Patrick Industries (PATK 4.49%), a manufacturing leader in recreational vehicles (RVs), marine, powersports, and housing markets, released its second-quarter results on July 31, 2025. GAAP revenue was $1.05 billion, above the analyst estimate of $1.027 billion, representing a 3.0% increase from the same quarter last year. Adjusted earnings per share (EPS) came in at $1.50, exceeding the $1.40 consensus estimate and edging up from last year’s $1.44. Despite these top-line and adjusted earnings beats, Headline net income (GAAP) declined due to a one-time legal settlement. Overall, the quarter showed operational stability amid mixed demand in key end markets.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Revenue (GAAP) | $1.05 billion | $1.03 billion | $1.02 billion | 2.9 % |
| EPS (Non-GAAP) | $1.50 | $1.40 | $1.44 | 4.2 % |
| Operating Income (GAAP) | $87 million | $84.7 million | 2.7 % | |
| Adjusted EBITDA | $135 million | $130 million | 3.8 % | |
| Free Cash Flow (Non-GAAP, trailing twelve months) | $262 million | $348 million | (24.7%) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Focus Areas
Patrick Industries manufactures and distributes components across the RV, marine, powersports, and manufactured housing industries. Its main customers are original equipment manufacturers (OEMs) producing end products such as motorhomes, boats, and factory-built homes. The company operates 179 manufacturing facilities and 47 distribution centers, supporting a broad North American footprint.
Recent years have seen the company focus heavily on strategic acquisitions to expand product lines and market presence, especially in powersports and RV content. It balances this growth with investments in advanced manufacturing and automation, aiming to maintain operational efficiency.
Key Developments and Financial Drivers in the Quarter
Revenue in the RV segment, which accounts for 46% of total sales, increased 7% to $479 million, outpacing the flat industry-wide unit shipments, and a 2% increase in content compared to Q1 2025. For the marine segment (15% of revenue), sales fell 1% to $156 million, reflecting a 5% fall in wholesale powerboat shipments. However, Content per marine unit increased by 2% compared to the prior year,
The powersports segment, representing 9% of revenue, saw a 7% drop in sales to $96 million. Market share gains and increasing attachment rates for premium features like Sportech cabin enclosures (aftermarket parts designed for weather protection and comfort) were not enough to counter broader industry declines. In housing (30% of sales), revenue rose 3% to $315 million. Manufactured housing shipments improved 3% and content per manufactured housing unit increased at the same rate, helping to support this growth even as overall US housing starts ticked down 1%.
Warehouse and delivery costs rose 18.9% and selling, general and administrative (SG&A) expense increased 11.5% compared to Q2 2024 (GAAP). The effect was partly offset by stable operating margins, which remained at 8.3%. Adjusted EBITDA, which measures earnings before interest, taxes, depreciation, and amortization, rose 4% to $135 million. Notably, Adjusted EBITDA margin grew to 12.9%, a 10 basis point improvement. These results reflect the company’s ongoing efforts to manage costs, invest in automation, and enhance margins.
A significant one-time legal settlement ($24.4 million pre-tax, or $18.4 million after-tax) hit GAAP net income, which dropped 32% year over year to $32 million. Adjusted net income, which excludes this legal charge, actually rose to $51 million. There were no large acquisitions in the quarter, but the CEO stated that capital allocation will shift more actively toward strategic deals in the second half of fiscal 2025 and into 2026, marking an anticipated upswing in acquisition activity.
In terms of products and solutions, the company continued to invest in RecPro, its aftermarket e-commerce platform. RecPro sells replacement and upgrade parts for RVs and marine vehicles, and accounted for about 8% of sales in 2024. Management noted aftermarket’s countercyclical potential, as consumers often upgrade existing vehicles during industry slowdowns. There were ongoing investments to expand RecPro’s offerings and cross-sell marine products, aiming to push aftermarket sales into double digits as a share of total revenue in 2025.
Shareholder returns featured prominently. The company repurchased $23 million in stock, and paid $13 million in dividends. Operating cash flow reached $189 million year-to-date, up from $173 million in the same timeframe a year ago. However, Free cash flow (non-GAAP) for the trailing twelve months ended Q2 2025 declined 24.7% compared to the prior year to $262 million, Debt levels remained manageable: $1.3 billion in debt and a net leverage ratio of 2.6x, with strong liquidity of $835 million.
Looking Ahead: Guidance and Key Themes
Management did not provide specific revenue or profit targets for coming quarters. However, it stated that expectations remain unchanged for “lower wholesale shipments in the second half of 2025 compared to the first half.” The company emphasized a continuing focus on cost containment, maintaining balance-sheet flexibility, and positioning itself to act quickly should industry conditions improve. No changes were announced to the quarterly dividend, which remains part of the ongoing capital return strategy.
Investors should watch for shifts in industry demand, especially consumer sentiment and wholesale RV and marine shipments, as well as further actions to offset any new or increased tariffs on imported goods. The balance between acquisition activity, capital spending, and continued investment in the company's aftermarket and advanced manufacturing initiatives will also be critical for the remainder of fiscal 2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
