On this page of StockholderLetter.com we present the latest annual shareholder letter from ADVANCED DRAINAGE SYSTEMS, INC. — ticker symbol WMS. Reading current and past WMS letters to shareholders can bring important insights into the investment thesis.

 •  6/4/2025 Letter Continued (Full PDF)
 •  6/5/2024 WMS Stockholder Letter
 •  More "Rubber & Plastics" Category Stockholder Letters
 •  WMS Benford's Law Stock Score = 83

WMS Shareholder/Stockholder Letter Transcript:

Fiscal Year 2025
Annual Report
Advanced Drainage Systems, Inc.
www.adspipe.com

Diversified Product Mix Shifting to High Margin Categories
$1.3B
Revenue
Dear Fellow Shareholders,
In Fiscal 2025, we generated $2.9 billion in revenue and $889 million in Adjusted EBITDA.
Revenue in the domestic construction markets increased 3%, as the successful execution of
ADS    material conversion strategy in the stormwater and onsite wastewater markets continued
to drive above market performance. In Fiscal 2025, we achieved an Adjusted EBITDA margin
of 30.6%, marking the second most profitable year in ADS    history, down modestly off peak
despite headwinds in pricing and material cost and a challenging economic backdrop.
The resiliency demonstrated by this year   s profitability is driven by our ongoing
strategy to grow the more profitable segments of the business, Infiltrator and Allied
products. Onsite wastewater and Allied products now represent a collective 44% of
revenue, with organic year-over-year sales growth of 5% and 3%, respectively.
Over the last ten years, we diversified the product portfolio, geography and end market mix to
become a higher margin, more profitable business. Allied product sales increased at a 10% CAGR
over the period, outpacing the end markets. We acquired Infiltrator in 2019, which increased the
company   s exposure to the residential market, accelerated growth and enhanced profitability. This
diversification is incredibly important to our go forward strategy     it increases resilience, supports
margin expansion and allows us to pursue projects across nearly all facets of water management.
2 | ADS Annual Report 2025
Revenue
Manufacturing Company
Water Management Solutions Provider
$187M Adj. EBITDA
$889M Adj. EBITDA
30.6% Adj. EBITDA Margin
14.5% Adj. EBITDA Margin
A Letter from our CEO
$2.9B
We participate in a large market of approximately ~$15 billion, offering ADS a long runway to
execute ADS    growth and conversion strategies in both the stormwater and onsite wastewater
markets. Over the long-term, this growth will be bolstered by strong secular tailwinds, due to
the underbuilt U.S. water infrastructure, increasing frequency and intensity of large-scale storm
events, and the undersupply of residential homes in the U.S. ADS water management solutions
reduce flooding, recharge aquifers, improve food security and mitigate water scarcity, making
them essential to a healthy economy and quality of life in communities. We will continue to drive
growth through the current portfolio offering, new product introductions, and acquisitions,
as we drive conversion and increase our share of customer spending on projects.
All of these initiatives are supported by the ADS value proposition. It starts with the bestin-class portfolio of water management products and national scale, capable of delivering
complete solutions that are safer, more sustainable, and faster to install at a lower total
cost. This product leadership is matched by a sales force of over 300 sales and engineering
professionals executing ADS    proven go-to-market strategy to convert the industry to our
solutions, further complimented by our industry leading fleet of trucks and trailers and design
tools and services. Backed by a strong balance sheet and consistent cash flow, we continue
to reinvest in capacity, product innovation, fleet refreshment and customer experience. When
you combine these elements, the solutions package, the proven go-to-market strategy, and
ability to reinvest, we believe we have a winning formula for long-term industry leadership.
Building on these three pillars, Fiscal 2025 represented another year of investment in future success,
further developing the vital role we play in advancing the future of water infrastructure to meet the
needs of communities we serve. We are particularly proud of ADS    new Engineering and Technology
Center, the largest and most advanced stormwater research facility in the world. This facility will allow
us to invest in material science; developing and accelerating commercialization of new products;
manufacturing and engineering excellence; and drive the industry forward through innovation.
ADS Annual Report 2025 | 3

