Builders FirstSource continued to face headwinds in the third quarter as weak housing starts and commodity price pressure drove another double-digit revenue decline and sharply lower profit. Despite these challenges, the company continued investing in value-added capacity, M&A, and its digital-platform transformation.

For its third quarter, Builders FirstSource reported net sales of $3.94 billion, down 13.5% year-over-year. Core organic sales fell 10.6%, driven by single-family construction down 12.1% and multifamily down 20.2%, while repair-and-remodel activity slipped 1.2%.

MDM’s 3Q25 MarketPulse Report (Premium access) 

The company’s gross profit declined 13.5% to $1.2 billion, with gross margin at 30.4%, down 240 basis points from a year earlier.

Adjusted EBITDA fell 31% to $434 million — an 11.0% margin vs. 14.1% a year ago — reflecting the volume slowdown and margin compression tied to product mix and commodity deflation.

Net income dropped 57% to $122 million (3.1% of sales), while adjusted net income declined 39% to $207 million (5.3% of sales).

On MDM’s 2025 Top Distributors Lists, BLDR was No. 2 for Building Materials/Construction.

By BLDR Product and End-Market in 3Q:

Value-added products — which include manufactured components, windows, doors and millwork — accounted for ~47% of sales, versus ~45% a year earlier.

• Manufactured products sales fell 14%
• Windows, doors & millwork were down 9%
• Specialty building products rose 4%
• Lumber and sheet goods were off 8%

End market representation in Q3 was: Single-family 25%, multifamily 9%, repair & remodel and other 66% combined

3Q Company Activity

BLDR said that, during 3Q, it invested about $20 million in new and expanded value-added facilities across seven states, including a new millwork location in South Carolina. It also realized $11 million in productivity savings during the quarter ($33 million year-to-date) and advanced its enterprise-wide SAP implementation.

On the strategic front, Builders FirstSource completed 38 acquisitions since its 2021 BMC merger — six of them in 2025 alone — expanding into key Western and Mid-Atlantic markets. The company repurchased $404 million of shares year-to-date and has retired about 48% of its total shares since the program began in 2021.

Outlook

BLDR maintained its 2025 guidance for total net sales of $15.1 billion to $15.4 billion and adjusted EBITDA of $1.625 billion to $1.675 billion, implying a margin around 11%. Free cash flow is projected between $800 million and $1 billion. Management still expects single-family starts in its core geographies to be down ~9% for the year and multifamily starts to fall mid-teens.

Strategic Focus

CEO Peter Jackson said the company is “continuing to compound value creation through strong execution and discipline in capital allocation,” pointing to progress in digital tools and AI-driven design capabilities within the company’s “Paradigm” platform. BFS views its digital integration and 47% value-added mix as core levers to weather housing cyclicality and strengthen long-term profitability.

MDM’s Take

Another tough quarter for Builders FirstSource underscores the persistent softness in U.S. housing starts and ongoing normalization after the pandemic boom. Yet the distributor’s cost discipline, rising value-added share and accelerating digital investments position it to benefit once single-family activity stabilizes in 2026.