What changed in TopBuild Corp's 2024 10-K compared to 2023?

Across the narrative sections we track, TopBuild Corp (BLD) added 208 paragraphs, removed 199, and edited 62 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+56/−78), Item 5. Market for Registrant's Common Equity (+87/−6), Item 1. Business (+12/−68).

Did TopBuild Corp add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 40 new/edited paragraphs and 35 removed paragraphs versus the 2023 10-K.

What changed in TopBuild Corp's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 56 new/edited paragraphs and 78 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did TopBuild Corp update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 7 paragraph-level changes between the 2023 and 2024 filings.

Where does this BLD 10-K diff come from?

The source filings are TopBuild Corp's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in TopBuild Corp's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of TopBuild Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+208 added−199 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-28)

Top changes in TopBuild Corp's 2024 10-K

208 paragraphs added · 199 removed · 62 edited across 8 sections

Item 7. Management's Discussion & Analysis+56 / −78
Item 5. Market for Registrant's Common Equity+87 / −6 · 4 edited
Item 1. Business+12 / −68 · 12 edited
Item 1A. Risk Factors+40 / −35 · 34 edited
Item 1C. Cybersecurity+7 / −6 · 6 edited

Item 1. Business

Business — how the company describes what it does

12 edited+0 added−56 removed17 unchanged

2023 filing

2024 filing

Biggest changeAs a result, this helps to reduce our exposure to cyclical swings in our business. Installation We provide insulation installation services nationwide through our Installation segment which has approximately 250 branches located across the United States. 4 Table of Contents Various insulation applications we install include: • Fiberglass batts and rolls • Blown-in loose fill fiberglass • Polyurethane spray foam • Blown-in loose fill cellulose In addition to insulation products, which represented 80% of our Installation segment’s sales during the year ended December 31, 2024, we install other building products including, glass and windows, rain gutters, garage doors, closet shelving, and fireplaces, among other items. We handle every stage of the installation process including material procurement supplied by leading manufacturers, project scheduling and logistics, multi-phase professional installation, and installation quality assurance. Our Installation customer base includes national and regional single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners. Specialty Distribution We distribute building and mechanical insulation, insulation accessories, rain gutters and other building product materials for the residential and commercial/industrial end markets through our Specialty Distribution business.

We recognize that competition for the installation and sale of insulation and other building material products occurs in localized geographic markets across the U.S. and Canada, and, as such, our operating model is based on geographically diverse branches that develop and maintain local customer relationships.

We recognize that competition for the installation and sale of insulation and other building material products occurs in localized geographic markets across the U.S. and Canada, and, as such, our operating model is based on empowering our geographically diverse branches that develop and maintain local customer relationships.

Second, being a leader in both installation and specialty distribution allows us to reach a broader set of builders and contractors more effectively, regardless of their size or geographic location in the U.S. and Canada, and leverage housing and commercial/industrial construction growth wherever it occurs.

On July 1, 2015, we began trading on the NYSE under the symbol “BLD.” Segment Overview We operate in two segments: our Installation segment, which accounts for approximately 61% of our sales, and our Specialty Distribution segment, which accounts for approximately 39% of our sales. We believe that having both Installation and Specialty Distribution provides us with a number of distinct competitive advantages.

On July 1, 2015, we began trading on the NYSE under the symbol “BLD.” Segment Overview We operate in two segments: our Installation segment, which accounts for approximately 62% of our sales, and our Specialty Distribution segment, which accounts for approximately 38% of our sales. We believe that having both Installation and Specialty Distribution provides us with a number of distinct competitive advantages.

Insulation and insulation accessories, primarily fiberglass and spray foam, comprise approximately 89% of our Specialty Distribution sales. We have approximately 150 distribution centers across the United States and 18 distribution centers in Canada.

Insulation and insulation accessories, primarily fiberglass and spray foam, comprise approximately 89% of our Specialty Distribution sales. We have approximately 170 distribution centers across the United States and 20 distribution centers in Canada.

During industry downturns many insulation contractors, who buy directly from manufacturers during industry peaks, return to purchasing through distributors for smaller shipments, less than a full truckload. This tends to drive incremental customers to our Specialty Distribution business, which could offset a decrease in demand for installation services in our Installation business because of a downturn.

During industry downturns many insulation contractors, who buy directly from manufacturers during industry peaks, return to purchasing through distributors for smaller shipments, less than a full truckload. This tends to drive incremental customers to our Specialty Distribution business, which can help offset a decrease in demand for installation services in our Installation business during market slowdowns.

In response to the housing downturn in prior years and to mitigate the cyclicality of residential new home construction, we expanded and enhanced our ability to serve the commercial/industrial construction markets.

In response to previous housing market downturns and to mitigate the cyclicality of residential new home construction, we expanded and enhanced our ability to serve the commercial/industrial construction markets.

Builders and contractors in each local market have different options in terms of choosing among insulation installers and specialty distributors for their projects, and for local relationships, quality, and timeliness. Our Installation branches are locally branded businesses that are recognized within the communities in which they operate.

Builders and contractors in each local market have the ability to choose among several insulation installers and specialty distributors they value their projects, and for local relationships, quality, and timeliness. Our Installation branches are locally branded businesses that are recognized within the communities in which they operate.

First, the combined buying power of our two business segments, along with our scale, strengthens our ties to the major manufacturers of insulation and other building material products. This helps to ensure we are buying competitively and ensures the availability of supply to our local branches and distribution centers. The overall effect is driving efficiencies through our supply chain.

First, the combined buying power of our two business segments, along with our scale, strengthens our ties to the major manufacturers of insulation and other building material products. This enables us to buy competitively and ensures the availability of supply to our local branches and distribution centers. The overall effect drives efficiencies throughout our supply chain.

For residential housing, our Specialty Distribution centers service primarily local contractors, lumberyards, retail stores and others who, in turn, service local homebuilders and other customers. For commercial/industrial mechanical insulation, we primarily service mechanical insulation installers, general contractors and end-users.

As a result, we can achieve profitability at lower levels of demand as compared to historical periods. For further discussion on our cash flows and liquidity, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources . Major Customers We have a diversified portfolio of customers.

As a result, we can achieve profitability at lower levels of demand as compared to historical periods. For further discussion on our cash flows and liquidity, see

Being a leader in both insulation installation and specialty distribution allows us to reach a broader set of customers more effectively.

The minimum amount of insulation installed in a new home or commercial project is regulated by various building and energy codes. Our leadership position in both insulation installation and specialty distribution allows us to reach a broader set of customers more effectively.

Removed

The amount of insulation installed in a new home or commercial project is regulated by various building and energy codes. Our Installation customer base includes national and regional single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners. Specialty Distribution We distribute building and mechanical insulation, insulation accessories, rain gutters and other building product materials for the residential and commercial/industrial end markets through our Specialty Distribution business.

Removed

Our top customer accounted for approximately three percent of our total revenues for the year ended December 31, 2023. Our top ten customers accounted for approximately 11 percent of our total sales in 2023. Suppliers Our businesses depend on our ability to obtain an adequate supply of high-quality products and components from manufacturers and other suppliers.

Removed

We source the majority of our fiberglass building products from four primary U.S.-based residential fiberglass insulation manufacturers: CertainTeed, Johns Manville, Knauf, and Owens Corning.

Removed

We have positive relationships with our suppliers and are in continuous contact and work closely with our suppliers regarding the quality of materials.

Removed

Our current business model with material suppliers affords us flexibility in maximizing material purchasing, which is often driven by region, demand, supply, and pricing, without the constraints of exclusivity agreements. Human Capital As a leading installer of insulation and specialty distributor of insulation and building material products to the construction industry in the U.S. and Canada, our performance relies heavily on human capital and relationships with customers and suppliers.

Removed

Accordingly, our success depends on our ability to attract, retain, protect, and develop our employees.

Removed

To support these objectives, we have designed and implemented a human capital management program that fosters a culture of inclusivity, collaboration, support, and innovation where every voice is welcome, heard, and respected. Employee Recruiting & Retention As of December 31, 2023, we had 14,012 employees (excluding contingent workers), of which 8,542 were installers.

Removed

Over 730 of our employees are currently covered by 61 collective bargaining agreements that expire on various dates through 2027. We believe that our relationships with our union partners are good. The residential new construction housing market remained strong through most of 2023, and continued to be a tight construction industry labor market.

Removed

To attract and retain experienced employees, we offer a positive culture and a competitive compensation and benefits program to all our employees.

Removed

Our benefits program is designed to meet the needs of a diverse employee workforce and includes tuition reimbursement, career growth and professional development, matching 401(k) contributions, multiple dental and medical plan options, and paid time off. We take proactive steps to find quality sources of construction labor and our Friends and Family Referral Program is our best source for recruiting and retaining installers.

Removed

This program has been very successful since its launch in 2020 and in 2023 led to the hiring and retention of 1,388 installers.

Removed

In addition, we hire directly from the local communities in which our branches operate, and we partner with organizations that help source talent with diverse backgrounds, including organizations in support of veterans, refugees, and trade school students and graduates. 7 Table of Contents Voluntary turnover across all employee categories in 2023 was 30%, which is an improvement from our 2022 turnover rate of 33.2%.

Removed

We attribute our effective retention rate to meaningful work, competitive wages, comprehensive benefits, and positive employee relations. To build a pipeline of leadership talent, we recruit internally and externally into our Manager in Training (MIT) program, which is designed to foster the development of participants into leaders of our Company and high performers in our industry.

Removed

The program lasts 12-24 months and participants are supported by our executive management team as they are immersed in all aspects of our operations and directly serve and support our customers and suppliers.

Removed

We average 18-22 participants in our MIT program and, upon completion, successful participants are regularly promoted into branch leadership roles within our Company. Diversity and Inclusion We continue to take steps as an employer to embrace and expand diversity and inclusion as part of our culture and talent practices.

Removed

As of December 31, 2023, our employees self-identified as 45.7% Hispanic, 34.1% White, 7.7% Black, 4% Other, and 8.5% Undisclosed. Our employees represent a higher racial diversification than both the construction industry average and the total U.S. workforce, as reported by the Bureau of Labor Statistics (December 2023).

Removed

In addition, our workforce self-identifying as female as of December 31, 2023, was 11.5%, which is higher than the U.S. construction industry female workforce of 9.9%, as reported by the Bureau of Labor Statistics (December 2023).

Removed

Our corporate leadership team (managers and above) self-identified as approximately 43% female, and of all leaders (managers and above) 25.7% identify as non-white or undisclosed. *Sums to >100% due to multi-racial reporting. We acknowledge and are committed to respecting and upholding the human rights and dignity of all individuals within our operations.

Removed

We have adopted a company-wide Human Rights policy, which is designed to promote a workplace that values and respects the contributions and perspectives of all employees from a variety of backgrounds, skills, and experiences.

Removed

Company policies, including the Human Rights Policy, are published in the ESG section of our website. Safety We prioritize a culture of safety that innovates better and safer ways to work, emphasizes best practices, and rewards ongoing improvement in our safety performance.

Removed

We believe our focus on safety is a key differentiator in our industry, and it is an important indicator in how we measure our Company’s success. 8 Table of Contents To achieve continuous improvement in safety, we provide our employees with ongoing safety training, information, and programs.

