FirstService Reports Third Quarter 2025 Results

Operating highlights:     Three months ended   Nine months ended       September 30   September 30       2025   2024   2025   2024                               Revenues (millions) $ 1,447.6   $ 1,396.0   $ 4,114.1   $ 3,851.5   Adjusted EBITDA (millions) (note 1)   164.8     160.0     425.2     375.8   Adjusted EPS (note 2)   1.76     1.63     4.39     3.66                               GAAP Operating Earnings   115.6     125.9     252.2     247.9   GAAP Diluted EPS   1.24     1.34     2.32     2.26                               TORONTO, Oct. 23, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today reported results for its third quarter ended September 30, 2025. All amounts are in US dollars. Consolidated revenues for the third quarter were $1.45 billion, a 4% increase relative to the same quarter in the prior year. Adjusted EBITDA (note 1) increased 3% to $164.8 million, and Adjusted EPS (note 2) was $1.76, reflecting 8% growth over the prior year quarter. During the third quarter, FirstService reported GAAP Operating Earnings of $115.6 million, versus $125.9 million in the prior year period. GAAP diluted earnings per share was $1.24 in the quarter, versus $1.34 for the same quarter a year ago. For the nine months ended September 30, 2025, consolidated revenues were $4.11 billion, a 7% increase relative to the comparable prior year period, Adjusted EBITDA was $425.2 million, up 13%, and Adjusted EPS was $4.39, an increase of 20% over the prior year period. FirstService’s GAAP Operating Earnings were $252.2 million in the current year period, versus $247.9 million in the prior year. GAAP diluted earnings per share for the nine months year-to-date was $2.32, compared to $2.26 in the prior year period. “We are pleased with the resilient growth in our consolidated third quarter results, despite weather-related and broader commercial macroeconomic headwinds which tempered the organic top-line within our Brands division,” said Scott Patterson, Chief Executive Officer of FirstService. “While we see these market challenges continuing to impact our performance in the fourth quarter, our businesses will collectively deliver a solid year of growth and profitability,” he concluded. About FirstService Corporation FirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service platforms: FirstService Residential - North America’s largest manager of residential communities; and FirstService Brands - one of North America’s largest providers of essential property services delivered through individually branded company-owned operations and franchise systems. FirstService generates approximately US$5.5 billion in annual revenues and has more than 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The common shares of FirstService trade on the NASDAQ under the symbol “FSV” and on the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 index. More information is available at www.?rstservice.com. Segmented Quarterly Results FirstService Residential revenues were $605.4 million for the third quarter, up 8% compared to the prior year quarter, including organic growth of 5% driven by new contract wins. Adjusted EBITDA for the quarter was $66.4 million, an increase of 13% compared to the prior year period. Operating Earnings were $53.3 million, versus $49.1 million for the third quarter of last year. The increase in Adjusted EBITDA margin compared to the prior year reflects sustained progress with labor-driven operational efficiencies, consistent with improvements realized in recent quarters. FirstService Brands revenues during the third quarter were $842.1 million, up 1% relative to the prior year period. On an organic basis, division revenues declined 4%, with reduced activity levels in our restoration and roofing operations offsetting strong growth at Century Fire Protection. Adjusted EBITDA for the third quarter was $102.1 million, compared to $105.8 million in the prior year period. Operating Earnings were $73.7 million, versus $87.1 million in the prior year quarter. Margins for the division were lower than prior year due to the negative operating leverage associated with the decline in organic revenue growth at our restoration and roofing service lines. The decrease in the Operating Earnings margin was further impacted by the comparison to an acquisition-related positive fair value adjustment on a contingent upside earn-out structure which we previously noted in the prior year quarter. Corporate costs, as presented in Adjusted EBITDA (note 1), were $3.7 million in the third quarter, relative to $4.4 million in the prior year period. GAAP corporate costs for the quarter were $11.4 million, relative to $10.2 million in the prior year period. Conference Call FirstService will be holding a conference call on Thursday, October 23, 2025 at 11:00 a.m. Eastern Time to discuss the quarter’s results. This call is being webcast live at the Company’s website at www.firstservice.com. Participants may register for the call here https://register-conf.media-server.com/register/BIb70c05d5a9c6431394c6be75540419f1 to receive the dial-in number and their unique PIN. To join the webcast in listen only mode, use this link: https://edge.media-server.com/mmc/p/5apa7p6e . It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). Forward-looking Statements This press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2024 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise. Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's consolidated financial statements and MD&A to be made available on SEDAR+ at www.sedarplus.ca. Notes 1. Reconciliation of net earnings to adjusted EBITDA: Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses Consolidated adjusted EBITDA and segment adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Consolidated adjusted EBITDA and segment adjusted EBITDA are presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company’s service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company’s method of calculating adjusted EBITDA and segment adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted EBITDA appears below.     Three months ended   Nine months ended (in thousands of US$) September 30   September 30     2025   2024   2025   2024                           Net earnings $ 70,887     $ 77,761     $ 140,398     $ 137,595   Income tax   27,700       26,372       57,377       50,971   Other income, net   (1,138 )     (381 )     (2,220 )     (2,376 ) Interest expense, net   18,179       22,150       56,609       61,707   Operating earnings   115,628       125,902       252,164       247,897   Depreciation and amortization   46,635       41,409       136,443       117,441   Acquisition-related items   (4,100 )     (13,036 )     15,795       (9,130 ) Stock-based compensation expense   6,617       5,699       20,772       19,626   Adjusted EBITDA $ 164,780     $ 159,974     $ 425,174     $ 375,834   A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below.                               (in thousands of US$)                                     Three months ended, September 30, 2025       FirstService     FirstService                 Residential     Brands     Corporate(1)                         Operating earnings (loss)     $ 53,279   $ 73,720     $ (11,371 ) Depreciation and amortization       12,164     34,449       22   Acquisition-related items       920     (6,082 )     1,062   Stock-based compensation expense       -     -       6,617   Adjusted EBITDA     $ 66,363   $ 102,087     $ (3,670 )                                                 Three months ended, September 30, 2024       FirstService     FirstService                 Residential     Brands     Corporate(1)                         Operating earnings (loss)     $ 49,059   $ 87,064     $ (10,221 ) Depreciation and amortization       8,871     32,516       22   Acquisition-related items       660     (13,814 )     118   Stock-based compensation expense       -     -       5,699   Adjusted EBITDA     $ 58,590   $ 105,766     $ (4,382 )                                                 Nine months ended, September 30, 2025       FirstService     FirstService                 Residential     Brands     Corporate(1)                         Operating earnings (loss)     $ 134,152   $ 154,728     $ (36,716 ) Depreciation and amortization       34,589     101,786       68   Acquisition-related items       4,748     8,555       2,492   Stock-based compensation expense       -     -       20,772   Adjusted EBITDA     $ 173,489   $ 265,069     $ (13,384 )                                                 Nine months ended, September 30, 2024       FirstService     FirstService                 Residential     Brands     Corporate(1)                         Operating earnings (loss)     $ 124,824   $ 160,171     $ (37,098 ) Depreciation and amortization       27,067     90,306       68   Acquisition-related items       1,385     (11,685 )     1,170   Stock-based compensation expense       -     -       19,626   Adjusted EBITDA     $ 153,276   $ 238,792     $ (16,234 )                         Segment Adjusted EBITDA margin is defined as segment Adjusted EBITDA divided by segment revenues.                         (1) Corporate is not an operating segment, but rather represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Segment Adjusted EBITDA.   2. Reconciliation of net earnings and diluted net earnings per share to adjusted net earnings and adjusted net earnings per share: Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below.     