Installed Building Products, Inc. Q3 FY2025 earnings call

• 2025 has been an encouraging year with record sales and profitability; national branches execute well. - Homeownership remains expensive, but long-term housing industry fundamentals are strong. - Paid $78 million in cash dividends and repurchased ~$135 million of common stock YTD. - Published 2025 ESG report, showing progress in reducing carbon footprint since 2021. - Third quarter sales: consolidated up 2%, same-branch flat; commercial up 12%, residential down 2%; multifamily down 7% but some markets stabilizing. - Acquired several businesses in 2025, including a $20M cellulose insulation maker and others. - 2026 outlook: residential starts flat, multifamily helps meet housing needs; focus on profitability and capital allocation.

Consolidated net revenue for the third quarter increased 2% to a record $778 million compared to $761 million in the same period last year. The Installation segment's same-branch sales were flat, with a 12% increase in commercial same-branch sales offsetting a 3% decline in residential same-branch sales. Price/mix increased 1.5% during the third quarter but was offset by a 4.8% decrease in job volumes. The heavy commercial end market saw same-branch sales growth exceeding 30%. Adjusted gross margin was 34% in the third quarter, an increase from 33.8% in the prior year period. Adjusted EBITDA for the third quarter 2025 increased to a record $140 million, with adjusted net income at $86 million or $3.18 per diluted share.

• No comprehensive financial guidance, but expects Q4 2025 amortization expense of approximately $10 million. - Effective tax rate expected to be 25% to 27% for the full year ending December 31, 2025. - ~$365 million available under stock repurchase program; Q4 dividend of $0.37 per share, a 6% increase from prior year.

• Macro-economic uncertainty influencing market conditions. - Potential delays in multifamily project completions due to labor issues. - Weakness in light commercial end market impacting overall results.

Q: Touch on backlogs for multifamily and commercial, and do you still see a multifamily rebound in 1Q 2026?

A: Michael Miller on multifamily: backlogs building in some markets, benefit to be seen in back half of 2026; on commercial: heavy commercial strong, light commercial still weak Q: Talk about geographic performance and how it benefits margin A: Michael Miller on regions: Midwest and Northeast performed well, South flat, West down; field team performing well despite headwinds Q: Discuss pricing, price mix, and gross margin A: Michael Miller on price/mix: mix driven by better performance with regional/local/custom builders; gross margin: headwinds from complementary products and other segment, offset by heavy commercial; expect to stay in 32%-34% range Q: Question on commercial, split between heavy and light A: Michael Miller on install side: heavy commercial ~11% of revenue, light commercial ~7.5% of revenue; defined by heavy as steel/concrete, light as framed construction Q: Question on M&A environment and future opportunities A: Jeffrey Edwards on M&A: acquisition environment consistent, chasing bolt-on deals and adjacent areas like commercial roofing