Carlisle Companies Q4 Earnings Call Highlights

Key Points

• Carlisle closed 2025 with solid cash generation — $5.0B revenue, adjusted EPS of $19.40, over $1B operating cash flow for the fourth straight year and $972M free cash flow, returning capital via $1.3B of share repurchases and a 49th consecutive dividend increase.
• Management emphasized resilience in commercial reroofing versus soft new construction, forecasting mid- to low-single-digit reroofing growth and guiding 2026 to low-single-digit consolidated revenue growth with about 50 bps of margin expansion and a planned $1B of share buybacks.
• Carlisle reaffirmed its Vision 2030 goals — $40 adjusted EPS and >25% ROIC — and is prioritizing operational excellence, innovation, bolt-on acquisitions, and talent to drive margins and longer-term growth.

Carlisle Companies NYSE: CSL executives emphasized cash generation, disciplined capital allocation, and continued reliance on commercial reroofing demand as the company wrapped up 2025 and outlined expectations for 2026 during its fourth-quarter earnings call.

Full-year 2025 results and capital returns

Chair, President, and CEO Chris Koch said Carlisle delivered “solid results in a very challenging environment” in 2025, reporting $5 billion in revenue, adjusted EPS of $19.40, adjusted EBITDA margins of 24.4%, and return on invested capital (ROIC) of about 25%.

Management highlighted cash flow as a key performance point. The company generated more than $1 billion of operating cash flow for the fourth consecutive year, while free cash flow from continuing operations totaled $972 million, representing a 19.4% free cash flow margin.

With M&A described as more challenging due to elevated valuation expectations, Koch said Carlisle remained disciplined and leaned more heavily into share repurchases. The company repurchased $1.3 billion of shares in 2025 and returned $181 million through dividends. Koch noted the company recorded its 49th consecutive annual dividend increase in August, raising the dividend 10% year over year.

Fourth-quarter performance: revenue steady, margins pressured by investment and volumes

CFO Kevin Zdimal said fourth-quarter consolidated revenue was $1.1 billion, up 0.4% from the prior year. Acquisitions (Plasti-Fab, Thermafoam, and Bonded Logic) contributed $30 million of revenue during the quarter, while organic revenue declined 3% amid soft new construction activity in commercial and residential markets, partially offset by solid commercial reroofing demand.

Adjusted EBITDA in the quarter was $249 million, producing a 22.1% adjusted EBITDA margin, down 300 basis points year over year. Zdimal attributed the margin decline primarily to strategic investments to support long-term growth and lower volumes at Carlisle Weatherproofing Technologies (CWT). Adjusted EPS was $3.90, down 13% year over year, driven by lower organic earnings and higher interest expense, partially offset by share repurchases and acquisition contributions.

By segment:

• Carlisle Construction Materials (CCM): Revenue of $827 million, down 0.8% year over year. Adjusted EBITDA of $222 million was down 10%, with adjusted EBITDA margin of 26.8% down 260 basis points. Management cited continued investments in innovation and initiatives tied to “the Carlisle Experience,” including customer service capabilities and digital tools to improve order visibility.
• CWT: Revenue of $301 million, up 4% year over year due to acquisitions. Organic revenue declined 7% on lower volumes tied to soft residential and non-residential new construction. Adjusted EBITDA was $48 million, down 10%, and adjusted EBITDA margin of 15.9% fell 240 basis points, primarily due to higher unit costs from lower volume absorption of fixed costs.

Market backdrop: reroofing resilience vs. new construction softness

Koch spent much of his prepared remarks reinforcing the importance of reroofing to Carlisle’s building envelope business. He said reroofing represents roughly 70% of CCM, and pointed to an aging non-residential building stock, noting that over 70% of the U.S. non-residential footprint is older than 25 years and roofs typically need replacement every 20–30 years.

Based on permit trends and content-per-square-foot gains, Koch said Carlisle forecasts mid-single-digit reroofing demand growth “for the foreseeable future,” citing a low single-digit growth rate in reroofing permits plus 150–200 basis points of annual content-per-square-foot growth. He also described structural factors supporting demand, including energy-efficiency regulation, rising utility rates (including growing electricity consumption tied to AI and data centers), and labor shortages that increase contractor demand for labor-saving solutions.

For 2026, Koch said CCM reroofing is expected to grow low to mid-single digits, while new commercial construction remains soft. Management’s planning assumption is for “a gradual bottoming out mid-year and an upward inflection in the second half of the year.”

