WATSCO INC Q4 FY2024 earnings call

• Transition to next-generation A2L products is well underway, with investments to train customers and transition inventories. • Technology platforms have gained momentum: community of Watsco mobile app users over 64,000; e-commerce sales up 16% and 35% of annual sales; OnCall Air generated 313k proposals with 25% GMV increase. • Strong financial position allows investment in growth opportunities, including 70th acquisition since 1989.

Watsco achieved record sales in the fourth quarter. Equipment sales grew 14%, residential products grew 16%. E-commerce sales during the quarter increased 16%, now representing 35% of annual sales, totaling $2.6 billion. OnCall Air, the digital sales platform for contractors, presented approximately 313,000 proposals to homeowners, generating 1.5 million in gross merchandise value, a 25% increase.

• Announced an 11% dividend increase to $12 per share. • Optimistic about A2L transition, technology investments, and using strong financial position to accelerate growth and gain market share. • Expect to be through selling 410A inventory by end of 2025 with strong business units helping each other in inventory management.

Q: Ref refrigerant price volatility and channel issues?

A: Paul Johnston said no spike in 410 price yet, some availability issue with containers for new refrigerants, and volumes from a supplier with past issues are less than 10% of total Watsco sales.

Q: Cost difference for full replacement vs outdoor unit only?

A: Paul Johnston said it's a higher price due to needing an indoor unit with sensors and switches, but exact delta not known yet, expected to be more than outdoor unit replacement.