TopBuild Corp_June 30, 2025

UNITED STATES

SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period June 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36870

TopBuild Corp.

(Exact name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of Incorporation or
Organization)

47-3096382

(I.R.S. Employer
Identification No.)

475 North Williamson Boulevard

Daytona Beach, Florida

(Address of Principal Executive Offices)

32114

(Zip Code)

(386) 304-2200

(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, par value $0.01 per share	BLD	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.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

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 had outstanding 28,138,831 shares of Common Stock, par value $0.01 per share as of July 29, 2025.

Table of Contents

TOPBUILD CORP.

TABLE OF CONTENTS


		Page No.
Part I.	Financial Information

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Operations	5

	Condensed Consolidated Statements of Comprehensive Income	6

	Condensed Consolidated Statements of Cash Flows	7

	Condensed Consolidated Statements of Changes in Equity	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

Part II.	Other Information

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	34

Index to Exhibits		35

Signatures		36

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GLOSSARY

We use acronyms, abbreviations, and other defined terms throughout this Quarterly Report, which are defined in the glossary below:


Term		Definition
3.625% Senior Notes		TopBuild's 3.625% senior unsecured notes issued March 15, 2021 and due March 15, 2029
4.125% Senior Notes		TopBuild's 4.125% senior unsecured notes issued October 14, 2021 and due February 15, 2032
2015 LTIP		2015 Long-Term Incentive Program authorizes the Board to grant stock options, stock appreciation rights, restricted shares, restricted share units, performance awards, and dividend equivalents
2024 Repurchase Program		$1 billion share repurchase program authorized by the Board on May 3, 2024.
2025 LTIP		TopBuild Corp. Amended and Restated 2015 Long Term Stock Incentive Plan, as amended April 28, 2025
2025 Repurchase Program		$1 billion share repurchase program authorized by the Board on February 17, 2025.
Amendment No. 5		Amendment No. 5 to the Credit Agreement dated May 16, 2025
Annual Report		Annual report filed with the SEC on Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
Board		Board of Directors of TopBuild
BofA		Bank of America, N.A.
Brabble		Brabble Insulation, Inc.
CODM		Chief Operating Decision Maker
Cost of sales		Primarily composed of labor, material costs and overhead
Credit Agreement		Amended and Restated Credit Agreement, originally dated March 20, 2020 and amended May 16, 2025, among TopBuild, BofA as administrative agent, and the other lenders and agents party thereto
Current Report		Current report filed with the SEC on Form 8-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
EBITDA		Earnings before interest, taxes, depreciation, and amortization
Exchange Act		The Securities Exchange Act of 1934, as amended
FASB		Financial Accounting Standards Board
GAAP		Generally accepted accounting principles in the United States of America
Green Space		Nate's Insulation, LLC d/b/a Green Space Insulation
Insulation Works		Insulation Works, Inc.
Lenders		Bank of America, N.A., together with the other lenders party to "Credit Agreement"
Morris Black		Morris Black & Sons, Inc.
Net Leverage Ratio		As defined in the “Credit Agreement,” the ratio of outstanding indebtedness, less up to $350 million of unrestricted cash, to EBITDA
NYSE		New York Stock Exchange
PCI		Pest Control Insulation, LLC
Progressive		PR Midco LLC, d/b/a Progressive Roofing
Quarterly Report		Quarterly report filed with the SEC on Form 10-Q pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
RSA		Restricted stock award
Seal-Rite		Seal-Rite Insulation Inc
SEC		United States Securities and Exchange Commission
Secured Leverage Ratio		As defined in the “Credit Agreement,” the ratio of outstanding indebtedness, including letters of credit, to EBITDA
Selling, general and administrative expenses		Includes allocation of corporate overhead, bad debt, bank fees, selling expenses, employee compensation, insurance, legal and consulting, office equipment & supplies, telecommunication & subscriptions, and travel & entertainment
SOFR		Secured overnight financing rate
SPI		SPI LLC d/b/a Specialty Products & Insulation
Term Loan		TopBuild's secured borrowings under the "Credit Agreement" due May 16, 2030
Texas Insulation		EOAKIS, LLC, d/b/a Texas Insulation
TopBuild		TopBuild Corp. and its wholly-owned consolidated domestic subsidiaries

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PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

TOPBUILD CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands except share data)


	As of
	June 30,		December 31,
	2025		2024
ASSETS
Current assets:
Cash and cash equivalents	$	842,493	$	400,318
Receivables, net of an allowance for credit losses of $24,268 at June 30, 2025, and $18,541 at December 31, 2024		752,559		751,612
Inventories		385,466		406,662
Prepaid expenses and other current assets		37,566		40,382
Total current assets		2,018,084		1,598,974

Right of use assets		180,626		189,146
Property and equipment, net		254,127		266,992
Goodwill		2,125,827		2,112,259
Other intangible assets, net		531,411		557,689
Other assets		9,743		10,366
Total assets	$	5,119,818	$	4,735,426

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	417,500	$	456,446
Current portion of long-term debt		50,000		48,750
Accrued liabilities		178,709		191,786
Short-term operating lease liabilities		66,884		68,713
Short-term finance lease liabilities		1,192		1,487
Total current liabilities		714,285		767,182

Long-term debt		1,833,213		1,327,159
Deferred tax liabilities, net		237,503		240,343
Long-term portion of insurance reserves		58,339		57,700
Long-term operating lease liabilities		129,166		129,360
Long-term finance lease liabilities		1,948		2,618
Other liabilities		1,366		1,446
Total liabilities		2,975,820		2,525,808

Commitments and contingencies

Equity:
Preferred stock, $0.01 par value: 10,000,000 shares authorized; 0 shares issued and outstanding		-		-
Common stock, $0.01 par value: 250,000,000 shares authorized; 39,607,969 shares issued and 28,255,264 outstanding at June 30, 2025, and 39,554,033 shares issued and 29,367,087 outstanding at December 31, 2024		396		396
Treasury stock, 11,352,705 shares at June 30, 2025, and 10,186,946 shares at December 31, 2024, at cost		(2,041,581)		(1,681,230)
Additional paid-in capital		935,784		926,137
Retained earnings		3,268,508		2,993,521
Accumulated other comprehensive loss		(19,109)		(29,206)
Total equity		2,143,998		2,209,618
Total liabilities and equity	$	5,119,818	$	4,735,426

See notes to our unaudited condensed consolidated financial statements.

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TOPBUILD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands except share and per common share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net sales	$	1,297,403	$	1,365,612	$	2,530,681	$	2,644,329
Cost of sales		903,360		941,690		1,785,165		1,833,257
Gross profit		394,043		423,922		745,516		811,072

Selling, general, and administrative expense		174,254		213,530		348,239		386,172
Operating profit		219,789		210,392		397,277		424,900

Other income (expense), net:
Interest expense		(20,545)		(18,568)		(37,147)		(37,363)
Other, net		4,348		11,350		9,434		22,632
Other expense, net		(16,197)		(7,218)		(27,713)		(14,731)
Income before income taxes		203,592		203,174		369,564		410,169

Income tax expense		(51,990)		(52,451)		(94,578)		(107,065)
Net income	$	151,602	$	150,723	$	274,986	$	303,104

Net income per common share:
Basic	$	5.34	$	4.81	$	9.58	$	9.63
Diluted	$	5.32	$	4.78	$	9.53	$	9.56

Weighted average shares outstanding:
Basic		28,371,644		31,324,833		28,698,125		31,483,144
Diluted		28,515,554		31,524,063		28,858,719		31,693,524

See notes to our unaudited condensed consolidated financial statements.

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TOPBUILD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$	151,602	$	150,723	$	274,986	$	303,104
Other comprehensive income (loss):
Foreign currency translation adjustment		9,868		(1,836)		10,096		(5,928)
Comprehensive income	$	161,470	$	148,887	$	285,082	$	297,176

See notes to our unaudited condensed consolidated financial statements.

