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FirstService Reports Fourth Quarter and Full Year Results

1. FSV reported a 27% revenue increase in Q4 2024 compared to Q4 2023. 2. Annual revenue reached $5.22 billion, growing 20% over the previous year. 3. Adjusted EPS grew 21% year-over-year in Q4 2024, reflecting strong profitability. 4. FSV's growth attributed to successful acquisitions and contract wins across markets. 5. Strong performance suggests positive momentum and expectations for 2025 growth.

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FAQ

Why Very Bullish?

Strong revenue growth and profitability improvements enhance investor confidence, potentially driving stock prices higher. Previous instances show similar results improved stock valuations significantly.

How important is it?

The article outlines major financial successes that can directly influence market sentiments and FSV's stock performance. Positive earnings reports historically correlate with upward moves in stock prices.

Why Long Term?

Sustained revenue increases and profitability indicate ongoing strength, influencing long-term investor outlook. Historical trends suggest that consistent growth often leads to improved stock performance.

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FSV
Strong Revenue Growth Drives Profitability February 05, 2025 07:30 ET  | Source: FirstService Corporation Operating highlights:   Three months ended Year ended  December 31 December 31  2024 2023 2024 2023             Revenues (millions)$1,365.3 $1,079.3 $5,216.9 $4,334.5Adjusted EBITDA (millions) (note 1) 137.9  103.3  513.7  415.7Adjusted EPS (note 2) 1.34  1.11  5.00  4.66             GAAP Operating Earnings 89.6  48.1  337.5  244.9GAAP EPS 0.71  0.14  2.97  2.24              TORONTO, Feb. 05, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today announced strong fourth quarter and full year results for the year ended December 31, 2024. All amounts are in US dollars. Consolidated revenues for the fourth quarter were $1.37 billion, a 27% increase relative to the same quarter in the prior year, including 10% organic growth. Adjusted EBITDA (note 1) was $137.9 million, up 33%, and Adjusted EPS (note 2) was $1.34, a 21% increase over the prior year quarter. Operating Earnings for the quarter were $89.6 million, relative to $48.1 million in the prior year period. Diluted EPS was $0.71 per share in the quarter, compared to $0.14 for the same quarter a year ago. For the year ended December 31, 2024, consolidated revenues were $5.22 billion, a 20% increase relative to the prior year. Adjusted EBITDA was $513.7 million, up 24%, and Adjusted EPS was $5.00, an increase of 7% versus the prior year. Operating Earnings were $337.5 million, versus $244.9 million in the prior year period. Diluted earnings per share was $2.97, compared to $2.24 in the prior year. “We are very pleased with how we closed out the year,” said Scott Patterson, Chief Executive Officer of FirstService. “Our teams were focused on driving healthy profitable growth which is reflected in the strong top-line and improved margins. This momentum and continued operational execution reinforces our expectations for a strong 2025,” he concluded. About FirstService CorporationFirstService Corporation is a North American leader in the property services sector serving its customers through two industry leading platforms: FirstService Residential - North America’s largest manager of residential communities; and FirstService Brands - one of North America’s largest providers of essential property services delivered through individually branded company-owned operations and franchise systems. FirstService generates more than US$5.2 billion in annual revenues and has approximately 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Common Shares of FirstService trade on the NASDAQ under the symbol “FSV” and on the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 Index. More information is available at www.firstservice.com. Segmented Fourth Quarter ResultsFirstService Residential generated revenues of $521.3 million for the fourth quarter, up 5% relative to the prior year quarter, including 3% organic growth. The top-line performance was underpinned by contract wins in high-rise markets including Texas, Toronto and Chicago, with growth tempered by the ongoing community budgetary pressures referenced in our prior third quarter. Adjusted EBITDA was $46.0 million, an increase of 6% compared to $43.5 million reported in the prior year period. Operating Earnings were $34.4 million, versus $34.1 million for the fourth quarter of last year. Operating margins were relatively in-line with the prior year quarter. FirstService Brands recorded revenues of $844.1 million, up 45% versus the prior year period. Revenues increased 16% on an organic basis primarily due to increased weather events and large-loss claims activity at our