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