Good morning, everybody. Welcome. Thank you for joining us here today for our Investor Day, both those of you in person as well as those of you on the webcast. I'm PI Aquino. I lead our investor relations effort at TopBuild. I've been with the company for almost two years now. I spent most of my career in the consumer packaged goods space, both leading corporate IR as well as on the sell side. When I joined TopBuild, there were really two things that attracted me to the company. First, the strong track record of compounding growth and driving shareholder returns, because, as you can imagine from my standpoint, having that track record makes talking about the company that much better, right? And then number two, at the end of the day, I'm a people person, and this is a people business, right?
We have an incredibly talented management team here today. I feel really privileged to get to work with each and every one of them on a day-to-day basis, so we have a great morning of presentations planned for you, followed by lunch, and what I hope you really take away today is that we have a vision here as a best-in-class industrial compounder. I hope you get a greater understanding of our businesses and the depth and talent of our management team, and finally, that we have a great vision for profitable growth. To commemorate the 2025 Investor Day, we're pleased to be making a donation on your behalf to Habitat for Humanity, who continues to make a difference in the communities that we serve.
We've partnered with Habitat for Humanity for many years, contributing both material and financial resources to help Habitat achieve its vision where everyone has a decent place to live. Finally, as we are a people-first, safety-focused company, I want to make sure I point out the emergency exits today. The doors from which you entered on your left, there's an exit behind you, and then there's also an emergency exit at the end of the room here behind the AV table. Moving on to the formal piece of our presentation, which can be downloaded from our website. Our Safe Harbor Statement is available on slide four. This presentation is being live webcasted, and the replay will also be available on our website following the conclusion of the event. We have a really exciting agenda for you today that starts out with our President and CEO, Robert Buck.
You'll then hear about culture and talent and our position in the industry as an employer of choice. We'll talk about the importance of operational excellence, and you'll also hear from each of our business leaders in installation services, installation, and commercial roofing. They'll provide an in-depth overview of their unique market position and how they drive sustainable growth and operational excellence each day. We'll then take a quick break. And if you haven't already this morning, I encourage you to visit our various displays out in the gallery. They're designed to give you a better understanding of what our teams accomplish every single day, from installing insulation. We have various commercial roofing types to fabricating mechanical and metal building insulation.
For those of you on the webcast, we'll pause for about 10 - 15 minutes between the roofing presentation and specialty distribution, and we'll announce what time we'll come back. After the break, we'll talk about specialty distribution and then host our first Q&A session, which will be focused on the first part of our presentation. Next, we'll talk about how we're leveraging technology both in the field. Oh, sorry. We'll move on to M&A. We'll have our M&A panel and talk about how we'll continue to drive value as an acquirer of choice. Next, we'll talk about how we're leveraging technology both in the field and in the back office and how we think about improving the customer experience as we look forward. Then, and the moment you'll all have been waiting for is the numbers.
Rob Kuhns, our CFO, will bring it all together from a financial perspective and share how we think about the future. Finally, Robert will make some closing remarks before we do a final Q&A session with all of the leadership team. And then at the conclusion, we'll have a leadership luncheon. You'll be able to sit down, get to know the management team, and so forth. With that, let me turn it over to Robert Buck, TopBuild's President and CEO. Thank you.
Okay. Thank you, PI. Good morning, everyone. I obviously know many of you and appreciate you being here. Thanks for those of you live here in New York, as well as those that are on the webcast. My name is Robert Buck, President and CEO of TopBuild. Been with the business since 2009 and have really led the evolution of what is TopBuild today. This is my fourth Investor Day, and to me, the most exciting one for our shareholders. Today is a look back at what we built, but most importantly, it's a look forward as to where TopBuild's going for the future, and it's a great opportunity for you to meet, as PI said, our leadership team and the team that's poised to drive the future results of the company for our shareholders.
So let me start with a few key themes today that you're going to hear throughout the presentations and my key messages as well. So four key themes. TopBuild is a best-in-class industrial compounder and value creator with a clear, profitable growth strategy. This is enabled by the great free cash flow we generate in this model and in the business. And we've taken that free cash flow to drive growth strategically and deliberately, organically in the business, as well as via M&A. We've got a proven and strong track record for doing this consistently over time. And we've consistently driven compounding returns and growth for our shareholders. This is a critical success factor in the model of TopBuild. You'll hear about it today, and Rob Kuhns will highlight it more in his presentation later this morning. This leads to my second point.
We have, again, you're going to hear me say strategically and deliberately a lot. We have strategically and deliberately created a great opportunity for TopBuild and our shareholders by expanding our total addressable market and our mix of revenue in non-discretionary, non-cyclical revenue streams. This has been by design. The growth opportunities are exciting and real. And you're going to hear John Achille our COO, talk about the details of our end markets of where that growth can go. The growth runway exists in our core of insulation. You'll hear Jeff Krestancic, our President of TruTeam, speak about that. You'll hear David Fischer, our President of Specialty Distribution, talk about it in the core insulation distribution space. And then our new growth platform in commercial roofing. We have Nick Hadden and David Stowers from Progressive Roofing.
They'll talk about the platform that we're building and where we're taking that in the future. All of this total addressable market that we've deliberately taken the path down, it's driven by a proven execution playbook. Why are we so confident? Because we have a proven execution playbook of where we can grow in this total addressable market that we've strategically positioned ourselves with. I talked about the total addressable market, but also the mix of that total addressable market, more into non-cyclical, non-discretionary revenue, making the revenue streams of TopBuild more resilient for our shareholders. You're going to hear our ops leaders today talk about critical decisions and actions they're taking in their business to drive the growth. You'll hear our M&A team talk about our acquirer of choice status and the competency we have in M&A.
Most importantly, with our M&A panel, talk about the future opportunities to continue to drive compounding growth in TopBuild via M&A. That'll be led by Joey Viselli, our Chief Growth Officer. He'll be joined by Jeff Caswell and Justin Rojas in the M&A panel discussion. The third theme today, talking about our differentiated business model and strategically advantaged technology and tools. You're going to hear today our team talk about how we win in the local markets, how we win in each business. This is facilitated by the tools and technology and the investments that we've made to do three things: drive operational excellence, drive growth in the business, and a better customer experience with TopBuild and our companies. You're also going to hear about the value-added services we offer across our network in the different businesses.
You also will talk about our future digital roadmap, future investments we intend to make. That'll be led by Sri Pullareddy, our CIO, and Madeline Otero, our Chief Accounting Officer, as well as Joey Viselli. It's really about the practical use of technology and tools to drive innovation throughout the business, both in the field, operations, and in the back office. Last but not least, the success of TopBuild, past, present, and future, is really about a people-first culture led by a battle-tested leadership team. Jennifer Shoffner, our CHRO, will talk details about the culture that we've built and continue to refine, as well as the talented team we continue to build and develop as well within TopBuild. You're going to hear the common theme today from Jennifer and others around talent development, local empowerment, and relationships, engagement of our team, and an entrepreneurial spirit that exists within TopBuild.
You're going to talk. You're going to hear us talk about how we influence our people to do the right thing every day. It's about employee engagement led by a passionate and psychometrically tested leadership team. This drives and maximizes shareholder returns. So I just want to give you a glimpse into the life at TopBuild on a daily basis. On an average day like today, we'll visit nearly 20,000 job sites between the U.S. and Canada. Those are 20,000 unique job sites that our installers will visit, our sales force, our drivers, our safety professionals, nearly 20,000 job sites, and if you think about those crews visiting those job sites, the majority of them are unsupervised.
So if you think about a model where the culture is so important of influencing people to do the right thing around quality, productivity, safety, managing and taking care of our assets, there's no better example than TopBuild and our model and why the culture here is so important as to what we've developed and part of the secret of our success. Steve Raia will come up and make the connection between our people, the culture, and the operations on a daily basis. So let's take a snapshot look at TopBuild and what we've created today. Obviously, a leadership position in our end markets, a leader in the U.S. and Canada, installation and distribution. We're proud of that, but we're not content. And you're going to hear that today with where we're taking the company. Key financial stat, market cap.
If we were sitting here on Investor Day 2017, that was $3.8 billion. Investor Day 2022, $6.2 billion. We've nearly doubled that today or more than doubled that today in 2025 with a market cap of $12.5 billion. 15,000+ employees, over 450 branches in our dispersed network. The sales breakdown, Rob will discuss the progression of the business in his presentation and a key part, the end market diversification that we've driven. But in the next couple of slides, I want to talk about the deliberate strategic decisions we've made as a management team to position TopBuild for the future. We are well-positioned. We're well-positioned with this differentiated model we've developed. But to me, it really starts about the focus on core competencies of a business. And it's going to be the common thread of what you hear through the presentations today.
We have a proven playbook, and that proven playbook is built upon these core competencies that we execute upon a daily basis. A lot of you have heard me say in the past, I think companies go astray whenever they don't understand their core competencies, whenever they think about where they're going to build, maybe adjacencies of where they're going. If they don't understand those core competencies, I think that's a mistake. On the opposite side, TopBuild, we lean into our core competencies, and we continue to strengthen upon these core competencies. So let me take a walk around this flywheel at a high level as we think about TopBuild's core competencies that we build upon every day. Strategy. We're disciplined. We're not flavor of the month. We're performance-driven with a drive to improve each and every day, and it shows in the results. People.
We're a people business, a people-first culture built on respect and safety of our people. We're driving a level of engagement and an employer of choice designation. Organization. It's about local empowerment. An entrepreneurial spirit to be the owner of your local business. Relationships are key in all directions with our customers, with our suppliers, and internally, all of our support functions as well. Technology. It's about our Connected Technology Platform that we've developed, which is an advantage. It's about a practical approach to enabling improvements in the business. It's also about having great command and control over our dispersed network on a daily basis. Operations. It's about leveraging our size and scale. It's about constantly optimizing and improving the model. It's about operational excellence and value-added services that we provide. Financial. Strong balance sheet. A disciplined capital allocation strategy. Persistence. Executing at the highest level and seeing things through.
I think for those of you that have been following us, you know our SPI transaction, which took nearly two and a half years to complete. That's persistence. Staying behind it to get that deal closed and done and now integrating. M&A. A true competency for TopBuild. The ability to identify, close, and integrate acquisitions. Exceeding synergies. Delivering compounding returns for our shareholders. Our differentiated model is built upon these competencies every day. These competencies and our playbook have positioned us well to outperform in the future. Let's take a look at our accomplishments since our 2022 Investor Day. Delivered sales growth, compounding annual growth rate of plus 16%, and even a margin still in line with our long-term targets. Expanded that total addressable market. Sitting here in 2022, we talk about a total addressable market of around $16 billion. Improved that by nearly six times to over $90 billion.
Successfully completed 24 acquisitions since 2022. That brings, in the last eight years, 49 acquisitions that we've acquired and integrated in TopBuild. Further diversified by design our end market exposure. This non-discretionary, non-cyclical revenue that we'll speak of today, doubling that from 11% in 2022 to 22% today, and again, continuing to build on our talent pipeline while improving on our industry-leading safety for our people. As you can see on the next slide, we've also continued to grow and expand our geographic reach. Over 450 branches now in our dispersed network, but while we've grown our geographic reach, all the while we've continued to optimize our operational footprint, driving improvements as we continue to grow. We have a continued strong track record for driving profitability throughout the network on a consistent basis.
You'll hear that discussion today from our leaders around new and innovative tools that we're deploying to the business to continue to drive these improvements. We have unrivaled scale in partnership with our suppliers. They're important to us, and we're important to them. We provide unique advantages to our supply partners. Our nationwide reach, the ability to support contractors and builders of all size and project scope, regardless of location and complexity of the project. With our bundled building envelope solutions, we're able to leverage our relationships, which is creating great cross-selling opportunities for our teams. We're seeing multiple projects where it's one project, but multiple TopBuild businesses providing services to those customers and contractors. It's also about value-add capabilities we keep talking about, and you'll hear our team talk about today.
I'll mention just a few: fabrication, an unrivaled fabrication footprint between the U.S. and Canada, our building science expertise, as well as design and engineer capabilities that you'll hear from our commercial roofing team. Value-added capabilities that our customers benefit from. M&A. It is a competency and definitely an expertise for TopBuild. I mentioned 24 acquisitions since 2022, acquiring $1.5 billion in revenue over that timeframe and $2.2 billion of capital successfully deployed. It is a competency, and it is a discipline that we have within TopBuild, a disciplined approach. Again, evaluating, integrating, and the synergy execution. Now look at the right side of the slide here, and the financial metrics are super critical, but here's another metric that's important, I believe, as well. The folks that we acquire, the owner-operators that come along with these acquisitions.
By far, if I think about those 49 acquisitions over the past eight years, the majority of those owner-operators are still with us in the business today. I think that's a key success factor for us at TopBuild, and you know what that metric speaks to? That metric speaks to this local empowerment culture that we've built and this acquirer of choice status that we have. Our M&A panel will discuss our approach and also discuss the opportunities we continue to have across all end markets, and I think you'll hear the confidence of that team to continue to drive growth from an M&A perspective, given this competency and the ability to continue to drive strong shareholder returns as well. We talked about the total addressable market. We absolutely, by design, play in some very large and highly fragmented end markets.
Again, John Kuhn and his presentation will go deeper into the end market details, but we've absolutely continued to scale our total addressable market to be in over $90 billion today. It's by, again, deliberate strategic decisions we've made in our core of insulation, continuing to make acquisitions in the commercial and industrial space, and now our decision to expand and build a new commercial roofing growth platform. Commercial roofing is a natural adjacency for TopBuild, and I want to cover that in more detail. This was a calculated move by TopBuild to move into the commercial roofing space. You know what? It started by a full understanding of our core competencies and what we're good at at TopBuild. But we got a third party involved. We did a very detailed, comprehensive review of several adjacencies, and quite honestly, commercial roofing was a clear space where TopBuild can win.
It's really built upon some of the key adjacency factors that you see on the right side here. Highly fragmented. Top 20 commercial roofers only make up about 10% of the share, with no one commercial contractor having more than 2% of the share. In commercial roofing, it's built upon a model of a dispersed branch model, labor-centric, very similar to the other TopBuild businesses. Most jobs are awarded at the local level. Local relationships, relationships matter. We understand that as TopBuild. We understand the importance of those local relationships and local empowerment. Strong supplier partnerships. And by the way, there's major overlap in the same supplier partnerships in commercial roofing as there is in insulation. Again, a natural adjacency. The non-cyclical, non-discretionary revenue streams that come along with commercial roofing. You have a leak in your roof, you have a hole in your roof, you're going to repair it.
That's non-discretionary. And now this unique building envelope bundle that only TopBuild can provide to our contractor customers. Specifically to the Progressive team, which you're going to get to meet today. We're confident in their ability. We're confident in their ability to help us build a platform for growth in commercial roofing. They have a very similar focus on people and operational excellence and a very similar playbook to what TopBuild has ran over the years as well. We feel like we can absolutely mirror the success in commercial roofing as we've done in the insulation space over the years. Really excited for you to hear from the Progressive Roofing team today. They're best in class. Not only best in class in the execution of their company, but also best in class in their flair that you'll see as well today.
That's investor day humor if you've ever seen it before. Okay, so look, last couple of points. It's about a consistent and clear playbook built upon competencies to drive compounded long-term value creation. This playbook is very similar to what we've ran and that we've talked to you about in 2022 as well. It's about attracting and retaining top talent, fostering that culture that you hear so much about today. Operational excellence. Drive to improve every day in the business. Drive profitable growth. Calculated expansion organically and through this M&A model, all enabled by practical technology, innovation, and a support network. And then it is about a team that's confident as to what they can deliver. You're going to hear that today. You're going to hear the experience of the team, the passion of the team. You're going to hear that confidence as each leader presents today.
Over 250 years of experience with the team, and it's a great mix of the team as well. You're going to hear from folks that came up through our manager and training program and our leading part of the business. You're going to hear some internal talent that's been developed and now have key leadership roles. You're going to hear some great external talent that we've been fortunate enough to bring into TopBuild, and you're going to hear a lot from folks that came along with acquisitions that now have key leadership positions in the company as well. It's about building the best team, which we've done within TopBuild. Winners surround themselves with winners, and this team knows how to win, so with that, thank you. Thank you for being here.
I want to introduce Jennifer Shoffner, our CHRO, who will talk to you about culture and talent as a competitive advantage for TopBuild. Thank you.
Thank you. Good morning. As Robert said, I'm Jennifer Shoffner. I'm TopBuild's Chief Human Resources Officer. I've been here almost six years, and before joining TopBuild, I worked about 23 years at a Masco company. So I was certainly familiar with TopBuild and its business before the spin. As you can imagine, in my position, I get an opportunity to talk to a lot of leadership candidates, managers in training, interns, and a question that I get asked the most is what I like best about TopBuild. That's always an easy answer for me, which is the people and the culture. So I get to talk about this topic a lot, and I'm excited to talk about it here with you today as well.
Robert already did a great job of introducing some of these key messages. One of the things that I describe around TopBuild's culture is, as he said, people first. And so for us, that really means living our values, treating people well, taking care of them financially and physically, keeping that entrepreneurial spirit, even as we grow organically and through M&A, keeping that spirit of being the owner. One of the things we talk about a lot is be the owner, be the leader. And for us, that means whatever your position, whatever your role, you can own that. You can act like it's your business. How would you run this? How would you make decisions if you owned this business? And we try to instill that in every person. We also have a model of local empowerment with central support.
And you'll hear later this morning about that central support model and how it enables local empowerment. And that lays the foundation, those values, those messages, that lays the foundation for a workplace where people can make an impact, know they're cared for, and be set up for success. And then on top of that foundation, we bring great talent. We add great talent to the foundation with programs that you'll hear about that really help us attract, retain, and reward the best people. All of this has helped us become an employer of choice. And we'll talk more about that as well. We know that employees have a choice where they work and what they do and how well they do it. And so we want to be the place where people come, land, work for us, are engaged, and work with a purpose.
This people-first culture that we talk about really starts with our values. These values sound good, they look good, but they're not just words on a page or on a wall. They're only important if we really live them. And so for us, it's important, especially in that distributed model. You heard Robert talk about 20,000 job sites. We have hundreds of branches, thousands of employees. So to have all of us living those same values and making sure that we're guided by common values, making the right decisions at every turn, that's a big part of what we do successfully. These core values, as I mentioned, aren't just words. They're really embedded in our practices and in our programs.
From everything from recruiting guides to performance evaluations to our leadership programs that I'll talk about, we embed the idea of these values and what it means to live them. It starts with valuing people, making sure they're safe, making sure they know what's expected of them, and giving them an opportunity to make a difference in their team, at their location, and in their communities. Our talent management strategy is structured, but it's also flexible. It flexes depending on the talent group that we're working with, as well as our changing business needs. Whether it's sales professionals, installers, drivers, leadership folks, we really flex our program to what they might need. We look for people who have a track record of hard work and success and who are smart, and then we match them to our opportunities. All of our elements of talent management provide choice.
Again, trying to create a workplace where there's something for everyone. So I'll talk more about each of these key areas, starting with attracting talent. We know that having labor available is a key competency for us, as Robert talked about. It's key to our success, and it's a competitive advantage. We compete by talent segment, so we think about our talent like that, making sure that we're highlighting things that are important to each of the different groups. Because like all of us, different workers want different things, and different things are important to different people. So for instance, for our installer and distribution teams, we highlight things like our safety program, keeping them safe, our pay program, our competitive and comprehensive benefits. For our administrative and professional teams, we highlight things like our flexible workspace, workplace, our development and career opportunities, and our performance.
A couple of programs. While labor hasn't been as tight recently as it has been some in the past, we know that keeping a pipeline of labor is important. So a couple of the programs that we've had some recent success with, one is around veterans and military recruiting. We have some new partnerships that have really helped us bring in some active military as well as veterans into our company, especially in operations leadership and in our Manager in Training program. And just last month, just before Veterans Day, we were awarded as a military-friendly employer. So that's good evidence of the fact that we're providing great opportunities for veterans and their families. And it's a great source of labor for us. We've had continued success with our friends and family referral program. You've heard about that before. That is our employee referral program.
