TopBuild Corp. reported a 17% increase in first-quarter sales, driven by acquisitions, as ongoing weakness in residential construction was offset by strength in commercial and industrial markets.

Revenue rose to $1.45 billion in the quarter ended March 31, up from $1.23 billion a year earlier, largely fueled by recent deals including SPI and Progressive Roofing.

Net income fell to $104.8 million, or $3.73 per diluted share, from $123.4 million, or $4.23 per share a year earlier, as margins tightened and costs increased.

“Our first quarter performance was in line with our expectations,” CEO Robert Buck said, noting the company continues to focus on operational execution and long-term growth.

The results reflect a shifting construction landscape. Same-branch residential sales — which exclude acquisitions and provide a clearer view of underlying demand — fell 10.9%, while total residential sales declined 7.9%.

By contrast, commercial and industrial revenue jumped nearly 59% in total, driven largely by acquisitions, while same-branch commercial activity was essentially flat, down 0.8%.

“In the first quarter, sales grew 17.2%, driven by the 2025 acquisitions of SPI and Progressive Roofing, offsetting the macro challenges in residential and light commercial new construction,” Buck said.

TopBuild’s Installation Services segment — which reflects on-site insulation and roofing work — saw sales rise 4.3% to $777 million, but adjusted profitability declined as volumes fell and pricing remained under pressure in residential markets.

Meanwhile, the Specialty Distribution segment, which supplies insulation and related building products, posted a 31.7% increase in sales to $737 million, benefiting from acquisition-driven growth and stronger demand tied to commercial work.

Overall profitability narrowed, with operating margin falling to 12.1% from 14.4% a year earlier, reflecting higher costs and a less favorable mix of work.

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TopBuild continues to lean on acquisitions to drive growth. The company completed four deals so far in 2026, adding about $83.8 million in annual revenue, and has signed an agreement to acquire Comfort Pro, an insulation installer in Wisconsin, expected to close in the second quarter.

“M&A continues to be a priority given our strong free cash flow and robust pipeline,” Buck said.

The company also announced plans to combine with QXO, a move expected to expand purchasing power, cross-selling opportunities and digital capabilities once completed.

Looking ahead, TopBuild said residential markets remain uncertain, while heavy commercial and industrial segments continue to show healthy demand.

TopBuild's results reflect a construction market in transition. Housing has slowed, large commercial and industrial projects are filling part of the gap, and companies like TopBuild are increasingly using acquisitions to buy growth that organic demand isn't delivering.