Group 1 - The article emphasizes the difficulty of forecasting the economy, highlighting that predictions are inherently uncertain and based on current data and developments [1] - It mentions that the research provided by iREIT on Alpha includes a variety of investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs, catering to income-seeking investors [1] Group 2 - The article includes a disclosure regarding the author's beneficial long position in specific stocks, indicating a vested interest in ODFL, FIX, and CP [1] - It clarifies that the opinions expressed are personal and not influenced by compensation from any company mentioned [1]

Shares of Comfort Systems (FIX) have gained 20.5% over the past four weeks to close the last trading session at $397.54, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $512.60 indicates a potential upside of 28.9%.The mean estimate comprises five short-term price targets with a standard deviation of $48.99. While the lowest estimate of $465 indicates a 17% increase from the cur ...

Financial Data and Key Metrics Changes - Earnings per share for the first quarter reached $4.75, an increase of over 75% compared to the previous year [5][13] - Revenue for the first quarter was $1.8 billion, a 19% increase year-over-year [9][10] - Gross profit increased to $403 million, up $106 million from the previous year, with a gross profit margin of 22% compared to 19.3% [10][11] - Operating income rose by 54% to $229 million, with an operating income margin of 11.4% [12][13] - Net income for the quarter was $169 million, compared to $96 million in the same quarter last year [13] Business Line Data and Key Metrics Changes - Electrical segment revenue increased by 22%, while Mechanical segment revenue grew by 18% [10] - Same store revenue growth for the first quarter was 15%, with $237 million attributed to same store growth and $57 million from acquisitions [9][10] - Modular revenue accounted for 19% of total revenue, with an average project size exceeding $20 million [21] Market Data and Key Metrics Changes - The technology sector accounted for 37% of total revenue, up from 30% the previous year [20] - Institutional markets, including education and healthcare, represented 24% of revenue, while the commercial sector accounted for 14% [20] - Backlog at the end of the first quarter reached a record $6.9 billion, with a same store sequential increase of 14% and a year-over-year increase of 16% [19] Company Strategy and Development Direction - The company is focused on project execution, recruiting, and retaining a skilled workforce while selecting the best projects [8] - There is a commitment to disciplined capital allocation, including a recent acquisition of Century Contractors expected to generate $90 million in revenue [6][7] - The company plans to continue rewarding shareholders through increased dividends and share repurchases [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued strong results in 2025 and into 2026, driven by strong demand in advanced technology and a record backlog [8][19] - The company is preparing for potential economic impacts from tariffs and other policy changes, emphasizing the importance of managing project execution and supply chain challenges [7][34] - Management noted that there is no current sign of demand destruction despite macroeconomic uncertainties [43][44] Other Important Information - The effective tax rate for the quarter was 18.6%, lower than the previous year's 21.7%, due to a tax refund received [12][13] - Free cash flow was negative $109 million, impacted by advanced customer payments and tax payments deferred from the previous year [14][16] - The company returned $92 million to shareholders through share repurchases in the first quarter [17] Q&A Session Summary Question: Revenue and margin guidance amidst strong start - Management indicated that while the start to the year was strong, high single-digit revenue growth guidance reflects tougher comparables in the latter half of the year [29][30] Question: Contracts and inflation management - Management stated that they are well-prepared to manage cost inflation and supply chain challenges through proactive engagement with suppliers and customers [34][36] Question: Ranking uncertainties in the market - Management ranked tariff uncertainty and demand for technology as significant concerns but noted strong ongoing demand for services [43][44] Question: Project bidding pipeline and backlog growth - Management reported broad-based bookings contributing to backlog growth, particularly in advanced technology sectors [58][60] Question: SG&A leverage outlook - Management expressed that SG&A leverage has likely run its course, with expectations of maintaining current levels rather than significant improvements [91][92] Question: Impact of tariffs on pricing - Management indicated that the impact of tariffs on pricing is not currently detectable, and they maintain strong relationships with customers to manage costs [101][104]

SYSTEMS CLAS Quality People. Building Solutions. Q1 2025 Earnings Call NYSE: FIX April 25, 2025 COMFORTUS A Certain statements and information in this presentation may constitute forward-looking statements within the meaning of applicable securities laws and regulations. The words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could," or other similar expressions are intended to identify forward-looking statements, which are generally not historic in nature. These forwar ...