Removed

Training commences upon employee onboarding and continues with regular sessions delivered throughout the year. All new hires must complete our standard safety curriculum and we require a minimum number of annual training hours thereafter. We provide training sessions in-person, online or on-demand, with specific training assigned by job and work scope.

Removed

All safety training programs are available in the employee’s preferred language and attending employees are evaluated for understanding through written, verbal, and skill-based assessments.

Removed

During 2023, we assigned each of our employees an average of 15.4 hours of safety training. To align our workforce with our safety goals, a portion of our annual incentive compensation for all eligible employees, including our senior leadership, is tied to our safety performance.

Removed

While we ultimately strive to have zero incidents, we set an aggressive annual target based on prior year performance as compared against industry average at the company level and for each business segment.

Removed

Further, our regional Safety Managers audit field locations and our Branch Support Center to assess compliance with our policies and procedures. We closely monitor injury trends and conduct extensive research to better understand and improve our safety performance. In 2023, we experienced no fatalities.

Removed

Our company-wide injury rate was 1.97 and our lost time case rate was 0.57, each of which is significantly below the industry average of 2.7 and 1.3, respectively, as reported by the Bureau of Labor and Statistics for NAICS 23831 (2022).

Removed

Our incident rates do not include the impact of acquired companies in the year of acquisition. Community Involvement TopBuild has a longstanding commitment to service in our communities, and we provided ongoing support to many national and local charitable organizations in 2023, including: Habitat For Humanity .

Removed

Our 2023 Habitat for Humanity Golf Tournament was our most successful event to date and raised approximately $0.7 million for Habitat for Humanity. Since 2016, TopBuild and its partners have raised approximately $3.8 million in support of the charity’s vision for creating a world where everyone has a healthy and affordable place to call home.

Removed

These monetary donations, combined with our donations of construction materials and volunteer hours contributed by our employees, have helped low-income families purchase their first home, supported disaster response initiatives, and revitalized communities. Salvation Army . TopBuild is a proud supporter of the Salvation Army and their annual Angel Tree program.

Removed

In 2023, we collected donations to help provide holiday gifts to nearly 100 children and to provide food, shelter, and utility assistance to families in need throughout the year. 9 Table of Contents NASCAR Foundation . TopBuild continued its partnership with the NASCAR Foundation in 2023.

Removed

Through a combination of fundraising and volunteering, our employees helped build playsets for pediatric cancer patients, decorated pediatric centers, and provided year-round support to the foundation and its efforts to improve the lives of children in our communities. American Red Cross .

Removed

We continued our support to the American Red Cross in 2023, helping to ensure the charity has the necessary funding to assist families reeling from the effects of hurricanes, tornadoes, and other natural disasters. Payit4ward . TopBuild was the proud sponsor of Payit4ward’s annual summer Back to School Drive for the 6th year running.

Removed

Our teams competed in fundraising competitions ahead of the event to raise money for supplies and backpacks and volunteered to help ensure thousands of under-served children in our Daytona Beach, FL community had the essentials for their first day of school. Our people are our most valuable resource, and together with our affiliate partnerships, we remain committed to supporting and improving the communities where we live and work. Employee Feedback Employee engagement is important to us as we continue to create a positive employee experience.

Removed

In addition to new hire and exit surveys, we conduct an all-employee survey bi-annually, which is administered by a third party and was most recently completed in 2023. 60% of our employees responded to our 2023 survey and we are proud that our engagement index score was 85%.

Removed

This score represents positive employee feedback on key questions related to pride in the Company, sense of accomplishment, and intent to stay. We shared the results of our survey with our employees, leadership at all levels and locations, and with our Board.

Removed

Our leaders reviewed areas of satisfaction and improvement with their teams and continue to prioritize actions and activities in response to the survey results.

Removed

Overall areas of strength include employee perception of a solid culture of safety and ethical behavior within our Company and a strong understanding of work expectations and how employee efforts contribute to the Company’s success. In 2023, TopBuild was certified as a Great Place to Work.

Removed

This certification is a two-step process that includes employee feedback to a third-party survey and a questionnaire about the workforce. 80% of employees said TopBuild is a great place to work, – compared to 57% of employees at a typical U.S-based company.

Removed

(Source: Great Place To Work® 2021 Global Employee Engagement Study.) Executive Officers Set forth below is information about our executive officers. There are no family relationships among any of the officers named below. Robert M.

Removed

Buck, age 54 • Chief Executive Officer and President since January 1, 2021 • President and Chief Operating Officer from June 2015 – December 2020 • Group Vice President of Masco from 2014 – June 2015, responsible for the Installation and Other Services Segment consisting of both Masco Contractor Services and Specialty Distribution • President of Masco Contractor Services from 2009 – 2014 Robert M.

Removed

Kuhns, age 50 • Vice President and Chief Financial Officer since March 2022 • Vice President, Controller from July 2018 – March 2022 • Senior Director, Assistant Corporate Controller of Mohawk Industries, Inc. from July 2015 – July 2018 • Senior Director, International Finance of Mohawk Industries, Inc. from March 2013 – July 2015 10 Table of Contents Luis F.

Removed

Machado, age 61 • Vice President, General Counsel and Corporate Secretary since August 2020 • Vice President, General Counsel and Secretary of CTS Corporation from 2015 – August 2020 • Senior Vice President, Legal, and Assistant Secretary of L Brands, Inc. from 2010 – 2015 Jennifer J.

Removed

Shoffner, age 51 • Chief Human Resources Officer since August 2020 • Vice President, Talent Management from February 2020 – August 2020 • Vice President, Human Resources of Liberty Hardware, a Masco Company, from 2006 – 2011 and 2013 – January 2020 Joseph M.

Removed

Viselli, age 56 • Vice President and Chief Operating Officer since October 2022 • Senior Vice President and General Manager of Distribution International from June 2020 – October 2022 • Senior Vice President and General Manager of Silvercote from June 2019 – October 2022 • General Manager of Silvercote and Senior Vice President of Knauf Insulation from February 2017 – June 2019 Steven P.

Removed

Raia, age 68 • President, TopBuild Special Operations and Executive Adviser since January 2024 • President, TruTeam Operations from March 2019 – January 2024 • Senior Vice President of Operations, from November 2015 – March 2019 • Various operations management and roles in insulation businesses prior to 2015 Robert J.

Removed

Franklin, age 64 • President, Specialty Distribution since October 2022 • President, Service Partners Operations from September 2019 to October 2022 • Vice President of Operations, TruTeam from 2017 – September 2019 • Regional Leader, TruTeam from 2015 – 2016 • Various operations management and roles in insulation businesses prior to 2015 Jeffrey M.

Removed

Krestancic, age 40 • President, TruTeam since January 2024 • Senior Vice President, TruTeam Operations from May 2023 – January 2024 • Vice President, TruTeam Operations from July 2021 to May 2023 • Regional Director, TruTeam from April 2017 to July 2021 • Various operations management and roles in insulation business prior to April 2017 Legislation and Regulation We are subject to U.S. and Canadian federal, state, provincial, and local laws and regulations, particularly those pertaining to health and safety (including protection of employees and consumers), labor standards/regulations, contractor licensing, and environmental issues.

Removed

In addition to complying with currently effective legal requirements and preparing for upcoming requirements, even more stringent legal requirements could be imposed on our industries. Additionally, some of our products and services require certification by industry or other organizations.

Removed

Maintaining compliance with potentially changing legal requirements and industry standards may require us to alter our specialty distribution and installation processes and our sourcing, which could adversely impact our business.

Removed

Further, as discussed in our Item 1A (Risk Factors), if we do not effectively and timely comply with legal requirements and industry standards, our operating results could be negatively affected. 11 Table of Contents Additional Information We provide our Annual Reports, Quarterly Reports, Current Reports and amendments to those reports free of charge on our website, www.topbuild.com, as soon as reasonably practicable after these reports are filed with or furnished to the SEC.

Removed

We also provide Environmental, Social and Governance (“ESG”) information, including with respect to certain safety metrics, on our website.

Removed

Information contained on our website is not incorporated by reference into this Form 10-K, and you should not consider information contained on our website to be part of this Form 10-K or in deciding whether to purchase shares of our common stock. Use of our Website to Distribute Material Company Information We use our website, www.topbuild.com, as a channel of distribution and routinely post important Company information including press releases, investor presentations and financial information.

Removed

We may also use our website to expedite public access to time-critical information regarding our Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information.

Removed

Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available. 12 Table of Contents

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

34 edited+6 added−1 removed82 unchanged

2023 filing

2024 filing

Biggest changeIn addition, we could be adversely affected if any of our significant customers or suppliers experience any similar events that disrupt their business operations or damage their reputations. We maintain monitoring practices and protections of our information technology to reduce these risks and test our systems on an ongoing basis for potential threats.

Biggest changeWe maintain monitoring practices and protections of our information technology to reduce these risks and test our systems on an ongoing basis for potential threats. In addition, we could be adversely affected if any of our significant customers or suppliers experience any similar events that disrupt their business operations or damage their reputations.

Volatility in the exchange rates between the foreign currencies and the U.S. dollar could materially harm our business, financial condition, or operating results. 20 Table of Contents Risks Relating to Information Technology and Cybersecurity We rely on information technology systems, and in the event of a disruption or security incident, we could experience problems operating our business and incur substantial costs to address resulting issues. Our operations are dependent upon our information technology systems, including systems run by third-party vendors which we do not control, to operate our business including, but not limited to managing customer orders on a timely basis, to coordinating our installation and specialty distribution activities across locations, and managing invoicing.

Volatility in the exchange rates between the foreign currencies and the U.S. dollar could materially harm our business, financial condition, or operating results. 20 Table of Contents Risks Relating to Information Technology and Cybersecurity We rely on information technology systems, and in the event of a disruption or security incident, we could experience problems operating our business and incur substantial costs to address resulting issues. Our operations are dependent upon our information technology systems, including systems run by third-party vendors which we do not control, to operate our business including, but not limited to managing customer orders on a timely basis, coordinating our installation and specialty distribution activities across locations, and managing invoicing.

Our ability to realize anticipated cost savings, synergies, and revenue enhancements may be affected by a number of factors, including, but not limited to, the following: • the use of more cash or other financial resources on integration and implementation activities than we expect; • unanticipated increases in expenses unrelated to any future acquisition, which may offset the expected cost savings and other synergies from any future acquisition; • our ability to eliminate duplicative back office overhead and redundant selling, general, and administrative functions; and • our ability to avoid labor disruptions in connection with the integration of any future acquisition, particularly in connection with any headcount reduction. While we expect future acquisitions to create opportunities to reduce our combined operating costs, these cost savings reflect estimates and assumptions made by our management, and it is possible that our actual results will not reflect these estimates and assumptions within our anticipated timeframe or at all. If we fail to realize anticipated cost savings, synergies, or revenue enhancements, our financial results may be adversely affected, and we may not generate the cash flow from operations that we anticipate. Risks Relating to Legal and Regulatory Matters Because we operate our business through highly dispersed locations across the U.S. and Canada, our operations may be materially adversely affected by inconsistent local practices, and the operating results of individual branches and centers may vary. We operate our business through a network of highly dispersed locations throughout the United States and Canada, supported by executives and services at our Branch Support Center in Daytona Beach, Florida, with local branch management retaining responsibility for day-to-day operations and adherence to applicable local laws.

