Acuity Brands (NYSE: AYI) reported first-quarter fiscal 2026 adjusted earnings that came in above analyst estimates, driven by solid revenue growth and margin improvement, though shares dropped more than 12% intraday on Thursday.

The company posted adjusted earnings of $4.69 per share for the quarter ended November 30, 2025, exceeding the consensus estimate of $4.58. Revenue rose 20.2% year over year to $1.14 billion, matching analyst expectations.

Revenue growth was led by the Acuity Intelligent Spaces segment, where sales surged 250.2% to $257.4 million. Meanwhile, the Acuity Brands Lighting segment recorded a more modest 1% increase in sales to $895.1 million.

Adjusted operating profit increased 23.7% to $196.3 million, while adjusted operating margin expanded 50 basis points to 17.2%. The company generated $140.8 million in operating cash flow during the quarter and repurchased approximately 77,000 shares for about $28 million.

Acuity also reduced debt, repaying $100 million of term-loan borrowings during the quarter. Segment profitability improved as well, with adjusted operating margin in the AIS business rising 100 basis points to 22.0%, while the lighting segment's margin increased 60 basis points to 17.9%.