Watsco (WSO) Financials
A multiple compares the market's price with a filed figure; it says what the market pays, not how the business is doing. The market capitalization is the vendor's as of Nov 2, 2026; every other figure is from the SEC filings on this page. Not financial advice.
Newest figures come from the 10-Q for Q2 FY2026, filed Aug 7, 2026. Each column of the statement tables below links to the filing it was taken from, and every filing is listed on the WSO SEC filings page.
Watsco, Inc. (WSO) reported $7.3B in revenue over the twelve months to Jun 30, 2026, down 3.0% from the prior twelve months. This page shows its income statement, balance sheet, cash flow statement, and key financial ratios. View 15 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).
Watsco's 2025 results show a resilient gross spread, but fixed selling costs and shareholder distributions absorbed much of a weaker cash year.
The key shift is cash conversion: operating cash flow still exceeded net income at114.6% in FY2025, but that ratio fell from144.2% in FY2024. Meanwhile, free-cash-flow margin fell2.4 pp to7.4% , so earnings continued producing cash, but the conversion benefit was materially less pronounced.
Revenue fell
The balance sheet became more conservative in reported proportions: debt-to-equity was 0.1x and total liabilities fell
Financial Health Signals
Scored against operating companies for FY2025. Each of the six dimensions is a percentile rank within that peer group, and the overall is the average of the dimensions that can be computed. A high score means strong standing among peers, not absolute cross-industry strength. How this score is calculated →
Health score ≠ stock price. This rates the quality of Watsco, Inc.'s business: profitability, growth, balance sheet strength. It doesn't tell you whether the stock is a good buy at today's price. Not financial advice. Use it alongside valuation analysis and your own research.
Watsco, Inc. has an operating margin of 10.0%, meaning the company retains $10 of operating profit per $100 of revenue. This strong profitability earns a score of 74/100, reflecting efficient cost management and pricing power. This is down from 10.3% the prior year.
Watsco, Inc.'s revenue declined 5.0% year-over-year, from $7.6B to $7.2B. This contraction results in a growth score of 29/100.
Watsco, Inc. carries a low D/E ratio of 0.13, meaning only $0.13 of long-term debt for every $1 of shareholders' equity. This conservative leverage earns a score of 90/100, indicating a strong balance sheet with room for future borrowing.
With a current ratio of 4.12, Watsco, Inc. holds $4.12 in current assets for every $1 of short-term obligations. This comfortable liquidity earns a score of 88/100.
Watsco, Inc. has a free cash flow margin of 7.4%, earning a moderate score of 59/100. The company generates positive cash flow after capital investments, but with room for improvement.
Watsco, Inc. earns a strong 17.9% return on equity (ROE), meaning it generates $18 of profit for every $100 of shareholders' equity. This efficient capital use earns a returns score of 89/100. This is down from 20.2% the prior year.
Watsco, Inc. scores 8.05, well above the 2.99 safe threshold. The largest contribution to the score comes from a market capitalization of $13.2B against total liabilities of $1.6B. This indicates low bankruptcy risk based on profitability, leverage, and asset efficiency.
Distress-screening estimate for non-financial companies. Not computed for banks or insurers, where the Altman model does not apply.
Watsco, Inc. passes 5 of 8 computable financial strength tests (1 of the nine could not be computed from available data). 3 of 4 profitability signals pass, 1 of 2 leverage/liquidity signals pass, 1 of 2 operating efficiency signals passes.
For every $1 of reported earnings, Watsco, Inc. generates $1.15 in operating cash flow ($569.6M OCF vs $497.0M net income). This indicates profits are well-supported by actual cash generation, not accounting adjustments.
Key Financial Metrics
Earnings & Revenue
Watsco, Inc. generated $2.1B in revenue in Q2 2026. This represents an increase of 2.1% from the same quarter a year earlier. Against the prior quarter it is up 37.3%.
Watsco, Inc.'s EBITDA was $249.3M in Q2 2026, measuring earnings before interest, taxes, depreciation, and amortization. This represents a decrease of 11.8% from the same quarter a year earlier. Against the prior quarter it is up 105.7%.
Watsco, Inc. reported $163.3M in net income in Q2 2026. This represents a decrease of 11.0% from the same quarter a year earlier. Against the prior quarter it is up 106.6%.
Watsco, Inc. earned $4.00 per diluted share (EPS) in Q2 2026. This represents a decrease of 11.5% from the same quarter a year earlier. Against the prior quarter it is up 113.9%.
