Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global equities continue to rally in the third quarter, the period with double-digit YTD gains. Major US indices like Russell 1000®, Russell Midcap®, and Russell 2000® reached record highs in the period. In the quarter, the fund’s Investor Class fund ARTSX returned 8.69%, Advisor Class fund APDSX posted a return of 8.75%, and Institutional ...

Financial Data and Key Metrics Changes - Consolidated net revenue for Q3 2025 increased 2% to a record $778 million compared to $761 million for the same period last year [16] - Adjusted EBITDA for Q3 2025 increased to a record $140 million, reflecting an adjusted EBITDA margin of 18% [18] - Adjusted net income increased to $86 million or $3.18 per diluted share [18] - Cash flow from operating activities increased 16% to $307 million for the nine months ended September 30, 2025 [10][18] - Adjusted gross margin for Q3 2025 was 34%, up from 33.8% in the prior year period [17] Business Line Data and Key Metrics Changes - Same branch sales for the installation segment were flat for Q3, with a 12% increase in commercial same branch sales offset by a 3% decline in residential same branch sales [16] - Third quarter installation sales in the multifamily end market were down 7% on a same branch basis [9] - Heavy commercial same branch sales growth exceeded 30% during Q3 2025 [17] - Same branch new single-family installation sales were down 2% [9] Market Data and Key Metrics Changes - Single-family starts year-to-date through August 2025 decreased by 5% from the prior year, while multifamily starts decreased by 15% for the same period [12] - The South region, which represents about 45% of residential sales, was essentially flat in the quarter, while the West region, accounting for roughly 20% of residential sales, was down very low single digits [42] Company Strategy and Development Direction - The company remains focused on growing earnings and cash flow while diligently deploying capital to shareholders, having returned nearly $213 million to shareholders through dividends and stock repurchases [8] - The company is pursuing acquisitions in well-run businesses that support attractive returns on invested capital, particularly in the fragmented residential installation market [11] - The company is optimistic about the long-term fundamentals of the U.S. housing construction industry despite current challenges [8][13] Management's Comments on Operating Environment and Future Outlook - Management expects residential housing starts to be flat compared to 2025, influenced by consumer confidence and buyer activity during the spring home selling season [13] - The company believes it operates from a position of strength and is flexible in navigating potential near-term challenges [14] - Management noted that while there are headwinds in the multifamily market, they are strategically gaining market share [25] Other Important Information - The company published its 2025 ESG report, highlighting efforts in environmental sustainability and community engagement [8] - The company has a net debt to trailing twelve-month adjusted EBITDA leverage ratio of 1.09 times, well below the target of 2 times [19] - The fourth quarter dividend of $0.37 per share represents a 6% increase over the prior year period [20] Q&A Session Summary Question: What is the outlook for multifamily and commercial backlogs? - Management indicated that while there are continued headwinds in the multifamily market, they are seeing building of backlogs and gaining share in new markets [24][25] Question: Are there any delays in the commercial side? - Management noted that while there are no widespread project delays, some select markets are experiencing delays, particularly influenced by the trades that come before them [32] Question: How is the company performing relative to competitors? - Management stated that they have outperformed the market opportunity, particularly with regional and local builders, despite headwinds in the entry-level market [50][51] Question: What are the expectations for pricing and gross margins? - Management expects continued pricing pressure in the entry-level market but is confident in maintaining margins through effective service and value provided to builders [129] Question: What is the growth outlook for the heavy commercial segment? - Management expressed confidence in the heavy commercial business continuing to deliver strong results, with significant opportunities for organic growth [115][120]

INVESTOR PRESENTATION INSTALLED BUILDING PRODUCTS Q3 2025 NYSE: IBP NOV 5, 2025 Safe Harbor This presentation contains "forward-looking statements" as defined under U.S. federal securities laws. Forward -looking statements are generally identified by the use of the words "will," "may," "believes," "expects," "forecast," "intends," "anticipates," "projects," "outlook," "target," "plans" and "seeks," and, in each case their negative, and other variations or comparable terminology. Forward-looking statements a ...

