Revenue growth has faced cyclical headwinds, declining 4.98% year-over-year in the most recent period, while gross margins remain resilient at 27.9%.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 7.24B | 7.24B | 7.62B | 7.28B | 7.27B | 6.28B | 5.05B | 4.77B | 4.55B | 4.34B | 4.22B | 4.11B | 3.94B | 3.74B | 3.43B | 2.98B | 2.84B | 2B | 1.7B | 1.76B | 1.8B | 1.68B | 1.32B | 1.23B | 1.18B | 1.24B | 1.31B | 1.25B | 1.01B | 635.2M | 425.4M |
| Revenue Growth % | -4.52% | -4.98% | 4.59% | 0.13% | 15.83% | 24.24% | 5.97% | 4.92% | 4.71% | 2.87% | 2.61% | 4.28% | 5.38% | 9.08% | 15.24% | 4.68% | 42.1% | 17.74% | -3.29% | -2.37% | 7.01% | 27.96% | 6.66% | 4.38% | -4.64% | -5.2% | 4.84% | 23.54% | 58.82% | 49.32% | 28.52% |
| Cost of Goods Sold | 5.19B | 5.21B | 5.57B | 5.29B | 5.24B | 4.61B | 3.83B | 3.61B | 3.43B | 3.28B | 3.19B | 3.11B | 2.99B | 2.84B | 2.62B | 2.25B | 2.17B | 1.52B | 1.26B | 1.31B | 1.31B | 1.24B | 978.09M | 927.83M | 893.61M | 939.61M | 999.12M | 943.2M | 811.3M | 521.8M | 283.4M |
| COGS % of Revenue | - | 71.95% | 73.16% | 72.65% | 72.09% | 73.45% | 75.81% | 75.75% | 75.36% | 75.46% | 75.49% | 75.51% | 75.75% | 75.98% | 76.27% | 75.54% | 76.33% | 75.98% | 74% | 74.57% | 72.97% | 73.68% | 74.38% | 75.26% | 75.66% | 75.86% | 76.46% | 75.68% | 80.42% | 82.15% | 66.62% |
| Gross Profit | 2.05B | 2.03B | 2.04B | 1.99B | 2.03B | 1.67B | 1.22B | 1.16B | 1.12B | 1.07B | 1.03B | 1.01B | 956.4M | 899.25M | 814.39M | 728.29M | 673.24M | 480.83M | 441.99M | 446.99M | 457.27M | 418.48M | 336.94M | 305.08M | 287.52M | 299.04M | 311.05M | 303.07M | 251M | 158.1M | 82M |
| Gross Margin % | 28.37% | 28.05% | 26.84% | 27.35% | 27.91% | 26.55% | 24.19% | 24.25% | 24.64% | 24.54% | 24.51% | 24.49% | 24.25% | 24.02% | 23.73% | 24.46% | 23.67% | 24.02% | 26% | 25.43% | 25.39% | 24.87% | 25.62% | 24.75% | 24.34% | 24.14% | 23.81% | 24.32% | 24.88% | 24.89% | 19.28% |
| Gross Profit Growth % | - | -0.7% | 2.64% | -1.88% | 21.75% | 36.37% | 5.69% | 3.28% | 5.12% | 3% | 2.7% | 5.33% | 6.36% | 10.42% | 11.82% | 8.18% | 40.02% | 8.79% | -1.12% | -2.25% | 9.27% | 24.2% | 10.44% | 6.11% | -3.85% | -3.86% | 2.63% | 20.75% | 58.76% | 92.8% | 35.31% |
| Operating Expenses | 1.34B | 1.34B | 1.26B | 1.2B | 1.2B | 1.04B | 821.79M | 790.07M | 748.17M | 711.78M | 688.95M | 670.61M | 650.65M | 628.04M | 589.49M | 529.24M | 507.67M | 399.77M | 343.39M | 335.83M | 321.88M | 301.2M | 254.88M | 243.89M | 236.6M | 250.72M | 256.75M | 243.6M | 196.9M | 123.3M | 60.9M |
| OpEx % of Revenue | - | 18.48% | 16.58% | 16.44% | 16.48% | 16.54% | 16.26% | 16.56% | 16.46% | 16.39% | 16.32% | 16.3% | 16.5% | 16.78% | 17.18% | 17.77% | 17.85% | 19.97% | 20.2% | 19.1% | 17.87% | 17.9% | 19.38% | 19.78% | 20.03% | 20.24% | 19.65% | 19.55% | 19.52% | 19.41% | 14.32% |
