การประชุมผลประกอบการไตรมาส 3 ปี 2026 ของ Watsco (WSO): ยอดขายสูงสุดเป็นประวัติการณ์และการฟื้นตัวของอุปสงค์ระบบ HVAC

ประเด็นสำคัญ

• ยอดขายประจำไตรมาส 3/2026 ของ Watsco เพิ่มขึ้น 7% สู่ระดับสูงสุดเป็นประวัติการณ์ที่ 2.22 พันล้านดอลลาร์ รวมถึงการเติบโตของยอดขายจากสาขาเดิม 4% ยอดขายอุปกรณ์ HVAC สำหรับที่พักอาศัยเพิ่มขึ้น 7% โดยได้แรงหนุนจากปริมาณการขายต่อหน่วยและราคาที่สูงขึ้น
• กำไรขั้นต้นแตะระดับสูงสุดเป็นประวัติการณ์ที่ 586 ล้านดอลลาร์ ขณะที่อัตรากำไรขั้นต้นอยู่ที่ 26.4% ผู้บริหารระบุว่าส่วนผสมของลูกค้าและผลิตภัณฑ์ การรวมงบของ Jackson Supply และฐานเปรียบเทียบเกี่ยวกับสารทำความเย็นที่สูงในปีก่อน เป็นปัจจัยที่กระทบต่ออัตรากำไร
• กำไรจากการดำเนินงานอยู่ที่ 225 ล้านดอลลาร์ อัตรากำไรจากการดำเนินงานอยู่ที่ 10.1% และกำไรต่อหุ้นอยู่ที่ 3.77 ดอลลาร์
• กระแสเงินสดจากการดำเนินงานนับตั้งแต่ต้นปีจนถึงปัจจุบันเพิ่มขึ้น 79% สู่ระดับ 304 ล้านดอลลาร์ โดย Watsco สิ้นสุดไตรมาสด้วยเงินสด 649 ล้านดอลลาร์ และไม่มีหนี้สิน
• การเปิดรับเทคโนโลยีดิจิทัลยังคงขยายตัวอย่างต่อเนื่อง ยอดขายอีคอมเมิร์ซเติบโต 12% นับตั้งแต่ต้นปีจนถึงปัจจุบัน และคิดเป็น 37% ของยอดขายรวมในช่วง 12 เดือนที่ผ่านมา โดยมีอัตราการเข้าถึงสูงถึง 60% ถึง 70% ในบางตลาด
• Watsco ขยายธุรกิจผ่านการเข้าซื้อกิจการ โดย Jackson Supply ซึ่งถูกเข้าซื้อเมื่อวันที่ 1 มิถุนายน เติบโต 16% ในระหว่างไตรมาส ขณะที่การเข้าซื้อกิจการ Granite Group ที่เสร็จสมบูรณ์แล้ว ได้ช่วยเพิ่มยอดขายต่อปีประมาณ 500 ล้านดอลลาร์ และเพิ่มสาขาในภาคตะวันออกเฉียงเหนืออีก 82 แห่ง

ข้อมูลทางการเงินที่สำคัญ

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

อุปสงค์ปรับตัวดีขึ้นอย่างต่อเนื่องเนื่องจากความซับซ้อนด้านกฎระเบียบและห่วงโซ่อุปทานคลี่คลายลง ผู้บริหารกล่าวว่าแรงขับเคลื่อนทางธุรกิจทวีความแข็งแกร่งขึ้นทุกเดือนนับตั้งแต่เดือนพฤษภาคม โดยเดือนตุลาคมดีกว่าเดือนกันยายน ขณะที่รายได้รวมในเดือนตุลาคมเพิ่มขึ้นในอัตราเลขสองหลักเมื่อรวมผลจากการเข้าซื้อกิจการ

อุปกรณ์ HVAC สำหรับที่พักอาศัยเป็นปัจจัยขับเคลื่อนการเติบโตที่ใหญ่ที่สุด ยอดขายอุปกรณ์เพิ่มขึ้น 5% เมื่อเทียบกับการลดลง 7% ในไตรมาสเดียวกันของปีก่อน กิจกรรมการเปลี่ยนทดแทนส่วนเพิ่มเติมปรับตัวดีขึ้นเป็นการเติบโตในระดับเลขตัวเดียวระดับต่ำ ขณะที่การก่อสร้างที่พักอาศัยใหม่และอาคารชุดที่พักอาศัยขยายตัวในระดับเลขสองหลักระดับต่ำ

ผู้บริหารกล่าวว่าปริมาณการเปลี่ยนทดแทนยังคงต่ำกว่าระดับเมื่อสองปีก่อน 10% ถึง 15% ซึ่งแสดงให้เห็นว่าตลาดกำลังเข้าใกล้แนวโน้มปกติมากขึ้นแต่ยังไม่ถึงระดับนั้น ทั้งนี้ สภาพการเปลี่ยนทดแทนในแต่ละภูมิภาคก็มีความแตกต่างกันไปทั้งในภาคเหนือ ภาคใต้ และภาคตะวันตก

ยอดขายอีคอมเมิร์ซเพิ่มขึ้น 12% นับตั้งแต่ต้นปีจนถึงปัจจุบัน และคิดเป็น 37% ของยอดขายรวมในช่วง 12 เดือนที่ผ่านมา แอปพลิเคชันบนมือถือของ Watsco มีผู้ใช้งานเป็นประจำต่อเดือนมากกว่า 73,000 ราย ข้อเสนอในรูปแบบดิจิทัลประมาณ 351,000 รายการ สร้างมูลค่าสินค้ารวม (GMV) ได้ 2 พันล้านดอลลาร์ในช่วงปีที่ผ่านมา เพิ่มขึ้น 14% จากช่วงเวลาเดียวกันของปีก่อน

Jackson Supply ร่วมสร้างรายได้ในผลประกอบการไตรมาส 3 หลังจากถูกเข้าซื้อกิจการเมื่อวันที่ 1 มิถุนายน ธุรกิจนี้มียอดขายต่อปี 230 ล้านดอลลาร์ ดำเนินงานใน 25 สาขาในแถบซันเบลต์ และเติบโต 16% ในระหว่างไตรมาส

การเข้าซื้อกิจการ Granite Group ได้เพิ่มธุรกิจที่มียอดขายต่อปีประมาณ 500 ล้านดอลลาร์ มีลูกค้ามากกว่า 11,000 ราย และมีสาขา 82 แห่งในภาคตะวันออกเฉียงเหนือ ทั้งนี้ Granite เป็นธุรกิจที่สี่ที่ Watsco เข้าซื้อซึ่งให้บริการแก่ผู้รับเหมาทั้งระบบ HVAC และระบบประปา ส่งผลให้ปัจจุบัน Watsco มีสาขาที่นำเสนอผลิตภัณฑ์ทั้งสองหมวดหมู่นี้รวม 112 แห่ง

