FSV

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was characterized by resilience in property management and fire protection, offset by persistent macroeconomic pressure in roofing and home services. Restoration results were impacted by a weakened pipeline following mild weather in late 2025., though management reported a significant recent uptick in large-loss project signings. The roofing segment underperformed due to a stubbornly weak new construction market and intense competition in the reroofing sector, particularly in Florida and Las Vegas. Management intentionally exited low-margin roofing contracts to preserve long-term profitability despite short-term top-line pressure. Century Fire continues to outperform, driven by a strong local branch network and diversified demand across sprinkler and alarm installation and service. Home service brands are successfully increasing close ratios and job sizes to offset housing market activity that remains at 10-year lows. The 'Resilience First' initiative was launched to differentiate the residential division by cross-selling restoration and roofing services to managed communities. Restoration brands are expected to achieve 5% year-over-year growth in the second half, supported by a bolstered pipeline of large-loss projects. Management cautioned that restoration revenue conversion remains subject to delays from scoping, permitting, and insurance navigation timelines. Roofing is expected to remain challenged in the near term, with Q3 organic growth projected to decline in the mid-single-digit range. Full-year consolidated revenue growth is projected to be similar to or slightly better than the 4% year-to-date rate, with mid-single-digit EBITDA growth. The company plans to continue its dual-track capital strategy, balancing tuck-under acquisitions with opportunistic share repurchases given current valuations. The company sold its residential pool maintenance accounts to focus exclusively on higher-margin commercial pool management. A significant roofing project delay was attributed to ongoing insurance claim negotiations between a property owner and carrier, though the project remains in the backlog. Management noted that Hurricane Ian created a 'pull-forward' of roofing demand in Florida, leading to current overcapacity and unsustainable pricing by competitors. The M&A environment is currently constrained by a lack of high-quality targets as owners wait for performance to recover before seeking exits. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Backlog is moving in the right direction sequentially, though it remains down year-over-year due to market softness and intentional exits from low-margin work. Delays in reroofing projects are primarily due to construction timing and insurance negotiations rather than project cancellations. Management views current share prices as a meaningful discount to private market valuations, justifying the $250 million in recent buybacks. The company maintains $800 million in liquidity and is comfortable increasing leverage to 2.5x to fund both acquisitions and repurchases simultaneously. Expertise in sensitive health care environments has led to new opportunities in specialty construction and capital improvement retrofits. This specialized reputation is building momentum for 2027, though it will not materially impact Q3 results due to scoping timelines. Management does not see structural changes to their business models but acknowledges increased competition for acquisitions from private equity capital. Current M&A scarcity is partly due to private equity owners being reluctant to crystallize losses on underperforming assets in the current environment.

Image source: The Motley Fool. Thursday, July 23, 2026 at 11:00 a.m. ET Chief Executive Officer - D. Scott Patterson Chief Financial Officer - Jeremy Alan Rakusin Operator: Good day, and welcome to the Second Quarter Investors Conference Call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements and involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward looking statement. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's annual report on form 40 f. As filed with the US Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is 07/23/2026. As a reminder, if you would like to ask a question, please press 11 on your telephone. You will then hear an automated message advising that your hand is raised. If you would like to remove yourself from the queue, please press *1 again. I would now like to turn the call over to chief executive officer, mister Scott Patterson. Please go ahead, sir. D. Scott Patterson: Thank you, Lisa. Good morning, everyone. Thank you for joining our Q2 conference call. I am on today with our CFO, Jeremy Alan Rakusin. I will kick us off with some high level comments. Jeremy will follow with more detail. Let me start by saying that we are generally pleased with our Q2 results in an economic environment that continues to be quite challenging. We are also pleased with the progress we made during the quarter on a few fronts that we believe puts us in position to achieve a stronger second half of the year and gain momentum into 2027. Total revenues for the second quarter were up 2% over the prior year. Half organic growth. EBITDA for the quarter was up 3% reflecting a consolidated margin of 11.2% up 10 basis points over the prior year and better than expectation primarily within our brands division. Jeremy will walk through the detail in his prepared comments. Finally, our earnings per share were up 2% over the prior year. In line with top line growth. Looking at our divisional results, first service residential revenues were in line with expectation and up 5% organically. The reported revenues were slightly less at 4% reflecting the sale of our residential pool maintenance early in the quarter. We separated and sold residential accounts that have accumulated over the years to focus solely on commercial pool maintenance and management. Our core property management business continues to perform solidly on expectation, and we expect similar results for the balance of the year. Moving on to FirstService Brands, revenues for the quarter were up 1% with strength at Century Fire. Tempered by approximately flat results at our restoration and home service brands and largely offset by revenue declines within our roofing operation. I will walk through each of the segments. Revenues for our 2 restoration brands Paul Davis and First On-site, were down slightly from the prior year. As we pointed out at the last 2 quarter ends, we entered the year with a weakened pipeline due to the mild weather experienced in Q4 of last year which has impacted us in the first half of this year. Towards the end of Q2 and July, we made significant progress in signing work and bolstering our pipeline back to historically healthy levels. In particular, we won a number of large loss projects across North America that will convert to revenue over the next 12 to 18 months. In addition, we are seeing opportunities for specialty construction projects that have arisen through our restoration work with certain customers and in certain verticals. Looking forward, we expect to show approximately 5% year-over-year growth in the back half of the year for our restoration brands. it is a modest outlook relative to the uptick in activity, as it is difficult to forecast how quickly the recent back backlog additions will convert to revenue. Our experience suggests that scoping, permitting, and insurance navigation could create delays in generating revenue. Storm and hurricane activity in the coming months could add to the backlog and improve this growth outlook. Moving to our Roofing segment. Revenues for the quarter were down approximately 6% on a reported basis and 10% organically. Lower than our expectation. There are a few factors that impacted our top line during the quarter. First and foremost, the market remains stubbornly weak and ultra competitive. Both the new construction market outside of data centers and the reroof market. And the market conditions are particularly acute in 2 of our larger branch regions. Las Vegas and Southwest Florida. In both markets, we have intentionally moved away from certain low-margin work that was in our pipeline. The