Oct 22, 2026 earnings call — Restoration growth, roofing headwinds, buybacks
Q3 revenue was $1.53 billion, up 6%, with adjusted EPS of $1.89 and EBITDA margin of 11.1%.
Revenue $1.5B (est $1.5B) · EPS $1.89 (est $1.84)
Key quotes
"Revenues for our two Restoration Brands, Paul Davis and First Onsite, were up 10% from the prior year, better than expectation."
"The lower margin was primarily reflected in our roofing operations, which was impacted by both the declining revenues that Scott noted, as well as gross margin compression due to competitive market pressures at certain key branches."
"In Q3, we repurchased 2.2 million shares at a cost of a little more than $300 million under our normal course issuer bid."
Analyst Q&A 8
Roofing margins and visibility
Q (Erin Kyle · CIBC): They asked how much roofing margin pressure is from competitive pricing versus lower volumes, whether margins can recover before volumes return, how much visibility they have across branches for the next 12 months, and the impact of Hurricane Isaias on Restoration Brands revenue for Q4.
A: Management said both lower revenues and margin compression are contributing to the roofing pressure and they are competing to protect the top line. Visibility is limited today because they run 12 different systems and are implementing a new ERP to improve data and visibility by 2027. On Hurricane Isaias, they said the impact to restoration is immaterial and not a big part of backlog.
"Both are contributing factors, and we are obviously taken the approach in this competitive environment to make sure we are being competitive to get enough projects in the hopper and protect the top line as best as possible." — Jeremy Rakusin (CFO)
Restoration backlog; Brands margins; buybacks
Q (Stephen MacLeod · BMO): They asked whether restoration backlog grew from Q2 into Q3, whether Brands margins will stay under pressure into Q4, and whether buyback activity will continue given the NCIB.
A: They said restoration backlog is about the same level as Q2, with more quick-turn mitigation work that does not hit backlog. Brands margins should be modestly lower in Q4 while they still expect to grow EBITDA, driven mainly by weaker roofing margins. Share repurchases will continue but be more in line with free cash flow and the acquisition pipeline, so not as aggressive as earlier in Q2.
"It's about the same level as Q2, Stephen." — Scott Patterson (CEO)
Roofing competition; residential pipeline
Q (Stephen Sheldon · William Blair): They asked if competitive pressure in roofing is improving or worsening and what that means for margins into Q4 and early next year, and asked about the residential new-business pipeline and visibility into growth for next year.
A: Management said roofing margins will continue to be under pressure into Q4 and they will provide more detail at the February call. For residential, they have a strong sales pipeline, are focused on larger and more complex management opportunities, and new development is slower so more wins are coming from existing communities, supporting a stable organic growth rate.
"We think that the margins will continue to be under pressure." — Jeremy Rakusin (CFO)
Roofing pricing and branch performance
Q (Himanshu Gupta · Scotiabank): They asked whether the roofing strategy favors preserving margins or chasing revenue, how widespread organic weakness is across branches beyond Florida and Las Vegas, whether backlog improvement is reroofing or new construction led, and about restoration pipeline and capital allocation targets.
A: They said they balance price and margin, often choosing not to bid but adjusting pricing for key relationships with local decisions. Excluding Florida, Q4 would show single-digit organic growth; a few branches remain weak but most are looking to grow. Backlog improvement is heavily weighted to reroof with some new construction wins, restoration mitigation often doesn't hit backlog, and leverage is in the mid two's (they are at 2.4) so buybacks will be more judicious and tied to free cash flow.
"Let me put it to you this way, ex Florida Q4, we would show single-digit organic growth." — Scott Patterson (CEO)
Roofing M&A focus and footprint expansion
Q (Tim James · TD): They asked how recent roofing market learnings affect M&A approach, and whether Florida exposure makes them more motivated to diversify geographically.
A: They said their M&A focus is unchanged: target reroof and commercial businesses and partner with founders and longtime owners, while tilting future acquisitions more toward reroof and growing the service component. They also said they are focused on expanding geographic footprint into priority white space, and they will not buy businesses in markets where they already partner locally.
"We're focused on reroof, we're focused on commercial, and we're focusing on partnering with founders and longtime owners." — Scott Patterson (CEO)
Competition for acquisitions after rate rise
Q (Frederic Bastien · Raymond James): They asked if higher interest rates are making financial buyers more cautious and easing competition for bids.
A: They said any easing is modest: multiples remain very high and there are fewer bidders on average for some situations. They are concentrating on tuck-under deals with family-owned businesses where they can differentiate, and they do not see broad competition reducing right now, though roofing multiples may be coming down a bit.
"I think there are fewer bidders, on average, for situations we're seeing." — Scott Patterson (CEO)
Restoration contract risk and Florida reroof timing
Q (Daryl Young · Stifel): They asked whether large restoration pipeline contracts are traditional work or newer fixed-price construction with more execution risk, and whether past storms pulled forward reroof work causing current weakness in Florida.
A: They said they are not taking fixed-price contracts or new types of contract that add execution risk; large jobs are similar to past large-loss restoration work and some involve capital improvements or new construction based on their reputation. Regarding Florida, they said Hurricane Ian pulled reroof work forward and that created a significant falloff since then, not because customers are deferring work.
"No, we're not taking on or looking at any fixed price contracts or any sort of different type of contract that we would not be deploying our expertise, typical expertise." — Scott Patterson (CEO)
Residential margins and M&A impact for 2027
Q (Faiza Alwy · Deutsche Bank): They asked for details on expected residential margin improvement in Q4, including the impact of exiting the non-core aquatics business, and how much announced M&A will add to 2027 revenue.
A: They said the residential run rate has been about 30 basis points of margin improvement year to date, and excluding the residential aquatics business that typically loses money in Q4 should meaningfully boost Q4 margin — at least double the 30 basis points so far. Home Services Brands margins should be roughly in line with Q4 last year, and M&A contributed only modestly so far (they spent $25 million this quarter) with mid-single-digit quarterly revenue impact; most growth into 2027 will be organic unless they close more deals in Q4.
"Overlaying on top of that would be, again, not having this residential aquatics business that typically loses money in the seasonal trough period of Q4, not in our numbers." — Jeremy Rakusin (CFO)