Watsco, Inc.
WSO Industrials Industrial Distribution
Watsco, Inc.’s revenue for fiscal 2025 (year ended December 2025) was $7.2 billion, down 4.98% from fiscal 2024. In the quarter to June 2026, revenue grew 2.06%, EPS fell 11.5%, free cash flow grew 17.6% and total debt rose 815.5%, each against the same quarter a year earlier. Dividend growth for ten consecutive years.
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Watsco, Inc. (WSO) Beneish M-score
Watsco, Inc.'s Beneish M-score for fiscal 2025 is −2.48; values above −1.78 are the model's flag for possible earnings manipulation — a statistical screen, not a finding.
Beneish M-score, annual
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Annual newest first
| Period | Beneish M-score | Change (points) |
|---|---|---|
| FY2025 | −2.48 | 0.15 |
| FY2024 | −2.63 | (0.41) |
| FY2023 | −2.22 | 0.07 |
| FY2022 | −2.28 | (0.09) |
| FY2021 | −2.19 | 0.62 |
| FY2020 | −2.81 | (0.39) |
| FY2019 | −2.42 | (0.22) |
| FY2018 | −2.20 | 0.29 |
| FY2017 | −2.49 | 0.04 |
| FY2016 | −2.54 | (0.12) |
How fiscal 2025’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Days’ sales in receivables index | 0.95 | — | 0.88 | |
| Gross margin index | 0.96 | — | 0.51 | |
| Asset quality index | 1.07 | — | 0.43 | |
| Sales growth index | 0.95 | — | 0.85 | |
| Depreciation index | 0.92 | — | 0.11 | |
| SG&A index | 1.09 | — | −0.19 | |
| Total accruals to total assets | 0.00 | — | 0.02 | |
| Leverage index | 0.74 | — | −0.24 | |
| Beneish M-score | Low — no pattern the model associates with manipulation | −2.48 | ||
How the Beneish M-score works
M = −4.84 + 0.920 × DSRI + 0.528 × GMI + 0.404 × AQI + 0.892 × SGI + 0.115 × DEPI − 0.172 × SGAI + 4.679 × TATA − 0.327 × LVGI (Beneish, 1999): eight changes in the accounts from one fiscal year to the next, which the model weighs for the pattern seen in companies that later restated their earnings. Higher is worse.
| below −2.22 | Low — no pattern the model associates with manipulation |
|---|---|
| −2.22 to −1.78 | Elevated |
| above −1.78 | Flagged by the model |
−1.78 is the cut-off usually quoted from the paper, −2.22 a common conservative one. A statistical screen, not a finding of wrongdoing.
When asset quality, depreciation or SG&A cannot be worked out, that index is set to 1, as Beneish did, and the breakdown says so; with all three missing there is no score. Depreciation includes amortisation, and asset quality leaves out securities. Not worked out for banks, insurers and REITs.
Beneish M-score against peers
| Company | Beneish M-score |
|---|---|
| MSM MSC Industrial Direct Company, Inc. compare | −2.7× |
| XMTR Xometry, Inc. compare | −2.7× |
| CNM Core & Main, Inc. compare | −2.6× |
| WSO.B Watsco, Inc. compare | −2.5× |
| WSO Watsco, Inc. | −2.5× |
| AIT Applied Industrial Technologies, Inc. compare | −2.4× |
| POOL Pool Corporation compare | −2.4× |
| WCC WESCO International, Inc. compare | −2.2× |
| QXO QXO, Inc. compare | 248× |
What Beneish M-score is
The Beneish M-Score combines eight year-on-year changes in the accounts into a statistical screen for patterns seen in companies that overstated earnings.
−4.84 + 0.920 × DSRI + 0.528 × GMI + 0.404 × AQI + 0.892 × SGI + 0.115 × DEPI − 0.172 × SGAI + 4.679 × TATA − 0.327 × LVGI