Watsco (WSO) investor relations material

Executive summary

• Revenue grew 2% year-over-year to $2.1 billion in Q2 2026, with residential HVAC equipment up 5% and same-store sales up 1%.

• The operating environment has normalized after years of volatility, with stabilizing markets and measurable results from digital investments.

• The acquisition of Jackson Supply added $20 million in June revenue, $230 million in annualized sales, and expanded Sunbelt market presence.

• E-commerce sales surged 13% in the first half of 2026, reaching $2.7 billion for the trailing 12 months and 37% of total sales.

• Year-to-date revenues increased 1% to $3.6 billion.

Financial highlights

• Gross profit was $579 million, with a gross margin of 27.5% versus 29.3% last year, reflecting normalization after prior-year anomalies.

• Operating income reached $238 million, down 12% year-over-year, with an operating margin of 11.3%.

• Earnings per share were $4.00, down from $4.52 last year.

• SG&A expenses rose 3% to $349 million (16.6% of sales), driven by technology investments and the Jackson Supply addition.

• Ended the quarter with $464 million in cash and no debt.

Outlook and guidance

• July organic growth was 4%-5%, with unit growth expected to continue into Q3.

• Management expects more conventional supply-chain trends, better inventory turns, and enhanced returns on invested capital for the remainder of 2026.

• No formal guidance provided, but the market is described as stable with regional differences.

• Focus remains on growth with existing and new customers, operating efficiencies, and leveraging technology.