Executive Summary / Key Takeaways

• Resilient Core Business: Janus International Group (JBI) demonstrates robust performance in a challenging macroeconomic environment, leveraging its market leadership in specialized self-storage and commercial building solutions.
• Technological & Strategic Differentiation: The Nokē Smart Entry System, particularly the advanced Nokē ION, provides a significant competitive moat by enabling virtual management and enhancing customer cost efficiency, driving strong adoption.
• Strategic Pivot to R3: JBI is well-positioned to capitalize on the aging self-storage infrastructure, with over 60% of U.S. facilities over two decades old, driving a strategic shift towards higher-margin Restoration, Rebuilding, and Replacement (R3) projects.
• Strong Financial Health & Capital Allocation: Despite revenue headwinds, JBI maintains a healthy balance sheet, robust cash flow generation, and a disciplined capital allocation strategy, including debt reduction and an expanded share repurchase program.
• Positive Outlook Amidst Headwinds: Management reaffirms 2025 guidance, anticipating a stronger second half driven by cost savings, international market recovery, and the R3 pivot, while actively mitigating tariff impacts.

A Foundation of Innovation in a Dynamic Market

Janus International Group, Inc. (JBI), founded in 2002 and headquartered in Temple, Georgia, has established itself as a global leader in turn-key solutions for the self-storage, commercial, and industrial sectors. The company's comprehensive offerings span roll-up and swing doors, hallway systems, relocatable storage units, and cutting-edge access control technologies. JBI's overarching strategy is to provide integrated solutions, guiding customers through every phase from facility planning and design to construction and the critical restoration, rebuilding, and replacement (R3) of existing assets. This full-service approach, coupled with geographic diversification across North America, Europe, the U.K., and Australia, forms the bedrock of its business model.

The self-storage industry, a core market for JBI, benefits from strong underlying demand driven by recurring life events. A significant tailwind for JBI is the aging infrastructure of this market; over 60% of U.S. self-storage facilities are more than 20 years old, creating a substantial and growing opportunity for R3 initiatives. However, the current macroeconomic climate, characterized by sustained high interest rates and customer liquidity challenges, has introduced headwinds, particularly impacting new construction projects.

JBI operates within a competitive landscape that includes both specialized niche players and larger, more diversified industrial conglomerates. Direct competitors like Allegion plc (ALLE), Masonite International Corporation (DOOR), and Stanley Black & Decker, Inc. (SWK) offer overlapping products such as doors and access control systems. Allegion, for instance, boasts a broader security portfolio and typically higher gross profit margins (44% TTM) compared to JBI (39.3% TTM), reflecting its scale and diversified revenue streams. Masonite and Stanley Black & Decker, while significant in door manufacturing and broader industrial solutions, generally exhibit lower gross profit margins (23% and 29% TTM, respectively) than JBI. JBI differentiates itself through its deep specialization in self-storage, offering integrated, turn-key solutions that simplify installation and operations for its targeted customer base. This focus, combined with a reputation for quality and customer service, has enabled JBI to gain market share, particularly from smaller, less capitalized competitors more susceptible to current economic pressures.

Technological Leadership: The Nokē Advantage

At the heart of JBI's competitive strategy lies its technological differentiation, most notably the Nokē Smart Entry System. This innovative suite of remote access solutions provides a significant competitive moat, transforming how self-storage facilities are managed and operated. The latest iteration, Nokē ION, is a hardwired smart locking system that offers enhanced stability and an attractive price point.

The tangible benefits of Nokē ION are compelling for customers. It enables "virtual management" of storage facilities, drastically reducing the need for on-site labor and thereby improving operational cost efficiency. This capability is a key lever for customers seeking to optimize their cost structures in a competitive market. The adoption metrics underscore its success: by the second quarter of 2025, JBI reported 409,000 installed Nokē units, representing a 6.5% sequential growth and a robust 26.6% year-over-year increase. Furthermore, JBI continues to innovate, having introduced the NS door series in late 2024, engineered for heightened safety and security in self-storage facilities.

For investors, Nokē's technological leadership is critical. It not only strengthens JBI's competitive position by offering a superior, integrated solution but also drives potential for recurring revenue streams from its technology services. The ability to provide a wired, stable, and cost-effective smart entry system positions JBI as an innovator, moving beyond a traditional hardware provider to a comprehensive technology solutions partner. This differentiation allows JBI to command pricing power and fosters deeper customer loyalty, directly contributing to its long-term growth strategy and market leadership.

Strategic Execution and Financial Resilience in a Challenging Environment

JBI's recent history, particularly from late 2024 into 2025, reflects a period of strategic adaptation amidst persistent macroeconomic headwinds. The company has faced significant project delays, with customer project churn rates extending from approximately 300 days pre-pandemic to around 500 days currently. This environment of high interest rates and customer liquidity constraints has particularly impacted the self-storage new construction and R3 segments.

In response, JBI has executed several strategic initiatives. In May 2024, the company completed the T.M.C. Acquisition for $59.4 million, diversifying its portfolio into trucking terminal renovation, construction, remodeling, and maintenance services. This acquisition contributed $3.8 million in inorganic revenue in the second quarter of 2025, demonstrating its accretive nature. Concurrently, JBI initiated a structural cost reduction plan in the third quarter of 2024, targeting $10 million to $12 million in annual pretax cost savings by the end of 2025, with the full run rate achieved by Q2 2025. This plan, which includes streamlining labor, rationalizing real estate, and reducing SG&A expenses, has already yielded $2.7 million in savings in Q2 2025. Leadership was also strengthened with the appointment of Jason Williams as President of Janus Core in May 2025, overseeing key self-storage and commercial door business strategies.