ผู้บริหารยังได้เน้นย้ำถึงการเปิดรับระบบ HVAC แบบปล่อยลมด้านข้างที่เพิ่มสูงขึ้น บริษัทประมาณการว่าผลิตภัณฑ์เหล่านี้คิดเป็นสัดส่วนราว 8% ถึง 10% ของตลาด และระบุว่าผลิตภัณฑ์หมวดหมู่นี้กำลังพัฒนาข้อเสนอในระดับดี-ดีกว่า-ดีที่สุด ที่ครอบคลุมหลากหลายแบรนด์และระดับราคามากขึ้น

แนวโน้มจากมุมมองผู้บริหาร

ผู้บริหารคาดว่าผลกระทบจากการเปลี่ยนผ่านไปใช้สารทำความเย็น A2L จะสิ้นสุดลงเป็นส่วนใหญ่ภายในสิ้นปี 2026

Watsco ยืนยันเป้าหมายอัตรากำไรขั้นต้นในระยะยาวที่ 30% อีกครั้ง พร้อมเตือนว่าความคืบหน้าจะไม่ได้เป็นเส้นตรงแบบราบรื่น โดยมีการระบุว่าการเพิ่มประสิทธิภาพด้านราคา การควบรวมและการจัดระเบียบผู้จำหน่ายสินค้า การใช้ระบบโลจิสติกส์ร่วมกัน การเปิดรับเทคโนโลยีดิจิทัล และสัดส่วนชิ้นส่วนและอุปกรณ์เสริมที่สูงขึ้น เป็นเครื่องมือศักยภาพในการผลักดันอัตรากำไรในระยะยาว

บริษัทตั้งข้อสังเกตว่า อัตรากำไรขั้นต้นในไตรมาสที่สี่ตามสถิติในอดีตมักจะปรับตัวดีขึ้นประมาณ 20 ถึง 30 basis points จากช่วงฤดูกาลก่อนหน้า โดยอ้างอิงจากค่าเฉลี่ย 10 ปี ทั้งนี้ ผู้บริหารระบุอย่างชัดเจนว่าข้อมูลนี้เป็นเพียงข้อมูลทางสถิติในอดีต ไม่ใช่การคาดการณ์ผลประกอบการ

Watsco คาดว่าการปรับราคาของผู้ผลิตในปี 2027 จะเกิดขึ้นเร็วกว่าและเป็นไปตามรูปแบบปกติมากกว่าเมื่อเทียบกับการปรับขึ้นราคาที่ผันผวนอย่างผิดปกติในช่วงไม่กี่ปีที่ผ่านมา นอกจากนี้ ผู้บริหารยังคาดว่าจะมีการปรับขึ้นราคาบางส่วนในช่วงฤดูใบไม้ร่วงและต่อเนื่องไปจนถึงปี 2027 เนื่องจากต้นทุนโลหะ เหล็ก และค่าขนส่งที่สูงขึ้น แม้ว่าจะยังได้รับคำแนะนำเฉพาะเจาะจงที่จำกัดจากผู้ผลิตอุปกรณ์ดั้งเดิม (OEM) ก็ตาม

บริษัทคาดว่าสินค้าคงคลังจะลดลงตามฤดูกาลในไตรมาสที่สี่ หากไม่รวม Jackson และ Granite ผู้บริหารระบุว่าสินค้าคงคลัง ณ สิ้นปีมีศักยภาพที่จะใกล้เคียงกับปีก่อนโดยรวม แต่ย้ำว่านี่คือโอกาสมากกว่าข้อผูกมัด

ความเสี่ยงและประเด็นที่ต้องจับตา

อัตรากำไรขั้นต้นยังคงมีความอ่อนไหวต่อส่วนผสมของลูกค้า ยอดขายอุปกรณ์เทียบกับยอดขายที่ไม่ใช่อุปกรณ์ กิจกรรมการก่อสร้างใหม่ และการกำหนดราคาของผู้ผลิต โดยทั่วไปแล้ว บัญชีผู้รับเหมารายใหญ่จะมีอัตรากำไรขั้นต้นอยู่ในระดับปานกลางมากกว่า แม้ว่าผู้บริหารจะกล่าวว่าบัญชีเหล่านี้มีต้นทุนการให้บริการที่ต่ำกว่าและสามารถสร้างโอกาสในการเพิ่มส่วนแบ่งทางการตลาดได้เช่นกัน

โครงสร้างอัตรากำไรของ Jackson Supply ยังไม่อยู่ในช่วงประมาณ 27% ของ Watsco ซึ่งส่งผลกดดันต่ออัตรากำไรขั้นต้นในไตรมาส 3 นอกจากนี้ ช่วงเดียวกันของปีก่อนยังได้รับประโยชน์จากการขาดแคลนสารทำความเย็น ทำให้เกิดฐานเปรียบเทียบที่สูงและท้าทายยิ่งขึ้น

ความสามารถในการจ่ายของผู้บริโภคยังคงเป็นข้อจำกัด เนื่องจากระบบที่ติดตั้งอาจมีราคาตั้งแต่ 10,000 ถึง 15,000 ดอลลาร์ นอกจากนี้ ผู้บริหารยังอ้างถึงความไม่แน่นอนของผู้บริโภคที่ยังคงมีอยู่ และสัดส่วนยอดขายที่กระจุกตัวอยู่ในระดับประสิทธิภาพขั้นพื้นฐาน

ต้นทุนวัตถุดิบและปัจจัยการผลิตกำลังปรับตัวสูงขึ้น โดยเฉพาะอย่างยิ่งโลหะ เหล็ก และค่าขนส่ง ส่งผลให้จังหวะเวลาและขนาดของการปรับราคาโดย OEM ยังคงมีความไม่แน่นอน

การเปรียบเทียบสินค้าคงคลังได้รับผลกระทบจากการเข้าซื้อกิจการ โดย Jackson เพิ่มสินค้าคงคลังเข้ามาประมาณ 60 ล้านถึง 70 ล้านดอลลาร์ ขณะที่ Granite มีสินค้าคงคลังประมาณ 140 ล้านถึง 150 ล้านดอลลาร์ ณ สิ้นเดือนกันยายน ก่อนที่จะรวมเข้าในงบแสดงฐานะการเงินของ Watsco

