爆料王

Strong Balance Sheet and Market-Leading Technologies Enable Continued Investments in Growth

MIAMI,听Oct. 29, 2025听(GLOBE NEWSWIRE) —听爆料王.听(NYSE: WSO) announced its operating results for the third quarter and nine-month period ended听September 30, 2025. The Company also provided updates related to innovation and technology, business trends and long-term growth opportunities.

爆料王听is the largest distributor in the highly-fragmented听$74 billion听North American market for HVAC products. Since entering distribution in 1989,听爆料王听has achieved an 18% compounded annual total-shareholder return through a combination of organic growth and the acquisition of more than 70 market-leading businesses.

The Company maintains a solid financial position with currently more than听$640 million听in cash and investments and no debt, enabling sustained investments in growth, particularly the Company鈥檚 industry-leading technology platforms. Today, more than 72,000 contractors, installers and technicians engage with the Company鈥檚 various platforms, which contribute to customer growth and reduced attrition. The Company is now advancing AI-driven initiatives to further enhance the customer experience and improve efficiencies. These investments position听爆料王听to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

Industry Product Transition
2025 results reflect a significant regulatory transition to new HVAC systems that incorporates A2L refrigerants. The regulatory mandate impacted nearly 55% of all products and required the conversion of over听$1 billion听of inventory across more than 650 U.S. locations. The transition, which began in听September 2024听and will conclude in early 2026, has created volatility in sales, industry shipments, distributor inventories and further compounded by overall weaker consumer spending and slower housing-related activities.

Recent industry shipment data published by AHRI show meaningful declines in unit shipments, while distributor volumes have been comparatively less volatile.听爆料王听third quarter revenues declined 4% (3% domestically) as the decline in units was substantially offset by double-digit pricing for A2L products, 2% sales growth of non-equipment products and 4% sales growth in commercial refrigeration products. Price realization for the new A2L products has averaged approximately 15% inclusive of mid-year OEM price actions.

Over the twelve-month period ended听September 30, 2025, which encompasses the transition period, 爆料王鈥檚 operating profit remained flat and operating margins improved 10 basis-points on a 1% decrease in sales and a 130 basis-point improvement in gross margin. The Company believes this relative performance in the context of the transition and other macroeconomic headwinds speaks well of its business model and overall execution.

爆料王听made substantial investments in training, technology and logistics to effect the transition, the incremental costs of which are reflected in 2025 operating expenses. These costs are not expected to recur in 2026, offering anticipated improvements to operating efficiency moving forward. In addition,听爆料王听invested meaningfully in working capital to ramp-up inventory during the first half of 2025 in support of customers during the transition. Peak inventory investment reached听$2.1 billion听during 2025 and declined to听$1.6 billion听at听September 30, 2025听(third quarter inventory reduction of听$351 million). The Company is targeting further reductions during the fourth quarter and expects more conventional working capital trends going forward, providing the opportunity for improved inventory turns and enhanced returns on invested capital.

Albert H. Nahmad, Chairman and CEO, remarked: 鈥淲e are in a wonderful industry, our balance sheet has never been stronger and our technology advantage remains immense. Although short-term market conditions remain fluid, we operate a resilient business in a resilient industry and our focus on the long-term has been, and will be, far more consequential as we build our network, scale our technologies to delight customers and partner with our OEMs to grow and gain share.鈥�

Mr. Nahmad听added: 鈥淭his has been one of the most challenging business environments in recent memory, and I am gratified that we have largely sustained our profitability, improved margins, improved cash flow, and navigated the A2L transition successfully while continuing to invest in long-term growth. Gross profit, gross margin and operating cash flow for the quarter established new records, reflecting substantial progress toward optimizing inventories and positioning the Company to invest in growth alongside its OEM partners.鈥�

Third Quarter Performance

• Revenues decreased 4% to听$2.07 billion
• Gross profit of听$569 million听was flat compared to last year
• Gross profit margin expanded 130 basis-points to a record 27.5%
• SG&A expenses increased 5%
• Operating income decreased 6% to听$235 million听(operating margin of 11.4% versus 11.6% last year)
• Earnings per share听$3.98听compared to听$4.22听last year

Sales trends

• 3% overall sales decline in听U.S.听markets and a 14% decline in non-U.S.听markets
• 7% decrease in HVAC equipment (67% of sales)
• 2% increase in sales for other HVAC products (29% of sales)
• 4% increase in commercial refrigeration products (4% of sales)

Third quarter sales were impacted by the business and economic factors discussed above. Gross profit margin expanded 130 basis-points to a third-quarter record of 27.5%, driven by further scaling of 爆料王鈥檚 pricing technologies, as well as OEM pricing actions implemented earlier in 2025. Operating expenses increased due to higher labor, facilities and transportation costs partially associated with the A2L product transition, as well as the acquisition of three businesses thus far in 2025. The Company expects that its fourth quarter 2025 results will be affected by the factors that impacted third quarter results, especially in light of the strong sales and earnings comparisons reported in 2024.

