FirstService Corporation ((TSE:FSV)) has held its Q2 earnings call. Read on for the main highlights of the call.
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FirstService Corporation’s recent earnings call revealed a robust financial performance, marked by significant growth in revenue, EBITDA, and earnings per share. Despite facing challenges such as a decline in organic revenue in the Roofing segment and stagnant revenues in Home Service Brands, the company’s strategic initiatives like debt reduction and acquisition efforts were highlighted as positive steps towards sustained growth.
Revenue Growth
FirstService Corporation reported a 9% increase in total revenues compared to the previous year. This growth was primarily driven by tuck-under acquisitions and organic growth in certain segments, showcasing the company’s ability to expand its market presence effectively.
EBITDA and Margin Improvement
The company’s EBITDA for the quarter rose by 19% to $157 million, reflecting a consolidated margin of 11.1%, which is an improvement of 90 basis points over the prior year. This indicates enhanced operational efficiency and profitability.
Earnings Per Share Increase
Earnings per share saw a notable increase of 26% over the previous year, underscoring the company’s strong financial performance and its ability to deliver value to shareholders.
Strong Performance in Century Fire
The Century Fire division reported impressive results with revenues up over 15% compared to the prior year. This was driven by better-than-expected organic growth, which reached double digits, highlighting the division’s robust operational capabilities.
Leverage Reduction
FirstService Corporation made significant strides in reducing its financial leverage by paying down nearly $70 million of debt during the period, bringing leverage down to 1.8x from 2x at the end of Q1. This move strengthens the company’s financial position and reduces risk.
Roofing Segment Decline
The Roofing segment experienced a 10% decline in organic revenues, attributed to the deferral of large commercial reroof and new construction projects. This highlights a challenge that the company needs to address moving forward.
Home Service Brands Flat Revenue
Revenues in the Home Service Brands segment remained flat compared to a year ago, with a noticeable decline in consumer sentiment since the beginning of the year. This stagnation presents an area for potential improvement.
Expected Revenue Decline in Restoration
Looking ahead, the company anticipates a 5% to 10% decline in Q3 revenues for the restoration segment due to a strong comparative quarter from the previous year, indicating potential short-term challenges.
Forward-Looking Guidance
FirstService Corporation’s leadership provided optimistic guidance for the remainder of 2025, expecting mid-single-digit revenue growth and margin expansion to drive double-digit EBITDA growth. This outlook reflects confidence in the company’s strategic direction and operational capabilities.
In conclusion, FirstService Corporation’s earnings call conveyed a generally positive sentiment, with strong financial metrics and strategic initiatives aimed at fostering growth. Despite facing some challenges in specific segments, the company’s forward-looking guidance suggests a promising trajectory for continued success.