Financial Data and Key Metrics Changes - In Q4 2024, TopBuild Corp. reported sales growth of 2% to $1.3 billion, with adjusted EBITDA increasing by 2.5% to $258 million, resulting in an adjusted EBITDA margin of 19.7%, which improved by ten basis points year over year [12][25][29] - The company has achieved a compounded annual growth rate of 14% in sales since its spin-off in 2015, with adjusted EBITDA margins expanding from 6.6% to 20.2% [25] Business Line Data and Key Metrics Changes - The residential business saw single-family sales grow slightly, while multifamily sales declined by double digits [11] - Installation sales were relatively flat year over year at $788.6 million, with a volume decline of 4.1% offset by M&A contributions of 2.3% and pricing increases of 1.5% [26] - Specialty distribution sales grew by 6.6% to $601.8 million, with volume rising by 4.4% due to growth in commercial industrial sales and spray foam sales [27] Market Data and Key Metrics Changes - The commercial industrial business experienced growth in Q4, with strong bidding activity and delayed projects moving forward [11][23] - The overall housing market fundamentals remain strong, despite external forecasts for housing starts in 2025 being trimmed [8][22] Company Strategy and Development Direction - TopBuild Corp. continues to prioritize acquisitions, having completed eight acquisitions in 2024, contributing approximately $153 million in annual revenue [15][32] - The company is focused on maintaining a healthy M&A pipeline and is optimistic about growth opportunities in both organic and inorganic avenues [24][59] - The management emphasizes a decentralized operating model, empowering local teams to make decisions and drive operational excellence [18][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges persistent inflation and high interest rates as challenges for the construction industry, but remains optimistic about long-term residential demand recovery [22][34] - The company expects continued choppiness in residential markets but anticipates an inflection point in demand [35] - Management is cautious about the timing of recovery and has not included potential M&A in their guidance for 2025 [24][34] Other Important Information - The company returned nearly $1 billion to shareholders through a share repurchase program in 2024, with a new authorization of up to $1 billion demonstrating confidence in the business [15][33] - Total liquidity at the end of Q4 was $836.5 million, with cash of $400.3 million and net debt of $987.2 million, resulting in a net debt leverage ratio of 0.91 times trailing twelve months adjusted EBITDA [31] Q&A Session Summary Question: Pricing environment and builder pressures - Management noted that affordability is a top concern for builders, leading to pressure in slower markets, but they are not chasing market share [48][49] Question: M&A pipeline and adjacent market opportunities - The company has a robust M&A pipeline, with potential larger opportunities in adjacent markets being considered [56][60] Question: Strategic pricing and volume decisions - Management is making strategic decisions to balance pricing and volume, particularly in the spray foam and distribution segments [66][68] Question: Bidding activity in commercial industrial - Bidding activity remains strong across various verticals, with optimism for growth in the commercial industrial side of the business [86][88] Question: Guidance assumptions and market conditions - The guidance for 2025 includes a range for single-family starts and anticipates low single-digit declines in volume, with Q1 expected to be the weakest [109][111] Question: Labor market pressures and competitive advantages - Management believes their strong workforce provides a competitive advantage, and they are cautious about labor reductions in the current environment [138][142]

For the quarter ended December 2024, TopBuild (BLD) reported revenue of $1.31 billion, up 2% over the same period last year. EPS came in at $5.13, compared to $4.69 in the year-ago quarter.The reported revenue represents a surprise of +0.06% over the Zacks Consensus Estimate of $1.31 billion. With the consensus EPS estimate being $5.08, the EPS surprise was +0.98%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectati ...

Fourth Quarter and Year End 2024 Robert Buck, President & CEO Rob Kuhns, CFO Published February 25, 2025 1 Safe Harbor Statements contained herein reflect our views about future periods, including our future plans and performance, constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "will," "would," "anticipate," "expect," "believe," "designed," "plan," or "intend," the negative of these terms, and s ...

