5 Revealing Analyst Questions From Installed Building Products’s Q1 Earnings Call

Installed Building Products’ first quarter results drew a negative market response as profit margins and non-GAAP earnings per share fell short of Wall Street expectations, despite revenue coming in ahead of consensus. Management attributed the softer results to lower installation volumes in core residential markets, driven by challenging housing affordability and a slower start to the spring selling season. CEO Jeffrey Edwards cited weather disruptions and one fewer selling day as further obstacles, particularly in new single-family installation work. On the profit side, higher vehicle insurance, depreciation, and administrative costs weighed on margins, and CFO Michael Miller noted that fixed and lagging variable costs became more pronounced as volumes declined.

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Installed Building Products (IBP) Q1 CY2025 Highlights:

• Revenue: $684.8 million vs analyst estimates of $674.4 million (1.2% year-on-year decline, 1.5% beat)

• Adjusted EPS: $2.08 vs analyst expectations of $2.20 (5.5% miss)

• Adjusted EBITDA: $102.4 million vs analyst estimates of $107.6 million (15% margin, 4.9% miss)

• Operating Margin: 10.2%, down from 12.7% in the same quarter last year

• Organic Revenue fell 4.2% year on year (2.9% in the same quarter last year)

• Market Capitalization: $4.9 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Installed Building Products’s Q1 Earnings Call

• Stephen Kim (Evercore ISI) asked about labor management in a weak demand environment. CFO Michael Miller explained that install labor adjusts with job volumes, while further G&A reductions are planned for the rest of the year.

• Michael Rehaut (JPMorgan) inquired about trends across builder types and regions. Miller noted regional/local builders outperformed public builders, and strength varied geographically, with Texas and the West Coast remaining solid.

• Susan Maklari (Goldman Sachs) questioned gross margin drivers and future outlook. Miller cited higher fleet expenses and a segment mix shift as margin pressures, with expectations for continued headwinds through 2025.

• Phil Ng (Jefferies) asked about the resilience of price/mix and SG&A reduction opportunities. Miller indicated that pricing remains stable due to carryover increases, and at least $15 million in cost savings are targeted in G&A, with impacts expected later in the year.

• Adam Baumgarten (Zelman & Associates) explored material pricing and branch consolidation. Management said material prices are stable unless volumes fall sharply, and ongoing efforts to consolidate branches should yield incremental cost savings.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely watch (1) signs of stabilization or improvement in residential installation volumes, (2) the pace and financial impact of cost reduction initiatives across general and administrative functions, and (3) continued momentum in heavy commercial project wins, especially data center construction. Acquisition activity and successful integration, as well as any shifts in housing affordability trends, will also serve as important indicators of Installed Building Products’ execution against its strategic priorities.

Installed Building Products currently trades at $178.56, up from $163.94 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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