EMCOR Group, Inc.
EME · NYSE
Next quarter
Reports Oct 29, 2026.
Consensus is $8.31 EPS for Sep 2026 across 4 estimates, ranging $8.08 to $8.69.
EME Jun 2026
- 25.31%
- -0.62%
- $7.23
- $9.06
- —
- $5.15B
Reported results
- $5.15B
- 19.83%
- $547.34M
- 10.62%
- $403.69M
- $9.06
Highlights
- Earnings beat: Diluted EPS was $9.06, 25.3% above the $7.23 consensus and up 34.8% from $6.72 a year ago; EPS increased 32.5% from $6.84 in Q1.
- Record scale and profitability: Revenue reached a quarterly-record $5.15 billion, up 19.8% year over year and 11.3% sequentially, while operating income rose 31.8% year over year to a record $547.3 million.
- Margin expansion: Operating margin improved to 10.6% from 9.6% a year ago and 8.7% in Q1; gross margin increased to 19.8% from 19.4%, while SG&A fell to 9.2% of revenue from 9.7%.
- Backlog visibility: Remaining performance obligations reached a record $17.14 billion, up 43.9% from $11.91 billion a year ago and 29.3% from $13.25 billion at year-end; $13.02 billion is expected to convert within one year.
- Broad segment growth: Electrical revenue rose 24.0% to $1.66 billion, mechanical revenue increased 31.1% to $2.30 billion, building services grew 5.6% to $837.7 million, and industrial services rose 25.9% to $353.8 million.
- Data center demand: Network and communications was the largest growth driver, with quarterly revenue of $973.0 million in electrical and $799.3 million in mechanical construction, versus $670.0 million and $389.7 million, respectively, a year earlier.
- Guidance raised sharply: Full-year revenue guidance increased to $20.00-$20.50 billion from $18.50-$19.25 billion, operating margin guidance to 9.5%-9.8% from 9.0%-9.4%, and EPS guidance to $32.00-$33.25 from $28.25-$29.75.
- Cash and capital deployment: Six-month operating cash flow was $289.9 million versus $302.2 million a year ago as growth consumed working capital; EMCOR ended June with $924.4 million of cash, no revolver borrowings, and repurchased $177.7 million of stock in the quarter.
Analysis
EMCOR's second quarter was a broad-based growth and execution print that materially exceeded expectations. Diluted EPS of $9.06 beat the $7.23 consensus by 25.3% and increased 34.8% year over year, while revenue of $5.15 billion rose 19.8% from $4.30 billion in the prior-year quarter. Against Q1, revenue increased 11.3%, operating income advanced 35.5% from $403.8 million to $547.3 million, and EPS rose 32.5% from $6.84. Net income was $403.7 million versus $302.2 million a year ago and $305.5 million in Q1.
The defining features were growth across every operating segment, better profitability, and an unusually strong forward order book. Operating margin expanded 100 basis points year over year to 10.6%, helped by gross-margin improvement and SG&A leverage, although mechanical construction margin fell to 12.5% from 13.6% because of project mix. Network and communications, particularly data center work, drove much of the construction growth. Record RPO of $17.14 billion, including $13.02 billion due within a year, supported a substantial guidance increase. Management now expects 2026 revenue of $20.00-$20.50 billion and EPS of $32.00-$33.25, versus prior ranges of $18.50-$19.25 billion and $28.25-$29.75.
Quarterly results
EMCOR converted strong demand into record quarterly earnings. Revenue increased 19.8% year over year to $5.15 billion, while operating income rose 31.8% to $547.3 million. Net income increased 33.6% to $403.7 million. The comparison also benefited modestly from $4.3 million of net interest income, versus $3.2 million of net interest expense in the year-ago quarter, while the effective tax rate was broadly unchanged at 26.8%.
- Gross profit: Gross profit increased to $1.02 billion from $833.8 million, with margin expanding to 19.8% from 19.4%.
