Builders FirstSource, Inc.

Previous wording

Statements in this report and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance, industry and business outlook or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. All forward-looking statements are based upon currently available information and the Company’s current assumptions, expectations and projections about future events. Forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially from the results or events described in the forward-looking statements as a result of many factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control or may be currently unknown to the Company, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital and technology strategies, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, home size and affordability, consumer confidence, labor and supply shortages, and also lumber and other commodity prices, which may be impacted by changes in tariffs. The Company may not succeed in addressing these and other risks. Further information regarding the risk factors that could affect our financial and other results can be found in the risk factors section of the Company’s 2024 Form 10-K filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this report are qualified by the factors, risks and uncertainties contained therein.

Current wording

Statements in this report and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance, industry and business outlook or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by our directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. All forward-looking statements are based upon currently available information and the Company’s current assumptions, expectations and projections about future events. Forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially from the results or events described in the forward-looking statements as a result of many factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control or may be currently unknown to the Company, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital and technology strategies, including our ability to drive growth by incorporating artificial intelligence and machine learning solutions into our platform, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, home size and affordability, consumer confidence, labor and supply shortages, and also lumber and other commodity prices, which may be impacted by changes in tariffs. The Company may not succeed in addressing these and other risks. Further information regarding the risk factors that could affect our financial and other results can be found in the risk factors section of the Company’s 2024 Form 10-K filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this report are qualified by the factors, risks and uncertainties contained therein.

Previous wording

We are a leading supplier and manufacturer of building materials, manufactured components and construction services to professional contractors, sub-contractors and consumers. The Company operates approximately 585 locations in 43 states across the United States, which are internally organized into geographic operating divisions. Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating divisions are aggregated into one reportable segment.

Current wording

We are a leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. The Company operates approximately 585 locations in 43 states across the United States, which are internally organized into geographic operating divisions. Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating divisions are aggregated into one reportable segment.

Previous wording

Through June 30, 2025, we have completed the acquisitions of Alpine Lumber, Cluss Lumber and Truckee Tahoe for an aggregate purchase price of approximately $891.9 million, net of cash acquired. Among other opportunities, these acquisitions further expand our market footprint and provide additional operations in our value-added product categories and allow us to better serve our customers in these markets. These transactions are described in further detail in Note 2 to the condensed consolidated financial statements included in Item 1 of this quarterly report on Form 10-Q.

Current wording

Through September 30, 2025, we have completed the acquisitions of Alpine Lumber, Cluss Lumber, Truckee Tahoe, and St. George Truss for an aggregate purchase price of approximately $910.8 million, net of cash acquired. Among other opportunities, these acquisitions further expand our market footprint and provide additional operations in our value-added product categories and allow us to better serve our customers in these markets. These transactions are described in further detail in Note 2 to the condensed consolidated financial statements included in Item 1 of this quarterly report on Form 10-Q.

Previous wording

During the six months ended June 30, 2025, the Company repurchased 3.4 million shares at a weighted average price of $118.65 per share, for a total cost of $403.6 million, inclusive of applicable fees and taxes.

Current wording

During the nine months ended September 30, 2025, the Company repurchased 3.4 million shares at a weighted average price of $118.65 per share, for a total cost of $403.6 million, inclusive of applicable fees and taxes.

Previous wording

According to the U.S. Census Bureau, actual U.S. total housing starts were 0.4 million for thesecond quarter of 2025, a decrease of 0.9% compared to the second quarter of 2024. Actual U.S. single-family starts for the second quarter of 2025 were 0.3 million, a decrease of 8.4% compared to the second quarter of 2024. A composite of third-party sources, including the National Association of Home Builders and John Burns Research and Consulting, are forecasting 1.3 million U.S. total housing starts and 940 thousand U.S single-family housing starts for 2025, which are decreases of 4.0% and 7.2%, respectively from 2024.

Current wording

As a result of the U.S. federal government shutdown, September 2025 housing starts have not been published as of the date of this quarterly report on Form 10-Q. According to the U.S. Census Bureau, as of August 2025, the seasonally adjusted annual rate (“SAAR”) U.S. total housing starts were 1.3 million and the SAAR U.S. single-family housing starts were 890 thousand, a decrease of 6.0% and 11.7%, respectively, compared to the comparable period of 2024. A composite of third-party sources, including the National Association of Home Builders and John Burns Research and Consulting, are forecasting 1.3 million U.S. total housing starts and 940 thousand U.S single-family housing starts for 2025, which are decreases of 2.5% and 7.4%, respectively from 2024.