Since the program began in 2021, we've had over 11,000 referrals. So this is TopBuild people trying to get other people to come to TopBuild. And we've had great retention with that program as well. And so that's a program we continue to leverage to have available labor. Once we get people to TopBuild, one of the things we want to do is make sure we have programs that help develop them. You've heard Robert mention Manager in Training. That's a program that we developed years ago, and you're going to hear from someone today who started as a Manager in Training. So it's a long-standing, successful program for TopBuild. It's customized to really teach someone our business from the ground up. So we have 25-30 people in this program at any given time. They come into a branch, they really start either in the warehouse or installing.
They move through sales, support. They learn how to manage a P&L, so they really learn our business from the ground up with a manager mentor that's working with them, as well as support from the leadership team, and when they graduate from our MIT program, they move, 80% of them move right into a branch manager or assistant branch manager role, so it's a successful program. We've got great retention in this program as well. We're proud that this now covers all of our legacy TopBuild businesses, and we look forward, in 2026, to adding this manager in training program to our two recent large acquisitions of SPI and Progressive Roofing. We also have a new leadership academy that we began last year based on need and customized to our business, so we started two programs.
One is a foundations of leadership program, and one is advanced leadership principles, so these are programs for people who are already in leadership, who are looking to further their skills. We use this program to help promote our culture as well as help build skills in leadership, so things like people management, delegation, strategic thinking; these are some of the things that we really cover in these six-month courses, and as I mentioned earlier with our values, this is just another opportunity to really embed our values and our leadership expectations in addition to building skills, which helps us achieve that consistent culture. In the year plus since these programs began, we've had nearly 100 graduates of these leaders in our business, so we've talked about recruiting and development. I want to talk a little bit about rewarding and retaining our employees.
We offer comprehensive benefits and competitive pay that aligns to our company goals, so we align them with our goals like safety, which you've heard about, sales growth, operating profit, working capital. Those are things that we communicate across our company so that people understand, one, what are those things, and two, how can I impact those, and that's a way to connect everybody in this pay-for-performance mentality to make sure that people are connected to each other as well as our business goals. Retention of labor, clearly, that's important to us, and that starts from recruiting right on through that life cycle of employment. Our commitment is to have employees who work safely, who are productive, and who are available and consistent, so if you think about our installers, that's our largest population. We have thousands of those across our company.
We use a combination of benefits that they may not get with smaller employers. If you think about an installer who's thinking about where they work, they can work at TopBuild, or they can work at maybe another local or regional employer. For us, they're going to get things that maybe for some of us seem standard, but are unique for an installer. They get tuition reimbursement. They get paid time off. They get a matching 401(k), so those are things that are unique to them that we provide and make sure that we're using those things to retain them, as well as competitive pay, and that includes incentive pay or piece rate. And that's where our installers are able to be paid based on their productivity and how much they can install safely and with quality.
We know that we're doing a good job here because we measure two things: voluntary turnover and retention, and our average tenure with our installer base is more than six years, and our turnover is 20%, which is well below the industry average. It's important for us, as I mentioned, to ensure that everybody is taken care of physically and financially, and that helps us ensure their commitment and engagement. Speaking of engagement, everything I've really talked about up till now leads to that employee engagement, which is important to us. We want to make sure that we have people who are giving their best every day. You would expect me, as the head of HR, to talk about what a great company we have and how engaged our workforce is, but I think it's probably more important what our employees have to say about our company.
In September, we had the opportunity to survey them. We do a biennial survey through a third-party company that we work with. And so we have some recent employee feedback, which is great. The first thing I'll point out is that 70% of employees participated, and that's well above an average, especially when you think about a distributed model like we have. So 70% participation already is great, hearing from thousands of employees. 85% of employees are considered engaged. Earlier this year, 82% rated us as a great place to work. Safety was our highest-rated category across our company, which, so again, we know that people understand living that value of safety. And then 93% of respondents, one, understand how their job contributes to TopBuild's success, and they know what's expected of them at work.
And those two things together, again, really help us make sure that we're driving a positive culture and people are connected to each other as well as to our business goals. So we're always looking for how we can do things better, what we can do more for employees, but we're really proud of the feedback and the response that we received. We're also proud that, again, this year we were rated as a Great Place to Work for the third year in a row. We were, for the first time, ranked as a Forbes Best Companies in 2025. And then, as I mentioned, most recently, we were awarded as a military-friendly employer. And these are all things we're proud of, not just for the recognition, but more for what that represents, that we are an employer of choice.
So in closing, what we do around talent is structured and straightforward and simple, but it's not easy. It's not easy to do that across the distributed network that we have, and it's not easily replicated. So it is a competitive advantage for us. To make sure that employees find a place where they can have a career, not just a job, that's what's important to us. We've achieved becoming an employer of choice, and we know that's something that's earned, but it's also something we have to maintain. So we can't just be content. So we are always looking for employee feedback, looking for ways that we can continue to compete as an employer and remain an employer of choice, giving people a purpose to their work and making sure that they're taken care of. This year, we celebrated 10 years as a public company.
As part of that celebration, we created a video that included a lot of folks across the company and really helps tell our story. We shared this with employees on our anniversary, and I'm excited today to share part of this video with you to help you see some of the many faces across TopBuild.
A bold idea to build something better for the future. A company rooted in values, driven by performance and wonderful people. In 2015, we transitioned from a Masco subsidiary to a standalone public company, generating $1.6 billion in sales at the time with about 8,000 employees. But we are ready to shape the future of building. Today, we look back with pride and forward with purpose. This is our story. Growth has always been a part of our story, but it's never been the goal on its own.
It's how we've expanded our impact, reached more customers, and created opportunities for thousands of team members. Since 2016, we've completed 49 acquisitions, each one strengthening our capabilities and bringing great people into the TopBuild family. What started as 180 branches and 70 distribution centers has transformed into a coast-to-coast network and a growing presence in Canada. TopBuild isn't just built to grow. It's built on people, and our culture is what makes us who we are. Our culture is what makes TopBuild more than a company. It's a place where people build careers, not just clock in. A place where integrity matters, where innovation is encouraged, and where everyone looks out for one another. We've been certified as a great place to work three years in a row and named one of Forbes' best companies in America for 2025.
That's because our people create a workplace worth showing up for. Through our friends and family referral program, more than 5,000 installers have come on board, brought in by those who believe in what we're building. And with more than 100 graduates of our management and training and leadership academy programs, we're developing leaders who will help shape the future of TopBuild. At the center of it all is safety. It's not just something we talk about. It's something we live. From hands-on training to job site visits and daily safety check-ins, our teams have built a culture where safety is personal. Since 2017, we've reduced our safety incident rate from 3.58 to just 1.95 in 2024, a number that reflects care, commitment, and shared responsibility. At TopBuild, we are safe every day because we protect what matters most, each other.
And that same spirit of care doesn't stop at our branches or job sites. It reaches into every community we serve. We don't just show up for work. We show up for our communities. Over the last decade, TopBuild and its subsidiaries have supported more than 160 organizations across the country. Our people have donated thousands of hours filling backpacks with school supplies, building homes, and delivering hope. From playsets for pediatric patients to food drives and holiday donations, our teams bring our values to life. This is what it means to make a difference locally. And this spirit of giving, it's not a program. It's just who we are. The last 10 years gave us a foundation from which to build.
The next 10 years are about building what's next, growing in new ways with our teams, our people, and new ways to deliver value and solutions to our customers. We'll keep investing in our people. We'll strengthen our partnerships and keep leading with the values that got us here today. To every employee, partner, customer, family who's been part of this journey, thank you. Because of you, TopBuild is 10 years strong and just getting started. T he best is yet to come.
Seeing that it's probably easy to see why we're so confident and excited and passionate about what we do and the people for whom we do it. Next up, I'm going to invite Steve Raia to come up. Steve has been a long-time employee with us.
He'll tell his story and really bring to life a bit more about the people and the culture and how it relates to operations. Yep.
Well, good morning, everybody. This is one business that I'm very passionate about and been all my life and growing up in the industry, and my father started an insulation company in 1946. Back then, it wasn't much insulation. It was a lot of foil, but after that, in 1955, I was born, and then 1969, summer vacations and high school breaks, I started hanging insulation and obviously learned the business. In 1973, I graduated high school on June 20th and moved to New Jersey on July 5th, so $100 a week in an El Camino, and off I went, so that's how I started. Had a nice business in New Jersey. 1991, my father passed away. We had three locations.
After 1991, me and my brother grew it to over 30 locations and doing about $300 million a year in business. In 1999, I sold out to Masco. I stayed there a few years. Their culture wasn't my type of culture. They're more of a product person, and I'm more of a people person. I run the businesses by having great people around me. Having great people around you makes you successful and makes your business successful. I try to teach everybody in the business, like our MIT program is where you start from the bottom up, and you train them so they understand how to deal with the installers every day because they did it.
If I did it, I know how to deal with them because I know how hard it is, and I know what it takes for someone to insulate a house and how much time it takes to do it and how they can make more money and keep them safe. The big thing today is you try to talk to them face-to-face before they leave the warehouse or the office or their truck drivers, whatever. And you just got to talk to them in a way like, "You see the way you look right now? This is what I want to see when you come back." So one split second, you could do something wrong. It could change your life forever. And you got to think of that. And it isn't like you don't think about it once a month or once a week.
You got to engage it every day. When you leave there, you start to think, "Well, you know he said something." It's on their mind for the rest of the day. We make sure we do those things. I guess it came to 1991. In 2011, I left Masco and I met Robert in 2011. We used to meet two to three times a year and gain our relationship, our friendship, and trust in each other. In 2015, Robert says, "Would you like to come back to the business?" I said, "I would love to, but I want to run it the right way, Robert. I want to run it with great people around me. I want to make sure our people do well in business and make money. I want them to make sure that, obviously, paid on the bottom line.
I want to treat them like partners," and because if we're going to grow, we can't be everywhere ourselves. We need great people to do it. And we have people today coming up to us and telling us how we changed their life and how happy they are. And these were ex-installers, the warehouse people or salespeople. And they have a great position here, and they run their businesses every day like it's theirs. And they get paid on the bottom. So if they want to throw away money, it's going to cost them also. So we try to engage that with them to make sure that they're engaged in doing the best for the company, for themselves, and go forward every day. So what do you got to do to be that person? Well, it's pretty much five basic things every day. It's the same old thing every day.
What is that? Well, you got to be engaged with your team in the morning. If it's 5:00 A.M. or 6:00 A.M. in the morning, you got to be on the docks with your drivers, your warehouse people, your installers. You have to have that personal relationship with them. How's your family? How's the soccer game? How did this go? You have to have a relationship with people for people to do good for you, for people that you want to do anything for you, like, "Hey, boss, I'm going to finish the job today. I'm going to stay an extra hour." Those are relationships driven. That isn't like, "I'm going to just leave. I don't care because my boss doesn't care about me. I don't care about him." Right? So it's very people-driven business where make sure our managers are engaged with our people.
So, what's the second thing you do after you get the men out in the morning and you go in the warehouse and you make sure you have the right goods for the next day's job? And you got jobs coming up, you want to make sure you have the right material. Then what else do you have to do? Well, you got to go into the office and make sure all the work you did yesterday, you bill it today because you have to make sure we bill everything every day to make sure we get paid. What else do you do? Well, there's a couple of contractors or builders or suppliers that owe us money. And I'm going to make some phone calls just to catch up and see when I'm going to get paid because there's some old accounts that aren't paying us on time.
What else do you do? The rest of the day, I work with my sales team. I work with my sales team and engage with them, drive with them, help them sell more jobs, help them look for more work, help them drive around and look at windshield time, meaning look for other work all the time, constantly, and try to make them feel get successful and do better. If you do these five or six basic things, you will be great in this business. You won't fail. You don't have to be anybody like Jennifer talked about the military. They know what five basic things are, right? They know what to do every day. As long as you do those things every day, you're going to be great. It makes our company what it is today great.
And it's the greatest feeling to talk about a business like this, what we did as a team in this whole room. In 10 years, you get the chills. It's exciting. It's the greatest story ever. I mean, it's hard to tell a story in 10 years in the business that we're in, a labor-intensive driven business. So very proud of it. And I just want to thank everybody for coming here today. You could feel the passion I have. And we have a person, John Achille , that I want to introduce where me and John's former owner competed in the 1980s in New Jersey together. And John worked for that company for 15, 20 years. So he'll tell you more about it. But we're getting great people for our company for the future in the business.
And that's the best part, is always look for the greatest people to come into our business and make it great and keep it great. So thank you, everyone. Thank you. John?
Thank you, Steve. Good morning, everyone. As Steve mentioned, I'm John Achille . Grab my clicker here. All right. As Chief Operating Officer at TopBuild, I'm thrilled to present our strategy for clear growth priorities accelerated by operational excellence. Before we dive into the details, I believe understanding my journey provides valuable context for how we approach these priorities. My foundation is in civil engineering, which I earned from Rutgers University in 2000. I gained practical experience early on as a project engineer with Turner Construction and later honed my skills in estimation and project management with a large heavy civil construction company.
My true immersion in the insulation industry began at Coastal Insulation in 2005, which was then one of the largest independent insulation contractors. I was brought on to build their new headquarters, but my interest in the business kept me there as production manager and ultimately led me to serve as vice president. It was through the acquisition of Coastal in 2021 that I proudly joined TopBuild, bringing direct operational leadership to our team. My time within TopBuild has been a continuous journey through our core businesses. I've had the invaluable experience of running a region and a portion of TruTeam, followed by overseeing some areas of Distribution International. In 2024, I led the Service Partners business, which collectively provided me with comprehensive hands-on understanding of our entire operational landscape, leading to my current role. Today, I want to highlight three key messages that underpin our strategy.
First, we are committed to expanding our market-leading positions across a large, highly fragmented, and growing total addressable market in excess of $90 billion. Next, we are relentlessly driving operational excellence to enable continuous outperformance across our entire branch network. And finally, we are leveraging and enhancing our dispersed network with our dedicated branch support center and technology tools. So what does all this mean? I will provide some context and details now. Let's start by diving a bit deeper into the scale of our opportunity that Robert introduced earlier. Our total addressable market is truly substantial, highly fragmented, and offering significant growth potential. Our newest division, Commercial Roofing, which you'll hear more from Nick and David later, represents a significant opportunity driven by new construction, re-roofing, maintenance, and other related services.
Residential install and distribution is focused on single and multifamily homes, from custom-built homes to single-family homes by national and regional builders, to repair, remodel, and retrofit projects and our own building science capabilities. Our commercial building, install, and distribution encompasses light commercial sectors such as retail, education, and hotels, as well as heavy commercial applications like manufacturing, data centers, airports, and sports facilities. Finally, mechanical, which David Fischer will expand on, and metal building insulation, both fabrication and distribution, serving industrial manufacturing, energy, pharma, food and beverage, and other critical verticals like oil and gas and marine. So overall, we're well diversified with opportunities across many verticals. TopBuild holds a uniquely advantaged position within the industry supply chain, which benefits both our manufacturers and our trusted builder and contractor partners.
For manufacturers, we offer deep local customer relationships and are a strong supplier partner, ensuring their products reach key markets efficiently. Our builder and contractor partners value us because they know they can rely on us to consistently arrive on time, provide skilled labor, ensure the job is completed to code, and stand behind our performance, ultimately helping to keep their projects moving and on schedule. Our services are an absolute critical piece of the overall construction process, and we are proud to partner with the leading manufacturers as seen here. We have great control of our businesses, and operational excellence is at the heart of how we continuously drive outperformance. We have a systematic approach and a clear cadence of communication across our entire branch network. Our Connected Technology Platform enables real-time measurement and tracking, and you'll hear more about that from our team later this morning.
By the fifth business day of every month, we conduct monthly reviews of our more than 450 branches. We focus on operational and financial metrics, labor productivity, and backlog. We also rank individual regions and branches so that we can focus and continually improve our bottom quartile. We can then dispatch special operations teams to train and improve the bottom quartile branches as needed. This is a continuous cycle whereby we empower local branches, but also measure and monitor performance from our Branch Support Center and take action to uplift performance by deploying best practices to train and elevate our teams. Our dispersed branch network provides distinct competitive advantages. First, it allows for deep local relationships, fostering trust and understanding within specific communities. Next, it enables us to make timely decisions, reacting quickly to local market demands and challenges.
This could be as simple as adjusting a bid to win a job or offering a value engineering option to keep a project within budget. Third, our structure ensures streamlined and efficient communication both internally and with our customers. Fourth, we prioritize agile and safe operations, adapting swiftly while maintaining the highest safety and DOT standards, and finally, it cultivates an owner mentality among our local teams, driving accountability and proactive problem-solving. This model truly enables local empowerment with national scale and efficiency. Central to our operational strategy is the Branch Support Center, or BSC. As a former independent business owner, I recognize the vital role the BSC plays in providing essential back office services, setting critical guardrails, and continuously monitoring performance. In comparison, our independent competitors must rely on outside firms or make uninformed decisions.
As we created this slide, I heard the passion from our BSC employees and departments about how they know they help support the field. The BSC centralizes administrative support, enabling branches to focus on customer-facing operations and performance, while the BSC handles the crucial back office functions. The BSC also streamlines and standardizes processes, driving efficiency, reducing costs, and significantly increasing productivity across all operations. It monitors performance by providing clear visibility of the business results through best-in-class business intelligence tools. The BSC sets guardrails and controls, helping to establish and closely monitor pricing and internal controls to maintain consistency and compliance. Ultimately, it provides access to critical safety and training resources, fostering professional development and knowledge sharing across our entire network. Overall, the BSC is focused on empowering and enhancing our dispersed branch network.
Now turning our attention to one of the most critical priorities, and as you saw in the video, keeping our more than 15,000 employees safe. This isn't just a corporate mandate. These are critical safety programs ingrained into the very fabric of our culture. How do we achieve this? It starts with ongoing engagement and continuous sharing of safety best practices across all our locations. We invest heavily in our safety leadership by continuously conducting safety training for our business leaders, ensuring safety is a priority from the top down. We also have comprehensive training initiatives that build on our Safety Live program, which uses a mix of hands-on and virtual training to keep our team sharp and informed. Consistent communication is key, so we host mandatory monthly safety meetings and distribute a quarterly safety newsletter. Ultimately, we aim to make safety personal for every single employee.
This commitment translates directly into measurable results. If you look at the chart on the right, you'll see our performance. This tracks the total number of work-related injuries per 100 full-time employees annually. You can observe TopBuild's incident, and our performance remains far better than the industry averages across both distributors or drywall and insulation. This visual evidence underscores the effectiveness of our proactive safety measures. While we've made significant strides, our ultimate aspiration, as indicated on the bottom, is to strive for zero safety incidents. This will further enhance profitability by eliminating costly and unnecessary incident expenses. Let me share a compelling case study that truly exemplifies our commitment in operational excellence with a recent branch safety improvement initiative. Initially, we identified some challenges within our network. We observed inconsistencies in adherence to our safety processes and policies at a particular branch.
At times, the pressures of daily operations led to shortcuts or choices that compromised safety. Recognizing this, we understood there was a clear need for renewed focus, instilling greater engagement, enforcement, and accountability. Our solution was a comprehensive improvement plan to increase collaboration between our safety and operation teams. We began with strong leadership, engagement, and attitude, working directly with the branch to foster a culture of compliance and positive safety behaviors. We then reinforced safety through various measures, including reestablishing safety committees and utilizing meetings to communicate expectations in the field clearly, and critically, we focused on employee expectations and accountability, providing feedback to recognize positive actions and ensuring teammates were held accountable when expectations were not met. The outcomes of these concerted efforts have been truly remarkable. We're proud to report a significant 90% decrease in recordable safety incidents year-over-year.