Economic Impact - U.S. stock markets are experiencing extreme volatility due to the "Liberation Day" tariffs imposed by the Trump administration, with a baseline tariff of 10% on all imports and rates as high as 145% for certain countries like China [1] - Economists express concerns about the tariffs' impact on U.S. economic growth and inflation, with fears of a near-term recession [2] - Ongoing negotiations between the U.S. and other countries, including China, have not yielded positive results [3] Company Analysis PG&E Corp. (PCG) - Engaged in the sale and delivery of electricity and natural gas in California, with a capital expenditure plan of $63 billion for infrastructure from 2024 to 2028 [8][9] - Expected revenue and earnings growth rates of 7.4% and 10.3% for the current year, with a Zacks Consensus Estimate for earnings improving by 0.7% in the last 60 days [10] - Average short-term price target indicates a potential increase of 17.5% from the last closing price of $17.39, with a maximum upside of 32.6% [11] Comfort Systems USA Inc. (FIX) - A national provider of HVAC services, with expected revenue and earnings growth rates of 7.4% and 22.4% for the current year [12][14] - The Zacks Consensus Estimate for earnings has improved by 6% in the last 60 days, with an average short-term price target suggesting a 42.7% increase from the last closing price of $376.21 [14] DXP Enterprises Inc. (DXPE) - A distributor providing innovative solutions to industrial customers, with expected revenue and earnings growth rates of 0.1% and 17.1% for the current year [15][16] - The Zacks Consensus Estimate for earnings has improved by 22.5% in the last 30 days, with an average short-term price target indicating a 17.4% increase from the last closing price of $85 [17] The Progressive Corp. (PGR) - Gaining from higher premiums and a strong product portfolio, with expected revenue and earnings growth rates of 16.5% and 11.7% for the current year [18][19] - The Zacks Consensus Estimate for earnings has improved by 0.8% over the last seven days, with an average short-term price target suggesting a 12.6% increase from the last closing price of $265.19 [20] GE Aerospace - Witnessing strength due to robust demand for commercial engines and rising defense budgets, with expected revenue and earnings growth rates of -6.8% and 17.8% for the current year [22][24] - Received orders for over 4,600 engines in the second half of 2024, with an average short-term price target indicating a 17.2% increase from the last closing price of $197.41 [25]

Core Insights - Comfort Systems (FIX) reported quarterly earnings of $4.75 per share, exceeding the Zacks Consensus Estimate of $3.66 per share, and showing a significant increase from $2.69 per share a year ago, resulting in an earnings surprise of 29.78% [1] - The company achieved revenues of $1.83 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 7.52% and up from $1.54 billion year-over-year [2] - Comfort Systems has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.21 on revenues of $1.92 billion, while for the current fiscal year, the estimate is $17.87 on revenues of $7.55 billion [7] - The estimate revisions trend for Comfort Systems is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Building Products - Air Conditioner and Heating industry, to which Comfort Systems belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Comfort Systems may be influenced by the overall industry outlook, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1—Financial Statements](index=4&type=section&id=Item%201%E2%80%94Financial%20Statements) Unaudited consolidated financial statements for Q1 2025, including Balance Sheets, Operations, Equity, Cash Flows, and significant accounting notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) - Cash and cash equivalents decreased significantly from **$549,939 thousand** at December 31, 2024, to **$204,758 thousand** at March 31, 2025[11](index=11&type=chunk) - Goodwill increased from **$875,270 thousand** at December 31, 2024, to **$905,843 thousand** at March 31, 2025, primarily due to acquisitions[11](index=11&type=chunk) | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :-------------------------- | :------------------ | | Total current assets | $2,597,499 | $2,790,241 | | Total assets | $4,569,218 | $4,711,088 | | Total current liabilities | $2,411,244 | $2,582,770 | | Total liabilities | $2,792,205 | $3,006,412 | | Total stockholders' equity | $1,777,013 | $1,704,676 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) - Gross profit margin improved from **19.3%** in Q1 2024 to **22.0%** in Q1 2025[13](index=13&type=chunk) - Selling, General and Administrative Expenses increased from **$162,723 thousand** in Q1 2024 to **$194,874 thousand** in Q1 2025[13](index=13&type=chunk) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Revenue | $1,831,286 | $1,537,016 | +19.1% | | Gross profit | $403,416 | $297,363 | +35.7% | | Operating income | $209,098 | $135,460 | +54.4% | | Net income | $169,289 | $96,319 | +75.8% | | Basic income per share | $4.77 | $2.70 | +76.7% | | Diluted income per share | $4.75 | $2.69 | +76.6% | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) - The company repurchased **264,054 shares** of treasury stock for **$92,243 thousand** during the three months ended March 31, 2025[16](index=16&type=chunk) - Dividends of **$0.40 per share** were paid, totaling **$14,162 thousand**, in Q1 2025, an increase from **$0.25 per share** (**$8,921 thousand**) in Q1 2024[16](index=16&type=chunk) | Metric | March 31, 2025 | December 31, 2024 | | :----------------------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $1,777,013 | $1,704,676 | | Retained Earnings | $1,782,457 | $1,627,330 | | Treasury Stock (Amount) | $(367,508) | $(273,799) | | Treasury Stock (Shares) | (5,815,389) | (5,562,453) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) - Cash used in operating activities increased significantly by **$234.5 million** YoY, primarily due to a **$431.3 million** decrease in accounts payable and other current liabilities and a federal tax payment[19](index=19&type=chunk)[154](index=154&type=chunk) - Cash used in investing activities decreased by **$124.9 million** YoY, mainly due to lower cash paid for acquisitions[19](index=19&type=chunk)[156](index=156&type=chunk) - Cash used in financing activities increased by **$131.2 million** YoY, driven by a **$91.1 million** increase in share repurchases[19](index=19&type=chunk)[157](index=157&type=chunk) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Operating Activities | $(87,950) | $146,557 | | Investing Activities | $(96,783) | $(221,648) | | Financing Activities | $(160,448) | $(29,267) | | Net Decrease in Cash and Cash Equivalents | $(345,181) | $(104,358) | | Cash and Cash Equivalents, end of period | $204,758 | $100,792 | [Condensed Notes to Consolidated Financial Statements](index=10&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) [1. Business and Organization](index=10&type=section&id=1.%20Business%20and%20Organization) - Comfort Systems USA, Inc. provides comprehensive mechanical and electrical contracting services, including HVAC, plumbing, electrical, piping, controls, off-site construction, monitoring, and fire protection, across the United States[21](index=21&type=chunk) [2. Summary of Significant Accounting Policies and Estimates](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies%20and%20Estimates) [Basis of Presentation](index=10&type=section&id=Basis%20of%20Presentation) - Interim financial statements are prepared using GAAP for interim financial information and SEC rules, and should be read with the Annual Report on Form 10-K for the year ended December 31, 2024[22](index=22&type=chunk)[23](index=23&type=chunk) [Use of Estimates](index=10&type=section&id=Use%20of%20Estimates) - Significant estimates include revenue and cost recognition for construction contracts, self-insurance accruals, income taxes, fair value accounting for acquisitions, and goodwill impairment testing[24](index=24&type=chunk) [Recent Accounting Pronouncements](index=10&type=section&id=Recent%20Accounting%20Pronouncements) - ASU 2023-09 (Income Taxes) is effective for fiscal years beginning after December 15, 2024, requiring more detailed tax rate reconciliation and income tax disclosures, with no impact on financial position, results, or cash flows[25](index=25&type=chunk) - ASU 2024-03 (Expense Disaggregation) is effective for fiscal years beginning after December 15, 2026, requiring disaggregated income statement expense information, with no impact on financial position, results, or cash flows[26](index=26&type=chunk)[27](index=27&type=chunk) [Revenue Recognition](index=12&type=section&id=Revenue%20Recognition) - Revenue is recognized over time for all services using a cost-to-cost input method, as control continuously transfers to the customer and the company has a right to payment for work performed[28](index=28&type=chunk)[29](index=29&type=chunk) - For service maintenance agreements, revenue is recognized over time based on the proportion of services provided out of the total contracted time[30](index=30&type=chunk) [Accounts Receivable and Allowance for Credit Losses](index=12&type=section&id=Accounts%20Receivable%20and%20Allowance%20for%20Credit%20Losses) - Expected credit losses are estimated using a loss-rate method for construction, service, and other portfolio segments, considering historical data, customer financial strength, aging, macroeconomic trends, and specific high-risk receivables[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [Unbilled Accounts Receivable](index=14&type=section&id=Unbilled%20Accounts%20Receivable) - Unbilled accounts receivable represent earned amounts