Results
For Immediate Release
Builders FirstSource Reports Third Quarter 2026 Results
October 29, 2026 (Irving, TX) – Builders FirstSource, Inc. (NYSE: BLDR) today reported its results for the third quarter ended September 30, 2026.
Third Quarter 2026 Highlights
All Year-Over-Year Comparisons Unless Otherwise Noted:
Net sales were $3.9 billion, a decrease of 2.2%, primarily due to a lower housing starts environment and related headwinds.
The decline reflects lower core organic net sales as well as commodity deflation, partially offset by growth from acquisitions.
Gross profit was $1.1 billion, a decrease of 10.6%.
Gross profit margin percentage decreased 260 basis points to 27.8%, primarily driven by a lower housing starts environment and related headwinds.
Net income was $60.4 million, or diluted EPS of $0.56 compared to diluted EPS of $1.10 in the prior year period.
Net income as a percent of net sales decreased by 150 basis points to 1.6%.
Adjusted EBITDA decreased 28.3% to $311.1 million, primarily driven by lower gross profit.
Adjusted EBITDA margin declined by 290 basis points to 8.1%, attributable to lower gross margin and reduced operating leverage.
Cash provided by operating activities was $146.6 million, a decrease of $401.2 million compared to the prior year period.
The Company's free cash flow was $76.0 million, a decrease of 83.7%, compared to $464.9 million in the prior year period.
The decrease was primarily driven by lower net income and higher net working capital, partially offset by lower capital expenditures.
“Our third quarter results reflect the disciplined execution of our team and the resilience of our platform.
While housing market conditions remain challenging, we are focused on what we can control: delivering solutions that help builders operate more efficiently and investing in value-added products and technology to drive productivity and fuel growth.
These efforts are reinforcing our leadership position and our role as the partner of choice for homebuilders,” commented Peter Jackson, CEO of Builders FirstSource.
Mr. Jackson continued, “This environment underscores the importance of operational excellence and differentiated capabilities at scale.
Our investments in value-added offerings and technology strengthen our competitive advantages and position us to outperform as housing market conditions improve.”
Pete Beckmann, CFO of Builders FirstSource, added, “Our third quarter results met our expectations, reflecting solid execution and a sustained focus on cost management.
Based on our year-to-date performance, we are narrowing our full-year outlook and maintaining the midpoints for net sales and Adjusted EBITDA as we enter the final quarter.
Our strong capital position and solid cash flow generation give us the capacity to pursue growth opportunities while maintaining financial flexibility.”
Third Quarter 2026 Financial Performance Highlights
All Year-Over-Year Comparisons Unless Otherwise Noted:
Net Sales
Net sales were $3.9 billion, a decrease of 2.2%, primarily due to a lower housing starts environment and related headwinds.
The decrease reflects a 3.9% decline in core organic net sales, as well as commodity deflation of 0.1%, partially offset by growth from acquisitions of 1.8%.
Core organic net sales declined 3.9%.
2Single Family declined 6.2%, Multi-Family increased 2.0%, and Repair and Remodel (“R&R”)/Other increased 0.3%.
6On a weighted basis, Single Family lowered net sales by 4.3%, Multi-Family increased sales by 0.2%, and R&R/Other increased sales by 0.2%.
Gross Profit
Gross profit was $1.1 billion, a decrease of 10.6%.
Gross profit margin percentage decreased 260 basis points to 27.8%, primarily driven by a lower housing starts environment and related headwinds.
Selling, General and Administrative Expenses
3SG&A was $973.2 million, an increase of $2.5 million, or 0.3%, primarily driven by additional expenses from operations acquired within the last twelve months and higher fuel and insurance expenses, partially offset by lower variable compensation as a result of decreased net sales and lower wages as a result of cost saving actions.
As a percentage of net sales, total SG&A increased by 70 basis points to 25.3%, primarily attributable to reduced operating leverage.
Net Interest Expense
5Net interest expense increased $3.0 million to $72.2 million, primarily due to additional interest expense from other finance obligations and higher average debt balan ces.
Income Tax Expense (Benefit)
8Income tax was $(33.6) million, compared to $37.1 million in the prior year period.
The decrease in income tax expense was primarily driven by losses before income taxes incurred by certain subsidiaries in the current year period, as well as lower consolidated income before income taxes.
Net Income
Net income was $60.4 million, or $0.56 earnings per diluted share, compared to net income of $122.4 million, or $1.10 earnings per diluted share, in the prior year period.
The decrease in net income was primarily driven by lower gross profit and higher net interest and SG&A expenses, partially offset by an income tax benefit.
4Net income as a percentage of net sales was 1.6%, a decrease of 150 basis points from the prior year period, primarily due to lower gross profit margin and higher net interest and SG&A expenses, partially offset by an income tax benefit.
