Watsco Q2 2026: Revenue +2.1%, net income -11.7% as gross margin compresses 180bp

Filed August 7, 2026 · Period ending June 30, 2026 · Compared to 10-Q Aug 8, 2025 · ~1 min read

Key Changes

• high

  Gross margin fell 180 basis points to 27.5% as the company absorbed OEM pricing actions from 2025; operating income declined 12% to $238.4M while net income dropped 11.7% to $191.3M.

  MD&A: Gross Profit Margin verify on EDGAR →
• high

  EPA eliminated the December 31, 2025 deadline for 410A HVAC system sales, allowing Watsco to continue selling matching 410A systems indefinitely; June 2026 tariff changes reduced residential HVAC tariffs from 25% to 15% temporarily.

  MD&A: Regulatory Developments verify on EDGAR →
• high

  Acquired Jackson Supply Company on June 1, 2026 for $186.2M in stock, adding 25 locations across seven Sunbelt states and ~$230M in annual sales; recognized $99.6M in non-deductible goodwill.

  Notes: Business Combinations view on EDGAR →