This facility was integral in this year   s launch of the EcoStream
stormwater treatment product, and we expect to reap the
benefits from this investment in innovation for many years
to come. Elsewhere in the business, Infiltrator launched two
new tank sizes for decentralized wastewater treatment to
provide contractors additional flexibility in product selection.
ADS launched new Allied product solutions, including a new
treatment product, two new storage chamber sizes, and a new
larger diameter capture product. In addition, we expanded
the stormwater solutions offering through partnerships with
a plastic storage crates provider and two capture products.
Beyond organic growth, we continued to build out the breadth
and depth of the solutions packages, most notably through
the acquisition of Orenco Systems, Inc. Integrated into the
Infiltrator business, Orenco is a leading manufacturer of
advanced decentralized wastewater treatment products.
Advanced wastewater treatment systems are specialized
technologies designed to provide a higher level of water
purification than traditional passive systems. These systems
are crucial for areas with high population density, sensitive
ecosystems, or stringent environmental regulations. By
adding the Orenco suite of products to the existing advanced
treatment products at Infiltrator, we became the leading
provider in a highly fragmented and fast-growing market.
As we move to Fiscal 2026, we remain focused on executing
our long-term strategy to drive consistent, long-term growth,
margin expansion and free cash flow generation in the large
and attractive stormwater and onsite wastewater markets.
While we expect the core non-residential and residential
construction end markets to remain under pressure from
higher interest rates and economic uncertainty, we will
continue to leverage our winning value proposition and a
significant addressable market for conversion opportunities
to drive long-term growth. On behalf of the ADS leadership
team and Board of Directors, I would like to thank the
6,000 employees for their hard work throughout the past
year, as well as their commitment to the future of ADS.
Thank you for your continued support.
Sincerely,
D. Scott Barbour
President and CEO
4 | ADS Annual Report 2025
ADS Annual Report 2025 | 5

4
4
namely the acquisition of Orenco Systems, which expands our water management offering in
the high-growth advanced treatment space for onsite wastewater. We have also continued to
return cash to shareholders through $120 million in share repurchases and dividends.
A Letter from our Chair
Dear Fellow Shareholders,
Capital Expenditures
Fiscal 2025 saw ADS strengthen its standing as a
leading provider of water management solutions,
and the Board of Directors remains well aligned
with the Company   s strategy and path forward.
In accordance with our business objectives,
$792M
ADS has made meaningful investments focused
on three pillars     expanding our capability for
in-house innovation; acquiring businesses
that fit strategically and extend our reach in
helping customers address their water-related
needs; and enhancing our value proposition to
customers through operational and customer
experience
improvements.
More broadly,
Capital
Expenditures
$213
modernizing
$792M the nation   s water infrastructure
5-Year
Total concern as storm $184
remains
a critical
events
$167 and intensity.
continue to increase in frequency
$149
ADS remains well positioned to capture this
demand with our advanced, sustainable water
management solutions that support essential
$79
infrastructure development and improve
the resiliency of communities we serve.
$213
Over the past year, the focus of the Board and
management
has been
on delivering
FY21 team
FY22
FY23
FY24
FY25
improved shareholder value through focused
and disciplined capital allocation. We are
pleased to share that, in Fiscal 2025, we
invested $213 million in capital expenditures
5-Year Spending
that continue to drive safety and growth in
Acquisitions
$334
the core
areas of our business. Of note
areMillion
investments to support the opening of the
world   sJet
most
advanced stormwater research
Polymer
Jul 2019
facility,Cultec
ADS    Engineering
and TechnologyDec 2021
Inc.
CenterOrenco
in Hilliard,
OH,
and
the expansion Oct
of 2024
Inc.
the ADS Recycling facility in Cordele, GA. This
was Share
complemented
by inorganic investment,
Repurchases
$1.1 Billion
FY25
6 | ADS Annual Report 2025
5-Year Total
$149
$167
$213
$184
5-Year Spending
In summary, your company continues to build upon its attractive market position to address the
increasingly complex water management challenges driven by longstanding underdevelopment
of infrastructure nationwide. Through the deployment of a disciplined approach to capital
allocation, we remain confident in the ability of the ADS leadership team to execute, innovate
and deliver on the company   s strategy and initiatives, supported by the 6,000 employees that
Annual Dividend
per Sharesolutions. Looking ahead to Fiscal
meet customers    needs for innovative
water management
$0.64
2026, we anticipate continued
success
you, our shareholders.
12%
CAGRand driving value creation for
Acquisitions
Sincerely,
$334 Million
Jet Polymer
Jul 2019
Cultec Inc.
$79
Dec 2021
Orenco Inc.
Robert M. Eversole
Oct 2024
FY22
FY23
FY24
$0.44
$0.48
$0.36
Chair of the Board of Directors
Share Repurchases
FY21
$0.56
$1.1 Billion
FY21
FY25
FY22
FY23
FY24
FY25
Annual Dividend per Share
$0.64
12% CAGR
5-Year Spending
Acquisitions
$0.56
$334 Million
Jet Polymer
$0.44
Jul 2019
Cultec Inc.
Dec 2021
Orenco Inc.
Oct 2024
Share Repurchases
$0.48
$0.36
$1.1 Billion
FY21
FY22
FY23
FY24
FY25
Annual Dividend per Share
$0.64
12% CAGR
$0.56
$0.44
$0.48
$0.36
FY21
FY22
FY23
FY24
FY25
ADS Annual Report 2025 | 7