| Selling, General & Admin | 1.34B | 1.34B | 1.26B | 1.22B | 1.22B | 1.06B | 833.05M | 800.33M | 757.45M | 715.67M | 688.95M | 670.61M | 650.65M | 628.04M | 589.49M | 529.24M | 507.67M | 399.77M | 343.39M | 335.83M | 321.88M | 301.2M | 254.88M | 243.89M | 236.89M | 247.85M | 256.75M | 232.4M | 187.9M | 118M | 58.4M |
| SG&A % of Revenue | - | 18.48% | 16.48% | 16.8% | 16.79% | 16.85% | 16.48% | 16.78% | 16.66% | 16.48% | 16.32% | 16.3% | 16.5% | 16.78% | 17.18% | 17.77% | 17.85% | 19.97% | 20.2% | 19.1% | 17.87% | 17.9% | 19.38% | 19.78% | 20.06% | 20.01% | 19.65% | 18.65% | 18.63% | 18.58% | 13.73% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | -1000K | 0 | 7.09M | -26.18M | -22.67M | -19.3M | -11.26M | -10.26M | -9.28M | -3.89M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -293K | 2.87M | 0 | 11.2M | 9M | 5.3M | 2.5M |
| Operating Income | 712.61M | 692.58M | 781.77M | 794.81M | 831.58M | 628.53M | 401.03M | 366.88M | 372.08M | 353.87M | 345.63M | 336.75M | 305.75M | 271.21M | 224.91M | 199.05M | 165.57M | 81.06M | 98.61M | 111.15M | 135.39M | 117.28M | 82.05M | 61.19M | 50.92M | 48.32M | 54.3M | 59.47M | 54.1M | 34.8M | 21.1M |
| Operating Margin % | 9.84% | 9.57% | 10.26% | 10.91% | 11.43% | 10.01% | 7.93% | 7.69% | 8.18% | 8.15% | 8.19% | 8.19% | 7.75% | 7.25% | 6.55% | 6.68% | 5.82% | 4.05% | 5.8% | 6.32% | 7.52% | 6.97% | 6.24% | 4.96% | 4.31% | 3.9% | 4.16% | 4.77% | 5.36% | 5.48% | 4.96% |
| Operating Income Growth % | - | -11.41% | -1.64% | -4.42% | 32.31% | 56.73% | 9.31% | -1.4% | 5.15% | 2.38% | 2.64% | 10.14% | 12.73% | 20.59% | 12.99% | 20.22% | 104.26% | -17.8% | -11.29% | -17.9% | 15.44% | 42.94% | 34.1% | 20.16% | 5.38% | -11% | -8.7% | 9.93% | 55.46% | 64.93% | 37.01% |
| EBITDA | 756.6M | 736.33M | 822.6M | 829.9M | 863.26M | 656.65M | 426.94M | 391.4M | 394.18M | 375.91M | 365.7M | 355.87M | 323.67M | 288.92M | 240.82M | 210.78M | 176.34M | 89.59M | 105.68M | 117.57M | 141.18M | 123.35M | 88.82M | 68.61M | 59.03M | 60.41M | 66.56M | 70.67M | 63.1M | 40.1M | 23.6M |
| EBITDA Margin % | 10.45% | 10.17% | 10.8% | 11.39% | 11.87% | 10.46% | 8.45% | 8.2% | 8.67% | 8.66% | 8.66% | 8.65% | 8.21% | 7.72% | 7.02% | 7.08% | 6.2% | 4.48% | 6.22% | 6.69% | 7.84% | 7.33% | 6.75% | 5.56% | 5% | 4.88% | 5.09% | 5.67% | 6.25% | 6.31% | 5.55% |
| EBITDA Growth % | -6.49% | -10.49% | -0.88% | -3.86% | 31.46% | 53.8% | 9.08% | -0.71% | 4.86% | 2.79% | 2.76% | 9.95% | 12.03% | 19.97% | 14.25% | 19.53% | 96.83% | -15.22% | -10.12% | -16.72% | 14.45% | 38.88% | 29.46% | 16.21% | -2.27% | -9.24% | -5.82% | 12% | 57.36% | 69.92% | 38.01% |
| D&A (Non-Cash Add-back) | 43.99M | 43.75M | 40.82M | 35.09M | 31.68M | 28.13M | 25.91M | 24.51M | 22.09M | 22.03M | 20.07M | 19.12M | 17.93M | 17.71M | 15.91M | 11.72M | 10.77M | 8.53M | 7.07M | 6.42M | 5.79M | 6.07M | 6.77M | 7.42M | 8.11M | 12.08M | 12.26M | 11.2M | 9M | 5.3M | 2.5M |
