June 26, 2025
Acuity Grows Lighting Business Amid Volatile Conditions
Sourcing and pricing moves help company weather disruptions as performance remains strong
In a quarter when tariff tremors rattled the industry and legacy lighting operations braced for cuts, Acuity’s Q3 2025 results revealed a company in motion — strategically pivoting, rebalancing its portfolio, and absorbing short-term blows in pursuit of long-term transformation.
The headline numbers show momentum: net sales of $1.18 billion, up 22 percent year-over-year, with adjusted operating profit soaring 33 percent. But the real story lies beneath the surface, where Intelligent Spaces is rising fast, Lighting is absorbing costs, and the QSC acquisition is accelerating beyond expectations.
Wall Street reacted favorably, with the stock jumping to $306.54, up $19.05 or 6.63%, in early trading.
Intelligent Spaces Takes a Bigger Bite
Just three years ago, Acuity’s Intelligent Spaces division barely registered on the earnings radar, contributing just 6-8 percent of the company’s total revenue. Today, it’s a fifth of the business — 22% of Q3 sales, up from 17% last quarter. That surge isn’t accidental. It’s powered by QSC, the pro audio and control platform whose $172.8 million Q3 performance implies a $691 million annualized run rate — 29 percent higher than its trailing twelve-month revenue when Acuity inked the acquisition agreement in late 2024.
The Lighting Division still drives the bulk of the profit — about 2.8 times more than Intelligent Spaces on an adjusted basis — but Intelligent Spaces holds a key advantage: margin. With a 23.6 percent adjusted operating profit margin versus Lighting’s 18.8 percent, the new tech-centric segment isn’t just growing, it’s earning.
Restructuring Reality
While Intelligent Spaces climbs, the Lighting Division is digging in — shedding brands, realigning facilities and absorbing pain. The company booked $29.7 million in special one-time charges this quarter, all tied to the Lighting business. That includes brand eliminations, employee severance tied to April layoffs and facility changes that appear focused on an underused administrative building in Conyers, Georgia, which it plans to sell. Acuity has multiple properties west of Atlanta in Decatur and in Conyers, including the distribution center that serves — and will continue to serve — the Southeast U.S.
"Everything's Greater in Decatur"
File photo of Acuity's Decatur facility lobby (2018)
“During the third quarter of fiscal 2025, we accelerated productivity actions in our ABL segment that resulted in $29.7 million of special charges,” the company wrote in its earnings release. Notably, that facility reorganization shifts increased investments in its Decatur, Georgia facility — a nod to Acuity’s tightening building footprint and focus.
The company cited “elimination of brands” in its earnings press release but only one brand appears to have exited the portfolio in the last year: QUICKTRONIC, a legacy from Acuity’s acquisition of parts of OSRAM. It’s our understanding that this reflects a broader internal consolidation effort — folding some smaller brands into more high-profile ones within the Lighting Division.
Tariffs, Price Jumps, and a Marketplace in Flux
Though Acuity’s earnings release didn’t mention tariffs, CEO Neil Ashe and CFO Karen Holcom didn’t shy away on the earnings call. Ashe cited “aggressive actions to get in front of the evolving tariff policy,” and credited “strategic pricing actions” for softening the blow.
About 18% of Acuity’s finished goods come from Asia — including China and Cambodia — while about half flows from Mexico, much of it USMCA-compliant and exempt from increased tariffs. The company issued two price hikes in back-to-back weeks during the third quarter, though it chose not to reprice its backlog.
“There is evidence of order acceleration,” Ashe noted, attributing part of the quarter’s lighting performance to customers rushing orders ahead of price increases. Holcom added that Q3 margins were not significantly impacted by tariffs — but Q4 will be.
Lighting Agents in Focus
If there’s one area where Acuity doesn’t hedge its words, it’s in defense of its agency network. “We believe unequivocally we have the best independent sales network for lighting in North America,” said CEO Neil Ashe — reiterating a belief he’s voiced more than once.