Our ability to realize anticipated cost savings, synergies, and revenue enhancements may be affected by a number of factors, including, but not limited to, the following: • the use of more cash or other financial resources on integration and implementation activities than we expect; • unanticipated increases in expenses unrelated to any future acquisition, which may offset the expected cost savings and other synergies from any future acquisition; • our inability to eliminate duplicative back office overhead and redundant selling, general, and administrative functions; and • our inability to avoid labor disruptions in connection with the integration of any future acquisition, particularly in connection with any headcount reduction. While we expect future acquisitions to create opportunities to reduce our combined operating costs, these cost savings reflect estimates and assumptions made by our management, and it is possible that our actual results will not reflect these estimates and assumptions within our anticipated timeframe or at all. If we fail to realize anticipated cost savings, synergies, or revenue enhancements, our financial results may be adversely affected, and we may not generate the cash flow from operations that we anticipate. Risks Relating to Legal and Regulatory Matters Because we operate our business through highly dispersed locations across the U.S. and Canada, our operations may be materially adversely affected by inconsistent local practices, and the operating results of individual branches and centers may vary. We operate our business through a network of highly dispersed locations throughout the United States and Canada, supported by executives and services at our Branch Support Center in Daytona Beach, Florida, with local branch management retaining responsibility for day-to-day operations and adherence to applicable local laws.

The process of integrating acquired businesses, may expose us to operational challenges and risks, including, but not limited to: • the ability to profitably manage acquired businesses or successfully integrate the acquired business’ operations, financial reporting, and accounting control systems into our business; • the expense of integrating acquired businesses; • increased indebtedness; • the loss of installers, suppliers, customers or other significant business partners of acquired businesses; • potential impairment of goodwill and other intangible assets; • risks associated with the internal controls and accounting policies of acquired businesses; 16 Table of Contents • diversion of management’s attention due to the increase in the size of our business; • the ability to fund cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal or external difficulties; • the availability of funding sufficient to meet increased capital needs; • difficulties in the assimilation of different corporate cultures and business practices; • the ability to retain vital employees or hire qualified personnel required for expanded operations; • failure to identify all known and contingent liabilities during due diligence investigations; and • the insufficiency of indemnification granted to us by sellers of acquired companies. Failure to successfully integrate any acquired business may result in reduced levels of revenue, earnings, or operating efficiency than might have been achieved if we had not acquired such business.

The process of integrating acquired businesses, may expose us to operational challenges and risks, including, but not limited to: • the ability to profitably manage acquired businesses or successfully integrate the acquired business’ operations, financial reporting, and accounting control systems into our business; • the expense of integrating acquired businesses; • increased indebtedness; • the loss of installers, suppliers, customers or other significant business partners of acquired businesses; • potential impairment of goodwill and other intangible assets; • risks associated with the internal controls and accounting policies of acquired businesses; • diversion of management’s attention due to the increase in the size of our business; 16 Table of Contents • the ability to fund cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal or external difficulties; • the availability of funding sufficient to meet increased capital needs; • difficulties in the assimilation of different corporate cultures and business practices; • the inability to retain vital employees or hire qualified personnel required for expanded operations; • failure to identify all known and contingent liabilities during due diligence investigations; and • the insufficiency of indemnification granted to us by sellers of acquired companies. Failure to successfully integrate any acquired business may result in reduced levels of revenue, earnings, or operating efficiency than might have been achieved if we had not acquired such business.

If we cannot obtain adequate capital, we may not be able to fully implement our business strategy and our business, operational results and financial condition could be adversely affected. Our indebtedness and restrictions in our existing credit facility, Senior Notes or any other indebtedness we may incur in the future, could adversely affect our business, financial condition, results of operations, ability to make distributions to shareholders, and the value of our common stock. Our indebtedness could have significant consequences on our future operations, including but not limited to: • making it more difficult for us to meet our payments and other obligations; • reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions or strategic investments and other general corporate requirements, and limiting our ability to obtain additional financing for these purposes; • subjecting us to increased interest expense related to our indebtedness with variable interest rates, including borrowings under our credit facility; • limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to changes in our business, the industry in which we operate and the general economy; and • placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged. Any of the above-listed factors could have an adverse effect on our business, financial condition, results of operations, or ability to meet our payment obligations.

If we cannot obtain adequate capital, we may not be able to fully implement our business strategy and our business, operational results and financial condition could be adversely affected. Our indebtedness and restrictions in our existing credit facility, senior notes or any other indebtedness we may incur in the future, could adversely affect our business, financial condition, results of operations, ability to make distributions to shareholders, and the value of our common stock. Our indebtedness could have significant consequences on our future operations, including but not limited to: • making it more difficult for us to meet our payment and other obligations; • reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions or strategic investments and other general corporate requirements, and limiting our ability to obtain additional financing for these purposes; • subjecting us to increased interest expense related to our indebtedness with variable interest rates, including borrowings under our credit facility; • limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to changes in our business, the industry in which we operate and the general economy; and • placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged. Any of the above-listed factors could have an adverse effect on our business, financial condition, results of operations, or ability to meet our payment obligations.

There can be no assurance, however, that our efforts will prevent the occurrence of a security breach of our databases or systems that could adversely affect our business. Risks Relating to Liquidity and Our Ability to Finance Our Operations If we are required to take significant non-cash charges, our financial resources could be reduced, and our financial flexibility may be negatively affected. We have significant goodwill and other intangible assets related to business combinations on our balance sheet.

There can be no assurance that our efforts will prevent the occurrence of a security breach of our databases or systems that could adversely affect our business. Risks Relating to Liquidity and Our Ability to Finance Our Operations If we are required to take significant non-cash charges, our financial resources could be reduced, and our financial flexibility may be negatively affected. We have significant goodwill and other intangible assets related to business combinations on our balance sheet.

While we are generally indemnified by our manufacturers and suppliers for claims relating to the quality of their products, our business could be negatively impacted by product quality or performance issues, including exposure to legal claims and regulatory proceedings and damage to our reputation. We may not be able to identify new products or new product lines and integrate them into our specialty distribution network, which may impact our ability to compete.

In addition, our past acquisitions results, and any future acquisitions could result in the incurrence of additional debt and related interest expense, contingent liabilities, and amortization expenses related to intangible assets, which could have a material adverse effect on our financial condition, operating results, and cash flow. We may not be able to achieve the benefits that we expect to realize as a result of future acquisitions.

In addition, our past acquisitions’ results, and any future acquisitions could result in the incurrence of additional debt and related interest expense, contingent liabilities, and amortization expenses related to intangible assets, which could have a material adverse effect on our financial condition, operating results, and cash flow. We may not be able to achieve the benefits that we expect to realize as a result of future acquisitions.

If we experience problems with our information technology systems, we could experience, among other things, delays in receiving customer orders, placing orders with suppliers, and scheduling production, installation services, deliveries, or shipments. A substantial disruption in our information technology systems could have an adverse impact on revenue, harm our reputation, and cause us to incur legal liability and costs, which could be significant, to address and remediate such events and related security and operational issues. In addition, we could be adversely affected if any of our significant customers or suppliers experience any similar events that disrupt their respective business operations or damage their reputations. In the event of a cybersecurity incident, we could experience operational interruptions, incur substantial additional costs, become subject to legal or regulatory proceedings or suffer damage to our reputation. In addition to the disruptions that may occur from interruptions in our information technology systems, cybersecurity threats and sophisticated and targeted cyberattacks pose a risk to our information technology systems.

If we experience problems with our information technology systems, we could experience, among other things, delays in receiving customer orders, placing orders with suppliers, and scheduling production, installation services, deliveries, shipments, invoicing, or collections. A substantial disruption in our information technology systems could have an adverse impact on revenue, harm our reputation, and cause us to incur legal liability and costs, which could be significant, to address and remediate such events and related security and operational issues. In addition, we could be adversely affected if any of our significant customers or suppliers experience any similar events that disrupt their respective business operations or damage their reputations. In the event of a cybersecurity incident, we could experience operational interruptions, incur substantial additional costs, become subject to legal or regulatory proceedings or suffer damage to our reputation. In addition to the disruptions that may occur from interruptions in our information technology systems, cybersecurity threats and sophisticated and targeted cyberattacks pose a risk to our information technology systems.

Moreover, if we do not respond to evolving customer preferences or changes in building standards, or if we do not maintain or expand our expertise in building science, our business, results of operation, financial condition, and cash flow would be adversely affected. Each of our lines of business is impacted by building codes and consumer preferences, including a growing focus on energy efficiency.

In addition, these same factors may also place us at a competitive disadvantage compared to foreign competitors. FCPA Risk We may face risks associated with violations of the Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws.

In addition, these same factors may also place us at a competitive disadvantage compared to local competitors. FCPA Risk We may face risks associated with violations of the Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws.

Our expansion into new markets may present competitive, distribution, and regulatory challenges that differ from current ones. Our business depends, in part, on our ability to identify future products and product lines that complement existing products and product lines and that respond to our customers’ needs.

Our expansion into new markets may present competitive, distribution, installation, and regulatory challenges that differ from current ones. Our business depends, in part, on our ability to identify future products and product lines that complement existing products and product lines and that respond to our customers’ needs.

Our contractual arrangements with our builder and contractor customers may include our agreement to defend and indemnify them against various liabilities. We rely on manufacturers and other suppliers to provide us with most of the products we install.

Our foreign operations are subject to inherent risks, which may materially adversely affect us, including: political and economic changes or instability; expropriation or the imposition of government controls; changes in government regulations; export requirements; trade restrictions; earnings repatriation and expatriation restrictions; exposure to different legal standards, including related to intellectual property and data privacy; health conditions and standards; currency controls; fluctuations in exchange rates; increases in the duties and taxes we pay; inflation or deflation; greater difficulty in collecting accounts receivable and longer payment cycles; changes in labor conditions, staffing, and managing our foreign operations; limitations on insurance coverage against geopolitical risks, natural disasters, and business operations; and communication among management and foreign operations.

Our foreign operations are subject to inherent risks, which may materially adversely affect us, including: political and economic changes or instability; expropriation or the imposition of government controls; changes in government regulations; export requirements; trade restrictions; earnings repatriation and expatriation restrictions; exposure to different legal standards, including related to intellectual property and data privacy; health conditions and standards; currency controls; fluctuations in exchange rates; increases in the duties, tariffs, and taxes we pay (directly or indirectly); inflation or deflation; greater difficulty in collecting accounts receivable and longer payment cycles; changes in labor conditions, staffing, and managing our foreign operations; limitations on insurance coverage against geopolitical risks, natural disasters, and business operations; and communication among management and foreign operations.

Our expansion into new markets, new products, or new product lines may present competitive, distribution, and regulatory challenges, as well as divert management’s attention away from our core business.

Our expansion into new markets, new products, or new product lines may present competitive, distribution, installation, and regulatory challenges, as well as divert management’s attention away from our core business.

Any of these factors could have a material adverse effect on our business, results of operations, and financial condition. Risks Relating to Human Capital The long-term performance of our businesses relies on our ability to attract, develop, and retain talented personnel, including sales representatives, branch managers, installers, and truck drivers, while controlling our labor costs. We are highly dependent on the skills and experience of our senior management team and other skilled and experienced personnel.

Any of these factors could have a material adverse effect on our business, results of operations, and financial condition. 14 Table of Contents Risks Relating to Human Capital The long-term performance of our businesses relies on our ability to attract, develop, and retain talented personnel, including sales representatives, branch managers, installers, and truck drivers, while controlling our labor costs. We are highly dependent on the skills and experience of our senior management team and other skilled and experienced personnel.

