Builders FirstSource, Inc. (BLDR): Results of Operations and Financial Condition
Builders FirstSource, Inc. (BLDR) filed an SEC Form 8-K — Results of Operations and Financial Condition. For Immediate Release Builders FirstSource Reports Second Quarter 2026 Results July 30, 2026 (Irving, TX) – Builders FirstSource, Inc. (NYSE: BLDR) today reported its results for the second quarter ended June 30, 2026. Second Quarter 2026 Highlights All Year-Over-Year Comparisons
How this was made
The 30-second read
Why it matters
The company reports weaker revenue, sharply lower profitability, and a large drop in free cash flow, alongside a more cautious view of the second half via an updated full-year outlook.
Market read
Q2 results include material declines in sales, gross margin, adjusted EBITDA, and free cash flow, which typically drive near-term estimate revisions for homebuilding materials suppliers.
What to watch
The filing attributes margin and cash declines to housing headwinds and commodity deflation, so investors may focus on whether those drivers are stabilizing rather than extrapolating linearly.
Builders FirstSource Reports Second Quarter 2026 Results
Net sales decreased 8.8%, gross profit decreased 16.3%, and the Company reported a net loss of $(3.9) million, while adjusted EBITDA decreased 34.9% and full-year guidance reflects a more cautious view of the second half.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $3.9 billion | – | a decrease of 8.8% |
| Core organic net salesother | a 7.0% decline | – | a 7.0% decline |
| Commodity deflationother | 2.7% | – | – |
| Growth from acquisitionsother | 0.9% | – | – |
| Gross profitGAAP | $1.1 billion | – | a decrease of 16.3% |
| Gross profit margin percentageGAAP | 28.1% | – | decreased 260 basis points |
| Selling, general and administrative expensesGAAP | $958.3 million | – | a decrease of $29.5 million, or 3.0% |
| SG&A as a percentage of net salesGAAP | 24.8% | – | increased by 150 basis points |
| Net interest expenseGAAP | $76.1 million | – | increased $4.1 million |
| Income taxGAAP | $56.3 million | – | – |
| Net income (loss)GAAP | $(3.9) million | – | – |
| Diluted earnings per shareGAAP | $(0.04) | – | – |
| Net income (loss) as a percentage of net salesGAAP | (0.1)% | – | a decrease of 450 basis points |
| Adjusted net incomenon-GAAP | $126.1 million | – | a decrease of 52.3% |
| Adjusted earnings per diluted sharenon-GAAP | $1.17 | – | The 50.8% decrease |
| Adjusted EBITDAnon-GAAP | $329.3 million | – | decreased 34.9% |
| Adjusted EBITDA marginnon-GAAP | 8.5% | – | declined by 350 basis points |
| Cash provided by operating activitiesGAAP | $68.0 million | – | a decrease of $273.0 million |
| Cash used in investing activitiesGAAP | $49.3 million | – | – |
| Free cash flownon-GAAP | $32.2 million | – | a decrease of 87.4% |
| Liquidityother | approximately $1.6 billion | – | – |
| Net borrowing availability under the revolving credit facilityother | $1.5 billion | – | – |
| Cash on handGAAP | $0.1 billion | – | – |
| LTM Adjusted EBITDAnon-GAAP | $1.3 billion | – | – |
| Net debtother | $4.6 billion | – | – |
| Net debt to LTM Adjusted EBITDA ratioother | 3.6x | – | – |
| Second-quarter productivity savingsother | approximately $28 million | – | – |
| Year-to-date productivity savingsother | approximately $34 million | – | – |
2026 Full Year outlook
- Revenue$14.0 billion to $14.8 billion
- Gross margin27.5% to 28.5%
- Tax rateAn adjusted effective tax rate of 22% to 24%.
- NoteAdjusted EBITDA to be in a range of $1.0 billion to $1.2 billion.
- NoteAdjusted EBITDA margin to be in a range of 7.1% to 8.1%.
- NoteFree cash flow of approximately $0.4 billion to $0.5 billion, assuming average commodity prices in the range of $390 to $410 per thousand board foot (mbf).
- NoteThe Company expects to deliver $50 million to $70 million in productivity savings in 2026.
- NoteWithin the Company’s geographies, Single Family starts are projected to be down mid- to high-single digits, Multi-Family starts are projected to be down mid-single digits, and Repair & Remodel activity is projected to be down 1%.
- NoteAcquisitions completed within the last twelve months are projected to add net sales growth of approximately 1%.