Three months ended   Nine months ended (in thousands of US$) September 30   September 30     2025   2024   2025   2024                           Net earnings $ 70,887     $ 77,761     $ 140,398     $ 137,595   Non-controlling interest share of earnings   (6,709 )     (7,756 )     (11,430 )     (11,985 ) Acquisition-related items   (4,100 )     (13,036 )     15,795       (9,130 ) Amortization of intangible assets   18,828       17,825       57,051       50,065   Stock-based compensation expense   6,617       5,699       20,772       19,626   Income tax on adjustments   (4,514 )     (6,821 )     (20,656 )     (20,210 ) Non-controlling interest on adjustments   (197 )     97       (1,186 )     (487 ) Adjusted net earnings $ 80,812     $ 73,769     $ 200,744     $ 165,474                                 Three months ended   Nine months ended (in US$) September 30   September 30     2025   2024   2025   2024                           Diluted net earnings per share $ 1.24     $ 1.34     $ 2.32     $ 2.26   Non-controlling interest redemption increment   0.15       0.21       0.50       0.52   Acquisition-related items   (0.05 )     (0.28 )     0.29       (0.20 ) Amortization of intangible assets, net of tax   0.29       0.27       0.86       0.77   Stock-based compensation expense, net of tax   0.13       0.09       0.42       0.31   Adjusted earnings per share $ 1.76     $ 1.63     $ 4.39     $ 3.66                             Organic growth is defined as revenue growth adjusted to exclude the revenue attributable to acquired businesses for a period of twelve months following their acquisition. FIRSTSERVICE CORPORATION Condensed Consolidated Statements of Earnings (in thousands of US dollars, except per share amounts)             Three months     Nine months           ended September 30     ended September 30       2025     2024     2025     2024                               Revenues   $ 1,447,565     $ 1,396,041     $ 4,114,124     $ 3,851,545                                 Cost of revenues     960,420       936,573       2,737,222       2,587,613   Selling, general and administrative expenses     328,982       305,193       972,500       907,724   Depreciation     27,807       23,584       79,392       67,376   Amortization of intangible assets     18,828       17,825       57,051       50,065   Acquisition-related items (1)     (4,100 )     (13,036 )     15,795       (9,130 ) Operating earnings     115,628       125,902       252,164       247,897   Interest expense, net     18,179       22,150       56,609       61,707   Other income, net     (1,138 )     (381 )     (2,220 )     (2,376 ) Earnings before income tax     98,587       104,133       197,775       188,566   Income tax     27,700       26,372       57,377       50,971   Net earnings     70,887       77,761       140,398       137,595   Non-controlling interest share of earnings     6,709       7,756       11,430       11,985   Non-controlling interest redemption increment     7,010       9,472       22,899       23,711   Net earnings attributable to Company   $ 57,168     $ 60,533     $ 106,069     $ 101,899                                 Net earnings per common share                           Basic   $ 1.25     $ 1.34     $ 2.33     $ 2.27     Diluted     1.24       1.34       2.32       2.26                                                             Adjusted earnings per share (2)   $ 1.76     $ 1.63     $ 4.39     $ 3.66                                 Weighted average common shares (thousands)                             Basic     45,568       45,047       45,462       44,961       Diluted     45,924       45,336       45,732       45,163                                         Notes to Condensed Consolidated Statements of Earnings (1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs. (2) See definition and reconciliation above. Condensed Consolidated Balance Sheets           (in thousands of US dollars)               September 30, 2025   December 31, 2024               Assets           Cash and cash equivalents $ 219,916   $ 227,598 Restricted cash   25,595     16,088 Accounts receivable   958,606     947,517 Prepaid and other current assets   397,243     368,150   Current assets   1,601,360     1,559,353 Other non-current assets   28,937     28,007 Deferred income tax   2,134     2,114 Fixed assets   286,263     253,994 Operating lease right-of-use assets   275,537     240,518 Goodwill and intangible assets   2,191,125     2,110,866   Total assets $ 4,385,356   $ 4,194,852                             Liabilities and shareholders' equity           Accounts payable and accrued liabilities $ 554,054   $ 541,509 Unearned revenues   217,243     190,885 Other current liabilities   64,818     23,690 Operating lease liabilities - current   58,038     53,115 Long-term debt - current   13,784     41,567   Current liabilities   907,937     850,766 Long-term debt - non-current   1,191,438     1,257,143 Operating lease liabilities - non-current   248,749     