Financially, JBI's performance in the second quarter of 2025 and the first half of 2025 reflects these market dynamics. Total revenues for Q2 2025 were $228.1 million, an 8.2% decrease year-over-year, and $438.6 million for H1 2025, down 12.8% year-over-year. This decline was primarily organic, driven by volume reductions in North American self-storage due to macroeconomic uncertainty. Adjusted EBITDA for Q2 2025 was $49.0 million, down 24.0% year-over-year, resulting in an adjusted EBITDA margin of 21.5%. For H1 2025, adjusted EBITDA was $87.4 million, down 33.2% year-over-year, with a margin of 19.9%. These margin compressions are largely attributed to lower volumes impacting fixed cost leverage and an unfavorable sales channel mix.

Segment-wise, Janus North America saw revenues decrease by 13.2% in Q2 2025, with new construction sales down 15.2% and R3 sales down 14.0%. Conversely, the Janus International segment demonstrated strong recovery, with revenues increasing by 57.8% in Q2 2025 and 51.7% in H1 2025, as local market conditions improved following a recessionary period in the U.K. The Commercial and Other segment also showed resilience, with revenues up 6.7% in Q2 2025, driven by growth in rolling steel doors, a recovery in carports and sheds, and contributions from the TMC acquisition. JBI's multi-year efforts to secure architectural specifications in the commercial space are beginning to yield benefits, allowing the company to gain market share.

JBI maintains a robust liquidity position, ending Q2 2025 with $244.3 million in total liquidity, including $173.6 million in cash and equivalents. Total outstanding long-term debt stood at $556 million, with a net leverage ratio of 2.3x, comfortably within its target range of 2x to 3x. The company's strong cash flow generation is evident, with $99.7 million in operating cash flow for H1 2025 and a trailing 12-month free cash flow conversion of adjusted net income at 211%. JBI's disciplined capital allocation includes a $40 million voluntary prepayment on its first lien term loan in Q1 2025, expected to save $2.2 million in interest expense for 2025. Furthermore, the Board authorized an additional $75 million for its share repurchase program in May 2025, bringing the remaining authorization to $81.3 million. The company repurchased 1.2 million shares for $10.1 million in Q2 2025, signaling management's belief that the stock remains undervalued.

Outlook, Guidance, and Mitigated Risks

JBI's reaffirmed full-year 2025 guidance reflects a cautious yet optimistic outlook, underpinned by strategic adjustments and anticipated market improvements. The company expects revenues to be in the range of $860 million to $890 million and adjusted EBITDA between $175 million and $195 million, translating to an adjusted EBITDA margin of 21.1% at the midpoint. Free cash flow conversion of adjusted net income is anticipated to be above the target range of 75% to 100%.

Management anticipates the back half of 2025 to be relatively flat to the first half in revenues, with EBITDA margins improving in the final two quarters. This margin expansion is expected from the full realization of cost reduction plan savings, lower blending steel costs, and an increase in volumes. While new construction in North America is projected to remain soft due to extended project timelines, the commercial sales channel and International segment are expected to continue their recovery. A key assumption is the ongoing pivot of customer capital allocation towards R3 initiatives, driven by the aging self-storage asset base and industry consolidation. JBI remains "agnostic" to this shift, as R3 and new construction projects carry similar margin profiles.

Regarding tariffs, JBI has significantly mitigated its exposure for 2025, estimating a low single-digit million expense impact due to dual sourcing and existing inventory. Beyond 2025, the estimated ongoing unmitigated annual impact has been revised down to $6 million to $8 million (from a previous $10 million to $12 million), reflecting proactive mitigation efforts through alternative sourcing and commercial actions. While commercial actions taken in Q3 2024 are expected to result in high single-digit price declines in the storage business for 2025, management anticipates these will be largely offset by cost savings and a more favorable sales mix.

Despite this positive outlook, JBI acknowledges several risks. Persistent macroeconomic uncertainty, high interest rates, and customer liquidity challenges continue to pose headwinds, particularly for smaller operators. The extended project timelines, with churn rates at approximately 500 days, introduce a degree of unpredictability. Furthermore, potential changes in U.S. trade policy and the imposition of new tariffs could impact raw material costs, although JBI is actively working to diversify its supply chain. The company also faced a credit risk event in Q3 2024 due to a customer bankruptcy, prompting a thorough review of its accounts receivable. However, JBI's strong balance sheet and diversified customer base, with a focus on more capitalized segments, help buffer these risks.

Conclusion

Janus International Group stands as a compelling investment thesis, demonstrating remarkable resilience and strategic foresight in a dynamic market. The company's foundational strengths, rooted in its specialized turn-key solutions for the self-storage and commercial sectors, are amplified by its technological leadership, particularly the Nokē Smart Entry System. The Nokē ION, with its proven ability to enhance operational efficiency and reduce labor costs for customers, is a powerful differentiator that strengthens JBI's competitive moat and drives future growth.

Despite near-term macroeconomic headwinds, JBI's strategic pivot towards the burgeoning R3 market, fueled by an aging self-storage infrastructure and industry consolidation, positions it for sustained long-term value creation. The company's disciplined financial management, evidenced by robust cash flow, a healthy balance sheet, proactive debt reduction, and an expanded share repurchase program, provides ample flexibility to pursue both organic and inorganic growth opportunities. With a clear roadmap for margin improvement, active mitigation of tariff impacts, and a strong competitive standing built on innovation and integrated solutions, Janus International Group is well-equipped to capitalize on evolving market dynamics and deliver attractive returns for its shareholders.