ไฮไลต์การถาม-ตอบกับนักวิเคราะห์

อัตรากำไรขั้นต้น: ผู้บริหารระบุว่าผลลัพธ์ 26.4% สะท้อนถึงหลายปัจจัยแทนที่จะเป็นการเปลี่ยนแปลงเชิงโครงสร้างเพียงอย่างเดียว ซึ่งรวมถึงกิจกรรมการก่อสร้างใหม่ที่มีอัตรากำไรต่ำกว่าซึ่งเติบโตแข็งแกร่งขึ้น สัดส่วนของลูกค้ารายใหญ่ขึ้น Jackson Supply และการไม่มีประโยชน์จากการขาดแคลนสารทำความเย็นเหมือนในปีก่อน ทั้งนี้ บริษัทยังคงยืนยันว่าการเพิ่มประสิทธิภาพด้านราคาและมาตรการการดำเนินงานต่าง ๆ จะเป็นหนทางไปสู่เป้าหมายระยะยาวที่ 30%

การประหยัดเชิงขนาดจากการดำเนินงาน: ต้นทุนคงที่นับตั้งแต่ต้นปีจนถึงปัจจุบันเพิ่มขึ้น 1% ขณะที่ต้นทุนผันแปรเพิ่มขึ้น 6% เนื่องจากหน่วยธุรกิจที่แข็งแกร่งขึ้นมีค่าคอมมิชชัน ค่าโบนัส และค่าใช้จ่ายในการจัดส่งสูงขึ้น ผู้บริหารมองว่าการมีวินัยด้านต้นทุนคงที่คือตัววัดหลักของการประหยัดเชิงขนาดจากการดำเนินงาน ในขณะที่ยังคงลงทุนในเทคโนโลยีอย่างต่อเนื่อง

การควบรวมกลุ่มลูกค้า: ผู้บริหารประมาณการว่ากลุ่มผู้รับเหมาที่ควบรวมกันคิดเป็นประมาณ 7% ถึง 8% ของตลาด Watsco กล่าวว่าแนวโน้มนี้อาจกดดันอัตรากำไรขั้นต้นเล็กน้อย แต่ก็สร้างโอกาสในด้านปริมาณการขายและส่วนแบ่งทางการตลาดเช่นกัน โดยผลกระทบแต่ละรายการมักจะอยู่ในช่วง 10 ถึง 20 basis points มากกว่าจะเป็นเปอร์เซ็นต์เต็ม

อุปสงค์การเปลี่ยนทดแทน: กิจกรรมการเปลี่ยนทดแทนส่วนเพิ่มเติมปรับตัวดีขึ้นจากที่ค่อนข้างทรงตัวในไตรมาส 2 มาเป็นการเติบโตในระดับเลขตัวเดียวระดับต่ำในไตรมาส 3 ผู้บริหารเชื่อว่าการฟื้นตัวเพิ่มเติมยังมีความเป็นไปได้ เนื่องจากอุปสงค์ที่ถูกดึงมาใช้ล่วงหน้าในยุคโรคระบาดเริ่มทยอยเข้าสู่ฐานการติดตั้งเดิมจนสมดุล

กลยุทธ์การเข้าซื้อกิจการ: Watsco ไม่ได้วางแผนการผนึกกำลังแบบลดต้นทุนตามแบบดั้งเดิมสำหรับ Jackson หรือ Granite แต่วิธีการของบริษัทคือการรักษาผู้บริหาร วัฒนธรรม และโครงสร้างพื้นฐานเดิมไว้ พร้อมทั้งสนับสนุนเงินทุน เทคโนโลยี ผลิตภัณฑ์ และหุ้นสำหรับพนักงานเพื่อส่งเสริมการเติบโต

การขยายสู่ธุรกิจระบบประปา: ผู้บริหารอธิบายว่าระบบประปาเป็นตลาดเพื่อการเติบโตเพิ่มเติมที่สำคัญ โดยระบุว่าการจัดจำหน่ายอุปกรณ์ประปามีโครงสร้างอัตรากำไรที่ไม่ได้แตกต่างจาก HVAC อย่างมีนัยสำคัญ ในขณะที่การเปิดรับเทคโนโลยีและการควบรวมกิจการของผู้รับเหมาดูเหมือนจะอยู่ในระยะเริ่มต้นมากกว่า

บันทึกการประชุมผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good day, and welcome to the Watsco Third Quarter of 2026 Earnings Call. [Operator Instructions] Please be aware that today's call is being recorded.

I would now like to turn the call over to Albert Nahmad. Please go ahead.

Albert Nahmad

Good morning, everyone. Welcome to our third quarter earnings call. And this is Al Nahmad, Chairman and CEO. With me is A.J. Nahmad, President; Paul Johnston, Barry Logan and Rick Gomez.

Before we start, a cautionary statement, this conference call has forward-looking statements as defined by SEC laws and regulations that are made pursuant to the safe harbor provisions of these various laws. Ultimate results may differ materially from the forward-looking statements on the report.

I'm happy to report that Watsco's third quarter results reflect improving demand and simpler operating conditions in our industry and in our business. The last 6 years brought a pandemic, supply chain disruption, regulatory transitions and tariff volatility. Through it all, we stayed the course and invested in our business. Demand trends are now normalizing. Organic growth is improving and our digital system ecosystem is producing measurable results and driving growth. Our largest and most impactful product group, which is residential HVAC equipment, grew 7% during the quarter with gains on both unit volume and pricing. We expect the impact from the A2L transition will be largely over by the end of this year.

Third quarter reflects Jackson Supply, which was acquired on June 1 of this year. Jackson has $230 million in annual sales and operates from 25 Sunbelt locations. Jackson is performing well and grew 16% during the quarter. We're also pleased to have completed the acquisition of the Granite Group. Granite has annual sales of approximately $500 million and serves over 11,000 customers from 82 locations in the Northeast. Granite marks the fourth business acquired by Watsco that serves both HVAC and plumbing contractors. Today, Watsco has 112 locations that offer both HVAC and plumbing products.

Our M&A pipeline has always included companies that have historically distributed both HVAC and plumbing products, and we hope to have other similar businesses to join us. As is our culture, Granite will continue to independently operate and grow their business with our full support. They have big ambitions, and we will support their leadership in any way we can. Watsco is a more efficient company this year. We have made investments in technology, supply sync, BCR, hydros and other initiatives that will benefit growth in the years ahead. Excluding these investments, fixed costs have increased 1% so far in 2026.

