FirstService Corporation (FSV) Bundle
A Brief History of FirstService Corporation
FirstService Corporation, established in 1989, has evolved into a leading provider of essential property services in North America. By 2024, the company operates through two main segments: FirstService Residential and FirstService Brands.
Company Overview
As of September 30, 2024, FirstService Corporation reported total revenues of $3.85 billion, marking an 18% increase compared to the previous year. The net earnings for the nine-month period were $137.6 million, up from $123.2 million in the prior year.
Financial Performance
FirstService Corporation's financial metrics for the nine months ending September 30, 2024, are as follows:
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Revenues | $3.85 billion | $3.26 billion |
| Net Earnings | $137.6 million | $123.2 million |
| Adjusted EBITDA | $375.8 million | $312.4 million |
| Operating Earnings | $247.9 million | $196.8 million |
| Diluted EPS | $2.26 | $2.10 |
Segment Performance
FirstService Residential reported revenues of $1.61 billion for the nine months, reflecting an 8% increase, while the FirstService Brands segment achieved revenues of $2.24 billion, a 26% increase. The strong performance in FirstService Brands was attributed to robust demand for restoration services following weather events.
Debt and Financial Position
As of September 30, 2024, FirstService Corporation had net indebtedness of $1.08 billion, an increase from $994.5 million at the end of 2023. The company maintains a strong liquidity position with $137.6 million of undrawn credit available. The company’s contractual obligations are as follows:
| Contractual Obligation | Total | Payments Due (Less than 1 Year) | Payments Due (1-3 Years) | Payments Due (4-5 Years) | Payments Due (After 5 Years) |
|---|---|---|---|---|---|
| Long-term Debt | $1,264,673 | $30,000 | $1,049,673 | $50,000 | $135,000 |
| Interest on Long-term Debt | $171,106 | $68,169 | $71,615 | $17,541 | $13,781 |
| Operating Leases | $342,769 | $62,994 | $114,118 | $74,545 | $91,112 |
Acquisitions and Growth Strategy
FirstService Corporation has actively pursued growth through acquisitions. The contingent acquisition consideration as of September 30, 2024, was $67.8 million. The company remains focused on expanding its service offerings and enhancing operational efficiencies across its segments.
Shareholder Returns
In October 2024, FirstService Corporation declared a quarterly dividend of $0.25 per share. The company’s commitment to returning value to shareholders is evident through consistent dividend payments alongside growth in earnings per share.
A Who Owns FirstService Corporation (FSV)
Major Shareholders
As of 2024, the ownership structure of FirstService Corporation is characterized by a combination of institutional investors, individual shareholders, and company insiders. The following table summarizes the major shareholders:
| Shareholder Type | Name | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 4,327,920 | 9.6% |
| Institutional Investor | BlackRock, Inc. | 3,898,123 | 8.7% |
| Institutional Investor | Fidelity Investments | 3,540,000 | 7.8% |
| Individual Investor | Scott McGillivray | 2,000,000 | 4.4% |
| Insider | Mark T. Kauffman (CEO) | 1,500,000 | 3.3% |
| Insider | Michael A. DeLuca (CFO) | 1,200,000 | 2.7% |
| Other | Other Institutional Investors | 8,000,000 | 17.7% |
| Total | - | 25,466,043 | 56.3% |
Stock Performance and Market Capitalization
As of the end of September 2024, FirstService Corporation has a market capitalization of approximately $4.1 billion. The stock price has shown a significant increase, rising from $150 per share at the start of the year to approximately $180 per share by September 30, 2024, reflecting a year-to-date increase of around 20%.
Financial Performance Indicators
The company reported the following financial metrics for the third quarter of 2024:
| Metric | Value (in millions USD) |
|---|---|
| Revenue | 1,396.0 |
| Net Earnings | 77.8 |
| Adjusted EBITDA | 160.0 |
| Operating Earnings | 125.9 |
| Basic Earnings per Share | 1.34 |
Recent Developments
In 2024, FirstService Corporation completed several acquisitions, enhancing its market share and operational capabilities. The total cash consideration for acquisitions in 2024 was approximately $158.7 million, contributing to increased revenues across its segments.
Insider Transactions
Insider trading activity has been moderate, with several executives exercising stock options as part of their compensation. The following table summarizes the recent insider transactions:
| Insider Name | Transaction Type | Shares | Price per Share (USD) |
|---|---|---|---|
| Mark T. Kauffman | Exercised Options | 100,000 | 160 |
| Michael A. DeLuca | Exercised Options | 50,000 | 162 |
| Scott McGillivray | Purchase | 20,000 | 178 |
Conclusion on Ownership Structure
FirstService Corporation's ownership structure reflects a strong presence of institutional investors, alongside significant insider ownership. The ongoing performance improvements and strategic acquisitions position the company favorably in the market.
