BLD

OVERVIEW ​ TopBuild, headquartered in Daytona Beach, Florida, is a leading installer of insulation and commercial roofing and a specialty distributor of insulation and related building products to the construction industry in the United States and Canada. ​ We operate in two segments: Installation Services and Specialty Distribution. Our Installation Services segment installs insulation, roofing materials and other building products nationwide. As of March 31, 2026, we had more than 200 Installation Services branches located across the United States. We install various insulation applications, including fiberglass batts and rolls, blown-in loose fill fiberglass, polyurethane spray foam, and blown-in loose fill cellulose. Additionally, we install other building products including glass and windows, rain gutters, garage doors, closet shelving, and fireplaces, among other items. We handle every stage of the installation process, including material procurement supplied by leading manufacturers, project scheduling and logistics, multi-phase professional installation, and installation quality assurance. ​ Our acquisition of Progressive on July 14, 2025 enables us to expand our building envelope offering to general contractor customers and provide a broad suite of solutions. We construct and repair commercial roofs using various construction application types including built-up roofing, single ply, tile, metal, shingle and others. We provide the full lifecycle of comprehensive roofing services spanning non-discretionary re-roofing, recurring maintenance services and new construction to a diverse set of commercial customers including education, technology, industrial, government and healthcare. ​ Our Specialty Distribution segment distributes a comprehensive portfolio of building envelope, specialty products and mechanical and fabricated insulation for the residential and commercial/industrial end markets. We also offer insulation accessories, rain gutters, and other related building products. As of March 31, 2026, we had more than 250 distribution centers across the United States and Canada. Our Specialty Distribution customer base consists of thousands of general contractors of all sizes serving a wide variety of residential and commercial/industrial industries, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. ​ We believe that having both Installation Services and Specialty Distribution provides us with a number of distinct competitive advantages. First, the combined buying power of our two business segments, along with our scale, strengthens our ties to the major manufacturers of insulation, commercial roofing and other building products. This enables us to buy competitively and ensures the availability of supply to our local branches and distribution centers. The overall effect drives efficiencies throughout our supply chain. Second, being a leader in both installation services and specialty distribution allows us to reach a broader set of builders and contractors more effectively, regardless of their size or geographic location in the U.S. and Canada, and leverage residential, commercial, and industrial construction growth regardless of location. Third, during housing industry downturns, many insulation contractors who buy directly from manufacturers during industry peaks return to purchasing through specialty distributors. This helps to reduce our exposure to cyclical swings in our business. We’ve also increased our exposure to non-cyclical revenue through maintenance and other recurring installation services through acquisitions. ​ For additional details pertaining to our operating results by segment, see Note 7 – Segment Information to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report. For additional details regarding our strategy, material trends in our business and seasonality, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the year ended December 31, 2025, as filed with the SEC on February 26, 2026. ​ 23 Table of Contents Recent Developments ​ To date, tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") and other trade authorities have had a minimal impact on our business because we purchase a limited number of products directly or indirectly from jurisdictions exposed to those tariffs. On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs, and all IEEPA-based tariffs were terminated effective February 24, 2026. Given the minimal impact of tariffs on our business, we do not expect the Court's ruling, or the termination of IEEPA tariffs, to have a material impact on our supply chain costs or our results of operations. In addition, we do not believe we have any material obligation to reimburse customers or other counterparties in connection with tariff-related charges previously collected or passed through. While tariffs remain in effect