FirstService Reports Second Quarter 2025 Results

Solid Top-Line Growth and Operating Margin Expansion Drive Strong Profitability July 24, 2025 07:30 ET | Source: FirstService Corporation Operating highlights: Three months ended Six months ended June 30 June 30 2025 2024 2025 2024 Revenues (millions)$1,415.7 $1,297.5 $2,666.6 $2,455.5Adjusted EBITDA (millions) (note 1) 157.1 132.5 260.4 215.9Adjusted EPS (note 2) 1.71 1.36 2.63 2.03 GAAP Operating Earnings 97.3 83.9 136.5 122.0GAAP Diluted EPS 1.01 0.78 1.07 0.92 TORONTO, July 24, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today reported results for its second quarter ended June 30, 2025. All amounts are in US dollars. Consolidated revenues for the second quarter were $1.42 billion, a 9% increase relative to the same quarter in the prior year. Adjusted EBITDA (note 1) increased 19% to $157.1 million, and Adjusted EPS (note 2) was $1.71, reflecting 26% growth over the prior year quarter. During the second quarter, FirstService reported GAAP Operating Earnings of $97.3 million, up from $83.9 million in the prior year period. GAAP diluted earnings per share was $1.01 in the quarter, up from $0.78 for the same quarter a year ago. For the six months ended June 30, 2025, consolidated revenues were $2.67 billion, a 9% increase relative to the comparable prior year period, Adjusted EBITDA was $260.4 million, up 21%, and Adjusted EPS was $2.63, an increase of 30% over the prior year period. FirstService’s GAAP Operating Earnings were $136.5 million in the current year period, versus $122.0 million in the prior year. GAAP diluted earnings per share for the six months year-to-date was $1.07, compared to $0.92 in the prior year period. “We are pleased to report strong financial results which largely mirrored the year-over-year growth profile we saw in the first quarter,” said Scott Patterson, Chief Executive Officer of FirstService. “Despite continued macroeconomic uncertainty, the resilient top-line performance and strong profitability across our operations during the first half of the year put us well on track to deliver on our goals for 2025,” he concluded. About FirstService CorporationFirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service 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$5.4 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 Quarterly ResultsFirstService Residential revenues were $593.0 million for the second quarter, up 6% compared to the prior year quarter, including organic growth of 3%. Adjusted EBITDA for the quarter was $65.5 million, an increase of 11% compared to the prior year period. Operating Earnings were $51.6 million, versus $49.1 million for the second quarter of last year. The Adjusted EBITDA margin improvement reflected ongoing efficiencies in our property management client service delivery model. The Operating Earnings margin was in-line with the prior year. FirstService Brands revenues during the second quarter grew to $822.7 million, up 11% relative to the prior year period. On an organic basis, division revenues were up 1%, with double-digit growth at Century Fire Protection, offsetting lower quarter-over-quarter results in our Roofing Corp of America operations. Recent tuck-under acquisitions across the division also contributed to the top-line increase. Adjusted EBITDA for the second quarter was $95.2 million, up 23% versus the prior year period. Operating Earnings were $56.5 million, versus $46.3 million in the prior year quarter. The increase in operating margins was attributable to continued operating process improvements at our restoration and home services brands. Corporate costs, as presented in Adjusted EBITDA (note 1), were $3.6 million in the second quarter, relative to $4.2 million in the prior year period. Corporate costs for the quarter were $10.9 million, relative to $11.5 million in the prior year period. Conference CallFirstService will be holding a conference call on Thursday, July 24, 2025 at 11:00 a.m. Eastern Time to discuss the quarter’s results. 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/BI4a1fa34337944f40a129a667fecbe126 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/b34k52bt . 