Builders FirstSource BLDR · USD

14. Significant Segment ExpensesThe accounting policies of our reportable segment are consistent with the accounting policies described in Note 2 to these consolidated financial statements. The primary measures regularly provided to the CODM, including revenue, gross margin and income before income taxes, are shown in these consolidated financial statements. The CODM uses these measures to assess performance for the reportable segment and to decide how to allocate resources. Gross margin and income before income taxes are driven by the segment’s significant expense items of cost of sales and compensation and benefits, as well as other segment items. Cost of sales is shown in these consolidated financial statements. Compensation and benefits were $2.2 billion, $2.3 billion and $2.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively, and are reported within selling, general, and administrative expenses in these consolidated financial statements. Other segment items are substantially all the remaining selling, general, and administrative expenses reported in these consolidated financial statements. The measure of segment assets is reported on the balance sheet as total consolidated assets.

13. Commitments and Contingencies As of December 31, 2025, we had outstanding letters of credit totaling $79.6 million under our Revolving Facility that principally support our self-insurance programs. The Company has a number of known and threatened construction defect legal claims. While these claims are generally covered under the Company’s existing insurance programs to the extent any loss exceeds the deductible, there is a reasonable possibility of loss that is not able to be estimated at this time because (i) many of the proceedings are in the discovery stage, (ii) the outcome of future litigation is uncertain, and/or (iii) the nature of the claims is complex. Although the Company cannot estimate a reasonable range of loss based on currently available information, the resolution of these matters could have a material adverse effect on the Company's financial position, results of operations or cash flows.In addition, we are involved in various other claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts in excess of our self-insured retention as we believe to be reasonable under the circumstances and that may or may not cover any or all of our liabilities in respect of such claims and lawsuits. Although the ultimate disposition of these other proceedings cannot be predicted with certainty, management believes the outcome of any such claims that are pending or threatened, either individually or on a combined basis, will not have a material adverse effect on our consolidated financial position, cash flows or results of operations. However, there can be no assurances that future adverse judgments and costs would not be material to our results of operations or liquidity for a particular period.

8. Long-Term Debt Long-term debt consisted of the following: December 31,2025 December 31,2024 (in thousands) Revolving credit facility $ — $ — 4.25% 2032 notes 1,300,000 1,300,000 6.375% 2034 notes 1,000,000 1,000,000 6.75% 2035 notes 750,000 — 6.375% 2032 notes 700,000 700,000 5.00% 2030 notes 550,000 550,000 Other finance obligations 183,891 190,312 Finance lease obligations 1,155 1,078 4,485,046 3,741,390 Unamortized debt discount/premium and debt issuance costs (43,679 ) (37,277 ) 4,441,367 3,704,113 Less: current maturities of long-term debt 14,334 3,470 Long-term debt, net of current maturities, discounts and issuance costs $ 4,427,033 $ 3,700,643 2024 Debt TransactionsOn February 29, 2024, the Company completed a private offering of $1.0 billion in aggregate principal amount of the 6.375% 2034 notes at an issue price equal to 100% of par value. The net proceeds from the offering were used to repay indebtedness outstanding under the Revolving Facility and for general corporate purposes. In connection with the issuance of the 6.375% 2034 notes, we incurred $12.8 million of various third-party fees and expenses. These costs have been recorded as a reduction to long-term debt and are being amortized over the contractual life of the 6.375% 2034 notes using the effective interest method. 2025 Debt TransactionsNotes Offering TransactionOn May 8, 2025, the Company completed a private offering of $750.0 million in aggregate principal amount of 6.75% 2035 notes at an issue price equal to 100% of par value. The net proceeds from the offering were used to repay indebtedness outstanding under the Revolving Facility. In connection with the issuance of the 6.75% 2035 notes, we incurred $11.1 million of various third-party fees and expenses. These costs have been recorded as a reduction to long-term debt and are being amortized over the contractual life of the 6.75% 2035 notes using the effective interest method. Revolving Credit Facility AmendmentOn May 20, 2025, the Company amended the Revolving Facility to, among other things, replace the existing revolving commitments of $1.8 billion with new revolving commitments of $2.2 billion, and to extend the maturity date to May 20, 2030.In connection with this amendment, we expensed approximately $0.2 million of unamortized debt issuance costs related to an exiting lender to interest expense, and we incurred approximately $8.