other factor during the quarter was the delay of a few large reroof projects that we expected to complete during the quarter. The delays accounted for half the miss relative to our expectation. All the projects remain in our backlog. The roofing market has been a challenge for us in the past year. it is been a difficult environment, and with ongoing macroeconomic uncertainty, it is unlikely to improve materially in the near term. That said, we strongly believe that the long term thesis is unchanged. Roofing is a huge market and an essential service with long term tailwinds. We believe in our team and are focused on continuing to build the platform. As evidence of our ongoing belief in the opportunity, we closed on the acquisition during the quarter of Sheffer's Roofing in Kansas City. Sheffer's is a leader in the market serving customers throughout Missouri and Northern Arkansas, and strengthens our presence in the important Midwest region. Looking forward to Q3, we expect our roofing operations to be down slightly with organic growth off in the mid single digit range. Moving to Century Fire. We had another strong quarter that was right on expectation. And mirrored our Q1 result. With revenues up over 10% versus the prior year, including high single digit organic growth. During the quarter, we announced the acquisitions of Titan Fire Protection, based in Tampa, Florida. And GSC Fire and Security based in Austin, Texas. Titan is a sprinkler installation company serving commercial customers across Central Florida. GSC is an alarm installation and service company serving the Austin and San Antonio markets. In both cases, Century will look to partner with the management teams to broaden the service capability and provide both sprinkler and alarm install and service across the respective customer bases. Looking forward for Century, we finished the quarter with an improved backlog sequentially, and expect similar strong 10%+ year over year growth in the third and fourth quarters. Now on to our home service brands, which as a group generated revenues that were up slightly versus year ago. Modestly better than our expectation. As a reminder, our home service brands include California Closets, CertaPro Painters, Floor Coverings International, and Pillar to Post home inspection. Activity levels at these brands are closely tied to the housing market and consumer sentiment, both of which continue to hover around 10-year lows. The teams continue to do a great job driving increases in close ratio and average job size to eke out revenue gains. We are not getting any help from market improvement and we are not expecting any over the back half of the year. Market indices and economic forecasts all suggest continued weakness in the housing market and consumer confidence. Looking forward for our home services group, we expect the teams continue to take market share to drive similar results for the third and fourth quarters with revenues that are slightly up year over year. Let me now hand off to Jeremy. Jeremy Alan Rakusin: Thank you, Scott. Good morning, everyone. As always, I will provide details of our segmented financial performance, summarize our cash flow, capital deployment and balance sheet position, and close out the commentary with a look forward. But first, a recap of our consolidated financial results. Revenues for the second quarter was $1.45 billion, up 2% year over year and we reported adjusted EBITDA of $161.7 million, up 3% versus the prior year. Adjusted EPS came in at $1.75, a 2% increase over Q2 2025. This brings our year to date consolidated financial performance for the first half of the year to revenues of $2.77 billion, an increase of 4% over last year. Adjusted EBITDA of $267 million, representing 3% growth over the $260 million last year. A margin of 9.7%, down 10 basis points year over year. And adjusted EPS for the first half of the year sits at $2.69 versus $2.63 in the prior year period. Our adjustments to operating earnings and GAAP EPS to calculate our adjusted EBITDA and adjusted EPS, respectively, have been summarized in this morning's press release and remain consistent with our disclosure in prior periods. Reviewing the second quarter segmented financial performance, I will lead off with our FirstService Residential division. Quarterly revenues came in at $617 million, up 4% over the prior year, and as Scott mentioned, up 5% organically. EBITDA for the quarter was $69 million, a 6% year over year increase with an 11.2% margin, up 20 basis points over the 11% margin in Q2 of last year. For the first half of 2026, our division EBITDA margin sits at 9.9%, up 30 basis points compared to the equivalent prior year period. During the remainder of the year, we expect margin improvement to continue at similar pacing to the year to date performance as our teams continue to extract efficiencies in various areas of the enterprise. Shifting to the FirstService Brands division, our financial metrics for the second quarter were relatively comparable to last year's Q2. Including revenues of $832 million and EBITDA at $96 million, both up 1%. Our margin during the quarter was 11.5%, down 10 basis points with the quarter over quarter performance better than both Q1 and our expectations heading into the current quarter. In particular, home services margins performed relatively better as we continue to optimize the balance of marketing and promotional investments in support of lead flow. Turning to our cash flow profile, we generated $112 million in operating cash flow during the second quarter prior to working capital movements and in line with the prior year. Cash flow after accounting for working capital changes was $130 million for the quarter, and sits at almost $220 million year to date. Our capital expenditures during the quarter were a little over $30 million and with our year to date total at $60 million, we expect our annual CapEx to be roughly $130 million, less than our initial target of $140 million we provided at the beginning of the year. Acquisition spending on tuck under deals during the quarter was just over $40 million. The combination of our recent free cash flow performance together with conservative debt levels on our balance sheet supported our decision during the second quarter to also execute share repurchases under our normal course issuer bid. During the quarter, we purchased more than 1.8 million shares at a total cost of almost $250 million or an average price per share of US dollars $135.91. With these buybacks, our leverage, as measured by net debt to EBITDA, increased modestly to 1.8x from the 1.5x level at the end of Q1. Our leverage remains conservative, and we still have ample liquidity with more than $800 million of cash on hand and undrawn bank credit facility balances. This current financial flexibility allows us to continue opportunistically repurchasing additional FirstService shares under the buyback program. When we see the valuation of our large diversified enterprise trading at a meaningful discount to smaller private market businesses in our respective industries. At the same time, we are focused on building our tuck deal pipeline to deploy growth capital when we see acceptable acquisition valuations and target return thresholds. Concluding with an outlook, our first service residential division will deliver growth in the balance of the year, largely mirroring recent quarters. Mid single digit top line growth with modest year over year margin improvement. For the brands division, Scott has provided top line growth indicators for each of the operating businesses which aggregates to mid single digit revenue growth in the back half of the year. This performance will be skewed to the fourth quarter and influenced by the amount of restoration backlog to revenue conversion from the increased pipeline activity levels that Scott referenced as well as capitalizing on any additional potential seasonal spikes in weather activity in the coming months. Putting it all together on a consolidated basis, for the upcoming third quarter, we expect both revenue and EBITDA growth to be similar to the second quarter in the low single digit range. For the full year, consolidated revenue growth is expected to be similar to or modestly better than our year to date top line growth and we are anticipating mid single digit annual EBITDA growth. over 2025. That concludes our prepared comments. Lisa, you may now open the call to questions. Operator: Thank you. Please press *11 on your telephone. You would like to remove yourself from the queue, press *11 again. We also ask that you please wait for your name and company to be announced before proceeding with your question. 