IBP(IBP) - 2025 Q2 - Quarterly Results

Company Overview & Highlights This section provides an overview of IBP's record Q2 2025 financial performance, strategic outlook, acquisition activities, and capital allocation decisions Second Quarter 2025 Performance Highlights Installed Building Products (IBP) reported record second quarter 2025 results, with net revenue increasing 3.1% to $760.3 million and net income rising 5.8% to $69.0 million. Adjusted EBITDA also saw a 3.2% increase to $134.0 million, and diluted EPS grew 9.6% to $2.52 Key Performance Metrics (Millions, except per share) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Net Revenue | $760.3 | $737.6 | +3.1% | | Net Income | $69.0 | $65.2 | +5.8% | | Adjusted EBITDA | $134.0 | $129.8 | +3.2% | | Net Income per Diluted Share | $2.52 | $2.30 | +9.6% | | Adjusted Net Income | $80.8 | $80.5 | +0.4% | | Adjusted Net Income per Diluted Share | $2.95 | $2.84 | +3.9% | | Net Cash Flow from Operations | $90.3 | $79.0 | +14.3% | - The company achieved a second quarter record for net revenue, gross profit, and adjusted gross profit as a percent of net revenue[5][9][10] CEO Commentary and Strategic Outlook CEO Jeff Edwards highlighted IBP's strong financial results, attributing them to high-value installation services and market positioning. He expressed confidence in the long-term fundamentals of the U.S. housing industry despite near-term affordability challenges and emphasized a growth-focused capital allocation strategy, including disciplined acquisitions and returning capital to shareholders - IBP continues to deliver strong financial results, demonstrating high-value installation services for homebuilding customers[3] - The company is confident in the long-term fundamentals of the U.S. housing industry and its growth-focused capital allocation strategy, despite near-term housing affordability challenges[3] - Management maintains a disciplined approach to acquisitions, focusing on favorable returns on invested capital, and aims to enhance operational and financial performance while returning capital to shareholders through dividends and share repurchases[4] Acquisition Strategy and Update IBP continues its strategy of profitable growth through acquisitions, having acquired over $10 million in annual revenue year-to-date in 2025, with a target of at least $100 million. A notable acquisition in Q2 2025 was Pro Foamers, Inc., adding $4 million in annual revenue - IBP prioritizes profitable growth through acquiring well-run installers of insulation and complementary building products[5] Acquisition Metrics | Acquisition Metric | YTD 2025 | Target | | :----------------- | :------- | :----- | | Annual Revenue Acquired | Over $10 million | At least $100 million | - In May 2025, IBP acquired Pro Foamers, Inc., a spray foam and air barrier installer in Green Bay, Wisconsin, with $4 million in annual revenue, expanding its commercial end market presence[6] Capital Allocation: Dividends and Share Repurchases IBP declared a third-quarter cash dividend of $0.37 per share, representing a 6% increase from the prior year. The company also repurchased 300,000 shares for $49.2 million in Q2 2025 and 500,000 shares for $83.5 million in H1 2025, with approximately $416.5 million remaining under its stock repurchase program Quarterly Dividend Information | Capital Allocation | Q3 2025 Dividend | Q2 2025 Dividend | Q3 2024 Dividend | YoY Change (Q3) | | :----------------- | :--------------- | :--------------- | :--------------- | :-------------- | | Per Share Amount | $0.37 | $0.37 | $0.35 | +6% | Share Repurchase Activity | Share Repurchases | Q2 2025 | H1 2025 | Remaining Authorization | | :---------------- | :------ | :------ | :---------------------- | | Shares Repurchased | 300,000 | 500,000 | N/A | | Total Cost | $49.2 million | $83.5 million | N/A | | Available under Program | N/A | N/A | ~$416.5 million (expiring March 1, 2026) | Detailed Second Quarter 2025 Financial Results This section provides an in-depth analysis of IBP's Q2 2025 financial performance, focusing on revenue, profitability metrics, and EBITDA figures Revenue Analysis Net revenue for Q2 2025 reached a record $760.3 million, a 3.1% increase from Q2 2024. Consolidated same branch net revenue increased by 0.7%. Installation revenue grew 2.6% to $715.6 million, while Other revenue (manufacturing and distribution) increased to $44.7 million from $40.3 million. Residential