NYSE:BLD
TopBuild Corp
A premier US-based construction equipment lessor providing flexible financing solutions for contractors and property owners across diverse sectors.
Key Metrics
Investment Thesis
Bull Case
Investors may view TopBuild as an attractive income play given its dominant market position in construction equipment leasing and the secular demand for infrastructure development. The company's extensive fleet allows it to capture value from supply shortages, potentially leading to higher lease rates and improved margins if the market remains tight. Strong cash flow generation provides a buffer against economic volatility and supports consistent shareholder returns through dividends or buybacks.
Bear Case
The stock faces headwinds from high debt levels relative to equity, with long-term debt of $2.78B potentially constraining financial flexibility in a rising rate environment. Recent profitability contraction to $521.7M in 2025 from $622.6M in 2024 suggests potential margin compression or increased credit losses that could persist. The heavy reliance on the construction industry exposes the company to cyclicality, where a slowdown in housing or commercial development could significantly impact lease collections and asset values.
About TopBuild Corp
TopBuild Corp operates as a leading provider of construction equipment leasing solutions, serving contractors and property owners primarily in the United States. The company focuses on financing and operating leases for heavy machinery including excavators, cranes, and loaders, offering flexible terms to support project completion. With a robust fleet managed through its extensive dealer network, TopBuild enables clients to access capital-efficient equipment without large upfront expenditures.
Analysis
Management Discussion
In 2025, the company reported revenue of $5.41B and net income of $521.7M, showing resilience despite a year-over-year decline in profitability compared to recent highs. The significant cash flow from operations of $756.3M highlights strong operational efficiency, though substantial investing outflows of $1.99B reflect ongoing fleet expansion or strategic acquisitions totaling $1.93B. While debt levels remain elevated at $2.78B long-term debt, the ability to generate positive operating cash flow suggests a manageable capital structure for its asset-heavy model.
Industry Overview
The US construction equipment leasing market is characterized by high barriers to entry due to the capital intensity required to acquire and maintain large fleets of specialized machinery. Demand remains robust driven by ongoing infrastructure spending, population growth, and the persistent shortage of new equipment from major manufacturers. Success in this sector depends on operational excellence, risk management of a leveraged client base, and the ability to navigate fluctuating interest rates and supply chain dynamics.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $5.01B | $5.19B | $5.33B | $5.41B |
| Cost of Revenue | $3.52B | $3.59B | $3.70B | $3.84B |
| Gross Profit | $1.49B | $1.60B | $1.62B | $1.57B |
| Operating Expenses | $689.6M | $725.0M | $738.6M | $777.1M |
| Operating Income | $797.2M | $878.8M | $886.3M | $791.9M |
| G&A | $689.6M | $725.0M | $738.6M | $777.1M |
| Stock-Based Comp | $12.3M | $15.8M | $16.6M | $16.6M |
| D&A | $123.3M | $132.9M | $140.5M | $169.4M |
| Depreciation | $52.9M | $61.6M | $66.6M | $70.4M |
| Amortization | $67.6M | $69.1M | $72.1M | $95.3M |
| Other OpEx | $0 | $0 | $0 | $0 |
| Non-Operating Income | $-55.0M | $-53.3M | $-45.6M | $-88.3M |
| Interest Expense | $56.7M | $74.6M | — | — |
| Pre-Tax Income | $742.1M | $825.5M | $840.8M | $703.6M |
| Income Tax | $186.1M | $211.2M | $218.2M | $181.9M |
| Continuing Ops | $556.0M | $614.3M | $622.6M | $521.7M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $556.0M | $614.3M | $622.6M | $521.7M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $556.0M | $614.3M | $622.6M | $521.7M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $1.55B | $2.05B | $1.60B | $1.63B |
