EMCOR Group, Inc.
EME · NYSE
Next quarter
Expected to report Feb 25, 2027 — estimated from last year’s reporting date.
Consensus is $8.77 EPS for Dec 2026 across 5 estimates, ranging $8.38 to $9.71.
EME Sep 2026
- 15.25%
- $8.33
- $9.60
- —
- $5.54B
Reported results
- $5.54B
- 20.00%
- $545.79M
- 9.85%
- $399.93M
- $9.04
Highlights
- Adjusted EPS beat EMCOR reported non-GAAP diluted EPS of $9.60, 15.25% above the $8.33 consensus; GAAP diluted EPS was $9.04, including a $34.0 million non-cash intangible-asset impairment.
- Record revenue and backlog Q3 revenue reached a record $5.54 billion, up 28.8% year over year and 25.5% organically; remaining performance obligations (RPO) hit a record $18.57 billion, up 47.2% year over year.
- Higher adjusted margin GAAP operating income was $545.8 million at a 9.8% margin; excluding the impairment, operating income was $579.8 million and margin was 10.5%, up 110 basis points year over year.
- Construction strength Electrical revenue rose 44.3% to $1.85 billion with a 13.3% operating margin; mechanical revenue increased 43.1% to $2.55 billion with a 12.1% margin.
- Data centers led demand Data-center RPO reached $8.74 billion, more than double a year earlier and up 13% sequentially; healthcare, water and wastewater, and institutional RPO grew 31%, 38%, and 25%, respectively.
- Guidance raised EMCOR lifted 2026 revenue guidance to $20.6–$21.0 billion from $20.0–$20.5 billion, non-GAAP operating margin to about 10% from 9.5%–9.8%, and non-GAAP diluted EPS to $34.50–$35.50 from $32.00–$33.25.
- Strong cash generation Quarterly operating cash flow was $796.7 million; nine-month operating cash flow reached $1.09 billion, and cash on hand was $774.8 million at September 30.
- Capital return expanded The board authorized an additional $500 million for share repurchases; EMCOR had repurchased $455.2 million of stock and paid $53.3 million in dividends in the first nine months.
Analysis
EMCOR’s September-quarter print combined a substantial earnings beat with record revenue, margins and RPO. Non-GAAP diluted EPS of $9.60 exceeded the $8.33 consensus by 15.25%; GAAP diluted EPS was $9.04, up from $6.57 a year ago, after a $34.0 million non-cash impairment charge. Revenue grew 28.8% year over year to $5.54 billion, including 25.5% organic growth. Sequentially, revenue rose from $5.15 billion in Q2, while GAAP operating income of $545.8 million and diluted EPS of $9.04 were slightly below Q2’s $547.3 million and $9.06.
The quarter’s defining features were the scale of construction demand, improved operating leverage and a sharply larger forward workload. Adjusted operating margin expanded 110 basis points year over year to 10.5%, as gross margin improved and SG&A declined to 9.5% of revenue. Electrical and mechanical construction revenue grew 44.3% and 43.1%, respectively, while data-center RPO alone reached $8.74 billion. Total RPO increased 8.3% sequentially to $18.57 billion. With year-to-date momentum and backlog visibility, EMCOR raised its 2026 revenue and adjusted EPS outlook and lifted its operating-margin expectation to about 10%.
Construction growth and margins
Construction drove the record quarter, with growth extending beyond data centers into institutional, healthcare, commercial, manufacturing and water-related work. Electrical construction revenue increased 44.3% to $1.85 billion, and operating income rose to $247.0 million; its 13.3% margin expanded 200 basis points, aided by execution and favorable mix. Mechanical revenue climbed 43.1% to $2.55 billion, with operating income of $308.2 million. Its 12.1% margin was down 80 basis points year over year as a greater share of work came from construction-manager or prime-contractor roles and GMP or cost-plus contracts, which carry lower percentage margins. Management expects mechanical margins to remain around current levels, with the year-over-year decline in comparisons easing as 2027 begins.
- Electrical demand Data-center revenue increased 68%; institutional, healthcare, and manufacturing and industrial revenue grew 78%, 31%, and 28%, respectively.
- Mechanical demand Data-center revenue rose nearly 130%, reflecting new projects and added cooling scope; institutional, healthcare, and water and wastewater revenue increased 56%, 29%, and 32%.
- Other businesses Building Services revenue rose 4.7% to $852.4 million, while operating margin improved 50 basis points to a quarterly-record 7.8%. Industrial Services revenue was approximately flat at $287.5 million and operating income declined to $5.1 million from $6.3 million.
Record RPO and data centers
RPO reached $18.57 billion at September 30, up $5.96 billion, or 47.2%, from a year earlier and 8.3% sequentially. Management said most of the increase was organic and spread across most markets served. Data centers were the largest contributor, but management also emphasized the breadth of demand and described balancing work across geographies, customers and end markets. The company noted that data-center work is diversified among customers and trades, and that most of its current data-center revenue still comes from cloud storage and computing projects.
- Data centers RPO was a record $8.74 billion, more than double year-earlier levels and up 13% sequentially.
- Other growing markets Healthcare RPO reached $1.71 billion, up 31% year over year; water and wastewater was $1.42 billion, up 38%; institutional was $1.72 billion, up 25%; and manufacturing and industrial was $1.18 billion, up 10%.
- Conversion visibility The filing showed $14.36 billion of RPO expected to be recognized within one year and $4.21 billion thereafter.
Operating leverage and earnings
GAAP operating income increased to $545.8 million from $405.7 million a year ago, while operating margin rose to 9.8% from 9.4%. Excluding the $34.0 million impairment, non-GAAP operating income was $579.8 million, up 43%, and margin was 10.5%, an expansion of 110 basis points. Gross profit margin improved 60 basis points to 20.0%, and SG&A fell to 9.5% of revenue from 10.0%, reflecting leverage on growth. The impairment related to identifiable intangible assets at a Building Services business representing less than 1% of that segment’s revenue; the after-tax charge was $24.7 million. Non-GAAP diluted EPS of $9.60 compared with $6.57 a year earlier.
- Nine-month performance Revenue increased 22.9% to $15.32 billion, or 20.8% organically; GAAP operating income rose to $1.50 billion from $1.14 billion, and diluted EPS increased to $24.93 from $18.53.
- Segment margin contrast Electrical’s margin rose to 13.3% from 11.3%; mechanical’s declined to 12.1% from 12.9%; Building Services improved to 7.8% from 7.3%.
Raised 2026 outlook
EMCOR raised its full-year outlook based on year-to-date momentum and near-term visibility. Management expects strong Q4 performance and a full-year adjusted operating margin at least equivalent to the 10% achieved in the first nine months. Guidance excludes the impairment charge. Management also cautioned that acquisition-related backlog amortization moderates near-term earnings contributions: it expects $35.3 million of amortization in Q4 2026 and estimates about $128 million in 2027 from acquisitions completed to date.
Cash and capital allocation
Operating cash flow was $796.7 million in Q3 and $1.09 billion for the first nine months, compared with $777.7 million in the prior-year nine-month period. Management attributed the quarter’s cash generation partly to working-capital dynamics and said slower growth could release cash tied up in receivables and unbilled work. At September 30, EMCOR had $774.8 million of cash and no outstanding revolver borrowings. It spent $455.2 million on share repurchases and $53.3 million on dividends in the first nine months, while investing $797.4 million in acquisitions. The new $500 million authorization expands repurchase capacity under the existing program.
