Builders FirstSource Q4 EBITDA Falls 44% to $275M, Sales Down 12%
Builders FirstSource reported Q4 net sales of $3.4 billion, down 12%, and adjusted EBITDA of $275 million, down 44%, driving adjusted EPS of $1.12, a 52% decline year-over-year. The company is executing $100 million of SG&A cost actions, consolidated 25 facilities, generated $109 million free cash flow and guided 2026 net sales of $14.8-15.8 billion.
1. Q4 Financial Results
In the fourth quarter, Builders FirstSource recorded net sales of $3.4 billion, a 12% year-over-year decline driven by lower single-family, multifamily and repair and remodel activity. Gross profit fell 19% to $1.0 billion, gross margin contracted 250 basis points to 29.8%, and adjusted EBITDA declined 44% to $275 million, resulting in adjusted EPS of $1.12, down 52%.
2. Cost Actions and Operational Efficiency
Management initiated $100 million of SG&A cost actions, comprising $75 million of reductions and $25 million of cost avoidance, through deeper cuts to overtime, incentive plan adjustments, and tighter discretionary controls. The company consolidated 25 facilities in 2025 and achieved $48 million in productivity savings, reinforcing its downturn playbook and preserving flexibility amid housing-start headwinds.
3. Balance Sheet and Cash Flow
Builders FirstSource generated $195 million of operating cash flow and $109 million of free cash flow in Q4, with full-year free cash flow of $874 million, representing an 8% yield. Net debt to adjusted EBITDA stood at 2.7x, with no long-term maturities until 2030 and $500 million remaining under its share repurchase authorization.
4. 2026 Guidance
For 2026, the company expects net sales between $14.8 billion and $15.8 billion and adjusted EBITDA of $1.3 billion to $1.7 billion, targeting an 8.8%–10.8% margin. It plans to deliver $50–70 million in productivity savings, maintain gross margin near 28.5%–30%, and invest $250–300 million in capital expenditures.