FirstService Reports Fourth Quarter and Full Year Results

Rhea-AI Summary

FirstService (FSV) reported strong financial results for Q4 and full year 2024. Q4 revenues increased 27% to $1.37 billion, including 10% organic growth. Q4 Adjusted EBITDA rose 33% to $137.9 million, while Adjusted EPS grew 21% to $1.34.

For full year 2024, consolidated revenues reached $5.22 billion, up 20% from 2023. Adjusted EBITDA increased 24% to $513.7 million, and Adjusted EPS grew 7% to $5.00. The FirstService Residential segment generated revenues of $521.3 million in Q4, up 5%, while FirstService Brands recorded revenues of $844.1 million, up 45%.

The company's performance was driven by contract wins in high-rise markets, increased weather events and large-loss claims activity in restoration operations, and contribution from the Roofing Corp of America acquisition.

Positive

• Q4 revenue growth of 27% to $1.37 billion with 10% organic growth
• Q4 Adjusted EBITDA increased 33% to $137.9 million
• Full year revenue up 20% to $5.22 billion
• FirstService Brands Q4 revenue jumped 45% to $844.1 million
• Improved operating margins in FirstService Brands segment

Negative

• Corporate costs increased from $1.2M to $8.9M in Q4
• Ongoing community budgetary pressures affecting Residential segment growth

Insights

Financial Analyst

FirstService's Q4 and full-year 2024 results demonstrate exceptional execution across both business segments, with particularly notable performance in the FirstService Brands division. The 45% revenue growth in FirstService Brands, driven by weather-related events and the strategic Roofing Corp of America acquisition, showcases the company's successful expansion strategy and ability to capitalize on market opportunities.

The residential segment's more modest but steady 5% growth reflects market resilience, with strategic wins in key metropolitan markets like Texas, Toronto and Chicago offsetting community budgetary pressures. This balanced performance between segments highlights the company's robust business model.

Particularly impressive is the margin expansion story. The FirstService Brands segment demonstrated significant operational leverage, driven by restoration operations efficiency and cost optimization in home services. The achievement of 11.9% Adjusted EBITDA margin in this segment (calculated from $100.7 million EBITDA on $844.1 million revenue) represents substantial improvement over the previous year.

The company's organic growth of 10% in Q4, combined with strategic acquisitions, positions FirstService favorably for 2025. The increased corporate costs, while notable, are primarily attributed to non-cash items rather than operational inefficiencies, suggesting continued strong underlying business performance.

Strong Revenue Growth Drives Profitability

Operating highlights:

		Three months ended						Year ended
		December 31						December 31
		2024			2023			2024			2023
Revenues (millions)		$	1,365.3		$	1,079.3		$	5,216.9		$	4,334.5
Adjusted EBITDA (millions) (note 1)			137.9			103.3			513.7			415.7
Adjusted EPS (note 2)			1.34			1.11			5.00			4.66
GAAP Operating Earnings			89.6			48.1			337.5			244.9
GAAP EPS			0.71			0.14			2.97			2.24

TORONTO, Feb. 05, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today announced strong fourth quarter and full year results for the year ended December 31, 2024. All amounts are in US dollars.

Consolidated revenues for the fourth quarter were $1.37 billion, a 27% increase relative to the same quarter in the prior year, including 10% organic growth. Adjusted EBITDA (note 1) was $137.9 million, up 33%, and Adjusted EPS (note 2) was $1.34, a 21% increase over the prior year quarter. Operating Earnings for the quarter were $89.6 million, relative to $48.1 million in the prior year period. Diluted EPS was $0.71 per share in the quarter, compared to $0.14 for the same quarter a year ago.

For the year ended December 31, 2024, consolidated revenues were $5.22 billion, a 20% increase relative to the prior year. Adjusted EBITDA was $513.7 million, up 24%, and Adjusted EPS was $5.00, an increase of 7% versus the prior year. Operating Earnings were $337.5 million, versus $244.9 million in the prior year period. Diluted earnings per share was $2.97, compared to $2.24 in the prior year.