where the right to payment is unconditional, expected to be billed and collected in the normal course of business[35](index=35&type=chunk) [Income Taxes](index=14&type=section&id=Income%20Taxes) - The effective tax rate is influenced by profitability in various jurisdictions, discrete items like tax law changes, and the tax treatment of goodwill impairment and acquisition-related assets/liabilities[36](index=36&type=chunk) - In Q1 2025, the provision for income taxes was reduced by **$8.9 million** (net of tax) from interest income on a **$107.1 million** federal tax overpayment refund received in April 2025[37](index=37&type=chunk) [Financial Instruments](index=14&type=section&id=Financial%20Instruments) - Financial instruments include cash, U.S. Treasury bills, receivables, payables, notes to former owners, and a revolving credit facility; carrying values approximate fair values for short-term instruments[38](index=38&type=chunk) [Investments](index=14&type=section&id=Investments) - The company holds a **$6.8 million** investment in a construction-focused technology fund recorded at cost and a **$7.3 million** investment in U.S. Treasury bills (maturities 90 days to one year) recorded at amortized cost[39](index=39&type=chunk) [3. Revenue from Contracts with Customers](index=14&type=section&id=3.%20Revenue%20from%20Contracts%20with%20Customers) [Revenue Recognition Principles](index=14&type=section&id=Revenue%20Recognition%20Principles) - Revenue is recognized when control of goods/services transfers to customers, based on fixed or variable consideration, with variable amounts included if a significant reversal of cumulative revenue is improbable[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - Contract modifications are recognized as cumulative adjustments to revenue, and management periodically reviews estimates at completion, recognizing adjustments quarterly[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[50](index=50&type=chunk) - Net revenue from performance obligations partially satisfied in the previous period positively impacted revenue by **5.8%** in Q1 2025 (vs. **4.1%** in Q1 2024) due to changes in estimates[51](index=51&type=chunk) [Disaggregation of Revenue](index=18&type=section&id=Disaggregation%20of%20Revenue) Revenue by Service Provided | Service Provided | Three Months Ended March 31, 2025 | % of Total | Three Months Ended March 31, 2024 | % of Total | | :----------------- | :-------------------------------- | :--------- | :-------------------------------- | :--------- | | Mechanical Segment | $1,402,215 | 76.6% | $1,185,009 | 77.1% | | Electrical Segment | $429,071 | 23.4% | $352,007 | 22.9% | | Total | $1,831,286 | 100.0% | $1,537,016 | 100.0% | Revenue by Type of Customer | Customer Type | Three Months Ended March 31, 2025 | % of Total | Three Months Ended March 31, 2024 | % of Total | | :------------------------------ | :-------------------------------- | :--------- | :-------------------------------- | :--------- | | Technology | $677,553 | 37.0% | $464,814 | 30.2% | | Manufacturing | $452,786 | 24.7% | $461,400 | 30.0% | | Healthcare | $182,542 | 10.0% | $133,729 | 8.7% | | Education | $161,242 | 8.8% | $133,983 | 8.7% | | Office Buildings | $122,526 | 6.7% | $101,892 | 6.6% | | Government | $96,281 | 5.3% | $87,801 | 5.7% | | Retail, Restaurants and Entertainment | $77,009 | 4.2% | $80,585 | 5.2% | | Multi-Family and Residential | $28,353 | 1.5% | $40,851 | 2.7% | | Other | $32,994 | 1.8% | $31,961 | 2.2% | | Total | $1,831,286 | 100.0% | $1,537,016 | 100.0% | Revenue by Activity Type | Activity Type | Three Months Ended March 31, 2025 | % of Total | Three Months Ended March 31, 2024 | % of Total | | :------------------------------ | :-------------------------------- | :--------- | :-------------------------------- | :--------- | | New Construction | $1,065,084 | 58.2% | $898,976 | 58.5% | | Existing Building Construction | $492,603 | 26.9% | $390,369 | 25.4% | | Service Projects | $119,214 | 6.5% | $104,114 | 6.8% | | Service Calls, Maintenance and Monitoring | $154,385 | 8.4% | $143,557 | 9.3% | | Total | $1,831,286 | 100.0% | $1,537,016 | 100.0% | [Contract Assets and Liabilities](index=18&type=section&id=Contract%20Assets%20and%20Liabilities) - Contract assets (costs in excess of billings) increased from **$91,681 thousand** at December 31, 2024, to **$227,678 thousand** at March 31, 2025[55](index=55&type=chunk) - Contract liabilities (billings in excess of costs and deferred revenue) increased from **$1,149,257 thousand** at December 31, 2024, to **$1,267,373 thousand** at March 31, 2025[55](index=55&type=chunk) - Revenue recognized from contract liabilities at January 1, 2025, was **$655.7 million**, up from **$547.5 million** in the prior year[55](index=55&type=chunk) [Remaining Performance Obligations](index=20&type=section&id=Remaining%20Performance%20Obligations) - As of March 31, 2025, remaining performance obligations totaled **$6.89 billion**, with **65-75%** expected to be recognized over the next 12 months[57](index=57&type=chunk) [4. Fair Value Measurements](index=20&type=section&id=4.