Builders FirstSource Reports First Quarter 2026 Results

First Quarter 2026 Highlights

All Year-Over-Year Comparisons Unless Otherwise Noted:

• Net sales were $3.3 billion, a 10.1% decrease, primarily due to a lower starts environment. The decline reflects lower core organic net sales and commodity deflation, partially offset by growth from acquisitions.
• Gross profit was $0.9 billion, a decrease of 16.7%. Gross profit margin percentage decreased 220 basis points to 28.3%, primarily driven by a lower starts environment.
• Net income (loss) was $(47.4) million, or diluted EPS of $(0.43) compared to diluted EPS of $0.84 in the prior year period. Net income (loss) as a percent of net sales decreased by 400 basis points to (1.4)%.
• Adjusted EBITDA decreased 42.1% to $213.8 million, primarily driven by lower gross profit.
• Adjusted EBITDA margin declined by 360 basis points to 6.5%, attributable to lower gross margin and reduced operating leverage.
• Cash provided by operating activities was $87.5 million, a decrease of $44.9 million compared to the prior year period. The Company's free cash flow was $42.7 million, a decrease of 5.1%, compared to $45.0 million in the prior year period. The decrease was primarily driven by lower net income.
• The Company repurchased 3.3 million shares of its common stock at an average price of $92.25 per share for $302.9 million, inclusive of applicable fees and taxes.

“Our first quarter results reflect the adaptability of our operating model as we delivered strong strategic share growth in a weak housing market. Across the organization, we remain focused on the factors within our control, including serving our customers, expanding our differentiated portfolio of value-added solutions, and leveraging technology to accelerate growth and drive operational excellence. This disciplined approach continues to strengthen our leading position as a trusted, full-service partner to homebuilders,” commented Peter Jackson, CEO of Builders FirstSource.

Mr. Jackson continued, “By continuing to invest in innovation and the capabilities that matter most to our customers, we are reinforcing our role as a preferred provider and extending our competitive advantages. Our strategy enables us to outperform as the market normalizes and to deliver sustainable, long-term value for our shareholders.”

Pete Beckmann, CFO of Builders FirstSource, added, “Our first quarter performance demonstrates our disciplined execution and focus on cost and working capital management. We are generating strong cash flow through the cycle, investing selectively in high-return opportunities, and maintaining a strong balance sheet. This balanced approach enables us to navigate the current environment while compounding shareholder value over time.”

First Quarter 2026 Financial Performance Highlights

All Year-Over-Year Comparisons Unless Otherwise Noted:

Net Sales

• Net sales were $3.3 billion, a 10.1% decrease, primarily due to a lower starts environment. The decrease reflects an 8.3% decline in core organic net sales, as well as commodity deflation of 3.3%, partially offset by growth from acquisitions of 1.5%.
• Core organic net sales declined 8.3%. Single Family declined 11.1%, Multi-Family declined 1.4%, and Repair and Remodel (“R&R”)/Other declined 1.3%. On a weighted basis, Single Family lowered net sales by 7.9%, R&R/Other by 0.3%, and Multi-Family by 0.1%.

Gross Profit

• Gross profit was $0.9 billion, a decrease of 16.7%. Gross profit margin percentage decreased 220 basis points to 28.3%, primarily driven by a lower starts environment.

Selling, General and Administrative Expenses

• SG&A was $912.5 million, a decrease of $18.4 million, or 2.0%, primarily driven by lower variable compensation due to lower core organic sales, partially offset by additional expenses from operations acquired within the last twelve months. As a percentage of net sales, total SG&A increased by 240 basis points to 27.8%, primarily attributable to reduced operating leverage.

Net Interest Expense

• Net interest expense increased $9.5 million to $74.4 million, primarily due to higher average debt balances.

Income Tax Expense (Benefit)

• Income tax was $(10.5) million, compared to $23.2 million in the prior year period, primarily driven by a decrease in income before income taxes. The effective tax rate in the first quarter decreased 130 basis points year-over-year to 18.1%, primarily related to an increase in stock-based compensation benefit.

Net Income (Loss)

• Net income (loss) was $(47.4) million, or $(0.43) earnings per diluted share, compared to net income of $96.3 million, or $0.84 earnings per diluted share, in the same period a year ago. The decrease in net income was primarily driven by lower gross profit and higher net interest expense, partially offset by lower SG&A and an income tax benefit.
• Net income (loss) as a percentage of net sales was (1.4)%, a decrease of 400 basis points from the prior year period, primarily due to lower gross profit margins and higher net interest expense, partially offset by lower SG&A and an income tax benefit.

