AZZ Inc. (AZZ): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of a focused industrial leader, AZZ Inc., trying to see past the stock ticker to the actual engine room of their business, and I get it; understanding the 'how' is everything. Honestly, their Business Model Canvas shows a clear focus on two high-margin segments-Metal Coatings and Precoat Metals-which together pulled in about $\text{1.58 billion}$ in sales for fiscal year 2025, with Precoat Metals alone hitting $\text{912.6 million}$. They aren't just selling a service; they are selling unmatched scale and superior corrosion protection, which locks in customers and helps generate significant cash flow, like the $\text{249.9 million}$ in operating cash flow they saw that year. It's a masterclass in industrial service delivery. Dive below to see the nine building blocks that explain how AZZ Inc. turns raw materials like zinc and natural gas into durable, high-value metal protection across North America.

AZZ Inc. (AZZ) - Canvas Business Model: Key Partnerships

You're looking at the critical relationships AZZ Inc. relies on to keep its Metal Coatings and Precoat Metals segments running strong, especially as of late 2025. These partnerships are about securing capacity, managing costs, and driving process improvements.

Joint Venture and Capacity Agreements

AZZ Inc. maintains a significant, though non-controlling, stake in a key operational relationship through the AVAIL JV, which was restructured in 2025. This partnership is central to the Infrastructure Solutions segment reporting.

• Minority equity interest in AVAIL JV: 40%.
• Cash distribution received from AVAIL JV for three months ended May 31, 2025: $273.2 million.
• AZZ's investment in AVAIL JV at that time was $107.4 million.
• The sale of AVAIL's Electrical Products Group to nVent Electric plc closed in the first half of calendar year 2025.

The Precoat Metals segment has locked in future revenue by securing commitments for its new capacity. This is a smart move to de-risk a major capital outlay.

AZZ Precoat Metals has secured long-term contractual customer commitments covering over 75% of the new capacity at the Washington, Missouri coil coating facility. This facility was expected to be operational in 2025. The initial capital investment for this 250,000-square-foot facility was estimated at $110 million, with an additional $25 million planned over the next 15 years. Capital payments for the project during fiscal 2025 totaled $52.8 million.

Strategic Alliances and Supplier Management

Managing the input side of the business is crucial, especially for the Metal Coatings segment, which relies heavily on commodities. AZZ Inc. has specific strategies in place with its primary raw material providers.

AZZ attempts to minimize the impact of volatile commodity pricing, like zinc and natural gas, by establishing formal agreements with suppliers. Here's a look at the known strategies and associated figures:

Regarding the strategic R&D partnership with Texas A&M to improve galvanizing processes, specific financial details or direct collaboration agreements between AZZ Inc. and Texas A&M for this purpose were not publicly detailed in the latest filings. However, Texas A&M is involved in broader research collaborations, such as the PRISE grant program, which in 2025 awarded $520,000 total to 13 collaborative teams, with each selected team receiving $40,000 for one year.

Finance: draft 13-week cash view by Friday.

AZZ Inc. (AZZ) - Canvas Business Model: Key Activities

You're looking at the core actions AZZ Inc. (AZZ) takes to deliver value in its pure-play metal coatings focus. These aren't just things they do; these are the specific, measurable activities driving their financial results as of late 2025.

Hot-dip galvanizing and spin galvanizing for corrosion protection.

This activity centers on the Metal Coatings segment, which is about applying robust corrosion protection. For the full fiscal year 2025, this segment generated sales of \$665.1 million. You can see the operational strength in the margins; the segment achieved an Adjusted EBITDA margin of 30.9% in FY2025, with the third quarter of that year hitting 31.5%, partly due to improved zinc utilization and higher volume. Galvanizing sales specifically grew by 5.2% year-over-year in Q3 FY2025, supported by demand in key end-markets.

Coil coating application of protective and decorative finishes on steel/aluminum.

This is the domain of the Precoat Metals segment, which was the larger revenue contributor in FY2025, bringing in \$912.6 million in sales. The activity here involves processing higher-value materials, as evidenced by its Q3 FY2025 sales growth of 7.6% year-over-year, driven by mix improvements. The segment's FY2025 Adjusted EBITDA margin was 19.6%, improving to 19.1% in Q3 FY2025 through operational performance. A major part of this activity involves expanding capacity, like the greenfield aluminum coil coating facility in Washington, Missouri, which is expected to add over 120 million pounds of annual capacity, with 75% of that volume already secured by firm customer commitments, projecting at least \$60 million in sales by 2026.