Although we believe that we operate our business, including each of our locations, in compliance with applicable laws and regulations and maintain all material permits required under such laws and regulations to operate our business, we may be held liable or incur fines or penalties in connection with such requirements.

Although we believe that we operate our business, including each of our locations and acquired businesses, in compliance with applicable laws and regulations and maintain all material permits required under such laws and regulations to operate our business, we may be held liable or incur fines or penalties in connection with such requirements.

In addition, we compete with other companies to recruit and retain qualified installers and truck drivers in a tight labor market, and we invest significant resources in training and motivating them to maintain a high level of job satisfaction. These positions generally have high turnover rates, which can lead to increased training and retention costs.

In addition, we compete with other companies to recruit and retain qualified installers, truck drivers, warehouse workers, and other laborers in a tight labor market, and we invest significant resources in training and motivating them to maintain a high level of job satisfaction. These positions generally have high turnover rates, which can lead to increased training and retention costs.

The commercial and industrial construction markets are affected by macroeconomic and local economic factors including, but not limited to, general economic conditions, cost of financing, credit availability, material costs, labor rates, vacancy and absorption rates, manufacturing capacity and demand, technological advancements, foreign and domestic competition, and import and export activity.

Volatile economic and credit conditions also make it more difficult for our customers to forecast and plan future business activities and may prevent them from ordering our products or services as frequently or in the quantities they otherwise would.

Volatile economic and credit conditions and elevated interest rates also make it more difficult for our customers to forecast and plan future business activities and may prevent them from ordering our products or services as frequently or in the quantities they otherwise would.

In addition, the inability to integrate new products and product lines into our specialty distribution network could affect our ability to compete. Risks Relating to Events Beyond Our Control A decline in general economic conditions could materially reduce demand for our services or the products that we distribute. Demand for our products and services depends heavily on the operating level of our customers and the economic factors that affect them, including general economic conditions.

In addition, the inability to integrate new products and product lines into our specialty distribution or installation network could affect our ability to compete. Risks Relating to Events Beyond Our Control A decline in general economic conditions could materially reduce demand for our services or the products that we distribute. Demand for our products and services depends heavily on the operating level of our customers and the economic factors that affect them, including general economic conditions and the financing and interest rate environment.

Significant additional government-imposed increases in the preceding areas could have a material adverse effect on our business, financial condition, and results of operations. In addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and the U.S.

Significant additional government-imposed increases in the preceding laws, regulations, or requirements could have a material adverse effect on our business, financial condition, and results of operations. In addition, certain states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and the U.S.

We may experience materially adverse impacts to our business because of any economic recession or slowing in the rate of growth. An epidemic, pandemic, or similar serious public health issue (such as COVID-19), and the measures undertaken by governmental authorities to address it, may cause business and market disruptions, impacting demand for our services or the products we distribute, our ability to provide services, or our results of operations or financial condition. The spread of highly infectious or contagious diseases (such as COVID-19) could cause quarantines, business shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions, and overall economic and financial market instability, all of which may impact general economic conditions or consumer confidence.

We may experience materially adverse impacts to our business because of any economic recession, slowing in the rate of growth, interest rate changes, or other economic factors negatively affecting affordability of residential housing or commercial construction. An epidemic, pandemic, or similar serious public health issue (such as COVID-19), and the measures undertaken by governmental authorities to address it, may cause business and market disruptions, impacting demand for our services or the products we distribute, our ability to provide services, or our results of operations or financial condition. The spread of highly infectious or contagious diseases (such as COVID-19) could cause quarantines, business shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions, and overall economic and financial market instability, all of which may impact general economic conditions or consumer confidence.

Any interruption in the production or delivery of these products could delay or reduce availability of these products and increase our costs. Our business relies significantly on the expertise of our employees and we generally do not have intellectual property that is protected by patents. Our business is significantly dependent upon our expertise in installation and distribution logistics, including significant expertise in the application of building science through our Environments for Living® program.

To the extent that economic activity, business conditions, and the industries in which we operate deteriorate as a result of such disruptions, we would expect to experience an adverse impact on demand for our services and the products we distribute, our ability to provide services, or our results of operations or financial condition. Our business may be adversely affected by economic, political and social conditions and events in North America or other regions where we may not operate. 14 Table of Contents We operate primarily in North America, but also supply projects in other parts of the world and have suppliers and customers that have operations outside of North America.

In addition, environmental laws and regulations, including those related to energy use and climate change, may become more stringent over time, and any future laws and regulations could have a material impact on our operations or require us to incur material additional expenses to comply. Changes in building codes and consumer preferences could affect our ability to market our service offerings and our profitability.

These factors could have a material adverse effect on our business, financial condition, and results of operations. 15 Table of Contents Union organizing activity and work stoppages could delay or reduce the availability of products that we install and increase our costs. Approximately 730 of our employees are currently covered by collective bargaining or other similar labor agreements that expire on various dates through 2027.

These factors could have a material adverse effect on our business, financial condition, and results of operations. 15 Table of Contents Union organizing activity and work stoppages could delay or reduce the availability of products that we install and increase our costs. As of December 31, 2024, 714 of our employees were covered by 47 collective bargaining agreements that expire on various dates through 2027.

We also compete with broad line building products distributors, big box retailers, insulation manufacturers, and mechanical insulation fabricators. In addition to price, we believe that competition in our industry is based largely on existing customer relationships, customer service, and the quality and timeliness of installation services and distribution product deliveries in each local market.

In addition to price, we believe that competition in our industry is based largely on existing customer relationships, customer service, and the quality and timeliness of installation services and distribution product deliveries in each local market.

While we do not believe we depend on any sole or limited source of supply, we source the majority of our building products, primarily insulation, from a limited number of large suppliers.

Fiberglass insulation has been on allocation for significant periods in the recent past through the date of this Annual Report. While we do not believe we depend on any sole or limited source of supply, we source the majority of our building products, primarily insulation, from a limited number of large suppliers.

We may also be required to alter our installation and distribution processes, product sourcing, or business practices, which could make recruiting and retaining labor in a tight labor market more challenging.

Compliance with these regulations and industry standards is costly and may require us to invest additional resources into our compliance infrastructure, thereby increasing our cost structure. We may also be required to alter our installation and distribution processes, product sourcing, or business practices, which could make recruiting and retaining labor in a tight labor market more challenging.

Congress and Department of Homeland Security from time to time consider and implement changes to federal immigration laws, regulations, or enforcement programs. These changes may increase our compliance and oversight obligations, which could subject us to additional costs and make our hiring process more cumbersome, or reduce the availability of potential employees.

These changes may increase our compliance and oversight obligations or cause labor shortages or challenges in hiring labor, which could subject us to additional costs and make our hiring process more cumbersome, or reduce the availability of potential employees.

Our Installation competitors include national contractors, regional contractors, and local contractors, and we face many or all of these competitors for each project on which we bid. Our Specialty Distribution competitors include numerous specialty insulation distributors. In some instances, our Specialty Distribution business sells products to companies that may compete directly with our installation service business.

Our Installation competitors include national contractors, regional contractors, and local contractors, and we face many or all of these competitors for each project on which we bid. Our Specialty Distribution competitors include numerous specialty insulation distributors on a national, regional, and local level, as well as broad-line distributors that offer competitive products.

We could also become subject to fines, penalties, and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration laws.

We could also become subject to fines, penalties, and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration laws. Changes to immigration laws may have an indirect impact on our business if other construction trades are impacted, potentially lengthening the construction cycle or increasing competition for labor.

In addition to complying with current requirements, even more stringent requirements could be imposed in the future by the Securities and Exchange Commission and other governmental authorities. Compliance with these regulations and industry standards is costly and may require us to invest additional resources into our compliance infrastructure, thereby increasing our cost structure.

Removed

We carry cybersecurity insurance to help mitigate financial exposure in the event of intentional intrusion.

Added

Further, periods during which interest rates remain elevated, or are perceived or expected to remain elevated, may dampen demand in the housing or construction markets that we serve or negatively impact our stock price.

Added

We operate primarily in North America, but also supply projects in other parts of the world and have suppliers and customers that have operations outside of North America.

Added

Congress and Department of Homeland Security from time to time considers and implements changes to federal immigration laws, regulations, or enforcement programs.

Added

We may be subject to environmental claims or liabilities arising from the ownership or operation of acquired businesses for the periods prior to our acquisition.

Added

If we are unable to successfully obtain insurance coverage or enforce our indemnification rights against the former owners regarding such liabilities or claims, or if the former owners are unable to satisfy their obligations for any reason, we could be held liable for such liabilities or claims, which could adversely affect our financial condition and results of operations. Changes in building codes and consumer preferences could affect our ability to market our service offerings and our profitability.

Added

In some instances, our Specialty Distribution business sells products to companies that may compete directly with our installation service business. We also compete with broad line building products distributors, big box retailers, insulation manufacturers, and mechanical insulation fabricators.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed13 unchanged

2023 filing

2024 filing

Biggest changeIf any such cybersecurity incident is determined by the CRT to have the potential to materially impact the Company, such event would be elevated for further review and assessment by a senior leadership team consisting of our Chief Executive Officer, Chief Financial Officer, General Counsel and, under certain circumstances, the Board. Governance Our full Board is responsible for oversight of risks from cybersecurity threats, including our cybersecurity risk management program.

Among the key features of our program are: 24 Table of Contents • Periodic independent, third-party reviews of our program and its maturity based on the National Institute of Standards and Technology (NIST) cybersecurity framework; • Strategic periodic engagements of consulting firms to advise the Board and our executive officers regarding the structure and oversight of our cybersecurity risk management program, cyber strategy framework evolution, risk-based assessments, incident response services, and cyber technology; • Consulting with external advisors and specialists on specific projects regarding opportunities and enhancements to strengthen our cyber practices and policies on an as needed basis; • Periodic review of SOC1 and SOC2 audit reports submitted by our strategic third-party technology suppliers, as prepared by their external auditors; • Ongoing cybersecurity training for employees; and • Periodic testing of incident response procedures. In addition to the third parties described above, we regularly engage consultants, advisors, service providers and other third parties to help develop and manage our cybersecurity risk management program. Our cybersecurity risk management program includes technology and processes designed to maintain active security of our information technology systems.

Among the key features of our program are: 24 Table of Contents • Periodic independent, third-party reviews of our program and its maturity based on the National Institute of Standards and Technology (NIST) cybersecurity framework; • Strategic engagements of consulting firms and legal advisors to advise the Board and our executive officers regarding the structure and oversight of our cybersecurity risk management program, cyber strategy framework evolution, risk-based assessments, incident response services, and cyber technology; • Consulting with external advisors and specialists on specific projects regarding opportunities and enhancements to strengthen our cyber practices and policies on an as needed basis; • Periodic review of SOC1 and SOC2 audit reports submitted by our strategic third-party technology suppliers, as prepared by their external auditors; • Ongoing cybersecurity training for employees; and • Periodic testing of incident response procedures. In addition to the third parties described above, we regularly engage consultants, advisors, service providers and other third parties to help test, develop and manage our cybersecurity risk management program. Our cybersecurity risk management program includes technology and processes designed to maintain active security of our information technology systems.