Previous wording

Net Sales. Net sales for the three months ended June 30, 2025, were $4.2 billion, a 5.0% decrease over net sales of $4.5 billion for the three months ended June 30, 2024. Core organic sales decreased net sales by 8.5%, primarily due to decreases in the multi-family and single-family customer segments, while commodity price deflation decreased net sales by another 1.5%. These decreases were partially offset by an increase in net sales from acquisitions of 5.0%.

Current wording

Net Sales. Net sales for the three months ended September 30, 2025, were $3.9 billion, a 6.9% decrease from net sales of $4.2 billion for the three months ended September 30, 2024. Core organic sales decreased net sales by 10.6%, primarily due to decreases in the multi-family and single-family customer segments, while commodity price deflation decreased net sales by another 1.1%. These decreases were partially offset by an increase in net sales from acquisitions of 4.8%.

Previous wording

We experienced decreased net sales in our manufactured products category primarily due to continued normalization in multi-family, and decreased single-family activity due to lower housing starts. Our windows, doors, and millwork declined primarily due to price normalization, and decreased single-family activity due to lower housing starts. Our lumber and lumber sheet goods category decreased primarily due to lower single-family housing starts and commodity price deflation, partially offset by an increase in net sales from acquisitions. For the comparable period, specialty building products remained relatively consistent.

Current wording

We experienced decreased net sales in our manufactured products category primarily due to decreased single-family activity due to lower housing starts and decreased multi-family activity, partially offset by an increase in net sales from acquisitions. Our windows, doors, and millwork declined primarily due to decreased single-family activity due to lower housing starts. Our lumber and lumber sheet goods category decreased primarily due to lower single-family housing starts and commodity price deflation, partially offset by an increase in net sales from acquisitions. For the comparable period, specialty building products remained relatively consistent.

Previous wording

Gross Margin. Gross margin decreased $0.2 billion to $1.3 billion. Our gross margin percentage decreased to 30.7% in the second quarter of 2025 from 32.8% in the second quarter of 2024, a 2.1% decrease. This decrease was primarily driven by single-family and multi-family margin normalization, as well as a below-normal starts environment.

Current wording

Gross Margin. Gross margin decreased $0.2 billion to $1.2 billion. Our gross margin percentage decreased to 30.4% in the third quarter of 2025 from 32.8% in the third quarter of 2024, a 2.4% decrease. This decrease was primarily driven by a below-normal starts environment.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $14.6 million, or 1.5%, primarily due to additional operating expenses from additional locations acquired within the last twelve months and our ongoing enterprise resource planning system implementation, partially offset by lower variable compensation due to decreased sales.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $12.4 million, or 1.3%, primarily due to additional operating expenses from locations acquired within the last twelve months and our ongoing enterprise resource planning (“ERP”) system implementation, partially offset by lower variable compensation due to decreased sales and the absence of prior year asset write-offs.

Previous wording

As a percentage of net sales, selling, general and administrative expenses increased to 23.3%, up from 21.8%, for the three months ended June 30, 2025 and 2024, respectively, primarily attributable to reduced operating leverage.

Current wording

As a percentage of net sales, selling, general and administrative expenses increased to 24.6%, up from 22.6%, for the three months ended September 30, 2025 and 2024, respectively, primarily attributable to reduced operating leverage.

Previous wording

Interest Expense, Net. Interest expense was $72.0 million in the second quarter of 2025, an increase of $20.0 million from the second quarter of 2024. The increase was primarily due to higher average debt balances.

Current wording

Interest Expense, Net. Interest expense was $69.3 million in the third quarter of 2025, an increase of $15.0 million from the third quarter of 2024. The increase was primarily due to higher average debt balances.

Previous wording

Income Tax Expense. We recorded income tax expense of $54.3 million and $93.4 million in the second quarters of 2025 and 2024, respectively. The decrease in the tax expense was primarily driven by a decrease in income before income taxes in the current period. Our effective tax rate was 22.7% in the second quarter of 2025, an increase from 21.3% in the second quarter of 2024, primarily related to a lower stock-based compensation windfall benefit.

