FirstService beats Q2 estimates as earnings surge on strong margin expansion

TORONTO - On Thursday, FirstService (TSX:CIGI) Corporation (NASDAQ:FSV) reported second quarter earnings that significantly exceeded analyst expectations, with adjusted EPS of $1.71 beating estimates by $0.26 and revenue of $1.42 billion surpassing the consensus of $1.39 billion.

The property services company delivered impressive profitability growth, with adjusted EBITDA climbing 19% to $157.1 million while revenue increased 9% YoY. This substantial margin expansion stemmed from operational improvements across both business segments.

"We are pleased to report strong financial results which largely mirrored the year-over-year growth profile we saw in the first quarter," said Scott Patterson, Chief Executive Officer of FirstService. "Despite continued macroeconomic uncertainty, the resilient top-line performance and strong profitability across our operations during the first half of the year put us well on track to deliver on our goals for 2025."

FirstService Residential, which manages residential communities, grew revenues by 6% to $593 million with 3% organic growth. The division improved its adjusted EBITDA by 11% to $65.5 million, with margin expansion reflecting efficiency improvements in their property management service model.

FirstService Brands performed even better, increasing revenues by 11% to $822.7 million, with 1% organic growth supplemented by recent acquisitions. This division saw adjusted EBITDA jump 23% to $95.2 million, with margin gains attributed to operational process improvements in restoration and home services.

The company’s six-month performance showed consistent strength, with year-to-date revenue up 9% to $2.67 billion, adjusted EBITDA increasing 21% to $260.4 million, and adjusted EPS growing 30% to $2.63 compared to the prior year period.

GAAP diluted earnings per share for the quarter was $1.01, up from $0.78 in the same quarter last year, while operating earnings rose to $97.3 million from $83.9 million.

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