Builders FirstSource (BLDR) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2026 were $3.9 billion, down 8.8% year-over-year, mainly due to lower housing starts and commodity deflation, partially offset by acquisitions.

• Gross profit fell 16.3% to $1.1 billion, with gross margin down 260 basis points to 28.1%.

• Net loss was $3.9 million (diluted EPS of $(0.04)), compared to net income of $185 million (EPS $1.66) in Q2 2025; a discrete $43.9 million tax expense from an IRS settlement significantly impacted results.

• Adjusted EBITDA dropped 34.9% to $329 million; adjusted EPS was $1.17, down 50.8% year-over-year.

• Value-added products comprised 46.2% of Q2 sales; since 2021, 42 acquisitions have contributed $2.3 billion in annual sales.

Financial highlights

• Q2 2026 net sales: $3.86 billion (down 8.8% YoY); gross margin: $1.09 billion (28.1% of sales); net loss: $3.9 million.

• Adjusted EBITDA margin was 8.5% (down 350 bps YoY); adjusted net income as a percent of sales was 3.3%.

• SG&A expenses decreased 3% to $958.3 million, but rose as a percent of sales to 24.8% due to reduced operating leverage.

• Free cash flow was $32 million, down sharply year-over-year; operating cash flow was $68 million.

• Net debt to adjusted EBITDA was 3.6x; liquidity at $1.6 billion as of June 30, 2026.

Outlook and guidance

• 2026 net sales guidance: $14.0–$14.8 billion; adjusted EBITDA: $1.0–$1.2 billion; gross margin: 27.5–28.5%.

• Free cash flow guidance: $400–$500 million; capex $175–$275 million.

• Single-family and multi-family starts expected to decline mid- to high-single digits; R&R activity down 1%.

• Q3 2026 guidance: net sales $3.6–$3.9 billion, adjusted EBITDA $275–$325 million.

• Interest expense expected at $280–$290 million; adjusted effective tax rate 22–24%.