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The call presented a mixed picture: clear strengths in commercial and heavy-commercial performance, strong operating cash flow, ample liquidity, an active M&A pipeline, and shareholder returns initiatives. These positives were contrasted with notable near-term headwinds: weaker residential/new-single-family demand, a meaningful volume decline (partly weather-driven), margin pressure from rising insurance, vehicle and fuel costs, and some project slowdowns. Management expressed confidence in the long-term fundamentals, expects further M&A activity, and reaffirmed a full-year gross margin range (32%–34%), but acknowledged persistent cost pressures that could pressure quarterly results.
Management said it was not providing comprehensive guidance but gave several forward-looking estimates and key metrics: Q2 amortization ~ $10M and full‑year 2026 amortization ~ $40M (subject to change with acquisitions), an expected effective tax rate of 25%–27% for FY‑2026, Q2 net interest expense of ~ $10M, and an expected $15M–$20M incremental other COGS headwind from fuel for the remainder of the year; they expect to acquire at least $100M of annual revenue in 2026, will continue to target positive free cash flow to support dividends and opportunistic buybacks (Q1 repurchases ~91k shares for $25M, $475M remaining authorization through Mar 1, 2027), and declared a Q2 dividend of $0.39/share (payable Jun 30, >5% YoY increase). For context, Q1 results included consolidated revenue of $661M (down 4%), adjusted EBITDA $92M (13.9% margin), adjusted net income $48M ($1.79/sh), adjusted gross margin 32.2%, cash on hand ~$474M, net debt / LTM adj. EBITDA 1.2x (target <2x), working capital (ex‑cash) $346M, and Q1 operating cash flow $102M (up 11% YoY).
Commercial same-branch sales increased 11% year-over-year in Q1, with heavy commercial outperforming (more than 20% growth, cited as ~22% in comments). Heavy commercial backlog growth positions that end market for continued strength in 2026.
Generated $102 million in cash flow from operations in Q1, an 11% year-over-year increase; ended the quarter with $474 million in cash on the balance sheet and $346 million in working capital (ex-cash).
Adjusted EBITDA was $92 million with an adjusted EBITDA margin of 13.9%; adjusted net income was $48 million or $1.79 per diluted share for the quarter.
Net debt to trailing 12-month adjusted EBITDA was 1.2x at March 31, 2026 (down slightly from 1.17x prior year) — well below the company's stated target of 2.0x.
Completed 4 acquisitions in Q1 representing approximately $28 million of annual sales across residential and commercial end markets; management expects to acquire at least $100 million of annual revenue in 2026.
Repurchased ~91,000 shares for $25 million in Q1 and has approximately $475 million remaining under the repurchase program (expires March 1, 2027); Q2 dividend approved at $0.39 per share, a >5% increase year-over-year.
Spray foam manufacturers announced ~25% price increases that management expects to be largely passed through (spray foam ~11% of total sales), and product margin was reported up ~70 basis points year-over-year in Q1.
Management reported growing multifamily backlogs (traditional multifamily growing; high-rise is small portion of revenue) and noted profitable share gains and positive April activity in multifamily.
Greetings, and welcome to the Installed Building Products First Quarter 2026 Financial Results Conference [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ryan Ricketts, Director of Investor Relations and Financial Planning and Analysis. You may begin.
Good morning, and welcome to Installed Building Products First Quarter 2026 Earnings Conference Call. Earlier today, we issued a press release on our financial results for the 2026 first quarter, which can be found in the Investor Relations section of our website. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements within the meaning of federal securities laws. These forward-looking statements are based on management's current beliefs and expectations and are subject to factors that could cause actual results to differ materially from those described today. Please refer to our SEC filings for cautionary statements and risk factors. We undertake no duty or obligation to update any forward-looking statement as a result of new information or future events, except as required by federal securities laws. In addition, management refers to certain non-GAAP and adjusted financial measures on this call. You can find a reconciliation of such non-GAAP measures to the nearest GAAP equivalent in the company's earnings release and investor presentation both of which are available in the Investor Relations section of our website.
This morning's conference call is hosted by Jeff Edwards, our Cha...