Builders FirstSource Reports Second Quarter 2025 Results

Builders FirstSource, Inc. reported its results for the second quarter ended June 30, 2025.

Second Quarter 2025 Highlights

All Year-Over-Year Comparisons Unless Otherwise Noted:

• Net sales were $4.2 billion, a 5.0% decrease, driven by lower core organic net sales and commodity deflation, partially offset by growth from acquisitions.
• Gross profit margin decreased 210 basis points to 30.7%, primarily driven by Single- and Multi-Family margin normalization as well as a below-normal starts environment.
• Net income was $185.0 million, or diluted EPS of $1.66 compared to diluted EPS of $2.87 in the prior year period. Net income as a percent of net sales decreased by 330 basis points to 4.4%.
• Adjusted EBITDA decreased 24.4% to $506.1 million, primarily driven by lower gross profit.
• Adjusted EBITDA margin declined by 300 basis points to 12.0%, attributable to lower gross margin and reduced operating leverage.
• Cash provided by operating activities was $341.0 million, a decrease of $111.0 million compared to the prior year period. The Company’s free cash flow was $255.0 million, a decrease of 30.5%, compared to $366.7 million in the prior year period. The decrease was primarily driven by lower net income.
• The Company repurchased 3.3 million shares of common stock at an average price of $118.27 for $390.9 million, inclusive of applicable fees and taxes.

Peter Jackson, CEO of Builders FirstSource, commented: “Our durable results in the second quarter reinforce the advantage of our differentiated product offerings and commitment to execution. In this challenging market environment, we are prioritizing what’s within our control—serving customers with excellence, leveraging technology, and managing the business with discipline. We remain focused on building for the future through investments in value-added solutions, digital capabilities, and operational efficiency. These efforts are strengthening our position in the industry and laying the foundation to emerge stronger and accelerate delivery of long-term shareholder value as market conditions improve.”

Pete Beckmann, CFO of Builders FirstSource, added, “We continue to benefit from the strength and adaptability of our operating model. By executing consistently through the cycle, we are generating strong free cash flow and preserving financial flexibility. We remain disciplined in our capital deployment with a focus on maintaining a healthy balance sheet and investing in high-return opportunities. Our scale, operational rigor, and talented team give us confidence in our ability to deliver solid results and compound value into the future.”

Second Quarter 2025 Financial Performance Highlights

All Year-Over-Year Comparisons Unless Otherwise Noted:

Net Sales

• Net sales were $4.2 billion, a 5.0% decrease, driven by an 8.5% decline in core organic net sales and commodity deflation of 1.5%, partially offset by growth from acquisitions of 5.0%.
• Core organic net sales declined 8.5%. Multi-Family declined 23.3% and Single-Family declined 9.1%, while Repair and Remodel (“R&R”)/Other increased 3.0%. On a weighted basis, Multi- and Single-Family lowered net sales by 2.6% and 6.5%, respectively, while R&R/Other raised sales by 0.6%.

Gross Profit

• Gross profit was $1.3 billion, a decrease of 11.2%. Gross profit margin percentage decreased 210 basis points to 30.7%, primarily driven by Single- and Multi-Family margin normalization as well as a below-normal starts environment.

Selling, General and Administrative Expenses

• SG&A was $987.8 million, an increase of $14.6 million, or 1.5%, primarily driven by additional expenses from operations acquired within the last twelve months and our ongoing enterprise resource planning system implementation, partially offset by lower variable compensation due to lower core organic sales. As a percentage of net sales, total SG&A increased by 150 basis points to 23.3%, primarily attributable to reduced operating leverage.

Net Interest Expense

• Net interest expense increased $20.0 million to $72.0 million, primarily due to higher average debt balances.

Income Tax Expense

• Income tax expense was $54.3 million, compared to $93.4 million in the prior year period, primarily driven by a decrease in income before income tax. The effective tax rate in the second quarter increased 140 basis points year-over-year to 22.7%, primarily related to a lower stock-based compensation windfall benefit.

Net Income

• Net income was $185.0 million, or $1.66 earnings per diluted share, compared to net income of $344.1 million, or $2.87 earnings per diluted share, in the same period a year ago. The 46.2% decrease in net income was primarily driven by lower gross profit and higher SG&A and net interest expense, partially offset by lower income tax expenses.
• Net income as a percentage of net sales was 4.4%, a decrease of 330 basis points from the prior year period, primarily due to lower gross profit margins and higher SG&A and net interest expense, partially offset by lower income tax expenses.