restoration operations, compared to the prior year quarter. The division top-line performance also included contribution from our Roofing Corp of America acquisition which was acquired in December 2023. Adjusted EBITDA for the quarter was $100.7 million, compared to $61.1 million in the prior year quarter. Operating Earnings were $69.9 million, versus $20.6 million in the prior year quarter. The segment Adjusted EBITDA margin increase was mainly due to operating leverage at our restoration operations, as well as continued realization of cost efficiencies within our home services brands. The Operating Earnings margin was further buoyed by the same acquisition-related fair value adjustments to contingent upside earn-out structures noted in the prior third quarter. Corporate costs, as presented in Adjusted EBITDA, were $8.9 million in the fourth quarter, relative to $1.2 million in the prior year period. Corporate costs for the quarter were $14.7 million, relative to $6.7 million in the prior year period. The increase was primarily due to non-cash foreign exchange adjustments. Segmented Full Year ResultsFirstService Residential reported revenues of $2.13 billion, up 7% relative to 2023, including 5% organic growth and the balance from tuck-under acquisitions. Organic growth was driven by new property management contract wins across most markets. Adjusted EBITDA was $199.3 million, up 6% versus the prior year. Operating Earnings were $159.2 million, compared to $155.0 million in the prior year. Operating margins were in-line with the prior year. FirstService Brands revenues were $3.08 billion, up 32% versus the prior year, including 3% organic growth. Growth in the division was driven primarily by our Roofing Corp of America acquisition, together with solid organic growth at our Century Fire Protection operations. Adjusted EBITDA for the year was $339.5 million, up 40% relative to the prior year. Operating Earnings were $230.1 million, versus $126.5 million a year ago. The segment Adjusted EBITDA margin was positively impacted primarily by margin improvement within our home services brands. The Operating Earnings margin was further positively impacted from contingent acquisition consideration fair value adjustments. Corporate costs, as presented in Adjusted EBITDA, were $25.1 million for the full year, relative to $14.4 million in the prior year. Corporate costs were $51.8 million, relative to $36.6 million in 2023, with the increase driven primarily by the impact of non-cash foreign exchange adjustments, as well as stock-based compensation expense. Conference Call & PresentationFirstService will be holding a conference call on Wednesday, February 5, 2025 at 11:00 a.m. Eastern Time to discuss the results for the fourth quarter and full year. This call is being webcast live at the Company’s website at www.firstservice.com. Participants may register for the call here https://register.vevent.com/register/BIc0caa93df85548909c3b68b8c526df66 to receive the dial-in number and their unique PIN. To join the webcast in listen only mode, use this link: https://edge.media-server.com/mmc/p/zvtxjnkg. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). Forward-looking StatementsThis press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2023 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise. Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's consolidated financial statements and MD&A to be made available on SEDAR+ at www.sedarplus.ca. COMPANY CONTACTS: D. Scott PattersonChief Executive Officer        Jeremy RakusinChief Financial Officer (416) 960-9566 Notes1. Reconciliation of net earnings to adjusted EBITDA: Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other expense (income); (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses Adjusted EBITDA to evaluate its own operating performance and its ability to service debt, as well as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Adjusted EBITDA is presented as a supplemental measure because the Company believes such measure is useful to investors as a reasonable indicator of operating performance because of the low capital intensity of its service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to Adjusted EBITDA appears below.   Three months ended Twelve months ended(in thousands of US$)December 31 December 31  2024  2023  2024  2023              Net earnings$50,179  $23,783  $187,774  $147,021 Income tax 19,153   12,051   70,124   56,317 Other income, net (863)  (595)  (3,239)  (5,810)Interest expense, net 21,146   12,823   82,853   47,364 Operating earnings 89,615   48,062   337,512   244,892 Depreciation and amortization 47,828   33,872   165,269   127,934 Acquisition-related items (5,272)  16,485   (14,402)  21,517 Stock-based compensation expense 5,685   4,924   25,311   21,385 Adjusted EBITDA$137,856  $103,343  $513,690  $415,728                  A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below.               (in thousands of US$)                                  Three months ended December 31, 2024   FirstService  FirstService         Residential  Brands  Corporate (1)            Operating earnings (loss)  $34,382  $69,909  $(14,676)Depreciation and amortization   10,439   37,366   23 Acquisition-related items   1,191   (6,578)  115 Stock-based compensation expense   -   -   5,685 Adjusted EBITDA  $46,012  $100,697  $(8,853)                        Three months ended December 31, 2023   FirstService  FirstService        Residential  Brands  Corporate (1)            Operating earnings (loss)  $34,136  $20,603  $(6,677)Depreciation and amortization   8,373   25,477   22 Acquisition-related items   1,002   14,992   491 Stock-based compensation expense   -   -   4,924 Adjusted EBITDA  $43,511  $61,072  $(1,240)                                    Year ended December 31, 2024   FirstService  FirstService         Residential  Brands  Corporate (1)            Operating earnings (loss)  $159,206  $230,080  $(51,774)Depreciation and amortization   37,506   127,672   91 Acquisition-related items   2,576   (18,263)  1,285 Stock-based compensation expense   -   -   25,311 Adjusted EBITDA  $199,288  $339,489  $(25,087)                        Year ended December 31, 2023   FirstService  FirstService        Residential  Brands  Corporate (1)            Operating earnings (loss)  $155,044  $126,468  $(36,620)Depreciation and amortization   33,114   94,729   91 Acquisition-related items   (366)  21,159   724 Stock-based compensation expense   -   -   21,385 Adjusted EBITDA  $187,792  $242,356  $(14,420)                        Segment Adjusted EBITDA margin is defined as segment Adjusted EBITDA divided by segment revenues.            (1) Corporate is not an operating segment, but rather represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Segment Adjusted EBITDA.  2. Reconciliation of net earnings and net earnings (loss) per common share to adjusted net earnings and adjusted net earnings per share: Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization of intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per common share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of diluted net earnings per common share to Adjusted EPS appears below.   Three months ended Twelve months ended(in thousands of US$)December 31 December 31  2024  2023  2024  2023              Net earnings$50,179  $23,783  $187,774  $147,021 Non-controlling interest share of earnings (3,639)  (3,925)  (15,624)  (14,140)Acquisition-related items (5,272)  16,485   (14,402)  21,517 Amortization of intangible assets 22,331   13,942   72,396   54,238 Stock-based compensation expense 5,685   4,924   25,311   21,385 Income tax on adjustments (8,125)  (4,905)  (28,335)  (19,662)Non-controlling interest on adjustments (206)  (665)  (693)  (1,517)Adjusted net earnings$60,953  $49,639  $226,427  $208,842                Three months ended Twelve months ended(in US$)December 31 December 31  2024  2023  2024  2023              Diluted net earnings per share$0.71  $0.14  $2.97  $2.24 Non-controlling interest redemption increment 0.31   0.30   0.83   0.72 Acquisition-related items (0.11)  0.36   (0.31)  0.47 Amortization of intangible assets, net of tax 0.34   0.23   1.11   0.88 Stock-based compensation expense, net of tax 0.09   0.08   0.40   0.35 Adjusted earnings per share$1.34  $1.11  $5.00  $4.66                  FIRSTSERVICE CORPORATIONOperating Results(in thousands of US$, except per share amounts)     Three months  Twelve months     ended December 31  ended December 31   2024   2023   2024   2023                Revenues $1,365,349  $1,079,260  $5,216,894  $4,334,548                Cost of revenues  911,361   735,920   3,498,974   2,947,008 Selling, general and administrative expenses  321,817   244,921   1,229,541   993,197 Depreciation  25,497   19,930   92,873   73,696 Amortization of intangible assets  22,331   13,942   72,396   54,238 Acquisition-related items (1)  (5,272)  16,485   (14,402)  21,517 Operating earnings  89,615   48,062   337,512   244,892 Interest expense, net  21,146   12,823   82,853   47,364 Other income, net  (863)  (595)  (3,239)  (5,810)Earnings before income tax  69,332   35,834   257,898   203,338 Income tax  19,153   12,051   70,124   56,317 Net earnings   50,179   23,783   187,774   147,021 Non-controlling interest share of earnings  3,639   3,925   15,624   14,140 Non-controlling interest redemption increment  14,064   13,596   37,775   32,490 Net earnings attributable to Company $32,476  $6,262  $134,375  $100,391                Net earnings per common share                              Basic $0.72  $0.14  $2.98  $2.25   Diluted  0.71   0.14   2.97   2.24                Adjusted earnings per share (2) $1.34  $1.11  $5.00  $4.66                Weighted average common shares (thousands)              Basic  45,194   44,639   45,019   44,556   Diluted  45,583   44,874   45,280   44,795  (1) Acquisition-related items include transaction costs, and contingent acquisition consideration fair value adjustments.