FirstService Reports Second Quarter 2025 Results

Operating highlights:   Three months ended   Six months ended   June 30   June 30   2025   2024   2025   2024                         Revenues (millions) $ 1,415.7   $ 1,297.5   $ 2,666.6   $ 2,455.5 Adjusted EBITDA (millions) (note 1)   157.1     132.5     260.4     215.9 Adjusted EPS (note 2)   1.71     1.36     2.63     2.03                         GAAP Operating Earnings   97.3     83.9     136.5     122.0 GAAP Diluted EPS   1.01     0.78     1.07     0.92                         TORONTO, July 24, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today reported results for its second quarter ended June 30, 2025. All amounts are in US dollars. Consolidated revenues for the second quarter were $1.42 billion, a 9% increase relative to the same quarter in the prior year. Adjusted EBITDA (note 1) increased 19% to $157.1 million, and Adjusted EPS (note 2) was $1.71, reflecting 26% growth over the prior year quarter. During the second quarter, FirstService reported GAAP Operating Earnings of $97.3 million, up from $83.9 million in the prior year period. GAAP diluted earnings per share was $1.01 in the quarter, up from $0.78 for the same quarter a year ago. For the six months ended June 30, 2025, consolidated revenues were $2.67 billion, a 9% increase relative to the comparable prior year period, Adjusted EBITDA was $260.4 million, up 21%, and Adjusted EPS was $2.63, an increase of 30% over the prior year period. FirstService’s GAAP Operating Earnings were $136.5 million in the current year period, versus $122.0 million in the prior year. GAAP diluted earnings per share for the six months year-to-date was $1.07, compared to $0.92 in the prior year period. “We are pleased to report strong financial results which largely mirrored the year-over-year growth profile we saw in the first quarter,” said Scott Patterson, Chief Executive Officer of FirstService. “Despite continued macroeconomic uncertainty, the resilient top-line performance and strong profitability across our operations during the first half of the year put us well on track to deliver on our goals for 2025,” 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 more than US$5.4 billion in annual revenues and has approximately 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.firstservice.com. Segmented Quarterly Results FirstService Residential revenues were $593.0 million for the second quarter, up 6% compared to the prior year quarter, including organic growth of 3%. Adjusted EBITDA for the quarter was $65.5 million, an increase of 11% compared to the prior year period. Operating Earnings were $51.6 million, versus $49.1 million for the second quarter of last year. The Adjusted EBITDA margin improvement reflected ongoing efficiencies in our property management client service delivery model. The Operating Earnings margin was in-line with the prior year. FirstService Brands revenues during the second quarter grew to $822.7 million, up 11% relative to the prior year period. On an organic basis, division revenues were up 1%, with double-digit growth at Century Fire Protection, offsetting lower quarter-over-quarter results in our Roofing Corp of America operations. Recent tuck-under acquisitions across the division also contributed to the top-line increase. Adjusted EBITDA for the second quarter was $95.2 million, up 23% versus the prior year period. Operating Earnings were $56.5 million, versus $46.3 million in the prior year quarter. The increase in operating margins was attributable to continued operating process improvements at our restoration and home services brands. Corporate costs, as presented in Adjusted EBITDA (note 1), were $3.6 million in the second quarter, relative to $4.2 million in the prior year period. Corporate costs for the quarter were $10.9 million, relative to $11.5 million in the prior year period. Conference Call FirstService will be holding a conference call on Thursday, July 24, 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.vevent.com/register/BI4a1fa34337944f40a129a667fecbe126 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/b34k52bt . 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   Six months ended (in thousands of US$) June 30   June 30   2025   2024   2025   2024                         Net earnings $ 55,431     $ 44,937     $ 69,511     $ 59,834   Income tax   23,677       18,584       29,677       24,599   Other income, net   (996 )     (115 )     (1,082 )     (1,995 ) Interest expense, net   19,166       20,531       38,430       39,557   Operating earnings   97,278       83,937       136,536       121,995   Depreciation and amortization   45,632       39,225       89,808       76,032   Acquisition-related items   7,662       2,306       19,895       3,906   Stock-based compensation expense   6,556       7,019       14,155       13,927   Adjusted EBITDA $ 157,128     $ 132,487     $ 260,394     $ 215,860   A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below.                             (in thousands of US$)                               Three months ended, June 30, 2025   FirstService     FirstService           Residential     Brands     Corporate(1)                       Operating earnings (loss) $ 51,606     $ 56,522     $ (10,850 ) Depreciation and amortization   11,789       33,820       23   Acquisition-related items   2,100       4,873       689   Stock-based compensation expense   -       -       6,556   Adjusted EBITDA $ 65,495     $ 95,215     $ (3,582 )                                             Three months ended, June 30, 2024   FirstService     FirstService           Residential     Brands     Corporate(1)                       Operating earnings (loss) $ 49,107     $ 46,308     $ (11,478 ) Depreciation and amortization   9,773       29,429       23   Acquisition-related items   207       1,827       272   Stock-based compensation expense   -       -       7,019   Adjusted EBITDA $ 59,087     $ 77,564     $ (4,164 )                                             Six months ended, June 30, 2025   FirstService     FirstService           Residential     Brands     Corporate(1)                       Operating earnings (loss) $ 80,873     $ 81,008     $ (25,345 ) Depreciation and amortization   22,425       67,337       46   Acquisition-related items   3,828       14,637       1,430   Stock-based compensation expense   -       -       14,155   Adjusted EBITDA $ 107,126     $ 162,982     $ (9,714 )                                             Six months ended, June 30, 2024   FirstService     FirstService           Residential     Brands     Corporate(1)                       Operating earnings (loss) $ 75,765     $ 73,107     $ (26,877 ) Depreciation and amortization   18,196       57,790       46   Acquisition-related items   725       2,129       1,052   Stock-based compensation expense   -       -       13,927   Adjusted EBITDA $ 94,686     $ 133,026     $ (11,852 )                       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   Six months ended (in thousands of US$) June 30   June 30   2025   2024   2025   2024                         Net earnings $ 55,431     $ 44,937     $ 69,511     $ 59,834   Non-controlling interest share of earnings   (3,478 )     (2,696 )     (4,721 )     (4,229 ) Acquisition-related items   7,662       2,306       19,895       3,906   Amortization of intangible assets   19,706       17,009       38,223       32,240   Stock-based compensation expense   6,556       7,019       14,155       13,927   Income tax on adjustments   (7,567 )     (6,968 )     (16,142 )     (13,389 ) Non-controlling interest on adjustments   (447 )     (320 )     (989 )     (584 ) Adjusted net earnings $ 77,863     $ 61,287     $ 119,932     $ 91,705                             Three months ended   Six months ended (in US$) June 30   June 30   2025   2024   2025   2024                         Diluted net earnings per share $ 1.01     $ 0.78     $ 1.07     $ 0.92   Non-controlling interest redemption increment   0.13       0.16       0.35       0.32   Acquisition-related items   0.14       0.05       0.35       0.08   Amortization of intangible assets, net of tax   0.30       0.26       0.57       0.49   Stock-based compensation expense, net of tax   0.13       0.11       0.29       0.22   Adjusted earnings per share $ 1.71     $ 1.36     $ 2.63     $ 2.03                           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     Six months       ended June 30     ended June 30   2025   2024   2025   2024                           Revenues $ 1,415,733     $ 1,297,459     $ 2,666,559     $ 2,455,504                             Cost of revenues   935,334       862,463       1,776,802       1,651,040   Selling, general and administrative expenses   329,827       309,528       643,518       602,531   Depreciation   25,926       22,216       51,585       43,792   Amortization of intangible assets   19,706       17,009       38,223       32,240   Acquisition-related items (1)   7,662       2,306       19,895       3,906   Operating earnings   97,278       83,937       136,536       121,995   Interest expense, net   19,166       20,531       38,430       39,557   Other income, net   (996 )     (115 )     (1,082 )     (1,995 ) Earnings before income tax   79,108       63,521       99,188       84,433   Income tax   23,677       18,584       29,677       24,599   Net earnings   55,431       44,937       69,511       59,834   Non-controlling interest share of earnings   3,478       2,696       4,721       4,229   Non-controlling interest redemption increment   5,855       7,183       15,889       14,239   Net earnings attributable to Company $ 46,098     $ 35,058     $ 48,901     $ 41,366                             Net earnings per common share                       Basic $ 1.01     $ 0.78     $ 1.08     $ 0.92   Diluted   1.01       0.78       1.07       0.92                                                     Adjusted earnings per share (2) $ 1.71     $ 1.36     $ 2.63     $ 2.03                             Weighted average common shares (thousands)                         Basic   45,449       44,984       45,409       44,917     Diluted   45,656       45,100       45,632       45,087                                     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)                                     June 30, 2025   December 31, 2024                   Assets               Cash and cash equivalents $ 201,806     $ 227,598   Restricted cash   23,064       16,088   Accounts receivable   983,049       947,517   Prepaid and other current assets   414,837       368,150     Current assets   1,622,756       1,559,353   Other non-current assets   28,118       28,007   Deferred income tax   2,128       2,114   Fixed assets   271,867       253,994   Operating lease right-of-use assets   276,378       240,518   Goodwill and intangible assets   2,167,862       2,110,866     Total assets $ 4,369,109     $ 4,194,852                                       Liabilities and