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CARLISLE COMPANIES INC (CSL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $1.45B, flat year-over-year, with diluted EPS $5.87 and record adjusted EPS $6.27; margins compressed as operating margin fell to 23.1% and adjusted EBITDA margin to 26.9% .
  • Results missed Wall Street consensus: revenue $1.45B vs $1.49B* and adjusted EPS $6.27 vs $6.63*; sequentially, margins improved vs Q1 but remain below prior-year levels .
  • Guidance cut: FY25 revenue growth reduced to low-single-digit and adjusted EBITDA margin now expected down 150 bps vs prior outlook of MSD growth with ~50 bps margin expansion; both CCM and CWT guided to low-single-digit growth .
  • Capital allocation remained active: repurchased 0.8M shares for $300M in Q2, $700M YTD; later raised quarterly dividend 10% to $1.10 (49th consecutive annual increase), and priced $1.0B senior notes for general corporate purposes .
  • Narrative pivot: strength in commercial re-roofing (~70% of CCM roofing) offset by persistent softness in new construction and residential; limited traction on price increases and volume deleverage weighed on CWT margins .

What Went Well and What Went Wrong

What Went Well

  • Resilient commercial re-roofing supported top-tier margins at CCM; management reaffirmed re-roofing remains a reliable recurring revenue stream and ~70% of CCM’s commercial roofing business .
  • Record adjusted EPS of $6.27 despite market softness; “We are proud of the Carlisle team’s ability to deliver record adjusted EPS of $6.27” — Chris Koch .
  • Strategic M&A execution and innovation pipeline: Bonded Logic acquisition enhances insulation platform and Henry UltraTouch recognized by Home Depot; expected synergies from MTL, Plasti-Fab, ThermaFoam to exceed $34M annually .

What Went Wrong

  • CWT organic revenue down 10%; adjusted EBITDA margin fell 260 bps to 19.9% due to volume deleverage in residential and new commercial .
  • Limited traction on announced price increases; company expects second-half pricing to be flat at both CCM and CWT .
  • New construction softness and weaker channel load-in drove project delays; July market survey indicated deteriorating contractor/distributor sentiment through H2 2025 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.12 $1.10 $1.45
Diluted EPS ($)$3.56 $3.13 $5.87
Adjusted EPS ($)$4.47 $3.61 $6.27
Operating Margin (%)19.9% 16.8% 23.1%
Adjusted EBITDA Margin (%)25.1% 21.8% 26.9%
MetricQ4 2024 ConsensusQ1 2025 ConsensusQ2 2025 Consensus
Revenue ($USD Billions)$1.16*$1.09*$1.49*
Primary EPS ($)$4.42*$3.42*$6.63*
Actual Revenue ($)$1.12 $1.10 $1.45
Actual Adjusted EPS ($)$4.47 $3.61 $6.27

Segment breakdown (Q2 2025):

SegmentRevenue ($MM)YoY %Organic YoY %Adj. EBITDA ($MM)Adj. EBITDA Margin (%)
CCM$1,095.6 +0.6% -0.6% $346.3 31.6%
CWT$353.9 -2.2% -9.9% $70.6 19.9%

KPIs and cash flow:

KPIQ4 2024Q1 2025Q2 2025
Free Cash Flow from Continuing Ops ($MM)$341.1 $(30.4) $258.0
Operating Cash Flow from Continuing Ops ($MM)$377.7 $(1.4) $286.8
Share Repurchases ($MM)$420 (Q4) $400 (Q1) $300 (Q2)
Cash & Equivalents ($MM)$753.5 $220.2 $68.4
Net Debt / EBITDA (x)——1.4x

Estimate comparison highlights:

  • Q2 2025: Revenue miss ($1.45B vs $1.49B*) and adjusted EPS miss ($6.27 vs $6.63*) amid volume deleverage and limited pricing traction; sequential margin recovery vs Q1 .
  • Q1 2025: Revenue and EPS beats vs consensus driven by stronger March weather and accretive acquisitions .
  • Q4 2024: Adjusted EPS beat; revenue slightly below consensus .