The breakdown of these core service revenues for the full fiscal year 2025 looks like this:

Operational excellence and efficiency initiatives to maintain segment margins.

Sustaining those margins requires constant focus on efficiency. The consolidated Adjusted EBITDA for fiscal year 2025 reached \$347.9 million, representing 22.0% of sales, an increase from 21.7% the prior year. Key drivers for this efficiency include:

• Improved zinc utilization in the galvanizing process.
• Driving operational productivity across facilities.
• Completing the greenfield project in Washington, Missouri, which is expected to contribute to margin expansion as it moves past startup costs.
• Investing in customer-centric and digital technology platforms like the Digital Galvanizing System and Coil Zone.

It's about processing more material efficiently; for instance, Q3 FY2025 saw galvanizing sales grow by 5.2% on higher tonnage processed.

Strategic capital allocation, including debt reduction of \$110.0 million in FY2025.

Managing the balance sheet is a critical activity. AZZ Inc. executed a planned debt reduction of \$110.0 million in fiscal year 2025, supported by \$250 million in cash flow from operations for that year. This disciplined approach brought the net leverage ratio below 2.5x as of February 28, 2025. By the time of the November 2025 conference presentation, the trailing twelve-month (TTM) debt reduction totaled \$355.4 million since the start of FY2023, pushing the net leverage down further to 1.7x, which is inside the management target range of 1.5x - 2.5x. Capital expenditures for FY2025 totaled \$115.9 million, which included \$52.8 million dedicated to the Washington, Missouri, greenfield facility.

Executing bolt-on M&A to expand coatings footprint and capabilities.

Inorganic growth through targeted acquisitions is a stated key activity to drive above-market growth. A concrete example is the purchase of Canton Galvanizing, which closed on July 1, 2025, immediately adding scale in the Metal Coatings business. As of October 2025, management indicated they are actively reviewing 13 potential acquisition targets out of a flagged pipeline of over 68. This M&A focus is enabled by the strong balance sheet, with net leverage at just 1.7x as of the second quarter of fiscal year 2026.

AZZ Inc. (AZZ) - Canvas Business Model: Key Resources

You're looking at the hard assets and financial muscle that let AZZ Inc. operate as North America's leading independent provider of hot-dip galvanizing and coil coating solutions. These aren't just line items; they are the physical and fiscal foundations of their market position.

The sheer geographic footprint is a massive resource. AZZ Metal Coatings maintains an extensive network of 41 galvanizing plants across the United States and Canada as of February 28, 2025. This scale is critical for serving a broad, decentralized customer base in the steel fabrication industry.

The Precoat Metals segment backs this up with its own specialized footprint. As of the end of fiscal year 2025, AZZ Precoat Metals operated 13 strategically located manufacturing facilities across the United States. These facilities aren't just buildings; they house the specific machinery needed for their value-added services.

Here's a breakdown of the physical capacity supporting the Precoat segment's operations:

• Number of manufacturing facilities: 13
• Coating lines in operation: 15
• Value-added processing lines: 17

The specialized industrial equipment is the next layer of resource. This includes the core assets like the galvanizing kettles necessary for the hot-dip process and the sophisticated coil coating lines used by Precoat Metals. These assets represent significant capital investment and operational barriers to entry for competitors.

Intellectual property, though less tangible, is a key differentiator. This includes proprietary coating formulations and process know-how that help AZZ Inc. achieve premium margins, like the 30.9% Adjusted EBITDA margin reported for the Metal Coatings segment in FY2025.

The financial health of AZZ Inc. provides the necessary liquidity and stability to maintain and grow these physical resources. You can see this strength reflected in the balance sheet metrics from fiscal year 2025.

Here's the quick math on the financial strength supporting operations:

This significant operating cash flow of $249.9 million in FY2025 allowed AZZ Inc. to execute its capital allocation strategy, including paying down debt and returning cash to shareholders, all while funding capital expenditures, which were $115.9 million during the year. That cash generation is a resource in itself, ensuring operational continuity and funding for specialized equipment upkeep.

To be fair, the value of the proprietary know-how is often reflected in the segment margins, such as Precoat Metals achieving a 19.6% Adjusted EBITDA margin for the full year 2025. That's the direct financial return on their specialized process knowledge.