“We are very pleased with how we closed out the year,” said Scott Patterson, Chief Executive Officer of FirstService. “Our teams were focused on driving healthy profitable growth which is reflected in the strong top-line and improved margins. This momentum and continued operational execution reinforces our expectations for a strong 2025,” he concluded.

About FirstService Corporation
FirstService Corporation is a North American leader in the property services sector serving its customers through two industry leading platforms: FirstService Residential - North America’s largest manager of residential communities; and FirstService Brands - one of North America’s largest providers of essential property services delivered through individually branded company-owned operations and franchise systems.

FirstService generates more than US$5.2 billion in annual revenues and has approximately 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Common Shares of FirstService trade on the NASDAQ under the symbol “FSV” and on the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 Index. More information is available at www.firstservice.com.

Segmented Fourth Quarter Results
FirstService Residential generated revenues of $521.3 million for the fourth quarter, up 5% relative to the prior year quarter, including 3% organic growth. The top-line performance was underpinned by contract wins in high-rise markets including Texas, Toronto and Chicago, with growth tempered by the ongoing community budgetary pressures referenced in our prior third quarter. Adjusted EBITDA was $46.0 million, an increase of 6% compared to $43.5 million reported in the prior year period. Operating Earnings were $34.4 million, versus $34.1 million for the fourth quarter of last year. Operating margins were relatively in-line with the prior year quarter.

FirstService Brands recorded revenues of $844.1 million, up 45% versus the prior year period. Revenues increased 16% on an organic basis primarily due to increased weather events and large-loss claims activity at our restoration operations, compared to the prior year quarter. The division top-line performance also included contribution from our Roofing Corp of America acquisition which was acquired in December 2023. Adjusted EBITDA for the quarter was $100.7 million, compared to $61.1 million in the prior year quarter. Operating Earnings were $69.9 million, versus $20.6 million in the prior year quarter. The segment Adjusted EBITDA margin increase was mainly due to operating leverage at our restoration operations, as well as continued realization of cost efficiencies within our home services brands. The Operating Earnings margin was further buoyed by the same acquisition-related fair value adjustments to contingent upside earn-out structures noted in the prior third quarter.

Corporate costs, as presented in Adjusted EBITDA, were $8.9 million in the fourth quarter, relative to $1.2 million in the prior year period. Corporate costs for the quarter were $14.7 million, relative to $6.7 million in the prior year period. The increase was primarily due to non-cash foreign exchange adjustments.

Segmented Full Year Results
FirstService Residential reported revenues of $2.13 billion, up 7% relative to 2023, including 5% organic growth and the balance from tuck-under acquisitions. Organic growth was driven by new property management contract wins across most markets. Adjusted EBITDA was $199.3 million, up 6% versus the prior year. Operating Earnings were $159.2 million, compared to $155.0 million in the prior year. Operating margins were in-line with the prior year.

FirstService Brands revenues were $3.08 billion, up 32% versus the prior year, including 3% organic growth. Growth in the division was driven primarily by our Roofing Corp of America acquisition, together with solid organic growth at our Century Fire Protection operations. Adjusted EBITDA for the year was $339.5 million, up 40% relative to the prior year. Operating Earnings were $230.1 million, versus $126.5 million a year ago. The segment Adjusted EBITDA margin was positively impacted primarily by margin improvement within our home services brands. The Operating Earnings margin was further positively impacted from contingent acquisition consideration fair value adjustments.

Corporate costs, as presented in Adjusted EBITDA, were $25.1 million for the full year, relative to $14.4 million in the prior year. Corporate costs were $51.8 million, relative to $36.6 million in 2023, with the increase driven primarily by the impact of non-cash foreign exchange adjustments, as well as stock-based compensation expense.

Conference Call & Presentation
FirstService will be holding a conference call on Wednesday, February 5, 2025 at 11:00 a.m. Eastern Time to discuss the results for the fourth quarter and full year.

This call is being webcast live at the Company’s website at www.firstservice.com. Participants may register for the call here https://register.vevent.com/register/BIc0caa93df85548909c3b68b8c526df66 to receive the dial-in number and their unique PIN. To join the webcast in listen only mode, use this link: https://edge.media-server.com/mmc/p/zvtxjnkg. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).

Forward-looking Statements
This press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2023 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise.

Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's consolidated financial statements and MD&A to be made available on SEDAR+ at www.sedarplus.ca.

COMPANY CONTACTS:

D. Scott Patterson
Chief Executive Officer
        
Jeremy Rakusin
Chief Financial Officer

(416) 960-9566

Notes
1. Reconciliation of net earnings to adjusted EBITDA:

Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other expense (income); (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses Adjusted EBITDA to evaluate its own operating performance and its ability to service debt, as well as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Adjusted EBITDA is presented as a supplemental measure because the Company believes such measure is useful to investors as a reasonable indicator of operating performance because of the low capital intensity of its service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to Adjusted EBITDA appears below.

		Three months ended								Twelve months ended
(in thousands of US$)		December 31								December 31
		2024				2023				2024				2023
Net earnings		$	50,179			$	23,783			$	187,774			$	147,021
Income tax			19,153				12,051				70,124				56,317
Other income, net			(863	)			(595	)			(3,239	)			(5,810	)
Interest expense, net			21,146				12,823				82,853				47,364
Operating earnings			89,615				48,062				337,512				244,892
Depreciation and amortization			47,828				33,872				165,269				127,934
Acquisition-related items			(5,272	)			16,485				(14,402	)			21,517
Stock-based compensation expense			5,685				4,924				25,311				21,385
Adjusted EBITDA		$	137,856			$	103,343			$	513,690			$	415,728

A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below.
(in thousands of US$)
Three months ended December 31, 2024					FirstService				FirstService
					Residential				Brands				Corporate (1)
Operating earnings (loss)				$	34,382			$	69,909			$	(14,676	)
Depreciation and amortization					10,439				37,366				23
Acquisition-related items					1,191				(6,578	)			115
Stock-based compensation expense					-				-				5,685
Adjusted EBITDA				$	46,012			$	100,697			$	(8,853	)
Three months ended December 31, 2023					FirstService				FirstService
					Residential				Brands				Corporate (1)
Operating earnings (loss)				$	34,136			$	20,603			$	(6,677	)
Depreciation and amortization					8,373				25,477				22
Acquisition-related items					1,002				14,992				491
Stock-based compensation expense					-				-				4,924
Adjusted EBITDA				$	43,511			$	61,072			$	(1,240	)
Year ended December 31, 2024					FirstService				FirstService
					Residential				Brands				Corporate (1)
Operating earnings (loss)				$	159,206			$	230,080			$	(51,774	)
Depreciation and amortization					37,506				127,672				91
Acquisition-related items					2,576				(18,263	)			1,285
Stock-based compensation expense					-				-				25,311
Adjusted EBITDA				$	199,288			$	339,489			$	(25,087	)
Year ended December 31, 2023					FirstService				FirstService
					Residential				Brands				Corporate (1)
Operating earnings (loss)				$	155,044			$	126,468			$	(36,620	)
Depreciation and amortization					33,114				94,729				91
Acquisition-related items					(366	)			21,159				724
Stock-based compensation expense					-				-				21,385
Adjusted EBITDA				$	187,792			$	242,356			$	(14,420	)
Segment Adjusted EBITDA margin is defined as segment Adjusted EBITDA divided by segment revenues.
(1) Corporate is not an operating segment, but rather represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Segment Adjusted EBITDA.

2. Reconciliation of net earnings and net earnings (loss) per common share to adjusted net earnings and adjusted net earnings per share:

Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization of intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per common share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of diluted net earnings per common share to Adjusted EPS appears below.

		Three months ended								Twelve months ended
(in thousands of US$)		December 31								December 31
		2024				2023				2024				2023
Net earnings		$	50,179			$	23,783			$	187,774			$	147,021
Non-controlling interest share of earnings			(3,639	)			(3,925	)			(15,624	)			(14,140	)
Acquisition-related items			(5,272	)			16,485				(14,402	)			21,517
Amortization of intangible assets			22,331				13,942				72,396				54,238
Stock-based compensation expense			5,685				4,924				25,311				21,385
Income tax on adjustments			(8,125	)			(4,905	)			(28,335	)			(19,662	)
Non-controlling interest on adjustments			(206	)			(665	)			(693	)			(1,517	)
Adjusted net earnings		$	60,953			$	49,639			$	226,427			$	208,842
		Three months ended								Twelve months ended
(in US$)		December 31								December 31
		2024				2023				2024				2023
Diluted net earnings per share		$	0.71			$	0.14			$	2.97			$	2.24
Non-controlling interest redemption increment			0.31				0.30				0.83				0.72
Acquisition-related items			(0.11	)			0.36				(0.31	)			0.47
Amortization of intangible assets, net of tax			0.34				0.23				1.11				0.88
Stock-based compensation expense, net of tax			0.09				0.08				0.40				0.35
Adjusted earnings per share		$	1.34			$	1.11			$	5.00			$	4.66