That branch also saw an incident rate, an impressive 83% reduction, and we achieved a notable 64% decrease in DART points year-over-year. Beyond these quantifiable metrics, we also observed a substantial increase in engagement during safety meetings and a proactive approach to preventing job site hazards. This case study clearly demonstrates the powerful impact of our operational focus and systematic approach. To summarize our discussion today, I want to reiterate the three core takeaways. First, TopBuild is strategically expanding our market-leading positions within a vast, highly fragmented, and growing total addressable market. Next, we are committed to continuously driving operational excellence to enable outperformance across the branch network. And third, we are effectively empowering our network through the dedicated Branch Support Center and technology tools. Thank you for your time. Next, we're going to watch a quick TruTeam video.
TruTeam is the nation's leading network of residential and commercial insulation installers. With more than 200 branches and approximately 8,000 installers, our unique model offers strong local relationships with all the synergy advantages of a national organization. Safety-first and people-focused, TruTeam is trusted by the country's leading national, regional, and custom home builders. We also provide superior insulation solutions to commercial general contractors, helping them to complete projects on time, cost-effectively, and to compliance. Exceeding customer expectations and focusing on operational efficiency has led TruTeam to deliver outstanding financial results year after year. From demonstrating steady growth in revenue and consistent improvements in Adjusted EBITDA performance, our results prove the strength of our cycle-tested business model in any operating environment. When it comes to professional installation, TruTeam's not only the biggest, but the best.
From fiberglass and spray foam to specialized commercial applications, we do it all, and we do it better than anyone.
Okay, now we're joined by Jeff Krestancic, a perfect example of success coming through our MIT program, our President of TruTeam.
Thank you, John. Thank you, John. Okay, good morning, everyone. As John said, my name is Jeff Krestancic, and I lead the TruTeam installation business. I've got about 20 years of experience with the company, and I started my career first in the Manager in Training program back in 2005, where Steve and Robert mentored me every day. It was a great opportunity to get my foundation here with the company and learn from some of the best and top leaders here in the business. Fantastic experience for me to learn the fundamentals, day-to-day operation, and really pave the way for my future.
Shortly after that, I transferred to our headquarters in Daytona Beach, Florida, where I worked on our ERP transformation project for the next couple of years. Good opportunity to learn about our systems, our process, and it really paved the way for where we are today with our connected technology platform. And then at the conclusion of that, I got my start as an operator in the business, first in Southwest Florida as a branch manager, spent a few years there, and then took on multi-site responsibility, expanding to a district manager also in Florida. And then when we spun, I transferred out to Colorado in 2017, where I became a regional director and ran businesses in Colorado for the next couple of years.
And then in the summer of 2021, I took on more of a national operations role with the business and then was eventually appointed as president of TruTeam in January of 2024. So that's a little bit about my background. Okay, so key messages that I want to cover with you today that support our strategy at TruTeam. So number one, we're going to spend some time talking about how we leverage best practices across our nationwide footprint, coast to coast. The strength of our relationships, extremely important how we interface with our customers and develop strong and tested relationships with those customers, and then how we bring national resources and expertise with any insulation solution.
Number two, driving operational excellence, which is hugely important on the install side of the business, where we're constantly looking to find meaningful improvements, optimize our productivity, drive our sales team, and we don't ever get comfortable with being complacent, and then number three, it's making targeted investments in our business that accelerate sales and support our profitable growth strategy. Okay, let me tell you a little bit about True Team in general, so True Team runs a $3.1 billion business. We have over 7,000 installers across our network, and we serve a wide variety here of end markets, so if you look at residential, light commercial, heavy commercial, retrofit, and remodel, residential is the largest component of the business, and we serve builders in a variety of different sizes. We have large builders, national alliance customers, regional builders, custom builders, and multifamily makes up the balance.
So what gives us our edge? So if you look at our nationwide network of over 7,000 installers, we have competencies in both residential and commercial. The strength of our local relationships, critically important key differentiator here for TruTeam. And then lastly, that continuous improvement mindset that we have that allows us to really bring value forward for our customers, do a great job for them, deliver projects on time, and do it from a profitable standpoint as well. Okay, so our broad geographic footprint, as I said, coast to coast operations, over 200 locations that we have throughout the country, strong presence across the top 100 MSAs. And then if you look at our complementary services, the one thing that doesn't vary across those verticals is we provide insulation. Obviously, that's our core product line. However, in some businesses, we add some additional product lines as well.
Based on the needs of our customers, what they require, that drives some of that variation, and then on the commercial side of the business, that's a key component within that end market is we want to be able to provide a package for our customers, so we're looking for complementary products and services that go along with insulation. Some of those examples could be fire stopping, fireproofing, air and vapor barriers. Great opportunity for us to add value for those customers, kind of one-stop shopping, if you will. Okay, so I'm going to spend a little bit of time on why we win at TruTeam, so I'm going to go through each one of these and give you a couple of examples, so number one, our unmatched scale, market leadership. TruTeam is the largest insulation installer in the country.
We're always looking to be the market leader in each market that we serve. We have unmatched capacity, 7,000 installers, and a proven track record for meeting customer scheduling requirements. We're able to share resources across our network, which allows us to respond well to spikes in demand, and we have the ability to take on large, complex projects, and we also have continuity with our large builder customers. Customers who operate in many different regions, our ability to scale and expand with them is a differentiator for us as well. Number two, local execution, national strength. Our operating model combines entrepreneurial local leadership with the discipline and resources of a national platform. We have strong long-term relationships with builders and contractors, which give us an advantage, and we have a service-first culture, which ensures reliability, quality, and safety. Key reasons why customers choose TruTeam over and over again.
And then our Connected Technology Platform to monitor and optimize performance. For us, it's a single source of truth for making decisions. It allows us to identify trends and inefficiencies in the business quickly. And we take a data-driven approach when we're making decisions, which drives accountability across our operations team. And then as the business grows and integrates new acquisitions, the platform makes it much simpler to scale. Essentially, everyone uses the same system. Recognized building science expertise. This is a big one. So building science brings a technical foundation to TruTeam's work that allows us to go beyond just installing insulation. We can help builders and homeowners achieve a more energy-efficient home. We can prevent comfort issues and warranty callbacks that ultimately add costs back into the business. And then we offer consultative value, which elevates us above just providing labor and material.
It's a differentiator between True Team and other installers. Number five, a culture of accountability and safety. Our team operates with clear accountability, empowered decision-making, and well-defined performance metrics. Safety is one of our core values, and our best-in-class safety performance reduces downtime and protects our people and our partners. Our culture is result-oriented and customer-focused, which helps drive consistent execution in every market, and to bring it all together, our advantage position within the industry is because of our scale and our national reach, the strength of our customer relationships, the diversification of the end markets that we serve, our single operating platform, our building science and technical expertise that allows us to bring great solutions to our customers, and our mindset of continuous improvement. All of those things add up to why True Team wins consistently. Okay, raising the bar with operational excellence.
I'm going to talk a little bit about our data-driven management approach. We do have a fair amount of standardization throughout our systems. One of those examples would be a schedule and dispatch component that we developed ourselves internally, which allows us to essentially mirror the schedule of our customers. We can take their requirements, their scheduling dates. We can replicate that in our system. We drag and drop that over to trucks, assign installers. We have priorities, and we have route optimization that comes through doing that, which really helps us drive minimal indirect labor, more of an optimized routing with our team. The scale of our purchasing power. Obviously, the economies of scale that we bring, big company, a lot of strength with the relationships that we have on the supply chain side.
And then we also have a standardized quoting tool, which allows us to have some standardization with how we price and allows us to bring discipline across all of our 200+ locations. And then we do a fair amount of performance benchmarking across the businesses, which drives accountability. We measure employee productivity, how we look at days on hand from an inventory perspective, and then making sure we have the right balance of staff with our back office and our front office. And then uniform P&L visibility. And for us, we talked a little bit about special ops in some of the earlier presentations. And what that means on our side of the business is we've got a team of highly skilled, capable, experienced operators that understand our operating model like the back of their hand.
So whenever we identify that we have an underperforming location, we have an opportunity to dispatch those folks into those branches, take more of a hands-on approach, resolve some of those issues, and drive efficiencies throughout the business. A couple of examples of focus areas for us. Number one would be labor productivity. TruTeam runs a huge component of labor, over 7,000 laborers. So we're constantly looking at revenue per head count. We're looking at making sure that we have the optimal amount of head count in place based on where demand's heading. And then the other component here for us is sales productivity, a big one.
So as we look at the average number of daily quotes that our sales team is putting out there, what our close ratio looks like, and how those folks are contributing to our backlog, critically important for us to optimize our outside sales team as well. And then the last one that I'll talk about is material yield. So we have a couple of products and services that we offer that are a bit sensitive to actual performance versus advertised performance. So if you look at loose fill blowing wool, spray foam is another good example. We would expect to get a certain amount of coverage or board foot yield from those respective products. Our systems allow us to notate differences between actual performance versus advertised performance, and it triggers our teams to make some adjustments with either the application or preventative maintenance or make some adjustments to the equipment.
And what that allows us to do is really maximize direct margins in the performance of that product versus where we would expect it to be. So these are all things that we look at from a continuous improvement operational excellence standpoint. Okay, I got a quick case study for you. And this is a good story of where we're able to leverage some of our best practices across the footprint. This is an example of a branch that was part of a larger acquisition based in North Carolina. Not a lot was going well at the branch initially. The team was a bit concerned. We weren't making money. Folks that were new within our business didn't really understand a lot of the things that we were trying to do. So great opportunity for us to find some meaningful improvement there.
I'd say the other aspect of this that was critical, obviously, the installers are the backbone of our business. In this particular situation, the installers didn't have consistent supply of material, which prevented them from completing a full schedule. They weren't making the kind of money that they expected to make, and it really held us up from providing the high level of service that we would expect to provide from our customers. Our local TruTeam management team stepped in and started going through the process. As I talked about a data-driven approach, having our systems in place allows us to very quickly identify weak points in the business. We took a close look at the P&L and started identifying where those weaknesses were and where we needed to drive some improvement. The other part of that is effective communication with the team.
Absolutely critical for us. Front office, back office have to be in lockstep, and we have to have some optimization with how we want to run our business. In some cases, we have overlap with branches, so making sure that we have the right crew, the right branch servicing those customers, and it's optimized from a routing perspective, and then the big part of this was, hey, we couldn't provide enough consistent material supply, so we leveraged our supply chain, the strength of our relationships, and we're able to stabilize the material supply side, and that was really a game changer for us as well, so going through that process, the cost structure of the branch really started to align, and things were improving.
And I'd say the other element of that is, hey, whenever you deliver at a high level, on time, high quality, you do it safely, you do it with value. It allows us to push the envelope a bit from a pricing perspective. And that was another component here of our solution. So the outcomes of this case study, the installer productivity improved. Their compensation improved as a result of that, and we had some good things happening there. Revenue and customer satisfaction increased as well because we were showing up on time and we're doing a great job for our customers. And then the net-net was both sales and operating profit improved in a relatively short amount of time.
So within 90 days, we took an underperforming location to one of our top-performing locations within that region, and it compared very well with the performance of the rest of the business. And then the most important thing for us is we gained the trust and loyalty of new team members. So having a group that came in that was part of an acquisition and being able to turn that into a really good experience for them and an opportunity to really address some of their concerns, it was just a fantastic story, and we're very proud of it. So just one of many examples where we can leverage those best practices across the footprint and drive some improvements throughout the business. Okay, driving profitable growth. For us, there's really two sides of the equation here. So we have organic growth initiatives, and we have inorganic growth initiatives.
So I'll start first walking you through organic growth initiatives for us. Number one, obviously, we're not going to forget about our current customer base, right? And making sure that we're taking care of existing customers, providing high service and reliability, and making sure that we've got that continuation with our existing customer base. Our CRM. So this is one of those targeted investments that we've made in the business. So if we look at what that means for us, CRM is a great opportunity. A component of that is we do a lead aggregation part of our CRM where we're basically bringing a whole bunch of advanced information in front of our sales team, giving them access to leads, giving them access to things a little quicker than maybe the next installation installer may be able to do.
And for us, getting our outside sales team out there in front of our customers and doing that timely, that's a key advantage for us. And then continue to leverage our resources across the regions, looking for that customer loyalty, looking for confidence from them as they may expand their markets and go into different geographies. We have the ability to do that as well. And then the targeted investments in Salesforce effectiveness, guided selling, better training, enhancing their capabilities. And then the customer analytics and digital engagement side, that goes into the CRM component that we had talked about where we want to drive optimization with leads and how we convert those leads, ultimately turning them into quotes and wins for the business. And then inorganically, it's pretty well documented.
We have a proven M&A track record, disciplined approach, looking at accretive acquisitions to expand our reach, customer base, and capabilities. And why do we select the targets that we select? And this is where the theme rings true throughout the presentation today is it's really all about the people. And we're looking for the best possible talent that we can find, obviously the quality of the operation and the strength of the markets that those acquisition targets service, all reasons why we make the selections that we make. And then the consistency of our post-acquisition playbook. We do our best for rapid integration. We get them on our systems, our best practices, make sure we're communicating effectively. We want to realize the synergies as well. That happens pretty quickly here within the installation business.
And then we take companies that are good, and we want to make them great. So leveraging our model, taking the TruTeam install model in place, driving improvements with direct margins and all of the things that are key factors in the profitability of one of our installation branches, that's what we want to bring forward and share with those folks. And at the end of the day, it's all about putting us in a position to bid more and win more. Okay, one more case study for you. And this is talking about a customer relationship that really took off. It expanded, introduced some new capabilities for us from an install perspective, but also took us into multiple geographies. So in this situation, this is a builder customer that was Florida-based, and they were specializing in the construction of warehouses and distribution centers.
So we did three initial projects with this customer. The projects went very well. We installed on time, high quality, and through that process, built a really nice connection with the customer. The relationship expanded. There was trust. There was confidence. So they had some opportunities that were on the horizon. A large online retailer had gotten in touch with them and said, "Hey, not only do we want to expand our presence in Florida, but we're going to start doing this type of work in other parts of the country." And the question is, "You got any interest in joining us and partnering with us to do something like that?" And naturally, our response was a very quick yes, right? Absolutely, we want to do that.
So as those opportunities started to come in, it was very important for us to understand the size and the scale of those because that's really what drives success on a large complicated project. Do we understand the material requirements? Do we understand what's going to be required from a capacity planning perspective? So that triggered our team to start collaborating with our strategic suppliers, making sure we get the right material delivered to the job site at the right time and make sure we have the people on site and in place to be able to receive and very quickly turn that into an installation. So as we started going through that process, this is one of the beautiful things with some of these new installation solutions is the more you do it, the more repetitions you get, you typically get a lot better at it.
So, in this particular situation, develop some synergies. As that competency expanded, we were able to do more with less, and it allowed us to deliver those projects with an elevated level of profitability. So the net outcome of this story expanded our geographic reach and capabilities through a new commercial builder partnership. And through the process, we've had a real nice portfolio of projects that we've been able to develop. So as we're going out and we're prospecting new customers that have these types of opportunities, being able to lay out that project portfolio, show them the work that we've done, the large complicated projects that we've successfully completed, a great way for us to earn confidence with those prospective customers. So that's been a good experience for us.
And in this particular example, it's generated an incremental revenue stream, so $10 million plus in annual revenue captured through a complimentary installation service. So a great example where we stepped a bit outside of the box, took on a new solution, expanded our geography, and it really highlights the strength of those relationships. Here's a visual illustration of what one of those projects might look like. Probably seen one of those before. And as you can see, it's a big building. There's a lot of material, significant amount of revenue associated with those types of opportunities.
Okay, so wrapping it all up, as I talk about leveraging our best practices, the depth of our network from coast to coast, the ability for us to take that and make some of these branches better as we go through that process, the strength of our local relationships, the natural resources that we bring, driving expertise with any installation solution. Number two is the relentless pursuit of continuous improvement, optimization, trying to fine-tune the TruTeam operating model. That's a big part of what we do every day. And then number three is about making targeted investments in the business that support our profitable growth strategy. So thank you for your time today. We have another video coming up here, which is going to introduce our commercial roofing business. So we have Nick and David that are going to come up and present next.
Building trust, protecting investments, and shaping skylines across the country. At Progressive Roofing, our focus starts with safety. Roofing brings unique challenges, and our people face those challenges every single day. Safety isn't optional with us. It's who we are. It's the culture that we've built. In roofing, things change daily. The job site changes daily. And we pride ourselves on the training and the education that we provided for our team members. It gives us the confidence knowing that when we're not there, they'll have the ability to make the changes necessary to keep everybody safe. We pride ourselves on our safety record. It's our commitment to safety, and it shines through. I've been with Progressive Roofing for 13 years. To take from what we're doing here is to kind of show our guys that we care about them. We want them to grow and succeed.
There's plenty of opportunity and growth in Progressive Roofing, and the sky's the limit here. Progressive stands among the largest roofing companies in the nation, a scale made possible by our people. Their dedication, combined with a culture rooted in collaboration and trust, has built a team that consistently delivers excellence at every level. From our beginnings as a modest family operation in Phoenix, Progressive Roofing has grown into a nationwide force with more than 1,700 employees, four generations of roofers, and 12 branch offices spanning coast to coast. Honestly, what makes Progressive really great is the people. It's the dedication. It's the camaraderie. It's everything that we have to offer when we go to each single project. There's no challenge that they can't face. Behind every project is collaboration. Our teams work side by side with clients, vendors, and partners to ensure expectations aren't just met. They're exceeded.
We specialize exclusively in commercial, industrial, and institutional roofing. That focus means we bring unmatched expertise to projects of every size and complexity, from massive industrial facilities to specialized institutional needs. And because we are certified by every major roofing manufacturer, we provide a single-source responsibility and long-term peace of mind. With decades of proven performance, a culture rooted in safety, and a people-first approach to growth, Progressive Roofing is building a future as strong as the roofs we put in place.
Good morning, everyone. My name's Nick Hadden. I'm the lucky guy that gets to lead the Progressive Roofing team every day. I'm the Chief Executive Officer, a role I've held now for two years. I took over from our founder, Mark Ferrell, who's been our founder and my biggest mentor throughout my career.
This is my 15th year in my current capacity, but I've been working at Progressive Roofing since I was 13 years old. It was a summer job. I started organizing blueprints and unloading and loading trucks, worked its way into draftsmen, then into estimating and leading our sales team, and kind of into my current capacity today. Hey, I'm David Stowers, the Chief Operating Officer. I've been with Progressive for three years now. And prior to that, I had a lot of experiences. I normally don't go this far back into my past, but since it's Army Navy Week this weekend, I'm a graduate of the United States Naval Academy, spent seven years in the military. And in the military, lots of discipline. And everything that I've done has led me to where I am at Progressive.
So you got the discipline in the military, started working on my leadership in the military, took that leadership, had more experiences at Walmart. I was in logistics at Walmart. That's where the operational efficiencies really came into fruition. From the cost side, I went to the sales side, the growth side at Johnson Controls. So I spent the last 15 years at Johnson Controls growing a business, learning business skills, and taking all of that experience to Progressive has really ended up here. So this is how I got here. Okay, a couple of key notes that we're going to talk through today. We're talking about deepening our customer relationships and leading position and sizable non-cyclical revenue. We do great production work. We do great service work, and we try to stay sticky with our customers. We're expanding geographic reach with repeatable business systems.
We've built the platform as a really good place for family businesses who aren't sure about their future to bring. We can have a great future for their people and part of our great platform. Enhanced talent pipeline and differentiator as an employer of choice. We've made large investments in our people. You got to hear Robert talk about being a people company. At Progressive Roofing, we talk about we're a people company first that happens to install a couple of roofs along the way. And then finally, deploying our Progressive Roofing business system. You got to hear a little bit about a $75 billion total addressable market. With the partnership with TopBuild, we really feel we've just left the launch pad, and we're just getting started. Here's a little bit about Progressive Roofing today.
