Watsco (WSO) risk factors, FY2024 10-K

Watsco's FY2024 10-K, filed Feb 28, 2025, lists 11 risk factors in 5 groups. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

Open WSO in Gloom →
Watsco's chart, financials and news, free in your browser.Open WSO in Gloom →
Risk factors listed
115 groups
Section length
3k wordsItem 1A

Watsco's biggest risks in the FY2024 10-K

  • Watsco relies heavily on Carrier for 62 percent of its HVAC product purchases.
  • Distribution agreements with major suppliers lack stated expiration dates.
  • Insider ownership is concentrated in Class B common stock.

The risks most specific to Watsco

  • Supplier Concentration and Supply Chain Risks

    Top ten suppliers accounted for 85 percent of purchases, with 62 percent coming from Carrier and 9 percent from Rheem.

  • We maintain trade name and distribution agreements with Carrier and Rheem that provide us with distribution rights on an exclusive basis in specified territories. Such agreements are not subject to a stated term or expiration date

    Distribution agreements with Carrier and Rheem lack stated expiration dates and restrict sales of competitive products in certain locations.

  • Risks Inherent in Acquisitions

    Acquisition strategy may require incurring additional debt or issuing more common stock.

  • possible loss of key employees and/or customer relationships of the acquired companies

    Undiscovered liabilities in acquired companies or joint ventures may not be fully covered by seller indemnification.

  • Cybersecurity Risks

    Failure to successfully manage the operational challenges and risks associated with, or resulting from, upgrades and conversions to newer versions of our information technology systems core to our operations could adversely affect our results of operations, cash flows, and liquidity

    Upgrades and conversions of core information technology systems pose operational challenges and risks to liquidity.

  • Cybersecurity Risks

    Foreign Currency Exchange Rate Fluctuations

    Canadian operations use the Canadian dollar as functional currency, exposing the company to foreign exchange rate fluctuations.

  • International Risk

    Goodwill, Intangibles and Long-Lived Assets

    Goodwill, intangibles, and long-lived assets represent approximately 31 percent of total assets at December 31, 2024.

  • Risks Related to our Common Stock

    Class B Common Stock and Insider Ownership

    Directors and executive officers own 90 percent of the outstanding Class B common stock.

All 11 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Supplier Concentration and Supply Chain Risks
  2. 02We maintain trade name and distribution agreements with Carrier and Rheem that provide us with distribution rights on an exclusive basis in specified territories. Such agreements are not subject to a stated term or expiration date
  3. 03Risks Inherent in Acquisitions
  4. 04possible loss of key employees and/or customer relationships of the acquired companies

Cybersecurity Risks

  1. 05Failure to successfully manage the operational challenges and risks associated with, or resulting from, upgrades and conversions to newer versions of our information technology systems core to our operations could adversely affect our results of operations, cash flows, and liquidity
  2. 06Foreign Currency Exchange Rate Fluctuations
  3. 07Dependence on Key Personnel
  4. 08Decline in Economic Conditions

International Risk

  1. 09Goodwill, Intangibles and Long-Lived Assets

Risks Related to our Common Stock

  1. 10Class B Common Stock and Insider Ownership
  2. 11Securities Analyst Research and Reports

Other Watsco 10-Ks

  • FY2025 10-K risk factors
    10 risks1 dropped1 reworded

    Supplier concentration remains high with Carrier and Rheem accounting for 70% of purchases in 2025. Rheem supply details were expanded to include Friedrich and AireVantage products.

    Filed Feb 27, 2026

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.