Strategy and Vision 2030 priorities

Management reiterated the company’s Vision 2030 targets, including adjusted EPS of $40 per share and ROIC above 25%, alongside longer-term margin ambitions of at least 25% EBITDA margins for Carlisle overall, 30%+ at CCM, and 25%+ at CWT. Koch said Carlisle was reaffirming the $40 adjusted EPS and 25%+ ROIC targets, while noting the path may not be linear given market conditions.

Koch outlined five “core pillars” of the strategy:

• Operational excellence through the Carlisle Operating System (COS), including expanded use of automation and AI in 2025 to improve changeover times, reduce scrap, and enhance safety and quality metrics.
• The Carlisle Experience, centered on product availability, on-time delivery, technical support, and long-term warranties; Koch said roughly half of Carlisle sales are tied to project specifications.
• Innovation, with an objective under Vision 2030 to invest 3% of sales in R&D and product development and have 25% of revenue in 2030 come from products five years old or newer. Koch highlighted products including ThermaThin 7 polyiso insulation and a temperature-sensing gun for Flexible FAST adhesive, along with other offerings such as RapidLock, SeamShield, APEEL, and VP Tech.
• Acquisitions focused on bolt-on and adjacent building envelope assets, with recent deals including MTL, Plasti-Fab, Thermafoam, and Bonded Logic. Koch said the company targets opportunities that enhance its systems offering and content per square foot and where Carlisle can apply COS and the Carlisle Experience to improve returns.
• Talent management, including the appointment of Jason Taylor as president of CCM in November.

2026 outlook: low single-digit revenue growth and modest margin expansion

Zdimal said Carlisle expects consolidated revenue growth in a low single-digit range for 2026, with both CCM and CWT also projected to grow in the low single digits. The outlook assumes continued strength in reroofing, offset by slower new construction, and contributions in CWT from share-gain initiatives and acquisitions, despite ongoing end-market softness.

Management also provided quarterly cadence expectations, citing harsh weather across much of the country and a prior-year comparison affected by a tariff-related pull-forward in the first quarter of 2025. Carlisle expects first-quarter 2026 revenue to be down low single digits year over year, second-quarter revenue to be flat, and a stronger second half to support full-year low single-digit growth.

Adjusted EBITDA margins are expected to expand by about 50 basis points for the year, supported by operational excellence efforts, cost-saving initiatives in both segments, and volume leverage. Zdimal also said the company plans to repurchase $1 billion of shares in 2026 and aims to maintain ROIC of approximately 25% and a free cash flow margin above 15%, consistent with Vision 2030 targets.

In the Q&A, management addressed Vision 2030 progress, pricing, distribution dynamics, and raw material trends. Koch said margin expansion at CWT and technology-driven product innovation are key levers for reaching the $40 adjusted EPS target, and reiterated that M&A “was always going to be a part” of that goal, while suggesting the company would have preferred to do more or larger deals in 2025 if valuation expectations had been more favorable.

On demand and pricing, Koch and Zdimal described first-quarter trends as similar to the fourth quarter and maintained expectations for improvement later in the year. Koch said single-ply pricing had been “relatively flat,” and suggested new construction improvement could help support more upward pricing pressure, alongside value-based pricing embedded in new technology offerings. Zdimal added that CCM pricing expectations for 2026 were roughly flat to down about 1% for the full year. In CWT, pricing was down less than 1% in the fourth quarter, with management expecting pricing to be “pretty flat” in 2026.

Regarding costs, Zdimal said raw materials were a mixed picture, with deflationary trends in certain inputs (including polyols, TPO resins, and MDI) and steel described as negative. He said Carlisle did not expect raw material benefits in the first quarter, but anticipated positive raw material trends beginning in the second quarter.

About Carlisle Companies NYSE: CSL

Carlisle Companies Inc is a diversified global manufacturer serving a broad array of markets with engineered products, systems and solutions. The company's operations span several core business segments, including construction materials, fluid technologies, interconnect technologies, brake and friction systems, and engineered products. Carlisle is known for its expertise in developing high-performance building envelope solutions, precision-engineered hoses and fluid-handling components, lightweight interconnect systems for aerospace and defense, and heavy-duty brake and friction products.

Within its construction materials segment, Carlisle offers single-ply roofing membranes, polyiso insulation, and waterproofing systems designed for commercial and industrial buildings.

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