Carlisle Companies (CSL -1.54%), a leading North American provider of energy-efficient building products and solutions, reported its financial results for the second quarter of fiscal 2025 on July 30, 2025. The main story from this quarter’s release: both revenue (GAAP) and adjusted earnings per share (non-GAAP) missed analyst expectations, as persistent headwinds in new construction and residential markets weighed on performance. Adjusted EPS came in at $6.27, missing the $6.58 consensus estimate, and revenue was $1,449.5 million, also below the $1,492.61 million analysts projected (GAAP). The company held revenue roughly flat compared to last year but saw margins and overall earnings growth slow. Management delivered a weaker outlook for the rest of 2025, tempering expectations for both revenue growth and profitability.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted EPS (Non-GAAP) | $6.27 | $6.58 | $6.24 | 0.5% |
| Revenue | $1,449.5 million | $1,492.61 million | $1,450.6 million | (0.1%) |
| Operating Margin | 23.1% | 26.0% | (2.9) pp | |
| Adjusted EBITDA | $389.3 million | $417.6 million | (6.8%) | |
| Free Cash Flow | $258.0 million | $155.8 million | 65.6% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
Carlisle Companies develops and manufactures a range of energy-efficient and sustainable products primarily for commercial and residential buildings. Its main business units are Carlisle Construction Materials (CCM) and Carlisle Weatherproofing Technologies (CWT), which together cover roofing systems, architectural metals, insulation materials, and weatherproofing applications.
The company’s long-term success depends on several factors: continued investment in energy-efficient product innovation, a disciplined approach to mergers and acquisitions to broaden its building solutions portfolio, and operational excellence driven by its Carlisle Operating System (COS). However, ongoing shifts in key construction markets, the pricing environment, and integration of recent acquisitions remain critical for growth and performance.
Quarter in Review: Data, Segment Trends, and Business Drivers
Revenue (GAAP) remained essentially unchanged from the prior year as market dynamics diverged across
segments, with growth in re-roofing activity mostly offsetting softness in new construction and residential end markets. The CCM segment delivered modest top-line growth thanks to contributions from last year’s MTL acquisition, though organic revenue in that segment declined slightly. CWT faced a 2% decrease in total revenue (GAAP), with a more pronounced 10% organic decline due to persistent weakness in residential demand. Management highlighted the strength and stability of the re-roofing market, which now accounts for 70% of CCM’s roofing business and helps generate recurring revenue.
Profitability measures softened compared to last year. Operating margin dropped to 23.1%, off 2.9 percentage points, while adjusted EBITDA margin slipped to 26.9%, reflecting higher costs and lower volumes in several key product lines. Segment-level adjusted EBITDA showed a 13% drop in CWT and a 5% drop in CCM, with margin compression felt more acutely in the weatherproofing segment due to deleveraging and limited traction on price increases. As higher operating expenses and weak pricing in areas like spray foam insulation took a toll.
Despite these pressures, Carlisle achieved record adjusted EPS of $6.27. It completed repurchases of 0.8 million shares for $300 million. For the first half of 2025, total share buybacks reached $700 million and dividends paid totaled $88 million. The quarterly dividend was raised 17.6% last August and stood at $1.00 per share, continuing the company’s long record of dividend increases. Management also highlighted the acquisition of Bonded Logic, which expands its position in the $14 billion insulation market and supports the push towards sustainable, energy-efficient building solutions. The Henry UltraTouch insulation—an eco-friendly building material—received industry recognition as a finalist in the Home Depot Merchandising Innovation Awards.
Innovation and operational improvement were central themes for the quarter. Carlisle completed significant automation projects within CWT using the Carlisle Operating System, estimating a $12 million annual uplift in adjusted EBITDA. New product launches included the dual-tank Flexible Fast Adhesive, Blueskin VP, and energy-efficient Henry UltraTouch insulation. These developments support the firm's goals around regulatory compliance, customer demand for sustainability, and margin improvements. Management’s focus continues to target recurring revenue streams, operational efficiency, and the creation of innovative solutions that deliver practical advantages like labor savings and regulatory compliance for building owners and contractors.
Management Outlook and What to Watch
The company revised its financial guidance for the remainder of fiscal 2025. Management now expects low single-digit revenue growth, down from previous guidance calling for mid-single-digit growth. Both major business units—CCM and CWT—are expected to achieve only limited top-line expansion, with the weatherproofing segment (CWT) guidance was reduced from earlier forecasts. Adjusted EBITDA margin, a key measure of underlying profitability, is now projected to decline by 150 basis points instead of growing as previously estimated.
This reduced outlook comes as a result of continued “project delays, smaller-than-expected distributor inventory load-in, and a slowdown in new construction bidding,” according to management. The ability to pass on price increases, except for those driven by tariffs, also remains limited. No further detailed quantitative guidance was provided in the earnings release beyond these headline expectations. The company confirmed a robust liquidity position with $68 million in cash and $1 billion undrawn on its credit line as of June 30, 2025, but its cash balance is sharply lower than last year due to aggressive capital deployment, including share repurchases and recent acquisitions.
Going forward, investors and analysts will be watching for stabilization in commercial and residential construction activity, renewed pricing momentum, and the effect of recent product launches and automation projects on segment margins. Progress in integrating new acquisitions and further execution against long-term sustainability goals remain core to Carlisle’s Vision 2030 plan, even as the near-term picture has become less certain due to shifting end-market demand and margin pressures.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