As you guys can see, we've got about $432 million in 2025 trailing 12 months revenue, at which we've performed $81 million of EBITDA, or 19% EBITDA percentage. We have a great mix of roofing, re-roofing, and new construction and maintenance. Probably the thing you'll hear us talk about that we're most prideful is over 1,700 roofers nationwide. As you can see, we've got a couple of other pieces here that make us unique and make this success story work for us. We have a complementary and comprehensive suite of commercial roofing services. We want to be involved in the entire life cycle of the building. So that starts out from the original design that comes out through the construction, past that from maintaining to repairing to all the way at the end of it, replacing your roof.
We feel with our business system, we can hop into that cycle at any given time. We have a highly experienced and capable management team with unparalleled expertise. The biggest investment that we've made into our company in the past five years has been in our people. We've created a leadership program, a training and development program, and we're really just starting to see the fruit of our labor. We've turned roofers into businessmen and women and shown them the career path within our organization that gives them unlimited opportunities. We have a customer-centric approach. One of the things you'll hear us talk a lot about is we want to make friendships with our customers. With friendships, we feel that we end up getting loyalty that comes with that.
It takes a lot of work to earn a friendship, and once you've earned that, one of the benefits that you get is the loyalty. We have attractive and diverse verticals. Our business runs on strategy, a combination of strategy, both being in the K through 12 markets where you're going to be investing in a community and part of it, as well as chasing larger opportunities in the things like the data centers and some of the other booms that you're seeing. We have a track record of profitability and expanding geographic reach. Our model is simple. We bring good people to good markets with good leadership, and again, with just getting going with TopBuild, we feel we're really just getting started down that path. Here you're going to see a layout of where we've got our branches across the country. We're licensed in 41 states.
We'll go anywhere for a customer with the right opportunity for us and the right need that the customer would have for us to travel. For us, this whole program works with the comprehensive services that we offer. And first and foremost, it starts with the roofing assessments. Everything starts with an assessment. It's just kind of like a checkup when you're getting into medicine. It's where we demonstrate our abilities and our proficiency and start to build trust with the customer, find the issues that they're having, find solutions, provide them in a timely manner. Specification, design, and value engineering. This is where we think we're experts. You think about a roof, first and foremost, it can't leak, but secondly, it needs to stay on the building. And there's a lot more science that goes into that than I think people understand.
It has to do with things like wind uplift, building code. There are certain requirements through different insurance agencies, and we have the skills and ability to put together roofing assemblies that fit the budget needs of any customer. Our expert installation. We're approved by every major manufacturer. In fact, we've reached top-tier status in every major manufacturer. The life cycle care program, once a roof is complete, we educate the customer on probably the most important part of their warranty, which is maintaining their warranty. There are some requirements that the owner has to do. So as soon as the roof is complete, we provide those services for them for a couple of years. We get them signed up into long-term maintenance agreements, and we stay engaged in that facility through the entire life cycle of the building.
And then the emergency repair, always being on call, always being available. Some of these stories that we have are there's a lot of stories about emergencies, but most importantly, if anyone's ever helped someone out in emergency, more times than not, they make a friend, right? When you make a friend, again, that brings back that loyalty. You'll hear us talk about being sticky with our clients, and that's a lot of what it means. So why we win in installation services? We have a dispersed network with local branch empowerment. We understand that people do business with people first, and we empower our local branches to do that with the support that we have at our own branch support center. Strong supplier relationships. We're good buyers. We negotiate direct, and we bring that value to our clients. We understand the budgets and the needs of owners.
We have a customer-centric approach. Again, we earn friendships, and to earn a friendship, it takes a lot of work. It's a two-way street. You can't just go in with expectations of being given something. You have to earn trust. We're the employer of choice. While other people in this industry were investing in intuitive softwares and automation, we invested in our people, their skills, and their abilities, and it's really made us where we're at today. We have a proven M&A process. Again, we're a great home for family businesses that aren't sure what they're going to do and what the future holds for their business. We take care of their people. We show them a career path and how they can climb within our organization, and highly skilled labor, again, over 1,700 of our own self-performing labor. That's what makes us stand out in this market. We self-perform.
We do very little subcontracting. So how do we drive profitable growth? This is some of the magic that we do here. It starts in the bidding process. We identify highly technical jobs across different target verticals, and we sell our skilled labor. We have an idea of what we actually provide, which is labor, and we look for jobs that have the best opportunity for us to deploy that labor. We review technical project requirements and provide tested assemblies based on interpretations. We do the work. We do the research. We find the right solution for the customer. We perform a peer review process within our own walls. Basically, we challenge each other to make sure this is the right type of work that we should be doing and the right type of work for our company to be chasing.
And that lets us get to what we'd call a go, no go for launch. If we don't meet those requirements and it's not something that fits for us, we're disciplined and we'll pass on that opportunity. What that does for us is it lets us target higher revenue opportunities and focus on our return per man there, the labor that we're deploying. On execution, we negotiate with manufacturers directly to capture the best pricing and installation methods. Again, we're good buyers. We understand how to buy direct, how to take it from the truck to the rooftop without multiple people handling it and not buying it from distribution necessarily. We deploy highly skilled labor and, again, self-performing labor. That's such a critical part of the Progressive Roofing solution.
A lot of these owners, when you're looking at these larger-scale facilities, they want that comfort to know that they're going to get the same company and the same people that work for them delivering those results. We leverage technology to track costs. We make corrections in real time. You'll get to hear David talk about that, but that's some of our magic when it comes to the operational excellence. We can see problems happening. We can adjust, and we can make changes to our course. And the key benefit you're seeing there is it enhances our margins. We're able to take a project and make it better, which is very difficult to do in our industry. Post-job, how we stay sticky, right? We educate the customer in what their responsibilities are to maintain their warranty and how we can assist with that.
We actually include that for them in that first two years because we know that's a critical part for them to understand you have to do it. We build that into your original process, and then we sign them up for that opportunity post that two-year period, and that lets us provide annual inspections, get on that roof on a yearly basis, and make sure that it's performing the way that they're expecting, and all this combined, what it does for us is, again, it makes us sticky. We have those maintenance programs. We have the service plans. We're the first person in line when that re-roof opportunity becomes available. Okay. I've got a case study here that we thought was kind of an interesting one to present to you. This opportunity was a new data center located in the rural suburbs.
Didn't have any of the commercial capabilities to develop something of this size, especially in the 60-day timeframe they gave us. 1.1 million sq ft of mission-critical roofing start to finish 60 days. So how we did it? We mobilized our 94-person installation team, and that came from across the country. Our own employees. We used the national support system to put together the estimates, the project management, the leadership, and the safety that it would need. And then from there, we took our manufacturer direct pricing. We made it the most efficient installation we could. We went from truck to rooftop. We used the most optimized, efficient methods that you could do when it came to the installation, new techniques, new tooling, advantages that not everyone has available to them. And it allowed us to maximize our efficiencies by front-loading the dry-in, right?
The most important part, get that building dried in as fast as possible, and then run a second crew behind them to get the completed roofing system finished. The outcome for us was being able to dry in 70,000 sq ft per day. That's about a football field and a half if you're not familiar with the square footage. Pretty impressive. We were able to significantly reduce our project costs because we were buying directly. We were running two separate shifts, and we brought more labor efficiency into the project. And by doing all this, we were able to deliver the toughest piece, which is completing in the 60 days. We earned the trust of the customer, and we were able to negotiate the second and the third buildings that came after. This is just an idea of what the data centers look like.
This was one that we did in, I believe, Columbus, Ohio, just to give you an idea on the scale.
Yeah, this is a good project for us. Nick covered the high level of the process. I geek out on this stuff, so I insisted that we take it down a notch, and so I want to go through the process, which to me is a competitive advantage for us. This process, operational excellence, is anchored in this process. It's broken up into three phases. Each phase ends with a meeting where we can collaborate and align as a team together. Two-thirds of the process is around planning before we even step foot on the job site. It started off with what Nick called the go, no go decision.
Our teams, our sales teams, qualify opportunities through a pretty complex filtering system to find the best opportunities that give us the best chances to win. We'll win that job. We'll then do a handoff meeting. The initiation phase, the first phase, ends with a handoff meeting between sales and operations. That's where we can collaborate on promises that were made during the bidding process. We consider ourselves as operations folks, promise keepers. That's where we can start to really understand what the promises were made for that job. We then enter from the initiation phase into the planning phase. The planning phase is probably one of the most important phases because this is where we can really build the roof before we actually install the roof. We go through our assemblies. We work with our manufacturers.
We figure out we're not loyal to any one manufacturer. We leverage those relationships to buy at the best cost. This is where TopBuild, we just started scratching the surface with their relationships. I thought we had really good relationships. They have really good relationships. So together, now we can leverage that buying power. We start to plan our labor. We start to do our quality control program. We start our safety program. This is where we really go through all the programs and communicate to everybody who's doing the installation, again, about the promises that we're making. The planning phase ends with the pre-construction meeting, and that's where we all collaborate. We problem-solve. We get on the right page, and then we enter the execution phase. The execution phase is where we install the roof.
This is where we have to follow up and communicate our plans on a daily basis. Weekly is too long. Problems happen in construction every day. This is where we can get. We send our expectations to the field. We get the feedback from the field. We make adjustments. Nick talked about the problem-solving as a key attribute. Solving problems early preserves profit. When you solve a problem late, when you find the problem at the end of the job, it's too late. You've already spent the money. It's gone. So the key to our profitability is identifying these problems early so that we can solve those problems and keep the profit. That project or that process, the execution phase ends with the last meeting that we have before we turn it over to service, which is a close-out meeting.
And then what John talked about in operational excellence around continuous improvement, that's our ability to learn what went well on the project, what didn't go well on the project, what do we need to do better. And then we train. We got the sales team in there. The operations team is all learning from that project. To me, this is one of our biggest. It's a true competitive advantage. This is a repeatable process. We can take this process to any size job anywhere in the country. It's a simple process that we use. We use our technology to make sure that it gets followed, and we contribute this way. So I'll just give you a quick case study here, and then we'll kind of wrap it up. And then we got a break right after this.
This case study is not necessarily about the complexity of the roof that we installed. It's more about the complexity of the logistics. So I wanted to reiterate around the planning side of it. This was a brand new customer of ours. It's a $3 million project, which is a nice sizable project. It was competitively bid and competitively won. However, this building had 22 buildings. This customer had 22 buildings. Each of the buildings was surrounded by trees. This is around last Christmas. Each of those trees had Christmas lights in it. They told us, "Do not damage the trees." So the promises that we made were, "Don't damage the trees." And so our staging area, our equipment, everything was across the street. The customer kept the occupation, so none of the buildings were unoccupied. So we had to dance around the employees coming and going.
We were able to plan our loading program, our labor program. In the end, we beat our labor estimate because that's the number he talked about, the army that we have, the army of roofers. That's where you can let it. That's where you can have margin erosion pretty easily if you don't plan that labor. We were able to beat the estimate by 20%, which pushed our margins higher. As a result, we got a referral to the next project within the next six months. This $3 million project turned into $6 million above market margins, and it was a really good job for us. I'll kind of close. As Robert talked about earlier, and people have mentioned about the total addressable market, the roofing industry is a very highly fragmented market, but it's a ton of runway for us.
We have a huge opportunity to capitalize on our processes, scale up with our labor to go to any market in the country. We have relationships at the local level and at the national level. These national-level relationships are bringing us into markets that we're probably not right now. The job that he was talking about on the slide on the previous, that was a customer taking us to a new state, and then we were able to capitalize. We were able to put a foothold in that state. From there, we're talking about expanding it with this process that I talked about. We can do this process anywhere, anytime, any size roof, and we have the technology to keep us on track. Our people are, as everybody has talked about, our talent development is critical.
And so we really have invested a lot in our training and development programs. We do performance-based incentives, and we pretty much guarantee a safe working environment for these roofers. And finally, we're able to scale this. We have been able to, through our acquisitions, been able to scale this very easily moving forward. And so for us, that is commercial roofing. So it's been a long morning, so we'll take a break. Let me see what time it is. It's 5:00 to 10:00. So let's come back at 10:05. Is that good, PI? So 10:05. Thank y'all very much. Thank you.
If we could please have everybody take their seats so that we can get started again.
Our specialty distribution business redefines excellence and delivers a differentiated customer experience. We provide a diverse range of products, from building envelope insulation to custom fabricated mechanical insulation to specialty products.
TopBuild's specialty distribution segment is the leading distributor of energy-saving insulation products to the commercial, industrial, and residential end markets. Our geographical reach is unmatched, with more than 250 branches, including more than 20 in Canada, enabling us to provide a one-of-a-kind customer service model that works seamlessly and guarantees that the highest quality material is delivered correctly and on time, always. For commercial and residential contractors, we distribute a wide range of in-demand building envelope insulation products. We offer a comprehensive range of top-quality materials, including fiberglass batts, blow-in insulation, spray foam, rigid board, and metal building insulation. We also provide gutters, safety gear, and accessories such as fasteners and sealants. We redefine excellence in the insulation and building supplies industry by also providing innovative services with the customer in mind, like flexible job site delivery and specialized application training.
We offer reliability, expertise, sustainability, and a commitment to helping our customers succeed. We are also the leading provider of mechanical and fabricated insulation in the U.S. and Canada to the commercial and industrial end markets. Mechanical insulation has both high and low-temperature applications and includes protective coverings for pipes, ducts, and other equipment to regulate temperature, reduce noise, improve energy efficiency, and keep people safe. Our customers range from engineering procurement and construction firms to general contractors, insulation and specialty installers, and facility maintenance and repair companies across a variety of industrial and commercial end markets. Our mechanical and fabricated insulation products are used in exciting and growing industrial vertical markets like data centers, energy, and industrial manufacturing. Our manufacturing customers reach across many industries: semiconductors, food and beverage, chemical, refining, alternative fuels, liquefied natural gas, pulp and paper, metals, and mining and pharmaceuticals, to name just a few.
We also supply vertical markets in commercial sectors such as healthcare, education, transportation, entertainment, and marine. What really sets us apart from the competition are our custom fabrication capabilities. We can provide a wide range of insulating materials produced specifically for our customers' unique projects. More than 40 of our locations have advanced custom fabrication capabilities, providing precision cutting and creating custom-fit components to ensure that customers receive the right fit for the right application faster and with less safety risk than on-site fabrication. We also offer specialty products such as pre-engineered metal building insulation and custom fabricated innovative insulation solutions. Technical expertise and geographic reach are key competitive advantages that help our specialty distribution business attract and retain customers.
Our commitment to innovation helps keep TopBuild at the forefront of the insulation distribution industry through unique programs like automatic order replenishment for maintenance and repair operations customers, and our industry-first e-commerce solution. We help customers get what they need when and where they need it every day.
All right, good morning to all of you here. The question is, why is specialty distribution important to TopBuild? That's what I'm going to talk about today. My name is David Fischer. I'm the president of the specialty distribution business for TopBuild. I came to TopBuild through the Distribution International acquisition. I have 35 years of experience in distribution, started with my degree from Texas A&M, which is in industrial distribution. I have 28 years of P&L management experience in the electrical business. I spent a decade at General Electric, specialty distribution, building materials.
I want to just talk about some of the best practices that we do here at TopBuild. I'm really excited to share with you that the specialty distribution business is one of the fastest-growing businesses at TopBuild. As Robert shared, we've really changed the landscape across the customer base that we target. We're a leader in the commercial, industrial, and residential construction segments, as well as doing maintenance, repair, and operations in the commercial and industrial segments. The way that we continue to drive profitable organic growth and increase non-cyclical revenue is by providing our customers with the best-in-class services and solutions. We have deep customer relationships and a comprehensive vertical market strategy, which I'm going to talk about later, across every type of commercial, industrial, and residential construction. We have a proven track record of driving synergies of acquisitions. Robert shared 24 acquisitions since just 2022.
So we have a very good playbook on how we drive synergies. We're committed to our most recent acquisition to drive $35 million-$40 million in synergies at SPI. We're going to do that through our operational excellence, which is enabled by a robust and evolving technology and data analytics platform that continues to inform labor, automation, and pricing decisions. I'll start with just the businesses. $3.1 billion in the specialty distribution business has significantly grown over the past four years, producing 16% EBITDA. We have 35 branches, I mean, 3,500 employees. And the breakdown of that revenue is 45% is mechanical insulation, and I'm going to explain what exactly that is a little bit later. 42% for building envelope in the building, and then 13% in specialty products. We have primarily five business units, Service Partners, services, the residential and commercial building envelope business.
Silvercote focuses on metal building insulation and all aspects and markets that use metal building. Distribution International and SPI both are leaders in the mechanical insulation specialty products and leaders in fabrication. And then Canada, across our areas of business, does the commercial and industrial job up in Canada. We have 250 specialty distribution branches. It's a comprehensive portfolio spanning all across North America with building envelope, interiors, mechanical systems, and specialty products. Not only does each business specialize in product and service in its own specific product and service offerings. Like Robert said, we cross-sell across each one of those geographies the different businesses for different scopes on the same exact project. Whether that's building interiors, mechanical, metal building, our sales teams are able to cross-sell and bring solutions to our customers' needs in any construction segment, commercial, industrial, and residential.
Now, I had a question earlier from someone outside asking about what is mechanical insulation and why is it important. And I want you to think about every single liquid or gas that is being processed into something else is being heated or cooled. The very air that comes into this room has been heated or cooled, goes through a duct system that is insulated to bring the desired temperature into this room. So it's affecting right now you. Oil converted into gasoline, food being cooked and processed, food and beverage industry, electricity using natural gas turbines or steam turbines, all of that is insulated. Liquefying natural gas, which is a very big industry for us in vertical markets. I'll talk about that in a little bit. So those are all just few examples of how mechanical insulation really touches every part of our lives.
Any place that you're trying to regulate the temperature, reduce the noise, ensure safety for your personnel, provide energy efficiency. They all use mechanical insulation. A significant portion of the specialty distribution business is MRO, standing for maintenance, repair, and operations. When you're processing a liquid, that liquid is going through a pipe, and you'll see examples of the pipe cover outside. What's important is that you keep what's going through the pipe inside the pipe and that it's insulated. So periodically, depending on how corrosive the environment is, the insulation is taken off, the pipes are inspected for corrosion, sandblasted, recoated, and re-insulated. That creates a repeat, same location business for specialty distribution business. So that's the takeaway I want you to take from that point.
Specialty distribution has a tremendous opportunity to participate in every single type of construction in North America, as well as provide the maintenance, repair, and operations for the insulation. The nationwide footprint shows that we have the right inventory, subject matter experts at the local branch to help customers with their insulation needs, the right product at the right time, every time. We have an unmatched geographical reach with our fabrication capabilities. Every type of the specialty distribution business touches fabrication. So we're fabricating mechanical products, we're fabricating metal building insulation. And in the residential sector, our gutter section has been one of the fastest-growing organic growth models that we have. So where we've been delivering insulation for a house being built, to that same house, we'll deliver gutter product that we've fabricated to a different contractor working on the same house. So why do we win?
The specialty distribution business is we are leading in this space, and I'm proud of that fact. My personal vision for our business is for it to be a leader in every single one of our geographical branches, so it's 250 branches, in the commercial, industrial, and residential segments. So we accomplish this by driving the best-in-class customer experience with comprehensive product offerings to our long-term customer relationships and continue to invest and innovate in technology with our digital platform. Just the other day, I was seeing a customer, and what resonated with them was they were doing commercial work, and they had one of our businesses delivering them building envelope insulation. We were providing them mechanical insulation for the plumbing portion of the business, and then they also had another project going on for metal building insulation.
That just shows an example of how we had multiple TopBuild customers calling on this one specific contractor and cross-selling multiple types of products to him. That is repeatable and scalable and just a great example. Underlying everything that we do is operational excellence. You've heard John talk about it earlier. Really, we raise the bar for distribution and operational excellence. We have minimum standards for all of our KPIs. We have a proven playbook that drives rhythm and rigor that drives results. By chasing every project in every vertical market in the commercial, industrial, and residential segments, we show that we have value-added services for multiple scopes of work on the same project. Our MRO focus is the broadest and most diverse offering of anybody in the space.