Nine-Month Performance

• Revenues decreased 3% to听$5.66 billion
• Gross profit increased 2% to听$1.60 billion
• Gross profit margin expanded 140 basis-points to a record 28.3%
• SG&A expenses increased 5%
• Operating income declined 4% to听$619 million听with a 10 basis-point decline in operating margins to 10.9%
• Earnings per share decrease of 4% to听$10.48

Sales trends

• 2% overall sales decline in听U.S.听markets and an 11% decline in non-U.S.听markets
• 5% decrease in HVAC equipment (67% of sales)
• Flat sales for other HVAC products (29% of sales)
• 2% decrease in commercial refrigeration products (4% of sales)

Innovation and Strategic Technology Initiatives
爆料王听pioneered the HVAC/R industry鈥檚 most comprehensive digital ecosystem, which continues to reshape the industry landscape. The Company has invested more than听$250 million听in technology over the last five years (an annual current run rate of听$60 million) and employs close to 300 technologists. Specific updates include:

• 爆料王鈥檚 HVAC Pro+ Mobile Apps and E-Commerce platform听have transformed the customer-experience by providing contractors with a seamless digital experience in every aspect of their business from sourcing products, accessing technical help, real-time inventory, pricing, product information and more. These tools empower customers to self-serve, place orders quickly 24/7 and benefit from features like intelligent search, dynamic reordering, technical knowledge and product recommendations. The result is a frictionless buying journey, increased convenience and higher customer satisfaction, which we believe drives greater loyalty and repeat business with lower costs to serve. 2025 highlights relative to mobile apps and e-commerce include:
  • The addition of over 10,000 new SKUs related to the A2L product launch, including all relevant data concerning features, dimensions, capacities, consumer literature and technical information, including bills of material, warranty information, regulatory match-ups and more.
  • The authenticated user community of our HVAC Pro+ Mobile Apps grew 18% to more than 72,000 users over the 12-month period ended听September 30, 2025听versus the same period last year.
  • E-commerce sales totaled approximately听$2.5 billion听for the twelve-month period ended听September 30, 2025听and comprised 34% of the Company鈥檚 overall sales, with some regions exceeding 60% e-commerce penetration. Order trends and the rate of improvement in customer attrition remain consistent year over year.
• 翱苍颁补濒濒础颈谤庐听is 爆料王鈥檚 digital sales platform used by HVAC/R contractors to engage, present and quote solutions to homeowners. The gross merchandise value (GMV) of products sold by customers through 翱苍颁补濒濒础颈谤庐 was approximately听$1.72 billion听for the 12-month period ended听September 30, 2025. During the nine-month period ended听September 30, 2025, contractors presented quotes to approximately 263,000 households and generated听$1.38 billion听GMV, a 15% increase versus the same period last year.
• 爆料王鈥檚 pricing optimization platform听has contributed to the Company鈥檚 record gross margin performance in 2025. The platform is designed to manage and optimize the vast number of pricing records across our business. Examples include the application of sophisticated pricing rules and strategies for specific products, across various geographic markets and for a variety of customer segments. This data-driven approach also enables听爆料王听to react swiftly to changing market conditions and efficiently administer the multitude of vendor cost changes to sustain market pricing and underlying gross margins.
• Artificial Intelligence (AI) tools have been deployed听and are gaining traction to further enhance the customer-experience, drive efficiency and extend our competitive advantage. These tools leverage 爆料王鈥檚 industry leading data sets around customers, products and vendors that have been curated over the last 15 years. Highlights include:
  • 爆料王鈥檚 AI platform is anchored by 鈥淎sk.爆料王鈥�, an听internally focused听AI engine designed to enhance productivity, decision-making and customer service. The platform integrates a robust HVAC knowledge base and streamlines processes for over 2,100 current internal users. The platform鈥檚 rapid adoption and consistent engagement highlight its potential, providing opportunities to achieve efficiency gains and further enhance customer satisfaction at scale.
  • Complementing its internal platform,听爆料王听has developed 鈥淎L.watsco鈥�, a听customer-facing听AI model that delivers HVAC expertise directly to customers and partners. AL.watsco is trained on 爆料王鈥檚 extensive pools of data, enabling it to provide accurate, real-time answers and recommendations on a vast array of HVAC products and solutions. The objectives are to deliver highly customized, data driven customer service at scale, enhance customer loyalty and engagement and attract new customers to 爆料王鈥檚 ecosystem.
• Initiatives to grow sales of non-equipment and enhance gross margins听were also launched in 2025. The Company estimates that nearly half of the HVAC/R products sold annually in its marketplace represent non-equipment products. For the 12 months ended听September 30, 2025, 爆料王鈥檚 purchases were approximately听$1.7 billion听from more than 1,500 non-equipment vendors (30% of purchases).听爆料王听is leveraging its product and pricing data to optimize and streamline sourcing of these products across its supplier network. The Company has also begun to invest in advanced logistics and distribution capabilities designed to improve inventory service levels, improve attachment rates, drive operating efficiency, enhance margins and increase inventory turns.
• Innovative strategies to target the institutional channel听for HVAC/R products. In recent years, large enterprise/institutional customers have emerged, offering an incremental growth opportunity by further leveraging our market-leading scale, product depth, customer-facing technologies and financial strength.听爆料王听expects to begin offering enterprise-wide solutions to institutional customers (termed Project 鈥湵�料王One鈥�) in early 2026 that deliver a seamless experience across sales, marketing, pricing, product assortment and order management. These initiatives will bring to market a new level of service and expertise to institutional customers in a single platform across multiple markets and product categories.