AZZ Inc. (AZZ) - Canvas Business Model: Value Propositions

You're looking at the core promises AZZ Inc. makes to its customers, the things that get them paid. For AZZ Inc., this is all about metal protection and processing scale, especially now that they've focused on being a pure-play metal coatings enterprise. They are positioning themselves to hit $2 billion in revenue by 2028, which tells you the value they believe they can deliver is substantial.

Superior corrosion protection extending steel lifecycle for decades.

This is the bread and butter of the Metal Coatings segment, specifically through hot-dip galvanizing. This metallurgical process creates a reaction between molten zinc and steel, which is designed to extend the lifecycle of fabricated steel for several decades. The segment itself performed strongly in fiscal year 2025, delivering an EBITDA margin of 30.9%.

High-quality decorative and protective coatings for metal coils.

This value proposition is delivered by the Precoat Metals segment, which focuses on protective and decorative coatings for steel and aluminum coils, serving markets like construction and appliances. This segment brought in $912.6 million in sales for fiscal year 2025, representing a 3.5% increase year-over-year, with an EBITDA margin of 19.6%. The coil coating process is specifically noted for emphasizing sustainability and enhanced product lifecycles.

Here's a quick look at how the two main coating segments stacked up financially in the fiscal year ended February 28, 2025:

Unmatched scale and capacity for high-volume, fast turnaround service.

The sheer physical footprint supports the claim of scale. As of February 28, 2025, AZZ Inc. operated a significant network across its coatings businesses. You can see the operational scale in the numbers:

• Metal Coatings operated 41 galvanizing plants.
• Metal Coatings also included six surface technologies locations.
• Precoat Metals operated 13 strategically located manufacturing facilities.
• Precoat Metals had 15 coating lines and 17 value-added processing lines.

Plus, they added capacity with a greenfield project in Washington, Missouri, which became operational in the first quarter of fiscal 2026. Overall, total sales for the combined coating segments in FY2025 were $1,577.7 million.

Sustainable solutions that reduce emissions and enhance product lifecycles.

AZZ Inc. explicitly builds sustainability into its process, aiming to reduce raw materials, energy, and waste while supporting sustainable infrastructure development. This commitment is recognized externally; for example, AZZ Inc. was named to Newsweek's "America's Most Responsible Companies List" in 2025. The company's overall Adjusted EBITDA for fiscal year 2025 was $347.9 million, or 22.0% of sales.

Single-source provider for both post-fabrication and pre-treatment metal coatings.

This is the synergy of the two primary segments-Metal Coatings (post-fabrication hot-dip) and Precoat Metals (pre-treatment coil coating). By offering both, AZZ positions itself as a comprehensive partner for metal finishing needs. The company is clear that it operates primarily as a toll coating business, meaning customers supply the steel or aluminum, and AZZ carries no commodity risk on the raw material itself. This focus on service over material ownership is a key part of their value exchange.

AZZ Inc. (AZZ) - Canvas Business Model: Customer Relationships

AZZ Inc. cultivates direct, long-term relationships primarily with large industrial fabricators and manufacturers across its core segments. The company's commitment to its customer base is evidenced by its operational footprint; as of February 28, 2025, AZZ Metal Coatings operated 41 galvanizing plants, six surface technology plants, and one tubular products plant across North America. The focus on high-volume, recurring business is supported by strategic capacity commitments, such as the new greenfield facility in Washington, Missouri, which is backed by a take-or-pay contract for approximately 75% of the output.

The management team emphasizes that superior customer service, quality, and operational excellence remain differentiators for AZZ Inc.. This focus helps manage high-volume, recurring orders, which contributed to the company achieving $1,577.7 million in Total Sales for the full Fiscal Year 2025. The company explicitly states it will embrace complexity with its customers, a trait valued by them.

The structure of the business supports deep integration into customer supply chains, which naturally creates high switching costs. For instance, the Metal Coatings segment, which saw sales of $665.1 million in FY2025, provides essential corrosion protection that extends the lifecycle of fabricated steel for decades. The Precoat Metals segment, with FY2025 sales of $912.6 million, serves markets like construction, appliance, and HVAC, where coating specifications are critical to the final product's performance and appearance.