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TOPBUILD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


	Six Months Ended June 30,
	2025		2024
Cash Flows Provided by (Used in) Operating Activities:
Net income	$	274,986	$	303,104
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		71,677		69,291
Share-based compensation		9,806		9,759
Loss (gain) on sale of assets		711		(131)
Amortization of debt issuance costs		1,549		1,440
Provision for bad debt expense		8,121		9,874
Provision for inventory obsolescence		4,570		4,892
Impairment losses		8,636		—
Deferred income taxes, net		(2,668)		(72)
Change in certain assets and liabilities, net of effects of businesses acquired:
Receivables, net		(4,988)		(58,411)
Inventories		20,146		(30,758)
Prepaid expenses and other current assets		2,884		(6,595)
Accounts payable		(39,053)		(17,480)
Accrued liabilities		(7,677)		(13,348)
Other, net		(2,421)		(2,437)
Net cash provided by operating activities		346,279		269,128

Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment		(24,915)		(35,974)
Acquisition of businesses, net of cash acquired		(21,185)		(88,123)
Proceeds from sale of assets		610		2,150
Net cash used in investing activities		(45,490)		(121,947)

Cash Flows Provided by (Used in) Financing Activities:
Proceeds from issuance of long-term debt		1,000,000		—
Repayment of long-term debt		(487,500)		(23,873)
Excise taxes paid on share repurchases		(9,444)		—
Payment of debt issuance costs		(6,970)		—
Taxes withheld and paid on employees' equity awards		(5,374)		(6,059)
Exercise of stock options		—		3,224
Repurchase of shares of common stock		(351,621)		(505,241)
Net cash provided by (used in) financing activities		139,091		(531,949)
Impact of exchange rate changes on cash		2,295		(576)
Net increase (decrease) in cash and cash equivalents		442,175		(385,344)
Cash and cash equivalents - Beginning of period		400,318		848,565
Cash and cash equivalents - End of period	$	842,493	$	463,221

Supplemental disclosure of noncash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	33,978	$	20,180
Accruals for property and equipment		353		277
Excise taxes capitalized to treasury stock		3,516		5,202

See notes to our unaudited condensed consolidated financial statements.

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TOPBUILD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

(In thousands except share data)


									Accumulated
	Common		Treasury		Additional				Other
	Stock		Stock		Paid-in		Retained		Comprehensive
	($0.01 par value)		at cost		Capital		Earnings		(Loss)/Income		Equity
Balance at December 31, 2024	$	396	$	(1,681,230)	$	926,137	$	2,993,521	$	(29,206)	$	2,209,618
Net income		-		-		-		123,385		-		123,385
Share-based compensation		-		-		5,042		-		-		5,042
Issuance of 51,633 restricted share awards under long-term equity incentive plan, net of forfeitures		-		-		-		-		-		-
Repurchase of 693,881 shares pursuant to the Share Repurchase Programs		-		(217,784)		-		-		-		(217,784)
14,178 shares withheld to pay taxes on employees' equity awards		-		(4,307)		(159)		-		-		(4,466)
Other comprehensive income, net of tax		-		-		-		-		229		229
Balance at March 31, 2025	$	396	$	(1,903,321)	$	931,020	$	3,116,906	$	(28,977)	$	2,116,024
Net income		-		-		-		151,602		-		151,602
Share-based compensation		-		-		4,764		-		-		4,764
Issuance of 2,303 restricted share awards under long-term equity incentive plan, net of forfeitures		-		-		-		-		-		-
Repurchase of 454,802 shares pursuant to the Share Repurchase Programs		-		(137,352)		-		-		-		(137,352)
2,898 shares withheld to pay taxes on employees' equity awards		-		(908)		-		-		-		(908)
Other comprehensive income, net of tax		-		-		-		-		9,868		9,868
Balance at June 30, 2025	$	396	$	(2,041,581)	$	935,784	$	3,268,508	$	(19,109)	$	2,143,998


									Accumulated
	Common		Treasury		Additional				Other
	Stock		Stock		Paid-in		Retained		Comprehensive
	($0.01 par value)		at cost		Capital		Earnings		Loss		Equity
Balance at December 31, 2023	$	394	$	(699,327)	$	906,334	$	2,370,919	$	(14,665)	$	2,563,655
Net income		-		-		-		152,381		-		152,381
Share-based compensation		-		-		5,127		-		-		5,127
Issuance of 51,236 restricted share awards under long-term equity incentive plan, net of forfeitures		1		-		-		-		-		1
14,965 shares withheld to pay taxes on employees' equity awards		-		(6,059)		-		-		-		(6,059)
5,757 shares issued upon exercise of stock options		-		-		1,020		-		-		1,020
Other comprehensive loss, net of tax		-		-		-		-		(4,092)		(4,092)
Balance at March 31, 2024	$	395	$	(705,386)	$	912,481	$	2,523,300	$	(18,757)	$	2,712,033
Net income		-		-		-		150,723		-		150,723
Share-based compensation		-		-		4,632		-		-		4,632
Issuance of 2,022 restricted share awards under long-term equity incentive plan, net of forfeitures		1		-		-		-		-		1
Repurchase of 1,246,182 shares pursuant to Share Repurchase Programs		-		(510,443)		-		-		-		(510,443)
10,269 shares issued upon exercise of stock options		-		-		2,204		-		-		2,204
Other comprehensive loss, net of tax		-		-		-		-		(1,836)		(1,836)
Balance at June 30, 2024	$	396	$	(1,215,829)	$	919,317	$	2,674,023	$	(20,593)	$	2,357,314

See notes to our unaudited condensed consolidated financial statements.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

TopBuild is a Delaware corporation and trades on the NYSE under the symbol “BLD.” We report our business in two segments: Installation and Specialty Distribution. Our Installation segment primarily installs insulation and other building products. Our Specialty Distribution segment primarily sells and distributes insulation and other building products. Our segments are based on our operating units, for which further discussion is included in Note 7 – Segment Information.

We believe the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to state fairly our financial position as of June 30, 2025, our results of operations and comprehensive income for the three and six months ended June 30, 2025 and 2024, and our cash flows for the six months ended June 30, 2025 and 2024. The condensed consolidated balance sheet at December 31, 2024 was derived from our audited financial statements, but does not include all disclosures required by GAAP.

These condensed consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual report for the year ended December 31, 2024, as filed with the SEC on February 25, 2025.

2. ACCOUNTING POLICIES

Financial Statement Presentation. Our condensed consolidated financial statements have been developed in conformity with GAAP, which requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from these estimates. All intercompany transactions between TopBuild entities have been eliminated.

Recently Adopted Accounting Pronouncements

Segment Reporting. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures”. This standard amends Topic 280 to require all entities to disclose, on an annual and interim basis, significant segment expenses and an amount for other segment items by reportable segment. This standard became effective for us as of December 31, 2024. Its adoption had no impact on our consolidated results of operations, financial position or cash flows. See Note 7 – Segment Information for required disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures”. This standard amends Topic 740 to require all entities to disclose specific categories in the rate reconciliation, income taxes paid and other income tax information. This standard is effective for fiscal years beginning after December 15, 2024, and should be applied on a prospective basis. We do not anticipate that this standard will affect our consolidated results of operations, financial position or cash flows.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40)”. This standard requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. This standard may be applied either prospectively or retrospectively. We do not anticipate that this standard will affect our consolidated results of operations, financial position or cash flows and we are assessing the impact of its adoption in our disclosures to our consolidated financial statements.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. REVENUE RECOGNITION

Revenue is disaggregated between our Installation and Specialty Distribution segments and further based on market and product, as we believe this best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

The following tables present our revenues disaggregated by market (in thousands):


	Three Months Ended June 30,
	2025								2024
	Installation		Specialty Distribution		Eliminations		Total		Installation		Specialty Distribution		Eliminations		Total
Residential	$	650,925	$	226,993	$	(68,418)	$	809,500	$	712,827	$	237,604	$	(66,331)	$	884,100
Commercial/Industrial		129,753		372,191		(14,041)		487,903		138,156		355,222		(11,866)		481,512
Net sales	$	780,678	$	599,184	$	(82,459)	$	1,297,403	$	850,983	$	592,826	$	(78,197)	$	1,365,612


	Six Months Ended June 30,
	2025								2024
	Installation		Specialty Distribution		Eliminations		Total		Installation		Specialty Distribution		Eliminations		Total
Residential	$	1,271,886	$	437,007	$	(129,641)	$	1,579,252	$	1,387,263	$	454,001	$	(122,321)	$	1,718,943
Commercial/Industrial		254,325		721,980		(24,876)		951,429		262,463		684,619		(21,696)		925,386
Net sales	$	1,526,211	$	1,158,987	$	(154,517)	$	2,530,681	$	1,649,726	$	1,138,620	$	(144,017)	$	2,644,329

The following tables present our revenues disaggregated by product (in thousands):


	Three Months Ended June 30,
	2025								2024
	Installation		Specialty Distribution		Eliminations		Total		Installation		Specialty Distribution		Eliminations		Total
Insulation and accessories	$	624,743	$	525,019	$	(72,461)	$	1,077,301	$	685,728	$	525,242	$	(68,758)	$	1,142,212
Glass and windows		60,973		-		-		60,973		62,322		-		-		62,322
Gutters		28,855		56,402		(8,888)		76,369		30,371		49,052		(7,924)		71,499
All other		66,107		17,763		(1,110)		82,760		72,562		18,532		(1,515)		89,579
Net sales	$	780,678	$	599,184	$	(82,459)	$	1,297,403	$	850,983	$	592,826	$	(78,197)	$	1,365,612


	Six Months Ended June 30,
	2025								2024
	Installation		Specialty Distribution		Eliminations		Total		Installation		Specialty Distribution		Eliminations		Total
Insulation and accessories	$	1,221,027	$	1,025,783	$	(136,486)	$	2,110,324	$	1,329,378	$	1,015,910	$	(126,267)	$	2,219,021
Glass and windows		120,489		-		-		120,489		120,438		-		-		120,438
Gutters		53,751		99,838		(15,962)		137,627		58,339		89,368		(15,232)		132,475
All other		130,944		33,366		(2,069)		162,241		141,571		33,342		(2,518)		172,395
Net sales	$	1,526,211	$	1,158,987	$	(154,517)	$	2,530,681	$	1,649,726	$	1,138,620	$	(144,017)	$	2,644,329

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table represents our contract assets and contract liabilities with customers, in thousands:


	Included in Line Item on	As of
	Condensed Consolidated	June 30,		December 31,
	Balance Sheets	2025		2024
Contract Assets:
Receivables, unbilled	Receivables, net	$	64,462	$	61,366

Contract Liabilities:
Deferred revenue	Accrued liabilities	$	13,430	$	18,651

The aggregate amount remaining on uncompleted performance obligations was $314.9 million as of June 30, 2025. We expect to satisfy the performance obligations and recognize revenue on substantially all of these uncompleted contracts over the next 18 months.