Our proven playbook that shows a track record of margin expansion and OpEX discipline and supply chain operational improvements and price expansion, all at the same time that happens in that playbook. We will use that same playbook to provide the cost synergies with SPI. Overall, as John highlighted earlier, we're leveraging operational excellence to continuously drive outperformance and profitable growth. Driving profitable growth is in our DNA. I'm going to explain a little bit later about how in depth I go in the vertical market strategy at the local branch level and how it's the basis for our organic growth. But Jennifer talked earlier about our development plans, primarily around the MIT, which stands for Manager and Training Program. We also have a branch manager development course for new hires, as well as custom-tailored programs that we do for more experienced associates.
The key to any training or digital tool that we use in specialty distribution is that it provides Salesforce effectiveness or operational improvement effectiveness to be more productive. I have to reiterate the broad reach of all the TopBuild companies across North America. Every single type of construction in the commercial, industrial, and residential segments in every state, in every city, every single project is what we're chasing. Innovation is one of our values. And if you notice, there's a big picture of a really big pipe on here with some insulation on it. That insulation is an engineered elbow that Distribution International at TopBuild has a patent for. That elbow is specifically designed, computer-aided design, cut on a CNC machine for that specific pipe. It shows up to the job site.
If you look really closely, you can see a numbering system on it, and it goes together with instructions on the site for our customers to be able to install this elbow rather than fabricate it on-site with a detailed set of instructions, and it saves them 40% labor savings. So that's a significant savings for them and just one of the examples of how we're driving innovation to help our customers. So here's an example of our industrial vertical markets here in green on the side. My goal is for us to be number one or number two in every single one of those verticals everywhere we have a branch in those 250 branch locations. Some of the recent projects that I see that are going to provide a very strong runway for the specialty distribution business are some pictures here.
First off, I want to talk about data centers. There's over 400 data centers in construction right now, today. Data centers produce a lot of heat. That means there's a great opportunity that they need significant cooling systems to cool them down. In addition to that, we provide the building envelope for the building. We provide the insulation for the cooling system that's bringing the chill water to the building, to the equipment to cool it down. And then we also, every one of those data centers needs a lot of power. So whether they're having on-site power or adding to the local power plants, we have experience in all of that. And the plants, the data centers, need additional power, whether that's a natural gas turbine or a generator. So we're providing the insulation for those as well. Semiconductor plants is another one that I've listed here.
We've participated. That's in the industrial manufacturing market. We've participated in every single semiconductor plant that's been built in the U.S. over the past couple of years and will continue to. So that's a vertical market I see some runway with. Liquefied natural gas, I'll dig in a little bit deeper on that, as well as the petrochemical industry are both areas that I see a good runway for us that not only provide a significant amount of construction, but also maintenance and repair and operations after we've completed the construction. So in addition to the industrial market, the commercial market has the vertical markets that we chase are listed here in green.
The commercial segment is one of the most exciting for specialty distribution because every one of the TopBuild businesses participate in it, whether it's insulation install, roofing install, supply of building envelope and interiors, mechanical insulation, are all required on commercial construction jobs. A few vertical markets highlighted here that I see continued growth for us are healthcare, education, and transportation. So we try to chase every single one of those segments in every geography that we have a branch in. Now I'd like to talk about a case study for one of our key clients. This is a liquefied natural gas plant that was installed in Plaquemine. That's the way you pronounce that word, Plaquemine, Louisiana, which is down almost at the mouth of the Mississippi River. It's one of the most farthest places you can go along the Mississippi before you get into the Gulf of Mexico.
With a project of this size, there are very few companies that have the project management experience and capabilities to custom fabricate and provide insulation across multiple states. TopBuild companies have participated in most LNGs built in North America. Our experience is that we participate in the construction, and then we also know the facility so then we can provide the MRO after it's done. This project, I personally tracked for five years before it was built because I live in New Orleans, and I knew that it was going to be built, so I tracked it for five years. LNG projects are very large scale. This specific job was 630 acres, 1.3 mi along the Mississippi River. It has a docking station. It had four 200,000 cu m storage tanks, all insulated, and two gas turbines.
We provide the insulation for the power and then all of the piping and everything to do with the plant. From the initial design through completion of three years, we provided mechanical insulation exceeding $50 million in revenue. This is a picture of it. It's big. It's really big. I've walked it. That's a full day to get around. Not only bringing the natural gas to the facility through two 42 in wide diameter pipes, 12 mi and 15 mi each. Modular construction was used on this job. Modules were made in other states and then transported along the waterway, brought to the facility. We insulated the modules. Every portion of the job, we did. Then once the modules got to the job site, we provided the insulation for the tie-in work in roughly every part of the project.
As with every LNG, TopBuild companies have the geographical span combined with technical expertise and project management skills that are scalable to any size of job, whether it's a house, a residential house, all the way to a 630-acre facility. Next case study I'd like to highlight is a major warehouse club customer. This leading global wholesale retailer was looking for a metal building insulation solution that was custom engineered and scalable worldwide for all of their club stores. Silvercote has provided the metal building insulation for the builder of 230 stores over the past 10 years. This is a prime example of our capability to scale this service for all construction projects in this segment.
Our fall protection system, I don't know if you noticed it during the video when it showed a guy getting caught, fall protection system that we have put in has prevented any lost time injuries. There have been zero over those 10 years and the 230 facilities built. In addition, our custom engineered insulation has been compliant with every country's energy codes in the specific locality, so the key here is that we create unique solutions for our customers that standardize and scale those solutions to achieve even greater efficiencies. So in conclusion, I just want to point out that we are a leader in commercial, industrial, and residential segments in construction in MRO for industrial and commercial segments. The way that we continue to drive profitable organic growth and increase non-cyclical revenue is by providing our customers with the best-in-class services and solutions.
We have deep customer relationships and a comprehensive vertical market strategy across every type of construction. We have a proven track record driving synergies of acquisitions. So we will deliver $35 million-$40 million for our SPI acquisition and through using our operational excellence that is enabled by a robust and evolving technology and data analytics platform that continues to inform labor, automation, and pricing decisions. Thank you for your time. And now we'll do a little Q&A.
We're going to host our first Q&A session here. So I'd like to ask our presenters from this morning, from the businesses, to please go ahead and head to the stage and get situated. And while they do that, you guys know how this works. We've got a couple of traveling mics in the room. Raise your hand if you would like to ask a question.
Please state your name clearly as well as your firm before asking the question. Try to keep it to one question with a follow-up so that everyone has a chance to ask a question. And as a reminder, if you don't get to ask a question at this time, we'll have everybody available for Q&A afterwards as well as at the lunch.
Yep. So I'll quarterback the Q&A today. So definitely open to the questions. But as PI mentioned, we'll have another Q&A at the end before we break out to lunch. Then we have about an hour for table breakouts at lunch as well for all the business leaders and topics. So we've got each business leader up here. And also you heard from Jennifer and Steve this morning as well. So we'll get started. So we've got a lot of questions. Phil, you want to get started?
Sure.
Well, my question is for Nick and David. I guess it was really impressive in terms of your presentation, the multi-generation building that business. I guess what weren't you able to do as a standalone versus being part of TopBuild going forward? And how do you scale the business? Right? M&A is going to be a very big part of the opportunity going forward. How do you kind of integrate these deals? And how long does it take to kind of companies that you acquire embrace the DNA of Progressive?
Good. Well, first on to the first question that you asked, what weren't we able to do? With this partnership with TopBuild comes the ability to look at every other roofing contractor that's in our space. There's nothing that's off-limits versus acquire. So that immediately gets released for us.
A lot of you asked the question too, what is our biggest lever for growth? That has been identified 100% as M&A. Having the cash flow that we have available to us and now the partnership with TopBuild and the understanding of how to go attract and find the right companies, use the skills that they've done with all of their acquisitions over the years, and really expedite kind of the process that you've talked about, which is how long it takes to integrate. There's no golden answer for that. Every company is kind of unique, but we're getting it more dialed in every day with the partnerships. We've got the experience from the leadership team. You'll get to hear Sri present a little bit later.
He's just been incredibly impactful on our entire team and building our own integration teams, using the playbooks and the collateral that they already have and just perfecting our craft.
Yeah. I think, Phil, I think it's great points that Nick made. So this has been one of our first areas of investment that we've made is around the M&A side, the M&A team. You're going to hear from Justin Rojas, who is the point person within Progressive on commercial roofing acquisitions, but then the integration team. So it's not just the upfront business development side, but dedicated integration team because as we go down this path, I mean, Progressive has great local relationships. They're very well known across the country for the type of business they run. So they've got great relationships. Some of the folks that they've acquired have come in with great relationships across the country.
And then we TopBuild have some of the bigger relationships. So we're tackling the M&A from both sides and actually making an investment here so we can move fast with M&A, integrate appropriately, but part of the same discipline process that TopBuild has.
Sorry, Phil, Stephen, you were next.
Yeah. Thanks. Yeah. Just a question, I guess, for the TruTeam and the Service Partners businesses. If we go back to 2018, late 2018 into 2019, you had a slowdown in the single-family market and also the multi-family market a little bit. And yet TopBuild was able to perform extraordinarily well through that time period. My recollection was that pricing actually held in better than we would have thought, given manufacturers couldn't get it, but you were able to actually get a little bit.
And then you also had efficiencies that you were able to extract at that time. And it's particularly the latter that I'm curious about. Can you give us a sense for what was actually really going on in your mind? If there were one or two things that stuck out during that period of time that enabled you to outperform on the margin side and how that might be tweaked in this environment given the different kind of situation that we find ourselves, we may find ourselves, and then let's say starts are down 5% or something like that next year.
Yeah. So I'll give you the TruTeam perspective. So I'd say the playbook is very consistent, right? I mean, it's not all that different from things that we had done in years past.
Now, you take a look at facility. We want to make sure that we don't have too much overlap. And we've done some work earlier this year where we did an optimization project within the business, which helped us recapture some of that margin as we have had a little bit of volatility with pricing. So for us, it's just maintaining constant with the business, continuing to pull out those inefficiencies as we find them and making sure that we're appropriately sized based on where the market is heading. So not all that different from how we ran the business in 2018 and 2019. The implication, though, from the street's perspective is that you've already done that, right? So does this put you in a little bit of a disadvantage because that's already been accomplished and low-hanging fruit's done, that kind of thing?
So that's, I guess, the essence of the question. Yeah. So I think we always expand on the low-hanging fruit, right? That's the easy stuff to grab first, and then we have to work. And that's where our team comes into play, the branch support center, really directing us, "Okay, there's opportunity here. Maybe we didn't see it at first. Let's dig deeper." And I think Jeff even mentioned yields that we've improved, right? There's so many different levers that we can pull to enhance the business. And I think that's why it's not like it's one and done. This is a consistent cadence that we have within the business that we're always driving that operational efficiency. So I think it just goes hand in hand with what we do every day.
Thanks. Good morning, Mike Rehaut, J.P. Morgan . Thanks for all the comments.
My question is for Dave and Nick. You kind of laid out a broad landscape of opportunity, and M&A, clearly a lot of opportunities there. But I wanted to focus on organic for a moment. Dave, you talked about kind of wanting to be number one in every end market and every branch and every city, every state. So real broad perspective there in terms of what the opportunity is. But I'd love to get a sense of how does that boil back to organic growth and how you see that path over the next two or three years. And a similar question for Nick, kind of along those lines.
The vertical market strategy and bringing that down to the geographical of every branch's location is what's driving the organic growth.
So it's a diversification across all of those segments, but then down to the point of every one of those verticals in each branch's geography is, I think, something that we're doing that not many people are. So I think that not only diversification, but also then diversifying the product scope that's offered. So gutters is a prime example of the residential segment that, back to your question about how have you been able to continue revenue generation, and it's by getting a larger share of the wallet at the project level, even though it's not the same contractor. Does that kind of answer your question?
I think if you, so if you look back, and let's talk about the DI history as an example, and you talk about organic growth.
If you look at the DI business, and we bought it in 2022, the industrial business was strong through the middle part of the country, and the edges of the country was mainly commercial. And so by taking this vertical market strategy, now you're taking that across the country where now the coasts, they're getting stronger industrial, and the mid part of the country has gotten stronger commercial. That's the strength in that vertical market because you're taking that across the country versus certain areas being that strength in one vertical market. Now you're getting them strong in all the markets. And if you look at this year and the results of TopBuild, that's really driven that organic growth. And while we've leaned in so much on commercial industrial, this year's residential has been slower.
Right. Let's take somebody, maybe Nick, one that wants to answer.
Yeah.
I'm going to answer. Yeah. Organic growth, I mean, you're hitting one of my favorite pieces. That's what we're living every single day. Talking about my roots, where we kind of came from, we were originally known as just an Arizona roofing company, and you've got to see that expansion now to all the different states. We're in 12 plus, and we brought that skill set that we developed in Arizona, and now we've traveled with it. You're seeing an explosive amount of growth for us in the state of Texas, and that's through exactly what me and David preach every single day. It's about growing new additional talent within the business, making them competent. There's lots of people that are in the roofing industry that have all the right answers to give you, but they don't have the right skills to deliver.
And they get exposed over that period of time. And that's really enhanced us being a people business, investing in our people, making roofing professionals, making them part of the community, building schools, building these large data center opportunities, focusing on this verticals. That's in the DNA of Progressive Roofing. So we feel we've already done a fantastic job, and we're continuing to do a fantastic job on the organic growth. And now we're turning into students from TopBuild and everything they can tea ch us through the M&A opportunities.
Keith?
Thanks. Keith Hughes, TruTeam is also a commercial roofing question. Just building on that M&A comment. As you get bigger, will your ability to buy truckload and direct product delivery to the job site grow? Or is it every job so independent that that kind of size leverage doesn't exist?
You're asking me as we continue to grow, is our pricing going to continue to improve?
I guess my question more on the cost side is you've been.
Well, more or less direct truckloads, not going through distribution, the volume that we'll be able to work through the engine here.
Absolutely. We make it a competitive environment for the manufacturers. I think you got to hear us briefly talk about it. We choose solutions that's best for the customer. We feel that customers come back to do business with Progressive Roofing. They don't necessarily pick a brand name of what they want in their building. And we utilize that advantage by going to these major manufacturers and saying, "Hey, we are growing this opportunity, and your pricing is not necessarily in line. So that might not be an opportunity for you to grow with us.
You might want to take another bite at the apple." We feel we're pretty good buyers in that space.
And I think one thing, Keith, that we'll be able to do is if you take, so go look at some of the built-up systems that are out in the lobby there. If you think about some of the polyiso boards, the spray foams, those types of things, not only will we leverage the scale, but we'll leverage our distribution network, which will only facilitate better logistics and stuff on the roofing side of the business. So all that works together here in the Playbook and what we're putting together.
Will you be adding more commercial roofing-focused products within your current distribution to be able to serve? The job site's changing for these guys all the time.
Yeah.
I don't know that we'll be expanding into some of the unique commercial roofing products, but there's definitely some crossover in our insulation products today that we'll be facilitating for the commercial roofing for the future. All right.
Thanks.
Good morning. Rob Davis, ACK Asset Management. Just had a question regarding commercial roofing. You mentioned you're 12 branches licensed in 41 states. Is there an opportunity organically to leverage the TopBuild footprint with distribution, building out your own facilities, greenfield leveraging their own facilities where you can expand, service some of those 41 states more from local branches or otherwise expand your physical geographic presence?
Absolutely. That's one of the first things we found out in our first six months of working with Robert is just the availability to us for expansion.
It's difficult when we're running the business every day and we start thinking about wanting to get a larger facility or a larger footprint in different locations. The resources are readily available to us in TopBuild. So it makes it to where we have partnerships in these tough decisions and it expedites the process for us.
There's probably two locations that are on the radar right now where they'll leverage a TopBuild facility.
I think we have time for probably one more question, and we're going to have plenty of time later as well. So front row.
Great. Thank you, Rafe Jadrosich at Bank of America. Just on the TruTeam side, sort of talked about the opportunity to improve the performance of certain branches. Can you talk about the margin difference between your best-performing branches versus that bottom quartile?
What is the opportunity to move that up and just help us quantify that?
Yep. So I'll give you an example. We talked about the spray foam yield improvement. So we just recently conducted an exercise across roughly 150 or so of our locations, and we were looking at the performance of that product. And the average across all the branches where we made those adjustments was roughly a 10% improvement in yield. That's not necessarily applicable across the entire footprint, but in that particular example, which is a significant portion of our business, that's a good reference on where we did drive some of that improvement.
I think the mindset is, guess what? Somebody's always in the bottom 10. And so you can move some up and some will fall in the bottom.
It's just a continual cycle of working that bottom 10%, whether it be products, customers, branches, installers as well. So there's a constant churn of that. Okay. I think we want to keep moving on with the presentations, but again, we have Q&A a little bit later and over lunch. So with that, we're going to get into talking about M&A and digital. So I want to thank you guys. I want to introduce Joey Viselli, who is TopBuild's Chief Growth Officer. And Joey will kick off talking about the M&A competency and then he'll be sponsoring an M&A panel discussion as well. So Joey.
Hey, thanks, Robert. Appreciate it. Hey, my name is Joey Veselli.
Before we go into the exciting world of M&A, which to me is very exciting, and I hope it is to you as well, I want to talk a little bit about myself. I spent the first 15 years out of school at Procter & Gamble . I rose up through the sales and then the marketing functions there. Eventually got to manage some global brands. That was a great experience for me. Then I also spent time at Goodyear Tire and Rubber Company. I ran their marketing and brand management and product development, product management functions for North America. Then in 2009, I got to enter the exciting world of insulation. I did that by joining the management board of Knauf Insulation. If you're not familiar with who Knauf is, they are the second largest producer of fiberglass insulation in North America and in the world.
They're also involved in a lot of other businesses that are based in Germany. That was a great change for me. I tell you, if you want to do something meaningful, there's not much that's more meaningful than positively impacting the energy efficiency, the sustainability, the energy independence in North America. There's not a better way to do that than helping insulate buildings, pipes, processes, all the things you can do to drive down energy consumption. I've really enjoyed my time in this industry. So I was still in this industry in 2021 when Distribution International was purchased by TopBuild. And that's how I kind of came into this company. I'm one of the people many people are going to hear from today that got to experience that M&A process myself, got to experience what it means to be here post-M&A process.
It's been great for Distribution International, just like it is for most companies that TopBuild purchases. So let's go a bit into some things we're going to talk about up here. Robert talked about our total addressable market being about $90 billion now. So as a $6.3 billion company, that gives us tremendous upside, tremendous runway across all of our verticals, across all of our key pillars. We strive to be, and we believe we are, the strategic buyer of choice for people who are looking to sell their businesses. We have a team of folks who are out there on a kind of constant basis looking for those opportunities. And it's great to sit down with them. We sat down with an owner recently.
We said, "Why are you thinking about selling to us?" He said, "My people are continuing to grow, and I think they're growing faster than our company is. And I don't want to limit their opportunities. So I want to send them somewhere where they have a lot of upside opportunities for themselves." And that's an incredibly noble reason to sell a business. And we're looking forward to continuing those talks to them and hopefully finalizing those talks with them and bringing their folks into our business. If you think about long-term prospects here, we don't just want to be the strategic acquirer of choice. We want to be the strategic employer of choice as well. And I came to TopBuild through an acquisition. You're going to hear from a lot of folks today.
I think the majority of us here, most of the TopBuild folks who are over here, raise your hand if you came to TopBuild through an acquisition. So this isn't a place where you just send your company. This is a place where you bring your people. This is a place where you can thrive. Your business can thrive, and your people can thrive, and that's our proposition to these folks. We can tap you into all of our processes and help you improve your businesses, and we can learn a lot from you as well, so we do have a rigorous process that we put all of our acquisition prospects through. It starts with identification. Our M&A team teams with our field leaders to constantly be looking for opportunities.
