TopBuild Corp. BLD reported mixed results for the first quarter of 2025, wherein its adjusted earnings topped the Zacks Consensus Estimate and the net sales missed the same. Year over year, both metrics declined.
The quarterly performance reflects lower sales volume in the Installation segment, mainly due to softened housing demand caused by affordability concerns. Also, increased selling, general and administrative (SG&A) expenses and the lingering inflation added to the performance decline. However, strength in the Specialty Distribution segment somewhat offset the downward trend during the quarter.
TopBuild remains optimistic about its opportunities in the maintenance and repair needs in the commercial and industrial sectors, along with the long-term growth expectations in the residential market.
Shares of this installer and distributor of insulation and other building products dropped 2.4% during yesterday’s trading session, following the earnings announcement.
Inside BLD’s Q1 Results
The company reported adjusted earnings per share (EPS) of $4.63 per share, which surpassed the Zacks Consensus Estimate of $4.43 by 4.5%. In the year-ago quarter, it reported an adjusted EPS of $4.81. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Net sales of $1.23 billion marginally missed the consensus mark of $1.24 billion by 0.6% and declined 3.6% year over year. Mergers and acquisitions (M&A), net of eliminations, led to a 2.6% increase, with prices rising 1.2%. The volume pulled back 7.4% during the quarter.
TopBuild’s Segmental Performance
Installation (which accounted for 57.1% of total net sales): The segment’s net sales were $745.5 million, down 6.7% year over year. M&A contributed 1.8% to the sales increase and pricing added 1.1%, while volume declined 9.6%.
The segment’s adjusted operating margin contracted year over year by 110 basis points (bps) to 18.5%.
Specialty Distribution (42.9%): The segment’s net sales rose 2.6% year over year to $559.8 million. M&A contributed 3.4% to the sales increase and pricing added 1.4%, while volume pulled back 2.2%.
The segment’s adjusted operating margin reduced 50 bps year over year to 13.6%.
Operating Highlights of BLD
Adjusted gross margin contracted 70 bps year over year to 29.6%. Adjusted SG&A expenses, as a percentage of sales, expanded 40 bps to 13.9% from a year ago. Adjusted operating margin contracted 110 bps to 15.7% from a year ago.
Adjusted EBITDA tumbled 7.5% year over year to $234.8 million. The adjusted EBITDA margin also contracted 80 bps to 19% from the year-ago figure.
BLD’s Financials
As of March 31, 2025, TopBuild had cash and cash equivalents of $308.8 million compared with $400.3 million at 2024-end. Long-term debt as of the first quarter was $1.31 billion, down from $1.33 billion at 2024-end.
Net cash provided by operations was $152.6 million in the first three months of 2025, down from $178.8 million a year ago.
In the first quarter, the company repurchased 693,881 shares for a total of $215.6 million.
TopBuild's Acquisition in 2025
In April 2025, TopBuild completed the acquisition of Omaha-based Seal-Rite Insulation, which is an installer of fiberglass and spray foam insulation and generates approximately $15 million in annual revenues. The company has been serving the residential and commercial end markets in Omaha and Lincoln for more than 25 years, and this strategic integration will help TopBuild expand its market base.
BLD Affirms 2025 Guidance
TopBuild continues to expect net sales between $5.05 billion and $5.35 billion for the full year. This compares with last year’s reported value of $5.33 billion.
Adjusted EBITDA is still projected to be between $925 million and $1.075 billion. This compares with the reported value of $725.8 million in 2024.
Residential sales are now expected to decline in the high-single digits, while Commercial/Industrial sales are expected to grow in the low-single digits.
M&As are expected to contribute about $85 million to full-year net sales.
BLD’s Zacks Rank & Recent Construction Releases
TopBuild currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boise Cascade Company BCC reported mixed first-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and sales topping the same. On a year-over-year basis, both the top and bottom lines declined.
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AECOM ACM reported mixed results for second-quarter fiscal 2025, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues missed the consensus mark and decreased from the prior year, while net service revenues grew.
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Fluor Corporation FLR reported mixed first-quarter 2025 results with adjusted earnings topping the Zacks Consensus Estimate while revenues missed the same. On a year-over-year basis, the top and bottom lines grew.
The quarter’s result reflects increased execution activities on several large projects in the company’s Urban Solutions segment, partially offset by soft contributions from the Energy and Mission Solutions segments. Fluor’s performance highlights the impact of its four-year strategy focused on expanding a reimbursable backlog, strengthening capital structure and improving project execution. The company also initiated a capital allocation program, which is expected to support long-term value creation for clients, employees and shareholders.
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