| Metric | Value ($ M) | Q2 FY25 | Q3 FY24 |
|---|---|---|---|
| Revenue | 2.1K | 0.2% | 4.3% |
| Total Income | 2.1K | 0.2% | 4.3% |
| Expenditure | 1.8K | 2.3% | 4.1% |
| PBT | 238.50 | 13.0% | 7.2% |
| Net Profit | 161.58 | 12.0% | 5.5% |
| OPM | 11.36% | 1.82pp | 0.23pp |
| NPM | 7.82% | 1.09pp | 0.10pp |
| EPS | 3.98 | 12.1% | 6.1% |
Watsco Reports Record Q3 2025 Gross Profit, Gross Margin and Operating Cash Flow
04 May 2026 · 4 May, 8:34 am
Summary
Watsco reported a 4% decrease in revenue for the third quarter, totaling $2.07 billion. Despite the revenue decline, gross profit remained flat at $569 million, and the gross profit margin expanded to a record 27.5%. Operating income decreased by 6% to $235 million. For the nine-month period, revenues decreased by 3% to $5.66 billion, while gross profit increased by 2% to $1.60 billion, with a record gross profit margin of 28.3%.
Key Highlights
- 1
Watsco's third quarter revenues decreased 4% to $2.07 billion.
- 2
Gross profit for the third quarter was flat at $569 million compared to last year.
- 3
Gross profit margin expanded 130 basis-points to a record 27.5% for the third quarter.
- 4
Operating income decreased 6% to $235 million in the third quarter, with an operating margin of 11.4%.
- 5
Earnings per share for the third quarter were $3.98 compared to $4.22 last year.
- 6
For the nine-month period, revenues decreased 3% to $5.66 billion.
- 7
Gross profit for the nine-month period increased 2% to $1.60 billion, with a gross profit margin expansion of 140 basis-points to a record 28.3%.
Management Comments
Albert H. Nahmad
We 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. This 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.
A.J. Nahmad
As 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 Watsco’s already-sizeable competitive advantage in the fragmented HVAC/R industry. We look forward to sharing more about these initiatives at our investor day on December 11th.
Informational and educational content only. Not investment advice.