Adjusted Net Income

• Adjusted net income was $264.3 million, a decrease of 37.1%, primarily driven by lower gross profit and higher net interest expense, partially offset by lower income tax expenses.

Adjusted Earnings Per Diluted Share

• Adjusted earnings per diluted share was $2.38, compared to $3.50 in the same period a year ago. The 32.0% decrease was primarily driven by lower adjusted net income, partially offset by share repurchases.

Adjusted EBITDA

• Adjusted EBITDA decreased 24.4% to $506.1 million, primarily driven by lower gross profit.
• Adjusted EBITDA margin declined by 300 basis points from the prior year period to 12.0%, primarily due to lower gross profit margins and reduced operating leverage.

Capital Structure, Leverage, and Liquidity Information

• For the three months ended June 30, 2025, cash provided by operating activities was $341.0 million, and cash used in investing activities was $147.4 million. The Company’s free cash flow was $255.0 million, compared to $366.7 million in the prior year period, largely the result of lower net income.
• Liquidity as of June 30, 2025, was approximately $1.6 billion, consisting of $1,538 million in net borrowing availability under the revolving credit facility and $87 million of cash on hand.
• As of June 30, 2025, LTM Adjusted EBITDA was $2.0 billion and net debt was $4.6 billion, resulting in a net debt to LTM Adjusted EBITDA ratio of 2.3x, compared to 1.4x in the prior year period.
• In May 2025, the Company completed the issuance of $750 million aggregate principal amount of 6.750% unsecured senior notes due 2035 at an issuance price of 100%. Net proceeds from the offering were used to repay indebtedness outstanding under its senior secured ABL facility.
• In May 2025, the Company amended its ABL facility, increasing the existing revolving commitments of $1,800 million with new revolving commitments of $2,200 million and extended the maturity date to May 2030.
• In the second quarter, the Company repurchased 3.3 million shares of its common stock at an average price of $118.27 per share for $390.9 million, inclusive of applicable fees and taxes.
• The Company has $500 million remaining under its repurchase authorization.
• Since the inception of its buyback program in August 2021, the Company has repurchased 99.3 million shares of its common stock, or 48.1% of its total shares outstanding, at an average price of $80.90 per share for a total cost of $8.0 billion, inclusive of applicable fees and taxes.

Productivity Savings From Operational Excellence

• For the second quarter, the Company delivered approximately $5 million in productivity savings related to operational excellence and supply chain initiatives. Year to date, the Company has delivered approximately $22 million in productivity savings.
• The Company expects to deliver $45 million to $65 million in productivity savings in 2025.

2025 Full Year Total Company Outlook

For 2025, the Company expects to achieve the financial performance highlighted below. Projected Net Sales and Adjusted EBITDA include the expected impact of price, commodities, and margins for 2025.

• Net Sales to be in a range of $14.8 billion to $15.6 billion.
• Gross Profit margin to be in a range of 29.0% to 30.5%.
• Adjusted EBITDA to be in a range of $1.5 billion to $1.7 billion.
• Adjusted EBITDA margin to be in a range of 10.1% to 10.9%.
• Free cash flow in the range of $0.8 to $1.0 billion, assuming average commodity prices in the range of $375 to $425 per thousand board foot (mbf).

2025 Full Year Assumptions

The Company’s anticipated 2025 performance is based on several assumptions for the full year, including the following:

• Within the Company’s geographies, Single-Family starts are projected to be down 10-12%, Multi-Family starts down mid-teens, and R&R is projected to be flat.
• Acquisitions completed within the last twelve months are projected to add net sales growth of 5.0% to 5.5%.
• Total capital expenditures in the range of $300 million to $350 million.
• Interest expense in the range of $270 million to $280 million.
• An effective tax rate of 23.0% to 25.0%.
• Depreciation and amortization expenses in the range of $550 million to $600 million.
• One fewer selling day is projected to decrease net sales by 0.4% in 2025 versus 2024.

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About Builders FirstSource

Headquartered in Irving, Texas, Builders FirstSource is the largest U.S. supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling. We provide customers an integrated homebuilding solution, offering manufacturing, supply, delivery, and installation of a full range of structural and related building products. We operate in 43 states with approximately 595 locations and have a market presence in 48 of the top 50 and 92 of the top 100 MSAs, providing geographic diversity and balanced end market exposure. We service customers from strategically located distribution and manufacturing facilities (some of which are co-located) that produce value-added products such as roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork, and pre-hung doors. Builders FirstSource also distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other specialty building products. www.bldr.com

Contact:

Heather Kos – SVP, Investor Relations – investorrelations@bldr.com

Source: Builders FirstSource, Inc.