BLDR · Q1 2026 Earnings

Bearish

Builders FirstSource

Reported April 30, 2026

30-second summary

Revenue fell 10.1% YoY to $3.29B with core organic down 8.3%; Adjusted EBITDA of $213.8M at a 6.5% margin is well below the FY26 run-rate implied by even the new lowered guide. Management cut FY26 revenue by $200M at both ends to $14.6–15.6B, slashed EBITDA by $200M to $1.1–1.5B (midpoint -13% to $1.3B), and dropped the margin guide 120–130bps — the macro assumption shifted from "flat starts" three months ago to "down low-single digits" for both single-family and multi-family. The Q1 watch list resolves almost entirely negatively: EBITDA at $214M is below the $300M threshold that would have kept the low end safe, single-family worsened to a level that breaks the flat-starts case, and FCF cadence ($43M) is tracking the lower end of the new range.

Headline numbers

EPS

Q1 FY2026

$0.27

Revenue

Q1 FY2026

$3.29B

-10.1% YoY

Gross margin

Q1 FY2026

28.3%

Free cash flow

Q1 FY2026

$0.04B

Operating margin

Q1 FY2026

0.5%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$3.29B	-10.1%	$3.36B	-2.1%
EPS	$0.27	—	$1.12	-75.9%
Gross margin	28.3%	—	29.8%	-150bps
Operating margin	0.5%	—	1.8%	-130bps
Free cash flow	$0.04B	—	$0.11B	-60.9%

Guidance

Broad guidance cut across FY2026: revenue lowered $0.2B, EBITDA cut $0.2B with margin compression of 120-130bps, FCF narrowed downward to $0.4-0.5B, as Q1 results reveal steeper housing demand declines than previously expected.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Net Sales	FY 2026	$14.8 billion to $15.8 billion	$14.6 billion to $15.6 billion	-$0.2B low end, -$0.2B high end	Lowered
Adjusted EBITDA	FY 2026	$1.3 billion to $1.7 billion	$1.1 billion to $1.5 billion	-$0.2B low end, -$0.2B high end	Lowered
Adjusted EBITDA margin	FY 2026	8.8% to 10.8%	7.5% to 9.6%	-130bps low end, -120bps high end	Lowered
Gross Profit margin	FY 2026	28.5% to 30%	27.5% to 29%	-100bps low end, -100bps high end	Lowered
Free cash flow	FY 2026	approximately $0.5 billion	$0.4 billion to $0.5 billion	-$0.1B (introduction of range with lower floor)	Lowered

Reaffirmed unchanged this quarter: Productivity savings ($50 million to $70 million)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Manufactured products	$0.735B	-13.7%
Windows, doors & millwork	$0.854B	-8.6%
Value-added products	$1.588B	-11.0%
Specialty building products & services	$0.853B	-5.6%
Lumber & lumber sheet goods	$0.845B	-12.7%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Adjusted EBITDA	$213.8 million
Adjusted EBITDA margin	6.5%
Core organic net sales decline	-8.3%
Single Family starts decline	-11.1%
Multi-Family starts decline	-1.4%
Repair and Remodel decline	-1.3%
Adjusted net income per diluted share	$0.27
Net debt to LTM Adjusted EBITDA ratio	3.2x

Management tone

Q2 25 "investments in value-added solutions" → Q3 25 "compete effectively today and poised to accelerate growth in a normal starts environment" → Q4 25 "operating from a position of strength" → Q1 26 "reinforcing our role as a preferred provider and extending our competitive advantages."

The arc is unmistakable: the language has migrated from offensive (investment, growth) to neutral (compete effectively) to declarative-confident (position of strength) to defensive (preferred provider, market normalization). The Q4 25 framing pushed any recovery call to "an unspecified future normal" — this quarter, even that future-normal frame is gone, replaced by "as the market normalizes" with no timing attached. The shift from "outgrow the market as conditions improve" (Q4 25) to "outperform as the market normalizes" (Q1 26) is subtle but real: outgrowing implies BLDR gains share in any environment; outperforming "as the market normalizes" requires the macro to cooperate first.

