TopBuild (BLD -0.25%), a leading provider of insulation installation services and building material distribution throughout the U.S. and Canada, reported its second quarter 2025 earnings on August 5, 2025. The company delivered non-GAAP EPS of $5.31, beating the consensus GAAP estimate of $5.09. Operational margins stayed healthy, and the company’s acquisition of Progressive Roofing marked a notable expansion into the commercial roofing sector. Overall, the quarter saw resilient profit margins and continued cost discipline, even as weakness in residential construction weighed on sales figures.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $5.31 | $5.09 | $5.42 | (2.0%) |
| Revenue (GAAP) | $1.30 billion | N/A | N/A | N/A |
| Adjusted EBITDA | $261 million | $277.7 million | (5.9%) | |
| Operating Margin (Non-GAAP) | 17.0 % | 17.4 % | (0.4 pp) | |
| Net Income (Non-GAAP) | $151 million | $171 million | (11.6%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
TopBuild’s Business Model and Key Success Factors
TopBuild operates as a dual-segment business. Its Installation segment installs insulation and related materials mainly for residential and commercial construction. The Specialty Distribution segment acts as a wholesaler, distributing insulation and other specialty building products to contractors and installers. The company’s reach spans more than 400 locations across the U.S. and Canada.
Scale and operational breadth are central to TopBuild’s strategy. Serving large national builders as well as local contractors, it uses its widespread network to maintain efficiency and reach. The business’s ability to flex between installation and distribution helps it handle construction cycles, while close ties to major suppliers and investment in workforce training help ensure quality and service consistency.
Quarterly Highlights: Performance, Challenges, and Developments
This quarter revealed a split in segment performance. Installation sales dropped 8.3%. Installation volume was down 10.5%, and Segment adjusted operating margin edged down to 19.8%, a 0.3 percentage point slip from last year. By contrast, The Specialty Distribution segment posted a 1.1% gain in sales, even as commercial sector demand offset soft residential activity there. Operating margin for Specialty Distribution was 14.6% (GAAP). This compared to 15.1% in Q2 2024.
Gross margin (adjusted, non-GAAP) came in at 30.3%, slightly lower than 31.0% in the prior year. However, Selling, General, and Administrative (SG&A) expenses as a percentage of sales improved to 13.3% from 13.6% on an adjusted basis, reflecting tight cost controls. Adjusted EBITDA margin of 20.1% held fairly steady, showcasing an ability to realign expenses despite revenue pressure. Net income on a non-GAAP basis fell to $151 million from $171 million compared to Q2 2024. The dip in profits was largely tied to the sharp fall-off in Installation volumes.
Strategic moves remained in focus. The company closed its $810 million acquisition of Progressive Roofing in July 2025, which brings around $438 million in annual revenue for the trailing 12 months ended March 31, 2025 and expands the company’s commercial service offerings. This is part of a push to diversify beyond residential construction and reduce exposure to building cycles. An earlier deal for Seal-Rite Insulation added $15.2 million in annual revenue for the trailing 12 months ended March 31, 2025. Combined, year-to-date acquisition spending reached $833 million as of July 2025. Cost management efforts also continued, including earlier facility consolidations expected to save $30 million annually, as discussed in Q1 2025.
Share repurchases continued, with 455,000 shares bought back at a cost of $136.0 million, bringing the year-to-date total to $351.6 million for the six months ended Q2 2025. The capital returned to shareholders coexisted with the company’s M&A spending, and liquidity at the end of Q2 2025 remained solid, with $842 million in cash.
Product Lines and End-Market Trends
TopBuild’s Installation segment serves residential builders, multi-family builders, commercial general contractors, remodelers, and homeowners with insulation and related materials such as fiberglass batts and spray foam products. The Specialty Distribution segment supplies industrial and commercial customers with insulation, mechanical products, and accessories. In the quarter, Residential sales shrank 9.4% in Q2 2025 on a same-branch basis, and Commercial and industrial end markets saw a mild 2.2% decline on a same-branch basis in Q2 2025, but With acquisitions, overall commercial and industrial sales rose 1.3% in Q2 2025. Within commercial construction, heavy commercial (large-scale projects) grew by double digits in Q1 2025, offsetting weaker results from light commercial (smaller retail and office jobs) and multifamily housing.
No industry-wide price increases were implemented for 2025, but the company maintained pricing discipline and operational execution. Notably, code changes are driving long-term increases in insulation per square foot in new homes, counteracting the impact of modest declines in unit size.
Financial Outlook and What to Watch Going Forward
Management forecasts full-year 2025 sales between $5.15 billion and $5.35 billion, a range that now includes the recently acquired Progressive Roofing, with a 2025 outlook for sales of $5,150 million to $5,350 million and adjusted EBITDA of $970 million to $1,070 million. Adjusted EBITDA guidance is set at $970 million to $1,070 million for FY2025. The company expects Q2 2025 to represent the steepest year-over-year sales decline, with the remainder of the year showing flatter or gradually improving results. The outlook for FY2025 assumes high single-digit declines in residential sales.
No additional guidance was provided for corporate transactions beyond the Progressive Roofing and Seal-Rite acquisitions already completed in 2025; management's 2025 outlook does not include the impact of any other potential acquisitions or divestitures. Cost controls, branch optimization, and operational discipline remain focus areas, but investors tracking the company in the coming quarters should monitor the pace of integration and revenue addition from M&A, as well as signs of stabilization or recovery in residential construction volumes. Persistent softness on the residential side, if not offset, could limit margin gains going forward.
BLD does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