Current wording

Income Tax Expense. We recorded income tax expense of $37.1 million and $89.0 million in the third quarters of 2025 and 2024, respectively. The decrease in the tax expense was primarily driven by a decrease in income before income taxes in the current period. Our effective tax rate was 23.3% in the third quarter of 2025, a decrease from 23.8% in the third quarter of 2024, primarily related to decreased permanent and other differences.

Previous wording

Six Months ended June 30, 2025 Compared with the Six Months ended June 30, 2024

Current wording

Nine Months ended September 30, 2025 Compared with the Nine Months ended September 30, 2024

Previous wording

Net Sales. Net sales for the six months ended June 30, 2025, were $7.9 billion, a 5.5% decrease over net sales of $8.3 billion for the six months ended June 30, 2024. Core organic sales decreased net sales by 8.4%, primarily due to decreases in the multi-family and single-family customer segments, while commodity price deflation and one fewer selling day decreased net sales by another 1.2% and 0.8%, respectively. These decreases were partially offset by increased net sales from acquisitions of 4.9%.

Current wording

Net Sales. Net sales for the nine months ended September 30, 2025, were $11.8 billion, a 5.9% decrease from net sales of $12.6 billion for the nine months ended September 30, 2024. Core organic sales decreased net sales by 9.1%, primarily due to decreases in the multi-family and single-family customer segments, while commodity price deflation and one fewer selling day decreased net sales by another 1.2% and 0.5%, respectively. These decreases were partially offset by increased net sales from acquisitions of 4.9%.

Previous wording

We experienced decreased net sales in our manufactured products category primarily due to continued normalization in multi-family, and decreased single-family activity due to lower housing starts. Our windows, doors, and millwork and lumber and lumber sheet goods sales declined primarily due to price normalization, and decreased single-family activity due to lower housing starts. For the comparable period, specialty building products remained relatively flat.

Current wording

We experienced decreased net sales in our manufactured products category primarily due to decreased single-family activity due to lower housing starts and decreased multi-family activity, partially offset by an increase in net sales from acquisitions. Our windows, doors, and millwork declined primarily due to decreased single-family activity due to lower housing starts. Our lumber and lumber sheet goods category decreased primarily due to lower single-family housing starts and commodity price deflation, partially offset by an increase in net sales from acquisitions. For the comparable period, specialty building products remained relatively flat.

Previous wording

Gross Margin. Gross margin decreased $0.3 billion to $2.4 billion, and our gross margin percentage decreased to 30.6% for the six months ended June 30, 2025, from 33.1% in the six months ended June 30, 2024, a 2.5% decrease. This decrease was primarily attributed to the normalization of margins in both single-family and multi-family customer segments, as well as a lower starts environment.

Current wording

Gross Margin. Gross margin decreased $0.5 billion to $3.6 billion, and our gross margin percentage decreased to 30.5% for the nine months ended September 30, 2025, from 33.0% in the nine months ended September 30, 2024, a 2.5% decrease. This decrease was primarily attributed to a lower starts environment.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $19.1 million, or 1.0%. This increase was primarily due to operating expenses from additional locations acquired within the last twelve months and our ongoing enterprise resource planning system implementation, partially offset by lower variable compensation due to decreased sales.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $31.5 million, or 1.1%. This increase was primarily due to additional operating expenses from locations acquired within the last twelve months and our ongoing ERP system implementation, partially offset by lower variable compensation due to decreased sales and the absence of prior year asset write-offs.

Previous wording

As a percentage of net sales, selling, general and administrative expenses increased to 24.3% up from 22.8% for the six months ended June 30, 2025 and 2024, respectively, primarily attributable to reduced operating leverage.

Current wording

As a percentage of net sales, selling, general and administrative expenses increased to 24.4% up from 22.7% for the nine months ended September 30, 2025 and 2024, respectively, primarily attributable to reduced operating leverage.

Previous wording

Interest Expense, Net. Interest expense was $136.9 million in the six months ended June 30, 2025, an increase of $36.5 million from the six months ended June 30, 2024. Interest expense increased primarily due to higher average debt balances.

