Q3 FY2026
Filed Oct 22, 2026FirstService Reports Third Quarter 2026 Results Balanced Top-Line Growth Across Both Divisions
Third-quarter revenue, adjusted EBITDA and adjusted EPS increased, led by organic growth at FirstService Residential and Restoration brands and Century Fire Protection. However, GAAP operating earnings, net earnings and diluted EPS declined, while FirstService Brands profitability weakened because of lower roofing revenue, competitive conditions and prior-year contingent-consideration benefits.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues, three months ended September 30GAAP | $1.53B | – | 6% |
| Adjusted EBITDA, three months ended September 30non-GAAP | $169.7M | – | 3% |
| GAAP operating earnings, three months ended September 30GAAP | $107.4M | – | – |
| Net earnings, three months ended September 30GAAP | $64.55M | – | – |
| Net earnings attributable to Company, three months ended September 30GAAP | $42.91M | – | – |
| Diluted net earnings per share, three months ended September 30GAAP | $ 0.99 | – | – |
| Adjusted earnings per share, three months ended September 30non-GAAP | $ 1.89 | – | 7% |
| Cost of revenues, three months ended September 30GAAP | 1,034,439 | – | – |
| Selling, general and administrative expenses, three months ended September 30GAAP | 334,678 | – | – |
| Depreciation, three months ended September 30GAAP | 29,735 | – | – |
| Amortization of intangible assets, three months ended September 30GAAP | 21,268 | – | – |
| Interest expense, net, three months ended September 30GAAP | 18,839 | – | – |
| Income tax, three months ended September 30GAAP | 23,834 | – | – |
| Net cash provided by operating activities, three months ended September 30GAAP | 84,161 | – | – |
| Purchases of fixed assets, three months ended September 30GAAP | (28,452) | – | – |
| Revenues, nine months ended September 30GAAP | $4.30B | – | 4% |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $437.1M | – | 3% |
| GAAP operating earnings, nine months ended September 30GAAP | $253.7M | – | – |
| Net earnings, nine months ended September 30GAAP | $149.1M | – | – |
| Diluted net earnings per share, nine months ended September 30GAAP | $ 2.41 | – | – |
| Adjusted earnings per share, nine months ended September 30non-GAAP | $ 4.57 | – | 4% |
| Net cash provided by operating activities, nine months ended September 30GAAP | 302,148 | – | – |
| Purchases of fixed assets, nine months ended September 30GAAP | (88,096) | – | – |
| Acquisition of businesses, net of cash acquired, nine months ended September 30GAAP | (73,191) | – | – |
| FirstService Residential adjusted EBITDA, three months ended September 30non-GAAP | $71.3M | – | 7% |
| FirstService Residential operating earnings, three months ended September 30GAAP | $58M | – | – |
| FirstService Brands adjusted EBITDA, three months ended September 30non-GAAP | $101.8M | – | – |
| FirstService Brands operating earnings, three months ended September 30GAAP | $60M | – | – |
| Corporate costs in adjusted EBITDA, three months ended September 30non-GAAP | $3.5M | – | – |
| GAAP corporate costs, three months ended September 30GAAP | $10.7M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| FirstService Residential, three months ended September 30, 2026All growth was organic, driven by new contract wins and expanded sited labor services. | $633.3M | – | 5% |
| FirstService Brands, three months ended September 30, 2026Organic revenue grew 3%, driven by Restoration brands and Century Fire Protection and partially offset by reduced activity levels at Roofing Corp. of America. | $898.4M | – | 7% |
| FirstService Residential, nine months ended September 30, 2026The filing reports segment adjusted EBITDA of $ 186,598 and operating earnings of $ 143,099. | $1.80B | – | – |
| FirstService Brands, nine months ended September 30, 2026The filing reports segment adjusted EBITDA of $ 261,751 and operating earnings of $ 146,566. | $2.50B | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Repurchases of common shares were (311,589) for the three months ended September 30, 2026, and (560,006) for the nine months ended September 30, 2026.
- Dividends paid to common shareholders were (13,467) for the three months ended September 30, 2026, and (40,065) for the nine months ended September 30, 2026.
- Purchases of non-controlling interests, net were (1,002) for the three months ended September 30, 2026, and (11,218) for the nine months ended September 30, 2026.
- Distributions paid to non-controlling interests were (3,933) for the three months ended September 30, 2026, and (17,504) for the nine months ended September 30, 2026.
What drove it
- Consolidated third-quarter revenue increased 6% relative to the same quarter in the prior year.
- FirstService Residential growth was entirely organic and reflected new contract wins and expanded sited labor services.
- FirstService Brands organic growth was driven by Restoration brands and Century Fire Protection.
- Residential division margins were modestly up due to labor cost management and incremental efficiency gains.
- Management cited sequential improvement in organic top-line growth.
Concerns
- FirstService Brands operating earnings were $ 60.0 million, versus $ 73.7 million in the prior-year quarter.
- FirstService Brands margin declined primarily because roofing operations had lower year-over-year revenues and faced a more competitive market environment.