And then we stay in contact with hundreds of them at a time across all of our main pillars. And that means that when they're ready to sell, it might not be today, but we're talking to them. We're forming a relationship with them. We're bringing them along. And when they are ready to sell, they know we're ready to buy. Right? It's a good conversation for us to have. We also have a dedicated team that does diligence. And diligence isn't just about financial diligence. We want to do things like we want to get to know very quickly if there's a reason why we have to say no on either side. We don't want to waste each other's time. It's not productive. We can also identify things in their business. We can go, "This is a reason we might not want to purchase you today.
But if we can fix these things, if you can fix these things, you can come talk to us again." We can kind of help point them in the right directions for making their business, getting it to the point where we're ready to buy it. We also take this opportunity, though, to learn what they do well. Because one of the secrets of our success is we know that there are people out there who still do things better than us. We can learn from every acquisition we make. And we have the processes. We have the technology to take their best practices and spread them across our other businesses. We're not just there to improve them. We know that they can help improve us as well. And that's key to our process.
Finally, we have a cross-functional team that helps to integrate those businesses and gets them along the lines of that process. So we've learned how they can affect us positively. We can learn some of their shortcomings. We can integrate them quickly into our systems and processes. And then they can benefit from all the things that we benefit from as well. Right? We have a great dispersed leadership and management style where we empower the field. Right? We have great relationships with our suppliers. We have a single technology platform that unifies us and unifies all of our processes. All the things that help drive our organic growth, we can quickly transition and drive their organic growth as well. You heard about that from some of the folks who've recently been acquired as well. So I talked about our processes.
I'll talk a little bit about our pillars now as well. On the left-hand side of that screen, you're going to see insulation services. That's the TruTeam business you saw up here. A lot of upside. We tend to get quick synergies here because we have a lot of purchasing power. We have a lot of experience making those businesses successful. Still a lot of runway there. On the far right, you're going to see specialty distribution. David talked about that. This is the distribution of building insulation, but also the fabrication and distribution of mechanical insulation to the commercial and industrial end markets. You can see how dedicated we are to that pillar for our actions this year. Right? We purchased a $700 million SPI business just a little bit earlier this year. And we've done several other acquisitions in this space over the last year or so.
So great pillar for us, very full, very robust pipeline there. And finally, that big center pillar you're seeing there is our newest pillar. And that's commercial roofing insulation. And Progressive, you heard from them several times. You'll hear from them again. They bring not just a solid M&A platform to us. They also bring a solid team to help execute that platform as well. So again, very diverse market, very dispersed market, great upside, great opportunity for us as a company. So as a $6.3 billion company within this $90 billion total addressable market, there's no reason we are able to fill up all these pillars with great opportunities for M&A. So I've talked to you about the process a little bit. I've talked to you about the pillars a little bit. I want to talk to you about the people as well who are helping drive success here.
You guys can come up here while I'm introducing you. Jeff Caswell is our Vice President of M&A for all of TopBuild. Jeff has been a CFO and a COO. He worked for a very large insulation installer in their M&A function. During his nine years there, he led 70 or so acquisitions. He integrated those acquisitions really well. A lot of success there. He brought us a great Rolodex. He came to us because in 2023, we purchased a business as he was helping run. He was a COO and CFO of SPI. He helped grow that business into a $65 million business before we were able to purchase it. So it's great to have him in here helping us lead our team. And then Justin is leading M&A for our new pillar for Progressive. And Justin has a lot of experience in the energy markets.
He has a lot of experience in construction services before he went to Progressive and became their Chief Growth Officer. And we're really thrilled to have him with us today. And we're going to sit down for just a bit and talk about their experience and the processes that they're helping lead. So we're going to look shorter to you in just a minute. Okay. So you both came to TopBuild through acquisitions. And I want to talk about that process just a little bit, see what you went through and see what that was like. And Justin, you're the newest one here, so I'll pick on you first. When you're helping Progressive with this process, what were you looking for in an acquirer?
Yeah. The common word we're hearing quite a bit is people. 1,600-1,700 employees.
Being introduced to TopBuild obviously means seeing over 15,000 employees. It was just eye-opening that they get it. Obviously, being a people business, that was important to us. Outside of that, in regards to the boutique private equity we were partners with, now on the publicly traded stage, kind of tying that back to our people, it's amazing that we can now have our mindset, our strategies more on perpetuity of growth per se versus kind of that three to seven-year cycle of what's hold of the private equity group transition and who knows what that vision is. This is just way more clear with the partnership today with TopBuild.
That's awesome. Thank you. Jeff, just the same question as Justin. You entered this process. There was a reason you entered this process to kind of talk about the rationale for being acquired.
Absolutely.
In 2018, we were a one-store, $6 million insulator in Augusta, GA. By 2022, we'd grown our run rate to $65 million in sales, half through acquisition, half organically. We had hit a ceiling for sure. Rates were starting to increase, and it was time for us to look for a partner. We looked at private equity. We looked at junior mezzanine and a lot of different options. We settled on TopBuild primarily because we were competing with TruTeam in all of our markets. We could see evidence of all the people-first type culture in our markets. They were staffed by wonderful people. When we tried to hire them away from TruTeam, they said no pretty consistently. We thought this would be a wonderful place for us to land.
You went through that process and you closed.
Then you had to tell your people about it. What was the internal sentiment kind of when you first talked to folks?
So there were a couple of themes that were very clear to us out of the gate. First of all, after the deal closed, Robert and Steve called immediately. So we felt very welcome to the organization. Joey, Sri, and Jeff Kay came to our stores quickly after that. So our people felt like they were part of an organization very quickly. The Branch Support Center, that is a gigantic deal at TopBuild, quickly engaged to interview my people. They made them feel safe and like they had a home and a place where they could continue their careers. So the people-first piece was fantastic.
The second piece, we need to explain this, the do-no-harm sort of philosophy that TopBuild has towards acquisitions is super important. The humility and open-mindedness with which the integration team works on deals allows us to keep the uniqueness of these acquisitions even through integration so they can continue to use those as a strategy going forward. So those two sort of pieces of the acquisition strategy, I think, came through very clearly to our people. We didn't have any kind of customer disruptions. Everything looked business as usual to our installers and customers, and things were very smooth and efficient.
Thanks, Jeff. And just referring to our mantra in M&A, first, do no harm. Don't assume you know everything about a company. Take time, learn about them, make sure they understand our processes, and we understand what they do well.
So that's a big thing that we pound into all our teams. So Justin, similar question. How did that process go for you?
Yeah. It's been excellent. Back to that saying, do no harm. TopBuild leadership came in, kept every word they pretty much promised to us. Major focus was on sincerely understanding our business, understanding what makes us special, understanding how we can scale this together with a lot of the efficiencies that TopBuild brings to the table. The senior leadership team, especially, has been world-class, putting us across the table with other peers within TopBuild that have scaled at the pace we're going. And it's just been tremendous to be able to have that peer across the table to make sure we're walking down this path with wisdom and not just firing from the hip.
That's helpful and excellent. Okay.
So once you went through the process, you went through integration, how do you think that the acquisitions changed the business for Progressive?
Yeah. The big word we keep talking about is people, obviously. Our future targets used to view Progressive as this whale of their people can now progress not only in their local branch but also within Progressive. But now with the TopBuild partnership, 15,000 employees, it's apparent that there's a hunger for leadership, as you've seen the headcount that's been a part of just the M&A process in general. Another key word would probably be growth. Growth has been obvious and apparent that it's going to happen. The pace of play within TopBuild is tremendously different from our private equity partner. Right? There is in-house counsel.
There's a deep bench of analysts that are allowing us to look at these deals of scale and to move at a pace that we weren't before. The other piece, back to the peers with operations, seeing different divisions handling over $3 billion in sales. And you see, obviously, where our revenue is at. We're just excited to have that expertise as we prepare for our national scale. And the last component on the M&A side, I feel it's apparent in the industry that our value proposition is very unique. You're seeing various models around franchising, etc., in the roofing space. But true integration and the expertise with 49+ acquisitions TopBuild has done, it's definitely going to make us stand out in the industry.
Thanks. I appreciate that. We're looking forward to that growth as well.
Jeff, you talked a little bit about how your folks kind of reacted to the acquisition. Tell me about how that went. What changed through the integration process?
Sure. The integration process was very smooth. I mean, first of all, I have to say that being part of a larger organization immediately had a tremendous impact on our margins. We were blessed with that. From an IT integration perspective, there were people at all of our stores that had a great degree of operational experience in our space. They knew how to talk to us in our language, and they knew how to, again, preserve our uniqueness in pricing and how we paid labor into their Oracle system. So that all went very smoothly. Being part of a publicly traded business was a little bit different for us.
Obviously, we had key controls and SOCs that we needed to comply with. They were extremely thoughtful and very, very patient with our people and getting them to understand those controls very quickly. Our folks felt very supported by the team that was at the stores. They spent a lot of time with us at the stores. When the folks left, our team felt very poised for growth.
You went through that whole process. You went through integration. I asked Justin how it changed the Progressive business. How did it change your business?
We grew from $6 million in sales to $65 million in sales in five years. There were a lot of things that we did well, and there were a lot of things that we just didn't have the resources for. Right?
Jennifer talked about the program she provides from an HR perspective on the leadership side. I've had some of my players go through our leadership programs, and they're very good. I've had some of my players be promoted into bigger roles and different roles, and they're thriving. So they're family to me. And I feel blessed that they're sort of blossoming here at TruTeam. From a growth perspective, obviously, I talked about margin expansion already. That was great. But what probably isn't talked about quite as much is the availability in our markets to bid bigger jobs. When you're all on the same production management platform, you can share labor pretty efficiently with one another. It gives you confidence.
And products that maybe you looked at and thought, "Oh, I don't really completely understand that product." You have experts all over the place that can help you sort of shepherd you through to that process. So growth was, I mean, it was easy for us post-acquisition. From an operational perspective, we valued safety in HR, but we didn't have the resources or the time necessarily to have dedicated resources in those spaces. TopBuild rolled those folks in, and they're excellent patient teachers. And we thrived on the safety and HR side as well. So thankful for that.
So we've just gone through, and thank you guys for both discussing how the process went for you and your businesses. But I want to kind of shift to the future and the processes you're managing now. So Justin, you're leading M&A for a big new business platform.
What's going to drive your success as you kind of start to build commercial roofing installation?
Yeah. We bring a proven playbook to the table. But again, 49 acquisitions on the TopBuild side, tweaking that playbook, increasing the pace of play. It's just apparent that we're definitely in good hands in this partnership. The ideal thing, obviously, it is a people business. We're trying to find the right leaders that share the same values. Again, the competitiveness in business with us, making sure that they fit us culturally. Obviously, there's a huge filter there on deal economics, etc. But anyways, once we find that right partner, we're able to implement a lot of our—you've heard Nick and David allude to our Progressive Roofing business systems. A lot of strategies there put into place. Some common ones are obviously tied to buying power.
But a lot of us take a lot of pride in our pre-construction services, our sales and estimating strategies. Obviously, we're able to promote that with our relationships across the nation as well with these targets. On top of that, David alluded to some of the controls we put in place to make sure that these projects or our promises on our sales side are actually executed exactly how we financially model them to be done. We take a lot of pride in just those processes as you heard David speak to them.
That makes sense. So you've got a process there to kind of identify and figure out which prospects you want. How does that translate in your deal pipeline n ow?
On that side, on the deal pipeline, it's extremely strong right now. And it's surprising that it's that case because we do say no quite a bit.
Economics are a big component of this. Finding the right cultural fit, as I talked about already. But with that being said, the industry, it's apparent, as you've seen that powerful pie chart of how fragmented this total addressable market really is. We're definitely excited on our value proposition versus what's out there.
So you want to keep filling that pipeline. What makes it so that business owners want to uniquely talk to Progressive?
Yeah. The big one for us is a lot of these founders, a lot of these owners, they're called on daily. It's known. It's known that this is a fragmented industry. But with a recent acquisition, again, we've gained influencers in the space. Just in our building alone, we're in the fourth generation of roofing. And so when you think about these founders taking inbound calls, yeah, it's not a banker. It's not private equity.
We have operated businesses. We've had recapitalized businesses. We understand the process and the psychology on their side. We're just not viewed as, "Oh, here's another cold call." It's an actual people that are dealing with roofers is something unique and definitely separates us.
That's awesome. Thanks for that time. Jeff, kind of coming over to you, running all the M&A. How do you think about TopBuild's M&A opportunities kind of going forward?
Sure. Absolutely. I'll piggyback off what Justin said. So I've always been self-generating. I've always had to self-generate acquisition activity. When it came to TopBuild, I found two other people that were self-generating. They were also generating acquisition activity. They were an installation contractor and a person with national scale and scope in the distribution business. So I'm now one of three people who is pretty actively outbound calling on these targets.
We are small business people. Right? We understand and talk the same talk that the people that we're talking to speak. So we can develop trust pretty quickly with the folks. So just from an acquisition activity perspective, we're generating great volume. What I didn't really expect that I'm seeing is that TopBuild's been an acquirer of choice for so long. A lot of activity comes to us, right, just because we're TopBuild. We also get inbound activity from customers and vendors. And it's also interesting how deep in the organization at TopBuild people take acquisitions seriously. So I get calls from branch leaders all across the country saying, "Hey, you should probably look at this guy. Hey, you should probably look at that guy." So we have a wide funnel and a full funnel on the TopBuild side.
That's awesome.
Any other advantages you want to point out before we head on?
Well, I would say that from a management team perspective, in regards to the uniqueness and what kind of gives us an advantage in this space, our team, I mean, as I think about my TopBuild coworkers here, they all have M&A in their job description someplace. I collaborate with them on just about every deal I do. So I'm blessed to have a deep, deep management team that supports me in doing acquisitions. We are truly kind of built for working on deals.
Yeah. I think so too. And I appreciate that. And I'll kind of wrap up this conversation so we can move on to the next piece. I want to close where we started. Robust pipeline of M&A opportunities. Huge total addressable market, $6.3 billion company. There's a lot of runway for us.
We like to be the strategic acquirer of choice. We leverage really deep relationships, and we manage those relationships, but we translate that into being the strategic employer of choice as well, and that creates kind of a beacon for us as we look for M&A opportunities, and finally, we have a very disciplined process from diligence, deal evaluation, integration, and maximizing the opportunity for each of these businesses. It gives us a really strong return on invested capital, and we intend to keep that going forward. So guys, thank you for your time. I appreciate it. Good seeing you. All right. We're going to go to the next session right now, which is unlocking growth through our Connected Technology Platform. You've heard about that some today. We're going to dive into it a bit deeper because it really is secret to a lot of success.
It's actually the answer to a lot of questions that you guys have answered. So Sri Pullareddy is our Chief Information Officer. He'll lead this conversation. So I'll hand this to you now.
Thanks, Joey.
And then Madeline Otero is our Chief Accounting Officer, and she'll be up here with us as well.
Good morning, everybody. I'm Sri Pullareddy, Chief Information Officer, TopBuild. 34 years of experience, 18 of which with TopBuild. During my early days, I had the opportunity spending time in one of our Texas branches. So that exposure helped technology groups focus and how they would design systems and applications grounded in practicality and simplicity. My group's focus is working with the business leaders and leveraging the technology to drive profitable growth.
During this presentation, you will hear additional examples from Joey and Madeline, how we have unlocked a connected technology platform to support our strategy. So three key messages. Number one, we continue to leverage our connected technology platform to drive operational excellence across our branch network and deliver that customer experience. You heard this from our operational leaders, from John, Jeff, and David. Number two, our technology platform allows us to consolidate and automate back-office functions, driving significant efficiencies and savings. This is especially critical when you think about our scale and M&A activity. Number three, we have a clear digital roadmap grounded in practical innovation and disciplined approach to further expand our competitive advantage. So let's look at our evolution of digital strategy here. We have integrated and orchestrated the best of the breed of applications with Oracle ERP as the anchor to support our strategy.
We continue to upgrade and invest on our tools and making sure that they deliver operational excellence, among many other things. One of which is actually you see what's in the middle section of this slide. Every single day, our installers, roofers, drivers visit thousands of customer job sites, delivering and installing material safely. This means 15,000 employees across 450+ branches, hundreds of processes, and technology coming together without missing a beat. We do this at scale, backed by the passion of our people to deliver customer experience. With everybody on one platform, all our business units, we have real-time access to a wealth of information across the spectrum of our operations, whether it is bidding, pricing, scheduling, distribution, labor, fleet, inventory, you name it. This access is critical for our branch managers at local level as well as operational leaders to drive better decisions.
Looking ahead, we'll continue to make digital investments in our digital transformation initiatives to drive that customer experience and lead in our segments. So you kind of heard a lot about the Connected Technology Platform this morning. So this is in a hybrid architecture that is built for scalability. It provides secure, scalable, extendable, and highly resilient to support our strategy. The secret sauce is the approach we have taken in developing and integrating these applications and delivering a platform on which all our business units can thrive without the constraints of systems and processes. So some of the customer-facing applications you see here on this slide make it easy for our customers to do business with us, whether they are looking for a price, stock availability, tracking a shipment, or paying invoices at their convenience. So this experience drives customer stickiness that Nick talked about.
We'll continue to invest in this area to drive that customer stickiness. As far as the back office is concerned, be it our branches, or the warehouses, or a Branch Support Center, the platform drives stability and scalability, which is critical for us when you think about our growth and M&A activity we will continue to pursue. So in short, the architecture has enabled several capabilities. Some of them are listed here. You heard from our leaders, and we'll hear a few more examples from Joey and Madeline in a moment. So thinking ahead, our digital roadmap will continue to leverage on the capabilities we have built with our connected technology platform and the wealth of information that flows through our system.
With the rapid commoditization of software, hardware, and the developments happening in the AI space, we will be diligent and opportunistic in pursuing the technologies and partners as well to drive and support our strategy. We'll now hear from Joey on his perspective.
Thanks, Sri. And Sri, you use the term digital roadmap. I just want to explain what that is for a minute because it means different things to different companies. For us, it's how we're going to take all the information we generate, it's a ton of information, and use it to do a few things: gather it, use it to drive customer satisfaction and loyalty, improve our efficiencies, and improve our operations. You've heard a lot of people say, "We have 450 branches. We like to be leaders in most of the markets that we're in." That generates a huge amount of data.
That data can be chaos, right? There can be a whole lot of chaos in all this data coming at you, or you can harness it and leverage it and make it an opportunity, use it as an advantage, and we choose, obviously, to take that data, leverage it, harness it, and use it to our advantage. Our digital roadmap just basically outlines for us how we're going to use it to our advantage, which it's about creating actionable knowledge for our branches with scorecards and digital maps they can see every day. It's also about more sophisticated tools like an AI-driven digital twin that we've built of our businesses, and we can look at that digital twin and scan the businesses on a regular basis and look for ways to improve our operational effectiveness.
So it's a broad span of things we're doing all to make all that information work for our businesses and ultimately work for our customers as well because our business doesn't move forward if we're not satisfying our customers with that knowledge as well. So how do we leverage this in the field? You've heard our leaders talk about they have real-time data behind branch productivity, sales productivity, labor productivity, inventory productivity. You name it, they have data they need. And you heard some of them talking about today that that gives them ability to adjust in real time. One example we talk about often is kind of top quartile and bottom quartile. We can give them that data so they can challenge their businesses that are in the bottom quartile and help drive change there.
But importantly as well, they can look at the top quartile of their businesses and go, "Okay. What are they doing well? I can look here digitally and see what they're doing well and then raise the rest of my businesses up to that level." So it's not just about pulling the bottom branches up. It's about improving their entire business through these digital tools we give them. It also allows customers to benefit from our size and scale. So you heard earlier that we can share product and even labor between our branches. That means a lot to a customer because if they have a big job that needs to get done, a sophisticated job that gets done, an unexpected job that needs to get done, we can flow resources to them. But that also means a lot to us.
