation priorities as discussed below.
Cash Our cash position at August 31, 2025 was $422.5 million, a decrease of $423.3 million from August 31, 2024. Cash generated from operating activities and cash on hand were used during the current year to partially fund the QSC, LLC (“QSC”) acquisition and our other capital allocation priorities as discussed below.
We currently believe that the estimates used in the evaluation of goodwill and indefinite-lived intangibles are reasonable, including our calculations of fiscal 2024 trade name impairment charges described below.
We currently believe that the estimates used in the evaluation of goodwill and indefinite-lived intangibles are reasonable.
We generated $619.2 million of cash flows from operating activities during fiscal 2024 compared with $578.1 million in the prior-year period, an increase of $41.1 million.
We generated $601.4 million of cash flows from operating activities during fiscal 2025 compared with $619.2 million in the prior-year period, a decrease of $17.8 million.
Critical Accounting Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses the financial condition and results of operations as reflected in our Consolidated Financial Statements , which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Accounting Standards Adopted in Fiscal 2025 and Accounting Standards Yet to Be Adopted See the New Accounting Pronouncements footnote of the Notes to Consolidated Financial Statements for information on recently adopted and upcoming standards. 26 Table of Contents Critical Accounting Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses the financial condition and results of operations as reflected in our Consolidated Financial Statements , which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S.
As of August 31, 2024, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 3.8 million shares.
As of August 31, 2025, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 3.3 million shares. 23 Table of Contents Results of Operations The following is a discussion of our results of operations in fiscal 2025 compared to fiscal 2024.
The following table sets forth information comparing the components of net income for the year ended August 31, 2024 with the year ended August 31, 2023 (in millions except per share data): Year Ended August 31, Increase Percent 2024 2023 (Decrease) Change Net sales $ 3,841.0 $ 3,952.2 $ (111.2) (2.8) % Cost of products sold 2,059.3 2,239.0 (179.7) (8.0) % Gross profit 1,781.7 1,713.2 68.5 4.0 % Percent of net sales 46.4 % 43.3 % 310 bps Selling, distribution, and administrative expenses 1,228.4 1,212.9 15.5 1.3 % Special charges — 26.9 (26.9) NM Operating profit 553.3 473.4 79.9 16.9 % Percent of net sales 14.4 % 12.0 % 240 bps Other expense: Interest (income) expense, net (4.5) 18.9 (23.4) (123.8) % Miscellaneous expense, net 9.2 7.8 1.4 17.9 % Total other expense 4.7 26.7 (22.0) (82.4) % Income before income taxes 548.6 446.7 101.9 22.8 % Percent of net sales 14.3 % 11.3 % 300 bps Income tax expense 126.0 100.7 25.3 25.1 % Effective tax rate 23.0 % 22.5 % Net income $ 422.6 $ 346.0 $ 76.6 22.1 % Diluted earnings per share $ 13.44 $ 10.76 $ 2.68 24.9 % NM - not meaningful Net Sales Net sales of $3.84 billion for the year ended August 31, 2024 decreased by $111.2 million, or 2.8%, compared with the prior-year period due to a decline in sales within our ABL segment, partially offset by higher sales within our ISG segment.
The following table sets forth information comparing the components of net income for the year ended August 31, 2025 with the year ended August 31, 2024 (in millions except per share data): Year Ended August 31, Increase Percent 2025 2024 (Decrease) Change Net sales $ 4,345.6 $ 3,841.0 $ 504.6 13.1 % Cost of products sold 2,267.1 2,059.3 207.8 10.1 % Gross profit 2,078.5 1,781.7 296.8 16.7 % Percent of net sales 47.8 % 46.4 % 140 bps Selling, distribution, and administrative expenses 1,484.9 1,228.4 256.5 20.9 % Special charges 29.7 — 29.7 NM Operating profit 563.9 553.3 10.6 1.9 % Percent of net sales 13.0 % 14.4 % (140) bps Other expense: Interest expense (income), net 22.0 (4.5) 26.5 NM Miscellaneous expense, net 41.7 9.2 32.5 NM Total other expense 63.7 4.7 59.0 NM Income before income taxes 500.2 548.6 (48.4) (8.8) % Percent of net sales 11.5 % 14.3 % (280) bps Income tax expense 103.6 126.0 (22.4) (17.8) % Effective tax rate 20.7 % 23.0 % Net income $ 396.6 $ 422.6 $ (26.0) (6.2) % Diluted earnings per share $ 12.53 $ 13.44 $ (0.91) (6.8) % NM - not meaningful Net Sales Net sales of $4.35 billion for the year ended August 31, 2025 increased by $504.6 million, or 13.1%, compared with the prior-year period due primarily to increases in sales in both our AIS and ABL segments.