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Total Revenue GrowthFY 2025Mid-single-digit growth Low-single-digit growth Lowered
Adjusted EBITDA MarginFY 2025~+50 bps expansion Down 150 bps Lowered
CCM Revenue GrowthFY 2025Mid-single-digit Low-single-digit Lowered
CWT Revenue GrowthFY 2025High-single-digit Low-single-digit Lowered
Pricing AssumptionsH2 2025Price increases expected to start in Q2 per survey Flat YoY pricing for H2 at CCM and CWT Lowered
Free Cash Flow MarginFY 2025~15%+ (implied from cash generation track record) >15% maintained Maintained
Share RepurchasesFY 2025Target raised to $1B $700M YTD; continuing Maintained trajectory
DividendFY 2025$1.00/qtr in Q2 $1.10/qtr effective Sep 2, 2025 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology initiativesEmphasis on operational excellence; no explicit AI in 4Q release Plan to enhance efficiency via automation and emerging AI technologies ; exploring AI to improve Carlisle Experience (tracking, inspections) Increasing focus
Supply chain/Contractor experienceChannel inventories lower than normal; weather impacts Investment in Carlisle Experience; initiatives to improve trucking visibility and inspection speed Execution emphasis
Tariffs/MacroConcern over tariffs and macro uncertainty into H2 2025 External risks materialized; sentiment worsened; delays and lower distributor load-in Deteriorated vs Q1
New construction vs re-roofRe-roof resilient; new construction softer in late 2024 Re-roof robust; new construction softened further; data center strength vs manufacturing/warehouse weakness Re-roof steady; new construction weaker
PricingExpect LSD price increases starting in Q2 per April survey Limited traction; H2 pricing expected flat YoY at CCM & CWT Weaker than plan
CWT margin actionsInvestments impacting near-term margin Automation + footprint rationalization driving ~$12M annualized; acquisitions synergies ~$14M (total ~$30M opportunities) Self-help ramping
Capital allocation$1.6B buybacks in 2024; MSD growth and margin expansion guide $300M Q2 repurchases; pricing of $1.0B senior notes post-quarter Continued

Management Commentary

  • Strategic posture: “We remain focused on executing our Vision 2030… leveraging synergies… disciplined capital deployment… committed to $40 adjusted EPS and 25% ROIC” — Chris Koch .
  • Market lens: “Underlying strength in our re-roofing markets at CCM… accounting for approximately 70% of CCM’s commercial roofing business” .
  • Outlook rationale: “We now anticipate low-single-digit revenue growth, with an adjusted EBITDA margin decline of 150 basis points… lower volume expectations and limited traction on price increases” .
  • Innovation & M&A: Dual-tank Flexible Fast Adhesive, Blueskin VP Tech, UltraTouch insulation, and Bonded Logic acquisition; synergies to exceed $34M .
  • Cost & efficiency: “Major automation capital projects within our CWT factories… expected to generate $12 million in adjusted EBITDA annually” .

Q&A Highlights

  • Segment margins outlook: CCM adj. EBITDA ~31% in Q3 and ~29% in Q4; CWT ~20% in both Q3 and Q4 as synergies and automation benefits begin to accrue .
  • CWT actions: ~$12M annualized automation savings (Fernley, Kingman) with footprint consolidation; ~$14M acquisition synergies (Plasti-Fab, ThermaFoam) → ~$30M opportunities; portion realized in H2 2025, remainder in 2026 .
  • Order phasing & sentiment: June-to-July steady; increased anxiety delays awards; weather impacted activity by ~1–2 days regionally; commentary on pending awards amid interest rate/tariff uncertainty .
  • Policy/tax catalysts: 100% bonus depreciation aids ROIC on manufacturing and R&D investments; potential manufacturing reshoring seen as positive for demand .
  • Pricing & materials: Pricing rational but traction limited given lower new construction volumes; inputs like MDI showed a small rise H1 then flattening H2; spray foam pricing stabilized .

Estimates Context

  • Q2 2025 missed consensus on both revenue and adjusted EPS due to weaker new construction, limited pricing traction, and CWT volume deleverage; sequential margins improved vs Q1 as seasonal activity ramped .
  • Prior quarters: Q1 2025 beat on revenue and EPS amid better March weather and acquisition contributions; Q4 2024 beat on adjusted EPS but missed revenue .
  • Implication: Street models likely to lower H2 revenue run-rate assumptions and compress FY25 margin forecasts; CCM margins resilient but CWT margin recovery weighted to 2026 via self-help .

Key Takeaways for Investors

  • Expect near-term estimate cuts: Guidance reset to LSD revenue and -150 bps margin for FY25 implies lower H2 earnings power vs prior MSD growth narrative; watch for CWT self-help execution cadence .
  • Reroofing moat intact: CCM re-roofing demand continues to underpin margins and cash generation, buffering macro/new construction volatility .
  • Pricing is stable but not accretive: Second-half pricing flat YoY reduces leverage to price/mix; volume recovery is required for margin expansion .
  • Capital returns remain robust: $700M YTD buybacks and a 10% dividend increase signal confidence in cash generation despite guidance cut; note $1.0B notes issuance adds balance sheet flexibility .
  • Watch leading indicators: Contractor/distributor sentiment and award timing are pivotal for H2; data center vertical strength vs manufacturing/warehouse weakness will shape mix .
  • CWT margin recovery is multi-quarter: Automation and footprint actions plus acquisition synergies should improve margins into 2026; monitor milestones and run-rate realization .
  • Vision 2030 credibility: Company reiterates $40 adjusted EPS and 25% ROIC long-term targets; near-term reset emphasizes execution on innovation, AI/automation, and M&A synergies .

Values marked with an asterisk (*) are retrieved from S&P Global consensus via Capital IQ.