%20Fair%20Value%20Measurements) [Interest Rate Risk Management and Derivative Instruments](index=20&type=section&id=Interest%20Rate%20Risk%20Management%20and%20Derivative%20Instruments) - The company uses derivative instruments, such as interest rate swaps, to manage interest rate risk, with gains/losses recorded in interest expense; currently, no derivatives are accounted for as hedges[58](index=58&type=chunk) [Fair Value Measurement Hierarchy](index=20&type=section&id=Fair%20Value%20Measurement%20Hierarchy) Fair Value Measurements at March 31, 2025 | Asset/Liability | Level 1 | Level 2 | Level 3 | Total | | :------------------------ | :------ | :------ | :------ | :------ | | Cash and cash equivalents | $204,758 | $— | $— | $204,758 | | U.S. Treasury bills | $— | $7,274 | $— | $7,274 | | Contingent earn-out obligations | $— | $— | $63,768 | $63,768 | Fair Value Measurements at December 31, 2024 | Asset/Liability | Level 1 | Level 2 | Level 3 | Total | | :------------------------ | :------ | :------ | :------ | :------ | | Cash and cash equivalents | $549,939 | $— | $— | $549,939 | | Contingent earn-out obligations | $— | $— | $140,156 | $140,156 | - Contingent earn-out obligations are Level 3 measurements, valued using a probability-weighted discounted cash flow method with a weighted average cost of capital of **19.5%** as of March 31, 2025[62](index=62&type=chunk) [Reconciliation of Level 3 Fair Value Measurements](index=22&type=section&id=Reconciliation%20of%20Level%203%20Fair%20Value%20Measurements) Contingent Earn-out Obligations (Level 3) Reconciliation | Metric | Three Months Ended March 31, 2025 | Year Ended December 31, 2024 | | :------------------------ | :-------------------------------- | :----------------------------- | | Balance at beginning of period | $140,156 | $44,222 | | Issuances | $218 | $51,784 | | Settlements | $(80,364) | $(43,996) | | Adjustments to fair value | $3,758 | $88,146 | | Balance at end of period | $63,768 | $140,156 | [5. Acquisitions](index=22&type=section&id=5.%20Acquisitions) [Summit Industrial Construction, LLC Acquisition](index=22&type=section&id=Summit%20Industrial%20Construction,%20LLC%20Acquisition) - On February 1, 2024, Comfort Systems acquired Summit Industrial Construction, LLC for **$359.8 million**, including **$267.5 million** cash, **$35.0 million** in notes, and **$42.7 million** in contingent earn-out payments[64](index=64&type=chunk)[66](index=66&type=chunk) - The acquisition resulted in **$155.3 million** in goodwill and **$170.1 million** in identifiable intangible assets (backlog, trade name, customer relationships), with fair values estimated using excess earnings and relief-from-royalty methods[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [J & S Mechanical Contractors, Inc. Acquisition](index=26&type=section&id=J%20%26%20S%20Mechanical%20Contractors,%20Inc.%20Acquisition) - On February 1, 2024, Comfort Systems acquired J & S Mechanical Contractors, Inc. for **$120.6 million**, including **$100.0 million** cash, **$10.0 million** in notes, and **$9.1 million** in contingent earn-out payments[71](index=71&type=chunk)[72](index=72&type=chunk) - The acquisition resulted in **$40.7 million** in goodwill and **$63.3 million** in identifiable intangible assets (backlog, trade name, customer relationships), valued similarly to Summit's acquisition[72](index=72&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk) [Other Acquisitions](index=28&type=section&id=Other%20Acquisitions) - On January 1, 2025, Century Contractors, LLC was acquired for a preliminary price of **$84.2 million** (**$73.1 million** cash, **$5.5 million** notes, earn-out), specializing in mechanical installation and pipe fabrication[76](index=76&type=chunk) - On May 1, 2024, a North Carolina plumbing service provider was acquired for a preliminary price of **$39.9 million**[77](index=77&type=chunk) [6. Goodwill and Identifiable Intangible Assets, Net](index=28&type=section&id=6.%20Goodwill%20and%20Identifiable%20Intangible%20Assets,%20Net) [Goodwill](index=28&type=section&id=Goodwill) - Goodwill increased by **$30,573 thousand** in Q1 2025 due to acquisitions and purchase price adjustments, primarily in the Mechanical Segment[79](index=79&type=chunk) Goodwill Carrying Amount | Segment | December 31, 2023 | December 31, 2024 | March 31, 2025 | | :----------------- | :------------------ | :------------------ | :------------- | | Mechanical Segment | $393,276 | $601,512 | $632,085 | | Electrical Segment | $273,558 | $273,758 | $273,758 | | Total | $666,834 | $875,270 | $905,843 | [Identifiable Intangible Assets, Net](index=30&type=section&id=Identifiable%20Intangible%20Assets,%20Net) Future Amortization Expense of Identifiable Intangible Assets (as of March 31, 2025) | Year Ending December 31 | Amount (in thousands) | | :------------------------ | :-------------------- | | 2025 (remainder) | $51,221 | | 2026 | $58,766 | | 2027 | $56,282 | | 2028 | $54,735 | | 2029 | $48,468 | | Thereafter | $172,030 | | Total | $441,502 | [7. Debt Obligations](index=30&type=section&id=7.