Our qualitative analysis considered and assessed external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade 27 Table of Contents name's actual and planned financial performance.
For fiscal 2025, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment. Our qualitative analysis considered and assessed external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade name's actual and planned financial performance.
The following tables present summarized financial information for Acuity Brands, Inc., Acuity Brands Lighting, Inc., and ABL IP Holding LLC on a combined basis after the elimination of all intercompany balances and transactions between the combined group as well as any investments in non-guarantors as of the dates and during the period presented (in millions): Summarized Balance Sheet Information August 31, 2024 August 31, 2023 Current assets $ 1,517.6 $ 995.7 Current assets due from non-guarantor affiliates 338.0 326.4 Non-current assets 1,337.7 1,377.9 Current liabilities 553.2 464.2 Non-current liabilities 746.5 785.4 Summarized Income Statement Information Year Ended August 31, 2024 Net sales $ 3,146.9 Gross profit 1,447.0 Net income 407.9 Capital Allocation Priorities Our capital allocation priorities are to invest in our current business for growth, to invest in mergers and acquisitions, to pay a dividend, and to make share repurchases.
The following tables present summarized financial information for Acuity Inc., Acuity Brands Lighting, Inc., and ABL IP Holding LLC on a combined basis after the elimination of all intercompany balances and transactions between the combined group as well as any investments in non-guarantors as of the dates and during the period presented (in millions): Summarized Balance Sheet Information August 31, 2025 August 31, 2024 Current assets $ 1,068.2 $ 1,517.6 Current assets due from non-guarantor affiliates 303.5 338.0 Non-current assets 1,369.4 1,337.7 Current liabilities 604.0 553.2 Non-current liabilities 1,138.4 746.5 Summarized Income Statement Information Year Ended August 31, 2025 Net sales $ 3,326.2 Gross profit 1,503.1 Net income 348.3 On November 25, 2024, we entered into an amendment to our credit agreement (the “Credit Agreement”) that, among other things, provided for a delayed draw term under the Term Loan Facility of up to $600.0 million.
We had no borrowings outstanding under our credit agreement as of August 31, 2024. Further details on our borrowings and operating lease liabilities are outlined in the Debt and Lines of Credit and Leases footnotes of the Notes to Consolidated Financial Statements , respectively, within this Annual Report on Form 10-K.
Further details on our borrowings and operating lease liabilities are outlined in the Debt and Lines of Credit, Leases, and Subsequent Event footnotes of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K. Contractual purchase obligations subsequent to August 31, 2025 include $323.3 million in fiscal 2026. Contractual purchase obligations beyond fiscal 2026 are not significant.
We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and location-aware applications. Financial Condition, Capital Resources, and Liquidity We have numerous sources of capital, including cash on hand and cash flows generated from operations, as well as various sources of financing.
Financial Condition, Capital Resources, and Liquidity We have numerous sources of capital, including cash on hand and cash flows generated from operations, as well as various sources of financing.
We use technology to solve problems in spaces and light. Through our two business segments, Acuity Brands Lighting and Lighting Controls (“ABL”) and the Intelligent Spaces Group (“ISG”), we design, manufacture, and bring to market products and services that make a valuable difference in people's lives.
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.
This increase was due primarily to higher net income in fiscal 2024, partially offset by higher working capital investments to fund profitable growth. 21 Table of Contents Financing Arrangements See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for discussion of the terms of our various financing arrangements, including the $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”) as well as the terms of our $600.0 million five-year unsecured revolving credit facility (“Revolving Credit Facility”).
Cash flows from operations decreased as payments for acquisition-related costs, higher interest, and increased purchases of inventory were partially offset by the timing of collections from customers. 21 Table of Contents Financing Arrangements See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for discussion of the terms of our various financing arrangements, including the 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”), the terms of our five-year unsecured revolving credit facility (“Revolving Credit Facility”), and the terms of our unsecured term loan facility (“Term Loan Facility”) due June 27, 2027.
