BuildDirect Q1 2025 slides: margin expansion offsets revenue dip, EBITDA climbs 29%

Introduction & Market Context

BuildDirect.com Technologies Inc. (TSXV:BILD) presented its Q1 2025 financial results on May 30, 2025, highlighting improved profitability metrics despite a slight revenue decline. The company continues to execute its strategy of expanding its physical footprint in the North American flooring market, valued at over $90 billion, through its Pro Center concept.

As shown in the following market breakdown, BuildDirect is targeting a massive opportunity where floor covering stores and contractors represent 73% of the market, while big home improvement retailers account for 24%, and the online segment comprises just 3%:

Quarterly Performance Highlights

BuildDirect reported Q1 2025 revenue of $15.1 million, representing a 3.2% year-over-year decline from $15.59 million in Q1 2024. Despite this revenue dip, which the company attributed to adverse weather conditions in Michigan according to the earnings call, BuildDirect achieved significant improvements in profitability metrics.

The company’s adjusted EBITDA increased by 29% year-over-year to $650,000, while gross margin expanded to 41.25% from 39.07% in the same period last year. This financial performance demonstrates the company’s focus on operational efficiency and margin enhancement.

As illustrated in the quarterly financial trend chart below, BuildDirect has maintained relatively stable revenue while steadily improving its adjusted EBITDA:

The detailed income statement comparison reveals the extent of BuildDirect’s margin improvements across several key metrics:

Strategic Initiatives

BuildDirect’s growth strategy centers on its dual "Build and Buy" approach to expanding its Pro Center network across North America. The company currently operates locations in British Columbia (2), California (1), Michigan (6), and Florida (1), with plans for continued expansion.

The Pro Center concept integrates brick-and-mortar locations with e-commerce capabilities, creating a comprehensive ecosystem for professional customers. As illustrated below, each Pro Center serves as a hub for order processing, warehousing, showroom displays, and home delivery services:

A key component of BuildDirect’s expansion strategy involves both establishing new Pro Centers and acquiring existing flooring retailers in strategic locations:

In line with this strategy, BuildDirect recently completed the acquisition of Anchor and Yorkshore Flooring assets for $593,000, approximately 1x EBITDA. These assets generated $5.8 million in revenue and $661,000 in EBITDA in FY2024, representing a potentially accretive acquisition:

Detailed Financial Analysis

BuildDirect’s balance sheet showed significant improvement in Q1 2025, with cash position increasing by 62.67% year-over-year to $3.49 million. Working capital also improved by 9.46% to $2.52 million, providing the company with enhanced financial flexibility for its expansion plans.

The cash flow statement further illustrates BuildDirect’s improved financial position, with a 348% improvement in net cash change compared to the same period last year:

The company has also implemented cost-saving measures expected to yield approximately $900,000 in annualized savings, which should further enhance margin expansion and strengthen its competitive position in the flooring materials sector.

Forward-Looking Statements

Looking ahead to the remainder of 2025, BuildDirect is focused on three key strategic priorities: Pro Center expansion, scalability and profitability improvements, and continued EBITDA growth through operational efficiencies.

The company has also secured a $2 million supply agreement with a North American customer in the sports, entertainment, and recreation sector, potentially providing a boost to future revenues. Additionally, BuildDirect closed a secured CAD$775,000 loan with Lyra Growth Partners to fund loans to senior management, enabling them to increase their ownership stake in the company.

BuildDirect’s stock was trading at $1.25 as of June 12, 2025, up 2.46% for the day. The stock has traded between $0.37 and $1.61 over the past 52 weeks, suggesting investors are cautiously optimistic about the company’s strategic direction despite the mixed Q1 results.

While BuildDirect faces challenges including weather-related disruptions and integration of acquisitions in a highly fragmented market with over 12,000 independent operators, the company’s improved profitability metrics and strengthened cash position provide a foundation for continued execution of its growth strategy in the North American flooring market.

Full presentation:

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