GMS Inc
NYSE:GMS
GMS Inc
GMS Inc., headquartered in Tucker, Georgia, has essentially carved a niche for itself at the spine of the construction supply chain in North America. Emerging in 1971, the company has grown to be one of the largest distributors of wallboard and suspended ceilings systems. Beyond these core commodities, it also supplies steel framing, insulation, and various other building materials crucial to both commercial and residential construction. Essentially, GMS operates by establishing deep-rooted relationships with manufacturers and leveraging its extensive distribution network. Through its strategically located yards and showrooms, it ensures that contractors and builders receive timely and reliable access to essential building materials. The company achieves scalability and economies of scale across its operations, optimizing logistics to offer competitive pricing and high service levels.
GMS Inc. generates revenue by selling these building products to a diverse customer base comprising contractors across various sectors. The demand for its products is heavily influenced by the health of the construction industry, which provides GMS with both opportunities and challenges. By continuously expanding its product offerings and refining its distribution capabilities, GMS maintains a competitive advantage. Moreover, the company leverages local expertise through regional operations while benefitting from the collective strength of its wider network. Through strategic acquisitions, GMS has consistently broadened its reach, optimized its supply chain, and augmented its market share, thus positioning itself as a robust player in the building materials industry. This approach of blending strategic growth with operational excellence propels GMS forward as a formidable force amidst the fluctuations of the construction cycles.
GMS Inc., headquartered in Tucker, Georgia, has essentially carved a niche for itself at the spine of the construction supply chain in North America. Emerging in 1971, the company has grown to be one of the largest distributors of wallboard and suspended ceilings systems. Beyond these core commodities, it also supplies steel framing, insulation, and various other building materials crucial to both commercial and residential construction. Essentially, GMS operates by establishing deep-rooted relationships with manufacturers and leveraging its extensive distribution network. Through its strategically located yards and showrooms, it ensures that contractors and builders receive timely and reliable access to essential building materials. The company achieves scalability and economies of scale across its operations, optimizing logistics to offer competitive pricing and high service levels.
GMS Inc. generates revenue by selling these building products to a diverse customer base comprising contractors across various sectors. The demand for its products is heavily influenced by the health of the construction industry, which provides GMS with both opportunities and challenges. By continuously expanding its product offerings and refining its distribution capabilities, GMS maintains a competitive advantage. Moreover, the company leverages local expertise through regional operations while benefitting from the collective strength of its wider network. Through strategic acquisitions, GMS has consistently broadened its reach, optimized its supply chain, and augmented its market share, thus positioning itself as a robust player in the building materials industry. This approach of blending strategic growth with operational excellence propels GMS forward as a formidable force amidst the fluctuations of the construction cycles.
Revenue: Full-year net sales were $5.5 billion, up marginally from the prior year, and Q4 net sales were $1.3 billion, coming in at the high end of guidance despite continued macroeconomic weakness.
Organic Sales: Organic sales for the year were $5.2 billion, down 5.4% on a same-day basis, and Q4 organic sales declined 8.3% per day, slightly better than expected.
Profitability: Q4 net income was $26.1 million, down from $56.4 million last year, due to continued headwinds but supported by strong cost controls and record free cash flow conversion.
Cost Savings: The company implemented $55 million in annualized cost reductions in fiscal 2025, exceeding earlier projections, with the full run rate expected in Q1 FY26.
Guidance: Q1 FY26 net sales expected to be down low to mid-single digits, with adjusted EBITDA guided to $132–137 million and margins in the 9.5–9.8% range.
End Markets: Single-family market shows relative strength and share gains, while commercial and multifamily remain weak; pent-up demand anticipated to drive future recovery.
Cash Flow: Q4 free cash flow reached $183.4 million, 167% of adjusted EBITDA, and full-year free cash flow was $336.1 million, 67% of adjusted EBITDA, both strong results.
Share Repurchases: $164.1 million spent on share repurchases in FY25, with $192 million of authorization remaining.
Margin Outlook: Management expects EBITDA margin to return to a 10–12% range as demand recovers and cost actions take hold.