1 moment while we compile the Q&A roster. Our first question will be coming from the line of Stephen MacLeod of BMO Capital Markets. Please go ahead. Stephen MacLeod: Thank you. Good morning, guys. D. Scott Patterson: Morning. Jeremy Alan Rakusin: Morning. Stephen MacLeod: I just wanted to just circle around on the on the roofing business. Obviously, the backdrop is quite weak, referenced a continued competitive environment. I am just curious if you see any I mean, I know you gave the outlook for the balance of the year, but just curious kind of what factors you are looking for to potentially see a light at the end of the tunnel with respect to some of the reroofing projects that have been delayed, and how your backlog currently looks. D. Scott Patterson: Yeah. Let me start with the backlog, Steve. it is down year over year, but it is up in June sequentially over May. And May was up sequentially over April. So we are moving in the right direction, but slowly, And I would say battling headwinds. You know, the misses in Q2 were really as I suggested, from some jobs that delayed. They all still remain in our backlog, but we do not have start dates. They have been there is a you know, there is a number of factors associated with each. The largest is an insurance claim relating to hail damage. And it is caught up in negotiations between the owner and insurance carrier. It will take place. it is just a matter of when. And then as I suggested, we have intentionally moved away from jobs that were in our pipeline due to the tight pricing, which was beyond our comfort level. Analyst: Particularly in Southwest Florida. Stephen MacLeod: Okay. that is that is helpful. D. Scott Patterson: And I guess, you noted that 1 of the, the largest sort of project in the backlog was related to an insurance claim. How much of the delays you are seeing are attributable to factors such as that versus the macro backdrop and companies just saying, you know, we will we will do this next year when we have better visibility. I think the delays are primarily related to delays in construction and whether that is other contractors, you know, finishing their bid on time and pushing it out or insurance related issues. Because all of these project the projects I am referencing were in our pipeline and we expect it to complete. But in terms of building the pipeline more quickly, we are seeing there you know, we are seeing softness in the market. Okay. Stephen MacLeod: that is helpful. Thanks, Scott. And then maybe just 1 for Jeremy. Just on the NCIB, you are obviously very active in the quarter. I know you talked a little bit about the balance between funding M&A as well as being active when the stock price is materially dislocated from fair value. I am just curious how you prioritize those 2 things. And how you how much how active you expect to be on the on the buyback in the back half of the year? Jeremy Alan Rakusin: Yes. I mean, we have been buying at current levels and you can be sure that we will continue to do so, just given our balance sheet is still quite conservative, under 2x. I mean, we would feel comfortable going at least to the mid twos level. Like, 2.5x would be a strong comfort level for us. We are always going to look at our pipeline. So if we see imminent deals that are of size, and provide attractive returns, that would take priority. But I think we can do both with our current balance sheet and $800 million-plus of liquidity you know, we can do them in tandem. So a lot of flexibility to use the buyback program as well as not compromise our, tuck-under acquisition prospect. Stephen MacLeod: that is great. Thanks, Jeremy. Operator: Thank you. 1 moment for the next question, please. And the next question is coming from the line of Steve Sheldon of William Blair. Please go ahead. Stephen Sheldon: Hey, good morning. Thanks. Scott, I wanted to dig in a little more on restoration and some of your comments in the prepared remarks. It sounds like sales activity pipeline has picked up there in the quarter. And not tied to big storm activity. So can you just refresh us on the progress building out relationships with larger, more national accounts? Is that becoming more impactful to the trajectory of the business? And then would also love more detail on where the team is finding success with more specialized and complex restoration services like you kind of alluded to in the prepared remarks? D. Scott Patterson: Right. Well, certainly, you know, I we have been talking about it for a few years how hard the team's been working in terms of developing and enhancing the national account roster, but also at the same time, really developing expertise in a number of different verticals. Health care and government. And, generally, developing a reputation for large loss claims. And you know, just really the last 4 to 6 weeks, I would say, we signed, as I said in my prepared comments, a number of large loss projects that will benefit us you know, over the next 18 months or so. Projects, they are not related in any way. They are all tied to various regional weather events or specific fire or water damage claims. They you know, factories, large warehouses, government buildings, big box retail, multifamily, across North America. So it is it is a significant sort of rally for us. That certainly is enhanced our backlog and as I said, you know, Not likely to help us materially in Q3. These projects are still being scoped. The sizes are not clear. We will see some in Q4, but it is certainly gonna help us in 2027. And you had a question at right at the tail end, Steve. Can you repeat that? Stephen Sheldon: Oh, yeah. It was just I think you answered it. D. Scott Patterson: Just with, like, health care and government, but just, yeah, where you are seeing, I guess, importance on You asked about the I made a comment about specialty contracting and that really has evolved from our expertise and depth of experience in the health care sector. We have a number of team members that have specific certification and training around the mitigation and construction in a sensitive health care environment. And this expertise and reputation has led to other construction opportunities. In health care. And then beyond that, other contracting opportunities in general. Stephen Sheldon: I am talking about retrofits and capital improvements and some new construction opportunities. D. Scott Patterson: So we have been asked to submit bids on unique situations based on our experience, and we have a few wins. With some pending and, I would say, momentum building. Stephen Sheldon: Got it. Very helpful. D. Scott Patterson: Maybe just following up on restoration then, you know, I you talked about 5% growth in the back half of the year. So I wanna make sure I heard that right. And then I know you do not wanna talk about next year, but you know, I guess if some of these things are starting to pick up, I mean, I know a lot can happen to flow with big storm activity, but, you know, excluding that, I guess, are we as we think about heading into next year especially the first half, some of the stuff picked up, would we be in line to have even better growth, I guess, and potentially even more than if storm activity gives you opportunities as well. Stephen Sheldon: I guess, yeah, just how are you thinking about it in the next year? D. Scott Patterson: Yeah. I mean, we should. it is, we are feeling good about our restoration because, you know, the pipeline where it is today. And we are just heading into storm season and who knows. Right? But we do feel good about the position we are in heading into the back half and into 2027 for sure. Great. Analyst: Thank you. Operator: Thank you. 1 moment for the next question. Daryl Young: And the next question is coming from the line of Daryl Young of Stifel. Please go ahead. Hey, good morning, everyone. I wanted to touch