Watsco, Inc. (NYSE: WSO) has announced its operating results for the second quarter and six-month period ended June 30, 2025. The company reported a 4% decrease in revenues to $2.06 billion for the second quarter. Despite the decline in revenues, gross profit increased by 4% to a record $603 million, and gross profit margin expanded by 220 basis points to a record 29.3%. Operating income increased by 1% to $272 million, and operating margin expanded by 60 basis points to 13.2%. Earnings per share were reported at $4.52, a slight increase from $4.49 in the prior year.
Sales trends for the second quarter included a 3% decline in domestic markets and a 12% decline in non-U.S. markets, a 6% decrease in HVAC equipment sales, flat sales for other HVAC products, and a 3% increase in commercial refrigeration products.
For the six-month period, revenues decreased by 3% to $3.59 billion, with gross profit increasing by 2% to $1.03 billion and gross profit margin expanding by 140 basis points to a record 28.7%. Operating income declined by 3% to $384 million, while earnings per share were reported at $6.50, down from $6.69 in the prior year.
Watsco's innovative initiatives in technology were highlighted, including the company's investments in technology, such as the HVAC Pro+ mobile apps and e-commerce platform, which have transformed the customer experience. The company reported that e-commerce sales totaled approximately $2.5 billion for the twelve-month period ended June 30, 2025, comprising 34% of the company’s overall sales.
Furthermore, Watsco's digital sales platform, OnCallAir®, saw significant growth, with contractors using the platform presenting quotes to approximately 177,000 households during the first half of 2025, resulting in a gross merchandise value of approximately $1.6 billion.
Watsco's AI tools, including "ask.watsco" and "al.watsco," have been deployed to enhance productivity, decision-making, and customer service. The company has also initiated strategies to target the institutional channel for HVAC/R products.
The company's acquisition strategy, which involves partnering with independent distributors, has contributed to its scale and leadership in the HVAC/R distribution landscape in North America. Watsco has acquired three distributors in key Sunbelt markets in 2025, bringing the total to 12 companies acquired since 2019, representing approximately $1.6 billion in annualized sales and 120 locations across its network.
Watsco maintains a solid financial position with $293 million in cash, no debt, and $3 billion in shareholders’ equity as of June 30, 2025, enabling investments in long-term growth, including the company’s industry-leading technology platforms.
The company's second-quarter earnings conference call is scheduled for July 30, 2025, at 10:00 a.m. (EDT). A webcast of the conference call will be available on the company’s website, and a replay will also be accessible.
Watsco operates the largest distribution network for heating, air conditioning, and refrigeration (HVAC/R) products in the U.S., Canada, Mexico, and Puerto Rico, and on an export basis to Latin America and the Caribbean. The company focuses on the replacement market, which has increased in size and importance due to the aging of installed systems and the introduction of energy-efficient models.
The company's efforts have contributed to averting an estimated 24.5 million metric tons of CO2e emissions from January 1, 2020, to June 30, 2025, through the sale of replacement HVAC systems at higher-efficiency standards, equivalent to removing 5.7 million gas-powered vehicles annually off the road. Today the company's shares have moved -3.13% to a price of $464.82. For the full picture, make sure to review WATSCO INC's 8-K report.