On certain of our long-term contracts, a percentage of the total project cost is withheld and not invoiced to the customer and collected until satisfactory completion of the customer’s project, typically within a year. This amount is referred to as retainage and is common practice in the construction industry. Retainage receivables are classified as a component of Receivables, net on our condensed consolidated balance sheets and were $69.7 million and $74.9 million as of June 30, 2025 and December 31, 2024, respectively.

4. GOODWILL AND OTHER INTANGIBLES

We have two reporting units which are also our operating and reportable segments: Installation and Specialty Distribution. Both reporting units contain goodwill. Assets acquired and liabilities assumed are assigned to the applicable reporting unit based on whether the acquired assets and liabilities relate to the operations of such unit and determination of its fair value. Goodwill assigned to the reporting unit is the excess of the fair value of the acquired business over the fair value of the individual assets acquired and liabilities assumed for the reporting unit.

In the fourth quarter of 2024, we performed an annual assessment on our goodwill resulting in no impairment and there were no indicators of impairment for the six months ended June 30, 2025.

Changes in the carrying amount of goodwill for the six months ended June 30, 2025, by segment, were as follows, in thousands:


									Accumulated
	Gross Goodwill				FX Translation		Gross Goodwill		Impairment		Net Goodwill
	December 31, 2024		Additions		Adjustment		June 30, 2025		Losses		June 30, 2025
Goodwill, by segment:
Installation	$	1,946,247	$	10,332	$	-	$	1,956,579	$	(762,021)	$	1,194,558
Specialty Distribution		928,033		36		3,200		931,269		-		931,269
Total goodwill	$	2,874,280	$	10,368	$	3,200	$	2,887,848	$	(762,021)	$	2,125,827

Additions during the six months ended June 30, 2025, primarily reflects the acquisition of Seal Rite on April 7, 2025, as well as measurement period adjustments to the fair value of goodwill assigned to businesses acquired in the last twelve months. See Note 12 – Business Combinations for further details.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other intangible assets, net includes customer relationships, non-compete agreements, and trademarks / trade names. The following table sets forth our other intangible assets, in thousands:


	As of
	June 30, 2025		December 31, 2024
Gross definite-lived intangible assets	$	876,300	$	864,693
Accumulated amortization		(344,889)		(307,004)
Other intangible assets, net	$	531,411	$	557,689

The following table sets forth our amortization expense, in thousands:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Amortization expense	$	18,406	$	17,947	$	36,562	$	35,633

5. LONG-TERM DEBT

The following table reconciles the principal balances of our outstanding debt to our condensed consolidated balance sheets, in thousands:


	As of
	June 30, 2025		December 31, 2024
3.625% Senior Notes due 2029	$	400,000	$	400,000
4.125% Senior Notes due 2032		500,000		500,000
Term loan due 2030		1,000,000		-
Term loan due 2026		-		487,500
Unamortized debt issuance costs		(16,787)		(11,591)
Total debt, net of unamortized debt issuance costs		1,883,213		1,375,909
Less: current portion of long-term debt		50,000		48,750
Total long-term debt	$	1,833,213	$	1,327,159

The following table sets forth our remaining principal payments for our outstanding debt balances as of June 30, 2025, in thousands:



	2025		2026		2027		2028		2029		Thereafter		Total
3.625% Senior Notes	$	-	$	-	$	-	$	-	$	400,000	$	-	$	400,000
4.125% Senior Notes		-		-		-		-		-		500,000		500,000
Term loan		25,000		50,000		50,000		50,000		50,000		775,000		1,000,000
Total	$	25,000	$	50,000	$	50,000	$	50,000	$	450,000	$	1,275,000	$	1,900,000

Credit Agreement

On May 16, 2025, we entered into Amendment No. 5 to the Credit Agreement, which increased our term loan facility to an aggregate principal amount of $1.0 billion, increased the aggregate borrowing capacity on our revolving credit facility to $1.0 billion, and added a delayed draw term facility with an aggregate borrowing capacity of $250.0 million. The Company is required to pay a ticking fee on the undrawn delayed draw term facility at an annual rate ranging from 0.175% to 0.250%, depending upon the Company’s consolidated secured leverage ratio, through the end of the availability period on November 12, 2025. Once drawn, the delayed draw term facility will be subject to substantially the same scheduled percentage amortization payments and maturity as the Company’s existing term loan facility under Amendment No. 5 to the Credit Agreement.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table outlines the key terms of Amendment No. 5 to the Credit Agreement (dollars in thousands):


Senior secured term loan facility	$	1,000,000
Delayed draw term loan (a)	$	250,000

Revolving facility (b)	$	1,000,000
Sublimit for issuance of letters of credit under revolving facility	$	150,000
Sublimit for swingline loans under revolving facility	$	50,000

Interest rate as of June 30, 2025		5.58	%
Scheduled maturity date		May 16, 2030

(a)	The delayed draw term loan has not been drawn upon as of June 30, 2025.

(b)	Use of the sublimits for the issuance of letters of credit and swingline loans reduces the availability under the revolving facility.

Interest expense on borrowings under Amendment No. 5 to the Credit Agreement is based on an applicable margin rate plus, at our option, either:

●

A base rate determined by reference to the highest of either (i) the federal funds rate plus 0.50 percent, (ii) BofA’s “prime rate,” and (iii) the SOFR rate for U.S. dollar deposits with a term of one month, plus 1.00 percent, in any case, subject to a floor of 1.00%; or

●

A SOFR rate determined by reference to the costs of funds for deposits in U.S. dollars for the interest period relevant to such borrowings, subject to a floor of 0%.

The applicable margin rate is determined based on our Secured Leverage Ratio. In the case of base rate borrowings, the applicable margin rate ranges from 0.25 percent to 1.00 percent and in the case of SOFR rate borrowings, the applicable margin ranges from 1.25 percent to 2.00 percent. Borrowings under Amendment No. 5 to the Credit Agreement are prepayable at the Company’s option without premium or penalty. The Company is required to make prepayments with the net cash proceeds of certain asset sales and certain extraordinary receipts.

Revolving Facility

The Company has outstanding standby letters of credit that secure our financial obligations related to our workers’ compensation, general insurance, and auto liability programs. These standby letters of credit, as well as any outstanding amount borrowed under our revolving facility, reduce the availability under the revolving facility.

The following table summarizes our availability under the revolving facility, in thousands:


	As of
	June 30, 2025		December 31, 2024
Revolving facility	$	1,000,000	$	500,000
Less: standby letters of credit		(61,198)		(63,770)
Availability under revolving facility	$	938,802	$	436,230

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We are required to pay commitment fees to the Lenders in respect of any unutilized commitments. The commitment fees range from 0.175 percent to 0.25 percent per annum, depending on our Secured Leverage Ratio. We must also pay customary fees on outstanding letters of credit.

3.625% Senior Notes

The 3.625% Senior Notes are $400.0 million senior unsecured obligations and bear interest at 3.625% per year, payable semiannually in arrears on March 15 and September 15, beginning on September 15, 2021. The 3.625% Senior Notes mature on March 15, 2029, unless redeemed early or repurchased. If we undergo a change in control, we must make an offer to repurchase all of the 3.625% Senior Notes then outstanding at a repurchase price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest (if any) to, but not including, the repurchase date.

The Company may redeem the 3.625% Senior Notes, in whole or in part, at any time on or after March 15, 2024 at the redemption prices specified in the notes plus accrued and unpaid interest if redeemed during the 12 month period commencing March 15 of the years set for: 2025 – 100.906%, 2026 and thereafter – 100.000%.

4.125% Senior Notes

The 4.125% Senior Notes are $500.0 million senior unsecured obligations and bear interest at 4.125% per year, payable semiannually in arrears on February 15 and August 15, beginning on August 15, 2022. The 4.125% Senior Notes mature on February 15, 2032, unless redeemed early or repurchased. If we undergo a change in control, we must make an offer to repurchase all of the 4.125% Senior Notes then outstanding at a repurchase price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest (if any) to, but not including, the repurchase date.

