Watsco (WSO) Earnings Call Presentation

Business Overview - Watsco operates in a highly fragmented industry, holding a leading market position [4, 13] - The company's business model involves contractors purchasing equipment, parts, and supplies to repair or replace HVAC systems [10] - Watsco has a significant geographic presence with 690 locations across the United States, Canada, and Latin America & Caribbean [12] - The company's revenue is primarily generated in the United States (90%), with Canada and Latin America contributing 5% each [19] - Residential HVAC equipment accounts for 54% of Watsco's revenue, followed by commercial HVAC equipment at 15% and other HVAC products at 27% [19] Technology and Digital Transformation - Watsco is focused on transforming the HVAC industry through technology, aiming to enhance customer experience and improve efficiency [23] - The company's annualized e-commerce revenue reached $2.4 billion in 2023, representing a 5% increase [32] - Watsco has digitized over 1.5 million product SKUs, accessible through its mobile app [29, 33] - E-commerce users experience approximately 50% less attrition compared to traditional customers [32] Financial Performance and Shareholder Value - From 1989 to 12/31/23, Watsco's revenues grew from $64 million to $7.3 billion, representing a 15% compound annual growth rate (CAGR) [41] - Over the same period, EBIT increased from $2 million to $795 million, with an 18% CAGR [41] - The company's market capitalization grew from $22 million to $16.9 billion, reflecting a 22% CAGR [41]