Cash & Balance Sheet
Watsco, Inc. recorded an outflow of $11.5M in free cash flow in Q2 2026, representing a cash shortfall after capex. The change from the same quarter a year earlier is not meaningful, because that figure was zero or negative. The change from the prior quarter is not meaningful, because that quarter’s figure was zero or negative.
Watsco, Inc. held $364.2M in cash as of Q2 2026; no long-term debt figure is on record for that period.
Watsco, Inc. paid $3.30 per share in dividends in Q2 2026. This represents an increase of 10.0% from the same quarter a year earlier. Against the prior quarter it is up 10.0%.
Margins & Returns
Watsco, Inc.'s gross margin was 27.5% in Q2 2026, indicating the percentage of revenue retained after direct costs. This is down 1.8 percentage points from the same quarter a year earlier. Against the prior quarter it is down 0.4 percentage points.
Watsco, Inc.'s operating margin was 11.3% in Q2 2026, reflecting core business profitability. This is down 1.9 percentage points from the same quarter a year earlier. Against the prior quarter it is up 4.1 percentage points.
Watsco, Inc.'s net profit margin was 7.8% in Q2 2026, showing the share of revenue converted to profit. This is down 1.1 percentage points from the same quarter a year earlier. Against the prior quarter it is up 2.6 percentage points.
Watsco, Inc.'s quarterly ROE was 5.5% in Q2 2026: one quarter's net income over shareholder equity, not annualized. This is down 1.2 percentage points from the same quarter a year earlier. Against the prior quarter it is up 2.6 percentage points.
Capital Allocation
Watsco, Inc. invested $9.0M in capex in Q2 2026, funding long-term assets and infrastructure. This represents an increase of 31.5% from the same quarter a year earlier. Against the prior quarter it is up 29.1%.
Not reported for Q2 2026.
Not reported for Q2 2026.
WSO Income Statement
Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.
| Metric | Q2'2610-Q | Q1'2610-Q | Q4'2510-K | Q3'2510-Q | Q2'2510-Q | Q1'2510-Q | Q4'2410-K | Q3'2410-Q |
|---|---|---|---|---|---|---|---|---|
| Revenue | $2.1B+2.1% | $1.5B+0.1% | $1.6B-10.0% | $2.1B-4.3% | $2.1B-3.6% | $1.5B-2.2% | $1.8B+9.4% | $2.2B+1.6% |
| Cost of Revenue | $1.5B+4.6% | $1.1B+0.4% | $1.2B-10.5% | $1.5B-6.0% | $1.5B-6.5% | $1.1B-2.9% | $1.3B+8.2% | $1.6B+2.2% |
| Gross Profit | $578.9M-4.1% | $427.6M-0.5% | $428.4M-8.5% | $568.9M+0.5% | $603.5M+4.1% | $429.6M-0.2% | $468.1M+13.0% | $566.2M-0.1% |
| SG&A Expenses | $349.0M+2.9% | $322.9M+0.1% | $332.6M-1.7% | $343.7M+5.3% | $339.0M+6.3% | $322.6M+4.2% | $338.5M+8.3% | $326.4M+2.0% |
| Operating Income | $238.4M-12.3% | $110.2M-1.8% | $101.5M-25.5% | $234.8M-6.2% | $271.9M+1.1% | $112.2M-11.3% | $136.2M+26.4% | $250.2M-2.5% |
| EBITDA | $249.3M-11.8% | $121.2M-1.4% | $112.6M-23.2% | $245.8M-5.7% | $282.8M+1.4% | $123.0M-9.9% | $146.7M+24.9% | $260.7M-1.8% |
| Income Tax | $50.6M-12.0% | $23.7M+2.8% | $20.3M-26.7% | $49.3M-11.0% | $57.4M-2.8% | $23.1M-6.8% | $27.7M+151.8% | $55.4M+2.3% |
| Net Income | $163.3M-11.0% | $79.1M-1.2% | $71.7M-25.9% | $161.6M-5.5% | $183.6M+1.2% | $80.1M-8.0% | $96.8M+17.3% | $171.0M0.0% |
| EPS (Basic) | $4.00-11.7% | $1.87-3.1% | $1.77-25.9% | $3.98-6.1% | $4.53+0.7% | $1.93-11.1% | $2.39+14.9% | $4.24-2.8% |
| EPS (Diluted) | $4.00-11.5% | $1.87-3.1% | $1.77-25.6% | $3.98-5.7% | $4.52+0.7% | $1.93-11.1% | $2.38+15.0% | $4.22-3.0% |
| Diluted Shares (Avg) | 38M+0.8% | 38M+0.3% | N/A | 38M+0.7% | 38M | 38M | N/A | 38M |
Not reported in any period shown, so not listed: R&D Expenses, Interest Expense.
