Building products installation services company Installed Building Products (NYSE: IBP) beat Wall Street’s revenue expectations in Q4 CY2025, but sales were flat year on year at $747.5 million. Its non-GAAP profit of $3.24 per share was 18% above analysts’ consensus estimates.

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“We closed out 2025 with a strong fourth quarter performance delivering record sales and profitability for the full year. With our core residential end markets experiencing headwinds, we maintained a disciplined approach to profitability and emphasized product diversification and quality of service. We continued to generate strong operating cash flow, which we used to support our growth-oriented capital allocation strategy. While we expect homebuilding activity to remain challenging in the near-term, our long-term outlook for our installed services remains positive, and we believe we are well positioned to continue investing in strategic acquisitions while returning cash to our shareholders,” stated Jeff Edwards, Chairman and Chief Executive Officer.

Company Overview

Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Installed Building Products grew its sales at an excellent 12.4% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Installed Building Products’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.4% over the last two years was well below its five-year trend.

This quarter, Installed Building Products’s $747.5 million of revenue was flat year on year but beat Wall Street’s estimates by 1.5%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

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Operating Margin

Installed Building Products has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 12.5%.

Analyzing the trend in its profitability, Installed Building Products’s operating margin rose by 3.5 percentage points over the last five years, as its sales growth gave it operating leverage. Its expansion shows it’s one of the better Home Builders companies as most peers saw their margins plummet.

This quarter, Installed Building Products generated an operating margin profit margin of 14.6%, up 1.4 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Installed Building Products’s EPS grew at an astounding 21.4% compounded annual growth rate over the last five years, higher than its 12.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Installed Building Products’s earnings to better understand the drivers of its performance. As we mentioned earlier, Installed Building Products’s operating margin expanded by 3.5 percentage points over the last five years. On top of that, its share count shrank by 8.8%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Installed Building Products, its two-year annual EPS growth of 5.5% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.

In Q4, Installed Building Products reported adjusted EPS of $3.24, up from $2.88 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Installed Building Products’s full-year EPS of $11.45 to shrink by 5%.

Key Takeaways from Installed Building Products’s Q4 Results

We were impressed by how significantly Installed Building Products blew past analysts’ EBITDA expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 5.6% to $317.55 immediately after reporting.

Installed Building Products may have had a good quarter, but does that mean you should invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).