Comfort Systems USA, Inc.
FIX · NYSE
FIX · NYSE
Reports Oct 22, 2026.
Consensus is $12.06 EPS for Sep 2026 across 6 estimates, ranging $10.90 to $12.96.
Comfort Systems delivered a broad-based blowout second quarter, with diluted EPS of $12.53 beating the $10.38 consensus by 20.7%. Revenue reached $3.27 billion, up 50.3% year over year and 13.8% from the prior quarter, while operating income rose 86.1% year over year to $558.0 million and 14.9% sequentially. Net income was $441.6 million versus $230.8 million a year ago and $370.4 million in the first quarter.
The print was defined by unusually strong demand, better execution and exceptionally high cash conversion. Same-store revenue increased 43.8%, led by technology and data-center activity, while electrical revenue grew 81.2% and lifted its mix to 29.7%. Gross margin expanded 240 basis points to 25.9%, and operating margin increased to 17.1% despite higher compensation and labor costs. Backlog rose to $14.06 billion, with same-store backlog up 68.7% year over year, providing substantial near-term visibility. Operating cash flow of $1.14 billion and free cash flow of $999.3 million were aided by $1.06 billion of higher billings in excess of costs and deferred revenue during the first half. Management expects high demand, particularly from technology and manufacturing customers, to continue through the remainder of 2026.
Comfort Systems converted rapid volume growth into disproportionate profit growth. Revenue increased 50.3% year over year to $3.27 billion, while gross profit rose 65.6% to $844.2 million. Gross margin expanded from 23.5% to 25.9%, primarily reflecting improved execution across operating locations and stronger mechanical margins. SG&A grew 36.4% to $287.0 million but declined to 8.8% of revenue from 9.7%, creating operating leverage. Operating income increased to $558.0 million, or 17.1% of revenue, from $299.9 million and 13.8% a year ago.
The quarter remained centered on technology-related construction, particularly data centers. Technology customers accounted for $1.92 billion, or 58.7% of revenue, compared with 43.0% in the year-ago quarter. New construction revenue nearly doubled to $2.45 billion, representing 75.1% of revenue. Management described demand in technology and manufacturing as likely to remain elevated through 2026, although it continues to flag labor-cost pressure and intermittent supply-chain delays.
Electrical was the fastest-growing segment, reflecting both acquired operations and sharply higher same-store technology activity. Revenue increased 81.2% to $969.0 million, and operating income rose 92.2% to $154.1 million. Electrical represented 29.7% of consolidated revenue, up from 24.6% a year ago, while its backlog reached $4.00 billion versus $2.31 billion a year ago.
Cash generation was a major differentiator in the quarter, though the increase was partly driven by working-capital timing rather than earnings alone. First-half operating cash flow was $1.53 billion versus $164.5 million a year ago, and free cash flow was $1.24 billion versus $113.1 million. Management attributed the improvement to higher earnings, increased customer advances and timing of billings and payments.
Comfort Systems added R.C. Hunt Electric on May 1 for a preliminary purchase price of $206.0 million, including $167.2 million of cash and $15.0 million of notes to former owners. Hunt provides electrical design and construction services in the Western United States across industrial, technology, commercial and infrastructure markets. The acquisition contributed to the quarter's 6.5% acquisition-related revenue growth and increased the electrical segment's footprint.
