Watsco Inc. Reports Third‑Quarter 2025 Results

Watsco Inc. (NYSE: WAT) announced its financial results for the third quarter ended September 30, 2025, on October 29, 2025. The company delivered a record gross profit and gross margin, and reported a strong operating cash flow, despite the challenging market environment that has impacted the broader industrial distribution sector.

Earnings Per Share and Revenue

  • GAAP earnings per share: $3.98, which was $0.31 below analyst consensus expectations.
  • Total revenue: $2.07 billion, falling short of the consensus estimate by $70 million.

These figures represent a shortfall relative to the earnings and revenue forecasts compiled by market analysts. The miss was highlighted in an earnings preview released by Watsco on October 28 and detailed in subsequent coverage by Seeking Alpha and other financial news outlets.

Gross Profit, Gross Margin, and Operating Cash Flow

The company recorded a record third‑quarter gross profit and gross margin. The gross margin was bolstered by cost‑management initiatives and a favorable mix of high‑margin products. Operating cash flow also reached a record high, underscoring the company’s ability to generate cash from its core distribution operations even as external pressures on pricing and supply chains persist.

Market Context

  • Stock performance: The share price closed at $358.39 on October 27, 2025, positioned near the 52‑week low of $350 recorded on October 14. The 52‑week high for the year stands at $571.42 (November 24, 2024).
  • Market capitalization: Approximately $12.51 billion USD.
  • Price‑earnings ratio: 27.50.

Despite the recent decline to a 52‑week low and negative analyst revisions reported on October 26, the company’s financial performance demonstrates resilience. The record gross profit, margin, and operating cash flow indicate that Watsco’s distribution model and cost‑control measures are effective in maintaining profitability amid a challenging market environment.

Summary

Watsco Inc. reported a third‑quarter 2025 earnings figure that fell short of market expectations in both EPS and revenue. Nonetheless, the company achieved record levels of gross profit, gross margin, and operating cash flow. The results reflect the company’s continued focus on operational efficiency and product mix optimization while navigating a volatile industrial distribution landscape.