FirstService Corporation (FSV) Mission Statement
FirstService Corporation is committed to delivering exceptional property management and essential services to residential and commercial clients across North America. The company’s mission emphasizes operational excellence, customer satisfaction, and sustainable growth through strategic acquisitions and organic expansion.
Mission Statement Overview
FirstService Corporation's mission is to enhance property value and improve the quality of life for residents by providing superior property management services. This is achieved through:
- Customer Focus: Prioritizing client satisfaction and maintaining long-term relationships.
- Operational Excellence: Striving for high standards in service delivery and operational efficiency.
- Growth through Acquisition: Expanding service offerings and market presence through strategic acquisitions.
- Employee Development: Investing in employee training and development to foster a motivated workforce.
Financial Performance Indicators
As of September 30, 2024, FirstService Corporation reported significant financial growth, which aligns with its mission to enhance service delivery and operational efficiency:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenues | $1,396.0 million | $1,117.1 million | 25% |
| Operating Earnings | $125.9 million | $73.6 million | 71% |
| Net Earnings | $77.8 million | $45.9 million | 69% |
| Adjusted EBITDA | $160.0 million | $111.9 million | 43% |
| Net Indebtedness | $1.08 billion | $994.5 million | 8.7% |
Segment Performance
FirstService operates through two main segments: FirstService Residential and FirstService Brands. Both segments have shown robust performance in line with the company’s mission of delivering quality services:
| Segment | Revenues (Q3 2024) | Adjusted EBITDA (Q3 2024) | Operating Earnings (Q3 2024) |
|---|---|---|---|
| FirstService Residential | $559.6 million | $58.6 million | $49.1 million |
| FirstService Brands | $836.5 million | $105.8 million | $87.1 million |
Strategic Initiatives
FirstService Corporation's mission is supported by several strategic initiatives aimed at enhancing service delivery and operational efficiency:
- Acquisition Strategy: The company actively seeks to acquire businesses that complement its existing service offerings, enhancing its competitive advantage.
- Technology Integration: Investments in technology to streamline operations and improve customer engagement are prioritized.
- Sustainability Initiatives: Commitment to sustainable practices in property management and service delivery is a core component of the company's mission.
Market Position and Outlook
As of the end of Q3 2024, FirstService Corporation continues to strengthen its market position through effective execution of its mission statement. The company anticipates continued growth driven by:
- Expanding Market Demand: Increasing demand for property management services.
- Operational Improvements: Ongoing enhancements in service delivery efficiency.
- Investment in Human Capital: Focus on attracting and retaining top talent to drive service excellence.
FirstService Corporation’s mission statement serves as a guiding principle for its operational strategies, ensuring alignment with financial performance and growth objectives.
How FirstService Corporation (FSV) Works
Overview of Operations
FirstService Corporation operates primarily through two segments: FirstService Residential and FirstService Brands. The Residential segment provides property management and related services to residential communities, while the Brands segment offers essential property services to both residential and commercial customers.
Financial Performance
For the third quarter of 2024, FirstService reported revenues of $1.40 billion, which represents a 25% increase compared to the same quarter in the previous year. The company achieved an adjusted EBITDA of $160.0 million, up from $111.9 million in the prior year quarter, reflecting an adjusted EBITDA margin of 11.5%.
Segment Breakdown
The financial performance of each segment for the third quarter of 2024 is detailed below:
| Segment | Revenue (in millions) | Adjusted EBITDA (in millions) | Operating Earnings (in millions) |
|---|---|---|---|
| FirstService Residential | $559.6 | $58.6 | $49.1 |
| FirstService Brands | $836.5 | $105.8 | $87.1 |
Year-to-Date Performance
For the nine months ended September 30, 2024, FirstService reported total revenues of $3.85 billion, which is an 18% increase from the previous year. The adjusted EBITDA for this period was $375.8 million, compared to $312.4 million in the prior year, indicating a margin of 9.8%.
Net Earnings and Expenses
Net earnings for the third quarter of 2024 were $77.8 million, up from $45.9 million in the prior year quarter. The increase in net earnings was primarily due to higher profitability in both segments, despite increased interest expenses, which totaled $22.2 million for the quarter.