%20Debt%20Obligations) [Revolving Credit Facility](index=30&type=section&id=Revolving%20Credit%20Facility) - The company has an **$850.0 million** senior credit facility expiring in July 2027, with no outstanding borrowings as of March 31, 2025, and **$766.8 million** of credit available[83](index=83&type=chunk)[84](index=84&type=chunk) - As of March 31, 2025, **$83.2 million** in letters of credit were outstanding, primarily for self-funded insurance programs, with **$61.2 million** expiring in 2025 and **$22.0 million** in 2026[83](index=83&type=chunk)[166](index=166&type=chunk)[85](index=85&type=chunk) - The facility includes floating interest rates (Base Rate Loan or SOFR Loan options) with additional margins based on Net Leverage Ratio, and commitment fees on unused capacity[84](index=84&type=chunk)[86](index=86&type=chunk) [Notes to Former Owners](index=32&type=section&id=Notes%20to%20Former%20Owners) Future Principal Payments of Notes to Former Owners (as of March 31, 2025) | Maturity Year | Balance (in thousands) | Range of Stated Interest Rates | | :-------------- | :--------------------- | :----------------------------- | | 2026 | $30,625 | 2.5% - 5.5% | | 2027 | $31,500 | 4.3% - 5.5% | | 2028 | $5,000 | 5.5% | | Total | $67,125 | | [8. Leases](index=32&type=section&id=8.%20Leases) - The company leases facilities, vehicles, and equipment, primarily under noncancelable operating leases, with a weighted average discount rate of **6.1%** for operating leases[88](index=88&type=chunk) - Operating lease expense for Q1 2025 was **$36.9 million**, up from **$28.2 million** in Q1 2024, with variable and short-term lease expenses aggregating to **$25.8 million**[88](index=88&type=chunk) Operating Lease Assets and Liabilities (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $226,620 | $229,106 | | Total operating lease liabilities | $238,332 | $240,265 | [9. Commitments and Contingencies](index=34&type=section&id=9.%20Commitments%20and%20Contingencies) [Claims and Lawsuits](index=34&type=section&id=Claims%20and%20Lawsuits) - The company is subject to legal and regulatory claims, with accruals for probable losses deemed immaterial to operating results, cash flows, or financial condition[95](index=95&type=chunk)[96](index=96&type=chunk) [Surety](index=35&type=section&id=Surety) - Performance and payment bonds are required by many customers, with the company reimbursing sureties for any outlays; **10-20%** of business historically requires bonds[97](index=97&type=chunk)[98](index=98&type=chunk) [Self-Insurance](index=35&type=section&id=Self-Insurance) - The company is substantially self-insured for workers' compensation, employer's liability, auto liability, general liability, and employee group health claims, with losses estimated and accrued based on facts, trends, and actuarial reviews[99](index=99&type=chunk) [10. Stockholders' Equity](index=35&type=section&id=10.%20Stockholders'%20Equity) [Earnings Per Share](index=35&type=section&id=Earnings%20Per%20Share) - Basic EPS is calculated by dividing net income by weighted average common shares outstanding; diluted EPS considers the dilutive effect of stock options, restricted stock, and performance stock units[100](index=100&type=chunk)[101](index=101&type=chunk) Shares Used in Computing Income Per Share (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Shares used in computing earnings per share—basic | 35,524 | 35,739 | | Shares used in computing earnings per share—diluted | 35,605 | 35,828 | [Share Repurchase Program](index=37&type=section&id=Share%20Repurchase%20Program) - The Board approved a stock repurchase program for **11.4 million shares** since inception; as of March 31, 2025, **10.7 million shares** have been repurchased at an average price of **$39.26 per share**[104](index=104&type=chunk) - During Q1 2025, the company repurchased **0.3 million shares** for approximately **$92.2 million** at an average price of **$349.34 per share**[105](index=105&type=chunk) [11. Segment Information](index=37&type=section&id=11.