On this page of StockholderLetter.com we present the latest annual shareholder letter from WATSCO INC — ticker symbol WSO. Reading current and past WSO letters to shareholders can bring important insights into the investment thesis.
IT S ALL ABOUT THE CULTURE ANNUAL REPORT 2025
IT S WHAT GOT US HERE. IT S WHAT GUIDES US FORWARD.
W AT S C O , I N C . 2 0 2 5 A N N U A L R E P O R T Watsco entered the distribution market in 1989 and is the largest distributor in the estimated $74 billion North American market for HVAC products. It is our culture that has mattered most in building Watsco, the continuity of which is assured given the generational nature of our ownership along with the long-term equity provided to our leaders, managers and employees. The most foundational aspect of our culture is simple we put entrepreneurs first, including over 130,000 contractor customers, who represent the purest form of entrepreneurship that we support each day. Our other community of entrepreneurs includes our locally empowered leaders and managers who are at the front line, delivering a highly-innovative customerexperience. 2 W AT S C O , I N C . 2 0 2 5 A N N U A L R E P O R T Watsco s culture is the single most durable competitive advantage we have. While we have accomplished much, we also have much to achieve. For instance, our technology solutions, many of which are in early phases of scaling and adoption, have already reshaped the customer-experience of our industry. And 2026 will mark the launch of several new growth initiatives intended to power the next wave of growth in our history, each of which further leverage our technology leadership and scale. Simply put, our focus is to deliver greater value to our customers, suppliers, employees, and shareholders and build an even stronger, more resilient Watsco for the years ahead. 3
W AT S C O , I N C . 2 0 2 5 A N N U A L R E P O R T WE ARE IN THE EARLY STAGES OF WHAT IS POSSIBLE, AND OUR IMMENSE DATA ADVANTAGE IS SPEARHEADING THE NEXT PHASE OF GROWTH AND INNOVATION. GROWTH THROUGH INNOVATION Watsco pioneered the HVAC industry s most comprehensive digital ecosystem, which continues to transform how contractors do business. Over the past five years, we have invested more than $250 million in technology solutions that enhance customer experience, drive operational efficiency and extend our competitive advantage. With vast customer, product, technical and vendor data accumulated over 15 years, we are now advancing AI-driven initiatives to deliver even more powerful, data-informed solutions. 5
W W AT AT SS C CO O ,, II N NC C .. 2 20 02 25 5 A AN NN NU UA A LL R RE EP PO OR R TT WE HOLD APPROXIMATELY 10% SHARE OF THIS GROWING $74 BILLION MARKETPLACE AND THERE IS TREMENDOUS ROOM TO GROW. WATSCO OPERATES IN A GROWING, FRAGMENTED INDUSTRY We consider our role as a distributor as incredibly strategic as we serve over 130,000 customers, all of which are central to how products are specified and installed in homes and businesses. Our job, and our passion, is to support every aspect of our customers daily life at a local, personal level given that their success powers our success, representing the highest form of collaboration. It is also fundamental that HVAC products are a necessity, providing health and comfort to every home and business. The installed base of HVAC systems has grown every year since their invention. Accordingly, long-term market growth is driven by a large and aging installed base of over 120 million HVAC systems today. We also consider population growth and population migration to the Sun Belt states, where approximately two thirds of Watsco s business resides, as important catalysts of future demand. 6 4
 • shareholder letter icon 4/24/2026 Letter Continued (Full PDF)
 • stockholder letter icon 4/28/2023 WSO Stockholder Letter
 • stockholder letter icon 4/26/2024 WSO Stockholder Letter
 • stockholder letter icon 4/25/2025 WSO Stockholder Letter
 • stockholder letter icon More "Industrial Machinery & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon WSO Benford's Law Stock Score = 58


WSO Shareholder/Stockholder Letter Transcript:

IT   S ALL ABOUT THE
CULTURE
ANNUAL REPORT 2025

IT   S WHAT
GOT US HERE.
IT   S WHAT
GUIDES US
FORWARD.

W AT S C O , I N C . 2 0 2 5 A N N U A L R E P O R T
Watsco entered the distribution market in
1989 and is the largest distributor in the
estimated $74 billion North American market
for HVAC products. It is our culture that has
mattered most in building Watsco, the continuity of
which is assured given the generational nature of
our ownership along with the long-term equity provided
to our leaders, managers and employees.
The most foundational aspect of our culture is simple    
we put entrepreneurs first, including over 130,000
contractor customers, who represent the purest form
of entrepreneurship that we support each day.
Our other community of entrepreneurs includes our
locally empowered leaders and managers who are at
the front line, delivering a highly-innovative customerexperience.
2
W AT S C O , I N C . 2 0 2 5 A N N U A L R E P O R T
Watsco   s culture is the single most durable
competitive advantage we have.
While we have accomplished much, we also have much
to achieve. For instance, our technology solutions, many
of which are in early phases of scaling and adoption, have
already reshaped the customer-experience of our industry.
And 2026 will mark the launch of several new growth
initiatives intended to power the next wave of growth in
our history, each of which further leverage our technology
leadership and scale.
Simply put, our focus is to deliver greater value to our customers, suppliers, employees, and shareholders and build
an even stronger, more resilient Watsco for the years ahead.
3

W AT S C O , I N C . 2 0 2 5 A N N U A L R E P O R T
WE ARE IN THE EARLY STAGES OF WHAT IS POSSIBLE,
AND OUR IMMENSE DATA ADVANTAGE IS SPEARHEADING
THE NEXT PHASE OF GROWTH AND INNOVATION.
GROWTH THROUGH
INNOVATION
Watsco pioneered the HVAC industry   s most comprehensive
digital ecosystem, which continues to transform how contractors do business. Over the past five years, we have invested
more than $250 million in technology solutions that enhance
customer experience, drive operational efficiency and extend
our competitive advantage.
With vast customer, product, technical and vendor data accumulated over 15 years, we are now advancing AI-driven initiatives to deliver even more powerful, data-informed solutions.
5

W
W AT
AT SS C
CO
O ,, II N
NC
C .. 2
20
02
25
5 A
AN
NN
NU
UA
A LL R
RE
EP
PO
OR
R TT
WE HOLD APPROXIMATELY 10% SHARE OF THIS
GROWING $74 BILLION MARKETPLACE AND THERE IS
TREMENDOUS ROOM TO GROW.
WATSCO OPERATES IN A
GROWING, FRAGMENTED
INDUSTRY
We consider our role as a distributor as incredibly strategic as
we serve over 130,000 customers, all of which are central to
how products are specified and installed in homes and businesses. Our job, and our passion, is to support every aspect
of our customers    daily life at a local, personal level given that
their success powers our success, representing the highest
form of collaboration.
It is also fundamental that HVAC products are a necessity,
providing health and comfort to every home and business.
The installed base of HVAC systems has grown every year since
their invention. Accordingly, long-term market growth is driven
by a large and aging installed base of over 120 million HVAC
systems today.
We also consider population growth and population migration to
the Sun Belt states, where approximately two thirds of Watsco   s
business resides, as important catalysts of future demand.
6
4


shareholder letter icon 4/24/2026 Letter Continued (Full PDF)
 

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