FirstService Corporation

Second-quarter revenue was $1.45 billion, up 2% year over year. Adjusted EBITDA was $161.7 million, up 3%, with consolidated margin at 11.2%, up 10 basis points. Adjusted EPS was $1.75, up 2%. For the first half, revenue was $2.77 billion, up 4%; adjusted EBITDA was $267 million, up 3%; margin was 9.7%, down 10 basis points; and adjusted EPS was $2.69 versus $2.63 last year. Segmentally, FirstService Residential revenue was $617 million, up 4% (5% organic), with EBITDA of $69 million and 11.2% margin. FirstService Brands revenue was $832 million, up 1%, with EBITDA of $96 million and 11.5% margin. For the second half, management expects Residential to deliver mid-single-digit top-line growth with modest margin improvement, Brands to grow mid-single digits overall in the back half, restoration to grow about 5% year over year in H2, roofing to be down slightly in Q3 and organically down mid-single digits, Century Fire to grow 10%+ in Q3 and Q4, and home services to be slightly up year over year. Full-year consolidated revenue growth is expected to be similar to or modestly better than year-to-date growth, with mid-single-digit annual EBITDA growth.

Scott Patterson said the quarter was solid despite a difficult economic backdrop and highlighted progress that should position the company for a stronger second half and momentum into 2027. He emphasized improving restoration pipeline activity, continued strength at Century Fire, and the long-term thesis in roofing despite near-term weakness. He also framed the new Resilience First cross-sell effort as a way to add value to managed communities through prevention, inspections, education, and lower claims costs.

Jeremy Alan Rakusin focused on the financial profile: Q2 revenue of $1.45 billion, adjusted EBITDA of $161.7 million, and adjusted EPS of $1.75, plus first-half revenue of $2.77 billion and EBITDA of $267 million. He said operating cash flow before working capital was $112 million in Q2, cash flow after working capital was $130 million, year-to-date cash flow was almost $220 million, and CapEx should be about $130 million for 2026 versus an initial $140 million target. He also noted more than 1.8 million shares repurchased for almost $250 million at an average price of $135.91, leverage at 1.8x net debt to EBITDA after buybacks, more than $800 million of liquidity, and that the company is comfortable going to about 2.5x leverage if needed while still funding tuck-in acquisitions.

Analysts focused heavily on roofing, asking what would signal a turnaround and how much of the weakness was due to macro versus project delays. Management said the backlog is down year over year but improved sequentially in June and that delays were driven mainly by construction timing and insurance-related issues, while the market remains weak and overly competitive in places like Southwest Florida and Las Vegas. Questions also centered on buybacks versus M&A; management said it can pursue both because leverage is conservative and liquidity is ample, but will prioritize attractive acquisitions if they appear. On restoration, management said recent large-loss wins and national-account efforts should help over the next 12 to 18 months, with more benefit likely in 2027 than Q3.