Builders FirstSource, Inc.

Net sales decreased approximately 9% to $3.9 billion. Gross profit was $1.1 billion, down 16.3%, and gross margin was 28.1%, down 260 basis points. Adjusted SG&A was $781 million, adjusted EBITDA was $329 million (down 35%) with an 8.5% margin (down 350 basis points), and adjusted EPS was $1.17, down 51%. Operating cash flow was $68 million versus $341 million last year, free cash flow was $32 million, and net debt-to-adjusted EBITDA was about 3.6x. For 2026, the company now expects net sales of $14 billion to $14.8 billion, adjusted EBITDA of $1 billion to $1.2 billion, adjusted EBITDA margin of 7.1% to 8.1%, gross margin of 27.5% to 28.5%, and free cash flow of approximately $400 million to $500 million. For Q3, it expects net sales of $3.6 billion to $3.9 billion and adjusted EBITDA of $275 million to $325 million.

Peter Jackson framed the quarter as evidence that Builders FirstSource’s platform can perform through a weak housing market, emphasizing discipline, technology, and value-added solutions. He said the company believes it maintained share, expects build-to-order trends to help, and sees M&A as an important long-term growth lever. His tone was cautious on the macro backdrop but confident in the company’s ability to outgrow the market over time.

Pete Beckmann focused on cost discipline, margin pressure, and liquidity. He detailed the quarter’s 9% sales decline, 28.1% gross margin, 8.5% adjusted EBITDA margin, and $1.17 adjusted EPS, then highlighted $68 million of operating cash flow, $32 million of free cash flow, and $1.6 billion of liquidity. He said the company remains comfortable at roughly 3.6x net debt-to-adjusted EBITDA and expects to move back toward target leverage as EBITDA recovers; he also raised 2026 cost actions to $115 million and cut capital spending plans, with second-quarter capital deployment including $36 million of capex and $14 million of acquisitions.

Analysts focused on the implied revenue and EBITDA trajectory, the commodity price outlook, pricing behavior in building products, M&A appetite, and the margin outlook into the second half. Management said Q4 sales are not implying a new year-over-year start inflection, just an easier comparison versus last year’s sharp decline, and said the market has been more stable lately even if pricing remains competitive. On commodities, they said their pricing assumption stayed unchanged because lumber and OSB are tracking the prior forecast, while on M&A they said the pipeline remains active and they are still willing to lean into deals despite higher leverage from the cycle.