Harmanshu Gupta

Harmanshu Gupta followed up on roofing weakness, asking about specific commercial asset classes or geographies experiencing contract deferrals beyond Florida. He questioned the potential organic growth for roofing if the reroofing business recovers, assuming a delayed new construction cycle. He also asked if roofing remains an M&A growth segment or if they would wait for weakness to pass. Additionally, he inquired about the restoration business backlog, its magnitude compared to last year/quarter, and excluding storm-related activity. Finally, he asked if Florida's organic growth in FirstService Residential was in line with the division's mid-single-digit level, given past budgetary pressures.

Answer

Scott Patterson (CEO) identified Las Vegas as a very soft market across all brands for roofing, noting new construction is down everywhere except data centers. He stated that roofing organic growth will return with market clarity but couldn't provide specific dates. He confirmed continued interest in roofing M&A, focusing on white space and cultural fit. For restoration, the backlog is similar to the prior quarter but slightly off from last year due to strong Canadian named storm work. For FirstService Residential, Scott Patterson (CEO) confirmed Florida is 'in line,' with budgetary pressures somewhat relieved by insurance market stabilization, showing low to mid-single-digit growth in Q3.

Harmanshu Gupta followed up on roofing weakness, asking if specific commercial asset classes or geographies, beyond Florida, were experiencing the most contract deferrals and softness. He then asked about the potential organic growth in roofing, assuming a delayed new construction cycle and a recovery in the reroofing business. He questioned whether roofing remained a target for M&A growth, or if the company would defer activity until the current market weakness subsided. He also asked for an update on the restoration business backlog, comparing its current magnitude and direction to last year and last quarter, and its status excluding storm-related activity. Finally, he inquired about FirstService Residential's organic growth, specifically asking if Florida was performing at a mid-single-digit level or slower, given past budgetary pressures in the region.

Answer

Scott Patterson (CEO) identified Las Vegas as a very soft market impacting all FirstService brands. He noted that new construction is down everywhere except data centers, a vertical not historically served by their roofing platform. He stated that the company will reset and start growing, as branches are strong and leadership is effective, but he could not provide specific dates or timelines due to market uncertainty. He confirmed continued interest in roofing M&A, stating that the thesis hasn't changed. He emphasized focusing on white space areas, cultural fit, and people, and will pursue opportunities if the right fit is found. He indicated the restoration backlog is similar to the prior quarter but slightly down from last year due to strong named storm work in Canada last year. He noted that some Helene and Milton work started entering the backlog at the end of September, describing the current backlog as solid and healthy for the environment. He stated that Florida is 'in line,' with budgetary pressures somewhat relieved due to a stabilized insurance market, though challenges remain with underfunded communities. He confirmed Florida's performance was in the low to mid-single digits in Q3.