I mean, using our labor more effectively means our installers don't have downtime, well, they don't like downtime. They're paid on their productivity, and that productivity really matters to us as a company as well. If we can get 10 minutes of productive time for an installer and we learn that across 7,000+ installers, we can deploy that. That has a real material impact not just on our customers but on our business as well, so our consolidated platform, finally, we heard about in the last session a bit, it enables M&A. Many companies we acquire, we're looking at their results on a quarterly basis or a semi-annual basis. It's a powerful shot in the arm for them to now be able to look at their business in real time and figure out how to improve it.
They can connect with other like businesses in our platform and share those products and share that labor. We can quickly get them up to speed on best practices. They can take things that they're doing well and help apply it across our company. So a lot of advantages there in the field. Now, I mentioned earlier that we've created this AI-empowered digital twin of our business using a lot of tools. Agility is one of those tools. That allows us to see every shipment, every order, every piece of installation or inventory. We can look at how that flows across our footprint. We can look at how it flows to our customers. We can look at how some of those products flow in from our suppliers. And that helps us constantly adjust and optimize our network.
We mentioned this earlier, and it kind of came up in the Q&A as well. When we saw the market start to soften in residential a little bit earlier this year, we could act quickly. We could look at this and say, "How can we rearrange our footprint a bit in a way that doesn't harm our customers?" Right? We want to take out waste but not take out effectiveness. And so quickly, we consolidated about 33 branches. The ongoing benefit is about $30 million for that change. So that helps our bottom line. But this digital twin isn't a single point in time. This is a process we're constantly looking at. So if someone asked, "Are we done?" No, we're not done. We're constantly looking at our operation for efficiencies. And we're going to do that as the market opportunities come up.
And sometimes as the market shifts in a way that it's not going to grow as much as we'd like, we'll continue to adjust. And we have the ability to do that using these tools. As another example, we've recently purchased SPI. That's already being folded into this digital twin. So we had a mechanical business in DI, right, Distribution International, and we can map them. Now we're going to map SPI. We have two mechanical businesses. We can map across them and say, "What are the efficiencies and opportunities across these two businesses as well?" That work has already started. We're having a meeting tomorrow in Dallas with some of the leaders of that business talking about some of those opportunities. So our digital twin doesn't just allow us to quickly identify opportunities. It allows us to quickly act on those opportunities as well.
We can realize synergies, and we can maximize through all of it our customer experience, which is absolutely key to us. Here's another example of driving our customer's experience. We have a new Service Partners' e-commerce platform. And that allows our customers to interact with Service Partners 24 hours a day, seven days a week. That matters to a contractor. If you're on a contractor and things aren't going well, you don't always think to order product for the next day or for the next job. You have to make adjustments quickly. If the branch is closed, it can cause a lot of tension for a contractor. Well, that's not a problem anymore. They can log onto our website. They can see their prices. They can see their past jobs. They can see their future jobs. They can order product. They can adjust things in real time.
So when the branch opens up in the morning, they can address those needs. They don't have to worry about doing it just when the branch is open. It's a big step change for them. Another example you've heard people talking about is the custom CRM platforms we've put together for our different businesses. Our CRM tools give these businesses a 360-degree look at their operations and at their customers for each and every market. It also lets them look at their pipelines because we don't just say, "We're not just going to reflect what they're doing." We also look at a lot of construction data sources, and we flow them into the CRM tool. We deduplicate them. We get them to the right people at the right time. And it allows them to always have something to sell.
We can hold accountability for those sales because we can actually see the leads that we're passing along to them. So it helps us improve our sales effectiveness as well. So I'll look. I've spent some time discussing how this connected platform in our digital roadmap impacts our operations and helps us improve our operations. Madeline's going to spend a little bit of time discussing how it's helping d rive efficiency and accuracy in the back office as well.
Thank you, Joey. Good morning, everyone. My name is Madeline Otero, and I'm the Chief Accounting Officer for TopBuild. I started my career in public accounting. I've been in accounting and finance for over 25 years. I'm there mainly in the consumer products industry. Two years ago, I joined the TopBuild family, and it's been a great journey.
What I like the most about TopBuild is the people, and that's something you've heard as a theme throughout the morning. And that's been true for me since the day I interviewed for this role. I also value how our philosophy for the branch support center, which you heard from John, which is to centralize administrative support so that the field can concentrate on what they do best, which is to drive the business and provide excellent customer service. And to carry out that mission, basically, we invest in technology and prioritize that technology. Let me give you a few examples. For instance, over the last two years, we have implemented technologies such as robotic process automation and intelligent document processing to increase operational efficiency in accounts payable. Specifically, we have increased the percentage of invoices that are processed through automation from 27% in 2023 to 65% in 2025.
Our goal is to achieve an 80% automation rate over the next 18 months. In addition to that, we have automated the preparation of supplier statement research files. Let me give you some background on that. Basically, every month, the accounts payable team, they review supplier statements looking for compliance with terms, but also to make sure that balances are complete and accurate. Before automation, the team would manually put together hundreds of these research files just to get them ready for analysis. After automation, the team now receives each file via email ready for analysis. This is saving us more than 200 hours every month, time that is now invested on not just the research, but of course, and more importantly, proactively communicating with suppliers, all of which has increased supplier satisfaction. The best part is that accounts payable is just one example.
Just this year, our operations, finance, and accounts receivable teams have also started to roll out this technology. And in doing so, they've been able to automate repetitive processes. And similar to that, we have also identified use cases across the organization, including legal, contracts, tax, just to name a few, all of which are part of our roadmap. Basically, if there's a process that is repetitive or time-consuming, there's an opportunity to automate it. We're excited to leverage technology to continue to centralize, streamline, and scale processes at the branch support center so that we can continue to provide great support to our branches across the U.S. and Canada. And now, Sri is going to wrap up this section for us. Okay.
Thanks, Madeline. So as we come to this section wrap-up, so just a recap of what you heard from our leaders.
Connected Technology Platform is a key differentiator in driving the strategic priorities in the field and in the back office. With all of the business units on one platform, it helps reduce complexity, deploy best practices across our network, and quickly onboard M&A-acquired companies. Speaking of M&A, with the competency that we have with our Branch Support Center and the Connected Technology Platform, it's a win-win. Our sellers can focus on growing the business without distractions while the synergies are realized in the back end. So sorry. So as far as we understand, we look at what's ahead of us. We understand the challenges with the rapid advancements happening in the technology and the market forces. We understand the challenges, and we see opportunities.
We will be diligent and disciplined in driving out investments and making sure that we are addressing customer experience, profitable growth, M&A synergies, operational excellence, and expand competitive advantage. We have the track record in delivering on the commitments we make. Thank you for listening. With that, we'll turn to Rob Kuhns, our Chief Financial Officer.
All right. Good morning, everyone. I'm Rob Kuhns, the Chief Financial Officer for TopBuild. I've been with the company for about seven and a half years now, wrapping up right now my fourth year as CFO. I've been in the building product space for roughly 20 years. I was with Mohawk prior to coming over to TopBuild. And I've been in corporate finance or corporate accounting roles for almost 30 years now, started my career with Ingersoll Rand.
So jumping into the key messages I want to make sure everybody takes away from today, right? Our company has a tremendous track record for growth, and that's been fueled by a unique, flexible, and capital-efficient business model that we've built. That unique business model is driven by culture, supported by technology, and as you learned about today, it cannot easily be replicated. That unique model generates significant free cash flows. And when it's supported by our solid balance sheet and our disciplined capital allocation strategy, we drive significant returns for shareholders. That disciplined capital allocation strategy is focused on M&A, and we have a proven discipline around M&A and proven processes around realizing the synergies with M&A.
As a result of that M&A strategy, as you heard Robert explain, we've strategically entered new markets, new spaces, and as a result of that, our revenues and cash flows are going to be more resilient as we move forward, more reliable. Our total addressable market is larger, so our ability to continue to do this is tremendous. When I put all that together, that's why we have a high level of confidence with what I'm about to show you guys. Moving to this next slide, this is my favorite one. First off, I should thank our whole team here that was here today. I think they did a magnificent job telling you more about our business.
And most of all, I have to thank them for putting up these results and what they do with their teams every day, drive these results, and make my job of talking to you guys a lot easier. So just to give you a few data points on here, just to walk you through the slide, 2015, that's the year we spun off from Masco, obviously. 2025F is the midpoint of our guidance for this year. 2020 is obviously the midpoint in between those two spots. And then the 2025 proforma is our September 30th results on a TTM basis, adjusted for the TTM results of SPI and Progressive, so you can see what we would look like with a full year of those acquisitions. And what you can see there is we've grown our sales over 10 years at a 13% compounded annual rate.
We've grown our EBITDA from $107 million of EBITDA to over $1 billion of EBITDA this year. We've expanded those EBITDA margins from 6.6% to over 19% this year. And over that period of time, and you'll see it on an upcoming slide, we've invested over $7 billion of capital and over that period of time increased our return on invested capital by 780 basis points. This is a slide I showed at our last investor day that I think, at least from my viewpoint, kind of summarizes TopBuild, all of our businesses, whether you're talking about distribution, installation, and now with roofing as well, they fit right into this as well. So when I say unique, what I think is unique about our business is our ability to optimize performance for 450 local businesses, right? That's not something that's easy to do.
The number one part of doing that, and you heard a lot about it today from Robert, from Jennifer, from others. You heard it from Nick and how it works in roofing. It's about the people. And it is about people and culture and how we drive that as a company. Our business is built on local empowerment, and we want people with entrepreneurial spirit out there making decisions and driving the business. Jennifer helped talk about how we drive that through training and recruiting to help build that into the organization. Now, sometimes people say, "Well, Rob, 450 branches with 450 entrepreneurs out there, that sounds a little out of control and a little crazy," right? And it would be, right? It could be without our Connected Technology Platform, which is a huge competitive advantage that you just heard a lot about, right?
What that does is it allows us to empower our folks, but put guardrails around it, right? Put some guardrails and checkpoints and reporting behind it. You heard John Achille talking about, from an operational excellence standpoint, how we use all that data to help drive our operational excellence, look at our bottom performance, work on moving them up. It's a big part of what we do, and it's not something that you'll see anywhere else in the industry. So I get back to this cannot be easily replicated. Then you put all that together, 450 branches, the largest player in the space, the way our supplier relationships cross over between product categories, we obviously have significant national scale and buying power, and that can't be replicated, right? So that's what makes us really unique and something that cannot be replicated.
The next part, resilient and flexible from a financial standpoint, this is what I really like. Our cost structure is highly flexible. Over 70% of our cost is variable, and you guys have seen that this year where residential sales have slowed. We've taken cost out of the business and maintained profitability. I'll show a chart coming up, but we've definitely increased our non-cyclical revenue mix. You heard today from Dave Fisher. You guys are aware that the roofing space is over 70% reroofing and maintenance, and so that percentage has grown over the last 10 years for us, and you can definitely see a path for that to continue to grow moving forward. And then finally, it's a very capital-efficient model, right? We have very low CapEx requirements, 1%-2% of sales, low working capital requirements at 15%-17% of sales.
You put all that together, we generate significant free cash flows, right? This is a great example this year. In 2025, we're going to generate nearly $700 million of free cash flows, and that's in a slowing residential environment. So you put with those strong free cash flows our solid balance sheet we have behind it. Currently, our net debt leverage sits at 2.4 times, trailing 12 months EBITDA. Historically, we run about one to two times, but we have gone up to 2.5, 2.6 post-large acquisitions like we recently did. Typically, we delever back to one or two times pretty quickly, but we're not uncomfortable where we are, and we've got plenty of dry powder to continue doing bolt-on acquisitions, which you guys have seen us recently do. And we're excited about the opportunities that are coming with commercial roofing as well.
Looking at our total liquidity, we've got over or we've got close to $1 billion of liquidity. We got a $1 billion-dollar revolver with our upsized credit facility we just did. Moving to our capital structure on the right-hand side, no significant maturities in the near term, and we maintain our strong credit ratings. Oops. So I talked about how we've been allocating capital. We've allocated $7 billion over the last 10 years. You can see how that's been spread out. 4% to mandatory debt reductions on our term loan, 7% to internal investments, again, the light capital model we have. So that goes towards our fleet and the digital investments that Sri and team talked about. We put 29% to share repurchases, and we've retired 30% of our shares over the past 10 years. But our primary focus with capital allocation is M&A.
We know that's where we can generate the most significant returns, but we're very disciplined around our M&A strategy. You guys are well aware of how we had to walk away from the SPI transaction a couple of years ago. We did finally get it done, and we're very excited about that opportunity moving forward. But over the course of our history, we've done 49 acquisitions. And so that's obviously the number one priority, but because of our discipline, we know it's going to be lumpy, and that's where we'll balance in the share repurchases and be opportunistic with that. As we move forward, I don't see a major change in that strategy coming. It's worked very well for us, and that's certainly our plan as we move forward.
So just to give you a little bit about our M&A history, this walks you through our four major deals we've done since SPIN, as well as on the far right, the 45 bolt-on acquisitions we've done as well. So, USI, back in 2018, first major acquisition we did. They were the third largest residential insulation installer in the country. We signed up for about $15 million of synergies with that. We well exceeded that. That transaction went very, very well for us. In 2021, late 2021, we made our first step into an adjacency when we acquired Distribution International. That got us into mechanical insulation and also expanded our metal building insulation business. That business was about a 10% EBITDA business when we acquired it. Today, it sits mid-teens to upper-teens overall as you look at it.
So the $35 million-$40 million of synergies we signed up for with that, we definitely exceeded. Progressive Roofing, which we did earlier this year, is our second adjacency we've stepped into. Again, Robert talked about the strategy there, how we looked at that space. We looked at a number of adjacencies. We looked for over a year at 30+ different adjacencies where it would make sense, where TopBuild could win. And that's where we landed with commercial roofing. Then we talked with a number of different commercial roofing players. And when we met Progressive, we knew that was the team. It wasn't just Nick's hair like Robert talked about. It was the business model they have, the commonality with TopBuild that you see. I mean, you definitely see commonality between the cultures.
You see commonality between the businesses, whether it's the supplier overlap, the importance of the labor force, the dispersed model, and we're really excited about what we bought there is a platform that we're going to grow, right? So we signed up for $5 million of synergies there. We've got clear line of sight to achieving that. We are not worried about those synergies whatsoever, but we're very excited about what's to come and the deals we're going to layer on with Nick and team moving forward. Then obviously SPI, that's our one that took a little longer than we would have liked. Ray Sears is here today, the CEO of SPI. He's excited to be part of the TopBuild team as well now. We brought over a great team from that side of the business, and we're very excited about having them.
With them, we've signed up for about $35 million-$40 million of synergies as well, similar to what we signed up with with DI. They're about an 11% EBITDA business today, so a little higher than where DI was when we acquired them, but we definitely feel like with those synergies, we'll get them to the mid-teens within two years, as we talked about, and then the 45 bolt-on deals we've done, that's something we do every day. We've got a process, a system as Joey detailed, and something we're learning a lot about with every deal we do. Every deal is a little different, but we definitely feel like we got an advantage.
When you hear from Jeff and Justin and folks like that, folks that sold or are part of a sale process to TopBuild that can sit across the table from an owner that's about to sell his business who wants to understand what's going to happen to my people, what's going to happen to my salespeople, what's going to happen to my installers, these guys can walk them through what they went through and what it's meant for their people, what it's meant for them. And so just a huge competitive advantage for us. In addition to that advantage, we also have the proven track record on the back end in terms of realizing synergies. So the team behind the scenes that does that work, they're not here today, but they've got a lot of experience at that and a great track record.
So one of the nice things about M&A is it's transformed our revenue profile, right? And we talked a lot about this today. If you look at the main demand drivers of what drives our revenue, new construction, that used to be 88%. We've shifted that by 10% with the move into mechanical insulation and into roofing, right? And David Fischer did a great job today talking about MRO and why that's so important for our commercial and industrial customers on the mechanical insulation side. On the roofing side, I think everybody gets it, right? When the roof leaks, you're going to get it fixed. So maintenance is a key part there. Nick talked about how he's making his customers sticky, getting them to come back for that maintenance work, building that relationship with them to get the reroofing when they need to do it.
You can definitely see where that 22% is going to continue to grow over time. Our end market mix is much more balanced today. So we were 20% commercial and industrial 10 years ago. That sits at about 47% today. So we're almost 50/50 on that front. So looking ahead, I know nobody flipped ahead and looked at this yet, so we'll preview what numbers we put in here. So from an outlook for this year, no change to our guidance, right? Just reiterating what we told you back in October. Sales of $5.35 billion-$5.45 billion. That's assumptions there. Our residential sales will be down low double digits. Commercial-industrial will be flattish. Inside of commercial-industrial, it's a tale of two stories, right? Heavy commercial has been good.
Mechanical insulation is up high single digits this year, so they're having a great year helping to balance things out there for us. M&A has obviously been a big part of the story this year. That's going to add $450 million of revenue this year, and then EBITDA from $1.01 billion to $1.06 billion, 19.2% at the midpoint of our guidance. I think that's really a testament to that flexible model we talk about and how we've taken cost out this year and still generating really good EBITDA margins, so before we look ahead, looking back at what we told you back in 2022 at Investor Day, we talked about $6.4 billion is where we wanted to be in 2025 in terms of sales. We said we wanted to keep our compounded annual growth rate moving like it had been at about 16%.
On a pro forma basis, with our recent acquisitions, we're at $6.3 billion. So I think the interesting part there, right? Obviously, the market didn't play out exactly how we thought, I'd say, from that period of time. Housing starts are down north of 15% over that three-year period, total housing starts. But if I would have told you back then that housing starts were going to be down 15% and we were going to do 16% compounded annual growth rate, you guys would have looked at me like I was crazy. So we feel really good about that. I think it's a testament to what we've built and the cash flows we generate even in challenging markets and our ability to keep growing as a company. You can see the EBITDA targets we gave back then, EBITDA margins broken down for incremental EBITDA margin, the M&A margin.
And we also talked about decremental margins. We said, "Hey, if we have a down year, here's what we'll do from an EBITDA perspective in terms of cost takeout," right? And you can see from the incremental margin perspective in 2022 to 2024, we exceeded our targets. The decremental margin, unfortunately, we're seeing that this year on a same branch basis, but we're right in line with what we expected to be. And our M&A is coming right in line with what we expected. So as we look forward, we want to take that $6.3 billion of revenue. And if we look out five years, 2030, and say, "What is TopBuild going to look like?" We think $9 billion-$10 billion is very achievable, right? I mean, the market growth, who knows, right? We know it's very unpredictable, the things that will happen over a five-year period.
But to assume 2% volume growth, that's not too far off of what we've seen over the last 10 years. In fact, our organic growth, including price over the last 10 years, has been 4%, which is what we're baking in here. We know if we do get that volume growth of 2%, materials will tighten up, pricing will be healthy. So we're assuming 1% price. Then you heard a lot today about a lot of the things we're doing strategically, whether it be with our CRM tool, whether it be with e-commerce, whether it's the organic initiatives, our vertical strategy in the mechanical business. There's a lot of things we think we can do to outgrow the market. So you put those three together, we're looking at about 4% organic growth on a compounded annual basis over the next five years.
And then from an M&A perspective, 4%-6%, we feel like is a nice conservative number to put out there. If you looked at the last 10 years, it's closer to 10%. Obviously, as we get bigger, the numbers get bigger as well. But we would say that's basically bolt-on acquisitions we're going to do in our core and in the roofing space as well. We know there are some larger deals in the roofing space, and if those come along, we'll be interested, and you'll see in a minute we'll have the cash flow to do it, but that's certainly not assumed in this right now. So you put all that together, we're looking at an 8%-10% compounded annual growth rate over the five years.
If we hit those sales, the EBITDA margin assumptions similar to what we've had in the past, that'll land our EBITDA at $1.7 billion-$2 billion. We hit those numbers, our cumulative cash flow, again, our strong free cash flow model will generate $4.2 billion-$5 billion of free cash flow over that five-year period. To support the M&A I talked about on the previous page, it'll use a little less than $2 billion, so that'll leave well over $2 billion for either returning to shareholders or doing some of the larger acquisition opportunities or doing additional bolt-ons, but significant free cash flow over the period of time, and then we plan to maintain or increase our return on invested capital at 14% over that time.