11. Income Taxes The components of income tax expense (benefit) were as follows for the years ended December 31: 2025 2024 2023 (in thousands) Current: Federal $ 64,048 $ 287,131 $ 468,635 State 6,327 41,529 77,475 Total current tax expense 70,375 328,660 546,110 Deferred: Federal 29,782 (16,453 ) (82,150 ) State (22,974 ) (2,580 ) (20,311 ) Total deferred tax expense (benefit) 6,808 (19,033 ) (102,461 ) Total Federal 93,830 270,678 386,485 State (16,647 ) 38,949 57,164 Total income tax expense $ 77,183 $ 309,627 $ 443,649 Temporary differences, which give rise to deferred tax assets and liabilities, were as follows as of December 31: 2025 2024 (in thousands) Deferred tax assets related to: Operating lease liabilities $ 151,548 $ 148,376 Operating loss and credit carryforwards 116,040 12,308 Insurance reserves 37,197 37,840 Accrued expenses 10,534 17,703 Stock-based compensation expense 10,051 10,931 Accounts receivable 10,111 10,006 Inventories 9,939 10,435 Other 9,201 312 Total deferred tax assets 354,621 247,911 Deferred tax liabilities related to: Property, plant and equipment (188,330 ) (179,862 ) Goodwill and other intangible assets (167,054 ) (66,263 ) Operating lease right-of-use assets (143,103 ) (140,255 ) Prepaid expenses (11,109 ) (9,698 ) Total deferred tax liabilities (509,596 ) (396,078 ) Net deferred tax liability $ (154,975 ) $ (148,167 ) A reconciliation of the statutory federal income tax rate to our effective rate is provided below for the years ended December 31: 2025 2024 2023 ($ amounts in thousands) U.S. federal statutory tax rate $ 107,600 21.0 % $ 291,380 21.0 % $ 416,683 21.0 % State and local income taxes, net of federal income tax effect (1) (18,518 ) (3.6 )% 33,267 2.4 % 40,639 2.0 % Tax credits Research and development tax credits (16,455 ) (3.2 )% (2,881 ) (0.2 )% (13,303 ) (0.7 )% Other (416 ) 0.0 % (264 ) 0.0 % (292 ) 0.0 % Nontaxable or nondeductible items Share-based payment awards (5,498 ) (1.1 )% (24,595 ) (1.8 )% (14,534 ) (0.7 )% Other 6,630 1.3 % 12,684 0.9 % 11,790 0.6 % Changes in unrecognized tax benefits 3,666 0.7 % (71 ) 0.0 % 2,543 0.1 % Other adjustments 174 0.0 % 107 0.0 % 123 0.1 % Effective tax rate $ 77,183 15.1 % $ 309,627 22.3 % $ 443,649 22.4 % (1) State taxes in California, Florida, and Texas made up the majority (greater than 50 percent) of the tax effect in this category.

