Builders FirstSource reported third-quarter 2025 net sales of $3.9 billion, a 6.9% decrease from the same period last year, reflecting lower core organic sales and commodity deflation, partially offset by acquisition-driven growth, according to Builders FirstSource, Inc.
Gross profit fell 14% to $1.2 billion, reducing the company’s gross margin by 240 basis points to 30.4%. The decline was mainly attributed to a below-normal housing starts environment.
Selling, general and administrative expenses increased 1% to $971 million, representing 24.6% of net sales. Higher costs from recent acquisitions and technology system implementation offset lower variable compensation.
Net income fell 57% to $122 million, or $1.10 per diluted share, compared to $2.44 a year earlier. Adjusted net income dropped 42% to $209 million, while adjusted earnings per share decreased 39% to $1.88.
Adjusted EBITDA declined 31% to $434 million, reducing the adjusted EBITDA margin to 11%. Operating cash flow fell 25% to $548 million, while free cash flow decreased 27% to $465 million.
The company’s liquidity at the end of September stood at $2.1 billion, including $1.8 billion in credit availability and $0.3 billion in cash. Net debt totaled $4.2 billion, equal to 2.3 times last twelve months’ adjusted EBITDA.
Builders FirstSource repurchased 3.4 million shares in the first nine months of 2025 for $404 million, with $500 million remaining under its authorization. Since its buyback program began in 2021, the company has repurchased 99 million shares for a total of $8 billion.
For full-year 2025, Builders FirstSource expects net sales between $15.1 billion and $15.4 billion, with an adjusted EBITDA range of $1.63 billion to $1.68 billion. The company projects a gross margin between 30.1% and 30.5% and free cash flow between $0.8 billion and $1.0 billion, based on average lumber prices of $370 to $390 per thousand board feet.
Housing market assumptions for the year include a 9% drop in single-family starts, mid-teen declines in multifamily starts, and flat repair and remodeling activity.
The outlook includes capital expenditures of $300 million to $350 million and an interest expense range of $270 million to $280 million.
