Here is the split every operator should sit with. FirstService reported third-quarter results on October 22, and its two restoration brands — Paul Davis and First Onsite — grew revenue 10% year over year, better than management expected. In the same breath, CEO Scott Patterson told analysts that claim activity in the continental U.S. across the industry has been down year-to-date.
The biggest restorers in North America grew double digits in a quarter when the everyday claim — the pipe break, the appliance leak, the bread-and-butter water job — was scarce. The growth did not come from the claim count. So where did it come from?
Geography they already owned
Part of the answer is position, bought years ago. Both brands hold top-three market positions in Canada, by the company’s own estimate, and First Onsite is the market leader in Hawaii — which, Patterson noted, “has been hit by a series of storms over the last several months.” Canada and Hawaii activity carried the quarter.
Read that the way an operator should: the storms did not make First Onsite the leader in Hawaii. They were already the leader when the storms arrived. Weather converts position into revenue; it does not create position. The companies that “get lucky” in a storm season are the ones who spent the quiet years becoming the obvious call in that market.
Large-loss signings, signed in the quiet
The second driver is the one that matters most on the mainland. Patterson’s words: “We have been successful in signing a number of large loss projects on the mainland that will be converted to revenue over the next many months.” While claim activity was down, they were signing large-loss work — and that signed work, not today’s weather, is what fills the next several quarters.
And it started earlier. On the Q2 call, management said they had spent late Q2 “signing work and building our pipeline back to a healthy level.” The Q3 revenue beat was manufactured a quarter earlier, in the signings. Backlog heading into Q4 is solid, and the company guided restoration growth of mid-to-high single digits for Q4 — on the strength of work already signed, in a market where claims are still soft.
Even the storm underdelivered
The quarter’s named storm makes the point from the other side. Hurricane Isaias hit the Florida Panhandle on October 10 as a Category 2. It caused less damage than feared, industry claims came in “much lower than expected,” and the restoration brands’ work from it — mostly mitigation and board-up — was, in Patterson’s words, not a material amount.
A Cat 2 landfall is not a pipeline. Any operator whose growth plan requires the right storm to hit the right coastline is not running a plan; they’re holding a lottery ticket. The platform that grew 10% grew on position and signings, and treated the storm as a footnote — because to them, it was one.
What this means at your size
You are not going to out-Canada anybody, and this page is not going to teach you Paul Davis’s playbook. But the shape of their quarter is the shape of every durable restoration business, at any size:
Position is pre-bought. The relationships that produce large-loss work — the property managers, the risk managers, the trades who get called first — are built in the months when nothing is happening. When the loss comes, the signing already happened.
Signings are a quiet-month activity. FirstService’s Q3 was won in Q2’s pipeline work. The time to get the agreement signed, the approval levels mapped, and your name in the building’s call list is precisely when everyday claims are soft and you have the hours — which is to say, now, in a down-claims year.
Backlog is yesterday’s business development, reporting in. When a soft quarter shows up, you find out what your BD actually was two quarters ago. There is no version of this where you market your way out of a slow quarter inside the slow quarter.
Claims will come back; they always do. The operators who grow through the soft stretch are the ones who used it to sign the work the busy stretch won’t have time to sell.
— Will Tygart