In terms of our balance sheet, we ended the quarter with $649 million cash and no debt. Even after using a portion of our cash to fund the Granite transaction in October, we remain a positive net cash flow position and are committed to maintaining a pristine balance sheet, enabling investments in growth opportunities as they arise. Turning to the third quarter results. Sales increased 7% to a record $2.22 billion and 4% on a same-store basis. Gross profit was a record $586 million. Gross margins were 26.4%. SG&A increased 5%, excluding Jackson, primarily due to variable expenses. Operating income was $225 million with an operating margin of 10.1% and earnings per share came in at $3.77. Gross margins over the last 12 months has been in a narrow range and more in line with historical seasonality and current business conditions.

Having said that, we remain focused on reaching our long-term goal of 30% and believe we have the right tools in place to get us there. Year-to-date, operating cash flow has improved 79% to $304 million, reflecting our continued vigilance towards managing our assets. Finally, I'm going to hand this call over to A.J. Nahmad, who is our President, to provide an update on Watsco's technology initiatives, and he will be joined by other leaders of Watsco. A.J.?

Aaron Nahmad

Thank you, and good morning to everyone. With the complexity of the last few years largely behind us, we believe our technology investments have made us a stronger company with higher growth prospects and a widening competitive moat. Our goals are ambitious and straightforward. First, leverage our industry-leading repository of data, product, market, customer, competitor pricing, you name it. This underpins and empowers the industry's most advanced technology platforms.

Second, revolutionize our customer experience so that contractors, installers and technicians love doing business and only want to do business with the Watsco companies. Next, transform our supply chain and distribution operations to better serve customers and gain operating efficiencies along the way. And finally, develop and launch technologies that help our customers grow their businesses. Importantly, we see contractor behavior evolving in ways that benefit the technology-enabled distributor long term. Our core technology platforms continue to scale and add value. E-commerce sales have grown 12% year-to-date while outpacing overall growth and broader industry metrics. E-commerce reached 37% of sales over the last 12 months with certain markets at 60% to 70% penetration.

Digital engagement with our mobile apps is strong at more than 73,000 active monthly users. And [Indiscernible] continues its growth trajectory. Over the last year, approximately 351,000 proposals represented a homeowners generating $2 billion of gross merchandise value, a 14% increase over the comparable period. .

Simply put, the contractors we serve digitally are growing faster, have greater loyalty, and we believe we can lower our cost to serve at scale over time. Just as exciting, the new initiatives announced late last year are making progress. [Indiscernible] our newest platform to serve the growing segment of large institutional customers launched earlier this year to great [Indiscernible]. We have launched the pilot program and are transacting the customers with a plan to scale it to more and more customers in the coming months. This is a growing channel with unique customer needs that provides incremental growth opportunity for Watsco. -- while leveraging our existing scale and infrastructure.

VCR, which stands for vendor consolidation and rationalization continues to expand across many of our non-equipment product categories. Relationships with our strategic vendor partners have strengthened, and in many cases, are at all-time highs. Hydro, which is our investment in share logistics and distribution has further matured and will continue to scale in 2027 and to more locations and more vendors. And the transformational use of AI continues to evolve throughout Watsco. I could spend the next few hours just on that subject. These investments, along with our scale, entrepreneurial culture and capacity to invest are unmatched in our industry. We view these technology investments as critical to growing our leadership position in the HVAC industry and attracted [Indiscernible] of companies like Jackson and Granite and many others before them to aid our M&A strategy of acquiring great businesses in our space. We invite you to visit us and learn more about what we consider to be our long-term competitive advantage.

In closing, a reminder of our fundamentals. Watsco is the market leader and the technology leader in what remains a highly fragmented HVAC distribution market. The products we sell are necessity and the installed base continues to expand. We have deep and collaborative relationships with industry-leading manufacturers and industry partners. We offer the broadest variety of products and operate a large and growing network to serve more and more customers, and our unique ownership culture shared by more than 8,200 employees rewards and incentivizes long-term performance.

With that, let's turn to Q&A.

Operator

[Operator Instructions] At this time, we will take our first question, which will come from Tommy Moll with Stephens.

ช่วงถาม-ตอบ

Thomas Moll

Of course. So I want to start on gross margin, which I suspect will dominate this call. I'm going to go out on a limb here and try to summarize what we're seeing and then I would invite anyone to correct me where I'm wrong. But you threw out a lot of factors that drove the results this quarter, customer mix and market equipment versus non-equipment. But is it an oversimplification to say that you've taken some share in the new home construction market and that inherently you're dealing with larger customers and lower margin equipment products primarily it's kind of all one and the same factor here.

Albert Nahmad

I'm going to let Barry Logan and Rick Goldman deal with that compare on top of the data better than I.

Barry S. Logan

Thank you, Thomas, for the question. Yes, it's -- I would have worried there was the second question by the way. So [Indiscernible] the first question. There's a measure of still kind of comparison reality going on that this should be accounted for. It's not as simple. I want it to be as simple as what you said, but not quite. But it is becoming more simple. A year ago, new construction-related equipment sales were down double digits. This year, they're up double digits. And so that's a mix reality to margin as well. It's also a comparison discussion to last year. And it's also our participation in this year through some of the inference in your question is gaining some share, but there's still a bit of a comparison discussion in that.

When we talk about larger customers, that doesn't necessarily mean new construction, not at all. In fact, even in new construction, the builders themselves hire contractors to do the work. They're not necessarily all large contractors. In the case of we comment about large customers, it's really that more seasoned call it, multi-truck multi-market customers that I think have done well that are using our technology, our penetration of technology in that group is in excess of 50% e-commerce into that channel.

You can see our e-commerce revenues are up double digits this year. That tells you something about traction and the affinity of technology and those customers. And as you might suspect, the larger the customer, there is a more moderate margin but there's also more moderate cost with our manufacturers who support that activity. It's not just up to us to set the price. We jointly work with our manufacturers and our customers on total margin in that segment, and the cost to serve is not as great in that community as it is in, let's say, the small contractor community. So that's a component of it.

Rick, anything -- anything else in there that that's important to discuss?

Rick Gomez

I would just add a couple of things, Tommy. First, First is that there's -- we had some -- this is part of the comparison reality that Barry described this time last year, there was a shortage of refrigerant in the market that helped last year's margin. And this year, we have Jackson Supply in our Q3 revenue mix. They're not quite yet at Watsco is 27% range. And so therefore, that weighed a little bit. So that will abate, obviously, and that's part of the comparison that Barry is describing.

