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Companies join forces to help professional builders work smarter, build faster, and deliver a better homeowner experience.

, /PRNewswire/ -- Builders FirstSource, Inc. (NYSE: BLDR), a leading provider of building materials and value-added services, and Digs, a leading AI platform for homebuilders and homeowners, today announced a strategic partnership to deliver the next generation of AI-powered workflows and digital infrastructure for professional builders and homeowners.

Under the partnership, Builders FirstSource is the solo lead on Digs' $25.3 million Series A financing and has also entered into a five-year commercial agreement with Digs to accelerate product development, strengthen platform integration, and expand AI capabilities. Through the commercial agreement, the companies will collaborate to strengthen Builders FirstSource's digital ecosystem for residential homebuilders and build out new experiences for homeowners.

"Our customers are looking for seamless technology that helps them operate more efficiently and deliver a better homeowner experience," said Peter Jackson, CEO of Builders FirstSource. "By combining Builders FirstSource's scale, deep customer relationships, product data, and extensive digital ecosystem with Digs' AI platform, we are advancing tools that can simplify workflows, improve productivity, and create a more connected experience across the homebuilding lifecycle, enabling us to serve our customers in new ways at every stage."

The companies intend to leverage Builders FirstSource's comprehensive digital ecosystem and Digs' patented AI platform to better serve homebuilders, including the more than 140,000 customers served by Builders FirstSource today, by helping them eliminate disconnected workflows, reduce manual work, and deliver exceptional homeowner experiences from pre-construction through warranty and beyond.

One Intelligent Platform Across the Entire Build

As part of the partnership, Builders FirstSource and Digs intend to enhance Builders FirstSource's digital ecosystem with Digs' patented AI technology to turn thousands of disconnected construction documents into a single living source of truth, connecting plans, specifications, selections, products, approvals, warranties, conversations, and project history into one intelligent platform.

For builders: Every stakeholder can work from the same trusted information, from estimating and purchasing to construction, design, sales, and homeowner care. For homeowners: Greater transparency during construction and a complete digital twin of their home that continues delivering value long after move-in. The result is faster decisions, less rework, shorter project cycle times, and a better ownership experience.

Helping Builders Work Faster at Every Stage

The partnership accelerates a new generation of AI-powered capabilities to streamline operations and improve both internal workflows and the homeowner experience.

Planned innovations include:

A single source of truth for every project with AI chat, files, e-signatures, QR codes, comments, tasks, and project collaboration. AI-powered diagramming, finish selections, and visual coordination between builders, designers, trades, and homeowners. Consumer-grade client experiences that keep homeowners informed throughout construction while reducing interruptions to project teams. AI-powered homeowner handoff, warranty, and aftercare that extends the builder relationship long after move-in. Integrated into Builders FirstSource's digital ecosystem, these connected workflows will be devised to span estimating, procurement, construction, and ongoing homeownership, helping teams build more homes with greater efficiency and confidence.

Extending the Builder Relationship Beyond Move-In

This intelligent foundation will be designed to enable homeowners to receive personalized maintenance guidance, warranty support, and tailored services for their home, while giving builders a more efficient way to manage aftercare and strengthen long-term customer relationships.

Over time, it opens the door to new services and innovations across the full life of the home.

"Our vision has always been beyond construction software," said Ryan Fink, CEO and Co-founder of Digs. "We're building the AI platform that understands every home. Builders FirstSource brings national reach, industry relationships, product data, and market scale. Together, we're creating something even beyond the next generation of residential construction, we're creating the first scalable true digital twin of the home for homeowners to power new experiences for the life of their home."

About Builders FirstSource

Builders FirstSource (NYSE: BLDR), headquartered in Irving, Texas, is a leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. With approximately 565 locations across 43 states, we serve 48 of the top 50 and 91 of the top 100 Core Based Statistical Areas (CBSAs), ensuring broad geographic coverage and enhancing our ability to partner with our customers. Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that we design and cut specifically for each home. We also assemble interior and exterior doors into pre-hung units for easy installation. Additionally, we distribute a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items. Our services, which vary by market, include professional installation, turnkey framing, and shell construction. Supported by the latest construction innovations and digital solutions, we help drive greater efficiency across homebuilding. Learn more at www.bldr.com.

About Digs

Digs is the leading AI platform for homebuilders and homeowners. Using patented artificial intelligence, Digs transforms construction documents into a single source of truth that helps builders boost productivity, accelerate workflows, improve collaboration, and deliver exceptional homeowner experiences from pre-construction through warranty, aftercare, and beyond. Digs serves builders, contractors, designers, trade partners, vendors, and homeowners across all 50 states.