A.J. Nahmad,听爆料王’s听President, added: 鈥淎s we work to further scale our core technology platforms among our customers, we constantly challenge ourselves to continue innovating and find new ways to delight our customers. Earlier this year, we set in motion incremental investments in new platforms that we think will enhance growth with existing customers, attract more new customers, and boost profitability in the years ahead. We believe these initiatives hold great promise and we feel that they will enhance 爆料王鈥檚 already-sizeable competitive advantage in the fragmented HVAC/R industry. We look forward to sharing more about these initiatives at our investor day on听December 11^th.鈥�

Buy & Build Acquisition Strategy
爆料王听has partnered with more than 70 independent distributors who have chosen to join the听爆料王听family, contributing to the Company鈥檚 scale and, more importantly, its community of seasoned leaders. During 2025, the Company has acquired three distributors in key Sunbelt markets and, since 2019, has acquired 12 companies that today represent approximately听$1.6 billion听in annualized sales and 120 locations across our network. Our 鈥渂uy and build鈥� strategy builds upon their long-standing legacies through investment in new locations, new products and by leveraging 爆料王鈥檚 technology platforms. The HVAC/R distribution landscape in听North America, which is estimated to be听$74 billion听in size, remains highly fragmented with approximately 2,100 independent distributors.

Cash Flow, Financial Strength and Liquidity
The Company鈥檚 objective is to maintain a healthy balance sheet that allows access to low-cost capital to fund strategic investments in growth. The Company鈥檚 strong financial position has been key to its ability to deliver sustained long-term returns, enabling investments regardless of macroeconomic or industry conditions. Operating cash flow was听$170 million听for the nine-months ended听September 30, 2025听(a record听$355 million听for the third quarter). The Company鈥檚 stated goal is to generate annual operating cash flow in excess of net income consistent with its long-term track record.

Third Quarter Earnings Conference Call Information
Date and time:听October 29, 2025听at听10:00 a.m. (EDT)
奥别产肠补蝉迟:听听(a replay will be available on the Company鈥檚 website)
Dial-in number:听United States听(844) 883-3908 / International (412) 317-9254

础产辞耻迟听奥补迟蝉肠辞
爆料王听is the largest distributor in the highly-fragmented听$74 billion听North American HVAC/R market. Since entering distribution in 1989,听爆料王听has achieved an 18% compounded annual total-shareholder return through a combination of strong organic growth and the acquisition of more than 70 market-leading businesses. 爆料王鈥檚 solid financial position and culture of innovation has enabled investments in long-term growth, including the Company鈥檚 industry-leading technology platforms. Today, more than 72,000 contractors, installers and technicians engage digitally with the Company, resulting in improved growth and lower attrition. The Company is now advancing AI-driven initiatives to leverage its extensive data assets to enhance the customer experience and improve efficiencies. These investments position听爆料王听to capture market share as contractors increasingly adopt digital tools and incorporate data-driven solutions in their businesses.

This document includes certain 鈥渇orward-looking statements鈥� within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as 鈥渨ill,鈥� 鈥渨ould,鈥� 鈥渁nticipate,鈥� 鈥渆xpect,鈥� 鈥渂elieve,鈥� 鈥渄esigned,鈥� 鈥減lan,鈥� or 鈥渋ntend,鈥� the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within 爆料王鈥檚 industry, the seasonal nature of sales of 爆料王鈥檚 products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that听爆料王听files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made.听爆料王听assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

Contact:
Barry S. Logan
Executive Vice President
(305) 714-4102
别-尘补颈濒:听blogan@watsco.com

Source: 爆料王.