- Overhead leverage: SG&A rose 13.5% to $475.0 million, but declined to 9.2% of revenue from 9.7%, allowing more of the revenue growth to reach operating income.
- Sequential acceleration: Revenue rose from $4.63 billion in Q1 to $5.15 billion, while operating margin increased from 8.7% to 10.6% and diluted EPS advanced from $6.84 to $9.06.
Construction demand
The construction businesses supplied the bulk of the quarter's growth, with network and communications projects, especially data centers, the most important demand driver. Electrical and mechanical construction together represented 77% of quarterly revenue, up from 72% a year earlier. Growth was supplemented by institutional, commercial, manufacturing and industrial work, and increased service activity.
- Electrical construction: Revenue rose 24.0% to $1.66 billion and operating income increased 46.6% to $231.4 million. Margin expanded to 13.9% from 11.8%, reflecting stronger execution and mix, particularly in network and communications.
- Mechanical construction: Revenue increased 31.1% to $2.30 billion and operating income grew 20.1% to $286.6 million. Margin declined to 12.5% from 13.6% as a greater mix of construction-manager, prime-contractor, guaranteed-maximum-price and cost-plus work carried lower margins.
- Network and communications: Electrical revenue in the sector increased to $973.0 million from $670.0 million, while mechanical revenue rose to $799.3 million from $389.7 million.
Other operating segments
Growth was not limited to data center-related construction. Building services benefited from a larger service contract base, HVAC repair and retrofit work, and building automation and controls. Industrial services recovered from the prior year's weak profitability as field-service activity increased.
- Building services: Revenue grew 5.6% to $837.7 million, while operating income increased 26.6% to $63.4 million. Margin improved to 7.6% from 6.3%, helped by better project mix, execution and lower overhead after 2025 restructuring actions.
- Industrial services: Revenue rose 25.9% to $353.8 million, and operating income improved to $9.6 million from a $0.4 million loss. The segment benefited from turnaround activity, petrochemical projects and a large solar project, while shop-services revenue declined.
- Acquisition contribution: First-half acquisitions added $403.3 million of revenue, including $169.2 million in the quarter; quarterly operating income included $13.9 million of net acquisition contribution after identifiable-intangible amortization.
Backlog and guidance
The order book strengthened alongside the income statement. RPO increased $3.89 billion from December 31 and $5.23 billion from June 30, 2025, with the largest additions in network and communications, healthcare, water and wastewater, and institutional markets. The company said it continues to see broad demand while maintaining pricing discipline and selectivity.
- RPO composition: Mechanical construction accounted for $9.37 billion, or 55%, of RPO; electrical construction represented $6.27 billion, or 36%; building services represented $1.36 billion, or 8%.
- Near-term conversion: $13.02 billion of the $17.14 billion RPO balance is expected to be recognized within one year, while $4.12 billion is scheduled thereafter.
- Raised outlook: Revenue guidance increased to $20.00-$20.50 billion from $18.50-$19.25 billion; operating margin guidance rose to 9.5%-9.8% from 9.0%-9.4%; EPS guidance increased to $32.00-$33.25 from $28.25-$29.75.
Liquidity and capital allocation
Cash generation was positive but lagged earnings growth as receivables, contract assets and other working-capital needs expanded with the business. EMCOR retained substantial financial flexibility for acquisitions and shareholder returns, including pending electrical acquisitions with an aggregate upfront purchase price of approximately $700 million expected to close in the third quarter.
- Operating cash flow: Six-month operating cash flow was $289.9 million, down from $302.2 million a year earlier, despite six-month net income increasing to $709.2 million from $542.8 million.
- Balance sheet: Cash was $924.4 million at June 30 versus $1.11 billion at year-end. The company had no direct borrowings and $1.23 billion of available capacity under its $1.30 billion revolving facility.
- Shareholder returns: EMCOR repurchased $177.7 million of stock in the quarter and $265.3 million in the first half, paid $17.8 million of quarterly dividends, and had $415.2 million remaining under its repurchase authorization.