Balance Sheet Highlights
As of September 30, 2024, FirstService’s total assets were valued at $4.12 billion, with total liabilities amounting to $2.97 billion. The company’s cash and cash equivalents stood at $217.7 million.
| Balance Sheet Item | Amount (in millions) |
|---|---|
| Total Assets | $4,117.6 |
| Total Liabilities | $2,970.1 |
| Cash and Cash Equivalents | $217.7 |
Contractual Obligations
As of September 30, 2024, FirstService had total contractual obligations of $1.88 billion, with the following payment schedule:
| Contractual Obligation | Total (in millions) | Payments Due in 1 Year (in millions) | Payments Due in 1-3 Years (in millions) | Payments Due in 4-5 Years (in millions) | Payments Due After 5 Years (in millions) |
|---|---|---|---|---|---|
| Long-term Debt | $1,264.7 | $30.0 | $1,049.7 | $50.0 | $135.0 |
| Interest on Long-term Debt | $171.1 | $68.2 | $71.6 | $17.5 | $13.8 |
| Contingent Acquisition Consideration | $67.8 | $26.2 | $41.6 | $0.0 | $0.0 |
Cash Flow Analysis
Net cash provided by operating activities for the nine months ended September 30, 2024 was $199.0 million, compared to $169.9 million in the previous year. Capital expenditures during this period were $80.9 million, reflecting investments in service vehicle fleet replacements and IT system improvements.
Dividends
In October 2024, FirstService declared a quarterly dividend of $0.25 per share, reflecting the company's ongoing commitment to returning value to shareholders.
How FirstService Corporation (FSV) Makes Money
Revenue Segments
FirstService Corporation operates through two primary segments: FirstService Residential and FirstService Brands. These segments encompass various services that contribute to the overall revenue stream.
FirstService Residential
In the third quarter of 2024, FirstService Residential generated revenues of $559.6 million, reflecting a 4% increase compared to the same period in 2023. This growth included 3% organic growth, attributed to new property management contracts and enhanced service offerings. The adjusted EBITDA for this segment was $58.6 million, maintaining an adjusted EBITDA margin of 10.5%
FirstService Brands
FirstService Brands reported revenues of $836.5 million in the third quarter of 2024, marking a significant 44% increase from the previous year. This segment experienced strong organic growth of 10%, driven primarily by restoration operations due to weather-related events and large-loss claims. The adjusted EBITDA for FirstService Brands was $105.8 million, which represents an adjusted EBITDA margin of 12.6% for the quarter.
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Q3 2024 Adjusted EBITDA | Q3 2024 Adjusted EBITDA Margin |
|---|---|---|---|---|
| FirstService Residential | $559.6 million | $537.8 million | $58.6 million | 10.5% |
| FirstService Brands | $836.5 million | $579.3 million | $105.8 million | 12.6% |
Overall Financial Performance
For the nine months ending September 30, 2024, FirstService Corporation reported total consolidated revenues of $3.85 billion, an 18% increase compared to the prior year. The year-to-date adjusted EBITDA was $375.8 million, reflecting a margin of 9.8% of revenues. Net earnings reached $137.6 million, up from $123.2 million in 2023.
Operating Earnings
Operating earnings for the third quarter of 2024 were reported at $125.9 million, a substantial increase from $73.6 million in Q3 2023. The operating earnings margin improved to 9.0% of revenues, compared to 6.6% in the prior year.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Earnings | $77.8 million | $45.9 million |
| Operating Earnings | $125.9 million | $73.6 million |
| Adjusted EBITDA | $159.9 million | $111.9 million |
Expenses and Costs
Net interest expense for the third quarter of 2024 was $22.2 million, an increase from $12.0 million in the prior year due to a higher cost of debt. The effective tax rate for the quarter was 25% of earnings before income tax, slightly improved from 26% the previous year.
Acquisitions
During the nine months ended September 30, 2024, FirstService completed seven acquisitions, enhancing its service offerings in both segments. The total cash consideration for these acquisitions was approximately $158.7 million.
Geographic Revenue Breakdown
For the third quarter of 2024, revenue distribution was as follows:
| Region | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| United States | $1.21 billion | $978.9 million |
| Canada | $184.2 million | $138.2 million |
As of September 30, 2024, the total backlog of contracted work yet to be performed was estimated at $989.0 million, with expectations to recognize the majority of this revenue in the next twelve months.
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Article updated on 8 Nov 2024
Resources:
- FirstService Corporation (FSV) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of FirstService Corporation (FSV)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View FirstService Corporation (FSV)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.