Acuity closed fiscal 2025 with a strong fourth quarter, growing total net sales 17% to $1.2 billion (up $177 million, including three months of QSC), lifting adjusted operating profit 26% to $225 million, expanding adjusted operating margin 130 basis points to 18.6%, and increasing adjusted diluted EPS 21% to $5.20. Acuity Brands Lighting grew sales just 1% to $962 million as independent-network strength was offset by declines in corporate accounts and direct sales, but ABL's aggressive third-quarter cost and organizational actions drove a 210-basis-point margin expansion to 20.1%. Acuity Intelligent Spaces added $171 million to reach $255 million at a 21.4% margin, with QSC growing about 15% and gaining roughly 500 basis points of margin in eight months while legacy Atrius and Distech grew about 13%. Management emphasized its dynamic supply chain (China exposure cut to about 20% of a prior peak), strategic low-to-mid-single-digit pricing that offsets tariff dollars but pressures ABL margin percentage by up to ~100 basis points, and a deliberate choice to prioritize AIS growth over near-term margin. The quarter also carried an approximately $31 million non-cash pension de-risking charge and a one-time $8 million tax benefit. For fiscal 2026, Acuity guided to net sales of $4.7-$4.9 billion (ABL low-single-digit, AIS low-to-mid-teens organic) and adjusted diluted EPS of $19.00-$20.50, assuming a flat-to-down market, while committing to disclose segment-level gross margins going forward.
Thank you, Operator. Good morning and welcome to the Acuity Fiscal 2025 Fourth Quarter and Full Year Earnings Call. On the call with me this morning are Neil Ashe, our Chairman, President and Chief Executive Officer, and Karen Holcom, our Senior Vice President and Chief Financial Officer. Today's call will include updates on our strategic progress and on our fiscal 2025 Fourth Quarter and Full Year performance. There will be an opportunity for Q&A at the end of this call. As a reminder, some of our comments today may be forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as detailed on slide 2 of the accompanying presentation.
Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2025 Fourth Quarter Earnings Release and Supplemental Presentation, both of which are available on our Investor Relations website at www.investors.acuityinc.com. Thank you for your interest in Acuity. I will now turn the call over to Neil Ashe.
Thank you, Charlotte, and thank you all for joining us this morning. Our fiscal 2025 fourth quarter performance was strong. We grew net sales, expanded our adjusted operating profit and adjusted operating profit margin, and increased our adjusted diluted earnings per share. Throughout fiscal 2025, we have demonstrated our ability to deliver growth and consistent operating performance that created stakeholder value and compounded shareholder wealth. Acuity Brands Lighting delivered sales growth and improved adjusted operating profit and adjusted operating profit margin in the fourth quarter. This performance was driven by the execution of our strategy and the aggressive actions taken over the last two quarters to manage margins despite the dilutive impact of the combination of higher tariff costs and corresponding price increases. We have the most dynamic and resilient supply chain in the industry, and we have adapted faster and more effectively than our competitors.
We have leveraged our multinational footprint to move away from higher tariff environments and optimize our supplier relationships. We accelerated productivity efforts, including the evaluation of operating expenses and our organizational structure in ABL, and we continue to strategically manage price. I have spent the last couple of quarters describing how our electronics portfolio is a unique offering in the marketplace, extending from the drivers that power our luminaires to the sensors, controls, and software which control light in a space and connect with the cloud seamlessly through our Atrius DataLab. We're developing market-leading solutions that drive productivity for us and for our partners. A good example of this is the TLS Twist-A-Lock Sensor by Sensor Switch that offers time-saving solutions to contractors. TLS is an occupancy sensor designed for industrial spaces like warehouses and manufacturing facilities.
It gives contractors the ability to easily add controls to any project, saving time and reducing complexity on the job site without the need for wires or separate installation. Our visual suite of applications are automating manual processes across the key phases of a project: design, installation, and optimization. These digital tools are designed to boost productivity, encourage collaboration, and build contractor preference. Visual lighting and visual control help designers create lighting solutions by mapping digital floor plans, automating design audits, and offering smart recommendations. Visual Installer gives installers real-time access to their design plans, enabling collaboration that results in an accelerated install and programming timeline. Visual Cloud optimizes project management, providing site access and team contacts, leading to simplified collaboration and an overall reduction in costs. This end-to-end support improves the end-user experience through increased productivity and lower costs.