The commodity assumption tells the same story from a different angle. Q4 25 tightened lumber to $365–385/mbf; this quarter raised it to $390–410/mbf. Higher lumber prices should help BLDR's margin — yet management cut the earnings guide. The implicit admission: volume erosion and operating deleverage are now dominant enough to overwhelm a commodity tailwind, which is the inverse of the framing six quarters ago.

No earnings call transcript was available for this quarter; tone shifts inferred from press-release language and the guide arc.

Answers to last quarter's watch list

Whether the FY26 EBITDA midpoint of $1.5B holds. It didn't. The midpoint was cut $200M to $1.3B. Q1 EBITDA of $213.8M is well below the $300M threshold flagged as a guide-cut trigger; the low end of the new $1.1B–$1.5B range will itself be tested if Q2 doesn't show material sequential improvement.

Resolved negatively

Whether single-family core organic stops worsening. Industry single-family starts ran -11.1% — the FY26 guide's "down low-single digits" assumption was already proven wrong on the first print. BLDR didn't disclose Q1 single-family core organic as a separate line, but with manufactured products at -13.7% and lumber at -12.7% (both new-construction proxies), the trough has not formed.

Resolved negatively

Gross margin trajectory below the new 28.5% floor. Q1 gross margin printed 28.3% — below the prior 28.5% floor, which is precisely why the FY guide range moved down to 27.5–29.0%. The trigger fired.

Resolved negatively

FCF cadence against the ~$0.5B FY26 target. Q1 FCF of $42.7M is tracking the lower half of the new $0.4–0.5B range, not the $0.5B prior point estimate. Management's reframing of FCF as a range with a $0.4B floor confirms the watch concern.

Resolved negatively

Leverage trajectory. Net debt / LTM EBITDA stepped from 2.7x to 3.2x — above the watch threshold. As LTM EBITDA continues to compress under the new guide, the ratio likely climbs further before stabilizing.

Resolved negatively

Multi-family stabilization. Multi-family starts at -1.4% is the lone bright spot — directionally consistent with stabilization and far better than Q4's -20.4% multi-family core organic. The flat-starts assumption is closer to holding here than in single-family.

Resolved positively

What to watch into next quarter

Whether Q2 26 Adjusted EBITDA exceeds $325M. The new FY26 midpoint of $1.3B implies a $325M quarterly average; Q1 printed $214M. Q2 has to materially outperform the quarterly average to keep the low end of $1.1B in play. A Q2 print below $300M makes a sub-$1.1B finish the base case and forces another cut.

Whether gross margin holds above 27.5%. Q1 at 28.3% sits 80bps above the new floor. Another 100bps of compression in Q2 would push BLDR through the floor and trigger a second guide cut on the same metric in two quarters.

Single-family starts trajectory vs. the "down low-single digits" macro assumption. Q1 industry single-family ran -11.1%. If Q2 doesn't recover to inside -5%, the FY revenue guide low end of $14.6B comes under direct pressure.

Leverage trajectory above 3.2x. EBITDA compression mechanically lifts the ratio. Watch whether Q2 26 prints above 3.5x — that level historically corresponds with covenant scrutiny and would force buyback moderation, removing the EPS support that has cushioned per-share metrics during the volume decline.

FCF run-rate vs. the $0.4B floor. Q1's $42.7M annualizes to ~$170M; the $0.4B floor needs $360M from Q2–Q4 combined. Watch whether Q2 26 FCF prints above $100M; below that and the $0.4B floor itself becomes a cut candidate.

Whether the productivity savings guide of $50–70M gets touched. It's the one cost lever management hasn't cut. If Q2 26 includes any narrowing of this range, the cost-out story — already the only fully intact piece of the FY guide — starts to crack.

Sources

Builders FirstSource Q1 2026 press release (SEC 8-K exhibit 99.1): https://www.sec.gov/Archives/edgar/data/1316835/000119312526193923/bldr-ex99_1.htm
Builders FirstSource Q4 2025 press release (prior-period guidance baseline): https://www.sec.gov/Archives/edgar/data/1316835/000119312526053039/bldr-ex99_1.htm

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