on residential and your new cross selling initiative that you announced I think it is called Resilience First, that looks to be a concerted effort to cross sell restoration with, with residential. Could you maybe expand on what that is and the opportunity and whether there is any other cross sell opportunities you are pursuing? Expressly. D. Scott Patterson: Yes. You know, that effort and program is between FirstService Residential and our restoration brands and roofing operations. You know, it is cross selling. But what I really think about it as a focus on bringing value to our managed communities. And differentiating FirstService Residential from its competitors. And the goal is to reduce the frequency of loss events and then so prevention and then minimizing the severity of losses. So we are talking about complementary inspections, training, education, storm preparation. You know, most of the losses we see in our communities are water losses. And simply educating residents and property managers around water shutoff Certainly, when they leave on vacation or, you know, you get water into 1 unit, it seeps into neighboring units, and that is the typical loss scenario in our communities. And they can be prevented. And that is what we are focused on. Access to a proprietary leak detection program for our communities. If we are successful, it will reduce the number of claims, reduce the severity of loss, and drive down insurance costs for our communities. Analyst: Again, the focus is on differentiating FirstService Residential. Daryl Young: Got it. Okay. And then just moving to margins, performances, I would say, continue to be quite strong despite maybe a softer organic growth environment. So I am wondering if when organic growth recovers, can you can you hold the existing benefits, or will there be some costs that maybe come back as activity levels pick up? Guess, said differently, is there operating leverage still to come from here? Jeremy Alan Rakusin: Yeah, Daryl. You gotta look at it business by business and property management. it is a lot of variable costs as we grow. And that business is performing right down the fairway. You know, we have got a little bit of margin expansion built in, as I said in my prepared comments. On the brand side, pretty well every business, and we, you know, we obviously speak about the optimistic outlook for growth in restoration. Those businesses do generate good operating leverage when you get the top line growth. Even if there are some investments that come in support of that growth, it is a net positive to the margin. Daryl Young: Okay. that is it for me. I will get back in the queue. Thanks. Operator: Thank you. 1 moment for the next question. Our next question is coming from the line of Erin Kyle of CIBC. Please go ahead. Erin Kyle: Himanshu. Good morning. Thanks for taking the questions. I just wanted to go back to the roofing segment and maybe follow-up on an earlier But maybe in your view in terms of what is impacting the segment from a macro perspective, what would you say is most meaningful or substantial to customer decisions there? Is it rates, inflation? Is it is it the Middle East conflict and oil prices? All of the above. Like, what would you say really needs to change for award activity to really start converting there? D. Scott Patterson: Well, remember, Erin, that first of all, the new construction outside of data centers is down. Year over year, and that is a big that is a big chunk of the market. So that is a driver. And a lot of new construction focused roofers have turned their attention to the reroof market. So the reroof market is probably flat nationally. But the level of competition around reroof has increased significantly. I think that everything you mentioned you know, interest rates, Mideast war, inflation, all of that is impacting both of those markets. And but you know, reroofs could be deferred, but longer term they are nondiscretionary. So it is it is a matter of time. And I think that the competitive environment will normalize because some of the pricing is not sustainable. And particularly in a few of our markets that I have referenced, You know, Southwest Florida, is a unique situation right now. I mean, we know from our major suppliers that the market's particularly weak relative to the rest of The US. And in fact, the data we have we are off less than the market in general. And a lot of that, you know, there is a couple things going on. Hurricane Ian effectively pulled forward. A few years of reroof work, and our businesses benefited at the time. But the last 2 years, we have seen declines off those off those peaks. And post hurricane, there were a number of roofers that expanded to Florida to capitalize on the surge. And so right now, there is overcapacity in that market, and every job is over competitive. We have a very strong position And we will we will be fine. We just need to let the market settle out The capacity will normalize. We know we know operations are pulling out and closing their doors. So it is it will just take some time. But we will be fine in Florida. Erin Kyle: Okay. that is helpful there. And then maybe just on the M&A side, just looking at the spend year to date, last quarter, I think you flagged that there is been fewer bidders as some funds have pulled back in this environment, but know, first service m and a spend remains modest compared to historical. it is in line with 2025, which is looking back here. You know, as you think about your capital deployment here, are you taking a more conservative approach as you are evaluating targets, or how should we think about M&A spend on a go forward basis? D. Scott Patterson: We are not necessarily taking a more conservative or approach. We are sticking to our discipline. Being patient, Frankly, we are not seeing many quality companies come to market, and certainly we are seeing fewer companies come to market I think there are fewer opportunities We are being very patient, focusing on the right partnerships and ensuring that it is a fit both in terms of service line geography and culture. So I would I would sort of confirm that we expect this year to be similar to last year. At this point based on the opportunities in our pipeline. But nothing's really changed for us. it is just the it is the number of opportunities that we are seeing. Erin Kyle: Got it. Thank you. I will pass the line. Operator: Thank you. 1 moment for the next question, please. Next question is coming from the line of Himanshu Gupta of Scotiabank. Please, ma'am. Please go ahead. Himanshu Gupta: Thank you, and good morning. So first on Century Fire, which has been strong for a few years now. I mean, are we going to face tough comps at some point of time? I mean, just wondering how long these you know, tailwinds can last in this business. What makes it so special? D. Scott Patterson: Not it is not in our sight line, Himanshu. We continue to experience growth in both the sprinkler and alarm installation side. So half the business. And on the repair service and inspection side. You know, we are we are seeing strength in multifamily. We have talked about some exposure to data center work, but it is it is you know, approximately 15% of our backlog is data center. So it is not the key driver. We are really throughout our branch system, We just have we just have a strong local branch network that are winning And, you know, we grew the backlog sequentially in the second quarter. And it is it is well up over prior year. So we expect continued growth as I said in my prepared comments. Himanshu Gupta: that is great color. Thank you. And then moving to, obviously, roofing, a lot of questions have been asked. I think you mentioned already elaborated on the Florida branch. I am just wondering on Las Vegas. We saw a fair bit of the weakness last year as well. In that branch. And again, I think you mentioned in Q2. Is there anything particular anything peculiar about this market, Las Vegas? Leading to the softness? D. Scott Patterson: Well, again, there is a couple things there. The market the market is weak, and we see that in our other businesses. So we know there is weakness in Vegas that is more significant than anything we might see nationally. The other issue for us in this market is