(2) See definition and reconciliation above. Condensed Consolidated Balance Sheets      (in thousands of US$)                 December 31, 2024 December 31, 2023         Assets      Cash and cash equivalents$227,598 $187,617 Restricted cash 16,088  19,260 Accounts receivable 947,517  842,236 Other current assets 368,150  311,889  Current assets 1,559,353  1,361,002 Other non-current assets 30,121  34,418 Fixed assets 253,994  204,188 Operating lease right-of-use assets 240,518  218,299 Goodwill and intangible assets 2,110,866  1,807,836  Total assets$4,194,852 $3,625,743                 Liabilities and shareholders' equity      Accounts payable and accrued liabilities$541,509 $471,083 Other current liabilities 214,575  211,661 Operating lease liabilities - current 53,115  50,898 Long-term debt - current 41,567  37,132  Current liabilities 850,766  770,774 Long-term debt - non-current 1,257,143  1,144,975 Operating lease liabilities - non-current 214,423  183,923 Other liabilities 150,542  115,938 Deferred income tax 84,895  53,024 Redeemable non-controlling interests 449,337  332,963 Shareholders' equity 1,187,746  1,024,146  Total liabilities and equity$4,194,852 $3,625,743                 Supplemental balance sheet information      Total debt$1,298,710 $1,182,107 Total debt, net of cash 1,071,112  994,490         Condensed Consolidated Statements of Cash Flows       (in thousands of US$)    Three months ended  Twelve months ended    December 31  December 31   2024   2023   2024   2023               Cash provided by (used in)                          Operating activities            Net earnings $50,179  $23,783  $187,774  $147,021 Items not affecting cash:             Depreciation and amortization  47,828   33,872   165,269   127,934  Deferred income tax  (7,172)  (18,413)  (13,986)  (19,049) Other  (1,424)  18,384   5,805   34,416     89,411   57,626   344,862   290,322               Changes in non-cash working capital             Accounts receivable  (22,323)  (17,045)  (42,306)  (93,822) Payables and accruals  15,249   38,159   22,602   19,662  Other  4,382   36,040   (20,129)  68,532               Contingent acquisition consideration paid  -   (4,334)  (19,355)  (4,334)Net cash provided by operating activities  86,719   110,446   285,674   280,360               Investing activities            Acquisition of businesses, net of cash acquired  (53,581)  (434,366)  (212,246)  (547,182)Purchases of fixed assets  (31,916)  (25,065)  (112,798)  (92,734)Other investing activities  (1,373)  (6,173)  1,342   (6,413)Net cash used in investing activities  (86,870)  (465,604)  (323,702)  (646,329)              Financing activities            Increase in long-term debt, net  3,613   390,998   103,577   446,847 Purchases of non-controlling interests, net  1,051   (111)  (24,354)  (4,285)Dividends paid to common shareholders  (11,277)  (10,042)  (43,828)  (39,055)Distributions paid to non-controlling interests  (1,555)  (454)  (9,292)  (7,376)Other financing activities  15,728   4,178   48,305   17,814 Net cash provided by financing activities  7,560   384,569   74,408   413,945               Effect of exchange rate changes on cash  229   (420)  429   (447)              Increase in cash, cash equivalents and restricted cash  7,638   28,991   36,809   47,529               Cash, cash equivalents and restricted cash, start of period  236,048   177,886   206,877   159,348               Cash, cash equivalents and restricted cash, end of period $243,686  $206,877  $243,686  $206,877                Segmented Results(in thousands of US$)                          FirstService FirstService     Residential Brands Corporate (2) Consolidated             Three months ended December 31                        2024            Revenues$521,256 $844,093 $-  $1,365,349 Adjusted EBITDA (1) 46,012  100,697  (8,853)  137,856 Operating earnings 34,382  69,909  (14,676)  89,615             2023            Revenues$496,281 $582,979 $-  $1,079,260 Adjusted EBITDA 43,511  61,072  (1,240)  103,343 Operating earnings 34,136  20,603  (6,677)  48,062                                       FirstService FirstService      Residential Brands Corporate Consolidated             Year ended December 31                        2024            Revenues$2,134,469 $3,082,425 $-  $5,216,894 Adjusted EBITDA 199,288  339,489  (25,087)  513,690 Operating earnings 159,206  230,080  (51,774)  337,512             2023            Revenues$1,996,823 $2,337,725 $-  $4,334,548 Adjusted EBITDA 187,792  242,356  (14,420)  415,728 Operating earnings 155,044  126,468  (36,620)  244,892                           (1) See definition and reconciliation on pages 5 and 6.       (2) See definition on page 6.      

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