GMS (GMS) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 net sales reached $5.51 billion, up marginally year-over-year, with organic sales down 5.8% due to macroeconomic headwinds and industry softness.

• Fourth quarter net sales were $1.33 billion, with organic sales declining 9.7% per day, but slightly better than expectations.

• Cost reduction initiatives delivered $55 million in annualized savings in fiscal 2025, exceeding initial targets.

• Three strategic acquisitions and four new greenfield locations were completed in FY25, supporting platform expansion.

• Cash flow generation remained strong, with record quarterly Free Cash Flow conversion (167% of Adjusted EBITDA).

Financial highlights

• Full year net income was $115.5 million, including a $42.5 million non-cash goodwill impairment charge; Q4 net income was $26.1 million.

• Adjusted EBITDA for the year was $500.9 million (9.1% margin); Q4 Adjusted EBITDA was $109.8 million (8.2% margin), both declining year-over-year.

• Free Cash Flow for FY25 was $336.1 million (67% of Adjusted EBITDA); Q4 Free Cash Flow was $183.4 million (167% of Adjusted EBITDA).

• Gross margin for Q4 and FY25 was 31.2%, down 70 bps and 110 bps year-over-year, respectively.

• SG&A expenses for Q4 were $315.1 million, with adjusted SG&A as a percentage of sales rising to 23.1%.

Outlook and guidance

• Fiscal Q1 2026 net sales expected to be down low to mid single digits, with organic sales down mid to high single digits year-over-year.

• Adjusted EBITDA for Q1 2026 projected at $132–$137 million, with margins of 9.5%–9.8%.

• Gross margins expected to remain around 31.2%; operating expenses to decline due to cost actions.

• Full year 2026 capital expenditures forecasted at $40–$45 million; free cash flow projected at 60–65% of Adjusted EBITDA.

• Single-family volumes expected flat to slightly up; multi-family down 25–30%; commercial down low teens in Q1 FY26.