FirstService Q4 Earnings Call Highlights

Key Points

• FirstService closed 2025 with consolidated revenue of $5.5 billion (+5%) and adjusted EBITDA of $563 million (+10%), with Q4 revenue of $1.38 billion (+1%) and adjusted EPS of $1.37; management expects mid-single-digit revenue growth in Q1 2026 ramping to high-single-digits later in the year while consolidated EBITDA margin should be roughly flat versus 2025's 10.2%.
• Performance was mixed by segment: Residential delivered mid-single-digit organic growth and margin improvement (2025 revenue $2.3 billion, margin near 9.8%), whereas Brands saw Q4 declines driven by weaker restoration and roofing (restoration down materially year-over-year; roofing organic down >5%), partially offset by strong Century Fire Protection.
• Capital position strengthened as operating cash flow exceeded $445 million, net leverage fell to 1.6x, the board raised the dividend 11% to $1.22/year, and management said it will remain selective on M&A with a tuck‑under focus and no buyback decision yet.

FirstService NASDAQ: FSV executives told investors the company finished 2025 with earnings growth despite what management described as “tough macro headwinds” across several businesses, particularly in restoration, roofing, and consumer-facing home services. On the company’s fourth-quarter call dated Feb. 4, 2026, Chief Executive Officer Scott Patterson and Chief Financial Officer Jeremy Rakusin also outlined expectations for 2026, including mid-single-digit consolidated revenue growth in the first quarter and a pickup to high single-digit growth later in the year, while forecasting relatively flat consolidated EBITDA margin versus 2025.

Fourth-quarter and full-year results

For the fourth quarter, FirstService reported consolidated revenue of $1.38 billion, up 1% year over year. Adjusted EBITDA was $138 million, flat compared with the prior-year period, while adjusted EBITDA margin slipped to 9.9% from 10.1%. Adjusted earnings per share rose to $1.37 from $1.34.

For the full year, revenue increased 5% to $5.5 billion. Adjusted EBITDA rose 10% to $563 million, producing a 10.2% margin, up 40 basis points from 9.8% in 2024. Adjusted EPS grew 15% to $5.75.

Rakusin attributed the bottom-line leverage in part to lower corporate costs during the quarter and year, citing “the positive impact of non-cash foreign exchange movements” that largely reversed 2024 impacts, as well as lower interest expense due to lower debt levels and declining interest rates.

Residential: mid-single-digit growth outlook, some early-year pressure

In FirstService Residential, fourth-quarter revenue rose 8% to $563 million, and EBITDA increased 12% to $51.5 million. Segment margin improved to 9.1% from 8.8% a year earlier.

For 2025, Residential revenue increased 7% to $2.3 billion, including 4% organic growth. Annual EBITDA grew 13%, and margin improved 50 basis points to 9.8%. Rakusin said the division returned to “mid-single digit annual organic top line growth” while profitability reached the upper end of the company’s stated 9% to 10% margin band.

Looking ahead, Patterson said Residential organic growth is expected to remain in the mid-single-digit range in 2026, with some quarter-to-quarter movement tied to seasonality and ancillary services. He noted pressure early in the year from declines in certain amenity management services, including pool construction and renovation and certain labor-based services such as custodial and concierge staffing. Several contracts—primarily with multifamily apartment owners—were not renewed at year-end, “all primarily due to pricing,” he said. Management expects Residential organic growth to land at the bottom end of the mid-single-digit range, around 3% to 4%, in the first quarter, while emphasizing the cancellations are “unrelated” to the core community management business and should have “little impact to profitability.”

On margins, Rakusin said much of the “heavy lifting” behind Residential margin improvement was implemented in 2024 and showed up in 2025, with expansion tapering toward the end of the year as the company “lap[s] those” initiatives. While the company expects Residential margins to be roughly in line in 2026, he said reaching above 10% remains a possibility “over a multiyear time horizon.”

Brands: mixed trends across restoration, roofing, home services, and fire protection

In FirstService Brands, fourth-quarter revenue declined 3% to $820 million and EBITDA fell 12% to $88.5 million. Segment margin decreased to 10.8% from 11.9% a year earlier, which Rakusin tied to weaker organic performance and negative operating leverage in restoration and roofing, partly offset by Century Fire Protection.

For the full year, Brands revenue rose 4% to $3.2 billion and EBITDA increased 4% to $354 million, leaving the segment margin flat at 11%.