- NoteTotal capital expenditures in the range of $175 million to $225 million.
- NoteInterest expense in the range of $280 million to $290 million.
- NoteDepreciation and amortization expenses in the range of $580 million to $610 million.
- NoteNo change in selling days versus 2025.
Capital returns
- The Company has $500 million remaining under its share repurchase authorization.
- Since the inception of its buyback program in August 2021, the Company has repurchased 102.6 million shares of its common stock, or 49.7% of its total shares outstanding, at an average price of $81.26 per share for a total cost of $8.3 billion, inclusive of applicable fees and taxes.
What drove it
- The net-sales decline reflected a lower housing starts environment and related headwinds, a 7.0% decline in core organic net sales, and commodity deflation of 2.7%, partially offset by growth from acquisitions of 0.9%.
- Core organic net sales declined 7.0%. Single Family declined 8.1%, Multi-Family declined 9.7%, and Repair and Remodel (“R&R”)/Other declined 1.8%.
- On a weighted basis, Single Family lowered net sales by 5.6%, Multi-Family by 1.0%, and R&R/Other by 0.4%.
- Gross profit margin percentage decreased 260 basis points to 28.1%, primarily driven by a lower housing starts environment and related headwinds.
- SG&A declined primarily because of lower variable compensation and lower wages resulting from cost saving actions, partially offset by higher ERP implementation expenses and higher fuel expenses.
- Adjusted net income was affected by lower gross profit and higher net interest expense, partially offset by lower SG&A and lower income tax expense after excluding the Internal Revenue Service R&D settlement agreement.
Concerns
- Housing market conditions remain weak, with persistent housing affordability challenges and softer demand trends.
- Adjusted EBITDA margin declined by 350 basis points to 8.5%, attributable to lower gross margin and reduced operating leverage.
- Net interest expense increased $4.1 million to $76.1 million, primarily due to additional interest expense from purchase options exercised related to other finance obligations.
- Income tax expense included an Internal Revenue Service research and development (R&D) settlement agreement concerning prior tax years.
- The net debt to LTM Adjusted EBITDA ratio was 3.6x, compared to 2.3x in the prior-year period.
What to watch
- Execution against the $50 million to $70 million productivity-savings target in 2026.
- The trajectory of Single Family starts projected to be down mid- to high-single digits, Multi-Family starts projected to be down mid-single digits, and Repair & Remodel activity projected to be down 1%.
- Whether acquisitions completed within the last twelve months deliver approximately 1% of net-sales growth.
- Gross profit margin performance against the 27.5% to 28.5% full-year outlook.
- Free cash flow performance against approximately $0.4 billion to $0.5 billion, assuming average commodity prices in the range of $390 to $410 per thousand board foot (mbf).
Balance sheet and cash flow
- For the three months ended June 30, 2026, cash provided by operating activities was $68.0 million, and cash used in investing activities was $49.3 million.
- The Company's free cash flow was $32.2 million, compared to $255.0 million in the prior-year period.
- Liquidity as of June 30, 2026, was approximately $1.6 billion, consisting of $1.5 billion in net borrowing availability under the revolving credit facility and $0.1 billion of cash on hand.
- As of June 30, 2026, LTM Adjusted EBITDA was $1.3 billion and net debt was $4.6 billion, resulting in a net debt to LTM Adjusted EBITDA ratio of 3.6x, compared to 2.3x in the prior-year period.
Analysis
Builders FirstSource reported a materially weaker second quarter as housing demand and commodity conditions pressured sales and profitability. Net sales were $3.9 billion, a decrease of 8.8%, driven by a 7.0% decline in core organic net sales and commodity deflation of 2.7%, partly offset by 0.9% growth from acquisitions. Core organic sales declined across Single Family, Multi-Family, and R&R/Other, with Single Family the largest weighted drag on net sales.
Profitability declined faster than sales. Gross profit was $1.1 billion, down 16.3%, and gross profit margin fell 260 basis points to 28.1%. SG&A declined 3.0% to $958.3 million, helped by lower variable compensation and cost-saving actions, but SG&A as a percentage of net sales rose 150 basis points to 24.8% because of reduced operating leverage. Adjusted EBITDA decreased 34.9% to $329.3 million and adjusted EBITDA margin declined 350 basis points to 8.5%.