The company's dedication to its customer base is reflected in the segment performance that drives its overall results. The Metal Coatings segment, for example, achieved a strong 30.9% EBITDA margin in FY2025, indicating successful execution on customer-driven volume and productivity. The Precoat Metals segment delivered a 19.6% EBITDA margin in the same period, driven by higher volume and favorable mix shifts in end markets like construction and transportation.

You can see the scale of these customer-facing segments in the table below, based on the full Fiscal Year 2025 results:

The company's financial health, with a Net Leverage ratio reduced to 1.7x by the end of Q2 FY2026, provides the stability necessary to maintain these long-term partnerships and invest in customer-specific needs, such as the new $125 million greenfield facility. The total workforce supporting these relationships and operations stood at 3,684 employees as of the end of FY2025.

• The company holds leading market shares in metal and coil coatings.
• Metal Coatings sales grew 10.8% year-over-year in Q2 FY2026, driven by infrastructure spending.
• The company is focused on maintaining its leadership position in the market segments in which it conducts business.

AZZ Inc. (AZZ) - Canvas Business Model: Channels

You're looking at how AZZ Inc. gets its coating solutions to the customer, and it's definitely built around physical presence. The backbone of the Metal Coatings channel strategy relies on a network of dedicated, local production sites. As of February 28, 2025, AZZ Metal Coatings operated 41 galvanizing plants across the United States and Canada. These locations are the direct interface for many of their hot-dip galvanizing services.

For the Precoat Metals segment, the channel is anchored by its manufacturing and service hubs. As of the end of fiscal year 2025, AZZ Inc. had 13 Precoat Metals facilities in the United States serving as direct manufacturing and service points for coil coating solutions. This network was recently bolstered by the substantial completion of the greenfield project in Washington, Missouri, during fiscal year 2025, designed to increase capacity.

The scale of the business flowing through these physical channels is significant. Here's a quick look at the segment financial data from fiscal year 2025, which represents the revenue generated via these direct channels:

Delivery and pickup logistics are handled through a mix of internal and external resources. You see direct delivery and pickup services utilizing both company-owned assets and third-party logistics providers to move finished metal components to the customer site or for customer collection. This is critical for managing the flow of large, fabricated steel items.

The digital channel is distinctly separate from direct sales execution. AZZ Inc. maintains a digital presence primarily focused on corporate and investor communications. You find resources like financial reports, SEC filings, and investor event schedules on their Investor Relations website. For instance, in November 2025, the company announced participation in several investor conferences. Furthermore, they use technology like the Digital Galvanizing System to provide customers with near real-time information on their steel's progress in the galvanizing process, which is a form of digital service support, not a direct sales channel.

The primary ways customers interact with AZZ Inc. for service requests and information, outside of direct sales contact, include:

• Completing an online form for quotes or investor relations information.
• Selecting specific service interests like Galvanizing Services or Precoat Metals via the contact form.
• Engaging with digital platforms for project tracking, such as the CoilZone platform mentioned in technology updates.

Finance: review the Q3 2025 logistics spend against the $115.9 million total capital expenditures for FY2025 by end of next week.

AZZ Inc. (AZZ) - Canvas Business Model: Customer Segments

You're looking at the core customers AZZ Inc. (AZZ) serves across its two primary operating segments, Metal Coatings and Precoat Metals, based on the latest full-year 2025 data and early 2026 performance.

The customer base is diverse, but the financial weight clearly falls under the Precoat Metals segment, which accounted for the majority of total sales in the last full fiscal year.

Here's how the revenue split looked for the fiscal year ending February 28, 2025:

The Metal Coatings segment, which includes hot-dip galvanizing, sees strong demand from infrastructure-related project spending, as evidenced by its second quarter of fiscal year 2026 sales reaching $190.0 million.

The Precoat Metals segment serves a wide array of manufacturing customers, with its second quarter of fiscal year 2026 sales coming in at $227.3 million.

The key customer groups AZZ Inc. (AZZ) targets are:

• Construction and infrastructure companies (structural steel, rebar).
• Renewables and utility markets for solar, wind, and transmission structures.
• Appliance, HVAC, and container manufacturers (Precoat Metals).
• Transportation and industrial end markets requiring durable metal protection.
• Steel fabricators and manufacturers across North America.

For the second quarter of fiscal year 2026 (ended August 31, 2025), the Metal Coatings segment saw sales increase by 10.8% year-over-year, driven by infrastructure spending.