under other legal authorities, including Sections 232 and 301 of applicable trade statutes, and the President has imposed a temporary 10% global tariff under Section 122 of the Trade Act of 1974, we do not currently anticipate that these measures will have a material impact on our business. We continue to monitor developments in U.S. trade policy, including potential new tariff actions and related litigation, and will update our disclosures as circumstances warrant. ​ FIRST QUARTER 2026 VERSUS FIRST QUARTER 2025 ​ The following table sets forth our net sales, gross profit, operating profit, and margins, as reported in our condensed consolidated statements of operations, in thousands: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2026 ​ 2025 ​ Net sales ​ $ 1,445,860 ​ $ 1,233,278 ​ Cost of sales ​ ​ 1,045,607 ​ ​ 881,805 ​ Cost of sales ratio ​ ​ 72.3 % ​ 71.5 % ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ ​ 400,253 ​ ​ 351,473 ​ Gross profit margin ​ ​ 27.7 % ​ 28.5 % ​ ​ ​ ​ ​ ​ ​ ​ Selling, general, and administrative expense ​ ​ 225,210 ​ ​ 173,984 ​ Selling, general, and administrative expense to sales ratio ​ ​ 15.6 % ​ 14.1 % ​ ​ ​ ​ ​ ​ ​ ​ Operating profit ​ ​ 175,043 ​ ​ 177,489 ​ Operating profit margin ​ ​ 12.1 % ​ 14.4 % ​ ​ ​ ​ ​ ​ ​ ​ Other expense, net ​ ​ (35,296) ​ ​ (11,516) ​ Income tax expense ​ ​ (34,934) ​ ​ (42,588) ​ Net income ​ $ 104,813 ​ $ 123,385 ​ Net margin ​ ​ 7.2 % ​ 10.0 % ​ Sales and Operations ​ Net sales increased by 17.2% for the three months ended March 31, 2026, from the comparable period of 2025. The increase was primarily driven by a 24.3% increase in sales from acquisitions, partially offset by a 5.5% decline in volume and a 1.6% impact from lower selling prices. ​ Gross profit margins were 27.7% and 28.5% for the three months ended March 31, 2026 and 2025, respectively. The decline in gross profit margin is primarily due to lower sales volume and lower customer pricing. ​ Selling, general, and administrative expenses as a percentage of sales were 15.6% and 14.1% for the three months ended March 31, 2026 and 2025, respectively. The increase in the percentage of sales during the three months ended March 31, 2026 is due to incremental selling, general, and administrative expenses from acquisitions, including intangible amortization. ​ Operating profit margins were 12.1% and 14.4% for the three months ended March 31, 2026 and 2025, respectively. Operating profit margins during the three months ended March 31, 2026 as a percentage of sales decreased due to lower sales volume and lower customer pricing, as well as incremental selling, general and administrative expenses from acquisitions, including intangible amortization. ​ 24 Table of Contents Business Segment Results ​ The following table sets forth our net sales and operating profit margins by business segment, in thousands: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Percent Change Net sales by business segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ Installation Services ​ $ 777,329 ​ $ 745,533 ​ 4.3 % Specialty Distribution ​ ​ 737,080 ​ ​ 559,804 ​ 31.7 % Intercompany eliminations ​ ​ (68,549) ​ ​ (72,059) ​ ​ ​ Net sales ​ $ 1,445,860 ​ $ 1,233,278 ​ 17.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit by business segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ Installation Services ​ $ 119,191 ​ $ 129,616 ​ (8.0) % Specialty Distribution ​ ​ 80,008 ​ ​ 69,059 ​ 15.9 % Intercompany eliminations ​ ​ (13,482) ​ ​ (11,927) ​ ​ ​ Operating profit before general corporate expense ​ ​ 185,717 ​ ​ 186,748 ​ (0.6) % General corporate expense, net ​ ​ (10,674) ​ ​ (9,259) ​ ​ ​ Operating profit ​ $ 175,043 ​ $ 177,489 ​ (1.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit margins: ​ ​ ​ ​ ​ ​ ​ ​ ​ Installation Services ​ ​ 15.3 % ​ 17.4 % ​ ​ Specialty Distribution ​ ​ 10.9 % ​ 12.3 % ​ ​ Operating profit margin before general corporate expense ​ ​ 12.8 % ​ 15.1 % ​ ​ Operating profit margin ​ ​ 12.1 % ​ 14.4 % ​ ​ ​ Installation Services ​ Sales ​ Sales in our Installation Services segment increased $31.8 million, or 4.3%, for the three months ended March 31, 2026, as compared to the same period in 2025. Sales increased 16.9% from acquisitions, partially offset by a 9.8% decline in sales volume and a 2.9% impact from lower selling prices. ​ Operating profit margins ​ Operating profit margins in our Installation Services segment were 15.3% and 17.4% for the three months ended March 31, 2026 and 2025, respectively. The decline in operating profit margin is primarily due to lower sales volume and lower customer pricing, as well as incremental selling, general and administrative expenses from acquisitions, including intangible amortization. ​ Specialty Distribution ​ Sales ​ Sales in our Specialty Distribution segment increased $177.3 million, or 31.7%, for the three months ended March 31, 2026, as compared to the same period in 2025. Sales increased 31.1% from acquisitions, 0.3% from higher selling prices and a 0.3% increase in sales volume. ​ Operating profit margins ​ Operating profit margins in our Specialty Distribution segment were 10.9% and 12.3% for the three months ended March 31, 2026 and 2025, respectively. The decline in operating profit margin is primarily due to incremental selling, general and administrative expenses from acquisitions, including intangible amortization. 