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, 2024 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. Notes1. Reconciliation of net earnings to adjusted EBITDA: Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses Consolidated adjusted EBITDA and segment adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and 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. Consolidated adjusted EBITDA and segment adjusted EBITDA are presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company’s 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 and segment 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 Six months ended(in thousands of US$)June 30 June 30 2025 2024 2025 2024 Net earnings$55,431 $44,937 $69,511 $59,834 Income tax 23,677 18,584 29,677 24,599 Other income, net (996) (115) (1,082) (1,995)Interest expense, net 19,166 20,531 38,430 39,557 Operating earnings 97,278 83,937 136,536 121,995 Depreciation and amortization 45,632 39,225 89,808 76,032 Acquisition-related items 7,662 2,306 19,895 3,906 Stock-based compensation expense 6,556 7,019 14,155 13,927 Adjusted EBITDA$157,128 $132,487 $260,394 $215,860 A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below. (in thousands of US$) Three months ended, June 30, 2025 FirstService FirstService Residential Brands Corporate(1) Operating earnings (loss)$51,606 $56,522 $(10,850)Depreciation and amortization 11,789 33,820 23 Acquisition-related items 2,100 4,873 689 Stock-based compensation expense - - 6,556 Adjusted EBITDA$65,495 $95,215 $(3,582) Three months ended, June 30, 2024 FirstService FirstService Residential Brands Corporate(1) Operating earnings (loss)$49,107 $46,308 $(11,478)Depreciation and amortization 9,773 29,429 23 Acquisition-related items 207 1,827 272 Stock-based compensation expense - - 7,019 Adjusted EBITDA$59,087 $77,564 $(4,164) Six months ended, June 30, 2025 FirstService FirstService Residential Brands Corporate(1) Operating earnings (loss)$80,873 $81,008 $(25,345)Depreciation and amortization 22,425 67,337 46 Acquisition-related items 3,828 14,637 1,430 Stock-based compensation expense - - 14,155 Adjusted EBITDA$107,126 $162,982 $(9,714) Six months ended, June 30, 2024 FirstService FirstService Residential Brands Corporate(1) Operating earnings (loss)$75,765 $73,107 $(26,877)Depreciation and amortization 18,196 57,790 46 Acquisition-related items 725 2,129 1,052 Stock-based compensation expense - - 13,927 Adjusted EBITDA$94,686 $133,026 $(11,852) Segment Adjusted EBITDA margin is defined as segment Adjusted EBITDA divided by segment revenues. (1) Corporate is not an operating segment, but rather represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Segment Adjusted EBITDA. 2. Reconciliation of net earnings and diluted net earnings per share to adjusted net earnings and adjusted net earnings per share: Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below. Three months ended Six months ended(in thousands of US$)June 30 June 30 2025 2024 2025 2024 Net earnings$55,431 $44,937 $69,511 $59,834 Non-controlling interest share of earnings (3,478) (2,696) (4,721) (4,229)Acquisition-related items 7,662 2,306 19,895 3,906 Amortization of intangible assets 19,706 17,009 38,223 32,240 Stock-based compensation expense 6,556 7,019 14,155 13,927 Income tax on adjustments (7,567) (6,968) (16,142) (13,389)Non-controlling interest on adjustments (447) (320) (989) (584)Adjusted net earnings$77,863 $61,287 $119,932 $91,705 Three months ended Six months ended(in US$)June 30 June 30 2025 2024 2025 2024 Diluted net earnings per share$1.01 $0.78 $1.07 $0.92 Non-controlling interest redemption increment 0.13 0.16 0.35 0.32 Acquisition-related items 0.14 0.05 0.35 0.08 Amortization of intangible assets, net of tax 0.30 0.26 0.57 0.49 Stock-based compensation expense, net of tax 0.13 0.11 0.29 0.22 Adjusted earnings per share$1.71 $1.36 $2.63 $2.03 Organic growth is defined as revenue growth adjusted to exclude the revenue attributable to acquired businesses for a period of twelve months following their acquisition. FIRSTSERVICE CORPORATIONCondensed Consolidated Statements of Earnings(in thousands of US dollars, except per share amounts) Three months Six months ended June 30 ended June 30 2025 2024 2025 2024 Revenues$1,415,733 $1,297,459 $2,666,559 $2,455,504 Cost of revenues 935,334 862,463 1,776,802 1,651,040 Selling, general and administrative expenses 329,827 309,528 643,518 602,531 Depreciation 25,926 22,216 51,585 43,792 Amortization of intangible assets 19,706 17,009 38,223 32,240 Acquisition-related items (1) 7,662 2,306 19,895 3,906 Operating earnings 97,278 83,937 136,536 121,995 Interest expense, net 19,166 20,531 38,430 39,557 Other income, net (996) (115) (1,082) (1,995)Earnings before income tax 79,108 63,521 99,188 84,433 Income tax 23,677 18,584 29,677 24,599 Net earnings 55,431 44,937 69,511 59,834 Non-controlling interest share of earnings 3,478 2,696 4,721 4,229 Non-controlling interest redemption increment 5,855 7,183 15,889 14,239 Net earnings attributable to Company $46,098 $35,058 $48,901 $41,366 Net earnings per common share Basic$1.01 $0.78 $1.08 $0.92 Diluted 1.01 0.78 1.07 0.92 Adjusted earnings per share (2)$1.71 $1.36 $2.63 $2.03 Weighted average common shares (thousands) Basic 45,449 44,984 45,409 44,917 Diluted 45,656 45,100 45,632 45,087 Notes to Condensed Consolidated Statements of Earnings(1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs.(2) See definition and reconciliation above. Condensed Consolidated Balance Sheets (in thousands of US dollars) June 30, 2025 December 31, 2024 Assets Cash and cash equivalents$201,806 $227,598 Restricted cash 23,064 16,088 Accounts receivable 983,049 947,517 Prepaid and other current assets 414,837 368,150 Current assets 1,622,756 1,559,353 Other non-current assets 28,118 28,007 Deferred income tax 2,128 2,114 Fixed assets 271,867 253,994 Operating lease right-of-use assets 276,378 240,518 Goodwill and intangible assets 2,167,862 2,110,866 Total assets$4,369,109 $4,194,852 Liabilities and shareholders' equity Accounts payable and accrued liabilities$577,159 $541,509 Unearned revenues 243,678 190,885 Other current liabilities 40,977 23,690 Operating lease liabilities - current 56,938 53,115 Long-term debt - current 13,230 41,567 Current liabilities 931,982 850,766 Long-term debt - non-current 1,229,053 1,257,143 Operating lease liabilities - non-current 249,529 214,423 Other liabilities 151,694 150,542 Deferred income tax 94,029 84,895 Redeemable non-controlling interests 460,997 449,337 Shareholders' equity 1,251,825 1,187,746 Total liabilities and equity$4,369,109 $4,194,852 Supplemental balance sheet information Total debt$1,242,283 $1,298,710 Total debt, net of cash 1,040,477 1,071,112 Consolidated Statements of Cash Flows (in thousands of US dollars) Three months ended Six months ended June 30 June 30 2025 2024 2025 2024 Cash provided by (used in) Operating activities Net earnings$55,431 $44,937 $69,511 $59,834 Items not affecting cash: Depreciation and amortization 45,632 39,225 89,808 76,032 Deferred income tax (771) (2,275) (1,590) (4,549) Other 11,153 8,052 29,352 14,384 111,445 89,939 187,081 145,701 Changes in non-cash working capital Accounts receivable (24,815) (22,637) (14,821) (2,640) Payables and accruals 56,573 33,002 (13,163) (23,282) Other 19,631 30,440 44,987 2,165 Net cash provided by operating activities 162,834 130,744 204,084 121,944 Investing activities Acquisition of businesses, net of cash acquired (43,280) (123,031) (51,916) (154,649)Purchases of fixed assets (33,375) (29,301) (62,938) (54,322)Other investing activities (1,624) (299) (8,670) (1,000)Net cash used in investing activities (78,279) (152,631) (123,524) (209,971) Financing activities Increase (decrease) in long-term debt, net (67,833) 90,473 (54,827) 136,728 Purchases of non-controlling interests, net (14,850) (10,221) (29,346) (21,442)Dividends paid to common shareholders (12,497) (11,244) (23,814) (21,298)Distributions paid to non-controlling interests (5,825) (3,817) (11,602) (4,470)Other financing activities 1,720 3,987 20,906 22,790 Net cash provided by (used in) financing activities (99,285) 69,178 (98,683) 112,308 Effect of exchange rate changes on cash (678) 123 (693) 351 Increase (decrease) in cash, cash equivalents and restricted cash (15,408) 47,414 (18,816) 24,632 Cash, cash equivalents and restricted cash, beginning of period 240,278 184,095 243,686 206,877 Cash, cash equivalents and restricted cash, end of period$224,870 $231,509 $224,870 $231,509 Segmented Results(in thousands of US dollars) FirstService FirstService Residential Brands Corporate Consolidated Three months ended June 30 2025 Revenues$593,023 $822,710 $- $1,415,733 Adjusted EBITDA 65,495 95,215 (3,582) 157,128 Operating earnings 51,606 56,522 (10,850) 97,278 2024 Revenues$557,504 $739,955 $- $1,297,459 Adjusted EBITDA 59,087 77,564 (4,164) 132,487 Operating earnings 49,107 46,308 (11,478) 83,937 FirstService FirstService Residential Brands Corporate Consolidated Six months ended June 30 2025 Revenues$1,118,110 $1,548,449 $- $2,666,559 Adjusted EBITDA 107,126 162,982 (9,714) 260,394 Operating earnings 80,873 81,008 (25,345) 136,536 2024 Revenues$1,053,628 $1,401,876 $- $2,455,504 Adjusted EBITDA 94,686 133,026 (11,852) 215,860 Operating earnings 75,765 73,107 (26,877) 121,995 COMPANY CONTACTS: D. Scott PattersonChief Executive Officer Jeremy RakusinChief Financial Officer (416) 960-9566

FirstService Reports Second Quarter 2025 Results

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