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Home » Distribution Industry News » Why Watsco is Turning Up The Heat on Digital Operations

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  • Published on: August 1, 2025

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Why Watsco is Turning Up The Heat on Digital Operations

Watsco is doubling down on digital innovation as it steers through a softer HVAC market and industry-wide product transitions. Despite a 4% drop in second-quarter sales, the company posted slightly higher profits and continues to invest heavily in customer-facing technologies, e-commerce, and artificial intelligence.

The company reported Q2 sales of $2.13 billion, down from $2.21 billion a year ago. But net income rose 2% to $167 million, reflecting better pricing discipline and operational efficiency.

The HVAC sector is adjusting to A2L refrigerants—new, environmentally safer chemicals that require redesigned equipment—disrupting inventory and sales cycles, particularly in the new construction segment.

Still, Watsco leaned on digital capabilities to keep momentum. Over the past year, e-commerce revenue reached $2.5 billion, accounting for 34% of total sales. Its mobile app for contractors, HVAC Pro+, grew to more than 70,000 users, a 17% increase. The company’s OnCallAir platform, which allows contractors to quote and sell systems in the field, processed $1.6 billion in product volume, up 19%.

The company highlighted the growing impact of AI. More than 2,000 employees now use an internal AI assistant, Ask.Watsco, while contractors benefit from AL. watsco, a tool that quickly surfaces parts and technical specs.

Watsco also improved its gross profit margin to 29.4%, up from 28.9% a year ago, thanks in part to smarter pricing and sales mix improvements. The company is expanding into new markets as well, opening 10 locations this year across the Sunbelt and adding capacity to handle shifting product demands.
Looking ahead, Watsco plans to launch a new platform—WatscoOne—in 2026 to serve commercial customers with enhanced ordering, pricing, and marketing capabilities.

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