- FirstService Brands operating earnings margin was also affected by contingent consideration fair value adjustments that benefitted the prior-year period.
- GAAP operating earnings declined to $ 107.4 million from $ 115.6 million, and GAAP diluted EPS declined to $ 0.99 from $ 1.24.
- Third-quarter operating cash flow declined to 84,161 from 126,362, while total debt increased to $ 1,554,414 from $ 1,082,676 at December 31, 2025.
What to watch
- Activity levels and profitability at Roofing Corp. of America.
- Whether Restoration brands and Century Fire Protection continue to support FirstService Brands organic growth.
- Execution on new contract wins and expanded sited labor services at FirstService Residential.
- Operating cash flow following 302,148 of net cash provided by operating activities for the nine months ended September 30, 2026.
- Debt levels following the increase in total debt to $ 1,554,414 at September 30, 2026.
- Management's ability to achieve its previously communicated full-year performance targets; the release provides no numerical full-year outlook.
Balance sheet and cash flow
- Cash and cash equivalents were $ 160,759 at September 30, 2026, versus $ 154,425 at December 31, 2025.
- Restricted cash was 25,054 at September 30, 2026, versus 25,665 at December 31, 2025.
- Total debt was $ 1,554,414 at September 30, 2026, versus $ 1,082,676 at December 31, 2025.
- Total debt, net of cash was 1,393,655 at September 30, 2026, versus 928,251 at December 31, 2025.
- Long-term debt, non-current was 1,541,075 at September 30, 2026, versus 1,069,027 at December 31, 2025.
- Net cash provided by operating activities was 84,161 for the three months ended September 30, 2026, versus 126,362 in the prior-year period.
- Net cash provided by operating activities was 302,148 for the nine months ended September 30, 2026, versus 330,446 in the prior-year period.
- Increase in long-term debt, net was 303,866 for the three months ended September 30, 2026, and 472,070 for the nine months ended September 30, 2026.
Analysis
FirstService reported balanced third-quarter top-line growth, with revenues of $ 1,531.7 million, up 6% from $ 1,447.6 million. Adjusted EBITDA increased 3% to $ 169.7 million and adjusted EPS rose 7% to $ 1.89. The nine-month results also remained positive, with revenues of $ 4,298.0 million, adjusted EBITDA of $ 437.1 million and adjusted EPS of $ 4.57, each above the comparable prior-year level as reported.
The two operating divisions both contributed to revenue growth. FirstService Residential revenues rose 5% to $ 633.3 million, entirely from organic growth, supported by new contract wins and expanded sited labor services. Its adjusted EBITDA increased 7% to $ 71.3 million, operating earnings increased to $ 58.0 million from $ 53.3 million, and management said margins were modestly up because of labor cost management and incremental efficiency gains.
FirstService Brands revenue increased 7% to $ 898.4 million, while organic revenue grew 3%. Restoration brands and Century Fire Protection were the stated growth drivers, but reduced activity at Roofing Corp. of America limited the organic result. Brands adjusted EBITDA was $ 101.8 million versus $ 102.1 million, while operating earnings fell to $ 60.0 million from $ 73.7 million. Management attributed the margin decline principally to lower roofing revenue and a more competitive market, with prior-year contingent-consideration fair-value adjustments also affecting the operating-earnings comparison.
GAAP profitability declined in the quarter despite revenue growth. GAAP operating earnings were $ 107.4 million versus $ 115.6 million, net earnings were $ 64,550 versus $ 70,887, and diluted EPS was $ 0.99 versus $ 1.24. Cash generation also softened, with net cash from operating activities of 84,161 compared with 126,362. At September 30, 2026, total debt was $ 1,554,414 and total debt net of cash was 1,393,655, compared with $ 1,082,676 and 928,251, respectively, at December 31, 2025.
Capital allocation included repurchases of common shares of (311,589) during the quarter and (560,006) year to date, alongside dividends paid to common shareholders of (13,467) and (40,065), respectively. Management reaffirmed confidence in previously communicated full-year performance targets, but this release does not provide numerical guidance. The central operating issue is whether Residential's organic growth and margin gains, together with Restoration brands and Century Fire Protection, can offset the lower activity and competitive pressure in roofing while operating cash flow and debt remain in focus.
Management, verbatim
We were pleased with our results for the quarter, highlighted by our sequential improvement in organic top-line growth.
Scott Patterson, Chief Executive Officer
The continued strong execution of our operating teams in the face of macroeconomic challenges reinforces our confidence in achieving our previously communicated full-year performance targets.
Scott Patterson, Chief Executive Officer
Not in the filing
stated, not guessed- Numerical forward revenue guidance
- Numerical forward gross-margin guidance
- Numerical forward operating-expense guidance
- Numerical forward tax-rate guidance
- Numerical prior guidance for comparison
- Gross margin
- Free cash flow
- Quarterly prior-quarter metrics
- A numerical segment adjusted EBITDA margin
AlphAI 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.