that we are more weighted towards new construction. it is well over 50%. Versus 30% on average across our portfolio. So it is really that folk that historical reliance on new construction that and we were strong in that business in 2023-2024. So we are coming off 2 years in a row from that from some real strength new construction strength in Vegas, including some very large projects in 2024 Got it. Himanshu Gupta: That was very helpful. And then if I look at overall roofing, you know, organic growth was down, like 10% in Q2. Is it like new roofing is down, like 20% or 30%? Is that the lion's share of all this kind of performance happening? For the entire segment I am talking now? D. Scott Patterson: Yeah. I mean, new construction. I you know what? I actually have not looked at it that way. Maybe Jeremy has, but it is yeah. I would definitely wait towards new construction. Yeah. Himanshu Gupta: And industrial warehouse deliveries you know, if that does not improve next year rather down double digits so then that will further push in that regard. D. Scott Patterson: Yeah. Himanshu Gupta: I am not sure I understand the question, Himanshu. So I am saying that if new roofing is tied to industrial warehouse construction new construction, Right. D. Scott Patterson: And then and if industrial warehouse construction is likely to be down double digits next year. Himanshu Gupta: In The US. That will not help the roofing recovery in the near term. D. Scott Patterson: Yeah. It will not it will not necessarily help our recovery, but we are our backlog heavily weighted right now towards reroof. And so that is really our focus go forward. Our recovery is gonna be driven by reroof. Construction will certainly help. A great when it happens. Got it. Himanshu Gupta: Just 1 last question on capital allocation. Obviously, is a big focus now. Have you reached a point when M&A is less accretive than buyback? Or are there where you will still prefer M&A over buyback? Jeremy Alan Rakusin: Hey, Max. it is it is really I mean, we target a mid teens or return on any of our capital deployment initiatives. And, again, growing through tuck under acquisitions and adding you know, strategic assets to our to our brands is really the primary focus. But again, we and I said it earlier, we are able to do both at this juncture And given the you know, the discount in the valuation of our business versus some other assets, We just think it makes it is compelling or highly compelling. That we buy back our stock at this juncture. So we are we are not at the point at know, with our with our conservative leverage to you know, We are able to do both at this point, and we are not gonna compromise a normal bread and butter tuck under program. it is just balancing that versus the opportunities. And as Scott said, some of the opportunities are a little lesser today. And so we are pursuing both paths. Equally. Himanshu Gupta: Fantastic. Thank you so much, and I will turn back. Operator: Thank you. 1 moment, please. Next question is coming from the line of Frederic Bastien of Raymond James. Please go ahead. Frederic Bastien: Thank you. Scott, I believe you are in the midst of a brand optimizing exercise at our sort of investing in the platform. Can you can you offer an update on that? D. Scott Patterson: Yeah. We are continuing and committed to it. it is it is really implementation of enterprise wide financial system that pulls together 14 different operating systems. It will give us much better information. And ability to certainly ability to forecast and manage the businesses. So that continues. it is on track. And then there is you know, we continue to invest in people and generally in the platform. Frederic. Frederic Bastien: We, as I said in my prepared comments, we are committed to the long term opportunity in this business and continued committed to continuing to invest. Will that exercise yield in your view, better growth opportunities or enhance margins or both? D. Scott Patterson: Or I think it will enhance margins, not materially. it is not something we are sort of modeling out. But it just is what we need to do to pull the business together and move forward strategically. We need better information. And it is very similar to what we did at First Service Residential years ago and FirstOn Site more recently and Century Fire. it is a similar exercise. Just puts us in a better long term position to grow this business. Frederic Bastien: Understood. that is that is helpful. Jeremy, I have 1 for you. Can you clarify if the 1.8 million shares bought back include purchases in July? Or does that just pertain to the first 6 months of the year? Jeremy Alan Rakusin: First 6 months of the year. Frederic Bastien: Can you indicate or tell us whether you have been active since? Jeremy Alan Rakusin: No. We were in blackout. We had an automatic share purchase program, and the trigger points were not activated. We had to do it before we went into blackout, so the parameters were not But we will be out of blackout on Monday. And then we, you know, we can we can be active, you know, with without our hands tied due to the backups. Frederic Bastien: Okay. Got it. Alright. Thanks. that is all I have. Operator: Thank you. 1 moment for the next question. And our next question is coming from the line of Tim James of TD Securities. Please go ahead. Tim James: Thank you. Scott, I am wondering, you have talked about fewer M&A opportunities coming to the market. I am just wondering if you could talk about, like, in your view, why that is? It seems there are some challenging conditions in roofing and to some extent in restoration. Part of me would have thought that maybe would have kind of churned out a couple more opportunities, and so either it would be a greater set. But I am I am just curious on your thoughts as to why you think there are fewer businesses coming to market. D. Scott Patterson: Well, I think in those 2 areas, Tim, it is because they are not performing And so the owners are they are coming off numbers that were better in 23, 24. And, they wanna get back there before they before they put the company on the market. And many of these businesses are owned by private equity, and so if the if the companies are not performing would mean that they would need to crystallize a loss. Tim James: And I think that they are they are reluctant to do that at this point. Okay. that is helpful. D. Scott Patterson: My second question really looking big picture here, do you think there are any structural changes in any of your businesses? Tim James: Or you know, structural changes in, I guess, your the ability to roll out capital? And, I guess, what I am thinking there is about PE and multiples being higher. Or would you say the challenge is that you know, the business across the business, you are seeing today are just purely related to market forces that should normalize and kinda get you back on the path with kinda the same structural reasons for your strategy as has been the case for many years? D. Scott Patterson: Well, I do not think that there are structural changes in the in the business models. As it relates to acquisitions, certainly, the level of private equity capital that we are competing with you know, increases every year. So that has changed. Over the years. And I guess could be defined as a structural change in how we operate. But in terms of our businesses, and the fundamentals, I do not see any change. Does that get at what you were asking? Tim James: Yeah. Yeah. I am just, you know, okay. Thinking as if we wanna kinda look forward and pick our time when we think market conditions normalize there is no reason to think for service is any different than it was, you know, prior to this challenging period. D. Scott Patterson: No. I-- yeah. Right. Okay. Analyst: Thank you. Operator: Thank you. And that does conclude today's programming. Thank you all for participating. You may now disconnect. Before you buy stock in FirstService, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and FirstService wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $369,577!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,301,557!* Now, it’s worth noting Stock Advisor’s total average return is 908% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of July 23, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends FirstService. The Motley Fool has a disclosure policy. FirstService (FSV) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

