The EPS beat is overshadowed by deteriorating organic trends (same-branch sales -7.1%, margins compressing) and the pending QXO acquisition. Traders should focus on QXO deal details (price, financing, regulatory timeline) as the primary catalyst — the standalone earnings story is secondary. Monitor for any QXO-related 8-K filings or merger proxy statements.
Price Chart
Executive Summary
TopBuild reported Q1 2026 GAAP diluted EPS of $3.73, a 23.5% beat vs the $3.64 consensus, on revenue of $1.446B, slightly above the $1.41B consensus. However, organic same-branch sales declined 7.1% (volume -5.5%, price -1.6%), adjusted operating margin compressed from 15.7% to 12.3%, and the stock faces significant uncertainty from the pending QXO acquisition announced April 19.
Key Financial Metrics
Key Facts
- GAAP diluted EPS $3.73 vs consensus $3.64 (beat by 2.5%)
- Revenue $1.446B vs consensus $1.41B (beat by 2.6%)
- Total sales grew 17.2% YoY, entirely from acquisitions (24.3% M&A contribution); organic same-branch sales declined 7.1%
- Same-branch residential sales fell 10.9% YoY; same-branch commercial/industrial sales fell 0.8%
- Adjusted operating margin compressed to 12.3% from 15.7% YoY; adjusted EBITDA margin fell to 16.5% from 19.0%
- Adjusted EBITDA grew only 1.6% YoY despite 17.2% revenue growth, implying near-zero incremental margins (1.8%)
- Net income declined to $104.8M from $123.4M YoY; GAAP operating profit fell to $175.0M from $177.5M
- Company announced definitive agreement to be acquired by QXO on April 19, 2026
- Completed 4 acquisitions YTD adding $83.8M in annual revenue; signed agreement for 5th ($6M)
- Operating cash flow improved to $160.7M from $152.6M YoY; no share repurchases in Q1 2026 vs $215.6M in Q1 2025
Financial Impact
EPS beat of $0.09 (2.5%) and revenue beat of ~$36M (2.6%) are positive, but organic decline and margin compression are negative. The QXO acquisition at an undisclosed price overhangs the stock.
Risk Factors
- Pending QXO acquisition creates uncertainty around standalone valuation and deal terms
- Organic same-branch sales declining 7.1% signals underlying weakness in residential end markets
- Adjusted operating margin compression from 15.7% to 12.3% YoY despite acquisition-driven revenue growth
- Near-zero incremental EBITDA margin (1.8%) suggests acquired businesses are diluting profitability
- Interest expense more than doubled to $36.6M from $16.6M YoY, pressuring net income
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-3287467 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 3, 2026 8w ago | Institutional Cluster | — | awaiting T+1 | — | — |
Jul 1, 2026 13w ago | 25-NSE | $354.53 $354.53 | · 0.00% | ▲ +0.13% | — |
Jun 29, 2026 13w ago | 8-K | $354.53 $354.53 | · 0.00% | ▲ +0.14% | — |
Jun 22, 2026 14w ago | 425 | $413.47 $407.41 | ▼ −1.47% | ▼ −0.01% | — |
Jun 22, 2026 14w ago | 8-K | $413.47 $407.41 | ▼ −1.47% | ▼ −0.01% | — |
Jun 22, 2026 14w ago | 425 | $413.47 $407.41 | ▼ −1.47% | ▼ −0.01% | — |
Jun 11, 2026 16w ago | Institutional Cluster | $409.84 $411.08 | ▲ +0.30% | ▼ −0.24% | — |
Jun 4, 2026 17w ago | 425 | $401.82 $399.03 | ▼ −0.69% | ▼ −0.92% | — |
Jun 4, 2026 17w ago | 8-K | $401.82 $399.03 | ▼ −0.69% | ▼ −0.92% | — |
May 29, 2026 17w ago | DEFM14A | $412.19 $407.07 | ▼ −1.24% | ▼ −1.39% | — |
US Market Status
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