Operating Profit Selling, distribution, and administrative (“SD&A”) expenses for the year ended August 31, 2024 were $1.23 billion compared with $1.21 billion in the prior year, an increase of $15.5 million, or 1.3%.
These increases were partially offset by increased production costs, higher tariffs, and acquisition-date fair value adjustments to QSC's inventory. Operating Profit Selling, distribution, and administrative (“SD&A”) expenses for the year ended August 31, 2025 were $1.48 billion compared with $1.23 billion in the prior year, an increase of $256.5 million, or 20.9%.
ISG operating profit was $43.6 million (14.9% of ISG net sales) for the year ended August 31, 2024 compared with $32.1 million (12.7% of ISG net sales) in the prior-year period, an increase of $11.5 million. This increase was due primarily to contributions from higher sales, partially offset by increased employee-related costs and professional fees.
These increases were partially offset by preliminary pre-tax fair value adjustments to QSC's inventory and higher tariffs. AIS operating profit was $76.1 million (10.0% of AIS net sales) for the year ended August 31, 2025 compared with $43.6 million (14.9% of AIS net sales) in the prior-year period, an increase of $32.5 million.
Sufficient cash flow generation is also critical to fund our operations in the short and long terms and to maintain compliance with covenants contained in our financing agreements. Our significant contractual cash requirements as of August 31, 2024 primarily include principal and interest on our unsecured notes, accounts payable, accrued employee compensation, and operating lease liabilities.
Sufficient cash flow generation is also critical to fund our operations in the short and long term and to maintain compliance with covenants contained in our financing agreements.
The assets have been included in ABL's financial results since the date of acquisition and did not have a material impact to our consolidated financial condition, results of operations, or cash flows. 22 Table of Contents KE2 Therm On May 15, 2023, using cash on hand, we acquired all of the equity interests of KE2 Therm Solutions, Inc. (“KE2 Therm”).
The assets have been included in ABL's financial results since the date of acquisition and did not have a material impact to our financial condition, results of operations, or cash flows. Dividends We paid dividends on our common stock of $20.6 million ($0.66 per share) in fiscal 2025 and $18.2 million ($0.58 per share) in fiscal 2024.
The increase in net interest income was due to higher interest bearing cash and cash equivalent balances, higher investing rates on those balances, and lower average short-term borrowings outstanding compared to the prior year.
The increase in net interest expense was due primarily to interest incurred on our outstanding Term Loan Facility and lower interest-bearing cash and cash equivalent balances as a result of our purchase of QSC.
Net sales in fiscal 2023 benefited from working through an elevated backlog. 25 Table of Contents Operating profit for ABL was $582.8 million (16.3% of ABL net sales) for the year ended August 31, 2024 compared to $509.5 million (13.7% of ABL net sales) in the prior year, an increase of $73.3 million.
These increases were partially offset by higher production and tariff costs. ABL operating profit was $590.6 million (16.4% of ABL net sales) for the year ended August 31, 2025 compared with $582.8 million (16.3% of ABL net sales) in the prior year, an increase of $7.8 million.
The increase in operating profit was due primarily to improved profitability on lower sales as well as lower sales-related costs, such as commissions and freight to customers. This improved profitability was partially offset by higher employee-related costs.
The increase in operating profit was primarily due to higher gross profit, partially offset by the recognition of nonrecurring special charges and higher selling costs associated with higher sales.
ISG net sales for the year ended August 31, 2024 increased 15.5% compared with the prior-year period primarily driven by higher demand for Distech products and the acquisition of KE2 Therm.
AIS net sales for the year ended August 31, 2025 increased $472.4 million or 161.8% compared with the prior-year period due primarily to the acquisition of QSC, which contributed $428.6 million in sales, as well as higher net sales of Atrius and Distech products.
Refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for more information. Arize Assets On January 19, 2024, we acquired certain assets related to Arize® horticulture lighting products from Current Lighting Solutions, LLC.
Refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for more information. 22 Table of Contents QSC, LLC On January 1, 2025, we acquired all of the equity interests of QSC, a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion.
Income Taxes and Net Income Our effective income tax rate was 23.0% and 22.5% for the years ended August 31, 2024 and 2023, respectively. Further details regarding income taxes are included in the Income Taxes footnote of the Notes to Consolidated Financial Statements .
