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Introduction & Market Context
FirstService (TSX:CIGI) Corporation (NASDAQ:FSV), a leader in essential outsourced property services across the U.S. and Canada, has released its February 2025 investor presentation highlighting strong financial performance for fiscal year 2024. The company, which operates through two main divisions – FirstService Residential and FirstService Brands – reported significant growth across key metrics while maintaining its strategic focus on both organic expansion and targeted acquisitions.
The presentation comes after FirstService reported robust Q3 2024 results in October, where the company posted a 25% increase in consolidated revenues to $1.4 billion and a 43% increase in EBITDA to $160 million. Those results had positioned the company for a strong finish to 2024, which the full-year figures now confirm.
Executive Summary
FirstService achieved $5.2 billion in revenue for 2024, representing a 17% compound annual growth rate (CAGR) over the past five years. The company’s adjusted EBITDA reached $514 million with a 9.8% margin, also growing at a 17% CAGR since 2019. This performance continues the company’s impressive track record of nearly three decades of consistent growth.
As shown in the following chart of FirstService’s long-term revenue trajectory:
The company maintains a dual-listing on both TSX and NASDAQ under the ticker FSV, with shares trading at $175.84 as of the most recent close. FirstService also increased its annual dividend to US$1.10 per share, representing an 11% CAGR since 2020.
Detailed Financial Analysis
FirstService’s business is divided into two main segments: FirstService Residential, which contributed 59% of revenue and 63% of EBITDA in 2024, and FirstService Brands, accounting for 41% of revenue and 37% of EBITDA. Geographically, 88% of revenue comes from the U.S. with the remaining 12% from Canada.
The company overview illustrates this breakdown:
Both divisions have demonstrated strong performance, with FirstService Residential managing over 9,000 communities and maintaining contract retention rates above 95%. This division’s operations are diversified across property types, regions, and services:
FirstService Brands has grown significantly, partly through strategic acquisitions. The division generated $5.4 billion in system-wide sales in 2024, with company-owned operations accounting for 93% of the division’s $3.1 billion in revenue:
The company’s five-year financial performance shows consistent growth across key metrics:
This strong revenue and EBITDA growth has translated to improved shareholder returns, with adjusted EPS growing at an 11% CAGR since 2019 and dividends increasing at the same rate:
FirstService maintains a conservative financial position with net debt to EBITDA of 2.0x as of December 31, 2024, down from 2.1x a year earlier. The company reported total liquidity of $861 million at year-end, providing substantial capacity for future growth investments.
Strategic Initiatives
A key strategic development in 2024 was the acquisition of Roofing Corp of America, which closed in mid-December 2023 for $413 million. This acquisition added approximately $400 million in annual revenues with low double-digit EBITDA margins. Roofing Corp operates 16 branches across 11 states with about 1,000 full-time employees, focusing primarily on commercial roofing (90% of revenue).
The acquisition positions FirstService as a top 5 player in the $45 billion North American roofing market, which is highly fragmented with market leaders commanding only 1-2% share. This aligns with FirstService’s broader strategy of establishing leadership positions in large, fragmented markets for essential property services.
FirstService’s growth strategy continues to balance organic growth through customer retention, new business development, and expansion of ancillary services with strategic acquisitions that extend geographic reach, add complementary service lines, or strengthen existing markets.
Forward-Looking Statements
Looking ahead, FirstService is positioned as a compelling investment opportunity based on its market leadership, attractive financial profile, and growth prospects:
In the Q3 2024 earnings call, management had projected Q4 revenue growth to exceed 20% and anticipated strong EBITDA growth for the full year, which the presentation confirms was achieved. The company noted an active M&A pipeline, particularly in the roofing sector, though high valuations driven by private equity interest present challenges.
While the presentation highlights the company’s strengths and opportunities, the Q3 earnings call had noted some headwinds, particularly budgetary pressures in FirstService Residential’s Florida operations, resulting in lower organic growth projections for upcoming quarters. This regional challenge appears to have been offset by strong performance in other areas, as the full-year results remained robust.
With its diversified portfolio of essential property services, strong cash flow generation, and conservative balance sheet, FirstService appears well-positioned to continue its nearly three-decade track record of consistent growth through both organic initiatives and strategic acquisitions.
Full presentation:
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