shareholders' equity               Accounts payable and accrued liabilities $ 577,159     $ 541,509   Unearned revenues   243,678       190,885   Other current liabilities   40,977       23,690   Operating lease liabilities - current   56,938       53,115   Long-term debt - current   13,230       41,567     Current liabilities   931,982       850,766   Long-term debt - non-current   1,229,053       1,257,143   Operating lease liabilities - non-current   249,529       214,423   Other liabilities   151,694       150,542   Deferred income tax   94,029       84,895   Redeemable non-controlling interests   460,997       449,337   Shareholders' equity   1,251,825       1,187,746     Total liabilities and equity $ 4,369,109     $ 4,194,852                                       Supplemental balance sheet information               Total debt $ 1,242,283     $ 1,298,710   Total debt, net of cash   1,040,477       1,071,112                   Consolidated Statements of Cash Flows               (in thousands of US dollars)       Three months ended     Six months ended       June 30     June 30   2025   2024   2025   2024                           Cash provided by (used in)                                                 Operating activities                       Net earnings $ 55,431     $ 44,937     $ 69,511     $ 59,834   Items not affecting cash:                         Depreciation and amortization   45,632       39,225       89,808       76,032     Deferred income tax   (771 )     (2,275 )     (1,590 )     (4,549 )   Other   11,153       8,052       29,352       14,384         111,445       89,939       187,081       145,701                             Changes in non-cash working capital                         Accounts receivable   (24,815 )     (22,637 )     (14,821 )     (2,640 )   Payables and accruals   56,573       33,002       (13,163 )     (23,282 )   Other   19,631       30,440       44,987       2,165   Net cash provided by operating activities   162,834       130,744       204,084       121,944                             Investing activities                       Acquisition of businesses, net of cash acquired   (43,280 )     (123,031 )     (51,916 )     (154,649 ) Purchases of fixed assets   (33,375 )     (29,301 )     (62,938 )     (54,322 ) Other investing activities   (1,624 )     (299 )     (8,670 )     (1,000 ) Net cash used in investing activities   (78,279 )     (152,631 )     (123,524 )     (209,971 )                           Financing activities                       Increase (decrease) in long-term debt, net   (67,833 )     90,473       (54,827 )     136,728   Purchases of non-controlling interests, net   (14,850 )     (10,221 )     (29,346 )     (21,442 ) Dividends paid to common shareholders   (12,497 )     (11,244 )     (23,814 )     (21,298 ) Distributions paid to non-controlling interests   (5,825 )     (3,817 )     (11,602 )     (4,470 ) Other financing activities   1,720       3,987       20,906       22,790   Net cash provided by (used in) financing activities   (99,285 )     69,178       (98,683 )     112,308                             Effect of exchange rate changes on cash   (678 )     123       (693 )     351                             Increase (decrease) in cash, cash equivalents and restricted cash   (15,408 )     47,414       (18,816 )     24,632                             Cash, cash equivalents and restricted cash, beginning of period   240,278       184,095       243,686       206,877                             Cash, cash equivalents and restricted cash, end of period $ 224,870     $ 231,509     $ 224,870     $ 231,509                                                       Segmented Results (in thousands of US dollars)                             FirstService   FirstService           Residential   Brands   Corporate   Consolidated                                 Three months ended June 30                                                             2025                               Revenues $ 593,023     $ 822,710     $ -     $ 1,415,733     Adjusted EBITDA   65,495       95,215       (3,582 )     157,128                                     Operating earnings   51,606       56,522       (10,850 )     97,278                                   2024                               Revenues $ 557,504     $ 739,955     $ -     $ 1,297,459     Adjusted EBITDA   59,087       77,564       (4,164 )     132,487                                     Operating earnings   49,107       46,308       (11,478 )     83,937                                                                                               FirstService   FirstService             Residential   Brands   Corporate   Consolidated                                 Six months ended June 30                                                             2025                               Revenues $ 1,118,110     $ 1,548,449     $ -     $ 2,666,559     Adjusted EBITDA   107,126       162,982       (9,714 )     260,394                                     Operating earnings   80,873       81,008       (25,345 )     136,536                                   2024                               Revenues $ 1,053,628     $ 1,401,876     $ -     $ 2,455,504     Adjusted EBITDA   94,686       133,026       (11,852 )     215,860                                     Operating earnings   75,765       73,107       (26,877 )     121,995                                     COMPANY CONTACTS: D. Scott Patterson Chief Executive Officer          Jeremy Rakusin Chief Financial Officer (416) 960-9566