As part of our ABL growth algorithm, we are making organic investments for future growth, prioritizing verticals where we have not historically competed or where we are underpenetrated. This year, we strengthened our offerings across healthcare by launching the Care Collection and developing our Nightingale range of products. Care Collection is a curated portfolio of lighting and lighting control solutions that have been designed for use in a healthcare environment, making it quicker and easier for customers and agents to select the products that they need. We introduced the Nightingale brand to expand our healthcare offering into in-room patient care. Our team developed a series of lighting solutions that combines the functional needs of caregivers with the environmental needs of patients. In addition to Nightingale Embrace, which we previewed last quarter, we launched Respond and Observe.
Respond is a multifunctional patient bed luminaire with ambient, exam, night observation, and reading modes. Respond can be paired with Sensor Switch. Observe is a skylight that can be used in common areas and patient rooms and can switch between exam, ambient, and sky modes, also using Sensor Switch. Nightingale has already received recognition from the industry. In the fourth quarter, it was one of several of our brands that were highlighted by the IES Industry Progress Report Awards that celebrates advancements in lighting products, research publications, and design tools from the past year. Other products recognized include the IVO cylinders and deep regressed downlights, HOLOBAY by Holophane, RBL Round High Bay, and Wander Pathway by Hydrel. Now, switching to Acuity Intelligent Spaces, which had another strong performance this quarter.
Through Atrius, Distech, and QSC, we have unique and disruptive technologies that are driving productivity for people experiencing spaces and for the people who are providing those spaces. Atrius and Distech control the management of the space, and QSC manages the experiences in that space. Over time, we will use the data that they generate to enhance productivity outcomes through data interoperability. During the quarter, Atrius, Distech, and QSC each delivered strong results and are continuing to collaborate to explore new and interesting ways of working together. QSC is building the industry's most innovative full-stack AV platform that unifies data, devices, and a cloud-first architecture to deliver real-time action, experiences, and insights. The addition of QSC has evolved the geographic footprint of our AIS business, accelerating our multinational expansion.
One of the markets where we have already benefited from this is India, where we compete commercially and have an experience center that we expanded during the quarter. The center includes product demonstrations for various room types in high-impact spaces, as well as design workshops and training for our ecosystem partners. This center also serves as a hub for intelligent spaces to develop collaborative use cases for future workspaces and is the first experience center to feature the integrated Acuity Intelligent Spaces offering. Now, I want to take a moment to review where our business is today and our view of how we are positioned for the future. Acuity Inc. is a leading industrial technology company comprised of Acuity Brands Lighting, which is the best-performing lighting and lighting controls company in the world, and Acuity Intelligent Spaces, which is a dynamic and growing building management and full-stack AV business.
We have transformed the company from principally a luminaires business to a data and controls and luminaires business and positioned ourselves well for long-term growth. Fiscal 2025 was an important year for us. We renamed our company Acuity Inc., reflecting our evolution and aligning to our strategy of using technology to solve problems and create impactful experiences that shape how people live, work, and connect. We continued to make our Acuity Brands Lighting business more predictable, repeatable, and scalable. We realigned the business into luminaires and electronics and delivered improved financial performance. ABL is a high-quality strategic asset and a core pillar of our company. In Acuity Intelligent Spaces, we acquired and integrated QSC. We have scaled AIS into a larger part of our overall company. At Acuity, we are doing things differently.
Our values are at the core of who we are, guiding how we serve our customers, associates, and communities. Each of our associates understands how we create value. We grow net sales, we turn profits into cash, and we don't grow the balance sheet as fast. We are empowered by our better, smarter, faster operating system to work in a structured and consistent way. The combination of these things allows us to operate more productively with greater distribution of responsibility and accountability throughout the company. It is how we are able to react aggressively to changes in the macro environment this year and how we were able to quickly and successfully integrate QSC. In Acuity Brands Lighting, we are focused on product vitality, elevating service levels, using technology to improve and differentiate both our products and how we operate the business, and driving productivity. Our growth algorithm is clear.