Financial Data and Key Metrics Changes - Fourth quarter sales increased by 2% to $1.3 billion, driven by specialty distribution growth [9][19] - Adjusted EBITDA grew by 2.5% to $258 million, with an adjusted EBITDA margin of 19.7%, improving by 10 basis points year over year [9][22] - Adjusted earnings per diluted share improved by 9.4% to $5.13 compared to the previous year [22] Business Line Data and Key Metrics Changes - Residential business performance was mixed, with single-family growth slightly and multifamily declining by double digits [8] - Installation sales were relatively flat year over year at $788.6 million, with volume declining by 4.1% offset by M&A and pricing [19] - Specialty Distribution sales grew by 6.6% to $601.8 million, with volume rising by 4.4% [20] Market Data and Key Metrics Changes - The new residential construction landscape remains challenging due to elevated interest rates, with forecasts for 2025 housing starts being trimmed [5][16] - Commercial industrial business saw growth, with delayed projects moving forward in the fourth quarter [9][17] Company Strategy and Development Direction - Acquisitions remain a top priority, with eight completed in 2024, contributing approximately $153 million in annual revenue [11][24] - The company is focused on its core insulation business while exploring opportunities to expand its total addressable market [12][40] - The management emphasizes a disciplined approach to capital allocation and maintaining a healthy balance sheet [15][24] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the long-term fundamentals of the housing market despite current uncertainties [16][29] - The company anticipates an inflection point in residential demand but acknowledges the timing is unclear [16][25] - There is confidence in the ability to outperform the market and capitalize on growth opportunities, both organic and inorganic [17][29] Other Important Information - The company generated $706.7 million in free cash flow in 2024 [23] - Total liquidity at the end of the quarter was $836.5 million, with net debt of $987.2 million [23] Q&A Session Summary Question: Pricing environment and builder pressures - Management noted that affordability is a top concern for builders, leading to pressure in slower markets, but they are not chasing market share [34][35] Question: M&A pipeline and adjacent market opportunities - The M&A pipeline is robust, with opportunities across residential, distribution, and commercial industrial segments [39][40] Question: Strategic pricing and volume decisions - Management is making strategic decisions to balance pricing and volume, particularly in the spray foam and installation markets [46][47] Question: Bidding activity in commercial industrial - Bidding activity remains healthy across various verticals, with optimism for growth in 2025 [60][61] Question: Guidance range assumptions - The guidance range reflects uncertainty, with expectations for low single-digit declines in residential volume [76][77] Question: Labor market dynamics - Management is cautious about labor costs and is monitoring market conditions closely to retain key talent [102][103]

TopBuild (BLD) came out with quarterly earnings of $5.13 per share, beating the Zacks Consensus Estimate of $5.08 per share. This compares to earnings of $4.69 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 0.98%. A quarter ago, it was expected that this insulation products company would post earnings of $5.62 per share when it actually produced earnings of $5.68, delivering a surprise of 1.07%.Over the last four quarters, th ...

