Installed Building Products, Inc.

Second-quarter consolidated net revenue increased 2% to $778 million from $760 million a year ago. Adjusted gross margin was 33.3% versus 34.2% last year; Installation segment gross margin was 36.5% versus 37.1%, and the lower-margin other segment created a 40 basis point headwind to consolidated gross margin. Adjusted EBITDA was $131 million with a 16.9% margin, and adjusted net income was $78 million, or $2.91 per diluted share. Same-branch sales for the Installation segment declined 2%, with new residential same-branch sales down 6% and commercial same-branch sales up 10%; price/mix was up 1% overall and up 3% including heavy commercial, while volume declined 5%. Management said it expects third-quarter amortization expense of approximately $10 million, full-year 2026 amortization expense of approximately $42 million, full-year effective tax rate of 25% to 27%, and third-quarter net interest expense of approximately $10 million. It ended the quarter with $395 million in cash, $374 million in working capital excluding cash, and net debt-to-trailing-12-month adjusted EBITDA of 1.34x. The company repurchased approximately 365,000 shares for $76 million and has about $398 million remaining under its repurchase authorization; the third-quarter dividend was set at $0.39 per share, more than 5% higher than the prior year period.

Jeff Edwards said the team executed well despite a difficult residential housing backdrop, with the business benefiting from diversification across commercial, manufacturing, distribution, and acquisitions. He stressed that heavy commercial, multifamily backlog, and the company’s acquisition pipeline provide multiple avenues for growth even if new single-family remains challenged. His tone was confident and constructive, repeatedly emphasizing resilience, competitive positioning, and optimism about the industry and IBP’s prospects.

Michael Miller focused on the quarter’s mix-driven margin story: adjusted gross margin was 33.3%, Installation gross margin was 36.5%, and the other segment’s faster growth weighed on reported margin because it carries lower gross margins. He called out a 50 basis point Installation margin hit from increased fuel expense and a 30 basis point EBITDA-margin impact from higher medical insurance costs, while noting adjusted SG&A rose 3% but as a percentage of sales was essentially flat at 18.9%. He also highlighted balance-sheet strength with $395 million in cash, 1.34x leverage, $18 million of capex and finance leases combined, and continued capital return through $76 million of buybacks and a $0.39 quarterly dividend.

Analysts pressed on whether private builders, public builders, and the shift toward build-to-order/spec reduction would change near-term demand; management said public builder revenue was down mid-single digits and that IBP expects its sales to track homebuilder revenue closely, though timing can lag as builders adjust inventories. Questions on gross margin centered on fuel, spray foam pricing, and mix: management said fuel was a second-quarter headwind, spray foam price realization may be bumpy in the third quarter because the material cost increase was about 25%, and the other segment’s growth should continue to weigh on reported gross margin. There were also questions on M&A, heavy commercial expansion, and buybacks; management said M&A is priority #1, leverage could rise to as high as 3x for the right deal, and heavier commercial platforms or adjacent trades like mechanical/industrial and roofing remain interesting.