Forward-Looking Statements

Statements in this news release and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about the partnership between Builders FirstSource and Digs, the resulting product innovation and the capabilities of Builders FirstSource's and Digs' digital platforms, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by the Builders FirstSource's directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. As with the forward-looking statements included in this release, these forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially as a result of many factors. All forward-looking statements are based upon information available to Builders FirstSource on the date this release was submitted. Builders FirstSource undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve risks and uncertainties, many of which are beyond the Builders FirstSource's control or may be currently unknown to the Builders FirstSource, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements; such risks or uncertainties include those related to the partnership between Builders FirstSource and Digs and the ability of the partnership to achieve the anticipated benefits thereof, adoption of the technologies being developed by Builders FirstSource and Digs by homebuilders and homeowners, the ability of Builders FirstSource's growth strategies, including acquisitions, organic growth and digital and technology strategies, including the Builders FirstSource's ability to drive growth by incorporating artificial intelligence and machine learning solutions into its platform, or the dependence of the Builders FirstSource's revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, home size and affordability, consumer confidence, labor and supply shortages, tariffs and duties, and also lumber and other commodity prices. The Builders FirstSource may not succeed in addressing these and other risks. Further information regarding factors that could affect our financial and other results can be found in the risk factors section of Builders FirstSource's most recent annual report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") and may also be described from time to time in the other reports Builders FirstSource files with the SEC. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein.

SOURCE Digs

Key Takeaways Builders FirstSource cut its 2026 sales and adjusted EBITDA outlook amid softer housing construction demand.BLDR's Q2 margins contracted as pricing pressure and weaker operating leverage weighed on profitability.BLDR's 2026 earnings estimate has fallen sharply, while higher leverage and weak housing trends remain risks. Builders FirstSource, Inc. (BLDR - Free Report) shares have fallen about 12% in the past month, extending a difficult stretch for the building-products supplier. The decline raises a central question for investors: Has the pullback created value, or are weaker fundamentals still being reflected in the stock?

The latest results favor caution. Housing demand remains soft, margins have contracted and the Zacks Consensus Estimate for 2026 earnings has moved sharply lower.

BLDR Faces Broad Housing Demand PressureCore organic sales declined 7% year over year in the second quarter of 2026. Single-family sales fell 8.1%, multifamily dropped 9.7% and repair-and-remodel and other sales decreased 1.8%, showing that weakness was not confined to one end market.

Management now expects single-family starts to decline by mid to high-single digits in 2026, multifamily starts to fall by mid-single digits and repair-and-remodel activity to decrease 1%. Installed Building Products, Inc. (IBP - Free Report) , a national installer of insulation and complementary building products, also has meaningful exposure to residential construction. UFP Industries, Inc. (UFPI - Free Report) serves construction customers alongside retail and industrial packaging markets, giving investors another building-products company through which to assess demand conditions.

Builders FirstSource Sees Margins ContractBuilders FirstSource’s gross margin fell 260 basis points year over year to 28.1% in the second quarter. Adjusted EBITDA margin declined 350 basis points to 8.5% as lower gross profit and reduced operating leverage outweighed cost reductions.

Pricing pressure remains another constraint. Value-added core organic sales declined 11%, including a 12% drop in manufactured products and a 10% decrease in windows, doors and millwork. Management said industry participants have competed aggressively to fill capacity, leaving margins below desired levels despite greater stability in recent months.

BLDR Estimate Cuts Reinforce the RisksThe company lowered its 2026 net sales outlook to $14-$14.8 billion from $14.6-$15.6 billion. It also reduced adjusted EBITDA guidance to $1-$1.2 billion from $1.1-$1.5 billion and narrowed the expected adjusted EBITDA margin range to 7.1-8.1%.

Second-quarter adjusted earnings of $1.17 per share missed the Zacks Consensus Estimate by 9.3%, while revenues of $3.86 billion missed by 1.2%. The consensus estimate for 2026 earnings has declined 22.9% over the past four weeks, reducing near-term earnings visibility.

Builders FirstSource Retains Recovery LeversBuilders FirstSource continues to use acquisitions, digital tools and productivity programs to strengthen its competitive position. Since the 2021 BMC merger, it has completed 42 acquisitions representing nearly $2.3 billion in annual sales, while recent deals expanded installation and manufactured-product capabilities.

Cost actions could also soften the downturn. The company generated $28 million of productivity savings in the second quarter and expects $50-$70 million for 2026. It remained free-cash-flow positive, with $32 million generated in the quarter and $1.6 billion of liquidity. Still, net debt to trailing adjusted EBITDA rose to 3.6 times from 2.3 times a year earlier, limiting the margin for error.

