Watsco, Inc.

Management did not state consolidated revenue, EPS, or gross margin figures in the prepared remarks or Q&A. They said U.S. sales increased 2% in the quarter, gross margins remained largely intact, SG&A was flat, and e-commerce sales increased 16%; OnCallAir customer sales increased 20%, and gross merchandise value for OnCallAir is expected to exceed $2 billion this year. Looking ahead, management expects continued improvement in stability, better inventory turns, and did not provide quantified full-year revenue or EPS guidance.

Al Nahmad framed the quarter as evidence that the business is moving past the most disruptive part of the A2L transition and toward a more normalized operating environment. His tone was upbeat but cautious: he repeatedly said it is still early in the selling season, while emphasizing competitive advantages from scale, technology, acquisitions, and capital strength. He also highlighted the Jackson Supply acquisition as a strong cultural and strategic fit and underscored that Watsco remains debt free.

The financial commentary centered on operating discipline and balance-sheet strength. Management said gross margins held up well, SG&A was flat despite technology and new-location investments, and the company remains debt free. They also emphasized inventory management: they expect to reduce inventory investment over time, improve inventory turns, and free up cash flow as supply chains normalize and product lead times improve.

Analysts focused on whether the business is finally stabilizing, what price increases might come from Section 232-related duties, and whether inventory builds were ahead of demand or pricing. Management said April had started well, March exited strongly, and the market is less complex, but they would not call a full inflection yet because the season is still early. On pricing, they expect OEMs to raise prices but said the realized increase is usually less than announced; on inventory, they said they did not buy ahead materially and are carrying product to support the summer selling season.