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Mar 31, 2024
Watsco Q1 2024 Earnings Report
Watsco's Q1 2024 results were released, showcasing record first quarter sales and cash flow, driven by customer adoption of technology and strategic balance sheet management.
Key Takeaways
Watsco reported a 1% increase in revenues to a record $1.56 billion for Q1 2024. The company generated record first quarter operating cash flow of $104 million and strengthened its balance sheet with $479 million in cash and investments. EPS was $2.17 compared to $2.83 in the previous year.
Revenues increased by 1% to a record $1.56 billion.
Gross profit was $431 million with a gross margin of 27.5%.
Operating income reached $127 million, representing an operating margin of 8.1%.
The company generated a record $104 million in operating cash flow for the first quarter.
Watsco
Watsco
Watsco Revenue by Segment
Watsco Revenue by Geographic Location
Revenue by Segment
HVAC Equipment Revenue
CapyFin.comOther HVAC Products Revenue
CapyFin.comCommercial Refrigeration Products Revenue
CapyFin.comRevenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
Watsco is currently experiencing growth in end-market demand as it enters the summer selling season and believes market share gains are continuing.
Positive Outlook
- Continued growth and profitability in the years ahead supported by company-specific and industry-driven catalysts.
- Customers who become active users of our technology platforms produce stronger sales growth rates and exhibit approximately 50% reduced attrition.
- Increased technology adoption by more contractors will aid future growth and profitability and will lower the Company’s overall cost to serve.
- Sales of heat pump HVAC systems during the first quarter continued to outpace growth rates for conventional straight-cool HVAC systems.
- Sales of ductless HVAC systems during the first quarter continued to outpace growth rates of conventional ducted HVAC systems.
Challenges Ahead
- Softer market conditions persisted during what is essentially the low-season for product sales.
- Comparative results were impacted by approximately $5.3 million of non-recurring SG&A items.
- First and fourth quarters are highly seasonal as demand for replacement HVAC systems is typically highest in the second and third calendar quarters.
- Changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors.
- Effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonal nature of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments.
Revenue & Expenses
Visualization of income flow from segment revenue to net income