same branch sales were down 1.1%, but commercial same branch sales were up 9.3% Net Revenue Breakdown (Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Net Revenue | $760.3 | $737.6 | +3.1% | | Installation Revenue | $715.6 | $697.3 | +2.6% | | Other Revenue | $44.7 | $40.3 | +10.9% | - Consolidated same branch net revenue increased 0.7% YoY[9] - Residential same branch sales within the Installation segment decreased 1.1%, while commercial same branch sales increased 9.3% from the prior year quarter[9] Profitability Metrics Gross profit increased 3.4% to $259.9 million, with gross profit margin reaching a record 34.2%. Net income rose 5.8% to $69.0 million, resulting in a net profit margin of 9.1%. Operating income for Q2 2025 was $101.0 million, up from $94.8 million in Q2 2024 Profitability Overview (Millions, except percentages) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Gross Profit | $259.9 | $251.4 | +3.4% | | Gross Profit Margin | 34.2% | 34.1% | +0.1 pp | | Operating Income | $101.0 | $94.8 | +6.5% | | Net Income | $69.0 | $65.2 | +5.8% | | Net Profit Margin | 9.1% | 8.8% | +0.3 pp | - Selling and administrative expense as a percent of total revenue increased to 19.6% compared to 19.1% in the prior year quarter[11] EBITDA and Adjusted EBITDA EBITDA for Q2 2025 increased 7.2% to $128.2 million. Adjusted EBITDA grew 3.2% to $134.0 million, maintaining an Adjusted EBITDA margin of 17.6% for both Q2 2025 and Q2 2024 EBITDA and Adjusted EBITDA (Millions, except percentages) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | EBITDA | $128.2 | $119.6 | +7.2% | | Adjusted EBITDA | $134.0 | $129.8 | +3.2% | | Adjusted EBITDA Margin | 17.6% | 17.6% | 0.0 pp | Consolidated Financial Statements This section presents the condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods Condensed Consolidated Statements of Operations and Comprehensive Income The statement details IBP's financial performance for the three and six months ended June 30, 2025 and 2024. Key figures include net revenue of $760.3 million for Q2 2025 (up from $737.6M in Q2 2024) and net income of $69.0 million (up from $65.2M). Diluted EPS for Q2 2025 was $2.52, compared to $2.30 in Q2 2024 Consolidated Statements of Operations (Millions, except per share) | Metric (Millions, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $760.3 | $737.6 | $1,445.1 | $1,430.5 | | Gross profit | $259.9 | $251.4 | $483.6 | $485.9 | | Operating income | $101.0 | $94.8 | $170.8 | $182.7 | | Net income | $69.0 | $65.2 | $114.4 | $121.1 | | Diluted EPS | $2.52 | $2.30 | $4.15 | $4.27 | | Cash dividends declared per share | $0.37 | $0.35 | $2.44 | $2.30 | Condensed Consolidated Balance Sheets As of June 30, 2025, IBP reported total assets of $2,020.1 million, a slight decrease from $2,059.9 million at December 31, 2024. Cash and cash equivalents stood at $305.2 million, down from $327.6 million. Total liabilities were $1,355.6 million, and total stockholders' equity was $664.5 million Consolidated Balance Sheet Highlights (Millions) | Metric (Millions) | June 30, 2025 | December 31, 2024 | Change | | :---------------- | :------------ | :---------------- | :----- | | Total Assets | $2,020.1 | $2,059.9 | -$39.8 | | Cash and cash equivalents | $305.2 | $327.6 | -$22.4 | | Accounts receivable | $447.6 | $433.9 | +$13.7 | | Total current assets | $1,017.4 | $1,054.9 | -$37.5 | | Goodwill | $436.9 | $432.6 | +$4.3 | | Total Liabilities | $1,355.6 | $1,354.6 | +$1.0 | | Total Stockholders' Equity | $664.5 | $705.3 | -$40.8 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities increased to $182.5 million from $163.8 million in the prior year period. Net cash used in investing activities was $43.2 million, and net cash used in financing activities was $161.7 million, primarily due to dividends paid and common stock repurchases Consolidated Statements of Cash Flows (Millions) | Metric (Millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change | | :---------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $182.5 | $163.8 | +$18.7 | | Net cash used in investing activities | $(43.2) | $(55.2) | +$12.0 | | Net cash used in financing activities | $(161.7) | $(114.8) | -$46.9 | | Net change in cash and cash equivalents | $(22.4) | $(6.2) | -$16.2 | | Cash and cash equivalents at end of period | $305.2 | $380.3 | -$75.1 | - Significant financing outflows were driven by $67.7 million in dividends paid and $83.5 million in