FirstService Corporation, a North American leader in essential outsourced property services, reported its Q2 2024 financial results with solid top-line growth and steady operating performance. Despite pressures on profitability due to acquisition costs and mixed weather conditions impacting restoration services, the company’s diversified service model and strategic execution enabled robust revenue expansion. The report reflects continued momentum across both of its primary divisions—FirstService Residential and FirstService Brands.
Key Financial Highlights
Revenue for Q2 2024 reached $1.30 billion, representing a 16% increase from $1.12 billion in Q2 2023.
Adjusted EBITDA rose 12% to $132.5 million, up from $118.4 million a year ago.
Adjusted EPS was $1.36, compared to $1.46 in Q2 2023, reflecting increased costs and amortization related to acquisitions.
GAAP net income was $44.9 million, with GAAP diluted EPS at $0.78, down from $1.01 last year due to higher financing and amortization costs.
Operating earnings remained steady at $83.9 million, up slightly from $82.3 million a year ago.
Strategic Initiatives and Market Performance
FirstService’s business is anchored by two major operating segments:
FirstService Residential
Q2 revenues reached $557.5 million, up 8% year-over-year, driven by 7% organic growth through new property management contract wins.
Adjusted EBITDA increased to $59.1 million, while operating earnings remained stable at $49.1 million.
Despite margin pressure from amortization linked to recent acquisitions, the division’s revenue consistency highlights strong client retention and market demand.
FirstService Brands
Q2 revenues surged to $740.0 million, up 23% compared to Q2 2023, largely fueled by the Roofing Corp of America acquisition and growth in Century Fire Protection.
Adjusted EBITDA for the segment was $77.6 million, a significant gain from $65.8 million the prior year.
Organic revenue, however, declined 6%, primarily due to reduced insurance restoration work as a result of milder weather, impacting profitability at restoration brands.
Challenges and Outlook
While FirstService demonstrated solid revenue growth and stable operations, several challenges affected margins:
Adjusted EPS and GAAP EPS declined, due to increased interest expense, stock-based compensation, and acquisition-related amortization.
Milder weather impacted restoration demand, which historically contributes a meaningful portion of high-margin revenue.
Corporate costs rose to $4.2 million, up from $3.2 million last year, driven by foreign exchange impacts and compensation-related expenses.
Looking ahead, management remains optimistic. CEO Scott Patterson noted that based on current momentum, FirstService expects to meet its top and bottom-line targets for the remainder of 2024. The company’s robust balance sheet, diverse portfolio, and growth in recurring service demand continue to position it well in a fragmented property services market.