The other assumptions you can see there, working capital, 15%-17%, slightly higher than our historical guidance with SPI and Progressive coming in, a little higher working capital businesses. Certainly something we're going to work towards trying to improve, but we think that's a safe assumption right there. CapEx remaining at the 1-2 we've talked about historically, and then taxes at 26%. So finally, just to simplify my key messages, we've got a great track record, but from our opinion, we're just getting started. Our business model is uniquely advantaged and cannot easily be replicated. Our M&A processes are disciplined and proven to drive great returns. And now with more resilient free cash flow and a larger TAM, we've got a high level of confidence in delivering the results I just talked about. So now I'll turn it over to Robert for some closing remarks.
Okay. Thank you, Rob. So number one, I think great job by the team walking through things. If I can see the clicker there, Rob. Walking through things. I think what you can hear today is a great confidence in our ability to continue to outperform in the future and what we've built. And I really do believe that we've positioned the company by making deliberate and strategic decisions here for the future. And what we've developed is this opportunity to continue to drive best-in-class compounding returns for our shareholders. What's that built upon? Look, we have the team and the talent. You've heard us talk all day about the people business. The proven track record, building upon that around execution. We focus on execution. We're about execution.
I think what I like about the lookback Rob did is we control what we can control, and that's what we're really good at executing in that playbook and that continued operation of that playbook as well, and we've got the competencies required to drive this outperformance and really make the most of this opportunity that we developed with the expanded total addressable market. And we believe absolutely the ability to outperform and deliver for our shareholders, and we think it's a great place for investment dollars as in TopBuild for what we're going to continue to do in this model for the future. And the best is yet to come, so I'm sure you walk away with that same confidence. We're going to take a little time here for some Q&A. It's cold in here, so we're going to move from Q&A to really a fireside chat.
Fireside chat here. John's going to come up and join us. We obviously have to have the lunchtime as well that we'll take some questions, but I think we just want to see if there's any general questions for the overall business, and glad to answer any.
Again, we've got two traveling mics. So when Robert calls on you, please state your first and last name and your firm for the webcast. Thank you.
I'll take any of them.
Keith Hughes, Truist. I guess two questions, Rob. On that planning period, are you expecting expansionary residential and non-residential on that 2% unit growth, or how are you thinking about those years economically?
Yeah. I mean, we're not breaking it down between residential and commercial, but I think to assume 2% over the longer period of time, now, it doesn't mean I should have said this during the presentation. It doesn't mean every year we're assuming 2%, right? It doesn't mean every year is going to turn out that way, because we know that the end markets can be unpredictable. But we definitely feel like over a five-year period, 2% volumes is a reasonable assumption.
Could you talk about the 1% price gain per year if you think about the different products? That seems a little light too, quite honestly, but if you could just talk about how you break those apart.
Yeah. I mean, we know on the fiberglass insulation side, right, capacity, even today, blowing wool is a little bit tight. Some of that's supply-side driven, for sure. We know there's some capacity announced that'll be coming on, but if we get this volume growth, we know the suppliers are going to maintain a tight market. And when fiberglass is tight, pricing tends to be healthy, right? So I'm with you. I hope that's conservative as well. On the mechanical side, this year is a great example where we had some price increases across some of the key products to start the year, and our teams did a great job of realizing that price as well. So I'm with you. I hope that's a conservative assumption, but we'd be happy to outdo it.
Okay. Thanks.
Thank you, guys, for your time. Ken Zener and Seaport, congratulations on 10 years. Your market cap is your company's market cap. So TopBuild's margin rise and stability, I think, has been a big story this year as well as over the last 10 years. A lot of it on the residential side, I think you guys initially projected it came from your purchasing power, but at this point, I think that really overshadows your business systems, which drove the stability and your ability to handle the degrading margins. So my question really to roofing is this: given that roofing is largely going to be a roll-up story similar to what insulation was, what gives you confidence that Progressive's business processes are replicable and sustainable, given that it's a new category? Two, can you give us reference to the 19% EBIT you had for Progressive?
What is kind of like the industry, if you will, just so you can benchmark that for us a little bit? And then, three, you can take pieces of these. The buckets of superior performance: labor, material, which we're conditioned to on the res side, and then bidding, obviously a big part of it. That's it.
Okay. I'm going to try to cover all those, Ken, but you gave me quite the list. If I think about, I think it's a great question that you're asking because if you said, maybe said differently, "Hey, Robert, what's underappreciated about the story here at TopBuild?" I think one of the main things underappreciated is the operational excellence piece. And so we can buy a 10%. Someone will talk insulation, then I'll move and talk roofing. We can buy a 10% company, and everybody knows, obviously, we get great synergies. We have great buying power. So we'll increase that EBITDA in that business pretty quickly to 15%-16% or something.
But it's the operational excellence of improving these businesses, whether it be from you've heard about technology, you've heard about underperformers, you've heard about how we get in and work the labor side of it, how we work the productivity side of it, the sales productivity side. The operational excellence piece is what really helps drive those margin and drive that performance. I mean, I loved your question earlier, Stephen, about how we did that in the past and what we're doing now. There's definitely plenty of room in the gas in the tank to continue to drive those improvements.
And so I think, as we've looked at, as we looked and understood the commercial roofing, it was super important to us, the first company that we purchased or partnered with, mainly as to what we could build, because we do feel very strongly we can replicate this in the commercial roofing space, what we did in insulation. But you had to start with this playbook, which is what we've had in insulation. We've been able to replicate over and over, but also this belief in this operational excellence of how you can take a company and you get supply chain synergies quickly, but then over a pretty definitive timeframe, i.e., a year, 18 months, now you can drive operational improvements that whenever you hear Nick and David talk about the jobs that you look at, how do you bid those jobs?
How do you look at labor hours or mandates, if you will? How do you constantly look at how that job's performing on a daily basis from a job costing perspective? That's operational excellence. And so that's why we have the confidence that what we can do here with commercial roofing, similar to what we've done in insulation, but it has to start with that right basis of the playbook and then how you stack operational excellence upon that. I think your third question was around what we've seen. We've seen a variety of margins in commercial roofing. Whenever I said that Progressive's best-in-class it is, we've seen everything from mid-single digits to mid-teens in that range. That's what we like about it because we know at the right multiple, we can buy these businesses. You put the synergies on top of it.
Somebody asked earlier about what we'll do in our distribution footprint with commercial roofing. There's going to be some great synergies there. We already see it. We have great line of sight for the future. But you put that on top of, you put those synergies on top of now the ability to improve operationally. That's why we love the fact that you'll see these companies that are 8, 9, 10, 12, and then we'll be able to get them to those high teens, 20% type of number from a margin perspective. So it's about the playbook, our confidence of what we can deliver here really built upon the operational excellence piece of it.
Thanks. Mike Dahl from RBC Capital Markets. I want to stick with commercial roofing. And it seems very obvious that the playbook operationally is repeatable. It seems like the top of the funnel, which I think Nick described as part of the secret sauce, is unique in terms of selection of jobs and focusing on the most technical, the most complex. So when you think about the addressable market and then also the M&A opportunity, how do you kind of distill that down to, "Well, this is actually kind of the market within that $75 billion. This is really what we can go after hard?" Or from an M&A standpoint, is it, "We can take any business and train them to do that?" Just help us understand that a little more.
I think there's definitely so if you look at that $75 billion, 30% of that, 25%-30% of that $75 billion is new construction. So whenever you hear Nick talk about the jobs that you target, you're targeting certain jobs in that new construction space. 70%-75% of it is this repair and maintenance re-roof piece of it as well. And so I think he mentioned it, but you're getting a whole lot better, some better margin performance in that re-roof and that maintenance activity. So we definitely, in that 75% of that pie, see a lot of opportunity. Then you are selective in the new construction jobs that you go after. But our thought is, and again, choosing the right partner to start with and where we can go.
And I think it is key around how they talk about David and Nick talk about the talent development piece. This repeatable process is we can train. And I think looking at some of the companies they've acquired, some of the things we believe that are on the horizon of the business, it is really now taking that playbook and the operational excellence and really instilling that into some new acquisitions for the future. So I think if you look at the $75 billion TAM in commercial roofing, we think by far a lot of that is addressable that we can go after. And it's going to be built upon some of these competencies that we have and that are proven.
Thanks. Two somewhat unrelated questions. I think earlier in the discussion of Progressive M&A, there was a comment about a lot of saying no. Help me understand the situations that you're walking away from and why might it be harder than it seems at first glance to consummate deals in roofing.
Yeah. So working with the team there and Justin or someone can feel free to speak up here. I think it's discipline. So as we've gotten involved with them, we've seen some businesses that are maybe 2% or 3% businesses. And maybe if you look at their backlogs, that type of thing, maybe look at some of the succession in the business as well. I think it's been a discipline that Progressive has brought along. You've heard us talk about disciplined capital allocation practices. I think it's been more of a discipline of some of the businesses that they've seen in the past. Justin, I get that right?
No, you're spot on. And as you know, you spearheaded this. The fidelity to the return on invested capital is the main criteria. As Robert alluded to some of that EBITDA margin profiles right away, right? We're saying no to anything below that 10% threshold. That's just one component outside of culture, outside of people, outside of alignment of vertical markets. There's just a lot out there to make sure, as Robert and Rob have illustrated to us, it can't be a distraction. We got to keep the pace of play of the business.
Yeah. And just to be, I mean, on our insulation business, we say no to a lot of deals as well, right? I mean, there's sometimes labor issues, cultural issues, things we don't want to get into in terms of the messiness or liabilities we see. So we like the fact that they're coming in with being disciplined with what they do.
So you basically don't want to fix her up, or you want a good business you can improve on.
That's right. I mean, it needs to be appropriate. We're all about adding best practices to businesses. We're all about this operational excellence, but Justin said it right. If you're going to come in, it's going to be a distraction, and we don't feel like that in the near term. There's plenty of other opportunities out there, and we're going to put our energy towards those opportunities. They're going to be the best for our shareholders.
Okay. And then one more, just on the outgrowth assumption of 100 basis points, have you guys been able to track that historically and how have you performed on the outgrowth over whatever historical timeframe might be relevant?
Yeah. I mean, on the residential side, I think when it comes to single-family results, our results you can track with kind of lagged single-family starts from a volume perspective. And that gives you some idea of where the market's at. You got to kind of break that down by region to really take a look at it. Price is another area. I think we've definitely, but again, it's hard to say exactly what the market price did. We know what we took and what we pushed. But I think we've definitely done better than most in terms of overachieving on price. So to answer your question, I mean, and then in commercial industrial, it's a little more difficult. Obviously, there's a lot of data out there from Dodge and other folks, but hard to really tie it back exactly to what did the insulation market do.
But we definitely feel like with the tools we're putting in place, some of the things we're working on strategically, that's very achievable.
Thank you.
Thank you, Charles [Perempiche] from Goldman Sachs. I just want to go back to, Rob, your growth algorithm you pointed out. And if you think about the insulation business as a whole, how do you think about the trade-off between volume of it and price? Considering the businesses are probably going to expand over time, you're going to get incremental purchasing power with some of your suppliers. How do you navigate that dynamic based on different market conditions ahead?
I'm sorry. You started that with.
The volume dynamics versus price. How do you approach that equation between insulation?
In the insulation side?
Yes.
Yeah. I mean, I think nothing's changing in our strategy there, right? I think what's unique that not everybody always appreciates in our business is the negotiations with our customers, whether it's a national builder or a small regional builder. It's local decisions that are being made by those folks. And so we got to give some leeway to our folks in terms of negotiating. And so that's power we give to our branch managers to make that volume price decision. Now, like I said before, we don't just open it up and say, "Go do what you want," right? We've got guardrails around pricing. Our incentive systems for our branch manager are based on you make a higher percentage of your profitability if you have a higher profit margin. And so they're driven towards driving price. But that's how we go about that.
I don't see that changing going forward.
Thank you.
I'll just add to that. So I mean, we would give the branch a bit of what their appetite should be, and then we'll guide within that. But it's up to them to determine what is their mix, whether it's different product lines, customer mix. So they get that makeup of what a P&L would look like for that branch that they're incentivized based off of that.
Thank you.
Thank you. Mike Rehaut, J.P. Morgan. On your margin targets, I think it's, in effect, you're kind of saying flat to up 100 basis points over the next few years, the 19%-20% range. You've also, at the same time, over the last few years, demonstrated an incremental EBITDA margin well above your target, to your credit. And we've talked over conference calls about your special ops teams, your bottom quartile focus. So looking forward, obviously, you guys want to continue to put out achievable targets, conservative targets. But is there any reason to, let's say, not expect the ability at points to outperform that 22%-27% range? And in particular, I'd love for you to kind of go into maybe the drivers of what allowed you to exceed that target over the past few years.
If that's changing at all or how you see those drivers, again, the special ops, the productivity, the bottom quartile focus, has any of that changed that would limit your ability to exceed that goal going forward?
Yeah. No, you've asked us that question a lot of times, right? We've gotten that a lot. 22%-27%, I think, is a number we're not going to apologize for hitting, right? I think 22%-27% for our business is a really strong number. We are going to look to do better than that like we have in the past. Now, in some of the years in the past, and we've pointed out, when you get a really small sales incremental, that percentage can be really big. It's just the way the math works, right? So you got to balance that in the equation. But to your question around our strategy, nothing's going to change around our strategy, right? The things that have driven that have been our ability to manage price and cost strategically across our markets.
And like I just answered Charles' question, we're not changing how we manage price and cost. The operational excellence piece has been a huge piece of how we do that. You heard a lot about that today from the team in terms of what we're doing, focusing on the bottom quartile. We're going to continue to do that and continue to look for that. And then we continue to leverage our fixed costs.
So if we are in a growth market, the things like Madeline talked about today that we're doing in the back office to talk, I mean, it may sound kind of boring to folks to talk about automating things and accounts payable, but that's going to allow us to continue to support this business as it grows to $10 billion with the 30 people we have paying the bills today, which 30 people for 450 branches, that's already a pretty good number, especially if you think about if we didn't have the common ERP system, you'd have a payables person at every single one of those branches. So we're going to continue to do those things, and we're going to try to do better than that 22-27, but we feel like for modeling purposes, that's the best number to use.
We definitely get that question a lot, to your point. And so I think as we look back here, so let's talk about today, right? If you ask John or Jeff or others today, one of the key things, we're working on sales productivity. You heard one of the takeaways on the slide was bid more, win more. So a lot of work around the sales productivity. How do we get the sales force more productive, right? We've talked about, I think Joey used the example, 10 minutes per day over 7,500 installers is significant what that can drop down. So some people ask me sometimes, is there more opportunity here in the model? There's absolutely more opportunity in the model because little incremental changes here, little incremental improvements can have a very significant impact from an EBITDA perspective and stuff.
So we just done a nice job of continuing to work those. And as we do acquisitions, which this idea of looking across our footprint and looking at where's our drop-off points with customers, where's product coming from with the suppliers, what's our overlap of branches, that type of thing. A lot of people wonder this year, how have we been able to sustain margins? It's that constant work. Jeff talked about yields on spray foam. We've talked publicly about spray foam has been a market that's been challenging, but we've maintained margins because we've worked really hard on yields this year on the spray foam side of the business. So there's always things for us to work here. We try to select a select few of high impact to really drive the improvements. So sorry, I know somebody was over here.
Hi. Adam Baumgarten, Vertical Research Partners. Just on the install side, maybe outside of insulation, maybe how much you're leaning into some of those ancillary products in a pretty weak market backdrop and how you can maybe lean into that more to sort of offset some of the underlying demand weakness in single-family?
Yeah, sure, so I mean, every business owner, every branch manager can choose what products, what adjacencies they want to get into. We give them the guidance. We give them the training that they would need to make that effective and efficient. But we have multiple products that we're looking at or deploying throughout the network that's allowing them to outperform if the market was softening in their area.
I got it. And then just one other, in the past, you've given a kind of dollar amount for every 50,000 starts on the residential side. Any update there and how that's evolved over the last few years?
Yeah. That's not something we updated. We just felt, given the mix of our business now and being so much more commercial, people tend to look at us as a pure resi play, and we wanted to kind of take away that metric as a result of that, so yeah, no update to that.
Hi, Phil Ng from Jefferies. We understand the pricing power in your legacy residential insulation business, especially when we have upcycle. But now that your commercial industrial business is much bigger, 50%, help us appreciate through a cycle, is there as much torque on price or is it more steady? And I guess a question for John. You talked at length in terms of operational excellence and looking at the top and bottom branch. Is there that opportunity on your commercial industrial distribution business as well as commercial roofing?
I'll take the first part on the pricing. So I'd say more stable on the commercial industrial side, but we have seen, as you've seen in our results, there has been some nice margin progression in the business there. Obviously, we've got some great scale in the business now with SPI being part of that. If you think about the major players there, would be Owens Corning, Knauf, and Johns Manville, obviously the big player there. We're doing business with all of them. So I think stable from a market perspective, but I think the team's done a nice job of our leverage, but also relative to margin opportunities. John, do you want to take the second question?
Yeah. I feel like follow-up. It's not just adding a different product, right?
So those branches that may be heavier residential, single multifamily, they can shift with that same product line that they offer and now go after a bit more commercial or even retrofit, right? That's something else that we can use to offset in this market.
Collin Verron at Deutsche Bank. You're targeting the mid-single digit revenue figure for M&A. Can you just talk about what the M&A is going to look like from an end market and product mix perspective and what BLD as a whole might look like in 2030 if you hit that $9 billion-$10 billion in sales?
Yeah. I mean, there's not any specific end market mix we're targeting, right? As we look at the pipeline of deals that Joey and team are bringing to us, and we've got healthy pipeline across all the businesses, we're prioritizing in terms of what gives us the highest return on capital. And so whether that's a residential installer, whether that's something in the mechanical distribution space, the residential distribution space, or in commercial roofing, we're going to prioritize based on returns. Now, if you just look at the white space that's out there, right, the reality is there's more white space in commercial. And so that's why I kind of alluded to on those revenue slides. You could certainly put together a scenario where in five years, potentially, our mix is more commercial than residential. And as a result, we'll probably have even more non-cyclical revenue streams.
But we'll have to see how the M&A pipeline plays out, right? We don't control who comes for sale. We're going to stay disciplined in our process, and we're going to prioritize based on returns.
Maybe two things. Number one, there's not a lack of targets out there and stuff. So that's the exciting point. I think we probably have time for one more question. We don't want the corn dogs to get cold for lunch.
Hi, Aatish Shah Evercore. Just want to go back to the commercial roofing space. You talked about kind of the best practices and kind of staying disciplined. But what do you see as kind of the challenges in consolidating that space going forward?
Justin, you got an opinion on that? I've got my opinion, but challenges of consolidating or some of the M&A challenges in the commercial roofing space.
No, it's a good question seeing how much opportunity there is there. But some of the main components, just again, that focus on return on invested capital. We're coming across a lot of targets where these are lifestyle businesses for families. Multi-generational roofing families exist and are prevalent within that. That's just one component of it. Progressive Roofing itself is in its fourth generation. And so finding businesses that have made that transition, the value proposition is a little more unique with a younger age group and trying to strategize behind that. But the big mega trend that's kind of our tailwind is that by 2030, the youngest baby boomer will be 65. And so riding on that tailwind right now is amazing, and it's been pretty opportunistic for us in the pipeline.
So I think it's going to be you're finding companies out there that are a certain time in their life cycle relative to their development and stuff. I think Justin's right. Some of the ones that we've looked at, we just looked at one here in the city over the weekend that the team had dinner with. It's a great opportunity. The owner is, call it late 30s. Is he ready for that next move from that perspective? I mean, we have got a robust number of targets that we're talking to. It's just kind of where they are relative to their time of selling the business and stuff. Okay. PI, you want to talk about the lunch plan?
Sure. That is going to end our webcast for today. So we appreciate the folks joining us.