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Jan 31, 2025
GMS Q3 2025 Earnings Report
GMS reported mixed results with slight revenue growth but a net loss due to goodwill impairment.
Key Takeaways
GMS reported Q3 FY25 revenue of $1.3 billion, up 0.2% YoY, but faced a net loss of $21.4 million due to a $42.5 million goodwill impairment. Adjusted net income declined to $36.2 million, while Adjusted EBITDA fell by 27.3% to $93.0 million. The company faced soft end-market demand and steel pricing challenges, though Wallboard and Ceilings showed pricing resilience.
Net sales increased slightly by 0.2% YoY to $1.3 billion.
Reported a net loss of $21.4 million due to a $42.5 million goodwill impairment.
Adjusted EBITDA declined 27.3% to $93.0 million.
Free cash flow of $83.1 million, down from $94.1 million last year.
Forward Guidance
GMS expects continued macroeconomic challenges in 2025, including soft demand and tight lending conditions. However, cost reduction efforts and pricing resilience in Wallboard and Ceilings are expected to provide support.
Positive Outlook
- Wallboard and Ceilings pricing resilience expected to continue.
- Additional $20 million in annualized cost reductions planned.
- Strong cash flow generation and liquidity of $469.7 million.
- Solid balance sheet positioning for market recovery.
- Ongoing investments in efficiency optimization.
Challenges Ahead
- Soft end-market demand expected to persist into late 2025.
- Steel pricing remains a headwind impacting margins.
- Economic uncertainty and tight lending conditions affecting construction activity.
- Higher SG&A expenses due to acquisitions and insurance claims.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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