10. Employee Stock-Based Compensation 2014 Incentive Plan Under our 2014 Incentive Plan (“2014 Plan”), as amended, the Company is authorized to grant awards in the form of incentive stock options, non-qualified stock options, restricted stock shares, restricted stock units, other common stock-based awards and cash-based awards. As of December 31, 2025, the Company had reserved 15.1 million shares of common stock for the grant of awards under the 2014 Plan, subject to adjustment as provided by the 2014 Plan. All shares under the Plan may be made subject to options, stock appreciation rights (“SARs”), or stock-based awards. Stock options and SARs granted under the 2014 Plan may not have a term exceeding 10 years from the date of grant. The 2014 Plan also provides that all awards will become fully vested and/or exercisable upon a change in control (as defined in the 2014 Plan) if those awards (i) are not assumed or equitably substituted by the surviving entity or (ii) have been assumed or equitably substituted by the surviving entity, and the grantee’s employment is terminated under certain circumstances. Other specific terms for awards granted under the 2014 Plan shall be determined by our Compensation Committee (or the board of directors if so determined by the board of directors). Awards granted under the 2014 Plan generally vest ratably over a three to four-year period or cliff vest after a period of three to four years. As of December 31, 2025, 7.1 million shares were available for issuance under the 2014 Plan. If it is assumed that shares will be issued at the target vesting amount for outstanding RSUs with variable payout provisions, an additional 0.4 million shares would be included in the shares available for future issuance under the 2014 Plan. Stock Options The following table summarizes our stock option activity: Weighted Weighted Average Average Exercise Remaining Aggregate Options Price Years Intrinsic Value (in thousands) (in thousands) Outstanding at December 31, 2024 25 $ 11.17 Exercised (18 ) 11.11 Forfeited — — Outstanding at December 31, 2025 7 11.32 0.9 $ 641 Exercisable at December 31, 2025 7 $ 11.32 0.9 $ 641 The outstanding options at December 31, 2025, are options granted under the 2014 plan and are exercisable. There were no options granted and no options vested during the years ended December 31, 2025, 2024 or 2023. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 were $2.

9. Leases and Other Finance Obligations Right-of-use assets and lease liabilities consisted of the following as of December 31: 2025 2024 (in thousands) Assets Operating lease right-of-use assets, net $ 622,188 $ 594,301 Finance lease right-of-use assets, net (included in property, plant and equipment, net) 1,437 1,318 Total right-of-use assets $ 623,625 $ 595,619 Liabilities Current Current portion of operating lease liabilities $ 111,132 $ 103,499 Current portion of finance lease liabilities (included in current maturities of long-term debt) 419 470 Noncurrent Noncurrent portion of operating lease liabilities 547,772 525,213 Noncurrent portion of finance lease liabilities (included in long-term debt, net of current maturities) 736 608 Total lease liabilities $ 660,059 $ 629,790 Total lease costs consisted of the following for the years ended December 31: 2025 2024 2023 (in thousands) Operating lease costs (1) $ 152,408 $ 143,878 $ 144,243 Finance lease costs: Amortization of finance lease right-of-use assets 484 1,120 2,089 Interest on finance lease liabilities 57 95 201 Variable lease costs 39,740 34,781 34,408 Total lease costs $ 192,689 $ 179,874 $ 180,941 (1) Includes short-term lease costs and sublease income which were not material for all periods presented. Future maturities of lease liabilities as of December 31, 2025, were as follows: Finance Leases Operating Leases (in thousands) 2026 $ 469 $ 145,809 2027 417 135,671 2028 240 123,762 2029 108 102,261 2030 12 72,863 Thereafter — 224,979 Total lease payments 1,246 805,345 Less: amount representing interest (91 ) (146,441 ) Present value of lease liabilities 1,155 658,904 Less: current portion (419 ) (111,132 ) Long-term lease liabilities, net of current portion $ 736 $ 547,772 Weighted average lease terms and discount rates as of December 31 were as follows: 2025 2024 Weighted average remaining lease term (years) Operating leases 6.7 7.0 Finance leases 2.9 3.0 Weighted average discount rate Operating leases 5.9 % 6.0 % Finance leases 5.5 % 5.