Core Insights - Owens Corning reported revenue of $2.68 billion for the quarter ended September 2025, reflecting an 11.9% decrease year-over-year [1] - The company's EPS was $3.67, down from $4.38 in the same quarter last year, with a surprise of +0.82% compared to the consensus estimate of $3.64 [1][3] - The stock has returned -8% over the past month, underperforming the Zacks S&P 500 composite, which increased by +1% [3] Revenue Breakdown - Insulation segment net sales were $941 million, slightly above the average estimate of $936.09 million, representing a -0.5% change year-over-year [4] - Doors segment net sales reached $545 million, exceeding the average estimate of $541.68 million, but showing a -4.9% change year-over-year [4] - Roofing segment net sales were $1.24 billion, below the estimated $1.28 billion, but marked a +15% increase compared to the year-ago quarter [4] EBITDA Performance - Roofing segment EBITDA was reported at $423 million, lower than the average estimate of $439.8 million [4] - Doors segment EBITDA was $56 million, significantly below the average estimate of $70.25 million [4] - Insulation segment EBITDA was $212 million, slightly above the average estimate of $206.03 million [4]

Core Insights - TopBuild Corp. reported third quarter sales of $1.4 billion, reflecting a 1.4% increase, and an adjusted EBITDA margin of 19.8% [1][2][5] - The company raised its 2025 sales outlook to a range of $5.35 to $5.45 billion, with adjusted EBITDA expected between $1.01 to $1.06 billion, incorporating contributions from recent acquisitions [1][3][14] Financial Performance - For the three months ended September 30, 2025, reported sales were $1,393,158, compared to $1,373,268 in the same period of 2024, with a gross profit of $418,920 [5][22] - The gross margin decreased to 30.1% from 30.7% year-over-year, while SG&A expenses increased to $203,910, representing 14.6% of sales [5][22] - Net income for the third quarter was $142,226, down from $168,960 in the prior year, with diluted earnings per share of $5.04 [5][22] Segment Performance - Installation Services segment sales were $858 million, a slight increase of 0.2%, while Specialty Distribution sales rose by 1.4% to $609 million [8][27] - Year-to-date, the company completed acquisitions totaling approximately $1.2 billion in annual revenue, enhancing its insulation and commercial roofing businesses [3][10] Acquisitions and Growth Strategy - TopBuild has prioritized acquisitions, spending approximately $851.2 million year-to-date, with additional acquisitions expected to close in the fourth quarter [10][11] - Recent acquisitions include Progressive Roofing and Specialty Products and Insulation, which are expected to contribute significantly to future growth [3][11] Market Outlook - The company remains optimistic about long-term fundamentals despite current challenges in residential construction due to weak consumer confidence [4] - The strength in commercial and industrial markets is viewed as a positive indicator for future opportunities [4]

Core Insights - TopBuild Corp. announced four acquisitions that will collectively add approximately $53 million in annual revenue, enhancing its business operations in insulation and commercial roofing [2][6] Company Overview - TopBuild Corp. is a leading installer of insulation and commercial roofing, as well as a specialty distributor of insulation and related building products in the U.S. and Canada [3] - The company operates over 200 branches for installation services and more than 250 branches for specialty distribution across the U.S. and Canada [3] Acquisitions Details - The acquisitions include: - **Insulation Fabrics**: Based in Alpharetta, Georgia, generates approximately $6.1 million in annual revenue, specializes in insulation netting and protective equipment [6] - **Diamond Door Products**: Located in Hempstead, Texas, generates about $30.4 million in annual revenue, focuses on insulated steel door systems for commercial and industrial buildings [6] - **Performance Insulation Fabricators**: Based in Nashville, Tennessee, generates approximately $8.9 million in annual revenue, distributes mechanical insulation for commercial and industrial markets [6] - **L&L Insulation**: A residential insulation installation business based in Fort Collins, Colorado, expected to close in November, generates about $7.2 million in annual revenue [6]