FirstService delivered modest revenue and adjusted earnings growth in the second quarter, while management warned that persistent economic pressure is likely to keep second-half top-line growth near current levels. FirstService (NASDAQ:FSV) reported second-quarter revenue of $1.45 billion, up 2% year over year. Adjusted EBITDA increased 3% to $161.7 million, while adjusted EPS rose 2% to $1.75. FirstService Residential remained the stronger operating segment, generating 5% organic growth and a 6% increase in adjusted EBITDA. FirstService Brands recorded a 3% organic revenue decline as weaker Roofing Corp. of America activity offset growth at Century Fire Protection. Management expects second-half revenue growth to be similar to, or modestly better than, the company’s year-to-date performance. FirstService Corporation (NASDAQ:FSV) reported second-quarter revenue of $1.45 billion, representing a 2% increase from the prior-year period. Adjusted EBITDA rose 3% to $161.7 million, while adjusted EPS increased 2% to $1.75. GAAP operating earnings reached $99.7 million, compared with $97.3 million a year earlier, although GAAP diluted EPS slipped to $1.00 from $1.01. For the first six months of 2026, revenue increased 4% to $2.77 billion. Adjusted EBITDA rose 3% to $267.4 million, and adjusted EPS advanced 2% to $2.69. The company’s residential operations produced the stronger quarterly performance. FirstService Residential revenue climbed 4% to $616.8 million, with organic growth of 5% supported by new contract wins and increased labour-related services. Residential adjusted EBITDA rose 6% to $69.4 million, while divisional margins remained broadly consistent with the prior year. FirstService Brands revenue increased 1% to $832.4 million, but organic revenue declined 3%. The company attributed the contraction to reduced activity at Roofing Corp. of America, partly offset by solid growth at Century Fire Protection. Adjusted EBITDA at FirstService Brands edged up to $95.9 million from $95.2 million, with margins remaining comparable year over year. The results show that FirstService continues to generate earnings growth despite subdued organic expansion and ongoing macroeconomic headwinds. The stronger performance at FirstService Residential may support the company’s defensive positioning, as contract wins and labour-related services helped the segment grow faster than the wider group. However, the organic decline at FirstService Brands highlights uneven demand across the company’s property services portfolio. Continued weakness at Roofing Corp. of America could limit the division’s ability to contribute meaningfully to consolidated growth unless operating activity improves. Management’s second-half outlook also suggests that a sharp acceleration is not currently expected. Chief Executive Scott Patterson said profitability was in line with expectations, but persistent market conditions had tempered organic growth. For investors, the near-term valuation narrative may therefore depend less on rapid revenue expansion and more on FirstService’s ability to protect margins, convert modest sales growth into higher earnings and maintain operational discipline. Investors will be watching whether second-half revenue growth improves modestly from the company’s year-to-date pace, as management expects. Segment performance will also remain important, particularly whether Roofing Corp. of America stabilises and whether FirstService Residential can sustain its contract-driven organic growth. Future margin trends may provide further evidence of whether disciplined execution can continue to offset restrained demand across parts of the business. FirstService stock price

Driven by FirstService Residential Division Organic Growth Operating highlights: TORONTO, July 23, 2026 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today reported results for its second quarter ended June 30, 2026. All amounts are in US dollars. Consolidated revenues for the second quarter were $1.45 billion, a 2% increase relative to the same quarter in the prior year. Adjusted EBITDA (note 1) increased 3% to $161.7 million, and Adjusted EPS (note 2) was $1.75, reflecting 2% growth over the prior year quarter. During the second quarter, FirstService reported GAAP Operating Earnings of $99.7 million, versus $97.3 million in the prior year period. GAAP diluted earnings per share was $1.00 in the quarter, versus $1.01 for the same quarter a year ago. For the six months ended June 30, 2026, consolidated revenues were $2.77 billion, a 4% increase relative to the comparable prior year period, Adjusted EBITDA was $267.4 million, up 3%, and Adjusted EPS was $2.69, an increase of 2% over the prior year period. FirstService’s GAAP Operating Earnings were $146.3 million in the current year period, versus $136.5 million in the prior year. GAAP diluted earnings per share for the six months year-to-date was $1.43, compared to $1.07 in the prior year period. “Our second quarter results delivered profitability in line with our expectations, reflecting disciplined execution by our teams as we navigated continued macroeconomic headwinds that tempered organic growth,” said Scott Patterson, Chief Executive Officer of FirstService. “Given the persistence of these market conditions, we expect our top-line growth in the back half of the year to be similar or modestly better than our year-to-date performance,” he concluded. About FirstService Corporation FirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service platforms: FirstService Residential - North America’s largest manager of residential communities; and FirstService Brands - one of North America’s largest providers of essential property services delivered through individually branded company-owned operations and franchise systems. FirstService generates more than US$5.5 billion in annual revenues and has approximately 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The common shares of FirstService trade on the NASDAQ under the symbol “FSV” and on the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 index. More information is available at www.firstservice.com. Segmented Quarterly ResultsFirstService Residential revenues were $616.8 million for the second quarter, up 4% compared to the prior year quarter. Organic growth (note 1) was 5% driven by new contract wins and increases in other labor-related services. Organic performance exceeded our reported growth due to a divestiture at the start of the second quarter of non-core residential aquatic operations which served single-family homes. Adjusted EBITDA for the quarter was $69.4 million, an increase of 6% compared to the prior year period. Operating Earnings were $53.0 million, versus $51.6 million for the second quarter of last year. Margins for the division were largely in-line with the prior year period. FirstService Brands revenues during the second quarter were $832.4 million, up 1% relative to the prior year period. On an organic basis, division revenues declined 3%, with reduced activity levels at Roofing Corp. of America offsetting solid growth at Century Fire Protection. Adjusted EBITDA for the second quarter was $95.9 million, compared to $95.2 million in the prior year period. Operating Earnings were $58.2 million, versus $56.5 million in the prior year quarter. Division margins were comparable to the prior year period. Corporate costs, as presented in Adjusted EBITDA (note 1), were $3.6 million in the second quarter, matching the amount in the prior year period. GAAP corporate costs for the quarter were $11.5 million, relative to $10.9 million in the prior year period. Conference CallFirstService will be holding a conference call on Thursday, July 23, 2026 at 11:00 a.m. Eastern Time to discuss results for the second quarter of 2026. This call is being webcast live at the Company’s website at www.firstservice.com. Participants may register for the call here https://register-conf.media-server.com/register/BI379ce10ddd9c4dafa717b55a1ed5b033 to receive the dial-in number and their unique PIN. To join the webcast in listen only mode, use this link: https://edge.media-server.com/mmc/p/oxxtnaae . It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). Forward-looking StatementsThis press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2025 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise. Summary financial information is provided in this press release. Our interim consolidated financial statements and related management’s discussion and analysis will be made available on SEDAR+ at www.sedarplus.ca. Notes1. Reconciliation of net earnings to adjusted EBITDA: Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) share-based compensation expense. The Company uses Consolidated adjusted EBITDA and segment adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Consolidated adjusted EBITDA and segment adjusted EBITDA are presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company’s service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company’s method of calculating adjusted EBITDA and segment adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted EBITDA appears below. 