Financial Performance - Watsco reported full-year revenues of $7.2 billion for 2025, a 52% increase from $4.8 billion in 2019, with a compound annual growth rate (CAGR) of 7%[9] - The company's operating income for 2025 was $720 million, up 96% from $367 million in 2019, reflecting a CAGR of 12%[9] - Watsco's earnings per share (EPS) for 2025 was $12.25, an 88% increase from $6.50 in 2019[9] - Revenues for Q4 2025 were $1,578,757, a decrease of 9.9% from $1,753,962 in Q4 2024[25] - The diluted earnings per share for 2025 was $12.25, down from $13.30 in 2024, a decrease of 7.9%[25] Profitability and Margins - Gross margin improved to a record 28.0%, an increase of 370 basis points from 24.3% in 2019[9] - Gross profit margin improved to 27.1% in Q4 2025 from 26.7% in Q4 2024[25] Cash Flow and Balance Sheet - The company maintained a debt-free balance sheet with $780 million in cash and investments, resulting in a net cash increase of $814 million since 2019[9] - Operating cash flow reached $570 million for the year, with a record $400 million in the fourth quarter, reflecting a sharp reduction in inventory[17] - Net cash provided by operating activities was $569,613 in 2025, down from $773,102 in 2024, a decrease of 26.4%[29] - Cash and cash equivalents at the end of 2025 were $433,283, down from $526,271 at the end of 2024, a decline of 17.7%[29] Assets and Liabilities - Total current assets decreased to $2,954,506 in 2025 from $3,079,981 in 2024, a decline of 4.1%[28] - Total liabilities decreased to $1,192,744 in 2025 from $1,415,285 in 2024, a reduction of 16.0%[28] Dividends and Investments - Dividends on common stock increased to $473,765 in 2025 from $423,521 in 2024, an increase of 11.9%[29] - Business acquisitions net of cash acquired amounted to $19,198 in 2025, compared to $5,173 in 2024, indicating increased investment in growth[29] E-commerce and Technology - E-commerce sales totaled approximately $2.5 billion in 2025, accounting for 35% of overall sales, with some regions exceeding 60% e-commerce penetration[20] - Watsco plans to continue investing in technology, with over $250 million spent in the last five years, to enhance customer experience and operational efficiency[16] Customer Engagement - Watsco's HVAC Pro+ Mobile Apps user community grew by 15% to approximately 73,000 users, enhancing customer engagement[20] Acquisitions - The company acquired three distributors in key markets during 2025, contributing to a total of 12 acquisitions since 2019, representing approximately $1.6 billion in annualized sales[19]
Watsco(WSO_B) - 2025 Q4 - Annual Results