The Company may redeem the 4.125% Senior Notes, in whole or in part, at any time on or after October 15, 2026 at the redemption prices specified in the notes plus accrued and unpaid interest if redeemed during the 12 month period commencing on October 15 of the years set for: 2026 – 102.063%, 2027 – 101.375%, 2028 – 100.688%, 2029 and thereafter – 100.000%. The Company may also redeem a make-whole redemption of the 4.125% Senior Notes at any time prior to October 15, 2026 at the treasury rate plus 50 basis points.

Covenant Compliance

The indentures governing our 3.625% Senior Notes and our 4.125% Senior Notes (together, our “Senior Notes”) contain restrictive covenants that, among other things, generally limit the ability of the Company and certain of its subsidiaries (subject to certain exceptions) to (i) create liens, (ii) pay dividends, acquire shares of capital stock and make payments on subordinated debt, (iii) place limitations on distributions from certain subsidiaries, (iv) issue or sell the capital stock of certain subsidiaries, (v) sell assets, (vi) enter into transactions with affiliates, and (vii) effect mergers. The indentures provide for customary events of default which include (subject in certain cases to customary grace and cure periods), among others: nonpayment of principal or interest; breach of covenants or other agreements in the indenture; defaults in failure to pay certain other indebtedness; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is continuing under the indenture, the trustee or the holders of at least 30% in aggregate principal amount of each of our Senior Notes then outstanding may declare the principal of, premium, if any, and accrued interest on the Senior Notes subject to such declaration immediately due and payable. The Senior Notes and related guarantees have not been registered under the Securities Act of 1933, and we are not required to register either the Senior Notes or the guarantees in the future.

The Credit Agreement contains certain covenants that limit, among other things, the ability of the Company to incur additional indebtedness or liens; to make certain investments or loans; to make certain restricted payments; to enter into consolidations, mergers, sales of material assets, and other fundamental changes; to transact with affiliates; to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends; or to make certain accounting changes. The Credit Agreement contains customary affirmative covenants and events of default.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Credit Agreement requires that we maintain a Net Leverage Ratio and minimum Interest Coverage Ratio throughout the term of the agreement. The following table outlines the key financial covenants effective for the period covered by this Quarterly Report:


		As of June 30, 2025
Maximum Net Leverage Ratio		3.75:1.00
Minimum Interest Coverage Ratio		3.00:1.00
Compliance as of period end		In Compliance

6. FAIR VALUE MEASUREMENTS

The carrying values of cash and cash equivalents, receivables, net, and accounts payable are considered to be representative of their respective fair values due to the short-term nature of these instruments.

Fair value measurements were applied to our long-term debt portfolio. We believe the carrying value of our Term Loan approximates the fair market value primarily due to the fact that the non-performance risk of servicing our debt obligations, as reflected in our business and credit risk profile, has not materially changed since we assumed our debt obligations under the Credit Agreement. In addition, due to the floating-rate nature of our Term Loan, the market value is not subject to variability solely due to changes in the general level of interest rates as is the case with a fixed-rate debt obligation.

Based on market trades of our 3.625% Senior Notes and our 4.125% Senior Notes close to June 30, 2025 (Level 1 fair value measurement), we estimate the fair value of each in the table below:


	As of June 30, 2025
		Fair Value		Gross Carrying Value
3.625% Senior Notes	$	380,520	$	400,000
4.125% Senior Notes	$	465,000	$	500,000

7. SEGMENT INFORMATION

Our business consists of two reportable segments: Installation and Specialty Distribution. We operate primarily in the U.S. and to a lesser extent Canada.

Our Installation segment installs insulation and other building products. Installation sells primarily to the residential new construction market, with increasing activity in the commercial/industrial construction market, along with repair/remodel of residential housing. In addition to insulation, it installs other building products including glass and windows, rain gutters, garage doors, closet shelving, and fireplaces, among other items.

Our Specialty Distribution segment distributes building and mechanical insulation, insulation accessories and other building product materials for the residential and commercial/industrial end markets. In addition to insulation and accessories, it distributes rain gutters, closet shelving, and roofing materials, among other items. Distributed products are sold from distribution centers in various parts of the United States and Canada, primarily to contractors and dealers (including lumber yards) serving a wide variety of commercial/industrial markets.

Intercompany sales from the Specialty Distribution segment to the Installation segment are recorded by the Specialty Distribution segment with a profit margin and by our Installation segment at cost. This intercompany profit is eliminated in consolidation.

Our CODM is our Chief Executive Officer. Our CODM measures performance for our reportable segments based on segment net sales and operating profit. Our CODM uses these measures to evaluate resource allocation and other strategic initiatives (e.g., making acquisitions and internal investments). Segment performance measures are compared to budgeted and forecasted amounts periodically to assist in evaluating performance versus expectations and to inform future allocation and strategic decisions.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Key information is presented below by segment for our profit measures for the three and six months ended June 30, 2025 and 2024, in thousands:


	Three Months Ended June 30, 2025
		Installation		Specialty Distribution		Total
Net sales from external customers	$	780,678	$	516,725	$	1,297,403
Intercompany net sales		—		82,459		82,459
Segment net sales		780,678		599,184		1,379,862

Reconciliation of Net Sales
Elimination of intercompany net sales						(82,459)
Consolidated net sales					$	1,297,403

Less (a):
Cost of sales (b)		521,053		451,134		972,187
Selling, general and administrative expenses (c)		104,184		60,568		164,752
Segment operating profit		155,441		87,482		242,923

Reconciliation of Segment Operating Profit
Elimination of intercompany profit						(13,632)
General corporate expense, net (d)						(9,502)
Other expense, net (e)						(16,197)
Consolidated income before taxes					$	203,592

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Three Months Ended June 30, 2024
		Installation		Specialty Distribution		Total
Net sales from external customers	$	850,983	$	514,629	$	1,365,612
Intercompany net sales		—		78,197		78,197
Segment net sales		850,983		592,826		1,443,809

Reconciliation of Net Sales
Elimination of intercompany net sales						(78,197)
Consolidated net sales					$	1,365,612

Less (a):
Cost of sales (b)		565,600		441,447		1,007,047
Selling, general and administrative expenses (c)		114,665		62,006		176,671
Segment operating profit		170,718		89,373		260,091

Reconciliation of Segment Operating Profit
Elimination of intercompany profit						(12,840)
General corporate expense, net (d)						(36,859)
Other expense, net (e)						(7,218)
Consolidated income before taxes					$	203,174


	Six Months Ended June 30, 2025
		Installation		Specialty Distribution		Total
Net sales from external customers	$	1,526,211	$	1,004,470	$	2,530,681
Intercompany net sales		—		154,517		154,517
Segment net sales		1,526,211		1,158,987		2,685,198

Reconciliation of Net Sales
Elimination of intercompany net sales						(154,517)
Consolidated net sales					$	2,530,681

Less (a):
Cost of sales (b)		1,032,490		881,633		1,914,123
Selling, general and administrative expenses (c)		208,664		120,813		329,477
Segment operating profit		285,057		156,541		441,598

Reconciliation of Segment Operating Profit
Elimination of intercompany profit						(25,559)
General corporate expense, net (d)						(18,762)
Other expense, net (e)						(27,713)
Consolidated income before taxes					$	369,564

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Six Months Ended June 30, 2024
		Installation		Specialty Distribution		Total
Net sales from external customers	$	1,649,726	$	994,603	$	2,644,329
Intercompany net sales		—		144,017		144,017
Segment net sales		1,649,726		1,138,620		2,788,346

Reconciliation of Net Sales
Elimination of intercompany net sales						(144,017)
Consolidated net sales					$	2,644,329

Less (a):
Cost of sales (b)		1,100,291		853,383		1,953,674
Selling, general and administrative expenses (c)		221,960		118,286		340,246
Segment operating profit		327,475		166,951		494,426

Reconciliation of Segment Operating Profit
Elimination of intercompany profit						(23,600)
General corporate expense, net (d)						(45,926)
Other expense, net (e)						(14,731)
Consolidated income before taxes					$	410,169

(a)	The significant expense categories align with the segment-level information that is regularly provided to our CODM.

(b)

Cost of sales is primarily composed of labor, material costs and overhead. Includes $12.4 million of one-time charges ($6.2 million for each of our Installation and Specialty Distribution segments) to optimize our branch footprint and align our cost structure with current demand levels during the six months ended June 30, 2025. Includes $1.1 million of adjustments to one-time charges ($0.9 million for our Installation segment and $0.2 million for our Specialty Distribution segment) during the three months ended June 30, 2025. These one-time expenses are primarily related to non-cash facility impairment and severance.

(c)

Selling, general and administrative expenses include allocation of corporate overhead, bad debt, bank fees, selling expenses, employee compensation, insurance, legal and consulting, office equipment & supplies, telecommunication & subscriptions, and travel & entertainment. Includes $2.2 million of one-time charges ($1.1 million for our Installation segment, $0.6 million for our Specialty Distribution segment and $0.5 million for our Branch Support Center) to align our cost structure with current demand levels during the six months ended June 30, 2025. These one-time expenses are primarily related to severance.