Sales Performance - Fourth quarter sales increased by 2.0% to $1.31 billion, with Specialty Distribution growing by 6.6%[2] - Full year 2024 sales reached a record $5.33 billion, with adjusted EBITDA of $1.07 billion[3] - The company expects mid-single digit decline in residential sales and low-single digit growth in commercial/industrial sales for 2025[17] - Net sales for Q4 2024 reached $1,312,206 thousand, a 2.0% increase from $1,286,074 thousand in Q4 2023[26] - The company's total net sales after eliminations for Q4 2024 were $1,312,206, a 2.0% increase from $1,286,074 in Q4 2023, with annual net sales growing by 2.6% to $5,329,803 from $5,194,694[31] - Installation segment sales for Q4 2024 were $788,554, a slight decrease of 0.2% from $790,414 in Q4 2023, while annual sales increased by 3.3% to $3,294,630 from $3,188,232[30] - Specialty Distribution segment sales increased by 6.6% to $601,830 in Q4 2024 compared to $564,468 in Q4 2023, with annual sales rising by 3.2% to $2,340,837 from $2,268,339[30] Financial Metrics - The adjusted EBITDA margin improved by 10 basis points to 19.7% in the fourth quarter[7] - Operating profit for the year ended December 31, 2024, was $886.3 million, with an operating margin of 16.6%[10] - Gross profit for the year ended December 31, 2024, was $1,624,918 thousand, compared to $1,603,820 thousand in 2023, reflecting a growth of 1.3%[26] - Net income for the year ended December 31, 2024, was $622,602 thousand, up from $614,254 thousand in 2023, representing a 1.1% increase[29] - Basic net income per share increased to $20.41 in 2024 from $19.44 in 2023, a rise of 5.0%[26] - Operating profit, as reported, for Q4 2024 was $217,450, up from $204,800 in Q4 2023, with an operating margin of 16.6% compared to 15.9% in the prior year[31] - Adjusted EBITDA for Q4 2024 was $258,025, reflecting a 2.5% increase from $251,641 in Q4 2023, while annual adjusted EBITDA rose by 2.4% to $1,074,595 from $1,049,160[31] - The adjusted EBITDA margin for the total company in Q4 2024 was 19.7%, slightly up from 19.6% in Q4 2023, with same branch EBITDA margin at 19.8%[33] Shareholder Returns - The company returned $966.4 million to shareholders through share repurchases, totaling approximately 2.5 million shares[3][14] - The new share repurchase authorization allows for up to $1 billion in additional stock buybacks, bringing total availability to $1.2 billion[15] - The company repurchased shares of common stock amounting to $966,352 thousand during the year[29] Acquisitions and Growth Strategy - The company completed 8 acquisitions in 2024, totaling $153.1 million in annual sales[3] - The company maintains a robust pipeline of M&A opportunities, prioritizing acquisitions for capital deployment[8] - Total acquisitions contributed $31,012 in sales for Q4 2024, with a total of $129,863 for the year, indicating growth from zero sales in the previous year[33] Cash Flow and Assets - Cash and cash equivalents at the end of 2024 were $400,318 thousand, down from $848,565 thousand at the end of 2023, a decrease of 52.8%[29] - The net cash provided by operating activities for 2024 was $776,026 thousand, compared to $849,409 thousand in 2023, a decrease of 8.6%[29] - Total assets decreased to $4,735,426 thousand in 2024 from $5,162,851 thousand in 2023, a decline of 8.3%[28] Expenses and Taxation - Selling, general, and administrative expenses for Q4 2024 were reported at $174,583, down from $186,316 in Q4 2023, with annual expenses totaling $738,575 compared to $724,995 in 2023[34] - The tax rate for the year was reported at 26.0%, with income tax expense for 2024 amounting to $218,186[35] Future Projections - For 2025, the company anticipates sales between $5.05 billion and $5.35 billion, with adjusted EBITDA ranging from $925 million to $1.075 billion[4] - For 2025, the estimated adjusted EBITDA range is projected between $925 million and $1,075 million, with estimated net income ranging from $519 million to $640 million[38]

Core Insights - TopBuild Corp. reported a 2.0% increase in fourth quarter sales to $1.31 billion, primarily driven by a 6.6% growth in Specialty Distribution [2][6] - The company achieved record results for 2024, with total sales of $5.3 billion and adjusted EBITDA of $1.07 billion [3][9] - For 2025, TopBuild anticipates sales between $5.05 billion and $5.35 billion, with adjusted EBITDA projected between $925 million and $1.075 billion [4][18] Fourth Quarter Highlights - Fourth quarter sales reached $1,312.2 million, up from $1,286.1 million in the same period last year [8] - Gross margin for the quarter was 29.9%, a slight decrease from 30.4% year-over-year [8] - Adjusted EBITDA margin improved to 19.7%, up from 19.6% in the previous year [8] Full Year Highlights - Total sales for 2024 were $5,329.8 million, compared to $5,194.7 million in 2023, marking a 2.6% increase [9] - The company completed eight acquisitions totaling $153.1 million in annual sales [3][7] - TopBuild returned $966.4 million to shareholders through share repurchases, demonstrating strong capital allocation [3][15] 2025 Outlook - The company expects residential sales to decline in the mid-single digits while commercial and industrial sales are projected to grow in the low single digits [19] - Interest expenses are anticipated to be between $49 million and $55 million, with capital expenditures estimated at 1.5% to 2.0% of sales [19][20] - The guidance does not include potential acquisitions or divestitures expected during the year [17][20] Capital Allocation - TopBuild's acquisitions remain a top priority for capital deployment, with a robust pipeline of opportunities [7][16] - The company has authorized up to $1.0 billion for share repurchases, in addition to the remaining $188.1 million from the previous authorization [16] Segment Performance - In the fourth quarter, Installation sales were $789 million, while Specialty Distribution sales were $602 million, reflecting a 6.6% increase in the latter [11] - For the full year, Installation sales totaled $3.3 billion, a 3.3% increase, while Specialty Distribution sales reached $2.34 billion, up 3.2% [11][12] Financial Metrics - Net income for the fourth quarter was $150.5 million, compared to $146.4 million in the prior year [8] - The company reported an operating profit of $217.5 million for the fourth quarter, up from $204.8 million year-over-year [8] - Adjusted EBITDA for the year was $1,074.6 million, a 2.4% increase from $1,049.2 million in 2023 [10][34]