Roughly 80 independent agencies represent the company’s lighting products across North America, and while performance varies, Ashe made clear that those closely aligned with Acuity’s tech-forward direction are “seeing real success.” Controls-centric agencies and those in growth markets are leading the charge.
Atlanta earned a rare local market shout-out. Without mentioning agencies by name, the company’s late-2022 switch from Smart Lighting Solutions to Lighting Associates was hailed by Ashe as an upgrade. “Where we’re sitting right now,” Ashe said from Atlanta, “the changes we’ve made... have really borne out.”
| $ millions USD | Three Months Ended | Nine Months Ended | ||
| May 31, 2025 | May 31, 2024 | May 31, 2025 | May 31, 2024 | |
| Acuity Brands Lighting: | ||||
| Independent sales network | $ 685.3 | $ 637.1 | $ 1,944.4 | $ 1,874.6 |
| Direct sales network | 101.5 | 97.0 | 306.1 | 287.4 |
| Retail sales | 41.4 | 45.7 | 127.3 | 147.7 |
| Corporate accounts | 35.5 | 60.5 | 103.8 | 140.1 |
| OEM and other | 59.5 | 58.2 | 168.2 | 168.6 |
| Total Acuity Brands Lighting (ABL) | 923.2 | 898.5 | 2,649.8 | 2,618.4 |
| Total Acuity Intelligent Spaces (AIS) | 264.1 | 75.7 | 509.1 | 208.0 |
| Eliminations | (8.7) | (6.1) | (22.4) | (17.7) |
| Total | $ 1,178.6 | $ 968.1 | $ 3,136.5 | $ 2,808.7 |
Product Mentions: Brands and Segments Getting the Spotlight
Earnings calls often serve as informal barometers of internal focus. Q3 remarks from Acuity leadership included several product and brand mentions that may indicate recent areas of investment or strategic emphasis:
- SensorSwitch AIR
Part of the Contractor Select lineup, this wireless controls offering was referenced as an example of practical, field-ready solutions. The AIR products are designed for straightforward setup and compatibility with 0–10V luminaires. - nLight Animate Controller
This DMX-enabled controller, powered by Pathway, was noted in the context of advanced lighting controls. - Nightingale
The rebranded healthcare lighting initiative received a mention highlighting Acuity’s broader repositioning within that vertical. No specific product was tied to the comment. It was framed as part of an answer to an analyst question highlighting the healthcare vertical. - M3 Innovations (Holophane)
The sports lighting and floodlighting products from M3 — acquired in Q3 — was briefly noted. While financial impact was small and non-material, its integration under Holophane signals potential future alignment with sports lighting projects and other related applications. - Verjure (Horticultural)
Referenced only in passing and in tempered language, the horticultural lighting segment was acknowledged by Ashe as operating “slower than expected.”
A Clear Direction in a Chaotic Quarter
Acuity’s third quarter played out against a backdrop of tariff turbulence, with pricing policies changing midstream and ripple effects coursing through sourcing strategies and customer ordering behavior. March, April, and May were marked by volatility across the industry, yet Acuity managed to deliver both growth and margin stability in its Lighting Division — while significantly expanding the footprint of Intelligent Spaces.
The numbers show a company that moved quickly: restructuring underused facilities, consolidating brands, and adjusting headcounts—all while holding margins steady in a market that left many competitors scrambling. Lighting still brings in the bulk of the profit, but Intelligent Spaces now carries a sharper edge on margin. Together, they point to a business that, while operating in a volatile world, is increasingly comfortable making hard choices early — and executing on them with precision.
The path forward won’t be without obstacles. Tariff pressures are expected to hit harder in the fourth quarter, and global supply unpredictability hasn’t exactly gone quiet. But if Q3 was a test, Acuity showed its hand: flexible, fast-moving, and not afraid to bet big on the future of smart buildings while shoring up its legacy lighting core.