Further details regarding income taxes are included in the Income Taxes footnote of the Notes to Consolidated Financial Statements . Net income for fiscal 2025 decreased $26.0 million, or 6.2%, to $396.6 million from $422.6 million reported for the prior year.
As of August 31, 2024, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $1.4 billion. The Unsecured Notes were issued by Acuity Brands Lighting, Inc., a wholly-owned subsidiary of Acuity Brands, Inc.
As of August 31, 2025, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $1.0 billion. Capital Allocation Priorities Our capital allocation priorities are to invest in our current business for growth, to invest in mergers and acquisitions, to pay a dividend, and to make share repurchases.
Additionally, we incur purchase obligations in the ordinary course of business that are enforceable and legally binding. Contractual purchase obligations subsequent to August 31, 2024 include $284.4 million in fiscal 2025. Contractual purchase obligations beyond fiscal 2025 are not significant.
Our significant contractual cash requirements as of August 31, 2025 primarily include principal and interest on outstanding debt, accounts payable, accrued employee compensation, operating lease liabilities, and certain purchase obligations incurred in the ordinary course of business that are enforceable and legally binding.
Please refer to the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information.
Please refer to the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information. Business Combinations We account for business combinations using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition.
The increase in SD&A expenses was due primarily to higher employee-related costs, partially offset by lower commissions and freight costs associated with the decline in net sales. 24 Table of Contents We recognized special charges of $26.9 million during fiscal year 2023.
The increase in SD&A expenses was due primarily to higher selling costs associated with higher sales and higher employee-related costs. The increase was also due to amounts related to the QSC acquisition, including higher employee-related costs, higher amortization from acquired intangibles, and acquisition-related costs.
Removed
KE2 Therm develops and provides intelligent refrigeration control solutions that deliver the precision of digital controls to promote safety, efficiency, and reliability, while delivering cost savings to the customer. This acquisition expanded ISG's technology and controls product portfolio and reached new customers. Divestitures There were no divestitures during fiscal 2024.
Added
(referred to herein as “we,” “our,” “us,” the “Company,” or similar references) is a market-leading industrial technology company. Effective March 26, 2025, we changed our corporate name from Acuity Brands, Inc. to Acuity Inc. We use technology to solve problems in spaces, light, and more things to come.
Removed
We sold our Sunoptics prismatic skylights business in the first fiscal quarter of 2023 and recognized a pre-tax loss of $11.2 million on the sale of this business. Dividends We paid dividends on our common stock of $18.2 million ($0.58 per share) in fiscal 2024 and $16.8 million ($0.52 per share) in fiscal 2023.
Added
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.
Removed
Recent Developments On October 24, 2024, Acuity Brands Technology Services, Inc., a wholly owned subsidiary of Acuity Brands, Inc. entered into an equity purchase agreement (the (“Purchase Agreement”) to acquire QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services.
Added
In January 2025, we drew the full $600.0 million on the Term Loan Facility to fund the QSC acquisition. During fiscal 2025, we voluntarily repaid $200.0 million of the outstanding obligation. We had $400.0 million in borrowings outstanding under the Term Loan Facility at August 31, 2025.
Removed
Refer to the Subsequent Event footnote of the Notes to Consolidated Financial Statements for additional information. 23 Table of Contents Results of Operations The following is a discussion of our results of operations in fiscal 2024 compared to fiscal 2023.
Added
This acquisition expands 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 Term Loan Facility.
Removed
Acquisitions and divestitures did not have material impacts on consolidated net sales for the year ended August 31, 2024. Gross Profit Gross profit for the year ended August 31, 2024 increased $68.5 million, or 4.0%, to $1.78 billion compared with $1.71 billion for the prior year.
Added
The operating results, assets, liabilities, and cash flows of QSC have been included in our consolidated financial statements since the date of acquisition. M3 Innovation, LLC On May 1, 2025, we acquired certain assets of M3 Innovation, LLC, a sports lighting startup that uses innovative technology to lower the overall cost of the installation and operation of sports lighting solutions.
Removed
Gross profit margin increased 310 basis points to 46.4% for fiscal 2024 compared with 43.3% in the prior-year period. Our gross profit increased compared with the prior year due primarily to favorable material and import costs, which more than offset the lower net sales and higher production costs.
