Watsco, Inc. (NYSE: WSO) reported its financial results for the quarter and nine months ended September 30, 2026, noting record sales and strong cash flow. The company is the largest distributor in the North American HVAC/R market.
For the third quarter of 2026, revenues increased 7% to a record $2.22 billion, with a 4% increase on a same-store basis. Gross profit increased 3% to a record $586 million, resulting in a gross profit margin of 26.4%. Operating income decreased 4% to $225 million, and earnings per share decreased 5% to $3.77. The company noted that gross margin was impacted by customer mix, end-market mix, and OEM pricing actions.
On a sales trends basis excluding acquisitions, HVAC equipment sales increased 5%, while sales of other HVAC products increased 2% and commercial refrigeration products increased 10%. The company stated that residential unit volumes have returned to growth following a prior year transition to new A2L products.
For the nine months ended September 30, 2026, revenues increased 3% to $5.86 billion. Gross profit decreased 1% to $1.59 billion, and operating income decreased 7% to $574 million. Earnings per share decreased 7% to $9.72. Operating cash flow increased 79% to $304 million.
Watsco recently completed the acquisition of Jackson Supply Company and The Granite Group. Jackson Supply, founded in 1972, had annual sales of approximately $230 million, while The Granite Group, founded in 1971, had annual sales of approximately $500 million. These acquisitions are expected to bolster annual revenue by approximately 10% and expand Watsco’s geographic reach.
In October 2026, Watsco signed a five-year $750 million unsecured senior revolving credit facility. The company also increased its annual cash dividend by 10% to $13.20 per share in April 2026.
The company highlighted its investments in technology, including its HVAC Pro+ Mobile Apps and E-Commerce platform, which reached $2.75 billion in sales for the 12 months ended September 30, 2026, representing 37% of revenues. Watsco has invested approximately $280 million in its digital platforms over the last five years.