Employees responsible for assessing identified risks deliver an update quarterly to our senior leadership team, which consists of our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Information Officer, General Counsel, Chief Human Resources Officer, Chief Growth Officer, and Vice President of Supply Chain.

Employees responsible for assessing identified risks deliver an update quarterly to our senior leadership team, which consists of our Chief Executive Officer, Chief Financial Officer, Chief Information Officer, General Counsel, Chief Human Resources Officer, Chief Growth Officer, and Vice President of Supply Chain.

The team’s credentials include Certified Information Security Manager and Certified Information Systems Security Professional. To help identify, assess, and manage risks from cybersecurity threats, we have integrated cybersecurity risk management into our broader, Company-wide enterprise risk management (ERM) evaluation and strategy process, which is led by our executive officers, overseen by the Audit Committee of the Board, and reviewed annually by the full Board.

The team’s credentials include Certified Chief Information Security Officer, Certified Information Security Manager and Certified Information Systems Security Professional. To help identify, assess, and manage risks from cybersecurity threats, we have integrated cybersecurity risk management into our broader, Company-wide enterprise risk management (ERM) evaluation and strategy process, which is led by our executive officers, overseen by the Audit Committee of the Board, and reviewed annually by the full Board.

We have a cybersecurity risk management program in place designed to assess, identify and manage material risks from cybersecurity threats.

We have a cybersecurity risk management program in place to identify, assess, and manage risks from cybersecurity threats.

In carrying out its oversight responsibilities, the Board receives an annual cybersecurity assessment and quarterly scorecards from our Chief Information Officer, which cover topics related to information security, privacy and cyber risks, and our risk management processes, including the status of any recent cybersecurity events meeting specified criteria, the emerging threat landscape, and the status of capital investments in our information security infrastructure. 25 Table of Contents At a management level, our cybersecurity risk management program is led by our Chief Information Officer, who reports to our Chief Executive Officer.

In carrying out its oversight responsibilities, the Board receives regular cybersecurity program updates and quarterly scorecard assessments from our Chief Information Officer, which cover topics related to information security, privacy and cyber risks, and our risk management processes, including the status of any recent cybersecurity events meeting specified criteria, the emerging threat landscape, and the status of capital investments in our information security infrastructure. At a management level, our cybersecurity risk management program is led by our Chief Information Officer, who reports to our Chief Executive Officer.

Added

Under certain circumstances, such review and assessment would include reporting to and oversight of the Board. 25 Table of Contents Governance Our full Board is responsible for oversight of risks from cybersecurity threats, including our cybersecurity risk management program.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged

2023 filing

2024 filing

Biggest changeItem 2. PROPERTIE S We operate approximately 240 Installation branch locations and approximately 170 Specialty Distribution centers in the United States and Canada, most of which are leased. Our 65,700 square foot Branch Support Center is leased and located at 475 North Williamson Boulevard in Daytona Beach, FL 32114.

Biggest changeItem 2. PROPERTIE S We operate approximately 250 Installation branch locations and approximately 190 Specialty Distribution centers in the United States and Canada, most of which are leased. Our 65,700 square foot Branch Support Center is leased and located at 475 North Williamson Boulevard in Daytona Beach, FL 32114.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+83 added−2 removed0 unchanged

2023 filing

2024 filing

Biggest changeThe graph and table assume an initial investment of $100 in our common stock and each of the three indices at the opening of business on January 1, 2019, and reinvestment of dividends. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 TopBuild Corp. $ 100 $ 229 $ 409 $ 613 $ 348 $ 832 Standard & Poor's 500 Index $ 100 $ 128 $ 150 $ 190 $ 153 $ 190 Russell 2000 Index $ 100 $ 123 $ 146 $ 166 $ 131 $ 150 Standard & Poor's 1500 Building Products Index $ 100 $ 142 $ 182 $ 268 $ 205 $ 296 Item 6. [Reserved] 27 Table of Contents

Biggest changeThe graph and table assume an initial investment of $100 in our common stock and each of the three indices at the opening of business on January 1, 2020, and reinvestment of dividends. 27 Table of Contents 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 TopBuild Corp. $ 100 $ 179 $ 268 $ 152 $ 363 $ 302 Standard & Poor's 500 Index $ 100 $ 117 $ 148 $ 119 $ 148 $ 183 Russell 2000 Index $ 100 $ 119 $ 135 $ 106 $ 122 $ 134 Standard & Poor's 1500 Building Products Index $ 100 $ 128 $ 188 $ 144 $ 208 $ 250 Item 6. [Reserved] 28 Table of Contents Item 7.

No dividends were paid during the years ended December 31, 2023 and 2022. Our Credit Agreement, in certain circumstances, limits the amount of dividends we may distribute. We do not anticipate declaring cash dividends to holders of our common stock in the foreseeable future. Issuer Purchases of Equity Securities .

No dividends were paid during the years ended December 31, 2024 and 2023. Our Credit Agreement, in certain circumstances, limits the amount of dividends we may distribute. We do not anticipate declaring cash dividends to holders of our common stock in the foreseeable future. Issuer Purchases of Equity Securities.

The following graph and table compare the cumulative total return of our common stock for the five-year period beginning January 1, 2019, through December 31, 2023, with the total cumulative return of the Russell 2000 Index, the Standard & Poor’s 500 Index, and the Standard & Poor’s 1500 Building Products Index.

The following graph and table compare the cumulative total return of our common stock for the five-year period beginning January 1, 2020, through December 31, 2024, with the total cumulative return of the Russell 2000 Index, the Standard & Poor’s 500 Index, and the Standard & Poor’s 1500 Building Products Index.

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders of our Common Stock . Our common stock is traded on the NYSE under the symbol “BLD”. As of February 20, 2024, there were approximately 1,424 holders of our issued and outstanding common stock. Dividends.

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders of our Common Stock . Our common stock is traded on the NYSE under the symbol “BLD”. As of February 18, 2025, there were 1,309 holders of our issued and outstanding common stock. Dividends.

Removed

On July 25, 2022, our Board authorized the 2022 Repurchase Program, pursuant to which the Company may purchase up to $200 million of our common stock. There were no share repurchases executed during the year ended December 31, 2023, leaving $154.4 million remaining under the 2022 Share Repurchase Program.

Added

We have $188.1 million remaining under our 2024 Share Repurchase Program.

Removed

Excluded from this disclosure are shares repurchased to settle statutory employee tax withholdings related to the vesting of stock awards. Performance Graph and Table.

Added

The following table provides information regarding the repurchases of our common stock for the three months ended December 31, 2024, in thousands, except share and per share data: Period Total Number of Shares Purchased Average Price Paid per Common Share Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 - - - $ 235,220 November 1, 2024 - November 30, 2024 56,642 $ 364.95 56,642 $ 214,548 December 1, 2024 - December 31, 2024 78,230 338.67 78,230 $ 188,054 Total 134,872 $ 349.71 134,872 Excluded from this disclosure are shares repurchased to settle statutory employee tax withholdings related to the vesting of stock awards. Performance Graph and Table.

Added

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIO N AND RESULTS OF OPERATIONS The financial and business analysis below provides information which we believe is relevant to an assessment and understanding of our financial position, results of operations, and cash flows.

Added

This financial and business analysis should be read in conjunction with the financial statements and related notes. In this section, we generally discuss the results of our operations for the year ended December 31, 2024, compared to the year ended December 31, 2023.

Added

For a discussion of the year ended December 31, 2023, to the year ended December 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024 , which discussion is hereby incorporated herein by reference. Executive Summary We are a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada.

Added

Demand for our products and services is driven primarily by residential and commercial/industrial construction and by industrial manufacturing activity.

Added

A number of local and national factors influence activity in each of our lines of business, including demographic trends, interest rates, employment levels, business investment, supply and demand for housing, availability of credit, foreclosure rates, consumer confidence, and general economic conditions. The core of our business is inherently environmentally friendly.

Added

The insulation we install and distribute drives thermal efficiency, lowers energy usage, and reduces carbon emissions. We are a leader in delivering these benefits for new and existing homes and commercial/industrial facilities across the United States and Canada. Strategy We are committed to creating long-term value for all stakeholders – employees, customers, suppliers, and investors.

Added

Our team is focused on driving operational efficiencies and sharing best practices throughout our organization.

Added

Our core values include: • Safety – We put the safety of our people first. • Integrity – We deliver results with integrity, respect, and accountability. • Focus – We are customer-focused, grounded in strong relationships. • Innovation – We are continuously improving and encourage idea sharing. • Unity – We are united as one team, valuing diversity. • Community – We make a difference in the communities we serve. • Empowerment – We are empowered to be our best, individually and as a team. Our strategy is focused on growth and productivity including: • Attracting and retaining top talent • Leveraging technology to streamline processes; • Expanding our business in the residential and commercial/industrial end-markets; • Acquiring strategically aligned businesses; • Driving operational efficiencies throughout the business. Our operating results depend on residential new construction activity, commercial construction activity and industrial manufacturing activity, all of which are subject to business and economic cycles.

Added

These cycles have less of an impact on our Specialty Distribution segment due to the repair and replacement component of our mechanical insulation distribution business.

Added

We are also dependent on third-party suppliers and manufacturers providing us with an adequate supply of high-quality products. 29 Table of Contents Material Trends in Our Business Residential New Construction We did not see the acceleration in demand for single-family homes in the back half of 2024 that we anticipated earlier in the year.

Added

Demand for single-family homes continues to be uneven across the country. Multi-family starts were slow throughout 2024 and that has started to negatively impact sales. We expect our multi-family sales will continue to be slow as we move into 2025.

Added

Multi-family housing units typically require approximately 40% of the insulation that a single-family unit requires. As a result of years of underbuilding in the United States an overall shortage of housing exists across the country. In addition, we believe long-term demand for homes will continue to be supported by strengthening energy efficiency requirements and increased household formations.

Added

As a result, we continue to be optimistic about the long-term fundamentals of our business. Commercial and Industrial Construction Our commercial backlog is strong, and our bidding activity is active, both of which continue to support our positive view of commercial/industrial sales at our Installation and Specialty Distribution segments.

Added

Some projects have been delayed in 2024, but we have not seen an uptick in cancellations.

Added

In addition, recurring maintenance and repair work on industrial sites serves as a continued driver for our Specialty Distribution business. Seasonality Sales across our end markets are typically slower during the winter months due to lower construction activity. Results of Operations We report our financial results in conformity with GAAP. The following table sets forth our net sales, gross profit, operating profit, and margins, as reported in our Consolidated Statements of Operations, in thousands: Year Ended December 31, 2024 2023 Net sales $ 5,329,803 $ 5,194,694 Cost of sales 3,704,885 3,590,874 Cost of sales ratio 69.5 % 69.1 % Gross profit 1,624,918 1,603,820 Gross profit margin 30.5 % 30.9 % Selling, general, and administrative expense 738,575 724,995 Selling, general, and administrative expense to sales ratio 13.9 % 14.0 % Operating profit 886,343 878,825 Operating profit margin 16.6 % 16.9 % Other expense, net (45,555) (53,342) Income tax expense (218,186) (211,229) Net income $ 622,602 $ 614,254 Net margin 11.7 % 11.8 % 30 Table of Contents Comparison of the Years Ended December 31, 2024 and December 31, 2023 Sales and Operations Net sales for 2024 increased 2.6 percent, or $135.1 million, to $5.3 billion.