FIRSTSERVICE CORPORATION
Operating Results
(in thousands of US$, except per share amounts)
					Three months								Twelve months
					ended December 31								ended December 31
					2024				2023				2024				2023
Revenues				$	1,365,349			$	1,079,260			$	5,216,894			$	4,334,548
Cost of revenues					911,361				735,920				3,498,974				2,947,008
Selling, general and administrative expenses					321,817				244,921				1,229,541				993,197
Depreciation					25,497				19,930				92,873				73,696
Amortization of intangible assets					22,331				13,942				72,396				54,238
Acquisition-related items (1)					(5,272	)			16,485				(14,402	)			21,517
Operating earnings					89,615				48,062				337,512				244,892
Interest expense, net					21,146				12,823				82,853				47,364
Other income, net					(863	)			(595	)			(3,239	)			(5,810	)
Earnings before income tax					69,332				35,834				257,898				203,338
Income tax					19,153				12,051				70,124				56,317
Net earnings					50,179				23,783				187,774				147,021
Non-controlling interest share of earnings					3,639				3,925				15,624				14,140
Non-controlling interest redemption increment					14,064				13,596				37,775				32,490
Net earnings attributable to Company				$	32,476			$	6,262			$	134,375			$	100,391
Net earnings per common share
		Basic		$	0.72			$	0.14			$	2.98			$	2.25
		Diluted			0.71				0.14				2.97				2.24
Adjusted earnings per share (2)				$	1.34			$	1.11			$	5.00			$	4.66
Weighted average common shares (thousands)
		Basic			45,194				44,639				45,019				44,556
		Diluted			45,583				44,874				45,280				44,795

_{⁽¹⁾ Acquisition-related items include transaction costs, and contingent acquisition consideration fair value adjustments.
⁽²⁾ See definition and reconciliation above.}

Condensed Consolidated Balance Sheets
(in thousands of US$)
											December 31, 2024															December 31, 2023
Assets
Cash and cash equivalents											$		227,598													$				187,617
Restricted cash													16,088																	19,260
Accounts receivable													947,517																	842,236
Other current assets													368,150																	311,889
			Current assets										1,559,353																	1,361,002
Other non-current assets													30,121																	34,418
Fixed assets													253,994																	204,188
Operating lease right-of-use assets													240,518																	218,299
Goodwill and intangible assets													2,110,866																	1,807,836
			Total assets								$		4,194,852													$				3,625,743
Liabilities and shareholders' equity
Accounts payable and accrued liabilities											$		541,509													$				471,083
Other current liabilities													214,575																	211,661
Operating lease liabilities - current													53,115																	50,898
Long-term debt - current													41,567																	37,132
			Current liabilities										850,766																	770,774
Long-term debt - non-current													1,257,143																	1,144,975
Operating lease liabilities - non-current													214,423																	183,923
Other liabilities													150,542																	115,938
Deferred income tax													84,895																	53,024
Redeemable non-controlling interests													449,337																	332,963
Shareholders' equity													1,187,746																	1,024,146
			Total liabilities and equity								$		4,194,852													$				3,625,743
Supplemental balance sheet information
Total debt											$		1,298,710													$				1,182,107
Total debt, net of cash													1,071,112																	994,490