Added
The increase in our AIS segment was driven by the acquisition of QSC, which contributed $428.6 million in sales, as well higher net sales of our Atrius and Distech products.
Removed
Additionally in fiscal 2023, we recognized a $13.0 million charge resulting from the collectability of a supplier warranty obligation owed to us for components we used in products manufactured and sold between 2017 and 2019.
Added
Additionally, net sales increased in our ABL segment due primarily to higher net sales within the independent sales and direct sales networks, partially offset by lower net sales within the corporate accounts and retail channels.
Removed
This year-over-year change was due primarily to the impact of foreign currency-related items compared to the prior year. This increase in expense was partially offset by the recognition in the prior year of an $11.2 million loss on the sale of our Sunoptics prismatic skylights business and an impairment charge of $2.5 million for one unconsolidated equity investment.
Added
Gross Profit Gross profit for the year ended August 31, 2025 increased $296.8 million, or 16.7%, to $2.08 billion compared with $1.78 billion for the prior year. Our gross profit increased compared with the prior period due primarily to the fall through of higher net sales, including contributions from the QSC acquisition, as well as favorable materials costs.
Removed
The details of the Sunoptics sale are described in the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements . The details of the equity investment impairment charge are included in the Fair Value Measurements footnote of the Notes to Consolidated Financial Statements .
Added
Acquisition-related costs were recorded within unallocated corporate amounts. 24 Table of Contents We recorded special charges totaling $29.7 million for the year ended August 31, 2025, which consisted primarily of impairments of long-lived assets as well as employee severance costs related to productivity initiatives.
Removed
Net income for fiscal 2024 increased $76.6 million, or 22.1%, to $422.6 million from $346.0 million reported for the prior year. Diluted earnings per share for fiscal 2024 was $13.44 compared with $10.76 for the prior-year period, an increase of $2.68, or 24.9%. This increase reflects higher net income as well as lower outstanding diluted shares.
Added
This year-over-year change was due primarily to the recognition of $30.9 million for non-cash pension settlement charges in the fourth quarter of fiscal 2025. The details of the pension settlement charges are described in the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements .
Removed
Additionally, in fiscal 2023, we recorded special charges for ABL of $25.0 million, charges related to the collectability of a supplier receivable of $13.0 million, and accelerated amortization expense for intangibles associated with certain brands that were discontinued of $4.0 million.
Added
Income Taxes and Net Income Our effective income tax rate was 20.7% and 23.0% for the years ended August 31, 2025 and 2024, respectively. This reduction was due primarily to a one-time $8.2 million tax benefit related to the expiration of the statute in fiscal 2025 of limitations on tax reserves for uncertain tax positions.
Removed
Accounting Standards Adopted in Fiscal 2024 and Accounting Standards Yet to Be Adopted See the New Accounting Pronouncements footnote of the Notes to Consolidated Financial Statements for information on recently adopted and upcoming standards.
Added
This decrease was due primarily to the recognition of non-cash pension settlement charges, nonrecurring special charges, higher SD&A expenses, and higher net interest expense, partially offset by higher gross profit and lower income tax expense. Diluted earnings per share for fiscal 2025 was $12.53 compared with $13.44 for the prior-year period, a decrease of $0.91, or 6.8%.
Removed
In the fourth quarter, management committed to a plan to rebrand certain products in ABL's portfolio. We determined this plan adversely impacted one trade name. Therefore, we performed a quantitative analysis to compare the fair value of this trade name with its carrying value.
Added
ABL gross profit was $1.7 billion (45.8% of ABL net sales) for the year ended August 31, 2025 compared with $1.6 billion (45.1% of ABL net sales) in the prior year, an increase of $42.0 million. The increase in gross profit was due primarily to fall through of higher net sales and favorable materials cost.
Removed
We estimated the fair value of this indefinite-lived trade name using the relief-from-royalty method, a fair value model based on discounted future cash flows. Our assumptions in valuing the trade name primarily reflected a projected decline in revenues generated by the trade name due to management’s planned reduction in future use of the asset.
Added
AIS gross profit was $424.0 million (55.5% of AIS net sales) for the year ended August 31, 2025 compared with $169.2 million (58.0% of AIS net sales) in the prior-year period, an increase of $254.8 million. The increase in gross profit was due primarily to fall through of higher net sales, including contributions from the QSC acquisition.