(d)	General corporate expense, net includes expenses for functions such as corporate human resources, finance, and legal, including salaries, benefits, and other related costs.

(e) Other expense, net is presented on the accompanying condensed consolidated statement of operations and is primarily composed of interest expense and interest income.

Key information by segment is as follows for the three and six months ended June 30, 2025 and 2024, in thousands:


	Three Months Ended June 30, 2025
		Installation		Specialty Distribution		Total Reportable Segments		Other (a)	Consolidated Totals
Depreciation and amortization (b)	$	19,247	$	15,096	$	34,343	$	1,543	$	35,886
Property additions (c)		7,308		3,709		11,017		1,244		12,261
Total assets		2,175,651		2,080,157		4,255,808		864,010		5,119,818

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Three Months Ended June 30, 2024
		Installation		Specialty Distribution		Total Reportable Segments		Other (a)	Consolidated Totals
Depreciation and amortization (b)	$	18,712	$	15,047	$	33,759	$	1,275	$	35,034
Property additions (c)		14,219		3,079		17,298		1,984		19,282
Total assets		2,303,698		2,099,317		4,403,015		499,978		4,902,993


	Six Months Ended June 30, 2025
		Installation		Specialty Distribution		Total Reportable Segments		Other (a)	Consolidated Totals
Depreciation and amortization (b)	$	38,573	$	30,097	$	68,670	$	3,007	$	71,677
Property additions (c)		14,776		6,968		21,744		2,131		23,875


	Six Months Ended June 30, 2024
		Installation		Specialty Distribution		Total Reportable Segments		Other (a)	Consolidated Totals
Depreciation and amortization (b)	$	36,979	$	29,883	$	66,862	$	2,429	$	69,291
Property additions (c)		26,034		9,003		35,037		3,858		38,895

(a) Represents amounts held at Corporate not specifically attributed to or allocated to the segments.

(b) Represents total by segment, inclusive of amounts presented within cost of sales and selling, general and administrative expenses, as applicable.

8. INCOME TAXES

Our effective tax rates were 25.5 percent and 25.6 percent for the three and six months ended June 30, 2025, respectively. The effective tax rates for the three and six months ended June 30, 2024, were 25.8 percent and 26.1 percent, respectively. The lower 2025 tax rate for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily related to a decrease in tax expense related to share-based compensation.

A tax expense of $0.5 million and $2.1 million related to share-based compensation was recognized in our condensed consolidated statements of operations as a discrete item in income tax expense for the six months ended June 30, 2025 and 2024, respectively.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. NET INCOME PER SHARE

Basic net income per share is calculated by dividing net income by the weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net income per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method.

Basic and diluted net income per share were computed as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income (in thousands)	$	151,602	$	150,723	$	274,986	$	303,104

Weighted average number of common shares outstanding - basic		28,371,644		31,324,833		28,698,125		31,483,144

Dilutive effect of common stock equivalents:
RSAs with service-based conditions		12,893		34,973		21,949		38,083
RSAs with market-based conditions		32,363		61,856		31,218		61,491
RSAs with performance-based conditions		17,918		10,885		25,500		17,474
Stock options		80,736		91,516		81,927		93,332

Weighted average number of common shares outstanding - diluted		28,515,554		31,524,063		28,858,719		31,693,524

Basic net income per common share	$	5.34	$	4.81	$	9.58	$	9.63

Diluted net income per common share	$	5.32	$	4.78	$	9.53	$	9.56

The following table summarizes shares excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Anti-dilutive common stock equivalents:
RSAs with service-based conditions		9,980		—		10,053		—
RSAs with market-based conditions		24,852		—		21,101		—
RSAs with performance-based conditions		—		—		—		—
Stock options		—		—		—		—
Total anti-dilutive common stock equivalents		34,832		—		31,154		—

10. SHARE-BASED COMPENSATION

Effective July 1, 2015, our eligible employees commenced participation in the 2015 LTIP. The 2015 LTIP authorized the Board to grant stock options, stock appreciation rights, restricted shares, restricted share units, performance awards, and dividend equivalents. All grants were made by issuing new shares and no more than 4.0 million shares of common stock may be issued under the 2015 LTIP.

On February 18, 2025, the Board of Directors adopted the 2025 LTIP. Shares of our common stock remaining available for awards under the previous 2015 LTIP will continue to be authorized for future awards under the 2025 LTIP. As of June 30, 2025, we had 1.7 million shares remaining available for issuance under the 2025 LTIP.

Share-based compensation expense is included in selling, general, and administrative expense. The income tax effect associated with share-based compensation awards is included in income tax expense.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents share-based compensation amounts recognized in our condensed consolidated statements of operations, in thousands:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Share-based compensation expense	$	4,764	$	4,632	$	9,806	$	9,759
Income tax benefit/(expense)	$	112	$	(98)	$	(549)	$	(2,107)

The following table presents a summary of our share-based compensation activity for the six months ended June 30, 2025, in thousands, except per share amounts:


	RSAs			Stock Options
	Number of Shares	Weighted Average Grant Date Fair Value Per Share		Number of Shares	Weighted Average Grant Date Fair Value Per Share		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
Balance December 31, 2024	176.0	$	269.50	112.7	$	30.10	$	83.97	$	25,604.9
Granted	55.9	$	339.97	—		—		—		—
Converted/Exercised	(56.6)	$	240.45	—		—		—		—
Forfeited/Expired	(14.7)	$	298.21	—		—		—		—
Balance June 30, 2025	160.6	$	301.62	112.7	$	30.10	$	83.97	$	27,001.3

Exercisable June 30, 2025 (a)				112.7	$	30.10	$	83.97	$	27,001.3

(a)	The weighted average remaining contractual term for vested stock options is approximately 3.7 years.

We have unrecognized share-based compensation expense related to unvested awards as shown in the following table, dollars in thousands:


	As of June 30, 2025
	Unrecognized Compensation Expense on Unvested Awards		Weighted Average Remaining Compensation Expense Period
RSAs	$	27,167		1.1
Stock options		—		—
Total unrecognized compensation expense related to unvested awards	$	27,167

Our RSAs with performance-based conditions are evaluated on a quarterly basis with adjustments to compensation expense based on the likelihood of the performance target being achieved or exceeded. The following table shows the range of payouts and the related expense for our outstanding RSAs with performance-based conditions, in thousands:


			Payout Ranges and Related Expense
RSAs with Performance-Based Conditions	Grant Date Fair Value		0%		25%		100%		200%
February 21, 2023	$	3,780	$	-	$	945	$	3,780	$	7,560
February 21, 2024	$	4,370	$	-	$	1,093	$	4,370	$	8,740
February 18, 2025	$	4,994	$	-	$	1,249	$	4,994	$	9,988

During the first quarter of 2025, RSAs with performance-based conditions that were granted on February 15, 2022 vested based on cumulative three-year achievement of 200%. Total compensation expense recognized over the three-year performance period, net of forfeitures, was $5.8 million.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair value of our RSAs with a market-based condition granted under the 2015 LTIP was determined using a Monte Carlo simulation. The following are key inputs in the Monte Carlo analysis for awards granted in 2025, 2024, and 2023:


	2025			2024			2023
Measurement period (years)		2.86			2.86			2.86
Risk free interest rate		4.28	%		4.36	%		4.42	%
Dividend yield		0.00	%		0.00	%		0.00	%
Estimated fair value of market-based RSAs at grant date	$	393.39		$	503.68		$	270.64

11. SHARE REPURCHASE PROGRAM

On May 3, 2024, our Board authorized the 2024 Repurchase Program, pursuant to which the Company could purchase up to $1.0 billion of our common stock. The Company completed its 2024 Repurchase Program during the first quarter of 2025 for a total of 2,685,478 shares of our common stock at a weighted average cost of $372.37 per share.

On February 17, 2025, our Board authorized the 2025 Repurchase Program, pursuant to which the Company may purchase up to $1.0 billion of our common stock. Share repurchases may be executed through various means including open market purchases, privately negotiated transactions, accelerated share repurchase transactions, or other available means. The 2025 Repurchase Program does not obligate the Company to purchase any shares and has no expiration date. Authorization for the 2025 Repurchase Program may be terminated, increased, or decreased by the Board at its discretion at any time. As of June 30, 2025, the Company has $836.4 million remaining under the 2025 Share Repurchase Program.

Effective January 1, 2023, the Inflation Reduction Act of 2022 mandated a 1% excise tax on all share repurchases. Excise tax obligations that result from our share repurchases are included in the cost of treasury stock. The Company has excise tax liabilities of $3.5 million and $9.4 million as of June 30, 2025 and December 31, 2024, respectively. Excise tax liabilities are included in accrued liabilities on our condensed consolidated balance sheets.