| EBIT | 734.38M | 737.68M | 751.27M | 768.63M | 808.91M | 628.53M | 401.03M | 366.88M | 372.08M | 353.87M | 345.63M | 336.75M | 305.75M | 271.21M | 224.91M | 199.05M | 165.57M | 81.06M | 98.61M | 111.15M | 135.39M | 117.28M | 82.05M | 61.19M | 50.88M | 51.19M | 54.3M | 59.47M | 54.1M | 34.8M | 21.1M |
| Net Interest Income | 18.37M | 17.33M | 20.87M | -4.92M | -2.17M | -996K | -1.24M | -4.03M | -2.74M | -6.36M | -3.71M | -5.55M | -5.21M | -5.83M | -4.67M | -4.46M | -3.49M | -2.73M | -2.02M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 18.37M | 17.33M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | -20.87M | 4.92M | 2.17M | 996K | 1.24M | 4.03M | 2.74M | 6.36M | 3.71M | 5.55M | 5.21M | 5.83M | 4.67M | 51.75M | 3.49M | 2.73M | 2.02M | 5.08M | 3.82M | 3.34M | 4.41M | 5.51M | 6.85M | 15.69M | 34.51M | 12.4M | 11.4M | 1.8M | 2.5M |
| Other Income/Expense | 24.11M | 45.09M | 20.87M | -4.92M | -2.17M | -996K | -1.24M | -4.03M | -2.74M | -6.36M | -3.71M | -5.55M | -5.21M | -5.83M | -4.67M | -4.46M | -3.49M | -2.73M | -2.02M | -3.17M | -3.82M | -3.34M | -4.41M | -5.51M | -7.19M | -9.96M | -23.86M | -12.67M | -11.3M | -3.3M | -3.2M |
| Pretax Income | 736.71M | 737.68M | 802.64M | 789.89M | 829.41M | 627.53M | 399.8M | 362.85M | 369.34M | 347.51M | 341.92M | 331.2M | 300.54M | 265.38M | 220.24M | 194.59M | 162.08M | 78.33M | 96.59M | 107.98M | 131.78M | 113.12M | 77.64M | 55.68M | 43.73M | 38.37M | 30.43M | 46.8M | 40.8M | 29.8M | 21.1M |
| Pretax Margin % | 10.17% | 10.19% | 10.54% | 10.84% | 11.4% | 9.99% | 7.91% | 7.61% | 8.12% | 8% | 8.1% | 8.05% | 7.62% | 7.09% | 6.42% | 6.53% | 5.7% | 3.91% | 5.68% | 6.14% | 7.32% | 6.72% | 5.9% | 4.52% | 3.7% | 3.1% | 2.33% | 3.76% | 4.04% | 4.69% | 4.96% |
| Income Tax | 150.72M | 150.09M | 166.9M | 155.75M | 125.72M | 128.8M | 76.62M | 67.08M | 72.81M | 90.22M | 105.94M | 104.68M | 91.84M | 77.66M | 62.64M | 56.85M | 50.36M | 26.76M | 36.22M | 40.49M | 49.42M | 43.1M | 29.53M | 20.79M | 15.2M | 13.93M | 11.32M | 17.3M | 15.1M | 11.5M | 8.1M |
| Effective Tax Rate % | 20.46% | 20.35% | 20.79% | 19.72% | 15.16% | 20.52% | 19.17% | 18.49% | 19.71% | 25.96% | 30.98% | 31.61% | 30.56% | 29.26% | 28.44% | 29.21% | 31.07% | 34.16% | 37.5% | 37.5% | 37.5% | 38.1% | 38.04% | 37.33% | 34.75% | 36.3% | 37.2% | 36.97% | 37.01% | 38.59% | 38.39% |
| Net Income | 496.01M | 496.99M | 536.29M | 536.34M | 601.17M | 418.94M | 269.58M | 245.95M | 242.93M | 208.22M | 182.81M | 172.93M | 151.39M | 127.72M | 103.33M | 90.45M | 80.76M | 43.31M | 60.37M | 65.58M | 82.36M | 70.02M | 48.1M | 34.9M | 28.54M | 24.44M | 19.11M | 29.5M | 25.2M | 18.4M | 13M |
| Net Margin % | 6.85% | 6.87% | 7.04% | 7.36% | 8.26% | 6.67% | 5.33% | 5.16% | 5.34% | 4.8% | 4.33% | 4.2% | 3.84% | 3.41% | 3.01% | 3.04% | 2.84% | 2.16% | 3.55% | 3.73% | 4.57% | 4.16% | 3.66% | 2.83% | 2.42% | 1.97% | 1.46% | 2.37% | 2.5% | 2.9% | 3.06% |