common stock repurchases during the first half of 2025[25] Segment and Market Performance Analysis This section analyzes IBP's performance across its operating segments and end markets, including detailed growth metrics and the impact of acquired versus same branch revenue Segment Information IBP operates in three segments: Installation, Distribution, and Manufacturing, with Distribution and Manufacturing reported under "Other." The Installation segment's revenue increased 2.6% to $715.6 million in Q2 2025, with its gross profit rising 5.0% to $265.5 million, and gross profit percentage improving to 37.1% from 36.5% YoY Segment Performance (Millions, except percentages) | Segment (Millions) | Q2 2025 Revenue | Q2 2024 Revenue | YoY Change (Revenue) | Q2 2025 Gross Profit | Q2 2024 Gross Profit | YoY Change (Gross Profit) | Q2 2025 Gross Profit % | Q2 2024 Gross Profit % | | :----------------- | :-------------- | :-------------- | :------------------- | :------------------- | :------------------- | :------------------------ | :--------------------- | :--------------------- | | Installation | $715.6 | $697.3 | +2.6% | $265.5 | $254.2 | +5.0% | 37.1% | 36.5% | | Other (Distribution & Manufacturing) | $56.7 (before eliminations) | $44.0 (before eliminations) | +28.9% | $13.0 (before eliminations) | $11.5 (before eliminations) | +13.0% | N/A | N/A | Revenue by End Market In Q2 2025, residential new construction remained the largest revenue contributor at $548.8 million (72% of total), showing a 1.2% increase. Commercial revenue grew significantly by 10.0% to $123.6 million (16% of total), while repair and remodel revenue increased 1.6% to $43.2 million (6% of total) Revenue by End Market (Millions, except percentages) | End Market (Millions) | Q2 2025 Revenue | Q2 2025 % of Total | Q2 2024 Revenue | Q2 2024 % of Total | YoY Change (Revenue) | | :-------------------- | :-------------- | :----------------- | :-------------- | :----------------- | :------------------- | | Residential new construction | $548.8 | 72% | $542.4 | 74% | +1.2% | | Repair and remodel | $43.2 | 6% | $42.5 | 6% | +1.6% | | Commercial | $123.6 | 16% | $112.4 | 15% | +10.0% | | Other | $44.7 | 6% | $40.3 | 5% | +10.9% | | Total Net Revenue | $760.3 | 100% | $737.6 | 100% | +3.1% | Supplementary Growth Metrics Consolidated sales growth was 3.1% in Q2 2025, with consolidated same branch sales growth at 0.7%. Installation segment sales grew 2.6%, but residential same branch sales declined 1.1%. Commercial sales growth was strong at 10.0%, with commercial same branch sales up 9.3%. U.S. housing market completions saw a significant decline, with total completions down 13.1% and multi-family completions down 19.7% Sales and Completions Growth | Metric | Q2 2025 Growth | Q2 2024 Growth | H1 2025 Growth | H1 2024 Growth | | :-------------------------------- | :------------- | :------------- | :------------- | :------------- | | Consolidated Sales Growth | 3.1% | 6.6% | 1.0% | 5.9% | | Consolidated Same Branch Sales Growth | 0.7% | 4.8% | (1.7)% | 3.9% | | Installation Sales Growth | 2.6% | 7.0% | 0.7% | 6.2% | | Installation Residential Same Branch Sales Growth | (1.1)% | 7.3% | (2.8)% | 5.6% | | Installation Commercial Sales Growth | 10.0% | (4.1)% | 3.8% | (0.7)% | | Installation Commercial Same Branch Sales Growth | 9.3% | (5.3)% | 3.3% | (3.1)% | | U.S. Total Completions Growth | (13.1)% | 12.6% | (6.5)% | 9.1% | | U.S. Single-Family Completions Growth | (9.8)% | 8.6% | (3.4)% | 1.8% | | U.S. Multi-Family Completions Growth | (19.7)% | 20.7% | (12.2)% | 24.4% | - Installation segment's same branch volume growth was negative at (1.1)% in Q2 2025, while price/mix growth was 0.8%[48] Incremental Revenue and Adjusted EBITDA Margins In Q2 2025, acquired revenue contributed $17.7 million (78.0% of total revenue increase), significantly more than same branch revenue which contributed $5.0 million (22.0%). Acquired operations also showed a higher Adjusted EBITDA margin contribution at 18.6% compared to 16.0% for same branch. For the six months ended June 30, 2025, same branch revenue decreased, leading to a decremental Adjusted EBITDA margin Revenue Increase Contribution (Millions) | Revenue Increase (Millions) | Q2 2025 | Q2 2025 % Total | Q2 2024 | Q2 2024 % Total | H1 2025 | H1 2025 % Total | H1 2024 | H1 2024 % Total | | :-------------------------- | :------ | :-------------- | :------ | :-------------- | :------ | :-------------- | :------ | :-------------- | | Same Branch | $5.0 | 22.0% | $32.5 | 71.4% | $(24.0) | (163.3)% | $51.9 | 65.6% | | Acquired | $17.7 | 78.0% | $13.0 | 28.6% | $38.7 | 263.3% | $27.2 | 34.4% | | Total | $22.7 | 100.0% | $45.5 | 100.0% | $14.7 | 100.0% | $79.1 | 100.0% | Adjusted EBITDA Margin Contributions (Millions) | Adjusted EBITDA Margin Contributions (Millions) | Q2 2025 | Q2 2025 % Margin | Q2 2024 | Q2 2024 % Margin | H1 2025 | H1 2025 % Margin | H1 2024 | H1 2024 % Margin | | :-------------------------------------------- | :------ | :--------------- | :------ | :--------------- | :------ | :--------------- | :------ | :--------------- | | Same Branch | $0.8 | 16.0% | $5.4 | 16.6% | $(17.4) | (72.5)% | $15.1 | 29.1% | | Acquired | $3.3 | 18.6% | $2.3 | 17.7% | $6.7 | 17.3% | $4.8 | 17.6% | | Total | $4.1 | 18.1% | $7.7 | 16.9% | $(10.7) | NMF | $19.9 | 25.2% | - For the six months ended June 30, 2025, same branch revenue decreased, resulting in a negative same branch adjusted EBITDA margin contribution, indicating a decremental margin[51] Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, including Adjusted Net Income, Adjusted Gross Profit, Adjusted Selling and Administrative Expense, and Adjusted EBITDA Explanation of Non-GAAP Measures IBP uses non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit, and Adjusted Selling and Administrative expense to provide investors with useful information regarding core operations and comparative performance. These measures adjust GAAP figures for items not considered part of core operations, like share-based compensation, acquisition-related expenses, and amortization - Non-GAAP measures are used to adjust GAAP net income, EBITDA, gross profit, and selling and administrative expense for items not considered part of core operations, aiding in analyzing and benchmarking business performance[30] - Adjusted EBITDA is considered useful for comparing operating performance by removing the effect of capital structure, asset base, income taxes, and non-core items, but it has limitations as it excludes material expenses like interest and taxes[31][32] - Adjusted Net Income is used to measure comparative operating performance by removing the effect of certain non-core items such as discontinued operations, acquisition-related expenses, and amortization expense, and their tax impacts[33] Adjusted Net Income Reconciliation Adjusted Net Income for Q2 2025 was $80.8 million, up from $80.5 million in Q2 2024. Diluted Adjusted Net Income per share was $2.95, compared to $2.84 in the prior year quarter. Adjustments primarily include share-based compensation, acquisition-related expenses, and amortization expense, net of their tax impact Adjusted Net Income Reconciliation (Millions, except per share) | Metric (Millions, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income, as reported | $69.0 | $65.2 | $114.4 | $121.1 | | Share-based compensation expense | $5.3 | $4.7 | $11.2 | $8.7 | | Acquisition related expenses | $0.5 | $0.6 | $1.0 | $1.1 | | Amortization expense | $10.1 | $10.5 | $20.2 | $21.2 | | Tax impact of adjusted items | $(4.1) | $(5.4) | $(8.4) | $(10.4) | | Adjusted net income | $80.8 | $80.5 | $138.4 | $150.7 | | Diluted net income per share, as reported | $2.52 | $2.30 | $4.15 | $4.27 | | Diluted adjusted net income per share | $2.95 | $2.84 | $5.02 | $5.32 | - The company ceased reporting financial results for dispositions as the closing of a commercial end market-oriented branch is essentially complete and its financial results are insignificant as of Q2 2025[35] Adjusted Gross Profit Reconciliation Adjusted Gross Profit for Q2 2025 was $260.2 million, slightly higher than the reported gross profit of $259.9 million, primarily due to the addback of share-based compensation expense. The Adjusted Gross Profit margin remained consistent with the GAAP gross profit margin at 34.2% Adjusted Gross Profit Reconciliation (Millions) | Metric (Millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross profit | $259.9 | $251.4 | $483.6 | $485.9 | | Share-based compensation expense | $0.3 | $0.3 | $0.6 | $0.6 | | Adjusted gross profit | $260.2 | $251.7 | $484.2 | $486.5 | | Gross profit margin | 34.2% | 34.1% | 33.5% | 34.0% | | Adjusted gross profit margin | 34.2% | 34.1% | 33.5% | 34.0% | Adjusted Selling and Administrative Expense Reconciliation Adjusted Selling and Administrative expense for Q2 2025 was $143.3 million, lower than