The following table sets forth our share repurchases under the share repurchase programs in 2025.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Number of shares repurchased		454,802		1,246,182		1,148,683	1,246,182
Share repurchase cost (in thousands) (a)	$	137,352	$	510,443	$	355,136	510,443

(a)	The three and six months ended June 30, 2025 includes $1.4 million and $3.5 million of excise taxes, respectively. The three and six months ended June 30, 2024 includes $5.2 million of excise taxes.

12. BUSINESS COMBINATIONS

Acquiring businesses is a key part of our ongoing strategy to grow our company and expand our offerings. Each acquisition has been accounted for as a business combination under ASC 805, “Business Combinations.” Acquisition related costs were $1.4 million and $1.7 million in the three and six months ended June 30, 2025, respectively. Acquisition related costs were $26.3 million and $26.8 million in the three and six months ended June 30, 2024, respectively, which includes $23.0 million paid in the second quarter in connection with the mutual termination of our previous agreement to acquire SPI. Acquisition related costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations.

On April 7, 2025, we acquired the assets of the residential and commercial insulation business Seal-Rite. This installation acquisition will enhance our presence in the Omaha and Lincoln, Nebraska markets. The purchase price of approximately $23.0 million was funded by cash on hand and we recognized $11.7 million of goodwill in connection with this acquisition.

Customer relationships related to the acquisition completed in the six months ended June 30, 2025, were assigned a total fair value of $6.6 million and are being amortized over their useful life of 12 years.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As third-party or internal valuations are finalized, certain tax aspects of the foregoing transactions are completed, and customer post-closing reviews are concluded, adjustments may be made to the fair value of assets acquired, and in some cases total purchase price, through the end of each measurement period, generally one year following the applicable acquisition date. See Note 4 – Goodwill and Other Intangibles for disclosure of measurement period adjustments.

On February 15, 2024, we acquired the assets of the residential and light commercial insulation business Brabble. This installation acquisition enhanced our presence in North Carolina. The purchase price of $5.4 million was funded by cash on hand and we recognized $2.9 million of goodwill in connection with this acquisition.

On March 1, 2024, we acquired the assets of the residential insulation business Morris Black. This installation acquisition enhanced our presence in Pennsylvania. The purchase price of $3.6 million was funded by cash on hand and we recognized $2.0 million of goodwill in connection with this acquisition.

On March 1, 2024, we acquired the assets of the customized insulation products and accessories business PCI. This specialty distribution acquisition has a national customer base focused on the domestic pest control industry. The purchase price of $13.8 million was funded by cash on hand and we recognized $5.7 million of goodwill in connection with this acquisition.

On April 18, 2024, we acquired the assets of the residential and light commercial insulation business Green Space. This installation acquisition enhanced our presence in Missouri and neighboring states. The purchase price of approximately $4.3 million was funded by cash on hand and we recognized $2.7 million of goodwill in connection with this acquisition.

On May 16, 2024, we acquired the assets of the residential and light commercial insulation business Insulation Works. This installation acquisition enhanced our presence in Arkansas and extended our expertise to the agricultural business. The purchase price of approximately $25.7 million was funded by cash on hand and we recognized $15.1 million of goodwill in connection with this acquisition.

On May 31, 2024, we acquired the assets of the residential and light commercial insulation business Texas Insulation. This installation acquisition enhanced our presence in Texas. The purchase price of approximately $33.9 million was funded by cash on hand and we recognized $21.1 million of goodwill in connection with this acquisition.

Goodwill to be recognized in connection with acquisitions is attributable to the synergies expected to be realized and improvements in the businesses after the acquisitions. Primarily all of the $11.7 million and $49.6 million of goodwill recorded from acquisitions completed in the six months ended June 30, 2025 and 2024, respectively, is expected to be deductible for income tax purposes.

13. ACCRUED LIABILITIES

The following table sets forth the components of accrued liabilities, in thousands:


	As of
	June 30, 2025		December 31, 2024
Accrued liabilities:
Salaries, wages, and bonus/commissions	$	58,687	$	64,713
Short-term portion of insurance liabilities		36,850		31,013
Sales and property taxes		17,363		13,884
Deferred revenue		13,430		18,651
Interest payable on long-term debt		12,419		12,307
Customer rebates		10,951		17,898
Excise taxes		3,516		9,444
Other		25,493		23,876
Total accrued liabilities	$	178,709	$	191,786

See Note 3 – Revenue Recognition for discussion of our deferred revenue balances.

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TOPBUILD CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. OTHER COMMITMENTS AND CONTINGENCIES

Litigation. We are subject to certain claims, charges, litigation, and other proceedings in the ordinary course of our business, including those arising from or related to contractual matters, intellectual property, personal injury, environmental matters, product liability, product recalls, construction defects, insurance coverage, personnel and employment disputes, antitrust, and other matters, including class actions. We believe we have adequate defenses in these matters, and we do not believe that the ultimate outcome of these matters will have a material adverse effect on us. However, there is no assurance that we will prevail in any of these pending matters, and we could in the future incur judgments, enter into settlements of claims, or revise our expectations regarding the outcome of these matters, which could materially impact our liquidity and our results of operations.

Other Matters. We enter into contracts, which include customary indemnities that are standard for the industries in which we operate. Such indemnities include, among other things, claims against our builder customers for issues relating to our workmanship. We generally exclude from our contracts with builder customers indemnity relating to product quality and warranty claims, as we pass such claims directly to the manufacturers of the products we install or distribute. In conjunction with divestitures and other transactions, we occasionally provide customary indemnities relating to various items including, among others, the enforceability of trademarks, legal and environmental issues, and asset valuations. We evaluate the probability that we may incur liabilities under these customary indemnities and appropriately record an estimated liability when deemed probable.

We also maintain indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law.

15. SUBSEQUENT EVENTS

On July 4, 2025, the One Big Beautiful Bill Act (“the Act”) was signed into law, enacting significant changes to tax and spending policies. We are currently assessing the Act and the potential impacts to the Company.

On July 14, 2025, we acquired Progressive, a leader in commercial roofing installation services based in Phoenix, Arizona. Progressive employs more than 1,700 people across 12 branches in the United States and serves in commercial and industrial roofing and roof maintenance. The purchase price of approximately $810.0 million was funded by a $250.0 million borrowing on our delayed draw term facility that we borrowed on July 11, 2025, and cash on hand. This acquisition will be accounted for as a business combination under ASC 805, “Business Combinations”, and a preliminary purchase price allocation will be included in the third quarter 10-Q.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

TopBuild, headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and other building material products to the construction industry in the United States and Canada.

We operate in two segments: Installation and Specialty Distribution. Our Installation segment installs insulation and other building products nationwide. As of June 30, 2025, we had more than 200 Installation 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 Specialty Distribution segment distributes building and mechanical insulation, insulation accessories, rain gutters, and other building product materials for the residential and commercial/industrial end markets. As of June 30, 2025, we had more than 150 distribution centers across North America including 18 distribution centers in Canada. Our Specialty Distribution customer base consists of thousands of insulation 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 and Specialty Distribution provides us with several 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 and other building material products. This helps to ensure we are buying competitively and ensures the availability of supply to our local branches and distribution centers. The overall effect is driving efficiencies through our supply chain. Second, being a leader in both installation 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 housing and commercial/industrial construction growth wherever it occurs. Third, during housing industry downturns, many insulation contractors who buy directly from manufacturers during industry peaks return to purchasing through specialty distributors. As a result, this helps to reduce our exposure to cyclical swings in our business.

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, 2024, as filed with the SEC on February 25, 2025.

Recent Developments

In recent months, the U.S. government has announced tariffs and trade restrictions on certain goods produced outside the United States. As a result, certain jurisdictions, including China, Mexico, Canada, and the European Union, have also imposed tariffs and restrictions on certain goods produced in the United States. While we have a limited number of products that we purchase directly or indirectly from jurisdictions exposed to effected or proposed tariffs, such products represent a relatively small portion of our current material spend and we believe the direct impact for our business is minimal. We actively work with our supply base to mitigate the anticipated impact of current applicable tariffs and evaluate pricing actions to the extent we believe necessary or appropriate. The potential direct and indirect impacts of tariffs on the broad economy and, in particular, housing demand, are uncertain and we continue to closely monitor and evaluate the ongoing situation.

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On July 14, the Company closed on its acquisition of Progressive, a leader in commercial roofing installation services in the United States. Progressive provides a comprehensive offering that includes re-roofing, recurring maintenance services, and new construction. The acquisition of Progressive will enable us to offer commercial customers more comprehensive building envelope solutions, increase our revenue exposure to non-discretionary demand drivers and serve as a significant growth platform for our Company. Progressive will be reflected in our financial results beginning with the third quarter of 2025.