2. Reconciliation of net earnings and diluted net earnings per share to adjusted net earnings and adjusted net earnings per share: Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; and (iv) share-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below. Notes to Condensed Consolidated Statements of Earnings(1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs.(2) See definition and reconciliation above. COMPANY CONTACTS: D. Scott PattersonChief Executive Officer Jeremy RakusinChief Financial Officer (416) 960-9566

Interested in FirstService Corporation? Here are five stocks we like better. FirstService posted modest Q2 growth, with revenue up 2% year over year to $1.45 billion, adjusted EBITDA up 3% to $161.7 million, and adjusted EPS up 2% to $1.75. Management said it expects a stronger second half, supported by improving restoration activity and continued strength in fire protection. Residential and fire protection were the main bright spots. FirstService Residential grew revenue 4% with margin expansion, while Century Fire rose more than 10% and is expected to keep growing at that pace in the back half of 2026. Roofing remained a weak spot, but restoration is improving. Roofing revenue fell 6% reported and 10% organically amid competitive conditions and delayed projects, while restoration signed several large-loss projects in late Q2 and July that should boost revenue later in 2026 and into 2027. FirstService (NASDAQ:FSV) reported modest second-quarter growth and said it expects a stronger second half, supported by improving restoration activity and continued strength in its fire protection business, even as roofing and housing-related services remain pressured by weak market conditions. On the company’s July 23, 2026 earnings call, Chief Executive Officer Scott Patterson said FirstService was “generally pleased” with its second-quarter results given what he described as a challenging economic environment. Total revenue increased 2% year over year, with about half of that growth organic. Adjusted EBITDA rose 3%, and adjusted earnings per share increased 2%. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Chief Financial Officer Jeremy Rakusin said quarterly revenue was $1.45 billion, adjusted EBITDA was $161.7 million and adjusted EPS was $1.75. For the first half of 2026, revenue rose 4% to $2.77 billion, adjusted EBITDA increased 3% to $267 million and adjusted EPS was $2.69, compared with $2.63 in the prior-year period. FirstService Residential generated second-quarter revenue of $617 million, up 4% from a year earlier and up 5% organically. Patterson said reported revenue growth was slightly below organic growth because the company sold its residential pool maintenance operations early in the quarter to focus solely on commercial pool maintenance and management. → 3 Photonics Companies Making Quantum Tech Possible Rakusin said FirstService Residential produced EBITDA of $69 million, up 6% year over year, with an 11.2% margin, up 20 basis points from the prior-year quarter. For the first half, the division’s EBITDA margin was 9.9%, up 30 basis points year over year. Rakusin said the company expects FirstService Residential to continue delivering mid-single-digit top-line growth and modest year-over-year margin improvement through the balance of 2026 as teams continue to find efficiencies across the business. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off FirstService Brands revenue was $832 million in the second quarter, up 1% year over year, while EBITDA also increased 1% to $96 million. The division’s margin was 11.5%, down 10 basis points from a year earlier, but Rakusin said the margin performance was better than in the first quarter and above the company’s expectations heading into the period. Patterson said Century Fire remained a key source of strength, with revenue up more than 10% year over year, including high-single-digit organic growth. He said Century Fire’s second-quarter results were consistent with its first-quarter performance and in line with expectations. The company also announced acquisitions of Titan Fire Protection in Tampa, Florida, and GSC Fire & Security in Austin, Texas. Century Fire ended the quarter with an improved backlog sequentially, and Patterson said the company expects similar revenue growth of more than 10% in the third and fourth quarters. By contrast, FirstService’s roofing segment remained under pressure. Patterson said roofing revenue fell about 6% on a reported basis and 10% organically, below company expectations. He cited a weak and highly competitive market, especially in Las Vegas and Southwest Florida, as well as delays on several large reroofing projects that had been expected to complete during the quarter. Those delayed projects remain in backlog. During the quarter, FirstService acquired Schefers Roofing in Kansas City, which Patterson said strengthens the company’s presence in the Midwest. Despite near-term weakness, he said the company continues to believe roofing is a large essential-service market with long-term tailwinds. Patterson said FirstService’s two restoration brands, Paul Davis and First Onsite, had revenue that was down slightly year over year. He said the company entered 2026 with a weakened pipeline following mild weather in the fourth quarter of 2025, which weighed on first-half results. However, Patterson said activity improved toward the end of the second quarter and into July, with the company signing a number of large loss projects across North America. Those projects are expected to convert to revenue over the next 12 to 18 months. In response to analyst questions, Patterson said recent large-loss wins were tied to regional weather events as well as specific fire and water damage claims involving factories, large warehouses, government buildings, big-box retail and multifamily properties. He said the projects are still being scoped and are not likely to materially benefit the third quarter, though some impact may appear in the fourth quarter and more in 2027. The company expects restoration revenue to grow about 5% year over year in the second half of 2026. Patterson said the outlook is modest relative to the improvement in activity because revenue timing can be affected by scoping, permitting and insurance processes. Storm and hurricane activity could add to backlog and improve the outlook, he said. FirstService’s home service brands, including California Closets, CertaPro Painters, Floor Coverings International and Pillar To Post Home Inspectors, posted revenue that was slightly higher than a year earlier and modestly better than expected. Patterson said these brands remain closely tied to the housing market and consumer sentiment, both of which he said continue to hover around 10-year lows. He said teams are increasing close rates and average job sizes to generate revenue gains but are not receiving support from market improvement. For the second half, FirstService expects home services revenue to remain slightly up year over year, with Patterson saying the company expects its teams to continue taking market share. Rakusin said FirstService generated $112 million in operating cash flow before working capital changes