| Net Income Growth % | -6.3% | -7.33% | -0.01% | -10.78% | 43.5% | 55.41% | 9.61% | 1.24% | 16.67% | 13.9% | 5.71% | 14.23% | 18.53% | 23.6% | 14.24% | 12% | 86.45% | -28.25% | -7.94% | -20.38% | 17.63% | 45.55% | 37.86% | 22.28% | 16.75% | 27.87% | -35.21% | 17.06% | 36.96% | 41.54% | 80.56% |
| Net Income (Continuing) | 585.99M | 587.59M | 635.74M | 634.14M | 703.7M | 498.74M | 323.17M | 295.77M | 296.53M | 257.29M | 235.98M | 226.52M | 208.7M | 187.72M | 157.6M | 137.74M | 111.72M | 51.57M | 60.37M | 67.49M | 82.36M | 70.53M | 48.1M | 34.9M | 28.54M | 24.44M | 19.11M | 29.5M | 27M | 19.4M | 11M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 452.81M | 440.69M | 407.25M | 386.35M | 359.04M | 332.47M | 293.08M | 279.34M | 253.86M | 253.02M | 245.92M | 246.41M | 248.08M | 287M | 273.83M | 198.92M | 164.44M | 156.78M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 13.07 | 12.25 | 13.30 | 13.67 | 15.41 | 10.78 | 7.01 | 6.50 | 6.48 | 5.12 | 4.73 | 4.51 | 4.00 | 3.42 | 2.48 | 2.74 | 2.49 | 1.40 | 2.18 | 2.36 | 2.96 | 2.52 | 1.79 | 1.34 | 1.07 | 0.90 | 0.69 | 0.99 | 0.89 | 0.68 | 0.60 |
| EPS Growth % | -7.52% | -7.89% | -2.71% | -11.29% | 42.95% | 53.78% | 7.85% | 0.31% | 26.56% | 8.25% | 4.88% | 12.75% | 16.96% | 37.9% | -9.49% | 10.04% | 77.86% | -35.78% | -7.63% | -20.27% | 17.46% | 40.78% | 33.58% | 25.23% | 18.89% | 30.43% | -30.3% | 11.24% | 30.88% | 13.33% | 30.43% |
| EPS (Basic) | - | 12.25 | 13.34 | 13.67 | 15.46 | 10.83 | 7.03 | 6.51 | 6.48 | 5.12 | 4.73 | 4.51 | 4.00 | 3.42 | 2.48 | 2.74 | 2.49 | 1.40 | 2.28 | 2.49 | 3.15 | 2.69 | 1.89 | 1.39 | 1.12 | 0.94 | 0.72 | 1.03 | 0.93 | 0.73 | 0.67 |
| Diluted Shares Outstanding | 37.96M | 37.9M | 37.51M | 36.53M | 35.68M | 35.42M | 35.15M | 34.68M | 37.46M | 37.23M | 35.53M | 35.31M | 35.01M | 34.73M | 34.52M | 33.01M | 32.45M | 28.52M | 27.74M | 27.82M | 27.83M | 27.77M | 26.93M | 26.04M | 26.67M | 27.25M | 27.79M | 29.8M | 28.31M | 26.91M | 21.33M |
| Basic Shares Outstanding | 37.96M | 37.9M | 37.51M | 36.53M | 35.56M | 35.24M | 35.07M | 34.64M | 37.46M | 37.23M | 35.53M | 35.31M | 35.01M | 34.73M | 34.52M | 33.01M | 32.45M | 28.52M | 26.45M | 26.3M | 26.15M | 26.05M | 25.51M | 25.09M | 25.56M | 25.95M | 26.55M | 28.64M | 27.1M | 25.07M | 19.1M |
| Dividend Payout Ratio | - | 95.33% | 78.97% | 71.34% | 55.3% | 70.3% | 98.57% | 98.15% | 86.12% | 78.83% | 69.8% | 56.98% | 46.15% | 31.19% | 247.95% | 81.01% | 81.76% | 131.79% | 81.75% | 56.03% | 32.02% | 24.25% | 21% | 14.91% | 10.57% | 10.79% | 14.32% | 9.83% | 10.32% | 13.04% | 14.62% |
Regulatory Refrigerant Transition Complexity
According to recent financial disclosures, Watsco's revenue growth has decelerated into negative territory, with the company reporting a 4.98% year-over-year decline in the most recent period, signaling a potential normalization of demand following the post-pandemic surge in HVAC equipment replacement and installation activity.