the reported $148.8 million, after adjusting for share-based compensation and acquisition-related expenses. As a percentage of total revenue, Adjusted Selling and Administrative expense was 18.8%, compared to 19.6% for the reported expense Adjusted Selling and Administrative Expense Reconciliation (Millions) | Metric (Millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Selling and Administrative expense, as reported | $148.8 | $141.2 | $292.6 | $277.1 | | Share-based compensation expense | $5.0 | $4.4 | $10.6 | $8.2 | | Acquisition related expenses | $0.5 | $0.6 | $1.0 | $1.1 | | Adjusted Selling and Administrative expense | $143.3 | $136.2 | $281.0 | $267.8 | | Selling and Administrative expense - % Total revenue | 19.6% | 19.1% | 20.2% | 19.4% | | Adjusted Selling and Administrative expense - % Total revenue | 18.8% | 18.5% | 19.4% | 18.7% | EBITDA and Adjusted EBITDA Reconciliation The reconciliation shows EBITDA for Q2 2025 at $128.2 million and Adjusted EBITDA at $134.0 million. Adjustments to net income to arrive at Adjusted EBITDA include interest expense, income tax provision, depreciation and amortization, acquisition-related expenses, and share-based compensation expense EBITDA and Adjusted EBITDA Reconciliation (Millions) | Metric (Millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income, as reported | $69.0 | $65.2 | $114.4 | $121.1 | | Interest expense | $8.3 | $8.2 | $16.6 | $20.1 | | Provision for income tax | $24.4 | $21.5 | $40.3 | $42.0 | | Depreciation and amortization | $26.5 | $24.7 | $52.9 | $49.2 | | EBITDA | $128.2 | $119.6 | $224.2 | $232.4 | | Acquisition related expenses | $0.5 | $0.6 | $1.0 | $1.1 | | Share based compensation expense | $5.3 | $4.7 | $11.2 | $8.7 | | Asset impairment | $0.0 | $4.9 | $0.0 | $4.9 | | Adjusted EBITDA | $134.0 | $129.8 | $236.4 | $247.1 | | Adjusted EBITDA margin | 17.6% | 17.6% | 16.4% | 17.3% | Additional Information This section provides background information on Installed Building Products, outlines forward-looking statements, and details the conference call and webcast for Q2 2025 results About Installed Building Products Installed Building Products, Inc. is a leading installer of new residential insulation and a diversified installer of complementary building products across the continental U.S. The company manages the entire installation process, serving new and existing single-family, multi-family, and commercial projects through over 250 branch locations - IBP is one of the largest new residential insulation installers in the U.S. and a diversified installer of complementary building products (waterproofing, fire-stopping, garage doors, etc.)[16] - The company manages all aspects of the installation process, from material purchase to timely supply and quality installation, serving residential and commercial projects in 48 continental states and D.C. through over 250 branch locations[16] Forward-Looking Statements The press release contains forward-looking statements regarding the housing and commercial markets, operations, financial model, dividends, demand for services, expansion, acquisitions, and profitability. These statements involve risks and uncertainties, and actual results may differ materially due to various factors, including economic conditions, interest rates, material prices, and other risks detailed in SEC filings. The company does not intend to update these statements unless required by law - Forward-looking statements relate to future events and depend on circumstances that may or may not occur, involving risks and uncertainties[17] - Actual results may differ materially due to factors such as general economic and industry conditions, increases in mortgage interest rates, rising home prices, inflation, material price and supply environment, and other risks outlined in the Company's Form 10-K[17] - The company has no obligation to update any forward-looking statements after the date of the press release, except as required by federal securities laws[17] Conference Call and Webcast IBP hosted a conference call and webcast on August 7, 2025, at 10:00 a.m. Eastern Time to discuss the Q2 2025 results. Replay information is available through September 7, 2025 - A conference call and webcast were held on August 7, 2025, to discuss the Q2 2025 results[14] - A replay of the conference call is available through September 7, 2025, via dial-in or webcast on the company's investor relations website[14]