Builders FirstSource Inc. reported a 6% revenue decline and 45% drop in net income in the first quarter of 2025, as weakness in the housing market—particularly in multifamily construction—continued to pressure volumes and margins.
Executives reaffirmed full-year guidance, but analysts flagged ongoing risks.
The Dallas-based building materials distributor posted net sales of $3.66 billion, down from $3.89 billion in Q1 2024. Net income declined to $171 million, compared to $309 million in the year-ago quarter.
“We’re managing through a tough environment,” said CEO Peter Jackson. “Despite the pressure, we’re focused on disciplined execution and investing where we see long-term value.”
Multifamily revenue fell 33% year over year, reflecting a steep drop off in activity. Single-family construction was down 6%, while the repair and remodel (R&R) segment grew 4%, aided by demand in the Southeast and Mid-Atlantic regions.
Executives also cited commodity deflation—particularly in oriented strand board (OSB)—as a headwind to sales. Lumber prices have recently risen, but not enough to offset volume and pricing pressure in core categories, the company said. Oriented strand board (OSB) is an engineered wood product used in construction, like plywood, but with a different construction method.
“This was a difficult quarter across most of our customer base,” said chief financial officer Pete Beckmann. “But margins remain healthy compared to historical norms, and our balance sheet continues to support long-term growth.”
Despite the broader slowdown, Builders FirstSource made two strategic acquisitions during the quarter—Alpine Lumber and O.C. Cluss—for a combined $828 million. Together, the two businesses added $565 million in trailing sales. In April, the company also completed the acquisition of Truckee Tahoe Lumber.
“These acquisitions strengthen our presence in key markets and support our goal of being a one-stop provider for customers,” Jackson said. “We’re executing against our long-term strategy regardless of near-term market cycles.”
Analysts supported the acquisition strategy. “These are smart, bolt-on deals that extend BFS’s regional scale,” said Michael Dahl of RBC Capital Markets. “They help offset some of the market pressure.”
Though not the primary earnings driver this quarter, BFS continues to invest in digital. The company has now processed more than $1.5 billion in cumulative orders through its digital platform, including $153 million in incremental digital revenue to date. The 2025 target for incremental digital sales remains $334 million.
“We’re seeing consistent adoption from small- and mid-sized builders,” said Jackson. “These tools simplify workflows and help our customers manage cost pressures.”
Builders FirstSource estimates that newly proposed import tariffs could increase annual costs by $175 million to $250 million. That estimate is not yet reflected in full-year guidance.
“We expect to pass through these costs where appropriate,” Beckmann said. “But affordability is still a critical constraint for our customers, so we’re monitoring elasticity closely.”
The company reaffirmed its 2025 revenue forecast of $16.05 billion to $17.05 billion and adjusted EBITDA guidance of $1.7 billion to $2.1 billion. Free cash flow is expected to range between $800 million and $1.2 billion.
“While market conditions remain uncertain, we’re focused on what we can control—operational efficiency, disciplined M&A, and strategic investments,” Jackson said.
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