Simpson Manufacturing (NYSE:SSD) executives said the company delivered higher sales and improved profitability in 2025 despite a “challenging market,” pointing to pricing actions, cost savings initiatives, and continued gains in several end markets as key supports. Management also introduced 2026 guidance that targets an operating margin range centered on the company’s long-term 20% goal, while acknowledging ongoing headwinds from tariffs and regional housing mix.
2025 performance and market conditions
President and CEO Mike Olosky reported full-year 2025 net sales of $2.3 billion, up 4.5% from 2024. He said the company’s revenue bridge attributed approximately 3% of growth to pricing, 1% to acquisitions, and 1% to foreign exchange, partially offset by an approximate 1% decline in volume due to weaker housing starts.
In Europe, full-year net sales totaled $499.6 million, up 4.3% year over year and “up slightly” on a local currency basis. Olosky said volumes in Europe outperformed the market and were slightly higher compared to 2024.
Olosky also highlighted operational metrics, including an exceptional 98% product delivery fill rate and customer satisfaction that contributed to “eight major awards” for service and product innovation. He added that the company achieved a total recordable incident rate of less than 1.0 for the second consecutive year, its best result in company history.
Segment and end-market commentary
Management described mixed performance across North American end markets in 2025, with several areas of strength:
- OEM: Olosky said the OEM business posted a “strong year” with volume up double digits, including growth with off-site construction manufacturers and mass timber projects.
- Component manufacturing: Volumes were up low single digits, driven by new customer acquisitions and expanded capabilities, including software. The company reiterated the importance of CS Producer, its cloud-based truss production management software announced the prior quarter, and said the Easy-Frame acquisition continued to perform well.
- Commercial: 2025 volumes were “essentially flat” in a commercial market management characterized as down mid-single digits. Olosky cited strength in cold-formed steel and anchoring products, supported by the company’s takeoff service, as well as increased adoption of third-generation anchoring adhesives.
- Residential: Volume declined modestly, with continued challenges particularly in the west and the south. Olosky said multifamily saw steady growth supported by increased quoting activity, while the company strengthened its single-family competitive position via multi-year renewals and new national builder contracts. He noted programs are now in place with 25 of the top 30 U.S. national builders.
- National retail: Shipments declined mid-single digits year over year, while point-of-sale volume performance declined low single digits, which management attributed in part to regional differences and tough comparisons to late-2024 product listings and retail-space expansion.
Margins, pricing, tariffs, and cost savings
For the full year, Olosky said consolidated gross margin was relatively flat at 45.9%, while operating margin was 19.6%, up 30 basis points year over year. He said 2025 results included approximately $13.1 million in strategic cost savings initiatives and footprint optimization costs, as well as a $12.9 million gain on the sale of the Gallatin, Tennessee facility. Adjusted EBITDA for 2025 totaled $544.3 million, up 3.3%.
CFO Matt Dunn provided fourth-quarter detail, reporting consolidated net sales of $539.3 million, up 4.2%. North America sales rose 3% to $416.9 million, and Europe sales increased 9.1% to $117.9 million, driven primarily by approximately $9.1 million of favorable foreign currency translation plus modest volume and pricing improvement.
Fourth-quarter gross margin was 43.6%, down 30 basis points year over year. Dunn said North America gross margin declined due to tariffs and higher factory overhead and labor costs, partly offset by lower warehouse costs as a percentage of sales. Europe gross margin improved to 33.6% from 32.3% due to lower material and freight costs, partly offset by higher factory and overhead, warehouse, and labor costs.
Operating expenses were a key driver in the quarter. Dunn said SG&A headcount was down about 7%, but total fourth-quarter operating expenses increased 8.2% to $161.8 million, driven primarily by the timing of charitable donations ahead of tax deductibility changes for 2026, variable incentive compensation, and personnel costs including severance. Fourth-quarter operating income was $74.8 million (down 2.7%), with an operating margin of 13.9%. Net income was $56.2 million, or $1.35 per diluted share, compared with $55.5 million, or $1.31, a year earlier.
In Q&A, Dunn said Simpson took price increases in 2025 that management expects to provide about $100 million of annualized pricing, with roughly $60 million realized during 2025 and an incremental $40 million expected to flow through largely in the first half of 2026. He also said tariff-related cost increases were about $100 million annualized, and that as the company exited the fourth quarter, products shipping were “fully tariffed.” Dunn said this dynamic was the primary reason the company expects gross margin to be “down a little bit” in 2026, assuming no additional tariffs and no further price increases.
Management also discussed cost reduction efforts. Dunn said the company incurred about $8 million in severance-related costs in 2025 tied to strategic cost savings initiatives, which are expected to deliver annualized cost savings of at least $30 million. He later described the savings as roughly two-thirds in operating expenses and about one-third in cost of goods sold, noting the impact in Q4 was “pretty neutral” due to one-time costs. For 2026, Dunn said the company expects absolute operating expense dollars to be down in the $10 million to $15 million range versus 2025, while also noting expected foreign exchange pressure in Europe.
Balance sheet, cash flow, and capital returns
Dunn said the company amended and restated its credit agreement late in the quarter, which includes a $600 million revolving credit facility and a $300 million five-year term loan. As of Dec. 31, 2025, the company had $74.2 million drawn on the revolver, with $525.8 million of remaining availability. Total debt was approximately $374.2 million, cash and cash equivalents were $384.1 million, and the company ended the year in a net cash position of $9.9 million.
Simpson generated cash flow from operations of $155.6 million in the fourth quarter and $458.6 million for the full year. In 2025, capital allocation included $161.5 million of capital expenditures, $47.6 million in dividends, and $120 million in share repurchases. Dunn reiterated that the board authorized a new $150 million share repurchase program through the end of 2026 and said the company plans to return at least 35% of free cash flow to shareholders.
2026 outlook and management’s key assumptions
For 2026, Dunn guided to a consolidated operating margin range of 19.5% to 20.5%. Key assumptions included slightly lower gross margin due to tariffs and increased depreciation costs, $3 million to $5 million of footprint optimization costs in Europe, and a projected $10 million to $12 million benefit on the sale of vacant land. The company estimated an effective tax rate of 25% to 26% and capital expenditures of $75 million to $85 million.
On the demand backdrop, Olosky said the company expects U.S. housing starts to be “relatively flat” year over year in 2026, while Europe is expected to see slight market growth. In Q&A, management emphasized a conservative planning stance given recent years in which housing forecasts began optimistically and ended “flat to down.” Olosky also highlighted the impact of regional mix, citing California and Florida as markets that have been down significantly and where the company has substantially higher content per home.
Executives said they believe Simpson can continue to outperform its markets over time, supported by product innovation, service, and an expanding set of digital tools and services. However, they characterized monetization of certain newer digital offerings as still “very early days,” without providing specific revenue figures.
About Simpson Manufacturing (NYSE:SSD)
Simpson Manufacturing Co, Inc, through its Simpson Strong-Tie® brand, is a leading global supplier of structural building products. The company specializes in the design, testing, manufacture and supply of connectors, anchors, fasteners and lateral systems that enhance the safety and performance of wood, concrete and masonry structures. Its product portfolio also includes repair and strengthening systems, concrete reinforcement and high-performance adhesives used in residential, commercial and industrial construction projects.
Founded in 1956 by Barclay Simpson in Oakland, California, Simpson Manufacturing has grown from a single product business into a diversified manufacturer with worldwide operations.