3. Business CombinationsDuring 2025, we completed a number of acquisitions for a combined $1.1 billion purchase price, net of cash acquired, including the acquisitions of (i) Alpine Lumber, (ii) O.C. Cluss, (iii) Truckee Tahoe, (iv) St. George Truss, (v) Stately Las Vegas, (vi) Rystin, (vii) Lengefeld Lumber, and (viii) Pleasant Valley.Alpine Lumber was the largest independently operated supplier of building materials in Colorado and northern New Mexico. Alpine Lumber serves the Colorado Front Range, western Colorado and northern New Mexico, providing a broad product range which includes prefabricated trusses and wall panels, and millwork. O.C. Cluss is a supplier of lumber and building materials to southwestern Pennsylvania, western Maryland and northern West Virginia. Truckee Tahoe is a supplier of lumber and building materials in the northern California and northwestern Nevada markets. St. George Truss manufactures trusses, serving builders in southern Utah and southern Nevada. Stately Las Vegas and Rystin provide turnkey door and trim solutions to customers in the Las Vegas area. Lengefeld Lumber supplies lumber and building materials to builders in central Texas, while Pleasant Valley Homes is a wholesale manufacturer of factory-built housing, selling HUD-compliant manufactured homes and semi-custom modular homes to land lease community developers, retailers and home builders across ten northeastern states.During 2024, we completed a number of acquisitions for a combined $345.4 million purchase price, net of cash acquired, including the acquisitions of (i) Quality Door & Millwork, Inc. (“Quality Door”), (ii) Hanson Truss Components, Inc. (“Hanson Truss”), (iii) RPM Wood Products, Inc. (“RPM”), (iv) Schoeneman Bros. Company (“Schoeneman”), (v) TRSMI, LLC (“TRSMI”), (vi) Western Truss & Components (“Western Truss”), (vii) CRi SoCal (“CRi”), (viii) Wyoming Millwork Co. (“Wyoming Millwork”), (ix) Sunrise Wood Designs, LLC (“Sunrise Wood Designs”), (x) Reno Truss, Inc. (“Reno Truss”), (xi) High Mountain Door and Trim, Inc. (“High Mountain”), (xii) Douglas Lumber, Kitchens and Home Center (“Douglas Lumber”), and (xiii) Kleet Lumber (“Kleet Lumber”).These acquisitions were funded with a combination of cash on hand and borrowings under our Revolving Facility.

Item 1C. CybersecurityRisk Management and StrategyThe Company maintains robust and comprehensive processes, procedures and controls to protect and secure its information systems and data infrastructure from cybersecurity threats. The Company’s cybersecurity program is led by its Chief Information Security Officer (“CISO”). The Company’s cybersecurity program interfaces with other functional areas within the Company, including but not limited to the Company’s business segments and information technology, legal, risk management, human resources and internal audit departments, as well as external third-party partners, to identify and understand potential cybersecurity threats and risks. The Company regularly assesses and updates its processes, procedures and management techniques in light of ongoing cybersecurity developments. Internally, the CISO coordinates oversight of reviewing security alerts, identifying and monitoring ongoing and potential cybersecurity threats, evaluating strategic business impacts of cybersecurity threats and developing programs and initiatives to educate the Company’s employees regarding cybersecurity. The CISO also manages the Company’s Security Incident Response Plan (the “Incident Response Plan”), which outlines action steps for the preparation, identification, triage, analysis, containment, eradication, recovery and reflection stages of a cybersecurity incident. The Incident Response Plan serves as the charter for the Company’s Security Incident Response Team (the “Incident Response Team”), which includes a strategic team comprised of executives from various cross-functional management teams, as well as a tactical team comprised of internal technical support roles and external third-party service providers. The Incident Response Plan provides how the Incident Response Team will analyze and, as necessary, escalate cybersecurity incidents both internally and with third-party service providers based on type and severity of the specific incident.The Company also requires cybersecurity training for all active employees, focusing on the appropriate protection and security of confidential company and third-party information. Additionally, the Company provides quarterly cybersecurity awareness training that covers a broad range of security topics, including secure access practice, phishing schemes, remote work and response to suspicious activities.