TopBuild(US:BLD)2025-11-04 21:06Financial Performance - Net sales for Q3 2025 were $1,393,158, a 1.4% increase from $1,373,268 in Q3 2024, driven by a 7.9% increase from acquisitions[119] - Gross profit margin decreased to 30.1% in Q3 2025 from 30.7% in Q3 2024, primarily due to lower sales volume and customer price pressures[120] - Operating profit for Q3 2025 was $215,010, down 11.9% from $243,993 in Q3 2024, with operating margin decreasing from 17.8% to 15.4%[119] - Net income for Q3 2025 was $142,226, compared to $168,960 in Q3 2024, resulting in a net margin of 10.2%[119] - For the first nine months of 2025, net sales decreased by 2.3% to $3,923,839 from $4,017,597 in the same period of 2024[131] - Gross profit margin for the first nine months of 2025 was 29.7%, down from 30.7% in 2024, impacted by one-time expenses and lower sales volume[133] Segment Performance - Installation Services segment net sales increased by 0.2% to $858,264 in Q3 2025, while Specialty Distribution segment sales rose by 1.4% to $608,892[123] - Installation Services segment sales fell by $121.6 million, or 4.9%, primarily due to a 10.2% lower sales volume, partially offset by a 4.8% increase from acquisitions[138] - Operating profit margin for Installation Services decreased to 18.9% from 19.9% due to lower sales volume and higher acquisition-related amortization[139] - Specialty Distribution segment sales increased by $28.9 million, or 1.7%, driven by a 2.7% increase from acquisitions[141] - Operating profit margin for Specialty Distribution decreased to 13.8% from 15.1%, impacted by one-time expenses and lower sales volume[142] Expenses and Taxation - Selling, general, and administrative expenses as a percentage of sales were 14.1% for the first nine months of 2025, slightly up from 14.0% in 2024[134] - Other expense, net, increased to $24.5 million in Q3 2025 from $16.1 million in Q3 2024, primarily due to higher interest expenses[129] - Income tax expense for Q3 2025 was $48.3 million, with an effective tax rate of 25.3%, compared to $58.9 million and 25.9% in Q3 2024[130] - Other net expenses rose to $52.2 million, up from $30.8 million, primarily due to lower interest income and higher interest expenses[143] Cash Flow and Liquidity - Net cash provided by operating activities increased by $69.8 million to $579.6 million for the nine months ended September 30, 2025[145] - Net cash used in investing activities was $892.3 million, mainly for acquisitions totaling $851.2 million[146] - Total liquidity as of September 30, 2025, was $2,075.8 million, significantly up from $836.5 million at the end of 2024[150] Market Outlook and Interest Rates - The company remains optimistic about long-term fundamentals in residential construction despite near-term uncertainties[152] - As of September 30, 2025, the applicable interest rate was 5.41%[165] - A 100-basis point increase in the interest rate would lead to a $12.1 million increase in annualized interest expense[165] - There was no outstanding balance under the revolving facility as of September 30, 2025[165]