Removed
We additionally considered other inputs, including theoretical royalty rates and discount rates, in valuing the asset. Based on the results of this assessment, we recorded an impairment charge of $3.0 million for one indefinite-lived trade name asset within Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income related to our ABL segment.
Added
This increase primarily reflects higher gross profit, partially offset by higher SD&A costs due primarily to contributions from the QSC acquisition. AIS's operating results also include preliminary pre-tax fair value adjustments to inventory and amortization of intangible assets related to the QSC acquisition.

… 8 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+2 added−0 removed3 unchanged
Biggest changeAs of August 31, 2024, we had no borrowings outstanding on our credit facility. Interest incurred on these borrowings is not significant to our overall results of operations or cash flows. See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements contained in this Form 10-K for additional information.
Biggest changeSee the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements contained in this Form 10-K for additional information. 29 Table of Contents Foreign Exchange Rates The majority of our net sales, expense, and capital purchases are transacted in U.S. dollars.
Our exposure to foreign currency risk related to our operations in Europe is immaterial and has been excluded from this analysis. 29 Table of Contents
Our exposure to foreign currency risk related to our operations in Europe is immaterial and has been excluded from this analysis. 30 Table of Contents
A hypothetical 10% decrease in the value of the Mexican peso in relation to the U.S. dollar would favorably impact operating profit by approximately $22.0 million, while a hypothetical 10% increase in the value of the Mexican peso in relation to the U.S. dollar would negatively impact operating profit by approximately $26.9 million.
A hypothetical 10% decrease in the value of the Mexican peso in relation to the U.S. dollar would favorably impact operating profit by approximately $23.0 million, while a hypothetical 10% increase in the value of the Mexican peso in relation to the U.S. dollar would negatively impact operating profit by approximately $28.1 million.
Based on fiscal 2024 performance, a hypothetical depreciation of 10% in the value of the Canadian dollar in relation to the U.S. dollar would negatively impact operating profit by approximately $8.6 million, while a hypothetical 10% appreciation in the value of the Canadian dollar in relation to the U.S. dollar would favorably impact operating profit by approximately $10.5 million.
Based on fiscal 2025 performance, a hypothetical depreciation of 10% in the value of the Canadian dollar in relation to the U.S. dollar would negatively impact operating profit by approximately $3.0 million, while a hypothetical 10% appreciation in the value of the Canadian dollar in relation to the U.S. dollar would favorably impact operating profit by approximately $3.7 million.
Foreign Exchange Rates The majority of our net sales, expense, and capital purchases are transacted in U.S. dollars. Our primary exposure with respect to foreign exchange rate fluctuation exists due to the translation of foreign operations' results into U.S. Dollars, with our largest exposures in Mexico and Canada, and, to a lesser extent, in Europe.
Our primary exposure with respect to foreign exchange rate fluctuation exists due to the translation of foreign operations' results into U.S. Dollars, with our largest exposures in Mexico and Canada, and, to a lesser extent, in Europe.
We do not currently engage in significant commodity hedging transactions for raw materials. The following discussion provides additional information regarding our market risks. Interest Rates Interest rate fluctuations expose variable-rate debt of the organization to changes in interest expense and cash flows. As of August 31, 2024, our long-term debt consisted primarily of fixed-rate senior unsecured notes.
We do not currently engage in significant commodity hedging transactions for raw materials. The following discussion provides additional information regarding our market risks. Interest Rates Interest rate fluctuations expose variable-rate debt of the organization to changes in interest expense and cash flows.
A fluctuation in interest rates would not affect interest expense or cash flows related to the Company’s fixed-rate debt. However, a 10% increase in market interest rates at August 31, 2024 would have decreased the estimated fair value of our senior unsecured notes by approximately $11.7 million.
As of August 31, 2025, our long-term debt consisted of fixed-rate senior unsecured notes and variable-rate borrowings on the term loan facility. A fluctuation in interest rates would not affect interest expense or cash flows related to the Company’s fixed-rate debt.
Added
However, a 10% increase in market interest rates at August 31, 2025 would have decreased the estimated fair value of our senior unsecured notes by approximately $9.6 million. As of August 31, 2025, we had $400.0 million borrowings outstanding on our credit facility.
Added
A hypothetical increase in interest rates of 10% would increase the annual interest expense on this outstanding debt by approximately $2.2 million.

Other AYI 10-K year-over-year comparisons