Added

The increase was driven by a 2.5 percent increase in sales from acquisitions and a 1.1 percent impact from higher selling prices, partially offset by a 0.7 percent decline in sales volume and a decline of 0.3 percent driven by the disposition of a non-core business. Our gross profit margins were 30.5 percent and 30.9 percent for 2024 and 2023, respectively.

Added

The decline in gross profit margin is primarily due to higher material costs and lower benefit of sales mix, partially offset by improved productivity and higher selling prices. Selling, general, and administrative expenses as a percentage of sales were 13.9 percent and 14.0 percent for 2024 and 2023, respectively. Operating margins were 16.6 percent and 16.9 percent for 2024 and 2023, respectively.

Added

The decline in operating margin was due to higher material costs and lower benefit sales mix, partially offset by higher selling prices and productivity initiatives. Other Expense, Net Other expense, net, decreased $7.8 million to $45.6 million in 2024 from $53.3 million in 2023.

Added

The decrease is primarily related to $5.1 million higher interest income due to higher average levels of invested cash balances throughout the year and $1.5 million lower interest expense due to declining interest rates in the fourth quarter of 2024. Income Tax Expense Our effective tax rate increased from 25.6 percent in 2023 to 26.0 percent in 2024.

Added

The higher 2024 rate was primarily related to share-based compensation. 2024 and 2023 Business Segment Results The following table sets forth our net sales and operating profit information by business segment, in thousands: Year Ended December 31, 2024 2023 Percent Change Net sales by business segment: Installation $ 3,294,630 $ 3,188,232 3.3 % Specialty Distribution 2,340,837 2,268,339 3.2 % Intercompany eliminations (305,664) (261,877) Net sales $ 5,329,803 $ 5,194,694 2.6 % Operating profit by business segment (a): Installation $ 649,162 $ 644,392 0.7 % Specialty Distribution 352,431 330,938 6.5 % Intercompany eliminations (49,834) (44,438) Operating profit before general corporate expense 951,759 930,892 2.2 % General corporate expense, net (b) (65,416) (52,067) Operating profit $ 886,343 $ 878,825 0.9 % Operating profit margins: Installation 19.7 % 20.2 % Specialty Distribution 15.1 % 14.6 % Operating profit margin before general corporate expense 17.9 % 17.9 % Operating profit margin 16.6 % 16.9 % (a) Segment operating profit includes an allocation of general corporate expenses attributable to the operating segments which is based on direct benefit or usage (such as salaries of corporate employees who directly support the segment).

Added

(b) General corporate expense, net includes expenses not specifically attributable to our segments for functions such as corporate human resources, finance and legal, including salaries, benefits, and other related costs. In our second quarter of 2024, we incurred an acquisition termination fee of $23.0 million. See Item 8. Financial Statements and Supplementary Data – Note 8.

Added

Business Combinations. 31 Table of Contents 2024 and 2023 Business Segment Results Discussion Changes in operating profit margins in the following business segment results discussion exclude general corporate expense, net in 2024 and 2023, as applicable. Installation Sales Sales increased $106.4 million, or 3.3 percent, in 2024 compared to 2023.

Added

Sales increased 3.1 percent from our acquisitions and 1.3 percent from higher selling prices, partially offset by 0.6 percent decrease from lower sales volume and by a decline of 0.5 percent driven by the disposition of a non-core business. Operating Results Operating margins in the Installation segment were 19.7 percent and 20.2 percent for 2024 and 2023, respectively.

Added

The decrease in operating margin was driven higher material costs and change in sales mix, partially offset by productivity initiatives and higher selling prices. Specialty Distribution Sales Sales increased $72.5 million, or 3.2 percent, in 2024 compared to 2023.

Added

Sales increased 1.3 percent from our acquisitions, 1.0 percent from higher sales volume and 0.9 from higher selling prices. Operating Results Operating margins in the Specialty Distribution segment were 15.1 percent and 14.6 percent for 2024 and 2023, respectively.

Added

The increase in operating margin was driven by productivity initiatives and higher selling prices, partially offset by higher material costs. Commitments and Contingencies We are subject to certain claims, charges, litigation, and other proceedings in the ordinary course of our business.

Added

We believe we have adequate defenses in these matters, and we do not believe that the ultimate outcome of these matters will have a material adverse effect on us. For additional information see Item 8. Financial Statements and Supplementary Data – Note 11.

Added

Other Commitments and Contingencies. Liquidity and Capital Resources We have access to liquidity through our cash from operations and available borrowing capacity under our Credit Agreement, which provides for borrowing and/or standby letter of credit issuances of up to $500 million under the revolving facility. For additional information regarding our outstanding debt and borrowing capacity see Item 8.

Added

Financial Statements and Supplementary Data – Note 6.

Added

Long-Term Debt. 32 Table of Contents The following table summarizes our total liquidity, in thousands: As of December 31, 2024 2023 Cash and cash equivalents (a) $ 400,318 $ 848,565 Revolving facility 500,000 500,000 Less: standby letters of credit (63,770) (63,770) Availability under Revolving facility 436,230 436,230 Total liquidity $ 836,548 $ 1,284,795 (a) Our cash and cash equivalents consist of AAA-rated money market funds as well as cash held in our demand deposit accounts. We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and known contractual obligations including funding our debt service requirements, capital expenditures, lease obligations and working capital needs for at least the next twelve months.

Added

We also have adequate liquidity to maintain off-balance sheet arrangements for short-term leases, letters of credit, and performance and license bonds. See Item 8. Financial Statements and Supplementary Data of this Annual Report for related disclosures. We occasionally use performance bonds to ensure completion of our work on certain larger customer contracts that can span multiple accounting periods.

Added

Performance bonds generally do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed.

Added

We also have bonds outstanding for license and insurance. The following table summarizes our outstanding performance, licensing, insurance, and other bonds, in thousands: As of December 31, 2024 2023 Outstanding bonds: Performance bonds $ 146,479 $ 145,982 Licensing, insurance, and other bonds 28,462 27,415 Total bonds $ 174,941 $ 173,397 Cash Flows The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated, in thousands: Year Ended December 31, 2024 2023 Changes in cash and cash equivalents: Net cash provided by operating activities $ 776,026 $ 849,409 Net cash used in investing activities (203,523) (198,170) Net cash used in financing activities (1,016,272) (43,836) Impact of exchange rate changes on cash (4,478) 1,093 Net (decrease) increase in cash and cash equivalents $ (448,247) $ 608,496 Net cash flows provided by operating activities decreased $73.4 million for the year ended December 31, 2024, as compared to December 31, 2023.

Added

Net income increased $8.3 million, or 1.4 percent, compared with the prior year period, driven by the impact of higher selling prices and our acquisitions, as well as productivity initiatives.

Added

We also incurred increases in working capital accounts, specifically inventory and accounts payable, leading to more cash used in operations. 33 Table of Contents Net cash used in investing activities was $203.5 million for the year ended December 31, 2024, primarily comprised of $136.8 million for acquisitions and $69.3 million for purchases of property and equipment (primarily vehicles, equipment and computer hardware and software).

Added

Those uses were partially offset by $2.6 million of proceeds received from the sale of assets. Net cash used in investing activities was $198.2 million for the year ended December 31, 2023, primarily comprised of $149.2 million for acquisitions and $64.0 million for purchases of property and equipment (primarily vehicles, equipment and computer hardware and software).

Added

Those uses were partially offset by $15.0 million of proceeds received from the sale of assets. Net cash used in financing activities was $1.0 billion for the year ended December 31, 2024.

Added

During the year ended December 31, 2024, w e used $966.4 million for the repurchase of common stock, $47.0 million for debt repayments, and $2.9 million net activity related to exercise of share-based incentive awards and stock options. Net cash used in financing activities was $43.8 million for the year ended December 31, 2023.

Added

During the year ended December 31, 2023, w e used $40.1 million for debt repayments and $3.4 million net activity related to exercise of share-based incentive awards and stock options. Critical Accounting Policies and Estimates We prepare our Consolidated Financial Statements in conformity with GAAP.

Added

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities, and any related contingencies, at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period.

Added

Actual results could differ from those estimates. Our significant accounting policies are more fully described in Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies .

Added

However, certain of our accounting policies considered critical are those we believe are both most important to the portrayal of our financial condition and operating results and require our most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Added

Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions.

Added

We consider the following policies to be most critical in understanding the judgments that are involved in preparing our Consolidated Financial Statements. Revenue Recognition and Receivables Revenue is disaggregated between our Installation and Specialty Distribution segments. A reconciliation of disaggregated revenue by segment is included in Item 8. Financial Statements and Supplementary Data – Note 8.

Added

Segment Information . We recognize revenue for our Installation segment over time as the related performance obligation is satisfied with respect to each particular order within a given customer’s contract. Progress toward complete satisfaction of the performance obligation is measured using a cost-to-cost measure of progress method.

Added

The cost input is based on the amount of material installed at that customer’s location and the associated labor costs, as compared to the total expected cost for the particular order.

Added

The total expected cost is an estimate in the revenue recognition process, requires judgment, and is subject to variability throughout the duration of the contract as a result of contract modifications and other circumstances impacting job completion. Generally, this results in revenue being recognized as the customer is able to receive and utilize the benefits provided by our services.

Added

Each contract contains one or more individual orders, which are based on services delivered.

Added

When material and installation services are bundled in a contract, we combine these items into one performance obligation as the overall promise is to transfer the combined item. Revenue from our Specialty Distribution segment is recognized when title to products and risk of loss transfers to our customers.

Added

This represents the point in time when the customer is able to direct the use of and obtain substantially all the benefits from the product.

Added

The determination of when control is deemed transferred depends on the delivery terms that are agreed upon in the contract. 34 Table of Contents The transaction price is the amount of consideration the Company expects to receive based on the arrangement with the customer.

Added

The duration of our contracts with customers is relatively short, generally less than a 90-day period, therefore there is not a significant financing component when considering the determination of the transaction price which gets allocated to the individual performance obligations, generally based on standalone selling prices.

Added

Additionally, we consider shipping costs charged to a customer as a fulfillment cost rather than a promised service and expense as incurred.

Added

Sales taxes, when incurred, are recorded as a liability and excluded from revenue on a net basis. We record a contract asset when we have satisfied our performance obligation prior to billing and a contract liability when a customer payment is received prior to the satisfaction of our performance obligation.

Added

The difference between the beginning and ending balances of our contract assets and liabilities primarily results from the timing of our performance and the customer’s payment. See Note 3 – Revenue Recognition for more information. We maintain allowances for estimated losses resulting from the inability of customers to make required payments.

Added

In addition, we monitor our customer receivable balances and the credit worthiness of our customers on an on-going basis.

Added

During downturns in our markets, declines in the financial condition and creditworthiness of customers impact the credit risk of the receivables involved and we have incurred additional bad debt expense related to customer defaults. Business Combinations The purchase price for business combinations is allocated to the estimated fair values of acquired tangible and intangible assets, including goodwill, and assumed liabilities, where applicable.

Added

Additionally, we recognize customer relationships, trademarks and trade names, and non-compete agreements as identifiable intangible assets, which are recorded at fair value as of the transaction date. The fair value of the customer relationships intangible assets is determined by management using the multi-period excess earnings method under the income approach.

Added

Assumptions used in determining the fair value of the customer relationships intangible asset include forecasted revenue growth rate, customer attrition rate, and discount rate. The fair value of other intangible assets is determined primarily using current industry information. Goodwill is recorded when consideration transferred exceeds the fair value of identifiable assets and liabilities.

