Watsco Inc

Latest Results (11.11.2025):

Watsco Inc's Q2 2025 financial results reflect a period of transition and resilience as the company navigates the regulatory shift to next-generation A2L HVAC products. In this quarter ended June 30, 2025, Watsco reported a 4% decrease in revenues to $2.06 billion while achieving record gross profit margins—with gross profit up 4% to $603 million and an expansion of 220 basis-points to 29.3%. The operating income grew modestly by 1% to $272 million with earnings per share increasing to $4.52, underscoring a strong financial foundation amid evolving market conditions and strategic technology investments.

Financial Performance

The results for Q2 2025 show that despite a 4% revenue decline, the company delivered solid profitability improvements including record gross profit and expanded operating margins. Operating income reached $272 million, with an EPS of $4.52, reflecting the effective cost management and premium pricing initiatives amid the A2L product transition.

Sales Trends & Market Dynamics

The quarter experienced a 3% decline in domestic sales and a sharper 12% drop in non-U.S. markets. Notably, the mix of new A2L equipment sold domestically surged to 60% in Q2 from 25% in Q1, while HVAC equipment sales declined by 6% and commercial refrigeration products grew by 3%, mirroring the complex market environment impacted by weather conditions and lower homebuilding activity.

Strategic Investments & Innovation

Watsco Inc’s strong balance sheet—with $293 million in cash, no debt, and $3 billion in equity—supports ongoing investments in growth and technology. Enhanced digital platforms, including HVAC Pro+ mobile apps and a pricing optimization tool, as well as the deployment of AI for internal processes and customer engagement, underpin its strategy to drive operational efficiency and long-term market share gains during this product transition phase.