%20Segment%20Information) - The company operates in two reportable segments: Mechanical Services and Electrical Services, with financial information reviewed by the CODM based on revenue, gross profit, and operating income[106](index=106&type=chunk) Segment Revenue and Operating Income (Three Months Ended March 31, 2025) | Segment | Revenue | Operating Income | | :----------------- | :---------- | :--------------- | | Mechanical Segment | $1,402,215 | $172,601 | | Electrical Segment | $429,071 | $55,055 | | Corporate | $— | $(18,558) | | Consolidated | $1,831,286 | $209,098 | Segment Revenue and Operating Income (Three Months Ended March 31, 2024) | Segment | Revenue | Operating Income | | :----------------- | :---------- | :--------------- | | Mechanical Segment | $1,185,009 | $107,304 | | Electrical Segment | $352,007 | $46,017 | | Corporate | $— | $(17,861) | | Consolidated | $1,537,016 | $135,460 | [Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202%E2%80%94Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of Q1 2025 financial condition and results, covering business, operations, economic factors, performance, and future outlook [Introduction and Overview](index=40&type=section&id=Introduction%20and%20Overview) - Comfort Systems USA is a national provider of mechanical and electrical installation, renovation, maintenance, repair, and replacement services, operating in commercial, industrial, and institutional markets[109](index=109&type=chunk) [Nature and Economics of Our Business](index=40&type=section&id=Nature%20and%20Economics%20of%20Our%20Business) - The mechanical segment focuses on HVAC, plumbing, piping, and controls, while the electrical segment handles electrical construction, engineering, logistics, and service work[110](index=110&type=chunk)[111](index=111&type=chunk) - Approximately **91.6%** of revenue comes from project-based installation services, typically fixed-price contracts, with labor, materials, and overhead as major cost components[113](index=113&type=chunk)[116](index=116&type=chunk) Stratification of Projects in Progress by Contract Price (as of March 31, 2025) | Contract Price of Project | No. of Projects | Aggregate Contract Price Value (millions) | | :------------------------ | :-------------- | :---------------------------------------- | | Under $2 million | 7,567 | $1,690.4 | | $2 million - $10 million | 831 | $3,588.6 | | $10 million - $20 million | 136 | $1,922.7 | | $20 million - $40 million | 130 | $3,679.6 | | Greater than $40 million | 86 | $5,547.5 | | Total | 8,750 | $16,428.8 | [Profile and Management of Our Operations](index=44&type=section&id=Profile%20and%20Management%20of%20Our%20Operations) - Operations are managed across **48 units**, emphasizing profitability, cash flow, working capital, SG&A, backlog, workforce, and growth, alongside operational factors like project selection, safety, and labor utilization[123](index=123&type=chunk)[134](index=134&type=chunk) - Attracting and retaining effective operating unit managers is crucial due to local market uniqueness, customer relationships, and high competition[124](index=124&type=chunk) [Economic and Industry Factors](index=44&type=section&id=Economic%20and%20Industry%20Factors) - The company operates in the nonresidential construction services industry, influenced by macroeconomic factors like GDP, interest rates, business investment, and government fiscal conditions[125](index=125&type=chunk) - Spending decisions for construction and renovation projects are significantly affected by economic uncertainty[126](index=126&type=chunk) [Operating Environment and Management Emphasis](index=44&type=section&id=Operating%20Environment%20and%20Management%20Emphasis) - Demand increased in 2022-2024, with high demand expected in 2025, especially from manufacturing and technology customers, despite persistent labor cost increases and supply chain delays[127](index=127&type=chunk) - The company maintains a strong balance sheet, favorable credit facility, and surety relationships, which are considered competitive advantages[128](index=128&type=chunk)[129](index=129&type=chunk) - Management emphasizes investing in service business, pursuing active market sectors, and growing regional and national account business amidst ongoing price competition[130](index=130&type=chunk) [Cyclicality and Seasonality](index=46&type=section&id=Cyclicality%20and%20Seasonality) - The construction industry is subject to business cycle fluctuations, with demand for new installations and renovations potentially declining during economic weakness[131](index=131&type=chunk) - Seasonal variations lead to lower revenue and operating results in Q1 due to reduced construction activity and less air conditioning use, with higher demand in Q2 and Q3[132](index=132&type=chunk) [Critical Accounting Estimates](index=46&type=section&id=Critical%20Accounting%20Estimates) - No significant changes to critical accounting estimates were identified during the three months ended March 31, 2025, as disclosed in the 2024 Form 10-K[133](index=133&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) [Revenue](index=48&type=section&id=Revenue) - Same-store revenue growth was driven by strong market conditions and increased backlog, particularly in the technology sector (data centers)[135](index=135&type=chunk) Revenue