Added

Measurement-period adjustments to assets acquired and liabilities assumed with a corresponding offset to goodwill are recorded in the period they occur, which may include up to one year from the acquisition date.

Added

Contingent consideration is recorded at fair value at the acquisition date. Goodwill and Other Intangible Assets We have two reporting units, which are also our operating and reporting segments: Installation and Specialty Distribution, and both contain goodwill.

Added

Our operating segments engage in business activities for which discrete financial information including long range forecasts is available, and we complete the impairment testing of goodwill at this level, as defined by accounting guidance.

Added

Assets acquired and liabilities assumed are assigned to the applicable reporting unit based on whether the acquired assets and liabilities relate to the operations of such unit and determination of its fair value.

Added

Goodwill assigned to the reporting unit is the excess of the fair value of the acquired business over the fair value of the individual assets acquired and liabilities assumed for the reporting unit. We perform our annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Added

When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Added

If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

Added

If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment.

Added

For the years ended December 31, 2024 and 2023, we performed qualitative assessments. 35 Table of Contents Fair value for our reporting units is determined using a discounted cash flow method and a market multiple approach (with a 50% weighting of each), both which include significant unobservable inputs (Level 3 inputs).

Added

We believe these methodologies are comparable to what would be used by other market participants. Using the discounted cash flow method requires us to make significant estimates and assumptions, including long term projections of cash flows, market conditions, and appropriate discount rates. Our judgments are based on historical experience, current market trends, consultations with external valuation specialists and other information.

Added

The market approach includes a comparison of the multiple of a reporting unit's carrying value to its earnings before interest, taxes, depreciation and amortization with the multiples of similar businesses or guideline companies whose securities are actively traded in the public markets.

Added

While we believe that the estimates and assumptions underlying the valuation methodologies are reasonable, changes to estimates and assumptions could result in different outcomes.

Added

In estimating future cash flows, we rely on internally generated long-range forecasts for sales and operating profits, and generally a one to three percent long term assumed annual growth rate of cash flows for periods after the long-range forecast.

… 9 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

2 edited+0 added−0 removed0 unchanged

2023 filing

2024 filing

Biggest changeFinancial Statements and Supplementary Data 36 Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 36 Consolidated Balance Sheets 38 Consolidated Statements of Operations 39 Consolidated Statements of Comprehensive Income 40 Consolidated Statements of Cash Flows 41 Consolidated Statements of Changes in Shareholders’ Equity 42 Notes to Consolidated Financial Statements 43

Biggest changeFinancial Statements and Supplementary Data 38 Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 38 Consolidated Balance Sheets 40 Consolidated Statements of Operations 41 Consolidated Statements of Comprehensive Income 42 Consolidated Statements of Cash Flows 43 Consolidated Statements of Changes in Shareholders’ Equity 44 Notes to Consolidated Financial Statements 45

Item 6. [Reserved] 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 35 Item 8.

Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 37 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

0 edited+56 added−78 removed0 unchanged

2023 filing

2024 filing

Removed

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIO N AND RESULTS OF OPERATIONS The financial and business analysis below provides information which we believe is relevant to an assessment and understanding of our financial position, results of operations, and cash flows.

Added

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources . Major Customers We have a diversified portfolio of customers. Our top customer accounted for approximately four percent of our total revenues for the year ended December 31, 2024.

Removed

Added

Our top ten customers accounted for approximately 12 percent of our total sales in 2024. Suppliers Our businesses depend on our ability to obtain an adequate supply of high-quality products and components from manufacturers and other suppliers.

Removed

For a discussion of the year ended December 31, 2022, to the year ended December 31, 2021, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023, which discussion is hereby incorporated herein by reference. Executive Summary We are a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada.

Added

We source the majority of our fiberglass building products from four primary U.S.-based residential fiberglass insulation manufacturers: CertainTeed, Johns Manville, Knauf, and Owens Corning.

Removed

Demand for our products and services is driven primarily by residential and commercial/industrial construction and by industrial manufacturing activity.

Added

Failure by our suppliers to provide us with an adequate supply of high-quality products on commercially reasonable terms, or to comply with applicable legal requirements, could have a material, adverse effect on our financial condition or operating results. We have positive relationships with our suppliers and work diligently with them to ensure the quality of materials.

Removed

Added

Removed

Added

Accordingly, our success depends on our ability to attract, retain, protect, and develop our employees.

Removed

Our team is focused on driving operational efficiencies and sharing best practices throughout our organization.

Added

To support these objectives, we have designed and implemented a human capital management program that fosters a culture of inclusivity, collaboration, support, and innovation where every voice is welcome, heard, and respected. Employee Recruiting & Retention As of December 31, 2024, we had 13,984 employees (excluding contingent workers), of which 8,394 were installers. 714 of our employees were covered by 47 collective bargaining agreements that expire on various dates through 2027.

Removed

Added

We believe that our relationships with our union partners are good. To attract and retain experienced employees, we offer a positive culture and competitive compensation, benefits, and development programs to all our employees.

Removed

These cycles have less of an impact on our Specialty Distribution segment due to the repair and replacement component of our mechanical insulation distribution business.

Added

Our benefits and development programs are designed to meet the needs of a diverse employee workforce and include tuition reimbursement, career growth and professional development opportunities and tools, matching 401(k) contributions, multiple dental and medical plan options, and paid time off. We take proactive steps to find quality sources of construction labor and our Friends and Family Referral Program remains a key source for recruiting and retaining installers.

Removed

We are also dependent on third-party suppliers and manufacturers providing us with an adequate supply of high-quality products. 28 Table of Contents Material Trends in Our Business Residential New Construction Home builders continue to report improving demand resulting in single-family housing starts increasing in the fourth quarter compared to prior year.

Added

This program has been very successful since its launch in 2020, and in 2024 led to the hiring and retention of 1,192 installers.

Removed

Multifamily construction activity also remains strong but starts have slowed, in comparison to the prior year. While there is a strong backlog of multi-family units that need to be completed, we do expect multifamily activity to decline as we move through the next 12 months.

Added

In addition, we hire directly from the local communities in which our branches operate, and we partner with organizations that help source talent with diverse backgrounds, including organizations in support of veterans, refugees, and trade school students and graduates. 7 Table of Contents Voluntary turnover across all employee categories in 2024 was 24.7%, which is an improvement from our 2023 turnover rate of 30%.

Removed

Overall, despite uncertainty around the economy and the impact of higher interest rates, we remain optimistic about the long-term fundamentals of the U.S. housing market, supported by a limited supply of both new and existing homes, favorable demographic trends, and increasing household formations. Commercial and Industrial Construction Our commercial backlog is strong, and our bidding activity is active, both of which continue to support our optimistic view of commercial/industrial sales at our Installation and Specialty Distribution segments.

Added

We attribute our effective retention rate to a positive employee experience featuring competitive wages, comprehensive benefits, meaningful work, and a sense of belonging and purpose. Employee Development To build a pipeline of leadership talent, we recruit internally and externally into our Manager in Training (MIT) program, which is designed to foster the development of participants into leaders across our Company.

Removed

There are many major projects being planned across several different industries fueling demand, in particular, for our Specialty Distribution products.

Added

The program lasts 12-20 months and participants are supported by our executive management team as they are immersed in all aspects of our operations and directly serve and support our customers and suppliers. Upon completion, successful participants are regularly promoted into branch leadership roles within our Company.

Removed

In addition, maintenance and repair work on industrial sites will serve as a continued driver for our Specialty Distribution business. Seasonality Sales across our end markets are typically slower during the winter months due to lower construction activity. Results of Operations We report our financial results in conformity with GAAP. The following table sets forth our net sales, gross profit, operating profit, and margins, as reported in our Consolidated Statements of Operations, in thousands: Year Ended December 31, 2023 2022 Net sales $ 5,194,694 $ 5,008,744 Cost of sales 3,590,874 3,522,025 Cost of sales ratio 69.1 % 70.3 % Gross profit 1,603,820 1,486,719 Gross profit margin 30.9 % 29.7 % Selling, general, and administrative expense 724,995 689,555 Selling, general, and administrative expense to sales ratio 14.0 % 13.8 % Operating profit 878,825 797,164 Operating profit margin 16.9 % 15.9 % Other expense, net (53,342) (55,029) Income tax expense (211,229) (186,146) Net income $ 614,254 $ 555,989 Net margin 11.8 % 11.1 % Comparison of the Years Ended December 31, 2023 and December 31, 2022 Sales and Operations Net sales for 2023 increased 3.7 percent, or $186.0 million, to $5.2 billion.

Added

Participants enter the MIT program on a rolling basis and in 2024 we had an average of 25-30 participants in the program at any given time, which is the highest in our Company’s history. Additionally, in 2024 we introduced the Leadership Academy, which features two key leadership courses: Foundations of Leadership and Advanced Leadership Principles.

Removed

The increase was driven by a 2.4 percent impact from higher selling prices and a 2.1 percent increase in sales from acquisitions, partially offset by a reduction in sales volume. 29 Table of Contents Our gross profit margins were 30.9 percent and 29.7 percent for 2023 and 2022, respectively.

Added

Participants are nominated by the Company’s senior leaders and take part in a 6-month program teaching inspirational leadership, personal leadership awareness, team management, people development, leadership skills, and the importance of high performing teams.

Removed

Gross profit margin improved primarily due to productivity initiatives, higher selling prices, partially offset by higher material costs. Selling, general, and administrative expenses as a percentage of sales were 14.0 percent and 13.8 percent for 2023 and 2022, respectively.

Added

The Leadership Academy aligns with TopBuild’s core values and leadership expectations and is designed to promote both personal and organizational growth. Workforce Diversification As of December 31, 2024, our employees self-identified as 46.8% Hispanic, 34.1% White, 7.4% Black, 3.8% Other or Multi Race, and 7.8% Undisclosed.

Removed

Selling, general, and administrative expenses as a percent of sales were higher driven by increased acquisition related costs. Operating margins were 16.9 percent and 15.9 percent for 2023 and 2022, respectively.

Added

Our employees represent a higher racial diversification than both the construction industry average and the total U.S. workforce, as reported by the Bureau of Labor Statistics (December 2024).

Removed

The increase in operating margin was due to productivity initiatives and higher selling prices, partially offset by higher material costs and higher acquisition related costs. Other Expense, Net Other expense, net, decreased $1.7 million to $53.3 million in 2023 from $55.0 million in 2022.

Added

In addition, our workforce self-identifying as female as of December 31, 2024, was 11.6%, which is in line with the U.S. construction industry female workforce, as reported by the Bureau of Labor Statistics (December 2024).

Removed

The decrease is primarily related to $20.6 million interest income earned on higher cash balances at an increased rate, which fully offset higher rate of interest expense incurred on our Term Loan borrowings . Income Tax Expense Our effective tax rate increased from 25.1 percent in 2022 to 25.6 percent in 2023.

Added

Our corporate leadership team (managers and above) self-identified as approximately 37.7% female, and of all leaders (managers and above) 28.3% identify as non-white or undisclosed. *Sums to greater than or less than 100% due to multi-racial reporting. We acknowledge and are committed to respecting and upholding the human rights and dignity of all individuals within our operations.

