Beacon Roofing Supply (BECN) Q4 2024 earnings summary

Executive summary

• Achieved record fourth quarter and full-year net sales, with Q4 net sales up 4.5% to $2.4B and full-year net sales up 7.1% to $9.8B, alongside record adjusted EBITDA of $930M, despite market headwinds and higher operating expenses.

• Growth was driven by acquisitions, greenfield expansion, digital and private label sales, and operational efficiency initiatives, including Ambition 2025 and Bottom Quintile Branch process.

• Returned $225 million to shareholders through share repurchases, reducing share count by over 23% since 2022 and to 61.5M shares outstanding.

• Ambition 2025 and operational excellence initiatives supported growth and shareholder value creation.

• Digital channel and private label sales reached record penetration, with digital sales up 20% year-over-year.

Financial highlights

• Q4 net sales were $2.4B, up 4.5% year-over-year; full-year net sales reached $9.8B, up 7.1%; Q4 adjusted EBITDA was $222.5M, and full-year adjusted EBITDA was $930M.

• Q4 net income was $83.6M (3.5% of sales); full-year net income was $362M (3.7% of sales); diluted EPS for Q4 was $1.32, and for the year $5.68.

• Gross margin for Q4 and full year was 25.7%, at the high end of guidance and unchanged year-over-year.

• Adjusted operating expense in Q4 was $434M, up $25M year-over-year, mainly due to acquisitions and greenfields; Q4 operating expense was 19.1% of net sales.

• Operating cash flow for 2024 was nearly $420M, with record Q4 cash generation of $360M.

Outlook and guidance

• 2025 net sales expected to grow mid-single digits year-over-year, with low-single digit contributions from acquisitions; Q1 2025 sales per day expected to decline 3%-5% due to weather.

• Adjusted EBITDA guidance for 2025 is $950M–$1.03B; operating cash flow expected between $500M–$600M.

• Gross margin for 2025 expected to be in line with prior year; cost reduction initiatives to yield $45M in annualized savings, with $30M realized in 2025.

• Plan to open 15–20 new greenfield locations and continue disciplined M&A.

• Strategic review and financial targets to be provided at Investor Day on March 13, 2025.