Topbuild 2025 Q1 Earnings Mixed Performance as Net Income Falls 19%

Topbuild Corp. (BLD) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The total revenue of Topbuild decreased by 3.6% to $1.23 billion in 2025 Q1, down from $1.28 billion in 2024 Q1. The results aligned with market expectations, as Topbuild maintained its full-year guidance. Despite a decline in sales, the company reaffirmed its projected sales range of $5.05 billion to $5.35 billion and adjusted EBITDA expectations between $925 million and $1,075 million.

Revenue

The revenue for Topbuild in the first quarter of 2025 totaled $1.23 billion, marking a 3.6% decrease from the previous year. The Installation segment generated $745.53 million, reflecting a 6.7% decline, while the Specialty Distribution segment experienced a 2.6% growth, contributing $559.80 million. Intercompany eliminations amounted to $-72.06 million, resulting in net sales of $1.23 billion.

Earnings/Net Income

Topbuild's earnings per share (EPS) declined 11.8% to $4.25 in 2025 Q1, compared to $4.82 in 2024 Q1. The company's net income fell to $123.39 million, representing a 19.0% decrease from the $152.38 million reported in the previous year. The decline in EPS suggests challenges in maintaining profitability amid sales decreases.

Price Action

The stock price of Topbuild has tumbled 8.32% during the latest trading day, dropped 3.98% during the most recent full trading week, and edged up 0.33% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing TopBuild (BLD) shares following a quarterly revenue drop and holding for 30 days resulted in a modest 23.03% return, which significantly underperformed the benchmark's 83.12% return. The strategy's compound annual growth rate (CAGR) was 4.28%, with a maximum drawdown of -15.33% and a Sharpe ratio of 0.28, indicating moderate risk and return. These metrics suggest that while the strategy provided some returns, it was not as effective as broader market investments during the same period. Investors should consider these factors when evaluating potential strategies involving TopBuild shares.

CEO Commentary

“Our first quarter results were in line with our expectations,” said Robert Buck, President and CEO of TopBuild. He noted a total sales decline of 3.6%, partially offset by a 2.6% growth in Specialty Distribution driven by commercial and industrial projects. The 6.7% decline in Installation segment sales reflects a slow start in new residential construction. Despite this, profitability remains strong, with an adjusted EBITDA margin of 19.0%. Buck expressed confidence in adapting to the current economic environment and emphasized the importance of acquisitions, returning $215.6 million to shareholders through share repurchases.

Guidance

TopBuild confirmed its full-year outlook, projecting sales between $5,050 million and $5,350 million, and adjusted EBITDA in the range of $925 million to $1,075 million. This guidance reflects management's current view of market conditions and is based on assumptions related to housing starts, general and administrative expenses, and interest rates. The outlook does not include potential effects from expected acquisitions or divestitures during the year.

Additional News

In recent developments, TopBuild announced the acquisition of Seal-Rite Insulation, a Nebraska-based fiberglass and spray foam insulation installer with over 25 years of experience. Seal-Rite generates approximately $15 million in annual revenue, and the acquisition is expected to bolster TopBuild's market position in residential and commercial insulation sectors. Additionally, TopBuild achieved its 2025 Great Place to Work Certification for the third consecutive year, underscoring its commitment to maintaining a positive workplace culture. The company also successfully repurchased 693,881 shares for $215.6 million, demonstrating strong capital allocation strategies.