Builders FirstSource Inc. reported a sharp decline in Q1 profit and revenue but continued to gain traction with its digital tools platform, which delivered $153 million in incremental sales despite ongoing weakness in the U.S. housing market.
Total net sales for the quarter fell 6% year over year to $3.66 billion. Meanwhile, net income dropped 45% to $171 million, down from $309 million in Q1 2024.
Amid the broader slowdown, Builders FirstSource leaned into its digital strategy. The company’s BFS digital tools have now processed more than $1.5 billion in orders since their launch in early 2024. That includes $153 million in incremental sales, up $19 million sequentially. Management reaffirmed a full-year goal of $334 million in incremental digital revenue.
CEO Peter Jackson said the company is seeing “steady week-over-week adoption” of its tools, particularly among smaller production builders. He called the platform “core to our long-term value proposition,” describing it as more than just an ecommerce channel, but rather “a system that reshapes how materials are ordered, scheduled, and delivered.”
The tools allow builders to manage orders in real time, adjust product packages, and coordinate deliveries — all increasingly important in a market defined by affordability pressures and tight cycle times. Executives noted a 92% on-time/in-full delivery rate in Q1, which they linked directly to digital adoption.
Builders FirstSource Q1 digital sales
Analysts responded positively to the company’s ecommerce progress, even as near-term financials softened. Goldman Sachs analyst Charles Perron-Piche said the BFS digital platform is “emerging as a differentiator,” with a sticky, scalable system that smaller builders continue to adopt. Barclays’ Matthew Bouley added that Builders FirstSource is “building a digital moat” that supports share retention and margin recovery over time.
At the same time, the company continued to invest heavily in operations and acquisitions. It spent $87 million in capital expenditures and deployed $828 million on the acquisitions of Alpine Lumber and O.C. Cluss. It also repurchased $13 million in shares in Q1 and another $391 million in April. A new $500 million buyback authorization is now in place.
While some analysts raised concerns about leverage, management emphasized confidence in the balance sheet. CFO Pete Beckmann said the company remains committed to its 1–2x net leverage target and is managing capital deployment accordingly. Executives said they expect full-year revenue between $16.05 billion and $17.05 billion, as well as adjusted EBITDA of $1.7 billion to $2.1 billion.
The company is also preparing for potential tariff headwinds, estimating a $175 million to $250 million impact based on current exposure. Jackson acknowledged the uncertainty but noted that most of the imported materials are resold through U.S.-based suppliers. While the forecast doesn’t currently include tariff-related effects, management expects to pass through increased costs over time, aided by the agility of its digital tools.
Builders FirstSource is currently limiting the use of the digital platform to builders completing 50 to 2,000 homes annually, but Jackson said the company plans to expand to larger homebuilders once the tools are fully optimized for scale. He said the response so far has been overwhelmingly positive and that larger builders are “already knocking on the door.”
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