• Restoration: Patterson said Paul Davis and First Onsite were down 13% year over year in the fourth quarter, though performance was “somewhat better than expectation” due to a pickup in claim activity in Canada. He highlighted that the prior-year quarter benefited from Hurricanes Helene and Milton, which generated about $60 million in revenue. Excluding those events, restoration brands were “up modestly” year over year. Patterson added that named storms have averaged more than 10% of total restoration revenue since 2019, but contributed less than 2% in 2025. The company finished 2025 down 4% in restoration, which management said compared favorably with an industry believed to be down over 20%. Looking to 2026, management expects restoration to return to growth if weather patterns normalize, while noting year-end backlog was down, suggesting a softer start to 2026. After a large winter storm in recent weeks, Patterson said it was too early to quantify but management expects first-quarter restoration results to be “modestly up” from the prior year.
• Roofing: Roofing revenue rose “a few percentage points” in the quarter due to tuck-under acquisitions, but was down organically by more than 5%. Patterson said demand remains muted, citing significantly lower new commercial construction outside data centers and power, along with tighter customer capital budgets and delays on larger reroof projects. He said bid activity is solid and backlog has stabilized, with expectations for modest organic growth in 2026 and sequential improvement through the year. For the first quarter, management expects mid-single-digit revenue growth with organic performance roughly flat. On competition, Patterson said more contractors are bidding reroof work amid weak new construction, compressing gross margins, and he does not expect that pressure to ease until new construction improves.
• Home services: Home service brands posted 3% revenue growth in the quarter, which Patterson said exceeded expectations despite depressed consumer confidence. He said teams are improving lead-to-estimate ratios, close rates, and average job size. With lead flow recently “flat to slightly down,” management expects low- to mid-single-digit revenue growth for the first quarter and for 2026 if conversion performance holds.
• Century Fire Protection: Century delivered what Patterson described as a strong finish, with fourth-quarter revenue up more than 10% and high single-digit organic growth, driven by both installation and service/inspection. He cited multifamily and warehouse activity, with “some positive exposure” to data centers. Management expects another year of 10% growth or more, “spread evenly across the quarters.”

Cash flow, balance sheet, dividend, and 2026 outlook

FirstService reported operating cash flow of $155 million in the fourth quarter, up 33% year over year, and more than $445 million for the full year, up 56%. Capital expenditures totaled $128 million in 2025, with 2026 CapEx expected to be about $140 million. Acquisition spending was $107 million, which Rakusin said reflected a “selective and disciplined” approach in a competitive market.

The company also announced an 11% dividend increase to $1.22 per share annually in U.S. dollars, up from $1.10. At year-end, leverage was 1.6x net debt to adjusted EBITDA, down from 2.0x a year earlier, and liquidity totaled $970 million including cash and available revolver capacity.

For 2026, Rakusin said the company forecasts mid-single-digit revenue growth in the first quarter, then a move to high single-digit year-over-year increases in subsequent quarters, driven primarily by organic growth with incremental support from acquisitions. Consolidated EBITDA is expected to be roughly in line in the first quarter versus Q1 2025, with high single-digit EBITDA growth in the balance of the year. Full-year consolidated EBITDA margin is expected to be “relatively flat” compared with 2025’s 10.2%.

M&A environment and capital allocation commentary

In the Q&A, Patterson said the M&A market remains slower than 12 months ago and that the company has not yet seen a meaningful change in competitive dynamics from private equity. He said multiples “still remain high across the board,” and noted some deals have been pulled or delayed. Patterson indicated the company expects to continue a tuck-under strategy, including occasional franchise buy-ins where underperforming markets warrant it, citing California Closets and Paul Davis as examples where it may acquire “one a year” on average.

Management said it remains “very patient” and focused on partnering with founders seeking a long-term owner rather than an exit. When asked about buybacks, Patterson said the topic had not been discussed and would be a board-level decision.

About FirstService NASDAQ: FSV

FirstService Corporation, founded in 1989 and headquartered in Toronto, Ontario, is a leading provider of property services in North America. The company operates through two principal segments—FirstService Residential and FirstService Brands—offering a broad range of services to residential, commercial and homeowner association clients.

FirstService Residential delivers community management, financial oversight and consulting services to thousands of residential communities across the United States and Canada.

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