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Net debt ~$200M, net leverage ~0.4x EBITDA; 20% rate rise adds ~$8-10M annual interest expense, minimal impact given low floating-rate exposure

Mostly fixed-rate debt; 20% rate increase has limited P&L impact (~$5-10M); greater risk via customer capex deferral reducing lighting project demand

Medium intensity; US-China trade tariffs on metals and components disrupt supply chains.

1) China semiconductor/LED component manufacturing; 2) Taiwan advanced chip fabrication for intelligent controls and IoT modules

~10% international revenue; top markets Canada, UK, Mexico — CAD and GBP devaluation pose modest risk; overall FX exposure limited and partially natural-hedged

~90% North America revenue; minimal sovereign currency devaluation risk; Canada and UK are primary international exposures with manageable FX volatility

Medium intensity; commodities: Steel, Aluminum, Copper, Crude Oil (fuel), Rare Earth Elements, Plastics/Resins; geopolitical: US-China trade tariffs on metals and components disrupt supply chains.

No single vendor exceeds 30% of input cost, but LED chip suppliers (Nichia, Cree/CreeLED) represent concentrated, partially non-substitutable component sourcing

Primarily hardware/product manufacturer with embedded software; cloud dependency moderate — 30-day termination disruptive to Atrius IoT platform but not core lighting sales

Hybrid: product sales (~85%) + software/services (~15% via Atrius); cloud exit would impair smart building SaaS but not kill revenue

Moderate API coupling risk; Atrius platform integrations (BACnet, DALI, cloud APIs) create stickiness but are not deeply proprietary; competitors offer comparable integrations

Not applicable; revenue from tangible product sales and software subscriptions — no investment contract, token, or passive profit expectation; Howey risk near zero

Medium

Moderate GDPR/CCPA exposure via Atrius IoT building data; lighting occupancy/sensor data subject to privacy regulation; compliance infrastructure likely adequate but evolving

Low-to-moderate; ~10% U.S. commercial lighting market share; Acuity is largest U.S. player but faces Signify, Hubbell competition; no current material antitrust proceedings

Medium burden; regimes: FAA, DOT, OSHA, EPA, ITAR, FTC; Export controls and defense procurement rules create contract concentration risk.

~85% transactional (product sales); ~15% recurring (Atrius SaaS, service contracts); recurring revenue growing but still minority of total

Primary: luminaire hardware sales; Secondary: intelligent controls/Atrius SaaS subscriptions billed per connected device or building square footage

Tiered by product line (Lithonia commodity to Holophane premium); controls/software priced separately; inflation pass-through demonstrated 2021-2023; architecture is resilient

Moderate-to-high; demonstrated price increases of 8-15% in 2022-2023 with margin expansion; brand portfolio and specification-selling model support above-average pricing power

Gross margins ~42-45%; above average for industrial/lighting hardware; software mix expansion targets 47-50% longer term

No material free-rider problem; products are purchased, not freemium; Atrius has modest churn risk if ROI of smart controls is not demonstrated to facility managers

Revenue growth is sublinear to headcount; manufacturing automation and product platform leverage allow ~10-15% revenue growth with mid-single-digit headcount growth

Marginal cost of growth is moderate; incremental software revenue near zero marginal cost; hardware growth requires modest supply chain and SG&A scaling

Not applicable; Acuity sells through independent sales agents and distributors, not a franchise model; channel compliance risk is low

At 10x scale, CAC efficiency improves via specification pull-through; however, distributor margin pressure and competition would compress unit economics meaningfully

Weak network effects; Atrius platform gains marginal value with more connected buildings but is not a true marketplace or platform with strong cross-side network effects

AI displacement risk moderate; AI-driven lighting design tools could commoditize specification work; Acuity investing in embedded AI controls to stay relevant

Tier 3 (cyclical); commercial construction-linked revenue contracts ~15-25% in recessions; renovation/retrofit segment more resilient; not a defensive business

Commercial/industrial building owners, electrical contractors, and architects/specifiers; no single customer >3% of revenue — low concentration risk

Institutional (schools, hospitals, government) and infrastructure (roadway, sports); provides some countercyclical stability via public spending

["11-0000 Management Occupations", "13-0000 Business and Financial Operations Occupations", "15-0000 Computer and Mathematical Occupations", "17-0000 Architecture and Engineering Occupations", "23-0000 Legal Occupations", "33-0000 Protective Service Occupations", "37-0000 Building and Grounds Cleaning and Maintenance Occupations", "41-0000 Sales and Related Occupations", "43-0000 Office and Administrative Support Occupations", "47-0000 Construction and Extraction Occupations", "49-0000 Installation, Maintenance, and Repair Occupations", "51-0000 Production Occupations", "53-0000 Transportation and Material Moving Occupations"]

0.3 (HIL — ~30% of characteristic roles agent-automatable)

Capex ~2-3% of revenue; mix shifting toward software/controls R&D and manufacturing automation; legacy plant investment declining as asset-light software segment grows

1144215

AYI