Builders FirstSource (BLDR) Q2 2025 earnings summary

Executive summary

• Q2 2025 net sales were $4.2B, down 5.0% year-over-year, with net income of $185M and adjusted EBITDA of $506M, reflecting a challenging housing market and lower single-family and multi-family starts; core organic sales declined 8.5%, partially offset by acquisitions.

• Value-added products comprised ~47% of net sales, with ongoing investments in digital tools, operational excellence, and geographic expansion through M&A.

• Free cash flow generation remained strong at $255M for the quarter, supporting continued share repurchases and strategic investments.

• Gross profit margin fell 210 basis points to 30.7% due to margin normalization and a below-normal starts environment.

• Acquisitions of Alpine Lumber, Cluss Lumber, and Truckee Tahoe for $891.9M expanded the market footprint and value-added product operations.

Financial highlights

• Q2 2025 net sales: $4.2B (down 5.0% year-over-year); gross margin: 30.7%; adjusted EBITDA: $506M (margin 12.0%); adjusted EPS: $2.38 (down 32%); net income: $185M (down 46%).

• Free cash flow for Q2 was $255M; liquidity at quarter-end was $1.6B, with $1,538M in revolver availability and $87M cash.

• SG&A expenses rose 1.5% to $987.8M, mainly from acquisitions and ERP implementation, with SG&A as a percent of sales up 150 basis points to 23.3%.

• Net interest expense increased by $20M to $72M due to higher average debt.

• Adjusted net income as a percent of sales was 6.2%, down from 9.4% year-over-year.

Outlook and guidance

• 2025 net sales guidance: $14.8–$15.6B; adjusted EBITDA: $1.5–$1.7B; margin: 10.1–10.9%; free cash flow: $0.8–$1.0B.

• Full-year gross margin expected at 29–30.5%, below long-term normalized levels.

• Q3 2025 net sales expected at $3.65–$3.95B; adjusted EBITDA at $375–$425M.

• Single-family starts expected to decline 10–12% for the year; multi-family down mid-teens; R&R flat; acquisitions to add 5.0–5.5% to net sales.

• Capital expenditures expected at $300–$350M; interest expense $270–$280M; effective tax rate 23.0–25.0%.