BLDR’s Weak Signals Favor Continued CautionBLDR’s lower share price and discounted valuation may attract value-focused investors, but the operating and estimate trends have not stabilized. Housing weakness, margin pressure and higher leverage suggest that a durable recovery may depend on improved residential construction activity.

The stock currently carries a Zacks Rank #5 (Strong Sell), reflecting unfavorable earnings estimate revisions and weak near-term prospects.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Its Value Score of B indicates comparatively favorable valuation characteristics, but the Growth Score of D, Momentum Score of C and VGM Score of D show that valuation support is not matched by broad strength across growth and momentum measures. The combination supports a cautious stance rather than a clear value case.

Key Takeaways Builders FirstSource is expected to post lower Q2 earnings and sales amid weak residential construction.BLDR faces margin pressure from competitive pricing, a lower-margin sales mix and elevated input costs.Acquisitions, bundled offerings and AI-enabled digital tools may support revenue and market share. Builders FirstSource, Inc. (BLDR - Free Report) is slated to report second-quarter 2026 results on July 30, before market open.

In the last reported quarter, the company’s adjusted earnings per share (EPS) missed the Zacks Consensus Estimate by 30.8%, while net sales beat the same by 4.5%. On a year-over-year basis, both top and bottom lines tumbled 10.1% and 82.1%, respectively.

BLDR’s earnings topped the consensus mark in two of the trailing four quarters and missed on two occasions, the average surprise being negative 8%.

Trend in Estimate Revision of BLDRThe Zacks Consensus Estimate for Builders FirstSource’s second-quarter EPS has moved south to $1.29 from $1.32 in the past 30 days. The estimated figure indicates a 45.8% year-over-year decline from EPS of $2.38 reported in the year-ago quarter.

The consensus estimate for net sales is pegged at $3.91 billion, indicating a decline of 7.6% from $4.23 billion reported in the year-ago quarter.

Factors Likely to Shape Builders FirstSource’s Q2 ResultsNet Sales

Builders FirstSource's second-quarter revenues are likely to remain under pressure as elevated mortgage rates, affordability constraints and cautious consumer sentiment continue to weigh on residential construction activity. Single-family revenues may remain soft as lower starts and the ongoing shift toward smaller, less complex homes reduce sales dollars per start. Multifamily activity is also expected to stay muted, with management not anticipating a meaningful improvement before 2027.

Value-added products, which comprised 48.3% of first-quarter sales, likely remained pressured by weak single-family construction and lower structural content per home. Specialty products, representing 26% of sales, may have provided some support, though pricing pressure and volatility likely persisted. Lumber and sheet goods, at 25.7% of sales, likely benefited from bundling and share gains, but lower margins and commodity-price movements may have limited the revenue contribution.

Despite these industry headwinds, the company continues to benefit from its broad product portfolio, bundled offerings and expanding value-added solutions. Acquisitions are expected to provide incremental revenue support. Since the BMC merger, Builders FirstSource has completed 41 acquisitions representing more than $2.3 billion in annual sales, while the Premium Building Components deal expanded its manufactured products presence into New York. Digital initiatives may also support growth, with the company preparing to launch its next generation of AI-enabled solutions later this year to strengthen customer engagement and capture additional market share.

Margins

Margins are likely to remain under pressure in the second quarter despite ongoing cost-control efforts. Competitive pricing, an unfavorable product mix with higher lumber and sheet goods sales, and elevated fuel and input costs are expected to weigh on profitability. While BLDR's $100 million cost-reduction program should provide some relief, weak housing demand, affordability challenges and pricing pressure are likely to keep second-quarter margins constrained.

What the Zacks Model Predicts for BLDROur proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.

BLDR’s Earnings ESP: BLDR has an Earnings ESP of -8.74%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank of BLDR: The company currently carries a Zacks Rank of #4 (Sell).

Stocks With the Favorable CombinationHere are some companies in the Zacks Retail-Wholesale sector, which, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

BJ's Restaurants, Inc. (BJRI - Free Report) currently has an Earnings ESP of +7.51% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

 In the to-be-reported quarter, BJRI's earnings are expected to decline 10.3%. BJRI's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 136%.

CAVA Group, Inc. (CAVA - Free Report) currently has an Earnings ESP of +20.30% and a Zacks Rank of 3.

In the to-be-reported quarter, CAVA’s earnings are expected to increase 6.3%. CAVA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 16.6%.

The Cheesecake Factory Incorporated (CAKE - Free Report) currently has an Earnings ESP of +2.76% and a Zacks Rank of 3.

In the to-be-reported quarter, Cheesecake Factory’s earnings are expected to register a 0.9% year-over-year rise. Cheesecake Factory’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 6.7%.