I think the other thing that's worth pointing out, though, is that this -- if we look at margins sequentially, Q2 to Q3, this is the type of sequential margin change that we've seen in the last several years, as a result of tariff pricing and product transition and other realities of the marketplace. And so I would point -- I would -- you could go back and look at '25, '24, '23, '22, and you'll see I think, similar types of changes from Q2 to Q3 margin and not wholly unexpected.

Aaron Nahmad

Yes. This is A.J. I'll add. I zoom out to the big picture, which is, I guess, where I like to live most of the time is there's a lot of -- you have a lot of noise you have to look for the signal, especially since we're such a long-term focused company, right? Watsco and our [Indiscernible], we used to operate at 24%, 25% gross margins. that ran up to 29% gross margin with all the noise and Barry and Rick just described some of that. But we're a 27-plus now year-to-date, and our goal is 30% and we see a path there. And it will not be a straight line, there will be choppiness certainly quarter-to-quarter. But our job, what our focus is, is the long-term, the ARC maturity and getting from where we were 24%, 25% to where we are, 27-ish to 30-ish where we're heading.

Thomas Moll

And as a follow-up, I wanted to ask about SG&A. If we just look at the same store, it ran a little hot versus the sales growth this quarter, maybe about 1 point more growth in SG&A than sales. Although Al, you pointed out a lot of the increased expense was around some of these big initiatives that you highlighted as early as your Investor Day last year. But just help us parse the trends here. When -- how do we measure success on operating leverage? And with these investments, when is it reasonable to expect to see it on an all-in or a same-store basis?

Albert Nahmad

Barry, you can jump in.

Barry S. Logan

Yes, I'll take a shot at that. It's a good -- I'd like to phrase, Tommy, where you said, how do you measure success. And as a distributor, the most simple way to measure success is our fixed cost remaining efficient while growth is going on because then the incremental margin, every dollar that you sell drops to the bottom line. We wanted to make a lot of progress this year on fixed cost because we couldn't make a lot of progress in the prior years. And so year-to-date, if I isolate fixed costs, they're up 1% this year. Year-to-date, I'll address the quarter in a second.

And year-to-date variable costs are up 6%, and which is some measure of business units that are doing well, that are growing, that are growing earnings. They're paying commissions [Indiscernible] recruiting bonuses. And little bit of freight and fuel and delivery cost inflation in that number, which is to be expected. But overall, on a same-store basis, SG&A is up 2%. And technology spending, by the way, year-to-date is up about 13% or $6 million. And those are some of the new initiatives that are in those numbers.

Thomas Moll

[Indiscernible] ease the word investments, but that's the right word for those dollars.

Barry S. Logan

That's correct. And so that's the big picture for the year-to-date is to become more efficient, fixed costs and make them as neutral as possible, battle inflation through other initiatives to save. And again, year-to-date, fixed expenses are up 1%. For the quarter, it's 3%. And again, there is some inflation in that for rent and facilities and things like that. But in relative terms, it's kind of in line with inflation. And during the quarter, variable expenses were up around 10%. Again, as we see some acceleration, certainly in some business units that are outgrowing what we report there are accruals and variable type expenses that go with that and some outsized inflation and delivery costs for the quarter, which is I consider that a short-term thing. But it's a good question about how do you measure success? And I would say this year's progress, not optimized, but good progress.

Operator

Our next question will come from David Manthey with Baird.

David Manthey

I'll go back to gross margin, of course, here. And if we're looking at normal seasonality, into the fourth quarter, I guess the implication is probably something in the 27% range, which I think would put you somewhere in the low 27% for the full year. I believe that you said in the past that excluding the abnormal second quarter in 2025, you would have been somewhere in the 27.5% range. So 27.5% to 27 low 27s, I'm not asking for any guidance here, but I'm just trying to think through -- as you think about from where we are in '26, looking ahead to '27, what are the key levers we should be thinking about moving here in terms of whether that's customer mix or equipment, non-equipment, pricing, price optimization that you're doing internally? What are the factors we should be thinking about to move the needle one way or the other?

Albert Nahmad

Anyone want to pick it up in there?

Barry S. Logan

That's a pretty good [Indiscernible]. It is a lot of those things. It's -- we are certainly still early days in our pricing optimization efforts. I think there is a huge runway there. There is certainly the influence and the impact of the mix of equipment versus non-equipment, what equipment is sold when it is sold of the customers that are showing up and buying every day. So it's all those things, and we can't predict or control all of those things. But back to where we're investing, we feel very good about what's in flight, right? We feel good about the technology. We know that the -- more that customers use more of our technology, the better customers they are, not only in gross margin, but also in sales and stickiness or lack of attrition.

We love the VCR initiative where we're finding ways to buy smarter and help our vendor partners at the same time. So it's a win-win to them. We love Hydros, which is helping our business units carry more products on the parts and supply side and expand our offering, and we love [Indiscernible] has got so much opportunity underneath it, and we keep learning about or thinking about new ideas with new partners. But what that should ultimately mean is a lot more sales and a lot more sales of parts and supplies as it matures. So your list is good. I like what -- we like what's in flight, when does it all show up in every quarter's financials, I can't tell you.

Yes. And just it would be helpful, Dave. I think just doing the math, just being objective and just using data in simple math, you're right, the fourth quarter generally is a better margin than the seasonality that preceded it. And if I look at the math over a 10-year average, it's about 20, 30 basis points of improvement. So that's just something to consider. I'm not -- again, as you said, I'm not giving guidance, but that's the math over at least a 10-year period.

I think it's important to remind everyone for the sake of looking forward that the OEM pricing actions that are taken either the amount of those actions or the timing of those actions certainly plays a role in the equation over, let's say, the next 12 months. And the expectation is that they will come early and more conventional and kind of more ordinary, if you will, than what we've seen in the last 4 or 5 years, which is different amounts, different by vendor, different timing with and without tariffs, with and without mega inflation -- and that volatility is part of what we've had -- what we've had to explain in the last 4 or 5 years. And I can't predict the future, but the expectation is that going into the next 12 months, that will be a more ordinary and conventional feeling than some of the volatility we've seen.

Albert Nahmad

Yes, sorry. it's Rick, sorry.

Rick Gomez

Yes. I was just going to add 1 item to that, which is I think what underappreciated in all of this right now is the fact that we are being a rebound and stabilization of industry volumes. That's important to any distributor. At the end of the day, if you're going to have incremental -- and this goes back to Tommy's question a little bit, if you're going to have incrementals that are good and healthy.