Condensed Consolidated Statements of Cash Flows
(in thousands of US$)
												Three months ended																			Twelve months ended
												December 31																			December 31
												2024								2023											2024					2023
Cash provided by (used in)
Operating activities
Net earnings										$		50,179							$	23,783									$		187,774				$	147,021
Items not affecting cash:
		Depreciation and amortization										47,828								33,872											165,269					127,934
		Deferred income tax										(7,172					)			(18,413							)				(13,986		)			(19,049		)
		Other										(1,424					)			18,384											5,805					34,416
												89,411								57,626											344,862					290,322
Changes in non-cash working capital
		Accounts receivable										(22,323					)			(17,045							)				(42,306		)			(93,822		)
		Payables and accruals										15,249								38,159											22,602					19,662
		Other										4,382								36,040											(20,129		)			68,532
Contingent acquisition consideration paid												-								(4,334							)				(19,355		)			(4,334		)
Net cash provided by operating activities												86,719								110,446											285,674					280,360
Investing activities
Acquisition of businesses, net of cash acquired												(53,581					)			(434,366							)				(212,246		)			(547,182		)
Purchases of fixed assets												(31,916					)			(25,065							)				(112,798		)			(92,734		)
Other investing activities												(1,373					)			(6,173							)				1,342					(6,413		)
Net cash used in investing activities												(86,870					)			(465,604							)				(323,702		)			(646,329		)
Financing activities
Increase in long-term debt, net												3,613								390,998											103,577					446,847
Purchases of non-controlling interests, net												1,051								(111							)				(24,354		)			(4,285		)
Dividends paid to common shareholders												(11,277					)			(10,042							)				(43,828		)			(39,055		)
Distributions paid to non-controlling interests												(1,555					)			(454							)				(9,292		)			(7,376		)
Other financing activities												15,728								4,178											48,305					17,814
Net cash provided by financing activities												7,560								384,569											74,408					413,945
Effect of exchange rate changes on cash												229								(420							)				429					(447		)
Increase in cash, cash equivalents and restricted cash												7,638								28,991											36,809					47,529
Cash, cash equivalents and restricted cash, start of period												236,048								177,886											206,877					159,348
Cash, cash equivalents and restricted cash, end of period										$		243,686							$	206,877									$		243,686				$	206,877

Segmented Results
(in thousands of US$)
				FirstService			FirstService
				Residential			Brands								Corporate (2)								Consolidated
Three months ended December 31
2024
	Revenues			$	521,256		$	844,093							$	-							$		1,365,349
	Adjusted EBITDA (1)				46,012			100,697								(8,853					)				137,856
	Operating earnings				34,382			69,909								(14,676					)				89,615
2023
	Revenues			$	496,281		$	582,979							$	-							$		1,079,260
	Adjusted EBITDA				43,511			61,072								(1,240					)				103,343
	Operating earnings				34,136			20,603								(6,677					)				48,062
				FirstService			FirstService
				Residential			Brands								Corporate								Consolidated
Year ended December 31
2024
	Revenues			$	2,134,469		$	3,082,425							$	-							$		5,216,894
	Adjusted EBITDA				199,288			339,489								(25,087					)				513,690
	Operating earnings				159,206			230,080								(51,774					)				337,512
2023
	Revenues			$	1,996,823		$	2,337,725							$	-							$		4,334,548
	Adjusted EBITDA				187,792			242,356								(14,420					)				415,728
	Operating earnings				155,044			126,468								(36,620					)				244,892
	(1) See definition and reconciliation on pages 5 and 6.
	(2) See definition on page 6.

FAQ

What was FirstService (FSV) revenue growth in Q4 2024?

FirstService reported Q4 2024 revenue growth of 27% to $1.37 billion, including 10% organic growth.

How much did FirstService (FSV) earn per share in Q4 2024?

FirstService reported Adjusted EPS of $1.34 in Q4 2024, a 21% increase over the prior year quarter.

What was FirstService's (FSV) full-year revenue for 2024?

FirstService's full-year revenue for 2024 was $5.22 billion, representing a 20% increase from 2023.

How did FirstService Brands (FSV) perform in Q4 2024?

FirstService Brands recorded revenues of $844.1 million in Q4 2024, up 45% versus the prior year period, with 16% organic growth.

What drove FirstService's (FSV) growth in 2024?

Growth was driven by contract wins in high-rise markets, increased weather events and large-loss claims activity in restoration operations, and the Roofing Corp of America acquisition.