Removed

The higher 2023 rate was primarily related to an increase in non-deductible items, state tax adjustments, and a decrease in the benefit related to share-based compensation. 2023 and 2022 Business Segment Results The following table sets forth our net sales and operating profit information by business segment, in thousands: Year Ended December 31, 2023 2022 Percent Change Net sales by business segment: Installation $ 3,188,232 $ 2,969,978 7.3 % Specialty Distribution 2,268,339 2,278,261 (0.4) % Intercompany eliminations (261,877) (239,495) Net sales $ 5,194,694 $ 5,008,744 3.7 % Operating profit by business segment (a): Installation $ 644,392 $ 548,795 17.4 % Specialty Distribution 330,938 326,226 1.4 % Intercompany eliminations (44,438) (39,839) Operating profit before general corporate expense 930,892 835,182 11.5 % General corporate expense, net (b) (52,067) (38,018) Operating profit $ 878,825 $ 797,164 10.2 % Operating profit margins: Installation 20.2 % 18.5 % Specialty Distribution 14.6 % 14.3 % Operating profit margin before general corporate expense 17.9 % 16.7 % Operating profit margin 16.9 % 15.9 % (a) Segment operating profit includes an allocation of general corporate expenses attributable to the operating segments which is based on direct benefit or usage (such as salaries of corporate employees who directly support the segment).

Added

Removed

(b) General corporate expense, net includes expenses not specifically attributable to our segments for functions such as corporate human resources, finance and legal, including salaries, benefits, and other related costs. 2023 and 2022 Business Segment Results Discussion Changes in operating profit margins in the following business segment results discussion exclude general corporate expense, net in 2023 and 2022, as applicable. 30 Table of Contents Installation Sales Sales increased $218.3 million, or 7.3 percent, in 2023 compared to 2022.

Added

Company policies, including the Human Rights Policy, are published in the ESG section of our website. 8 Table of Contents Safety We prioritize a culture of safety that innovates better and safer ways to work, emphasizes best practices, and rewards ongoing improvement in our safety performance.

Removed

Sales increased 3.6 percent due to higher selling prices and 3.6 percent from our acquisitions. Operating Results Operating margins in the Installation segment were 20.2 percent and 18.5 percent for 2023 and 2022, respectively.

Added

We believe our focus on safety is a key differentiator in our industry, and it is an important indicator in how we measure our Company’s success. To achieve continuous improvement in safety, we provide our employees with ongoing safety training, information, and programs. Training commences upon employee onboarding and continues with regular sessions delivered throughout the year.

Removed

The increase in operating margin was driven by productivity initiatives and higher selling prices, partially offset by higher material costs. Specialty Distribution Sales Sales were essentially flat in 2023 compared to 2022, a decrease of $9.9 million, or 0.4 percent.

Added

All new hires must complete our standard safety curriculum and we require a minimum number of annual training hours thereafter. We provide training sessions in-person, online or on-demand, with specific training assigned by job and work scope.

Removed

Sales decreased 1.6 percent from lower sales volume, partially offset by a 1.1 percent increase from higher selling prices. Operating Results Operating margins in the Specialty Distribution segment were 14.6 percent and 14.3 percent for 2023 and 2022, respectively.

Added

All safety training programs are available in the employee’s preferred language and attending employees are evaluated for understanding through written, verbal, and skill-based assessments.

Removed

Added

During 2024, we assigned each of our employees an average of 13.0 hours of safety training. To align our workforce with our safety goals, a portion of our annual incentive compensation for all eligible employees, including our senior leadership, is tied to our safety performance.

Removed

Added

Removed

Added

Removed

In addition, we have availability to our $550.0 million Term Facility Two, the proceeds of which can be used to finance in part the acquisition of SPI, including the payment of related fees and expenses. For additional information regarding our outstanding debt and borrowing capacity see Item 8. Financial Statements and Supplementary Data – Note 6.

Added

Our company-wide injury rate was 1.95 and our lost time case rate was 0.61, each of which is significantly below the industry average of 3.6 and 1.5, respectively, as reported by the Bureau of Labor and Statistics for NAICS 23831 (2023).

Removed

Long-Term Debt. The following table summarizes our total liquidity, in thousands: As of December 31, 2023 2022 Cash and cash equivalents (a) $ 848,565 $ 240,069 Revolving facility 500,000 500,000 Less: standby letters of credit (63,770) (67,689) Availability under Revolving facility 436,230 432,311 Total liquidity $ 1,284,795 $ 672,380 (a) Our cash and cash equivalents consist of AAA-rated money market funds as well as cash held in our demand deposit accounts. 31 Table of Contents We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and known contractual obligations including funding our debt service requirements, capital expenditures, lease obligations and working capital needs for at least the next twelve months.

Added

Our incident rates do not include the impact of acquired companies in the year of acquisition. Community Involvement TopBuild has a longstanding commitment to making a positive impact on the communities in which we live and work.

Removed

We also have adequate liquidity to maintain off-balance sheet arrangements for short-term leases, letters of credit, and performance and license bonds. See Item 8.

Added

Through our affiliate partnerships, we support initiatives that create positive and lasting improvements in these communities: Habitat for Humanity : Our 2024 Habitat for Humanity Golf Tournament was our largest event ever, raising a total of $1.0 million.

Removed

Financial Statements and Supplementary Data of this Annual Report for related disclosures. Cash Flows The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated, in thousands: Year Ended December 31, 2023 2022 Changes in cash and cash equivalents: Net cash provided by operating activities $ 849,409 $ 495,801 Net cash used in investing activities (198,170) (93,907) Net cash used in financing activities (43,836) (300,073) Impact of exchange rate changes on cash 1,093 (1,531) Net increase in cash and cash equivalents $ 608,496 $ 100,290 Net cash flows provided by operating activities increased $353.6 million for the year ended December 31, 2023, as compared to December 31, 2022.

Added

Since 2016, TopBuild and its supplier partners have contributed nearly $5.0 million to help Habitat for Humanity realize its vision of providing families with safe and affordable housing. Alongside monetary donations, TopBuild and its employees have provided material donations, countless volunteer hours, and attended numerous dedication ceremonies to celebrate families and their entry into home ownership.

Removed

Net income was up $58.3 million, or 10.5 percent, compared with the prior year period, driven by the impact of higher selling prices and our acquisitions, as well as productivity initiatives.

Added

Together, TopBuild and Habitat for Humanity have helped build better lives, strengthening our communities one family at a time. 9 Table of Contents NASCAR Foundation : In 2024, TopBuild continued its partnership with the NASCAR Foundation and was a primary sponsor of their Speedy Bear Brigade initiative, which provided 4,000 pediatric patients across the country with a teddy bear, other toys, and a personalized ‘Get Well Soon’ card, making their hospital stays more comfortable. Payit4ward : TopBuild sponsored Payit4ward’s annual summer Back to School Drive by donating over 2,000 backpacks for the event.

Removed

In addition, we generated cash from improvements in management of working capital, particularly receivables and inventory. Net cash used in investing activities was $198.2 million for the year ended December 31, 2023, primarily comprised of $149.2 million for acquisitions and $64.0 million for purchases of property and equipment (primarily vehicles, equipment and computer hardware and software).

Added

In partnership with other volunteers from the community, our employees helped fill the backpacks with school supplies, ensuring thousands of underserved children were prepared and excited for their first day of school. American Red Cross : In 2024, TopBuild donated $25,000 to the American Red Cross to help provide aid to families impacted by storms and other natural disasters. Sophie’s Circle : In 2024, TopBuild employees helped raise $5,000 to provide food, shelter, and medical care to animals in our community. Salvation Army : TopBuild is an active supporter of the Salvation Army and their Angel Tree program.

Removed

Those uses were partially offset by $15.0 million of proceeds received from the sale of assets.

Added

In 2024, our employees purchased holiday gifts for 75 children, along with providing financial support to help the Salvation Army offer humanitarian aid to individuals and families in need throughout the year. Employee Engagement Employee feedback and engagement are critical as we continue to foster a positive work environment and employee experience.

Removed

Net cash used in investing activities was $93.9 million for the year ended December 31, 2022, primarily comprised of $76.4 million for purchases of property and equipment (primarily vehicles, equipment and computer hardware and software), as well as $20.5 million for acquisitions. Net cash used in financing activities was $43.8 million for the year ended December 31, 2023.

Added

In addition to new-hire and exit surveys, we conduct all-employee engagement surveys administered by a third party. The most recent survey took place in 2023 and 60% of our employees responded.

Removed

During the year ended December 31, 2023, w e used $40.1 million for debt repayments and $3.4 million net activity related to exercise of share-based incentive awards and stock options.

Added

We are proud that our engagement index score was 85%, representing positive feedback on questions related to pride in our Company, a sense of accomplishment, and an intent to stay. We shared the results of our survey with our employees, leadership at all levels and locations, and with our Board.

Removed

Net cash used in financing activities was $300.1 million for the year ended December 31, 2022, primarily comprised of $250.0 million for the repurchase of common stock, $38.7 million for debt repayments, and $9.7 million net activity related to exercise of share-based incentive awards and stock options.

Added

While the survey results were positive, we understand that we must continue to listen to our employees and prioritize action in areas of improvement identified by the survey respondents. In 2024, TopBuild was certified as a Great Place to Work® for the second consecutive year.

Removed

Additionally, we borrowed and repaid $70.0 million on our Revolving Facility, all within the second quarter of 2022. Critical Accounting Policies and Estimates We prepare our Consolidated Financial Statements in conformity with GAAP.

Added

This two-step certification process includes employee feedback to a third-party survey and a questionnaire about the workforce and culture. We are proud to report that 81% of our surveyed employees say that TopBuild is a great place to work, as compared to 57% of employees at a typical U.S. based company.

Removed

Added

(Source: Great Place To Work® 2021 Global Employee Engagement Study.) TopBuild was also named to Forbes’ America’s Best Companies 2025 inaugural list. This is Forbes’ most comprehensive company ranking, assessing thousands of U.S.-headquartered public companies against more than 60 metrics and 11 primary categories to identify the top 300 companies that excel across the board.

Removed

Added

The measured categories include financial strength, employee and customer sentiment, and workforce stability.

… 54 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed2 unchanged

2023 filing

2024 filing

Biggest changeBased on our outstanding borrowings as of December 31, 2023, a 100 basis point increase in the interest rate would result in a $5.2 million increase in our annualized interest expense. There was no outstanding balance under the revolving facility as of December 31, 2023. 35 Table of Contents

Biggest changeBased on our outstanding borrowings as of December 31, 2024, a 100-basis point increase in the interest rate would result in a $4.7 million increase in our annualized interest expense. There was no outstanding balance under the revolving facility as of December 31, 2024. 37 Table of Contents

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RIS K Interest Rate Risk We have a Term Loan outstanding with a principal balance of $532.5 million and a revolving facility with an aggregate borrowing capacity of $500.0 million.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RIS K Interest Rate Risk We have a Term Loan outstanding with a principal balance of $487.5 million and a revolving facility with an aggregate borrowing capacity of $500.0 million.

As a result, we are exposed to market risks related to fluctuations in interest rates on this outstanding indebtedness. As of December 31, 2023, the applicable interest rate as of such date was 6.46%.

As a result, we are exposed to market risks related to fluctuations in interest rates on this outstanding indebtedness. As of December 31, 2024, the applicable interest rate as of such date was 5.46%.

Top changes in TopBuild Corp's 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other BLD 10-K year-over-year comparisons