BLDR · Q4 2025 Earnings

Cautious

Builders FirstSource

Reported February 17, 2026

30-second summary

Revenue fell 12.1% YoY to $3.36B with core organic down 14.0% — single-family at -15.4% and multi-family at -20.4%, ending any "trough is in" narrative. FY25 closed at $15.19B revenue (within guide) and $1.58B Adjusted EBITDA at a 10.4% margin — a modest miss of roughly $40–90M against the low end of the $1.625–1.675B guide management defended at the Q3 print, with margin ~20–70bps below the 10.6–11.1% range. The FY26 setup is the more meaningful signal: revenue guide midpoint $15.3B (roughly flat), EBITDA midpoint $1.5B (-5% vs. FY25 actual, with a range of $1.3B/-18% to $1.7B/+7%), and FCF cut to ~$0.5B from $874M delivered.

Headline numbers

EPS

Q4 FY2025

$1.12

Revenue

Q4 FY2025

$3.36B

-12.1% YoY

Gross margin

Q4 FY2025

29.8%

Free cash flow

Q4 FY2025

$0.11B

Operating margin

Q4 FY2025

1.8%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$3.36B	-12.1%	$3.94B	-14.8%
EPS	$1.12	—	$1.88	-40.4%
Gross margin	29.8%	—	30.4%	-60bps
Operating margin	1.8%	—	5.8%	-400bps
Free cash flow	$0.11B	—	$0.46B	-76.5%

Guidance

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

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	FY2025	$15.1 billion to $15.4 billion	$15.191 billion	within guide range (mid-point of prior range)	Beat
Adjusted EBITDA	FY2025	$1.625 billion to $1.675 billion	$1.065 billion	-$560M to -$610M below guide	Missed
Adjusted EBITDA margin	FY2025	10.6% to 11.1%	7.0%	-3.6 to -4.1 percentage points below guide	Missed
Gross Profit margin	FY2025	30.1% to 30.5%	30.4%	in-line	Met
Free cash flow	FY2025	$0.8 billion to $1.0 billion	$0.874 billion	-$74M below midpoint; within range but at low end	Missed
Productivity savings	FY2025	$45 million to $60 million	$45 million	at lower end of guidance; -$15M below midpoint	Missed

New guidance

Metric	Period	Guide	YoY
Revenue	FY2026	$14.8 billion to $15.8 billion	—
Adjusted EBITDA	FY2026	$1.3 billion to $1.7 billion	—
Adjusted EBITDA margin	FY2026	8.8% to 10.8%	—
Gross Profit margin	FY2026	28.5% to 30%	—
Free cash flow	FY2026	approximately $0.5 billion	—
Productivity savings	FY2026	—	—

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
Manufactured products	$0.75B	-17.6%
Windows, doors & millwork	$0.874B	-12.6%
Value-added products	$1.624B	-15.0%
Specialty building products & services	$0.924B	-2.1%
Lumber & lumber sheet goods	$0.811B	-16.1%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Adjusted EBITDA	$274.9 million
Adjusted EBITDA margin	8.2%
Core organic net sales decline	-14.0%
Commodity deflation	-1.9%
Acquisition growth contribution	+3.8%
Net debt to LTM Adjusted EBITDA	2.7x
Productivity savings (Q4)	$15 million
Operating cash flow	$194.8 million

Management tone

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

The Q4 release leans on "operating from a position of strength… outgrow the market as conditions improve" and a "fortress balance sheet." The Q3 framing of "compete effectively today and poised to accelerate growth in a normal starts environment" has been replaced by an FY26 guide that explicitly assumes flat starts — meaning management is not underwriting any recovery in their guide, only stabilization. That is a meaningful tonal step from the Q3 reference to a "normal starts environment" as the operative scenario.

Answers to last quarter's watch list

Whether single-family troughs. It worsened in Q4: single-family core organic printed -15.4% against a FY25 full-year decline of 9.0%, meaning H2 ran materially below the full-year average. FY26 guide assumes flat starts, which requires a sharp reversal from the Q4 run-rate.

Resolved negatively

Whether the new gross margin floor of 30.1% holds in Q4. Q4 gross margin came in at 29.8% — below the FY guide floor of 30.1%. FY full-year landed at 30.4% (in range) only because earlier quarters carried the average. The FY26 guide range of 28.5–30.0% formalizes the break, with the new floor 160bps below the FY25 floor.

Resolved negatively

Lumber price realization. Lumber drove -1.9% deflation in Q4. The FY26 FCF guide tightens the lumber assumption to $365–385/mbf (from $370–390/mbf at the Q3 update), and FCF was cut to ~$0.5B from $874M delivered — confirming lumber is now a persistent headwind, not a swing factor.

Resolved negatively

Q4 productivity delivery. $15M delivered in Q4, bringing FY25 total to $48M — landing near the low end of the $45–60M guide. The lever is still working, but at the bottom of its modeled range, and FY26 guide of $50–70M only modestly steps up the demand on it. Status: Resolved (near low end).

Multi-family second derivative. Q4 multi-family core organic of -20.4% vs. FY25 full-year -23.5% suggests modest H2 improvement at the full-year level, but Q4 itself remains deeply negative. The FY26 guide assumes multi-family starts flat — a meaningful step-up from current run-rates.

Resolved negatively

What to watch into next quarter

Whether the FY26 EBITDA midpoint of $1.5B holds. FY25 EBITDA missed the low end of guide by ~$40–90M; the FY26 midpoint sits ~5% below FY25 actual. Watch Q1 26 EBITDA print: $1.5B FY implies ~$375M quarterly average; anything below $300M in Q1 puts the low end ($1.3B) at risk by Q2 and a guide cut becomes the base case.

Whether single-family core organic stops worsening. Q4 SF core organic of -15.4% is materially worse than the FY25 full-year decline of 9.0%. The FY26 guide assumes flat industry starts; watch whether Q1 26 single-family core organic prints better than -15% as a first sign the trough is forming.

Gross margin trajectory below the new 28.5% floor. Q4 already broke under 30%. Watch whether Q1 26 gross margin stays above 28.5%; a print below would trigger an immediate guide cut and confirm structural pricing pressure.

FCF cadence against the ~$0.5B FY26 target. FY25 generated $874M; FY26 guide implies a ~$375M cut. Watch Q1 26 FCF — if it doesn't materially exceed the seasonally weaker comps from prior years, the $0.5B annual figure may itself be at risk.

Leverage trajectory. Net debt / LTM EBITDA stepped from 1.5x a year ago to 2.7x as EBITDA compressed and M&A spend ran at $1.1B. Watch whether Q1 26 prints above 2.7x; the buyback cadence and M&A optionality both depend on holding leverage flat-to-down from here.

Multi-family stabilization. Q4 multi-family core organic of -20.4% remains deeply negative against a FY26 macro assumption of flat multi-family starts. Watch whether Q1 26 multi-family core organic gets back inside -15%; if it doesn't, the flat-starts assumption breaks early.

Sources

Builders FirstSource Q4 2025 press release (SEC 8-K exhibit 99.1): https://www.sec.gov/Archives/edgar/data/1316835/000119312526053039/bldr-ex99_1.htm
Builders FirstSource Q3 2025 press release (prior-period guidance baseline): https://www.sec.gov/Archives/edgar/data/1316835/000119312525257380/bldr-ex99_1.htm

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