25 Table of Contents OTHER ITEMS ​ Other expense, net ​ Other expense, net, increased to $35.3 million from $11.5 million in the three months ended March 31, 2026 and 2025, respectively. The increase was primarily driven by $20.0 million higher interest expense from Amendment No. 5 and issuance of our 5.625% Senior Notes, along with $2.9 million lower interest income due to lower average levels of invested cash balances during the first quarter of 2026. ​ Income tax expense ​ Income tax expense was $34.9 million, an effective tax rate of 25.0 percent, for the three months ended March 31, 2026, compared to $42.6 million, an effective tax rate of 25.7 percent, for the comparable period in 2025. The tax rate for the three months ended March 31, 2026, was lower primarily related to an increase in tax benefit related to share-based compensation. ​ Cash Flows and Liquidity ​ Significant sources (uses) of cash and cash equivalents are summarized for the periods indicated, in thousands: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2026 ​ ​ ​ 2025 Changes in cash and cash equivalents: ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ $ 160,736 ​ $ 152,589 Net cash used in investing activities ​ (41,493) ​ (12,853) Net cash used in financing activities ​ ​ (34,385) ​ (231,344) Impact of exchange rate changes on cash ​ ​ (753) ​ ​ 101 Net increase (decrease) in cash and cash equivalents ​ $ 84,105 ​ $ (91,507) ​ Net cash flows provided by operating activities increased $8.1 million for the three months ended March 31, 2026, as compared to the prior year period. The increase compared to the three months ended March 31, 2025 was primarily driven by favorable changes in working capital accounts, specifically accounts payable, which was partially offset by $18.6 million lower net income mainly due to higher intangible amortization. Net cash used in investing activities was $41.5 million for the three months ended March 31, 2026, primarily composed of $27.9 million for our acquisitions and $14.0 million for purchases of property and equipment, mainly vehicles and equipment. Net cash used in investing activities was $12.9 million for the three months ended March 31, 2025, primarily composed of $13.4 million for purchases of property and equipment, mainly vehicles. ​ Net cash used in financing activities was $34.4 million for the three months ended March 31, 2026. During the three months ended March 31, 2026, we incurred $16.9 million net cash outflow related to exercise of share-based incentive awards and stock options, used $15.6 million for debt repayments and repaid $1.9 million in principal on finance lease obligations. Additionally, we borrowed and repaid $65.0 million on our revolving facility, all within the first quarter of 2026. Net cash used in financing activities was $231.3 million for the three months ended March 31, 2025. During the three months ended March 31, 2025, we used $215.6 million to repurchase shares of our common stock under the 2024 and 2025 Repurchase Programs, $11.3 million for debt repayments and incurred $4.5 million cash outflow related to exercise of share-based incentive awards. ​ We have access to liquidity through our cash from operations and available borrowing capacity under Amendment No. 5, which provides for borrowing and/or standby letter of credit issuances of up to $1.0 billion under the revolving facility. Additional information regarding our outstanding debt and borrowing capacity is incorporated by reference from Note 5 – Long-term Debt to our unaudited condensed consolidated financial statements contained in Part 1, Item 1 of this Quarterly Report. ​ 26 Table of Contents The following table summarizes our liquidity, in thousands: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ March 31, 2026 ​ December 31, 2025 Cash and cash equivalents (a) ​ $ 268,847 ​ $ 184,742 ​ ​ ​ ​ ​ ​ ​ Revolving facility ​ ​ 1,000,000 ​ ​ 1,000,000 Less: standby letters of credit ​ ​ (65,897) ​ ​ (66,103) Availability under Revolving facility ​ ​ 934,103 ​ ​ 933,897 ​ ​ ​ ​ ​ ​ ​ Total liquidity ​ $ 1,202,950 ​ $ 1,118,639 (a) Our cash and cash equivalents consist of AAA-rated money market funds as well as cash held in our demand deposit accounts. ​ We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and