GAAP results included a net loss of $(3.9) million, or $(0.04) earnings per diluted share, compared with net income of $185.0 million, or $1.66 earnings per diluted share, in the prior-year period. The Company cited lower gross profit and higher net interest expense as primary factors, partly offset by lower SG&A. Income tax was $56.3 million and included an Internal Revenue Service R&D settlement agreement concerning prior tax years. Adjusted net income decreased 52.3% to $126.1 million and adjusted earnings per diluted share decreased 50.8% to $1.17.
Cash generation also declined. Cash provided by operating activities was $68.0 million and free cash flow was $32.2 million, compared to $255.0 million in the prior-year period. Liquidity was approximately $1.6 billion, while net debt was $4.6 billion and the net debt to LTM Adjusted EBITDA ratio was 3.6x, compared to 2.3x in the prior-year period. The Company retained $500 million under its repurchase authorization and highlighted approximately $28 million of second-quarter productivity savings.
The full-year outlook calls for net sales of $14.0 billion to $14.8 billion, gross profit margin of 27.5% to 28.5%, adjusted EBITDA of $1.0 billion to $1.2 billion, and free cash flow of approximately $0.4 billion to $0.5 billion. Management characterized the outlook as reflecting current market conditions and a more cautious view of the second half. The key operational variables are housing-start trends, commodity prices, acquisition contribution, productivity savings, and the ability to maintain gross margin and cash generation amid softer demand.
Management, verbatim
Despite the ongoing housing market headwinds, our second quarter results were in line with our expectations and reflect the strength of our differentiated platform and the adaptability of our operating model. We remain focused on the factors within our control, including managing the business with discipline, and leveraging both our technology capabilities and our value-added solutions. This approach continues to strengthen our position as a trusted, full-service partner to homebuilders.
Peter Jackson, CEO of Builders FirstSource
While housing market conditions remain weak, we are continuing to invest in innovation and capabilities that enhance the customer experience, improve efficiency across the value chain, and reinforce our competitive advantage. Our business model is built to perform through the cycle, and we remain confident in our ability to outgrow the market over time and create sustainable, long-term value for our shareholders.
Peter Jackson, CEO of Builders FirstSource
Our second quarter results demonstrate continued discipline through managing costs, working capital, and capital deployment. Given persistent housing affordability challenges and softer demand trends, our updated full-year outlook reflects current market conditions and a more cautious view of the second half.
Pete Beckmann, CFO of Builders FirstSource
Not in the filing
stated, not guessed- Dollar revenue by operating segment or end market was not reported.
- GAAP operating income was not reported.
- GAAP operating margin was not reported.
- Prior-year net sales, gross profit, SG&A, net interest expense, adjusted net income, adjusted EBITDA, and cash provided by operating activities were not reported on their respective line items.
- Prior-quarter comparisons for reported metrics were not reported.
- Total debt and gross debt were not reported.
- Quarterly share repurchases, shares repurchased, and repurchase spending were not reported.
- Dividend information was not reported.
- Prior outlook was not provided, so comparison of actual results with prior guidance was not available.
- Quantitative GAAP reconciliations for forward-looking adjusted EBITDA, adjusted EBITDA margin, adjusted effective tax rate, and free cash flow were not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) with an earnings release for Builders FirstSource’s second quarter ended June 30, 2026.
Ticker impact
Builders FirstSource reported Q2 2026 net sales of $3.9B (-8.8%) and net loss of $(3.9)M, with free cash flow down to $32.2M.
Likely negative bias for the stock until the market gains confidence in stabilization of gross margin and working-capital/free-cash-flow trends.
The filing discloses broad-based deterioration: gross profit -16.3%, gross margin -260 bps to 28.1%, adjusted EBITDA -34.9% to $329.3M, and free cash flow -87.4% to $32.2M, plus a more cautious full-year outlook.
Market effects
Signals continued pressure on homebuilding supply-chain earnings and cash conversion tied to housing starts and commodity deflation.
Most relevant to US housing-related construction materials demand and contractor/homebuilder activity.
Limited direct global impact, but commodity deflation and housing cycle dynamics can affect broader building-materials sentiment.
Counterpoint
Management says results were in line with expectations and emphasizes discipline, productivity savings, and a full-cycle business model, which could limit downside if the market had priced in worse.
Key entities
- issuerBuilders FirstSource, Inc.
Reports Q2 2026 results and provides commentary on housing headwinds, operating discipline, and an updated full-year outlook.
- executivePeter Jackson
CEO quoted on results being in line with expectations and focus on innovation and operating model adaptability.
- executivePete Beckmann
CFO quoted on cost, working capital, capital deployment discipline and updated full-year outlook.
