10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2025

☐	Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period From

Commission file number

1-5581

WATSCO, INC.

(Exact name of registrant as specified in its charter)


FLORIDA		59-0778222
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2665 South Bayshore Drive, Suite 901 Miami, FL		33133
(Address of principal executive offices)		(Zip Code)

(305)

714-4100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.50 par value	WSO	New York Stock Exchange
Class B common stock, $0.50 par value	WSOB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☐ No ☒

The registrant’s common stock outstanding as of August 5, 2025 comprised (i) 34,902,826 shares of Common stock, $0.50 par value per share, excluding

4,066,963

treasury shares and (ii)

5,643,706

shares of Class B common stock, $0.50 par value per share.

WATSCO, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Unaudited Financial Statements

	Condensed Consolidated Unaudited Statements of Income – Quarters and Six Months Ended June 30, 2025 and 2024		3

	Condensed Consolidated Unaudited Statements of Comprehensive Income – Quarters and Six Months Ended June 30, 2025 and 2024		4

	Condensed Consolidated Unaudited Balance Sheets – June 30, 2025 and December 31, 2024		5

	Condensed Consolidated Unaudited Statements of Shareholders’ Equity – Quarters and Six Months Ended June 30, 2025 and 2024		6

	Condensed Consolidated Unaudited Statements of Cash Flows – Six Months Ended June 30, 2025 and 2024		8

	Notes to Condensed Consolidated Unaudited Financial Statements		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		24

Item 4.	Controls and Procedures		25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		26

Item 1A.	Risk Factors		26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26

Item 5.	Other Information		26

Item 6.	Exhibits		27

SIGNATURE			28

EXHIBITS

2 of 28

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

WATSCO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF INCOME

(In thousands, except per share data)


	Quarter Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenues	$	2,062,442	$	2,139,328	$	3,593,528	$	3,704,319
Cost of sales		1,458,954		1,559,568		2,560,417		2,693,934

Gross profit		603,488		579,760		1,033,111		1,010,385
Selling, general and administrative expenses		339,001		319,029		661,582		628,577
Other income		7,382		8,072		12,528		13,532

Operating income		271,869		268,803		384,057		395,340
Interest income, net		2,329		4,913		7,746		7,383

Income before income taxes		274,198		273,716		391,803		402,723
Income taxes		57,430		59,065		80,495		83,810

Net income		216,768		214,651		311,308		318,913
Less: net income attributable to non-controlling interest		33,155		33,241		47,634		50,499

Net income attributable to Watsco, Inc.	$	183,613	$	181,410	$	263,674	$	268,414

Earnings per share for Common and Class B common stock (collectively “common stock”):
Basic	$	4.53	$	4.50	$	6.52	$	6.71

Diluted	$	4.52	$	4.49	$	6.50	$	6.69

See accompanying notes to condensed consolidated unaudited financial statements.

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WATSCO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)


	Quarter Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
Net income	$	216,768	$	214,651		$	311,308	$	318,913
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		15,770		(3,336	)		16,018		(11,336	)

Comprehensive income		232,538		211,315			327,326		307,577
Less: comprehensive income attributable to non-controlling interest		38,567		32,205			53,130		47,002

Comprehensive income attributable to Watsco, Inc.	$	193,971	$	179,110		$	274,196	$	260,575

See accompanying notes to condensed consolidated unaudited financial statements.

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Table of Contents

WATSCO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(In thousands, except per share data)


	June 30, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	292,978		$	526,271
Short-term cash investments		—			255,669
Accounts receivable, net		1,015,738			877,935
Inventories, net		1,952,842			1,385,436
Other current assets		38,160			34,670

Total current assets		3,299,718			3,079,981
Property and equipment, net		137,257			140,535
Operating lease right-of-use assets		425,940			419,138
Goodwill		466,167			451,858
Intangible assets, net		209,792			208,472
Investment in unconsolidated entity		177,862			168,611
Other assets		12,777			10,928

	$	4,729,513		$	4,479,523

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of lease liabilities	$	115,417		$	110,273
Accounts payable		678,114			490,879
Accrued expenses and other current liabilities		277,385			382,749

Total current liabilities		1,070,916			983,901

Long-term obligations:
Operating lease liabilities, net of current portion		324,601			321,715
Finance lease liabilities, net of current portion		14,068			15,475

Total long-term obligations		338,669			337,190

Deferred income taxes and other liabilities		98,109			94,194

Commitments and contingencies
Watsco, Inc. shareholders’ equity:
Common stock, $0.50 par value		19,484			19,431
Class B common stock, $0.50 par value		2,813			2,789
Preferred stock, $0.50 par value		—			—
Paid-in capital		1,531,598			1,472,170
Accumulated other comprehensive loss, net of tax		(49,371	)		(59,893	)
Retained earnings		1,329,149			1,295,972
Treasury stock, at cost		(73,231	)		(73,479	)

Total Watsco, Inc. shareholders’ equity		2,760,442			2,656,990
Non-controlling interest		461,377			407,248

Total shareholders’ equity		3,221,819			3,064,238

	$	4,729,513		$	4,479,523

See accompanying notes to condensed consolidated unaudited financial statements.

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WATSCO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF SHAREHOLDERS’ EQUITY


(In thousands, except share and per share data)	Common Stock, Class B Common Stock and Preferred Stock Shares		Common Stock, Class B Common Stock and Preferred Stock Amount		Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings		Treasury Stock			Non-controlling Interest		Total
Balance at December 31, 2024		40,352,263	$	22,220	$	1,472,170	$	(59,893	)	$	1,295,972	$	(73,479	)	$	407,248	$	3,064,238
Net income											80,061					14,479		94,540
Other comprehensive income								164								84		248
Issuances of restricted shares of common stock

SEC Form 10-Q filed by Watsco Inc.