TopBuild Corp Q2 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Rehaut - JPMorgan Chase & Co - Analyst : First, I wanted to dive in a little bit to Progressive and just the impact on the second half more so from the margin side if you expect that to be dilutive or accretive to margins and how you're thinking about the contribution in 2026. And I guess more broadly, how you're seeing early opportunities perhaps even from the sales synergy side as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 1:00PM, BLD.N - Q2 2025 TopBuild Corp Earnings Call

Question: Michael Rehaut - JPMorgan Chase & Co - Analyst : Oh, that's great to hear and obviously very exciting in terms of the multi-year prospects that whole vertical can lend itself to, so congrats on that. Secondly, appreciate also I guess, challenging core business specifically residential end markets down low double digits versus down high single digits before. Maybe you could just talk about which parts of the business that's hitting more? Is it kind of equally on installation or distribution? And also, just if there's particular areas of the country or any more color in terms of what's driving that softness and if we should expect perhaps a down low double digit rate into, let's say, the first half of '26?

Question: Michael Rehaut - JPMorgan Chase & Co - Analyst : Great. And any thoughts about how that might carry over into the first half of next year?

Question: Susan Maklari - Goldman Sachs Group Inc - Analyst : My first question is focused on the commercial industrial side of the business. Can you give us a bit more detail on how you're thinking about the volume versus price breakdown in there? And maybe with that, are you still seeing some of that momentum on the price side within that segment of the business that you talked to in the first quarter?

Question: Susan Maklari - Goldman Sachs Group Inc - Analyst : Okay. That's helpful. And then one of the things that you mentioned in your prepared remarks was improvements to the supply chain. Can you talk a bit more about what some of those efforts are? How we should think about them continuing to flow through the business in the back half of this year? And any potential for additional opportunities there and what those could mean for the business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 1:00PM, BLD.N - Q2 2025 TopBuild Corp Earnings Call

Question: Susan Maklari - Goldman Sachs Group Inc - Analyst : Good luck with the quarter.

Question: Philip Ng - Jefferies LLC - Analyst : Congrats on a really strong quarter and dynamic environment. So I guess the question for me is around pricing. Pricing was actually pretty solid in the first half. It's holding despite a pretty tough resi backdrop. Rob, I guess implicit in your guide and your conversations with your big builder customers, how are you seeing that pricing backdrop kind of unfolding? Obviously, they're dealing with a lot of affordability headwinds as well. And on the flip side, the cost side, what are you seeing on that side of things, especially material cost? Whether it's fiberglass or spray foam in the back half? So when you kind of think about price cost, what's embedded in your guide and how you're thinking about it?

Question: Philip Ng - Jefferies LLC - Analyst : Got it. No doubt, Robert and Rob. I mean, that margin performance guidance for the year is pretty incredible given the current backdrop. So true testament to the business. On your C&I stack of things, any more color on how booking orders are progressing as well as the Progressive deal? Any cancellation project delays? And how is the order book looking into 2026?

Question: Philip Ng - Jefferies LLC - Analyst : That's really great color. Any way to size on these stronger end markets in C&I that you're seeing, whether it's data centers or perhaps some of these LNG projects and whatnot. Just kind of give us a little perspective and how impactful it is for your C&I functions.

Question: Philip Ng - Jefferies LLC - Analyst : Appreciate all the great color, guys. Continue to good works. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 1:00PM, BLD.N - Q2 2025 TopBuild Corp Earnings Call

Question: Keith Hughes - Truist Securities - Analyst : Thank you. You said earlier on the call, I think you're about 40% commercial industrial sales. Did that include the roofing transaction? Was that before the transaction?

Question: Keith Hughes - Truist Securities - Analyst : Okay. And on Progressive, can you give us a feel how much of their business would be in the heavy commercial versus the light commercial?

Question: Keith Hughes - Truist Securities - Analyst : And does Progressive slant towards any one of the different applications, PPDM, TPO or anything like that?

Question: Keith Hughes - Truist Securities - Analyst : Okay. And final question. As you progress in the second half of the year, these commercial numbers are -- I think they're weakening. I think we said that in the call. Is there any signs of life in terms of order activity coming in that could paint to something brighter in 2026? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 1:00PM, BLD.N - Q2 2025 TopBuild Corp Earnings Call

Question: Keith Hughes - Truist Securities - Analyst : Okay. So no light at the end of the tunnel on that yet?

Question: Ken Zener - Seaport Research - Analyst : Ten years, Robert. Long time. That makes me think because this quarter, you guys had a big footprint. You all said you're going to grow into your branches that would provide you operating leverage with your IT system, etc, etc. We've, by and large, seen that. Then, the concern was during a contraction, which volume down 10% res, it's a modest one. You guys cut costs. Your SG&A is still, percentage-wise, the same. Rob, you're talking about the second half price, cost headwinds that are baked in your guidance. It's just you guys have been able to handle the incrementals better, right? So specific to the second half positive, negative factors, what kind of gets you -- if you're guiding conservative to that 29%? What are kind of the things that you think about in the positive bucket that could get you more to what you saw in the first half? And what are the things that could go against you to get to that midpoint? Is it volume predominantly?

Question: Ken Zener - Seaport Research - Analyst : And then we estimate to the public builders, the res exposure, you guys are, call it, 30%, give or take, to the larger builders, top 10. Are you doing better with the publics, would you say, or with the private builders? And given your guidance, do you think that the public builders, which kind of more the smile states, we all kind of know where they are, but like is inventory more of an issue in those markets where the publics are or is it more on the private side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 1:00PM, BLD.N - Q2 2025 TopBuild Corp Earnings Call

Question: Rafe Jadrosich - Bofa Merrill Lynch Asset Holdings Inc - Analyst : It's Rafe. I wanted to just follow up on some of the price, cost commentary for the second half of the year. The $30 million headwind, it sounds like that's predominantly price on the Installation side. Are you getting any relief? Are you able to push back on the manufacturers yet? And if we go into 2026 and say the market stays like stable with where it is, remains soft, will there be more opportunity on the cost side of that price, cost equation? Like could that narrow going forward if the backdrop stays consistent.

Question: Rafe Jadrosich - Bofa Merrill Lynch Asset Holdings Inc - Analyst : You haven't seen anything on the fiberglass side yet, though, it sounds like in terms of the relief from manufacturers?

Question: Rafe Jadrosich - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay. Got it. And then in terms of the outlook for M&A on the commercial roofing side with Progressive, can you talk about your willingness of the level of leverage you would be willing to take for larger deals, just given some of the weakness on the core business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 1:00PM, BLD.N - Q2 2025 TopBuild Corp Earnings Call