We will grow with the market, we will take share, and we will enter new verticals. We have the opportunity to continue to expand margins. In Acuity Intelligent Spaces, we are making spaces smarter, safer, and greener. We have unique and disruptive technologies that are driving productivity for people experiencing spaces and for the people who are providing those spaces. Our focus in AIS will continue to be on growth with the opportunity for margin expansion. We are effective capital allocators. We have grown our business organically and through acquisitions. We have rewarded our shareholders with increased dividends, and we have been opportunistic in repurchasing more of our outstanding shares. Acuity is positioned for long-term growth. We are innovators, disruptors, and builders who are creating stakeholder value and compounding shareholder wealth. Now, I'll turn the call over to Karen, who will update you on our fourth quarter performance.
Thank you, Neil, and good morning, everyone. We ended fiscal 2025 with strong fourth quarter performance. We grew net sales, improved our adjusted operating profit and adjusted operating profit margin, and increased our adjusted diluted earnings per share. For total Acuity, we generated net sales in the fourth quarter of $1.2 billion, which was $177 million, or 17% above the prior year. This was driven by growth in both business segments and includes three months of QSC sales. During the quarter, our adjusted operating profit was $225 million, up $47 million, or 26% from last year. This improvement was due to the growth of AIS, including the acquisition of QSC, and the result of actions taken at ABL to control operating expenses. Adjusted operating profit margin during the quarter expanded to 18.6%, an increase of 130 basis points from the prior year.
This quarter, there are a few additional non-GAAP adjustments to call out. First, there is a non-cash charge of approximately $31 million, resulting from the de-risking of our qualified pension plans in the U.S. and Mexico. As we said last quarter, over the last few years, we have taken steps to simplify and minimize the future impact of our pension obligations on the company. Through our investment policies and capital allocation decisions, these pension plans were overfunded. As a result, we transferred the majority of the related obligations to a third party. Our U.K. pension plan transfer is anticipated to be completed in the first quarter of fiscal 2026, and we expect to take an additional non-cash GAAP charge of around $10 million at that time. This quarter, we also recognized a one-time tax benefit of $8 million.
After non-GAAP items, our adjusted diluted earnings per share was $5.20, which was an increase of $0.90, or 21% over the prior year. ABL delivered sales of $962 million, an increase of $7 million, or 1% versus the prior year, driven by growth in our independent sales network of $25 million, or 4%, partially offset by declines in corporate accounts and our direct sales network. Adjusted operating profit increased $22 million to $194 million, and we delivered an adjusted operating profit margin of 20.1%, which was up 210 basis points compared to the prior year. This improvement was driven largely by the intentional actions we took in the third quarter to reduce operating costs and our increased focus on productivity. Now, moving to Acuity Intelligent Spaces, sales for the fourth quarter were $255 million, an increase of $171 million.
Atrius and Distech combined grew approximately 13%, while QSC grew approximately 15% year-over-year. Adjusted operating profit in Intelligent Spaces was $55 million, with an adjusted operating profit margin of 21.4%. Now, turning to our cash flow performance. During the fiscal year, we generated $601 million of cash flow from operations, which was $18 million lower than last year, primarily due to the acquisition-related items, the timing of tariff payments, and accelerated inventory purchases driven by the tariff policy. In fiscal 2025, we continued to allocate capital effectively and consistent with our priorities. We invested for growth in our existing businesses, allocating $68 million to capital expenditures. We invested over $1.2 billion in acquisitions and repaid $200 million of our term loan, including an additional $100 million this quarter.
We increased our dividend by 13% and allocated around $119 million to repurchase approximately 436,000 shares at an average price of around $270. Since the beginning of the fourth quarter of fiscal 2020, we have repurchased approximately 10 million shares at an average price of around $150 per share, which was funded by organic cash flow. This amounts to about 25% of the then outstanding shares. I now want to spend a few minutes on our outlook for 2026. Consistent with our prior practice, we are going to provide annual guidance anchored around net sales and adjusted diluted EPS. We will also provide you with certain assumptions, which you can find in the supplemental presentation available on our website after the conclusion of this call. For full-year fiscal 2026, our expectation is that net sales will be within the range of $4.7 billion-$4.9 billion for total AYI.
This is based on the assumption that ABL will deliver low single-digit sales growth and AIS will generate organic sales growth in the low to mid-teens. We expect to deliver adjusted diluted EPS within the range of $19-$20.50. In summary, we delivered strong performance in fiscal 2025. We grew net sales, improved margins, and increased adjusted diluted EPS. We generated strong cash flow from operations and allocated capital effectively. We are positioned well to deliver another strong year in fiscal 2026. Thank you for joining us today. I will now pass you over to the operator to take your questions.