Patrick Industries (NASDAQ:PATK) executives emphasized content growth, aftermarket expansion, and continued investment in composites as key drivers of the company’s fourth-quarter and full-year 2025 performance, while outlining expectations for modest end-market improvement and margin expansion in 2026.
Fourth-quarter and full-year results
In the fourth quarter, Patrick reported net sales of $924 million, up 9% year over year. CEO Andy Nemeth said the increase was driven primarily by organic growth and acquisitions, partially offset by wholesale shipment declines across the company’s RV, marine, and housing markets.
SVP of Finance and Chief Accounting Officer Matt Filer, who is stepping into the CFO role, said fourth-quarter gross margin increased to 23% from 22.1% a year earlier, citing fixed-cost leverage from content gains during model-year changeovers, stronger revenues, and acquisitions in the aftermarket space. Adjusted operating margin expanded 110 basis points to 6.3% in the quarter, while full-year adjusted operating margin was 7%, which he said was in line with the company’s prior outlook.
Patrick delivered $246 million of free cash flow in 2025, with operating cash flow of $329 million and capital expenditures of $83 million. Filer noted the company added more than $30 million of inventory in the fourth quarter to support composites, innovation, and product initiatives.
Segment performance and content-per-unit gains
President Jeff Rodino said demand across end markets remained shaped by macroeconomic uncertainty and tariff volatility, which has contributed to cautious consumer behavior. He added that OEMs and dealers have shown discipline in aligning production and inventory with retail demand.
- RV: Fourth-quarter RV revenue increased 10% to $392 million, representing 43% of consolidated sales. Rodino said RV content per wholesale unit for the full year was $5,190, up 7% from 2024, and content per unit increased 13% year over year on a quarterly basis. He estimated fourth-quarter RV retail unit shipments of about 60,100 and RVIA wholesale shipments of about 75,000, implying a seasonal dealer restock of roughly 14,900 units and dealer inventory of about 16–18 weeks on hand, below historical averages of 26–30 weeks.
- Marine: Fourth-quarter marine revenue increased 24% to $150 million, representing 16% of consolidated sales. Rodino said the company significantly outperformed an estimated 1% decrease in wholesale marine powerboat unit shipments. Estimated marine content per wholesale powerboat unit increased 11% for the full year to $4,327, and rose 25% year over year on a quarterly basis. He estimated marine retail and wholesale unit shipments of 17,300 and 33,000, respectively, implying dealer restock of roughly 15,700 units and field inventory of about 21–23 weeks on hand versus historical averages of 36–40 weeks.
- Powersports: Fourth-quarter powersports revenue increased 39% to $109 million, representing 12% of consolidated sales. Rodino said Sportech increased full-year platform-specific content by approximately 8%, driven by demand for cab enclosures and consumer preference for utility-focused vehicles. He also highlighted Rockford Fosgate’s launch of its redesigned Punch speaker line.
- Housing: Housing revenue decreased 5% to $272 million and represented 29% of fourth-quarter sales. Rodino said the company outperformed a 10% decrease in manufactured housing shipments and an estimated 10% decline in total housing starts. Full-year MH content per wholesale unit was flat at $6,633.
On content per unit, Rodino told analysts gains reflected a combination of share gains and mix, with some benefit in RV from “bigger, higher contented units” appearing in the third quarter and fourth quarter. He said composites and electronics also contributed to content gains during model year changeovers.
Acquisitions, aftermarket growth, and “The Experience”
Nemeth said Patrick added several companies in 2025—Medallion Instrumentation Systems, Quality Engineered Services (QES), Egis Group, and LilliPad Marine—positioning them as complementary additions to the company’s marine “full solutions” platform, including technology, engineered products, and additional aftermarket content. Rodino provided additional detail, saying Medallion enhanced instrumentation and control offerings (digital switching, displays, sensors, integrated electronics), QES strengthened wire harnessing and full electrical systems, Egis added engineered power distribution and protection components (including terminal blocks, fuses, circuit breakers, and relays), and LilliPad contributed patented diving boards and products sold to OEMs and directly to consumers through aftermarket channels.