And so if I step back in time, if we go to this call a year ago, same-store sales were down. Now they're up. Add-on replacement was down. Now it's up. R&D was down more than 10%. Now it's up more than 10%. Equipment sales were down 7% last Q3, now they're up 5%. I know, by the way, we're a 10% bigger company having made 2 great acquisitions in the last 120 days. So I do think that the -- my point in saying that is that there has to be some base level of industry health and stability in volumes, and we're starting to see that now, that hasn't been the case over the last 3 or 4 quarters.

David Manthey

Yes, that's helpful. So then all of the things we just went through, those all sound like positive needle movers with the one exception being the large customer mix that you cited this quarter, is that a cyclical or a secular thing in terms of larger customers? And certainly, with all of the things we talked about it's not enough customer mix being towards larger customers. That would not be enough to overwhelm all of the other goodness that you're working on. Is that correct?

Barry S. Logan

[Indiscernible] No, I'll just take a shot at it. I think the word affordability is in lexicon now a great deal of the fact that the products are $10,000, $15,000 or whatever to install. And I've always said from my career, we've said for our careers and people know [Indiscernible] these things. So you have immense product change, you have a higher price tag. You have a trickier economy. You have a more tricky consumer, therefore, and yet e-commerce sales grew 10%, 12% this year. And I would say, higher efficiency systems grew 10%, 15% this year-to-date. So does that make sense?

And I think, again, the larger customer, the one that is using technology that's appliable and going to the home and selling that wants to move on from the [Indiscernible] product that wants to get their business, marketing and financing and so on directed toward the opportunity and helping us helping empower them to do that is where we see the benefit from it, Dave. And again, the cost to serve in those customers is lower than, let's say, 50 smaller customers that may do as much volume as 5 that are considered large customers.

So I think it's really part of the transition, part of the maturation in [Indiscernible] products is those customers have done a good job of it. And then our job is how do we help our customers plug along and move along the transition and maturity as well. That would be some observations, I think without data, but some good observations, I think.

Albert Nahmad

Yes, I'll double down on that, Barry, which is just to be clear, large customers is not a bad thing, right? We have tools and technology and systems and processes and programs, and we welcome that customer base. Our mission and our goal is to make sure that we are the supply house of choice for all those customers and that we can do so at a profitable level and sell them the full suite of products that we have and with the services that we provide. But we don't exclusively cater to that segment of customers either. I mean the small guys with 1 truck or 3 trucks, we've got wonderful pricing and programs in technology and systems and processes for those guys as well, including helping them go from small to big because when they do, when they drag us long in their growth and they're very loyal.

So like Barry said, our job is to cater to all the customers and these investments that we keep talking about, certainly focus not just on one group but all groups.

Unknown Executive

If you look at the market that we've got out there right now, the market is up. but it hasn't recovered yet back to what it was. And I think at that point, you're going to see the smaller customer becomes -- he's going to become a better customer than what he was this year. This year, the small customers probably suffered more than the large customers. They don't advertise. They don't promote and they have an issue where everything has to go by word of mouth. So I think as the market recovers, I think you're going to see the smaller customer recover with them. .

Operator

Our next question will come from Ryan Merkel with William Blair.

Ryan Merkel

Can you comment on October trends quarter-to-date? I think you mentioned further momentum, and then I'm curious on the complexion, are you seeing the new construction recover further comment on commercial, if that's getting better and then aftermarket replace if you're seeing a pickup there?

Albert Nahmad

That's good news. [Indiscernible] do you want to share that?

Unknown Executive

Yes. I don't have the data in front of me though. So if Rick or Barry, you want to be more explicit.

Rick Gomez

October [Indiscernible] is looking healthy to date, and continuing the momentum that you've been alluding to, and we hope and expect to carry through the end of the year, but hard to say on the R&C details, I don't know, Barry or Rick, if you have that or if you want to share it?

Albert Nahmad

Well, in revenues, we're up double digits so far in this quarter in revenues.

Ryan Merkel

Got it. Is that total company revenues? Or is that organic?

Albert Nahmad

[Indiscernible] I mean it includes the acquisitions that we've made.

Ryan Merkel

Got it. Yes, I was just -- yes, okay. So [Indiscernible] would you say is recovery?

Barry S. Logan

Just to say it this way, Ryan. I think less to say it this way, so it's careful. So -- we said in the press release that since May, we've seen improvement every month, month over month in terms of progression and momentum in October is no different. October was better than September. And if you add acquisitions on top of that, that's where you get into the 10% plus on acquired revenue on top of what we're seeing organically. .

Ryan Merkel

Okay. Got it. That's helpful. And then I wanted to ask on the side discharge, which is becoming a big topic. I'm curious for you, are you seeing progress on that product? How big is it? And if you know, can you comment on the ASPs versus their traditional condensers?

Unknown Executive

Yes. [Indiscernible] has been a good growth market for us over the last 2 years. And what we're seeing is it's probably in the 8% to 10% range of the total market today. It's going to continue to grow. It's got a lot of benefits that you don't have with the top discharge. It's variable speed. So it's -- it's got a lot of efficiency and the cost of the product is relative to the top discharge. So we're -- we feel like we're outperforming. We want to continue to outperform in the side discharge. Side discharges, we think is going to be the future of our markets. So it's important to us.

Albert Nahmad

Yes, we are leaning in besides this charge. We are excited about innovation on the products.

Barry S. Logan

And obviously, the manufacturing community that supports us, it's very -- it's as diverse as our typical ducted units. I mean they are branded products. There are more affordable products. There are private label products. In our case, as Watsco, our job is to have the broadest diversity and spectrum of good, better, best across all the products we sell on side discharge would be the same. So it's really, to me, not a discounted cheaper product strategy. It's not. It's an ultra-high efficiency play with a new product that has a lot of diversity in brands and price across the spectrum and all of our partners that are supporting that we're growing with, and it's -- it's kind of -- it's fun to sell a new product.

And as Paul said, it's not necessarily new, but I would say contractor acceptance is where we're seeing traction. And as their supplier, we're supporting it.

Albert Nahmad

And I think you said [Indiscernible] but just I would say that the -- that segment of the market is maturing, where now it has evolved into a good, better, best offering where it's not just the best anymore and it's not just the value line anymore. There is room and the market size for that stratification.

Unknown Executive

And it's a proven product. Basically, what you've done is you've taken the ductless product and you put [Indiscernible] as opposed to just having a high wall or a cassette on the inside. So it's a proven product, and it's going to be a great product for us in the future.

Operator

Our next question will come from Steve Volkmann with Jefferies.

Stephen Volkmann

It's funny timing. I have 2 side discharge units in there also. [Indiscernible] end of the call...