WSO Balance Sheet
Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.
| Metric | Q2'2610-Q | Q1'2610-Q | Q4'2510-K | Q3'2510-Q | Q2'2510-Q | Q1'2510-Q | Q4'2410-K | Q3'2410-Q |
|---|---|---|---|---|---|---|---|---|
| Total Assets | $5.1B+7.5% | $4.6B+4.4% | $4.4B-1.4% | $4.6B+0.8% | $4.7B+7.6% | $4.5B+2.2% | $4.5B+20.1% | $4.5B+11.8% |
| Current Assets | $3.5B+4.7% | $3.2B+4.8% | $3.0B-4.1% | $3.1B-0.5% | $3.3B+8.7% | $3.0B+1.2% | $3.1B+28.8% | $3.1B+14.7% |
| Cash & Equivalents | $364.2M+24.3% | $392.7M-9.1% | $433.3M-17.7% | $324.3M+10.2% | $293.0M+30.3% | $431.8M+54.9% | $526.3M+150.5% | $294.4M+68.2% |
| Short-Term Investments | $100.0Mn/m | $200.0Mn/m | $300.0M+17.3% | $200.0M-21.8% | $0-100.0% | $0-100.0% | $255.7Mn/m | $255.7Mn/m |
| Inventory | $1.9B-3.2% | $1.7B-3.4% | $1.4B+0.1% | $1.6B+0.3% | $2.0B+24.1% | $1.8B+7.3% | $1.4B+2.8% | $1.6B+3.0% |
| Accounts Receivable | $1.1B+4.4% | $839.2M+5.7% | $796.2M-9.3% | $941.9M-0.3% | $1.0B+1.4% | $794.3M-4.5% | $877.9M+10.0% | $944.5M-0.5% |
| Long-Term Investments | $0n/m | $0n/m | $0n/m | $0n/m | $0n/m | $0n/m | $0n/m | $0n/m |
| Goodwill | $559.7M+20.1% | $461.4M+1.4% | $462.5M+2.4% | $465.1M+1.4% | $466.2M+1.7% | $454.9M-1.0% | $451.9M-1.2% | $458.8M-6.7% |
| Total Liabilities | $2.1B+6.2% | $1.9B+5.5% | $1.6B-10.4% | $1.7B-4.5% | $2.0B+10.3% | $1.8B-2.3% | $1.8B+21.6% | $1.8B+0.3% |
| Current Liabilities | $1.1B+0.8% | $951.9M+2.9% | $717.7M-27.1% | $812.1M-13.0% | $1.1B+13.3% | $925.1M-9.8% | $983.9M+38.2% | $933.1M+5.1% |
| Non-Current Liabilities | $1.0B+12.5% | $935.5M+8.3% | $915.7M+9.2% | $927.8M+4.5% | $898.2M+7.0% | $864.2M+7.4% | $838.6M+6.5% | $888.0M-4.3% |
| Long-Term Debt | N/A | $368.5M+6.4% | $361.6M+7.2% | $340.8M+6.2% | $338.7M+10.3% | $346.4M+13.1% | $337.2M+10.7% | $321.0M-17.8% |
| Total Equity | $3.0B+8.5% | $2.8B+3.6% | $2.8B+4.7% | $2.8B+4.4% | $2.8B+5.7% | $2.7B+5.5% | $2.7B+19.2% | $2.7B+21.2% |
| Retained Earnings | $1.3B-1.8% | $1.3B+0.8% | $1.3B+1.8% | $1.4B+4.7% | $1.3B+6.7% | $1.3B+8.0% | $1.3B+9.5% | $1.3B+9.3% |
WSO Cash Flow Statement
Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.