Adjusted Net Income
Adjusted net income was $162.2 million, a decrease of 26.9%, primarily driven by lower gross profit and higher net interest expense, partially offset by lower adjusted SG&A and an income tax benefit.
Adjusted Earnings Per Diluted Share
Adjusted earnings per diluted share was $1.51, compared to $2.00 in the prior year period.
The 24.5% decrease was primarily driven by lower adjusted net income, partially offset by share repurchases.
Adjusted EBITDA
Adjusted EBITDA decreased 28.3% to $311.1 million, primarily driven by lower gross profit.
Adjusted EBITDA margin declined by 290 basis points from the prior year period to 8.1%, primarily due to lower gross profit margin and reduced operating leverage.
Capital Structure, Leverage, and Liquidity Information
For the three months ended September 30, 2026, cash provided by operating activities was $146.6 million, and cash used in investing activities was $188.3 million.
7The Company's free cash flow was $76.0 million, compared to $464.9 million in the prior year period, largely the result of lower net income and higher net working capital, partially offset by lower capital expenditures.
Liquidity as of September 30, 2026, was $1.5 billion, consisting of approximately $1.4 billion in net borrowing availability under the revolving credit facility and $0.1 billion of cash on hand.
As of September 30, 2026, LTM Adjusted EBITDA was $1.1 billion and net debt was $4.6 billion, resulting in a net debt to LTM Adjusted EBITDA ratio of 4.1x, compared to 2.3x in the prior year period.
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.
Productivity Savings From Operational Excellence
For the third quarter, the Company delivered approximately $23 million in productivity savings related to operational excellence and supply chain initiatives.
Year to date, the Company has delivered approximately $57 million in productivity savings.
The Company expects to deliver $60 million to $70 million in productivity savings in 2026.
2026 Full Year Total Company Outlook
For 2026, the Company expects to achieve the financial performance highlighted below.
Projected Net Sales and Adjusted EBITDA include the expected impact of price, commodities, and margins.
We are not providing a quantitative reconciliation of our forward-looking guidance of adjusted EBITDA, adjusted EBITDA margin, or free cash flow because we are unable to predict with reasonable certainty all the
components required to provide such reconciliation without unreasonable efforts, which are uncertain and could have a material impact on GAAP reported results for the guidance period.
See “Non-GAAP Financial Measures” for additional information.
Net Sales to be in a range of $14.2 billion to $14.6 billion.
Gross Profit margin to be in a range of 27.5% to 28.5%.
Adjusted EBITDA to be in a range of $1.075 billion to $1.125 billion.
Adjusted EBITDA margin to be in a range of 7.4% to 7.9%.
Free cash flow of approximately $400 million to $450 million, assuming average commodity prices in the range of $390 to $410 per thousand board foot (mbf).
2026 Full Year Assumptions
The Company’s anticipated 2026 performance is based on several assumptions for the full year, including the following:
Within 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%.
Acquisitions completed within the last twelve months are projected to add net sales growth in the range of 1.5% to 2%.
Total capital expenditures in the range of $175 million to $225 million.
Interest expense in the range of $290 million to $300 million.
Depreciation and amortization expenses in the range of $580 million to $610 million.
No change in selling days versus 2025.
The teleconference will begin at 8:00 a.m. Central Time and will be hosted by Peter Jackson, Chief Executive Officer, and Pete Beckmann, Chief Financial Officer.
To participate in the teleconference, please dial into the call a few minutes before the start time at 800-420-1459 (U.S. and Canada) or 203-518-9861 (international), Conference ID: BLDRQ326.
The Company will host an Investor Day at the New York Stock Exchange (NYSE) in New York on Tuesday, November 17, 2026, with the formal schedule beginning at 8:45 a.m. Eastern Time.
The event will feature presentations by the executive management team and multiple Q&A sessions.
Additionally, the Company will participate in investor meetings at the Goldman Sachs Industrials and Materials Conference in New York City on December 3.
Builders FirstSource (NYSE: BLDR), headquartered in Irving, Texas, is a leading provider of building materials for professional builders in new residential construction and repair and remodeling.
We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products.
1With approximately 575 locations across 43 states, we serve 48 of the top 50 and 91 of the top 100 Core Based Statistical Areas (CBSAs), ensuring broad geographic coverage and enhancing our ability to partner with our customers.
Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that we design and cut specifically for each home.
We also assemble interior and exterior doors into pre-hung units for easy installation.
Additionally, we distribute a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items.
Our services, which vary by market, include professional installation, turnkey framing, and shell construction.
Supported by the latest construction innovations and digital solutions, we help drive greater efficiency across homebuilding.