Albert Nahmad

Special price...

Stephen Volkmann

So can we talk a little bit about pricing. I think pricing was up about 2%. I think you said in the quarter. Sorry, I have a lot of calls going on today. But just curious if you've heard any sort of directionally what we should be thinking going forward, how the OEs are thinking about price for '27?

Paul Johnston

We're seeing a lot of metal prices are going up. A lot of steel prices are going up right now. And so we're seeing price increases on those. We've only had -- we really don't have a lot of indication yet from the OEMs, what direction they're going to be going -- but obviously, with the cost of freight, with the cost of metal, which is what these products are made of, we expect to have some price increases this fall going into next year.

Stephen Volkmann

Okay. All right. Fair enough. And then maybe just switching, I'm curious how you're thinking about inventory. I think last quarter, you said you thought it had sort of peaked, but I see it's up a little bit. I assume that includes the acquisitions. Just how are inventory levels? How should we be thinking about that going into '27 as well?

Albert Nahmad

Barry, we were just talking about it so you go ahead.

Barry S. Logan

Yes. Well, first, you're right. Our balance sheet in September this year includes Jackson $60 million, $70 million inventory that was not in the prior year comparison. And last year, at this time, we were as [Indiscernible] said, a giant [Indiscernible] sound was going on in terms of unit declines. And this year, we're seeing unit increases. So a year later, I think inventory [Indiscernible] in sales, yes.

So as we entered -- as we close this quarter, inventory is reflective of that is reflective of an increasing demand environment. And as we -- but as we close the year, this is usually and historically, our season of reaping cash flow and reducing inventory. And there's an opportunity. I'm not saying it will happen, but an opportunity to get inventory more or less equal to last year at the year-end, excluding the 2 acquisitions we've made. So historically, I think sequentially, we have very little reduction in inventory sequentially, second to third quarter, much of it comes in the fourth quarter. And I would say that's how it looks this year.

Operator

Our next question will come from Mitch Moore with KeyBanc.

Mitchell Moore

Maybe just to build on some of the questions around customer mix. I guess my question is how much, if any, of the customer mix headwinds reflects existing contractors kind of consolidating into larger accounts? Or is it just because larger customers are outgrowing their smaller peers?

Paul Johnston

I think the answer is yes. We're seeing a lot of consolidation. I mean it's just natural. There's a consolidation going industry and it's probably 7% to 8% of the market right now. That's going to continue. So it's not the big guys. We're already there. It's the growth of the [Indiscernible] start growing with private equity.

Barry S. Logan

And can I just maybe attempt to, I think, reframe the narrative around this a little bit as others have tried. We does it have an implication in margin? Yes. Is it a headwind to the business? No, not necessarily. I mean when this happens, Mitch, when you have customer A buying customer C, usually there's a market share pickup opportunity also, right? So it's not just axiomatic risk. It's both risk and opportunity when this happens. And I also -- I think we should ground ourselves in the fact that this is a $75 billion industry. 2,000 distributors comprise the landscape. We are, by far, the best positioned to capitalize on this trend relative to that fragmented distribution network that exists.

And so I -- is it an irritation in margin? Yes. Can we count it in basis points? Yes -- even nowhere near full percentage points, basis points. I think what's -- and by the way, we're doing this as [Indiscernible] is launching right? So we're not even yet to market with the product and the platform that we think is going to be game-changing in this space. So we're not in any way thinking about this defensively or [Indiscernible] what's it going to do to margin next quarter? We're thinking about this more as an opportunity for growing with customers, growing volumes and growing share at the end of the day. Yes. The industry is dynamic, and we're dynamic.

Mr. Operator, our Chairman fell off the call. Could you please get him back on the line.

Unknown Executive

I mean I just want to add at a data point to the question because I like to -- I want it to be abstract. We said this in our Investor Day when we're developing the technology for supply sync. The consolidated community today is about a $400 million or $500 million business for us. if that grows -- there's outgrowth, let's say, 10% in that community, either because they're giving us more business or there's more of them, that's a growth opportunity, obviously, becomes at a lower margin. I don't think that's particularly material to the big picture analysis of Watsco's gross margin.

It's a headwind, okay. It's also a growth opportunity to Rick's point. And overall, I think where we kind of segment out margin impacts in our press release and in this conversation today, we're talking 10, 20 basis points in each one of the discussion items. This is not like a revolution or an evolution that I think has a lot of volatility to it. It's really explaining some of the nuance that we're managing. And as I said very carefully, cost to serve is different, meaning SG&A is different in those products -- in those customer segments also, which means EBIT margin is not necessarily proportionately affected by it.

So I just think it's -- we're giving a lot of color today on these nuances, but I don't think anyone should run with it too far when it's 10, 15, 20 basis point discussion items.

Mitchell Moore

Great. That was a lot of color. And I guess just my next question, I think residential units were up 5%. Could you just help us parse out how much of that growth was replacement versus new construction?

Unknown Executive

We have don't disclose that. We've seen the AOR trends get better as the year has progressed, Mitch, and it was flat around flat in the second quarter. It was up low single digits in the third quarter, what we consider to be the add-on replacement universe. And where your volatility good or bad can come is in that residential new construction multifamily side of the market, that was up low double digits for us in the third quarter, and that's how you get to a 5%.

Operator

Our next question will come from Jeffrey Sprague with Vertical Research Partners.

Jeffrey Sprague

We covered a lot of ground. I did want to just touch on replacement a little bit more. Thanks for the comment a moment ago. So obviously, with the replacement comps are a little bit easier, but you just kind of stand back here and look at things at an absolute level. Have we gotten to what you would call some semblance of just normality between repair and replacement?

Albert Nahmad

Good question. I think there's still a lot of room to grow in replacement. I mean you had a pull forward that occurred during the pandemic. And I think -- as those units mature, I think you're going to see the replacement market return to what we call normal.

Paul Johnston

Regionally, it's unique. You have a different replacement market in the north than you do in the South and in the West. And we've seen the replacement market change based upon where in the marketplace, the change is occurring.

Unknown Executive

Yes, I agree just all in -- just quick data points there, Jeff, to maybe help you. One is we're -- I look at just units, we're still about -- I would characterize it as we're closer to a trend line, but we're not quite at the trend line. units are still, call it, 10% to 15% below where they were 2 years ago. AHRI, which you should never anchor on in any given month, but you can look at longer picture trends with AHRI. Those volumes today are where they were around mid-2018. That was a while ago. And so -- and I think more importantly, we're still dealing with the consumer that's uncertain and I'm sure about the state of things and all of that points to -- we're closer to trend line, not fully to Paul's point, at some level of normality yet with replacement.