SECOND QUARTER 2025 VERSUS SECOND QUARTER 2024

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 June 30,
	2025			2024
Net sales	$	1,297,403		$	1,365,612
Cost of sales		903,360			941,690
Cost of sales ratio		69.6	%		69.0	%

Gross profit		394,043			423,922
Gross profit margin		30.4	%		31.0	%

Selling, general, and administrative expense		174,254			213,530
Selling, general, and administrative expense to sales ratio		13.4	%		15.6	%

Operating profit		219,789			210,392
Operating profit margin		16.9	%		15.4	%

Other expense, net		(16,197)			(7,218)
Income tax expense		(51,990)			(52,451)
Net income	$	151,602		$	150,723
Net margin		11.7	%		11.0	%

Sales and Operations

Net sales declined by 5.0% for the three months ended June 30, 2025, from the comparable period of 2024. The decline was primarily driven by a 7.8% decrease in volume as housing demand has softened, partially offset by 1.9% increase in sales from acquisitions, and a 0.9% impact from higher selling prices.

Gross profit margins were 30.4% and 31.0% for the three months ended June 30, 2025, and 2024, respectively. The decline in gross profit margin is primarily due to lower sales volume, and customer price pressures on residential products within our distribution business, partially offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025.

Selling, general, and administrative expenses as a percentage of sales were 13.4% and 15.6% for the three months ended June 30, 2025 and 2024, respectively. Selling, general, and administrative expenses as a percentage of sales were lower, benefiting from headcount reductions taken in the first quarter of 2025. Additionally, the three months ended June 30, 2024 reflects a $23.0 million fee paid to terminate our previous agreement to acquire SPI.

Operating margins were 16.9% and 15.4% for the three months ended June 30, 2025, and 2024, respectively. Operating margins during the six months ended June 30, 2025 benefited from branch consolidations and headcount reductions taken in the first quarter of 2025. In addition, the three months ended June 30, 2024 reflects a $23.0 million fee paid to terminate our previous agreement to acquire SPI.

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Business Segment Results

The following table sets forth our net sales and operating profit margins by business segment, in thousands:


	Three Months Ended June 30,
	2025			2024			Percent Change
Net sales by business segment:
Installation	$	780,678		$	850,983		(8.3)	%
Specialty Distribution		599,184			592,826		1.1	%
Intercompany eliminations		(82,459)			(78,197)
Net sales	$	1,297,403		$	1,365,612		(5.0)	%

Operating profit by business segment:
Installation	$	155,441		$	170,718		(8.9)	%
Specialty Distribution		87,482			89,373		(2.1)	%
Intercompany eliminations		(13,632)			(12,840)
Operating profit before general corporate expense		229,291			247,251		(7.3)	%
General corporate expense, net		(9,502)			(36,859)
Operating profit	$	219,789		$	210,392		4.5	%

Operating profit margins:
Installation		19.9	%		20.1	%
Specialty Distribution		14.6	%		15.1	%
Operating profit margin before general corporate expense		17.7	%		18.1	%
Operating profit margin		16.9	%		15.4	%

Installation

Sales

Sales in our Installation segment decreased $70.3 million, or 8.3%, for the three months ended June 30, 2025, as compared to the same period in 2024. The sales decline was primarily due to 10.5% lower sales volume, partially offset by 1.4% increase from acquisitions, and 0.9% from higher selling prices.

Operating margins

Operating margins in our Installation segment were 19.9% and 20.1% for the three months ended June 30, 2025 and 2024, respectively. The decline in operating margin is primarily due to lower sales volume, almost entirely offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025.

Specialty Distribution

Sales

Sales in our Specialty Distribution segment increased $6.4 million, or 1.1%, for the three months ended June 30, 2025, as compared to the same period in 2024. Sales increased 2.3% from acquisitions and 0.8% from higher selling prices, partially offset by 2.1% decline in sales volume.

Operating margins

Operating margins in our Specialty Distribution segment were 14.6% and 15.1% for the three months ended June 30, 2025 and 2024, respectively. The decline in operating margin is primarily due to lower sales volume and price pressures on residential products within our distribution business, partially offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025.

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OTHER ITEMS

Other expense, net

Other expense, net, increased to $16.2 million from $7.2 million in the three months ended June 30, 2025, and 2024, respectively. The increase was primarily driven by $5.4 million lower interest income due to lower cash balances as well as $2.0 million higher interest expense due to the refinancing of our Term Loan during the second quarter of 2025, which increased the associated outstanding principal balance to $1.0 billion.

Income tax expense

Income tax expense was $52.0 million, an effective tax rate of 25.5 percent, for the three months ended June 30, 2025, compared to $52.4 million, an effective tax rate of 25.8 percent, for the comparable period in 2024. The tax rate for the three months ended June 30, 2025 was lower, primarily related to a decrease in tax expense related to share-based compensation.

FIRST SIX MONTHS 2025 VERSUS FIRST SIX MONTHS 2024

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:


	Six Months Ended June 30,
	2025			2024
Net sales	$	2,530,681		$	2,644,329
Cost of sales		1,785,165			1,833,257
Cost of sales ratio		70.5	%		69.3	%

Gross profit		745,516			811,072
Gross profit margin		29.5	%		30.7	%

Selling, general, and administrative expense		348,239			386,172
Selling, general, and administrative expense to sales ratio		13.8	%		14.6	%

Operating profit		397,277			424,900
Operating profit margin		15.7	%		16.1	%

Other expense, net		(27,713)			(14,731)
Income tax expense		(94,578)			(107,065)
Net income	$	274,986		$	303,104
Net margin		10.9	%		11.5	%

Sales and Operations

Net sales decreased 4.3% for the six months ended June 30, 2025, from the comparable period in 2024. The decline was primarily driven by a 7.6% decrease in volume as housing demand has softened, partially offset by 2.2% increase in sales from acquisitions, and a 1.1% impact from higher selling prices.

Gross profit margins were 29.5% and 30.7% for the six months ended June 30, 2025 and 2024. The decline in gross profit margin is primarily due to $12.4 million of one-time expenses incurred in connection with our branch consolidations and headcount reductions, lower sales volume, and customer price pressures on residential products within our distribution business, partially offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025.

Selling, general, and administrative expenses as a percentage of sales were 13.8% and 14.6% for the six months ended June 30, 2025 and 2024, respectively. Selling, general, and administrative expenses as a percentage of sales were lower, benefiting from headcount reductions taken in the first quarter of 2025. Additionally, the six months ended June 30, 2024 reflects a $23.0 million fee paid to terminate our previous agreement to acquire SPI.

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Operating margins were 15.7% and 16.1% for the six months ended June 30, 2025 and 2024, respectively. The decrease in operating margins was primarily due to $14.3 million of one-time expenses incurred in connection with our branch consolidations and headcount reductions, lower sales volume and customer price pressures on residential products within our distribution business. These were partially offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025 and the $23.0 million fee paid to terminate our previous agreement to acquire SPI last year.

Business Segment Results

The following table sets forth our net sales and operating profit margins by business segment, in thousands:


	Six Months Ended June 30,
	2025			2024			Percent Change
Net sales by business segment:
Installation	$	1,526,211		$	1,649,726		(7.5)	%
Specialty Distribution		1,158,987			1,138,620		1.8	%
Intercompany eliminations		(154,517)			(144,017)
Net sales	$	2,530,681		$	2,644,329		(4.3)	%

Operating profit by business segment (a):
Installation	$	285,057		$	327,475		(13.0)	%
Specialty Distribution		156,541			166,951		(6.2)	%
Intercompany eliminations		(25,559)			(23,600)
Operating profit before general corporate expense		416,039			470,826		(11.6)	%
General corporate expense, net (b)		(18,762)			(45,926)
Operating profit	$	397,277		$	424,900		(6.5)	%

Operating profit margins:
Installation		18.7	%		19.9	%
Specialty Distribution		13.5	%		14.7	%
Operating profit margin before general corporate expense		16.4	%		17.8	%
Operating profit margin		15.7	%		16.1	%

Installation

Sales

Sales in our Installation segment decreased $123.5 million, or 7.5%, for the six months ended June 30, 2025, as compared to the same period in 2024. The sales decline was primarily due to 10.1% lower sales volume, partially offset by a 1.6% increase from acquisitions, and 1.0% from higher selling prices.

Operating margins

Operating margins in our Installation segment were 18.7% and 19.9% for the six months ended June 30, 2025 and 2024, respectively. The decline in operating margin is primarily due to $7.3 million of one-time expenses incurred during the six months ended June 30, 2025, in connection with our branch consolidations and headcount reductions, and lower sales volume, which was partially offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025.

Specialty Distribution

Sales

Sales in our Specialty Distribution segment increased $20.4 million, or 1.8%, for the six months ended June 30, 2025, as compared to same period in 2024. Sales increased 2.8% from acquisitions and 1.1% from higher selling prices, partially offset by a 2.1% decline in sales volume.