Still, the Precoat Metals segment experienced weaker demand in several end markets during that same period, with sales down 4.3% year-over-year to $227.3 million.

Finance: draft 13-week cash view by Friday.

AZZ Inc. (AZZ) - Canvas Business Model: Cost Structure

When you look at the cost side of the AZZ Inc. business, you see a structure heavily influenced by external commodity markets and internal operational scale. It's not just about fixed overhead; a big chunk of the spending moves up and down with business activity.

Highly variable costs driven by raw materials like zinc, paint, and natural gas.

AZZ Inc. explicitly flags exposure to fluctuations in key inputs, which directly impacts the cost of goods sold, especially within the Metal Coatings segment. These are costs you definitely need to watch quarter-to-quarter.

• Raw materials like zinc and natural gas are primary drivers for the hot-dip galvanizing process.
• Paint costs are a significant variable input for the Precoat Metals segment.
• Management notes that increases in these components can pressure margins if not fully passed through to customers.

Significant labor costs for plant operations and specialized personnel.

Running large-scale galvanizing and coating facilities requires a dedicated workforce, making direct and indirect labor a substantial, non-material cost component. The company acknowledges the ongoing need to secure experienced management and employees to execute its growth strategy, which implies competitive labor costs.

Capital expenditures, totaling $115.9 million in FY2025, for maintenance and growth.

Capital spending in the fiscal year ending February 28, 2025, reflected significant investment in the operational footprint. This level of investment is key to maintaining capacity and executing strategic projects.

Debt service costs, though interest rate margin was reduced in FY2025.

With variable-rate debt, interest expense is a dynamic cost. AZZ Inc. successfully managed to lower this cost during the fiscal year through proactive refinancing actions, which helps stabilize the bottom line.

• The Term Loan B was repriced in August 2025, reducing the interest rate margin by 75 basis points to SOFR + 175 basis points.
• This latest repricing is expected to generate annual interest savings of approximately $3.3 million per year.
• The total interest rate margin savings achieved since the loan issuance in May 2022 reached 250 basis points.
• The net debt to EBITDA leverage ratio stood at a disciplined 1.7x as of May 2025.

Selling, General, and Administrative (SG&A) expenses.

These are the costs of running the corporate and sales functions, distinct from direct production costs. For the full fiscal year 2025, the company reported these expenses relative to sales.

Finance: draft 13-week cash view by Friday.

AZZ Inc. (AZZ) - Canvas Business Model: Revenue Streams

You're looking at how AZZ Inc. (AZZ) actually brings in the money, which really boils down to its two main coating segments and that minority stake in a joint venture. Honestly, the numbers for fiscal year 2025 show a clear split between the two core businesses that make up the bulk of their top line. Total Sales for the full fiscal year 2025 hit $1,577.7 million. That's the big picture you need to keep in mind.

The Precoat Metals segment was the larger revenue driver, bringing in $912.6 million for fiscal year 2025. This segment focuses on the coil coating side of the business. The Metal Coatings segment followed, with sales totaling $665.1 million for the same period. These two figures, when added together, account for the entire reported total sales number, which is a good sanity check for you.

Then there's the equity income stream, which comes from AZZ Inc.'s 40% non-controlling interest in the AVAIL JV, which is part of their Infrastructure Solutions reporting structure. While the final audited number isn't explicitly separated from the total sales in the same way as the segments, the guidance you should be tracking for FY2025 was set in the range of $15-$18 million. This is income recognized from the JV's earnings, not direct sales revenue from AZZ's own operations.

Here's the quick math on how those primary revenue streams stacked up for the fiscal year ended February 28, 2025:

To be fair, you need to know what services generate those segment sales. The revenue streams are defined by the specific processes AZZ Inc. (AZZ) performs for its customers. You'll see the revenue derived from these specific activities:

• Fees for hot-dip galvanizing services.
• Fees for spin galvanizing services.
• Fees for surface technology services.
• Revenue from protective coil coating applications.
• Revenue from decorative coil coating applications.

The Precoat Metals segment, for instance, is where the revenue from protective and decorative coil coating applications is recognized, serving markets like construction, appliance, and HVAC. Meanwhile, the Metal Coatings segment is where the core galvanizing and surface tech fees are booked, often driven by infrastructure and construction spending. Finance: draft 13-week cash view by Friday.