• Revenue Growth: 20% growth in 2024, with Q4 revenues up 27%.
• EBITDA Growth: 24% growth in 2024, with Q4 EBITDA up 33%.
• Consolidated Margin: Increased by 20 basis points for the year, with a Q4 margin of 10.1% (up 50 basis points).
• Adjusted EPS: $5.00 for 2024, up 7% year-over-year; Q4 adjusted EPS was $1.34, up 21%.
• FirstService Residential Revenue: Q4 revenues up 5%, with full-year revenues at $2.1 billion, up 7%.
• FirstService Brands Revenue: Q4 revenues up 45%, with full-year revenues exceeding $3 billion, up 32%.
• Restoration Segment Revenue: Q4 revenues up 40% year-over-year, with $60 million generated from named storms.
• Roofing Corp of America Revenue: Significant Q1 revenue increase expected, over 50% due to acquisitions.
• Cash Flow from Operations: $285 million for 2024, up modestly from 2023.
• Capital Expenditures: $115 million in 2024, with a projected $125 million for 2025.
• Dividend Increase: 10% increase to $1.10 per share annually.
• Net Debt to Adjusted EBITDA: 2 times at year-end 2024.

• Warning! GuruFocus has detected 6 Warning Signs with FSV.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• FirstService Corp (NASDAQ:FSV) achieved a 20% growth in revenues and a 24% growth in EBITDA for 2024, doubling their long-term growth goals.
• The acquisition of Roofing Corp of America significantly contributed to the company's strong financial performance.
• The company's consolidated margin improved by 20 basis points despite a challenging economic environment.
• FirstService Brands division saw a 45% increase in revenues, driven by strong performance in the restoration segment.
• The company announced a 10% dividend increase, reflecting its robust financial performance and commitment to returning value to shareholders.

Negative Points

• FirstService Residential faced budgetary pressures due to rising costs, including insurance premiums, impacting management contracts.
• Organic growth in the residential division is expected to be in the low single digits for the first half of 2025.
• The restoration segment's backlog conversion is slow, making it difficult to forecast near-term revenue accurately.
• Corporate costs increased significantly due to non-cash foreign exchange movements, impacting adjusted earnings per share.
• Higher interest costs due to increased debt levels and a higher rate environment tempered annual EPS growth.

Q & A Highlights

Q: Can you provide visibility on when the budgetary pressures in the FirstService Residential business might ease? A: D. Scott Patterson, CEO: We expect the pressures to normalize over the next few quarters. Organic growth in Q4 and Q1 reflects adjustments made over the past year. We anticipate a pickup later in the year, with full-year organic growth matching 2024's mid-single-digit rate.

Q: How does the timeline for remediation and construction work evolve after hurricanes like Helene and Milton? A: D. Scott Patterson, CEO: The conversion of backlog from these hurricanes is slow due to adjudication and permitting delays. We expect the backlog to convert over the next year, but it reduces our visibility from quarter to quarter.

Q: What is the expected organic growth for the brands division, considering the impact of storm revenues? A: Jeremy Rakusin, CFO: We anticipate mid-single-digit organic growth for the brands division in 2025, with stronger growth in the first half due to roofing acquisitions, and a more moderate pace in the second half.

Q: How much of the 2025 revenue growth is expected to be organic versus from tuck-under acquisitions? A: Jeremy Rakusin, CFO: We expect mid-single-digit organic growth, around 4% to 5%, with the remainder coming from tuck-under acquisitions, primarily impacting the first half of the year.

Q: How are insurance dynamics affecting growth plans for the residential property management and restoration businesses? A: D. Scott Patterson, CEO: Rising insurance costs are leading to more uninsured properties and self-insured homes. This impacts Paul Davis more than First Onsite in restoration. We are targeting self-insured homeowners in high-risk areas to drive awareness and business.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.