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Operating margins

Operating margins in our Specialty Distribution segment were 13.5% and 14.7% for the six months ended June 30, 2025 and 2024, respectively. The decline in operating margin is primarily due to $6.8 million of one-time expenses incurred during the six months ended June 30, 2025, in connection with our branch consolidations and headcount reductions, lower sales volume, and price pressures on residential products within our distribution business, partially offset by savings from the branch consolidations and headcount reductions we made in the first quarter of 2025.

OTHER ITEMS

Other expense, net

Other expense, net, decreased to $27.7 million for the six months ended June 30, 2025 from $14.7 million in the six months ended June 30, 2024. The decrease was driven by $12.7 million lower interest income due to lower cash balances held prior to the refinancing of our Term Loan in the second quarter of 2025.

Income tax expense

Income tax expense was $94.6 million, an effective tax rate of 25.6 percent, for the six months ended June 30, 2025 compared to $107.1 million, an effective tax rate of 26.1 percent, for the comparable period in 2024. The tax rate for six months ended June 30, 2025 was lower, primarily related to a decrease in tax expense 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:


	Six Months Ended June 30,
	2025		2024
Changes in cash and cash equivalents:
Net cash provided by operating activities	$	346,279	$	269,128
Net cash used in investing activities		(45,490)		(121,947)
Net cash provided by (used in) financing activities		139,091		(531,949)
Impact of exchange rate changes on cash		2,295		(576)
Net increase (decrease) in cash and cash equivalents	$	442,175	$	(385,344)

Net cash flows provided by operating activities increased $77.2 million for the six months ended June 30, 2025, as compared to the prior year period. The increase was driven by favorable changes in working capital, specifically accounts receivable and inventory, compared to the six months ended June 30, 2024. This increase was partially offset by $28.1 million lower net income.

Net cash used in investing activities was $45.5 million for the six months ended June 30, 2025, primarily composed of $24.9 million for purchases of property and equipment, mainly vehicles and equipment, and $21.2 million for our acquisitions. Net cash used in investing activities was $121.9 million for the six months ended June 30, 2024, primarily composed of $88.1 million for our acquisitions and $36.0 million for purchases of property and equipment, mainly vehicles and equipment, partially offset by $2.2 million proceeds received from the sale of assets.

Net cash provided by financing activities was $139.1 million for the six months ended June 30, 2025. During the six months ended June 30, 2025, we refinanced our Term Loan resulting in the issuance of $1.0 billion long-term debt, repayment of $487.5 million long-term debt, and payment of $7.0 million on debt issuance costs. Additionally, we used $351.6 million to repurchase shares of our common stock, paid $9.4 million of excise taxes on share repurchases, and incurred $5.4 million cash outflow related to exercise of share-based incentive awards. Net cash used in financing activities was $531.9 million for the six months ended June 30, 2024. During the six months ended June 30, 2024, we used $505.2 million to repurchase shares of our common stock, $23.9 million for debt repayments and incurred $2.8 million net cash outflow related to exercise of share-based incentive awards and stock options.

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We have access to liquidity through our cash from operations and available borrowing capacity under Amendment No. 5 to our Credit Agreement, 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.

The following table summarizes our liquidity, in thousands:


	As of
	June 30,		December 31,
	2025		2024
Cash and cash equivalents (a)	$	842,493	$	400,318

Revolving facility		1,000,000		500,000
Less: standby letters of credit		(61,198)		(63,770)
Availability under Revolving facility		938,802		436,230

Total liquidity	$	1,781,295	$	836,548

(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. Information regarding our outstanding bonds as of June 30, 2025, is incorporated by reference from Note 14 – Other Commitments and Contingencies to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.

OUTLOOK

Residential New Construction

Demand for single-family homes continues to be uneven across the country. Multi-family activity has slowed considerably as the lower housing starts of 2024 began to impact the industry in 2025. While the residential end-markets are facing near-term uncertainty around tariffs, inflation, and interest rates, we remain optimistic about the longer-term fundamentals due to underbuilding in the United States in prior years.

Commercial and Industrial Construction

Our commercial backlog is strong, our bidding activity is active, and our third quarter acquisition of Progressive, all continue to support our positive view of commercial/industrial sales at our Installation and Specialty Distribution segments. We remain optimistic that declining interest rates in the future will continue to unlock projects across many industries. In addition, recurring maintenance and repair work on industrial sites serves as a continued driver for our business.

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OFF-BALANCE SHEET ARRANGEMENTS

We had no material off-balance sheet arrangements during the three months ended June 30, 2025, 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 occasionally 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
	June 30, 2025		December 31, 2024
Outstanding bonds:
Performance bonds	$	152,169	$	146,479
Licensing, insurance, and other bonds		28,794		28,462
Total bonds	$	180,963	$	174,941

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, 2024, as filed with the SEC on February 25, 2025, except as follows:

On May 16, 2025, we entered into Amendment No. 5 to the Credit Agreement, which increased our term loan facility, increased the aggregate borrowing capacity on our revolving credit facility, and added a delayed draw term facility. See Note 5 – Long-Term Debt for discussion of our obligations in connection with Amendment No. 5, which is incorporated by reference to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.

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, 2024, as filed with the SEC on February 25, 2025.

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.

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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 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, 2024, as filed with the SEC on February 25, 2025, 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.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have a Term Loan outstanding with a principal balance of $1.0 billion and a revolving facility with an aggregate borrowing capacity of $1.0 billion. We also have outstanding 3.625% Senior Notes with an aggregate principal balance of $400.0 million and 4.125% Senior Notes with an aggregate principal balance of $500.0 million. The 3.625% Senior Notes and 4.125% Senior Notes bear a fixed rate of interest and therefore are excluded from the calculation below as they are not subject to fluctuations in interest rates.

Interest payable on both the aggregate Term Loan and revolving facility is based on a variable interest rate. As a result, we are exposed to market risks related to fluctuations in interest rates on this outstanding indebtedness. As of June 30, 2025, the applicable interest rate as of such date was 5.58%. Based on our outstanding borrowings as of June 30, 2025, a 100-basis point increase in the interest rate would result in a $9.8 million increase in our annualized interest expense. There was no outstanding balance under the revolving facility as of June 30, 2025.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) in the most recent fiscal quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The information set forth under the caption “Litigation” in Note 13 – Other Commitments and Contingencies to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report, is incorporated by reference herein.

Item 1A. RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in our Annual Report for the year ended December 31, 2024, as filed with the SEC on February 25, 2025 which are incorporated by reference herein.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information regarding the repurchase of our common stock for the three months ended June 30, 2025, in thousands, except share and per share data:


Period	Total Number of Shares Purchased	Average Price Paid per Common Share (a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2025 - April 30, 2025	123,690	$	300.79	123,690	$	935,221
May 1, 2025 - May 31, 2025	80,970		281.55	80,970	$	912,423
June 1, 2025 - June 30, 2025	250,142		303.79	250,142	$	836,433
Total	454,802	$	299.01	454,802

(a)	These amounts exclude the 1% excise tax mandated by the Inflation Reduction Act on share repurchases.

Excluded from this disclosure are share repurchased to settle statutory employee tax withholdings related to the vesting of stock awards.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

During the quarter ended June 30, 2025, no director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408 of Regulation S-K), except as follows:

On May 21, 2025, Alec Covington, a director of the Company, adopted a Rule 10b5-1 trading arrangement providing for the sale of up to 3,500 shares of common stock of the Company, subject to certain conditions (including a cooling-off period). The expiration date of Mr. Covington’s Rule 10b5-1 trading arrangement is July 24, 2026.

Item 6. EXHIBITS

The Exhibits listed on the accompanying Index to Exhibits are filed or furnished (as noted on such Index) as part of this Quarterly Report and incorporated herein by reference.

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INDEX TO EXHIBITS


		Incorporated by Reference			Filed
Exhibit No.	Exhibit Title	Form	Exhibit	Filing Date	Herewith
10.16	Amendment No. 5 to Amended and Restated Credit Agreement, dated as of May 16, 2025, among TopBuild Corp., Bank of America, N.A. as administrative agent, and the other guarantors, lenders and agents party thereto	8-K	10.16	5/19/2025

10.17	Form of Restricted Stock Award Agreement for Non-Employee Directors under the 2025 LTIP				X

10.18	Form of Restricted Stock Unit Award Agreement under the 2025 LTIP				X

10.19	Form of Performance Restricted Stock Unit Award Agreement under the 2025 LTIP				X

31.1	Principal Executive Officer Certification required by Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X

31.2	Principal Financial Officer Certification required by Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X

32.1‡	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

32.2‡	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

101.INS	Inline XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document				X

101.SCH	Inline XBRL Taxonomy Extension Schema Document				X

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				X

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				X

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				X

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)				X

	‡Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		TOPBUILD CORP.


		By:	/s/ Madeline Otero
		Name:	Madeline Otero
		Title:	Vice President and Chief Accounting Officer
			(Principal Accounting Officer)

August 5, 2025



	By:	/s/ Robert Kuhns
	Name:	Robert Kuhns
	Title:	Vice President and Chief Financial Officer (Principal Financial Officer)

August 5, 2025