Learn more at www.bldr.com
The Company may not succeed in addressing these and other risks.
Further information regarding the risk factors that could affect the Company’s financial and other results can be found in Part I, Item 1A, “Risk Factors” of the Company’s 2025 Form 10-K and may also be described from time to time in the other reports the Company files with the Securities and Exchange Commission.
The financial measures entitled Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income as a percent of net sales, basic Adjusted net income per share, diluted Adjusted net income per share, Adjusted SG&A, Adjusted SG&A as a percent of net sales, Adjusted effective tax rate, and Free cash flow are not financial measures recognized under GAAP and are therefore non-GAAP financial measures.
The Company believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and operating results.
Adjusted EBITDA is defined as GAAP net income before depreciation and amortization expense, net interest expense, income tax expense and other non-cash or special items including stock compensation expense, acquisition and related expense, technology implementation expense, debt issuance and refinancing costs, severance and gain on sale of assets and other one-time costs partially offset by the tax effect of those adjustments to net income.
LTM Adjusted EBITDA is defined as Adjusted EBITDA for the last twelve consecutive months.
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales.
Adjusted net income is defined as GAAP net income before non-cash or special items including stock compensation expense, acquisition and related expense, technology implementation expense, debt issuance and refinancing cost, amortization expense, severance, gain or loss on sale of assets and other one-time costs, partially offset by the tax effect of those adjustments to net income and non-recurring discrete income tax items.
Adjusted net income as a percent of net sales is defined as Adjusted net income divided by net sales.
Basic Adjusted net income per share is defined as Adjusted net income divided by weighted average basic common shares outstanding while diluted Adjusted net income per share is defined as Adjusted net income divided by weighted average diluted common shares outstanding.
Adjusted income tax expense is defined as GAAP income tax expense before non-cash or special items including IRS settlement agreements.
Adjusted effective tax rate is defined as GAAP income tax expense before non-cash or special items including IRS settlement agreements divided by GAAP income before income taxes.
Adjusted SG&A is defined as GAAP SG&A expense before non-cash or special items including stock compensation expense, acquisition and related expense, technology implementation expense, debt issuance and refinancing cost, severance and gain on sale of assets and other one-time costs.
Adjusted SG&A as a percent of sales is defined as Adjusted SG&A divided by net sales.
Free cash flow is defined as GAAP net cash from operating activities less capital expenditures, net of proceeds from the sale of property, plant and equipment.
Note that amounts for prior periods have been updated in this report to present information consistently for all periods presented.
The reconciling adjustments are described in the tables below.
Company management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income as a percent of net sales, basic Adjusted net income per share and diluted Adjusted net income per share as supplemental measures in its evaluation of the Company’s business, including for trend analysis, purposes of determining management incentive compensation and budgeting and planning purposes.
Company management believes that these measures provide a meaningful measure of the Company’s performance and a better baseline for comparing financial performance across periods because these measures eliminate the effects of period to period changes, in the case of Adjusted EBITDA and Adjusted EBITDA margin, in taxes, costs associated with capital investments, net interest expense, stock compensation expense, and other non-cash and non-recurring items and, in the case of Adjusted net income, Adjusted net income as a percent of sales, and Adjusted net income per diluted share, in certain non-recurring items.
Company management also uses free cash flow as a supplemental measure in its evaluation of the Company’s business, including for purposes of its internal liquidity
Company management believes that free cash flow provides a meaningful evaluation of the Company’s liquidity.
The Company believes that these non-GAAP financial measures provide additional tools for investors to use in evaluating ongoing operating results, cash flows and trends and in comparing the Company’s financial measures with other companies in the Company’s industry, which may present similar non-GAAP financial measures to investors.
However, the Company’s calculations of these financial measures are not necessarily comparable to similarly titled measures reported by other companies.
Company management does not consider these financial measures in isolation or as alternatives to financial measures determined in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below.
The Company’s Adjusted EBITDA outlook, free cash flow and full-year forecast for its effective tax rate on operations exclude the impact of certain income and expense items that management believes are not part of underlying operations.
These items may include, but are not limited to, loss on early extinguishment of debt, restructuring charges, certain tax items, and charges associated with non-recurring costs such as professional and legal fees associated with our acquisitions and enterprise resource planning (ERP) program.
The Company’s management cannot estimate on a forward-looking basis without unreasonable effort the impact these income and expense items will have on its reported net income, operating cash flow and its reported effective tax rate because these items, which could be significant, are difficult to predict and may be highly variable.
As a result, the Company does not provide a reconciliation to the most comparable GAAP financial measure for its Adjusted EBITDA or free cash flow outlook or its effective tax rate on operations forecast.
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