Adjusted Net Income

• Adjusted net income was $30.0 million, a decrease of 82.6%, primarily driven by lower gross profit and higher net interest expense, partially offset by lower SG&A and income tax expenses.

Adjusted Earnings Per Diluted Share

• Adjusted earnings per diluted share was $0.27, compared to $1.51 in the same period a year ago. The 82.1% decrease was primarily driven by lower adjusted net income, partially offset by share repurchases.

Adjusted EBITDA

• Adjusted EBITDA decreased 42.1% to $213.8 million, primarily driven by lower gross profit.
• Adjusted EBITDA margin declined by 360 basis points from the prior year period to 6.5%, primarily due to lower gross profit margins and reduced operating leverage.

Capital Structure, Leverage, and Liquidity Information

• For the three months ended March 31, 2026, cash provided by operating activities was $87.5 million, and cash used in investing activities was $57.8 million. The Company's free cash flow was $42.7 million, compared to $45.0 million in the prior year period, largely the result of lower net income as well as lower capital expenditures.
• Liquidity as of March 31, 2026, was approximately $1.5 billion, consisting of $1.4 billion in net borrowing availability under the revolving credit facility and $0.1 billion of cash on hand.
• As of March 31, 2026, LTM Adjusted EBITDA was $1.4 billion and net debt was $4.6 billion, resulting in a net debt to LTM Adjusted EBITDA ratio of 3.2x, compared to 2.0x in the prior year period.
• In the first quarter, the Company repurchased 3.3 million shares of its common stock at an average price of $92.25 per share for $302.9 million, inclusive of applicable fees and taxes.
• On April 29, 2026, the Board of Directors authorized the repurchase of up to $500 million of the Company’s outstanding shares of common stock, which includes the approximately $200 million remaining under its prior April 2025 authorization.
• Since the inception of its buyback program in August 2021, the Company has repurchased 102.6 million shares of its common stock, or 49.7% of its total shares outstanding, at an average price of $81.26 per share for a total cost of $8.3 billion, inclusive of applicable fees and taxes.

Productivity Savings From Operational Excellence

• For the first quarter, the Company delivered approximately $6 million in productivity savings related to operational excellence and supply chain initiatives.
• The Company expects to deliver $50 million to $70 million in productivity savings in 2026.

2026 Full Year Total Company Outlook

For 2026, the Company expects to achieve the financial performance highlighted below. Projected Net Sales and Adjusted EBITDA include the expected impact of price, commodities, and margins. We are not providing a quantitative reconciliation of our forward-looking guidance of adjusted EBITDA, adjusted EBITDA margin, or free cash flow because we are unable to predict with reasonable certainty all the components required to provide such reconciliation without unreasonable efforts, which are uncertain and could have a material impact on GAAP reported results for the guidance period. See “Non-GAAP Financial Measures” for additional information.

• Net Sales to be in a range of $14.6 billion to $15.6 billion.
• Gross Profit margin to be in a range of 27.5% to 29%.
• Adjusted EBITDA to be in a range of $1.1 billion to $1.5 billion.
• Adjusted EBITDA margin to be in a range of 7.5% to 9.6%.
• Free cash flow of approximately $0.4 billion to $0.5 billion, assuming average commodity prices in the range of $390 to $410 per thousand board foot (mbf).

2026 Full Year Assumptions

The Company’s anticipated 2026 performance is based on several assumptions for the full year, including the following:

• Within the Company’s geographies, Single Family starts are projected to be down low-single digits, Multi-Family starts are projected to be down low-single digits, and R&R is projected to be down 1%.
• Acquisitions completed within the last twelve months are projected to add net sales growth of approximately 1%.
• Total capital expenditures in the range of $225 million to $275 million.
• Interest expense in the range of $275 million to $285 million.
• An effective tax rate of 20% to 22%.
• Depreciation and amortization expenses in the range of $525 million to $575 million.
• No change in selling days versus 2025.

About Builders FirstSource

Builders FirstSource (NYSE: BLDR), headquartered in Irving, Texas, is the nation's leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. With approximately 570 locations across 43 states, we serve 48 of the top 50 and 94 of the top 100 Core Based Statistical Areas (CBSAs), ensuring broad geographic coverage and enhancing our ability to partner with our customers. Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that we design and cut specifically for each home. We also assemble interior and exterior doors into pre-hung units for easy installation. Additionally, we distribute a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items. Our services, which vary by market, include professional installation, turnkey framing, and shell construction. Supported by the latest construction innovations and digital solutions, we help drive greater efficiency across homebuilding. Learn more at www.bldr.com