| Metric | Q2'2610-Q | Q1'2610-Q | Q4'2510-K | Q3'2510-Q | Q2'2510-Q | Q1'2510-Q | Q4'2410-K | Q3'2410-Q |
|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | -$2.5Mn/m | -$18.9Mn/m | $399.8M+5.5% | $354.9M+52.5% | -$7.4M-112.9% | -$177.6M-271.3% | $378.9M+26.9% | $232.8M-34.0% |
| Depreciation & Amortization | $10.9M+0.1% | $11.0M+2.2% | $11.1M+5.5% | $11.0M+5.3% | $10.9M+9.0% | $10.8M+9.1% | $10.5M+8.3% | $10.4M+18.7% |
| Stock-Based Compensation | N/A | $8.1M-8.2% | N/A | N/A | N/A | $8.8M+8.3% | N/A | N/A |
| Capital Expenditures | $9.0M+31.5% | $7.0M-7.7% | $11.3M+40.6% | $8.9M-9.4% | $6.8M+6.5% | $7.5M+29.0% | $8.0M-19.5% | $9.8M+1.3% |
| Free Cash Flow | -$11.5Mn/m | -$25.9Mn/m | $388.5M+4.7% | $346.1M+55.2% | -$14.3M-127.8% | -$185.2M-289.2% | $370.9M+28.5% | $223.0M-35.0% |
| Investing Cash Flow | $98.6Mn/m | $93.1M-61.9% | -$111.6Mn/m | -$208.8Mn/m | -$22.3Mn/m | $244.6Mn/m | -$8.0Mn/m | -$65.4Mn/m |
| Financing Cash Flow | -$123.4Mn/m | -$114.0Mn/m | -$180.3Mn/m | -$113.6Mn/m | -$112.6Mn/m | -$161.7M-190.6% | -$133.5Mn/m | -$98.9Mn/m |
| Dividends Paid | $134.1M+10.4% | $121.8M+11.7% | $121.7M+11.6% | $121.6M+11.6% | $121.5M+11.6% | $109.0M+12.7% | $109.0M+13.0% | $108.9M+13.8% |
Not reported in any period shown, so not listed: Share Buybacks.
WSO Financial Ratios
Margins and returns are percentages; the remaining ratios are unitless multiples. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.
| Metric | Q2'2610-Q | Q1'2610-Q | Q4'2510-K | Q3'2510-Q | Q2'2510-Q | Q1'2510-Q | Q4'2410-K | Q3'2410-Q |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 27.5%-1.8pp | 27.9%-0.2pp | 27.1%+0.4pp | 27.5%+1.3pp | 29.3%+2.2pp | 28.1%+0.5pp | 26.7%+0.8pp | 26.2%-0.5pp |
| Operating Margin | 11.3%-1.9pp | 7.2%-0.1pp | 6.4%-1.3pp | 11.4%-0.2pp | 13.2%+0.6pp | 7.3%-0.8pp | 7.8%+1.0pp | 11.6%-0.5pp |
| Net Margin | 7.8%-1.1pp | 5.2%-0.1pp | 4.5%-1.0pp | 7.8%-0.1pp | 8.9%+0.4pp | 5.2%-0.3pp | 5.5%+0.4pp | 7.9%-0.1pp |
| Return on Equity | 5.5%-1.2pp | 2.9%-0.1pp | 2.6%-1.1pp | 5.7%-0.6pp | 6.7%-0.3pp | 3.0%-0.4pp | 3.6%-0.1pp | 6.3%-1.3pp |
| Return on Assets | 3.2%-0.7pp | 1.7%-0.1pp | 1.6%-0.5pp | 3.5%-0.2pp | 3.9%-0.3pp | 1.8%-0.2pp | 2.2%-0.1pp | 3.8%-0.4pp |
| Current Ratio | 3.20+0.1x | 3.34+0.1x | 4.12+1.0x | 3.84+0.5x | 3.08-0.1x | 3.28+0.4x | 3.13-0.2x | 3.36+0.3x |
| Debt-to-Equity | N/A | 0.130.0x | 0.130.0x | 0.120.0x | 0.120.0x | 0.130.0x | 0.130.0x | 0.12-0.1x |
| Liabilities-to-Equity | 0.700.0x | 0.680.0x | 0.59-0.1x | 0.62-0.1x | 0.710.0x | 0.67-0.1x | 0.690.0x | 0.68-0.1x |
| Asset Turnover | 0.410.0x | 0.330.0x | 0.360.0x | 0.450.0x | 0.44-0.1x | 0.340.0x | 0.390.0x | 0.480.0x |
| FCF Margin | -0.5%+0.1pp | -1.7%+10.4pp | 24.6%+3.5pp | 16.7%+6.4pp | -0.7%-3.1pp | -12.1%-18.4pp | 21.1%+3.1pp | 10.3%-5.8pp |
Similar Companies
Newest fiscal year on record for each company. The health score is the peer-relative Financial Health Score for that year; a dash means no score is published for it. Market cap is stated at each company's latest close.
| Company | Fiscal year | Revenue | Net income | Net margin | Market cap | Health score |
|---|---|---|---|---|---|---|
| Watsco, Inc. WSO | FY2025 | $7.2B | $497.0M | 6.9% | $13.2B | 72/100 |
| QXO, Inc. QXO | FY2025 | $6.8B | -$279.4M | -4.1% | $12.1B | 65/100 |
| Wesco International Inc. WCC | FY2025 | $23.5B | $640.2M | 2.7% | $16.3B | 48/100 |
| Applied Industrial Technologies, Inc. AIT | FY2026 | $5.0B | $414.5M | 8.3% | $10.9B | 71/100 |
| Ferguson Enterprises Inc. FERG | FY2025 | $30.8B | $1.9B | 6.0% | $46.8B | 58/100 |
| W.W. Grainger, Inc. GWW | FY2025 | $17.9B | $1.7B | 9.5% | $64.9B | 69/100 |
Where Watsco, Inc. Ranks
Frequently Asked Questions
Watsco, Inc. (WSO) reported $7.2B in total revenue for fiscal year 2025. This represents a -5.0% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.