Group 1 - TopBuild Corp. (NYSE:BLD) is involved in supplying and installing insulation and building materials for various construction markets, including residential, commercial, and industrial [1] - Jim Cramer expressed concerns about the stock being overvalued despite liking the company, suggesting that investors should consider trimming their positions [1] - Truist raised the stock price target for TopBuild from $370 to $390 while maintaining a Hold rating, citing the company's acquisition of Specialty Products as a factor that enhances its industrial insulation distribution and fabrication capabilities [1] Group 2 - Following the acquisition and a recent commercial roofing installation deal, non-residential operations now account for 47% of TopBuild's business [1]

Core Insights - Investment advisor Paradiem, LLC significantly increased its stake in Owens Corning by acquiring 85,047 shares in Q3 2025, bringing its total holdings to 94,067 shares valued at $13.31 million [4][11] - Owens Corning's stock price as of October 17, 2025, was $126.96, reflecting a one-year decline of 33.04%, underperforming the S&P 500 by 45.03 percentage points [5][11] - Despite macroeconomic challenges, Owens Corning reported a 10% year-over-year sales growth in Q2, achieving $2.75 billion in revenue, and a 34% increase in diluted earnings per share to $3.91 for continuing operations [12][13] Company Overview - Owens Corning is a leading global manufacturer specializing in insulation, roofing, and fiberglass composite products, serving various construction and industrial markets [7][8] - The company operates through three segments: composites, insulation, and roofing, generating revenue from direct sales and distribution of building materials [8] - Key financial metrics include a total revenue of $11.74 billion and a net income of $333 million for the trailing twelve months [6] Investment Context - Paradiem's increased investment in Owens Corning indicates confidence in the company's potential despite its stock price decline from a 52-week high of $214.53 [11] - The construction sector has faced challenges due to higher interest rates and inflation, prompting Owens Corning to divest less profitable businesses and focus on North American and European markets [12] - The anticipated Federal Reserve interest rate cuts may stimulate the construction industry, making Owens Corning an attractive investment opportunity [14]

Core Viewpoint - Installed Building Products, Inc. has announced the acquisition of Echols Glass & Mirror, Inc. and Vanderkoy Bros, LLC, which will enhance its geographic presence and diversify its revenue streams in the building products sector [1] Group 1: Acquisitions - The acquisition of Echols Glass & Mirror, Inc. and Vanderkoy Bros, LLC is aimed at expanding IBP's geographic footprint across the U.S. [1] - These acquisitions are expected to further diversify IBP's revenue and cash flows within the attractive building products market [1]

Core Insights - Lowe's is facing challenges in attracting customers due to inflation, tariffs, and an uncertain housing market, despite a slight increase in sales during the second quarter [1] - Customer visits to Lowe's same-store locations decreased by 3.9% year-over-year, indicating a concerning trend in customer behavior [2] - The U.S. housing market challenges and higher labor costs have led professional contractors to focus on smaller projects rather than large home improvements [2][3] Financial Performance - Comparable sales increased by 1.1% year-over-year, while the average customer spending per purchase rose by 2.9%, but comparable transactions declined by 1.8% [7] - Existing-home sales dropped by 0.2% month-over-month in August, with the median existing-home sales price increasing to $422,600, a 2% year-over-year increase [3] Strategic Moves - Lowe's completed an $8.8 billion acquisition of Foundation Building Materials to enhance its offerings to professional customers [5][6] - This acquisition is part of Lowe's strategy to accelerate sales and serve a $250 billion total addressable market [7] - The company previously acquired Artisan Design Group for about $1.3 billion, further expanding its pro offerings [8] Industry Context - Lowe's acquisition strategy mirrors that of Home Depot, which has also increased its Pro offerings in response to similar customer behavior trends [9] - Home Depot recently closed a $5.5 billion acquisition of GMS, enhancing its position in the building materials distribution market [10][11]