Core Insights - TopBuild Corp. reported a 2.0% increase in fourth quarter sales to $1.31 billion, primarily driven by a 6.6% growth in Specialty Distribution [2][6] - The company achieved record full-year results for 2024, with sales reaching $5.3 billion and adjusted EBITDA of $1.07 billion [3][9] - For 2025, TopBuild anticipates sales between $5.05 billion and $5.35 billion, with adjusted EBITDA projected between $925 million and $1.075 billion [4][18] Fourth Quarter Highlights - Fourth quarter sales were $1,312,206 thousand, up from $1,286,074 thousand in the previous year [8] - Gross margin decreased to 29.9% from 30.4%, while adjusted EBITDA margin improved to 19.7% from 19.6% [8][34] - Installation sales were $789 million, down 0.2%, while Specialty Distribution sales increased by 6.6% to $602 million [10][12] Full Year Highlights - Total sales for 2024 were $5,329,803 thousand, compared to $5,194,694 thousand in 2023, marking a 2.6% increase [9] - The company completed eight acquisitions totaling $153.1 million in annual sales [3][7] - Capital returned to shareholders through share repurchases amounted to $966.4 million, with approximately 2.5 million shares repurchased [3][16] 2025 Outlook - The company expects residential sales to decline in the mid-single digits, while commercial and industrial sales are projected to grow in the low single digits [18] - The guidance does not include potential acquisitions or divestitures expected during the year [18] - Interest expense is anticipated to be between $49 million and $55 million, with capital expenditures estimated at 1.5% to 2.0% of sales [19] Capital Allocation - TopBuild's Board of Directors authorized a new share repurchase program of up to $1.0 billion, in addition to the remaining $188.1 million from the previous authorization [17] - The company maintained a disciplined approach to capital allocation, focusing on acquisitions as a top priority for deploying free cash flow [7][18] Segment Profitability - For the year ended December 31, 2024, the Installation segment reported an operating profit of $649,162 thousand, while the Specialty Distribution segment reported $352,431 thousand [13][14] - The operating margin for Installation was 19.7%, and for Specialty Distribution, it was 15.1% [13][14]

Core Viewpoint - Wall Street analysts forecast a quarterly earnings per share (EPS) of $5.08 for TopBuild, indicating an 8.3% year-over-year increase, with revenues expected to reach $1.31 billion, reflecting a 2% increase compared to the same quarter last year [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 0.8% in the past 30 days, indicating a reassessment by covering analysts [2]. - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Key Metrics Projections - Analysts project 'Net Sales- Specialty Distribution' to reach $568.07 million, representing a 0.6% increase from the previous year [5]. - 'Net Sales- Installation' is expected to be $813.49 million, indicating an 8.2% increase from the prior-year quarter [5]. - 'Operating profit, as reported- Installation' is anticipated to be $154.89 million, up from $150 million reported in the same quarter last year [5]. - The estimated 'Operating profit, as reported- Specialty Distribution' is $84.76 million, compared to $83.36 million in the same quarter of the previous year [6]. Stock Performance - TopBuild shares have decreased by 9.5% over the past month, contrasting with a 2.6% increase in the Zacks S&P 500 composite [6]. - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [6].

Group 1 - TopBuild Corp. will release its fourth quarter and year-end 2024 results on February 25, 2025, prior to 7:00 a.m. ET [1] - A conference call to review the financial results will be held at 9:00 a.m. ET on the same day [1] - The company is a leading installer and specialty distributor of insulation and building material products in the U.S. and Canada [3] Group 2 - TopBuild operates approximately 240 branches for insulation installation services across the United States [3] - The Specialty Distribution business has around 170 branches distributing building and mechanical insulation and related products [3] - The company serves residential, commercial, and industrial end markets [3]