Jeffrey Sprague

And then just I want to make sure I've dialed correctly on this inventory for year-end. I think Barry gave us the Jackson inventory. How much comes in for Granite?

Barry S. Logan

It's coming in, in October. And yes, Rick, maybe handle that.

Rick Gomez

There was about Jeff, I'll say about $140 million, $150 million of inventory. Now there's going to be some seasonality to that for granted, but that's what it was, let's say, the end September, which was not on our balance sheet.

Jeffrey Sprague

And then maybe just one other quick one. Just plumbing is becoming a little bit more of a strategic focus imperative. Does that fundamentally have a different margin profile than your kind of core legacy HVAC business?

Rick Gomez

I was going to say not necessarily. I think what's true in the plumbing space is if you saw a lot of equipment there, you're going to have 1 margin profile if you sell a lot of non-equipment, you're going to have a different margin profile. The same is true there in HVAC, by the way. We see that within our portfolio of businesses too. I wouldn't call it structurally different or radically different.

What is, I think, different is that their customer curve, if you will, is probably at a different state of maturity than the HVAC contractor, which is to say there's likely less consolidation going on there. Those customers are slightly less technology-enabled today than as compared to the HVAC contractor. And so we think that there's the same kind of maturity and sophistication curve that we've seen with our HVAC contractor base over the last 5 or 10 years and how they've adopted technology in their business, we think that it's in the very early innings as it relates to the plumbing contractor which is all opportunity in the long term.

Barry S. Logan

I wanted to say this too, Jeff. I think we get a lot of questions about entering plumbing. And what we've actually entered is acquiring businesses that have done both HVAC and plumbing well for decades. [Indiscernible] been around for over 50 years doing both HVAC and plumbing well for that period of time, gateway a few years ago, same thing. In fact, if you look at the top 50 plumbing distributors in the country, of them, 20 of the 50 also sell HVAC and are on the top 50 list of HVAC companies in the industry.

So it's not a new thing or a novel thing. It's an ordinary thing. And we've known these families for a long time. It's taken us this long to do 4 of them. But that's the approach. And to answer your question again, we don't see a big profile difference in terms of margins because, again, they do both well and have the better companies have a higher margin. And have figured out how to coexist in those markets with those products.

Unknown Executive

And I also just want to say, I got to say publicly, Bill and Chris and Amir and the whole Granite team are just world-class and as good as it gets. So we can't be more excited to have them finally part of this family. Like Barry said, we've known the family for a long time. but it took us this long as we talked about it with them to get to the starting line. But now they're part of the family, and it's all upside from here and let the fund begin.

Albert Nahmad

And I would add to that, on a big picture that Watsco is now taking out and committed. Can you hear me?

Jeffrey Sprague

Yes. Yes.

Albert Nahmad

I would say that the big picture for Watsco that we should explain is that we're now committed to growing in the plumbing market, which means that we have enormous opportunity in that distribution business of planning as well as the HVAC market. So we've got 2 industries that we can play and play hard and get size. The plumbing on we're just beginning, and it's pretty healthy stuff. We have 2 other business units before this one that showed us, plumbing can add profitability to the business as they already have over the last several years. So that's a huge ability now for us to take share in the plumbing market where we just have a few hundred million dollars worth of sales in a much larger market. Big opportunity is what I'm trying to say, in.

Operator

Our next question will come from [Indiscernible] Singh with UBS.

Unknown Analyst

Yes. So we continue to hear about customers trading down more towards lower efficiency levels -- but it feels like the scope for further mix down could be limited. So can you give your views on what you are seeing and like some sense of portfolio impact for you?

Paul Johnston

Yes, we are seeing -- when you say low efficiency today, it means that the efficiency is high efficiency compared to what it was 5 or 10 years ago. So as they trade down to the baseline efficiency that we have in the marketplace, that is occurring. And that's why we get very excited about the opportunity to be able to sell the side discharge. So I think the side discharge will be a breakthrough where customers will start going back to high efficiency once they see the opportunity.

Unknown Executive

Right. And just one perspective. I mean this is the entry-level as the industry has been in quite a long time, Paul, you've got some great data around that. But if it's 80% to 85% entry level today, I think the thrust of your question is right, which is it's there's more likely a mix-up opportunity over time, particularly now that you have a side discharge product that competes very well from a price perspective and get you all the efficiency on the high end -- so it does allow a contractor to deliver more value to that homeowner versus just entry-level and traditional top discharge high efficiency, there's now something that can help broaden the industry beyond where it is today.

Paul Johnston

Every time there's been an efficiency change, we've seen a compression to the low end and then it spreads back up. So it's not something new that we haven't experienced before.

Unknown Analyst

That's very helpful. And just on the margin side, like you are integrating a couple of big recent acquisitions. Now should we expect that to be a headwind to margin in the near term, but with the potential for improvement in the medium term as you scale margins within those businesses? And can you also help size those impact.

Barry S. Logan

Again, I'd just be careful with this. So when we acquire a company like Granite or Jackson, we're keeping the people, we're keeping the culture we're keeping the infrastructure. We're keeping the what's made them successful for 50 years. And the question is, how do we help them build on that success and build on their networks? And adding capital or products or technology, whatever it might be. So the word synergy does not exist in our mindset. How do we take cost out, how do we tweak margins. That's not a concept for Watsco. We built a very successful company supporting great companies that became part of our family. And that the intent is identical to that theory for Jackson and Granite.

So in terms of your question, I don't think there's anything any risk or short-term kind of trigger or anything that needs to be kind of worried about. The question is, will they be successful as part of the Watsco family? And the only scorecard I can show you and Jackson is up 16% in its first quarter as part of Watsco. So I want to impute that in the future, of course. But just know that there's no like sudden move or sudden synergy or sudden anything relative to these kind of opportunities. It's really how do we build on the great success of these good companies that have been around forever.

Paul Johnston

How do we provide them the technology, the financial resources so they can grow faster. That's the opportunity, and that's the only synergy we have.

Albert Nahmad

Another important aspect we create an equity culture, we provide equity throughout the organizations that we acquire, which means that they have a stake in the whole company, win or lose. And I think that's very important in terms of our culture, providing equity to people that sell us their business. They're leaders so that they act as owners and be great conscious of that.

Operator

This concludes our question-and-answer session. I'd like to [Indiscernible].

Albert Nahmad

[Indiscernible] we'll talk again in 3 months or sooner. Bye-bye.