Watsco, Inc. (WSO) revenue declined by 5.0% year-over-year, from $7.6B to $7.2B in fiscal year 2025.
Yes, Watsco, Inc. (WSO) reported a net income of $475.7M over the trailing 12 months to June 30, 2026. In fiscal year 2025 it reported a net income of $497.0M, with a net profit margin of 6.9%.
Watsco, Inc. (WSO) had EBITDA of $764.1M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.
As of fiscal year 2025, Watsco, Inc. (WSO) had $433.3M in cash and equivalents against $361.6M in long-term debt.
Watsco, Inc. (WSO) had a gross margin of 28.1% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.
Watsco, Inc. (WSO) had an operating margin of 10.0% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.
Watsco, Inc. (WSO) had a net profit margin of 6.9% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.
Yes, Watsco, Inc. (WSO) paid $11.70 per share in dividends during fiscal year 2025.
Watsco, Inc. (WSO) has a return on equity of 17.9% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.
Watsco, Inc. (WSO) generated $535.1M in free cash flow during fiscal year 2025. This represents a -28.0% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.
Watsco, Inc. (WSO) generated $569.6M in operating cash flow during fiscal year 2025, representing cash generated from core business activities.
Watsco, Inc. (WSO) had $4.4B in total assets as of fiscal year 2025, including both current and long-term assets.
Watsco, Inc. (WSO) invested $34.5M in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.
Watsco, Inc. (WSO) had a current ratio of 4.12 as of fiscal year 2025, which is generally considered healthy.
Watsco, Inc. (WSO) had a debt-to-equity ratio of 0.13 as of fiscal year 2025. We compute it as long-term debt divided by total shareholder equity, where long-term debt is the noncurrent part of the company's borrowings, so debt due within the next twelve months is not counted.
Watsco, Inc. (WSO) had a liabilities-to-equity ratio of 0.59 as of fiscal year 2025, which is total liabilities divided by total shareholder equity. Total liabilities counts every obligation on the balance sheet (payables, deposits, insurance reserves and deferred taxes as well as borrowings), so this ratio usually runs well above debt-to-equity.
Watsco, Inc. (WSO) had a return on assets of 11.3% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.
Watsco, Inc. (WSO) trades at 27.7x earnings, its market capitalization divided by $475.7M net income, trailing 12 months to June 30, 2026. The market capitalization is $13.2B as of Nov 2, 2026; a multiple compares that price with a filed figure and says nothing about the quality of the business.
Watsco, Inc. (WSO) trades at 1.8x sales, its market capitalization divided by $7.3B revenue, trailing 12 months to June 30, 2026. The market capitalization is $13.2B as of Nov 2, 2026; a multiple compares that price with a filed figure and says nothing about the quality of the business.
Watsco, Inc. (WSO) has an Altman Z-Score of 8.05, placing it in the Safe Zone (low bankruptcy risk). The Z-Score combines five financial ratios (working capital, retained earnings, EBIT, market capitalization, and revenue relative to total assets) to predict the likelihood of bankruptcy. Scores above 2.99 indicate financial safety while scores below 1.81 suggest financial distress. Learn more in our complete guide to financial health indicators.
Watsco, Inc. (WSO) has a Piotroski F-Score of 5 out of 8 computable signals; 1 of the nine could not be computed from available data, so the full-scale strength rating is not shown. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7 to 9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.
Watsco, Inc. (WSO) has an earnings quality ratio of 1.15x, considered cash-backed (high quality). This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.
Watsco, Inc. (WSO) scores 72 out of 100 on our Financial Health Score, indicating strong standing within its operating companies peer group. The score is the average of six dimensions (Profitability, Growth, Leverage, Liquidity, Cash Flow, Returns), each ranked as a percentile relative to companies in the same scoring family (banks against banks, REITs against REITs, and so on) rather than across all industries. It rates the quality of the business, not whether the stock is fairly priced, and is not financial advice. Learn more in our complete guide to financial health indicators.