known contractual obligations including funding our debt service requirements, capital expenditures, lease obligations and working capital needs for at least the next twelve months. We also have adequate liquidity to maintain off-balance sheet arrangements for short-term leases, letters of credit, and performance and license bonds. ​ OUTLOOK Residential New Construction Demand for single- and multi-family homes continues to be uneven across the country and challenged by elevated price levels and borrowing costs, which continue to affect consumer purchasing power and spending behavior. Although the residential end-markets are facing near-term uncertainty around tariffs, inflation, interest rates, and consumer confidence, we remain optimistic about the longer-term fundamentals due to underbuilding in the United States in prior years. ​ Commercial and Industrial Construction Our heavy commercial and industrial backlog is strong, our bidding activity is active, and our acquisitions of Progressive and SPI last year all continue to support our positive view of commercial/industrial sales for our Installation Services and Specialty Distribution segments. In addition, recurring maintenance, service and repair work on industrial sites serves as a continued demand driver for our business. ​ OFF-BALANCE SHEET ARRANGEMENTS ​ We had no material off-balance sheet arrangements during the three months ended March 31, 2026, other than short-term leases, letters of credit, and performance and license bonds, which have been disclosed in Part 1, Item 1 of this Quarterly report. ​ We use performance bonds to ensure completion of our work on certain larger customer contracts that can span multiple accounting periods. Performance bonds generally do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed. We also have bonds outstanding for license and insurance. ​ The following table summarizes our outstanding performance, licensing, insurance, and other bonds, in thousands: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ March 31, 2026 ​ December 31, 2025 Outstanding bonds: ​ ​ ​ ​ ​ ​ Performance bonds ​ $ 280,569 ​ $ 251,622 Licensing, insurance, and other bonds ​ ​ 30,663 ​ ​ 30,656 Total bonds ​ $ 311,232 ​ $ 282,278 ​ ​ ​ 27 Table of Contents CONTRACTUAL OBLIGATIONS ​ There have been no material changes to our contractual obligations from those previously disclosed in our Annual Report for the year ended December 31, 2025, as filed with the SEC on February 26, 2026. ​ CRITICAL ACCOUNTING POLICIES ​ We prepare our condensed consolidated financial statements in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. Our critical accounting policies have not changed from those previously reported in our Annual Report for the year ended December 31, 2025, as filed with the SEC on February 26, 2026. ​ APPLICATION OF NEW ACCOUNTING STANDARDS ​ Information regarding the application of new accounting standards is incorporated by reference from Note 2 – Accounting Policies to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report. ​ FORWARD-LOOKING STATEMENTS ​ Statements contained in this report that reflect our views about future periods, including our future plans and performance, constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “will,” “would,” “should,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “may,” “project,” “estimate” or “intend,” the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against unduly relying on any of these forward-looking statements. Our future performance may be affected by the duration and impact of negative macro-economic impacts on the United States economy, specifically with respect to residential, commercial/industrial construction, our ability to collect our receivables from our customers, our reliance on residential new construction, residential repair/remodel, and commercial/industrial construction; our reliance on third-party suppliers and manufacturers; our ability to attract, develop, and retain talented personnel and our sales and labor force; our ability to maintain consistent practices across our locations; our ability to maintain our competitive position; and our ability to find attractive acquisition targets, successfully complete acquisitions and realize the expected benefits of our acquisitions. We discuss the material risks we face under the caption entitled “Risk Factors” in our Annual Report for the year ended December 31, 2025, as filed with the SEC on February 26, 2026, as well as under the caption entitled “Risk Factors” in subsequent reports that we file with the SEC. Our forward-looking statements in this filing speak only as of the date of this filing. Factors or events that could cause our actual results to differ may emerge from time to time and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise. ​