during the second quarter, in line with the prior year. After working capital changes, cash flow was $130 million for the quarter and nearly $220 million year to date. Capital expenditures were a little over $30 million in the quarter and $60 million year to date. Rakusin said the company now expects annual capital expenditures of about $130 million, below its initial $140 million target. FirstService spent just over $40 million on tuck-under acquisitions during the quarter. The company also repurchased more than 1.8 million shares under its Normal Course Issuer Bid at a total cost of almost $250 million, or an average price of $135.91 per share. Rakusin said the repurchases increased net debt to EBITDA to 1.8 times from 1.5 times at the end of the first quarter, while liquidity remained above $800 million, including cash and undrawn credit capacity. During the Q&A session, Rakusin said the company can continue pursuing both share repurchases and tuck-under acquisitions, noting that FirstService would be comfortable with leverage of at least about 2.5 times. Patterson said acquisition activity remains disciplined and that fewer quality companies are coming to market, particularly where owners are waiting for business performance to recover. For the third quarter, Rakusin said FirstService expects revenue and EBITDA growth to be similar to the second quarter, in the low-single-digit range. For the full year, the company expects consolidated revenue growth to be similar to or modestly better than year-to-date growth and annual EBITDA growth in the mid-single-digit range over 2025. FirstService Corporation, founded in 1989 and headquartered in Toronto, Ontario, is a leading provider of property services in North America. The company operates through two principal segments—FirstService Residential and FirstService Brands—offering a broad range of services to residential, commercial and homeowner association clients. FirstService Residential delivers community management, financial oversight and consulting services to thousands of residential communities across the United States and Canada. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "FirstService Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Total Revenue: $1.45 billion, up 2% year-over-year. Adjusted EBITDA: $161.7 million, up 3% versus the prior year. Consolidated Margin: 11.2%, up 10 basis points over the prior year. Adjusted EPS: $1.75, a 2% increase over Q2 2025. FirstService Residential Revenue: $617 million, up 4% year-over-year, 5% organic growth. FirstService Residential EBITDA: $69 million, a 6% year-over-year increase, with an 11.2% margin. FirstService Brands Revenue: $832 million, up 1% year-over-year. FirstService Brands EBITDA: $96 million, up 1% year-over-year, with an 11.5% margin. Operating Cash Flow: $112 million during the second quarter. Capital Expenditures: Over $30 million for the quarter, with an annual target of $130 million. Share Repurchases: More than 1.8 million shares at a total cost of almost $250 million. Net Debt-to-EBITDA: Increased to 1.8 times from 1.5 times at the end of Q1. Warning! GuruFocus has detected 3 Warning Signs with FSV. Is FSV fairly valued? Test your thesis with our free DCF calculator. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenues for the second quarter were up 2% over the prior year, with half of this growth being organic. EBITDA for the quarter increased by 3%, reflecting a consolidated margin of 11.2%, which was better than expected. FirstService Residential revenues were up 5% organically, indicating strong performance in the core property management business. Century Fire reported strong growth with revenues up over 10% versus the prior year, including high single-digit organic growth. The company has a strong cash flow profile, generating $112 million in operating cash flow during the second quarter, with a year-to-date total of almost $220 million. Revenues for the roofing segment were down approximately 6% on a reported basis and 10% organically, which was lower than expectations. The restoration brands, Paul Davis and First OnSite, experienced slight revenue declines due to a weakened pipeline from mild weather in the previous year. The housing market and consumer sentiment remain weak, impacting the home service brands, which are closely tied to these factors. The market for new construction and re-roofing remains ultra-competitive, particularly in regions like Las Vegas and Southwest Florida. The company faces ongoing macroeconomic uncertainty, which is unlikely to improve materially in the near term, affecting the roofing market. Q: Can you provide an update on the roofing business, given the weak market conditions and competitive environment? A: D. Scott Patterson, CEO: The backlog is down year-over-year but has been improving sequentially. The delays in Q2 were due to postponed projects, primarily related to insurance claims and construction delays. We are moving away from low-margin work, especially in Southwest Florida, due to tight pricing. Q: How do you prioritize between share buybacks and M&A, given the current market conditions? A: Jeremy Rakusin, CFO: We are actively buying back shares due to our conservative balance sheet and liquidity. We prioritize M&A when deals offer attractive returns, but we believe we can pursue both buybacks and acquisitions simultaneously without compromising our financial position. Q: Can you elaborate on the progress in the restoration segment and the impact of national accounts? A: D. Scott Patterson, CEO: We've made significant progress in signing large loss projects, enhancing our backlog. These projects are tied to regional weather events and specific claims, not major storms. Our expertise in healthcare and government sectors is leading to more specialized restoration opportunities. Q: What is the outlook for the Century Fire segment, and are there any concerns about facing tough comparisons? A: D. Scott Patterson, CEO: We continue to see growth in both sprinkler and alarm installations, as well as repair services. The backlog is strong, and we expect continued growth. The multifamily sector and our local branch network are key drivers. Q: What are the main macro factors impacting the roofing segment, and what needs to change for improvement? A: D. Scott Patterson, CEO: New construction is down, and competition in the re-roof market has increased. Factors like interest rates, inflation, and geopolitical issues are impacting the market. Re-roofs are non-discretionary long-term, and we expect the competitive environment to normalize over time. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

FirstService (FSV) came out with quarterly earnings of $1.75 per share, beating the Zacks Consensus Estimate of $1.71 per share. This compares to earnings of $1.71 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.34%. A quarter ago, it was expected that this property services provider would post earnings of $0.9 per share when it actually produced earnings of $0.95, delivering a surprise of +5.56%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. FirstService, which belongs to the Zacks Real Estate - Operations industry, posted revenues of $1.45 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.51%. This compares to year-ago revenues of $1.42 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. FirstService shares have lost about 8.9% since the beginning of the year versus the S&P 500's gain of 9.6%. While FirstService has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for FirstService was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.91 on $1.54 billion in revenues for the coming quarter and $6.17 on $5.82 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Real Estate - Operations is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Mobile Infrastructure Corporation (BEEP), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of +18.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Mobile Infrastructure Corporation's revenues are expected to be $8.93 million, down 0.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FirstService Corporation (FSV) : Free Stock Analysis Report Mobile Infrastructure Corporation (BEEP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research