Current wording

Interest Expense, Net. Interest expense was $206.1 million in the nine months ended September 30, 2025, an increase of $51.5 million from the nine months ended September 30, 2024. Interest expense increased primarily due to higher average debt balances.

Previous wording

Income Tax Expense. We recorded income tax expense of $77.5 million and $159.9 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in tax expense was primarily driven by a decrease in income before income taxes in the current period. Our effective tax rate was 21.6% in the first six months ended June 30, 2025, an increase from 21.0% in the first six months ended June 30, 2024, primarily related to a decrease in our stock-based compensation windfall benefit, partially offset by permanent and other differences.

Current wording

Income Tax Expense. We recorded income tax expense of $114.6 million and $248.8 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease in tax expense was primarily driven by a decrease in income before income taxes in the current period. Our effective tax rate was 22.1% in the first nine months ended September 30, 2025, an increase from 21.9% in the first nine months ended September 30, 2024, primarily related to a decrease in our stock-based compensation windfall benefit, partially offset by permanent and other differences.

Previous wording

As of June 30, 2025, we had $233.0 million outstanding borrowings under our Revolving Facility, and our net excess borrowing availability was $1,538.1 million after being reduced by outstanding letters of credit totaling $79.6 million. Excess availability must equal or exceed a minimum specified amount, currently $185.1 million, or we are required to meet a fixed charge coverage ratio of 1.00 to 1.00. We were not in violation of any covenants or restrictions imposed by any of our debt agreements at June 30, 2025.

Current wording

As of September 30, 2025, we had no outstanding borrowings under our Revolving Facility, and our net excess borrowing availability was $1.8 billion after being reduced by outstanding letters of credit totaling $79.6 million. Excess availability must equal or exceed a minimum specified amount, currently $187.0 million, or we are required to meet a fixed charge coverage ratio of 1.00 to 1.00. We were not in violation of any covenants or restrictions imposed by any of our debt agreements at September 30, 2025.

Previous wording

Our liquidity at June 30, 2025, was $1.6 billion, which consists of net borrowing availability under the Revolving Facility and cash on hand.

Current wording

Our liquidity at September 30, 2025, was $2.1 billion, which consists of net borrowing availability under the Revolving Facility and cash on hand.

Previous wording

Cash provided by operating activities was $473.4 million for the six months ended June 30, 2025, compared to cash provided by operating activities of $769.3 million for the six months ended June 30, 2024. The decrease in cash provided by operating activities was largely the result of lower net income in the first six months of 2025.

Current wording

Cash provided by operating activities was $1.0 billion for the nine months ended September 30, 2025, compared to cash provided by operating activities of $1.5 billion for the nine months ended September 30, 2024. The decrease in cash provided by operating activities was largely the result of lower net income in the first nine months of 2025.

Previous wording

For the six months ended June 30, 2025, cash used in investing activities increased $743.8 million compared to the six months ended June 30, 2024, primarily due to using an additional $752.6 million of cash for acquisitions.

Current wording

For the nine months ended September 30, 2025, cash used in investing activities increased $0.6 billion compared to the nine months ended September 30, 2024, primarily due to using an additional $0.6 billion of cash for acquisitions.

Previous wording

Cash provided by financing activities was $519.5 million for the six months ended June 30, 2025, which consisted primarily of a net $739.3 million received for the issuance of the 6.75% 2035 Notes, and $233.0 million net borrowings on the Revolving Facility, offset by $414.0 million for repurchases of common stock. Cash used in financing activities was $444.2 million for the six months ended June 30, 2024, which consisted primarily of $1.0 billion for repurchases of common stock and $365.0 million in net payments on the Revolving Facility, offset by a net $987.5 million received for the issuance of the 6.375% 2034 Notes.

Current wording

Cash provided by financing activities was $0.3 billion for the nine months ended September 30, 2025, which consisted primarily of a net $0.7 billion received for the issuance of the 6.75% 2035 Notes, offset by $0.4 billion for repurchases of common stock. Cash used in financing activities was $0.7 billion for the nine months ended September 30, 2024, which consisted primarily of $1.2 billion for repurchases of common stock and $0.5 billion in net payments on the Revolving Facility, offset by a net $1.0 billion received for the issuance of the 6.375% 2034 Notes.