Patrick also acquired Elkhart Composites early in 2025 to complement its investments in composite materials. Nemeth said the company expects to debut additional manufacturing capabilities aligned with its lamination and composites platform in 2026.
Aftermarket sales rose approximately 30% year over year and were 10% of total revenue in 2025 versus 8% in 2024, according to Rodino. He said the company had more than 500 Patrick SKUs on the RecPro site and has formalized a unified aftermarket strategy. In the Q&A, Rodino said about two-thirds of the aftermarket sales increase came from acquisition activity, with RecPro described as a “big piece” of that growth, and he characterized pull-through from SKU additions as a longer-term effort dependent on marketing and advertising.
Rodino also highlighted a new customer-facing virtual design platform called “The Experience”, which uses virtual reality, advanced product scanners, and a large LED display to present life-size RV, boat, and powersports designs. He said the display is 50 feet wide by 14 feet tall, and the company hosted over 30 customer demos since launching in late November, with “overwhelmingly positive” feedback.
Balance sheet, capital allocation, and 2026 outlook
Filer said net leverage ended the fourth quarter at 2.6x, down from 2.8x at the end of the third quarter, as the company continues to target a leverage range of 2.25x–2.5x. Available liquidity was approximately $818 million, consisting of $26 million in cash and $792 million of unused revolver capacity.
In 2025, Patrick invested $122 million in acquisitions and returned $87 million to shareholders through $32 million of share repurchases (about 377,600 shares) and $55 million in dividends. Nemeth said the company increased its dividend by 17.5% during the year. Remaining share repurchase authorization was approximately $168 million at year-end.
Looking to 2026, management said a “meaningful retail demand inflection” likely depends on consumer confidence and interest rates, while OEMs and dealers are expected to remain disciplined on inventories. The company provided the following 2026 end-market assumptions:
- RV: Retail registrations flat; wholesale shipments up low-to-mid single digits.
- Marine: Retail registrations flat; wholesale powerboat shipments up low single digits.
- Powersports: Unit shipments up low single digits; organic content up low single digits, implying mid-to-high single digit business growth.
- Manufactured housing: Wholesale shipments flat to up 5%.
- Residential housing: New housing starts flat to up 5%.
Based on that outlook, Filer said Patrick expects 2026 adjusted operating margin to improve by 70–90 basis points versus 2025, with operating cash flow of $380–$400 million, capital expenditures of $70–$80 million, and free cash flow of approximately $300 million or more. He also projected a full-year tax rate of 24%–25%.
In response to questions on what would drive margin expansion, Nemeth pointed to operating leverage, the company’s cost structure, and the ability to scale volumes without adding significant overhead, while also citing value from content gains and “full solution” offerings.
The company also discussed composites as a long-term opportunity, with Rodino reiterating a previously stated long-term total addressable market of about $1.5 billion and a nearer-term attainable opportunity around $500 million, while declining to provide product-level margin comparisons to traditional wood products.
Nemeth closed by thanking employees and customers, describing 2025 as “dynamic and extremely volatile,” and said the company is optimistic about 2026 and focused on executing what it can control.
About Patrick Industries (NASDAQ:PATK)
Patrick Industries, Inc is a leading manufacturer and distributor of component products and building materials for the recreational vehicle (RV), manufactured housing, marine and industrial markets. The company supplies a broad array of interior and exterior products, including cabinetry, countertops, flooring, wall panels and decorative trim. Patrick Industries also offers engineered composites, adhesives, sealants and insulation solutions that cater to both original equipment manufacturers (OEMs) and aftermarket customers across North America.
Founded in 1959 and headquartered in Elkhart, Indiana, Patrick Industries began as a small distributor of hardwood and millwork products.