The recent revenue contraction suggests that the non-discretionary replacement cycle may be experiencing a temporary lull as contractors manage inventory levels. Investors should monitor whether this trend reflects a broader softening in residential construction or merely a short-term destocking phase following aggressive procurement in prior quarters.
As reported in quarterly filings, Watsco has maintained gross margins near 28%, demonstrating a consistent ability to pass through manufacturer price increases despite the recent revenue volatility and the ongoing industry-wide transition to new, higher-efficiency refrigerant standards mandated by federal regulatory bodies.
The stability of gross margins suggests that Watsco retains significant pricing power within its fragmented contractor base, effectively insulating the firm from input cost volatility. However, the slight compression in operating margins during lower-volume quarters indicates that fixed costs remain a sensitivity factor that warrants further investigation.
Based on the provided income statement data, Watsco's operating income exhibits high sensitivity to seasonal revenue peaks, with operating margins fluctuating from 6.1% in the fourth quarter to 13.2% in the second quarter, reflecting the inherent seasonality of the Sunbelt cooling market.
The company's ability to scale operating income during peak periods suggests a lean corporate structure, yet the rapid margin contraction during off-peak quarters implies that overhead costs are not fully variable. This operating leverage profile suggests that profitability is highly dependent on maintaining volume during the critical summer months.
Financial data indicates that the transition to A2L refrigerants poses a material risk, as the company must navigate the potential for inventory write-downs of older, non-compliant equipment while managing the complex logistics of introducing new, higher-cost product lines into its distribution network.
Short-term margin pressure may arise if the company is forced to discount legacy inventory to clear warehouse space for new regulatory-compliant units. Analysts should monitor whether the shift to these new standards results in a permanent increase in working capital requirements or potential inventory impairment charges.
Quick answers to the most common questions about buying WSO stock.
For fiscal year 2025, Watsco, Inc. (WSO) reported total revenue of $7.24B. This represents a 1601.8% increase compared to $425.4M in 1996.
Watsco, Inc. (WSO) is profitable, generating $497.0M in net income for the fiscal year ending 2025 with a net profit margin of 6.9%.
Watsco, Inc. (WSO) reported an operating income of $692.6M, resulting in an operating profit margin of 9.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Watsco, Inc. (WSO) generated $2.03B in gross profit for the year, representing a gross profit margin of 28.0%. This demonstrates the company's core pricing power and production efficiency.