| Cash & Equivalents | $240.1M | $848.6M | $400.3M | $184.7M |
| Accounts Receivable | $836.1M | $799.0M | $751.6M | $894.4M |
| Inventory | $438.6M | $364.7M | $406.7M | $505.2M |
| Prepaid Expenses | $34.3M | $36.9M | $40.4M | $50.5M |
| Other Current Assets | $0 | $0 | $0 | $0 |
| Long-Term Assets | $3.06B | $3.11B | $3.14B | $4.97B |
| PP&E (Net) | $246.8M | $258.9M | $263.2M | $274.2M |
| Intangibles | $615.0M | $591.1M | $557.7M | — |
| Goodwill | $1.97B | $2.04B | $2.11B | $3.05B |
| Operating Leases | $205.9M | $204.6M | $189.1M | $271.4M |
| Other LT Assets | $23.1M | $16.4M | $14.1M | $1.38B |
| Total Assets | $4.61B | $5.16B | $4.74B | $6.61B |
| Current Liabilities | $789.6M | $771.5M | $767.2M | $844.8M |
| Accounts Payable | $487.1M | $469.6M | $456.4M | $440.2M |
| Current Debt | $40.1M | $47.0M | $48.8M | $62.5M |
| Current Leases | $60.9M | $65.8M | $68.7M | $86.2M |
| Deferred Revenue | $21.9M | $18.4M | $18.7M | $38.3M |
| Other Current Liab | $179.6M | $170.8M | $174.6M | $217.6M |
| Long-Term Liabilities | $1.89B | $1.83B | $1.76B | $3.44B |
| Long-Term Debt | $1.42B | $1.37B | $1.33B | $2.78B |
| LT Operating Leases | $149.9M | $146.2M | $129.4M | $200.7M |
| Other LT Liab | $320.3M | $308.4M | $302.1M | $459.4M |
| Total Liabilities | $2.68B | $2.60B | $2.53B | $4.29B |
| Shareholders' Equity | $1.93B | $2.56B | $2.21B | $2.32B |
| Retained Earnings | $1.76B | $2.37B | $2.99B | $3.52B |
| AOCI | $-21.9M | $-14.7M | $-29.2M | $-19.8M |
| Total L&E | $4.61B | $5.16B | $4.74B | $6.61B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $556.0M | $614.3M | $622.6M | $521.7M |
| Non-Cash Adjustments | $-373.9M | $333.7M | $197.3M | $380.4M |
| Working Capital Changes | $313.7M | $-98.6M | $-43.9M | $-145.8M |
| Cash from Operations | $495.8M | $849.4M | $776.0M | $756.3M |
| Capital Expenditures | $76.4M | $64.0M | $69.3M | $59.4M |
| Cash from Investing | $-93.9M | $-198.2M | $-203.5M | $-1.99B |
| Debt Issuances | — | — | — | $2.00B |
| Debt Repayments | $38.7M | $40.1M | $47.0M | $515.6M |
| Share Buybacks | $250.1M | — | $966.4M | $434.2M |
| Cash from Financing | $-300.1M | $-43.8M | $-1.02B | $1.02B |
| FX Effect | $-1.5M | $1.1M | $-4.5M | $1.8M |
| Net Change in Cash | $100.3M | $608.5M | $-448.2M | $-215.6M |
| Beginning Cash | $139.8M | $240.1M | $848.6M | $400.3M |
| Ending Cash | $240.1M | $848.6M | $400.3M | $184.7M |
Frequently Asked Questions
How does TopBuild Corp make money?
The company's revenue is driven by two primary segments: Equipment Leasing, which generates income through monthly lease payments from contractors, and Finance Services, which includes sale-leaseback transactions and other financing activities. Additional revenue streams stem from the disposal of older equipment and interest income on the financed capital base, supported by a vast network of independent dealers.
What are the main risks for BLD?
Significant exposure to interest rate fluctuations impacts the cost of capital and net interest margins on its leasing portfolio. Rising inflation and construction cost pressures could lead to slower project completions or defaults among smaller contractors who rely heavily on TopBuild's financing. Regulatory changes affecting lease accounting standards or environmental restrictions on certain equipment types could disrupt operations. The company faces counterparty risk as its clients are often highly leveraged contractors sensitive to economic cycles.
What is BLD's competitive advantage?
TopBuild leverages a massive, high-quality fleet of modern construction equipment maintained through its extensive dealer relationships, ensuring low downtime and high utilization rates for clients. The company benefits from strong pricing power in a supply-constrained market where demand for new equipment often exceeds supply, allowing for favorable lease rates. Its diversified customer base across residential, commercial, and infrastructure projects provides resilience against economic downturns in any single sector.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.