FirstService (NASDAQ:FSV) reported modest second-quarter growth and said it expects a stronger second half, supported by improving restoration activity and continued strength in its fire protection business, even as roofing and housing-related services remain pressured by weak market conditions.
On the company’s July 23, 2026 earnings call, Chief Executive Officer Scott Patterson said FirstService was “generally pleased” with its second-quarter results given what he described as a challenging economic environment. Total revenue increased 2% year over year, with about half of that growth organic. Adjusted EBITDA rose 3%, and adjusted earnings per share increased 2%.
Residential Business Delivers Steady Growth
FirstService Residential generated second-quarter revenue of $617 million, up 4% from a year earlier and up 5% organically. Patterson said reported revenue growth was slightly below organic growth because the company sold its residential pool maintenance operations early in the quarter to focus solely on commercial pool maintenance and management.
Rakusin said FirstService Residential produced EBITDA of $69 million, up 6% year over year, with an 11.2% margin, up 20 basis points from the prior-year quarter. For the first half, the division’s EBITDA margin was 9.9%, up 30 basis points year over year.
Rakusin said the company expects FirstService Residential to continue delivering mid-single-digit top-line growth and modest year-over-year margin improvement through the balance of 2026 as teams continue to find efficiencies across the business.
Brands Division Mixed as Roofing Weighs on Results
FirstService Brands revenue was $832 million in the second quarter, up 1% year over year, while EBITDA also increased 1% to $96 million. The division’s margin was 11.5%, down 10 basis points from a year earlier, but Rakusin said the margin performance was better than in the first quarter and above the company’s expectations heading into the period.
Patterson said Century Fire remained a key source of strength, with revenue up more than 10% year over year, including high-single-digit organic growth. He said Century Fire’s second-quarter results were consistent with its first-quarter performance and in line with expectations. The company also announced acquisitions of Titan Fire Protection in Tampa, Florida, and GSC Fire & Security in Austin, Texas.
Century Fire ended the quarter with an improved backlog sequentially, and Patterson said the company expects similar revenue growth of more than 10% in the third and fourth quarters.
By contrast, FirstService’s roofing segment remained under pressure. Patterson said roofing revenue fell about 6% on a reported basis and 10% organically, below company expectations. He cited a weak and highly competitive market, especially in Las Vegas and Southwest Florida, as well as delays on several large reroofing projects that had been expected to complete during the quarter. Those delayed projects remain in backlog.
During the quarter, FirstService acquired Schefers Roofing in Kansas City, which Patterson said strengthens the company’s presence in the Midwest. Despite near-term weakness, he said the company continues to believe roofing is a large essential-service market with long-term tailwinds.
Restoration Pipeline Improves After Slow First Half
Patterson said FirstService’s two restoration brands, Paul Davis and First Onsite, had revenue that was down slightly year over year. He said the company entered 2026 with a weakened pipeline following mild weather in the fourth quarter of 2025, which weighed on first-half results.
However, Patterson said activity improved toward the end of the second quarter and into July, with the company signing a number of large loss projects across North America. Those projects are expected to convert to revenue over the next 12 to 18 months.
In response to analyst questions, Patterson said recent large-loss wins were tied to regional weather events as well as specific fire and water damage claims involving factories, large warehouses, government buildings, big-box retail and multifamily properties. He said the projects are still being scoped and are not likely to materially benefit the third quarter, though some impact may appear in the fourth quarter and more in 2027.
The company expects restoration revenue to grow about 5% year over year in the second half of 2026. Patterson said the outlook is modest relative to the improvement in activity because revenue timing can be affected by scoping, permitting and insurance processes. Storm and hurricane activity could add to backlog and improve the outlook, he said.
Home Services Still Facing Housing Headwinds
FirstService’s home service brands, including California Closets, CertaPro Painters, Floor Coverings International and Pillar To Post Home Inspectors, posted revenue that was slightly higher than a year earlier and modestly better than expected.
Patterson said these brands remain closely tied to the housing market and consumer sentiment, both of which he said continue to hover around 10-year lows. He said teams are increasing close rates and average job sizes to generate revenue gains but are not receiving support from market improvement.
For the second half, FirstService expects home services revenue to remain slightly up year over year, with Patterson saying the company expects its teams to continue taking market share.
Buybacks, M&A and Outlook
Rakusin said FirstService generated $112 million in operating cash flow before working capital changes during the second quarter, in line with the prior year. After working capital changes, cash flow was $130 million for the quarter and nearly $220 million year to date.
Capital expenditures were a little over $30 million in the quarter and $60 million year to date. Rakusin said the company now expects annual capital expenditures of about $130 million, below its initial $140 million target.
FirstService spent just over $40 million on tuck-under acquisitions during the quarter. The company also repurchased more than 1.8 million shares under its Normal Course Issuer Bid at a total cost of almost $250 million, or an average price of $135.91 per share. Rakusin said the repurchases increased net debt to EBITDA to 1.8 times from 1.5 times at the end of the first quarter, while liquidity remained above $800 million, including cash and undrawn credit capacity.
During the Q&A session, Rakusin said the company can continue pursuing both share repurchases and tuck-under acquisitions, noting that FirstService would be comfortable with leverage of at least about 2.5 times. Patterson said acquisition activity remains disciplined and that fewer quality companies are coming to market, particularly where owners are waiting for business performance to recover.
For the third quarter, Rakusin said FirstService expects revenue and EBITDA growth to be similar to the second quarter, in the low-single-digit range. For the full year, the company expects consolidated revenue growth to be similar to or modestly better than year-to-date growth and annual EBITDA growth in the mid-single-digit range over 2025.
About FirstService (NASDAQ:FSV)
FirstService Corporation, founded in 1989 and headquartered in Toronto, Ontario, is a leading provider of property services in North America. The company operates through two principal segments—FirstService Residential and FirstService Brands—offering a broad range of services to residential, commercial and homeowner association clients.
FirstService Residential delivers community management, financial oversight and consulting services to thousands of residential communities across the United States and Canada.