214,423 Other liabilities   124,776     150,542 Deferred income tax   100,801     84,895 Redeemable non-controlling interests   472,172     449,337 Shareholders' equity   1,339,483     1,187,746   Total liabilities and equity $ 4,385,356   $ 4,194,852                             Supplemental balance sheet information           Total debt $ 1,205,222   $ 1,298,710 Total debt, net of cash   985,306     1,071,112 Consolidated Statements of Cash Flows               (in thousands of US dollars)           Three months ended     Nine months ended         September 30     September 30       2025     2024     2025     2024                             Cash provided by (used in)                                                     Operating activities                         Net earnings   $ 70,887     $ 77,761     $ 140,398     $ 137,595   Items not affecting cash:                           Depreciation and amortization     46,635       41,409       136,443       117,441     Deferred income tax     (830 )     (2,265 )     (2,420 )     (6,814 )   Other     518       (7,155 )     29,870       7,229           117,210       109,750       304,291       255,451                               Changes in non-cash working capital                           Accounts receivable     34,649       (17,343 )     19,828       (19,983 )   Payables and accruals     (13,312 )     30,635       (26,475 )     7,353     Other     (12,185 )     (46,031 )     32,802       (43,866 ) Net cash provided by operating activities     126,362       77,011       330,446       198,955                               Investing activities                         Acquisition of businesses, net of cash acquired     (44,469 )     (4,016 )     (96,385 )     (158,665 ) Purchases of fixed assets     (33,663 )     (26,560 )     (96,601 )     (80,882 ) Other investing activities     (1,372 )     3,715       (10,042 )     2,715   Net cash used in investing activities     (79,504 )     (26,861 )     (203,028 )     (236,832 )                             Financing activities                         Increase (decrease) in long-term debt, net     (36,941 )     (36,764 )     (91,768 )     99,964   Purchases of non-controlling interests, net     (4,597 )     (3,963 )     (33,943 )     (25,405 ) Dividends paid to common shareholders     (12,501 )     (11,253 )     (36,315 )     (32,551 ) Distributions paid to non-controlling interests     (1,828 )     (3,267 )     (13,430 )     (7,737 ) Other financing activities     28,869       9,787       49,775       32,577   Net cash used in financing activities     (26,998 )     (45,460 )     (125,681 )     66,848                               Effect of exchange rate changes on cash     781       (151 )     88       200                               Increase in cash, cash equivalents and restricted cash     20,641       4,539       1,825       29,171                               Cash, cash equivalents and restricted cash, beginning of period     224,870       231,509       243,686       206,877                               Cash, cash equivalents and restricted cash, end of period   $ 245,511     $ 236,048     $ 245,511     $ 236,048   Segmented Results (in thousands of US dollars)                               FirstService   FirstService           Residential   Brands   Corporate   Consolidated                           Three months ended September 30                                                 2025                         Revenues $ 605,426   $ 842,139   $ -     $ 1,447,565   Adjusted EBITDA   66,363     102,087     (3,670 )     164,780                             Operating earnings   53,279     73,720     (11,371 )     115,628                           2024                         Revenues $ 559,585   $ 836,456   $ -     $ 1,396,041   Adjusted EBITDA   58,590     105,766     (4,382 )     159,974                             Operating earnings   49,059     87,064     (10,221 )     125,902                                                                               FirstService   FirstService             Residential   Brands   Corporate   Consolidated                           Nine months ended September 30                                                 2025                         Revenues $ 1,723,536   $ 2,390,588   $ -     $ 4,114,124   Adjusted EBITDA   173,489     265,069     (13,384 )     425,174                             Operating earnings   134,152     154,728     (36,716 )     252,164                           2024                         Revenues $ 1,613,213   $ 2,238,332   $ -     $ 3,851,545   Adjusted EBITDA   153,276     238,792     (16,234 )     375,834                             Operating earnings   124,824     160,171     (37,098 )     247,897                             COMPANY CONTACTS: D. Scott Patterson Chief Executive Officer Jeremy Rakusin Chief Financial Officer (416) 960-9566