Key Financial Highlights
How We Win: The ADS Value Proposition
FY 2025 Revenue
FY 2025 Adjusted EBITDA1
(Figures in millions)
Best-In-Class
Product Portfolio
(Figures in millions)
CAGR: 11.9%
CAGR: 10%
Proven Go-toMarket Strategy
Balance Sheet
to Invest
300+
Field Sales and Engineering
Professionals
Lifecycle of a Raindrop
$1,983
2021
$2,769 $3,071 $2,874 $2,904
2022
2023
2024
2025
FY 2025 Sales by Geography
$567
$676
$904
$923
$889
2021
2022
2023
2024
2025
    >200 national and
state approvals
    >1,100 local approvals
Rain Event
FY 2025 Sales by Product Category
Acceptance
93%
Domestic
56%
Pipe
4%
Canada
26%
Allied
3%
Other
International
18%
Onsite
Septic
Capture
Conveyance
Infrastructure
Construction
7%
+1%
ADS Sales Growth
8%

of Sales
Residential
Construction
36%
Non-Residential
Construction
44%
+3%
Non-Residential
Construction
+3%
Residential
Construction
+2%
Infrastructure
Construction
(16%)
(6%)
Coverage
    >4,500 waterworks
distributor locations
Agriculture
5%
    >3,700 engineering firms
engaged in Fiscal 2025
Productivity & Capacity
    $405M invested in growth,
capacity and productivity
over the last 3 years
    10x larger than
closest competitor
Design Tools & Services
    $7M invested in digital
engineering and design tools
    115 dedicated design services
resources, with ~100k
designs annually
FY 2025 Revenue by End Market
International
Approvals
Storage
Treatment
    30 US pipe production plants
Win Rate
24%
International
HP Pipe
Lakes & Streams
    625 trucks and 1,150 trailers
    $17M invested in Customer
Experience project
    On time in full delivery
performance trending >90%
5 Year CAGRs
Agriculture
Customer Investments
14%
Allied
Innovation
    Engineering and
Technology Center
    10 new products
launched in Fiscal 2025 +
3 product partnerships
EBITDA adjustments exclude transaction costs and certain non-cash items; Adjusted EBITDA is a Non-GAAP measure. Please see    Management   s Discussion and Analysis of
Financial Condition and Results of Operations    section of the accompanying Form 10-K for the definitions of non-GAAP measures and reconciliation of non-GAAP measures
to GAAP measures.
1
8 | ADS Annual Report 2025
ADS Annual Report 2025 | 9



 6/4/2025 Letter Continued (Full PDF)