Performance (Three Months Ended March 31) | Metric | 2025 | 2024 | Change (YoY) | | :----------------- | :---------- | :---------- | :----------- | | Total Revenue | $1,831,286 | $1,537,016 | +19.1% | | Same-store revenue increase | | | +15.4% | | Acquisition-related revenue increase | | | +3.7% | Segment Revenue Growth (Three Months Ended March 31) | Segment | 2025 Revenue | 2024 Revenue | Change (YoY) | | :----------------- | :----------- | :----------- | :----------- | | Mechanical Segment | $1,402,215 | $1,185,009 | +18.3% | | Electrical Segment | $429,071 | $352,007 | +21.9% | Backlog Performance (in thousands) | Backlog | March 31, 2025 | December 31, 2024 | March 31, 2024 | Change (QoQ) | Change (YoY) | | :----------------- | :------------- | :---------------- | :------------- | :----------- | :----------- | | Mechanical Segment | $5,205,745 | $4,687,619 | $4,627,294 | +11.1% | +12.5% | | Electrical Segment | $1,683,073 | $1,306,347 | $1,284,354 | +28.8% | +31.0% | | Total Backlog | $6,888,818 | $5,993,966 | $5,911,648 | +14.9% | +16.5% | [Gross Profit](index=50&type=section&id=Gross%20Profit) - Gross profit increased by **$106.1 million** (**35.7%**) to **$403.4 million** in Q1 2025, with a gross profit margin of **22.0%** (up from **19.3%** in Q1 2024)[142](index=142&type=chunk) - The increase was driven by higher revenues, improved operational execution in Texas and South Carolina operations, and increased volumes at the Texas electrical operation[142](index=142&type=chunk) [Selling, General and Administrative Expenses ("SG&A")](index=50&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20(%22SG%26A%22)) - SG&A increased by **$32.2 million** (**19.8%**) to **$194.9 million** in Q1 2025, remaining steady at **10.6%** of revenue[143](index=143&type=chunk) - Same-store SG&A, excluding amortization, increased by **$26.9 million** (**17.9%**) due to higher revenue and increased compensation costs from headcount growth[143](index=143&type=chunk) SG&A Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | SG&A | $194,874 | $162,723 | | Less: SG&A from acquired companies | $(3,295) | $— | | Less: Amortization expense | $(14,562) | $(12,609) | | Same-store SG&A, excluding amortization expense | $177,017 | $150,114 | [Interest Income](index=50&type=section&id=Interest%20Income) - Interest income increased by **$2.7 million** (**166.2%**) to **$4.3 million** in Q1 2025, driven by an increase in the average cash balance[145](index=145&type=chunk) [Changes in the Fair Value of Contingent Earn-out Obligations](index=50&type=section&id=Changes%20in%20the%20Fair%20Value%20of%20Contingent%20Earn-out%20Obligations) - Expense from changes in fair value of contingent earn-out obligations decreased by **$8.7 million** (**69.9%**) in Q1 2025, primarily due to lower expenses at J&S and a South Carolina operation, and smaller changes in Summit's forecasted results[146](index=146&type=chunk) [Provision for Income Taxes](index=50&type=section&id=Provision%20for%20Income%20Taxes) - The provision for income taxes was **$38.7 million** in Q1 2025, with an effective tax rate of **18.6%**, down from **21.7%** in Q1 2024[147](index=147&type=chunk) - The lower effective tax rate in 2025 was primarily due to **$8.9 million** net interest income on a federal tax overpayment and a **$6.3 million** R&D tax credit, partially offset by state income taxes and non-deductible items[147](index=147&type=chunk)[148](index=148&type=chunk) [Outlook](index=52&type=section&id=Outlook) - The company anticipates solid earnings for 2025, driven by strong demand and substantial advance bookings, despite ongoing labor cost increases and supply chain challenges[149](index=149&type=chunk)[150](index=150&type=chunk) - Management is proactively addressing challenges through job planning, earlier material ordering, and customer collaboration to mitigate supply risks[149](index=149&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash Flow](index=52&type=section&id=Cash%20Flow) - Cash used in operating activities increased by **$234.5 million** YoY, primarily due to a **$431.3 million** decrease in accounts payable and other current liabilities and an **$80.0 million** federal tax payment[154](index=154&type=chunk)[155](index=155&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(87,950) | $146,557 | | Investing activities | $(96,783) | $(221,648) | | Financing activities | $(160,448) | $(29,267) | | Net increase (decrease) in cash and cash equivalents | $(345,181) | $(104,358) | Free Cash Flow (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Cash provided by operating activities | $(87,950) | $146,557 | | Purchases of property and equipment | $(22,208) | $(24,952) | | Proceeds from sales of property and equipment | $1,095 | $1,014 | | Free cash flow | $(109,063) | $122,619 | [Share Repurchase Program](index=54&type=section&id=Share%20Repurchase%20Program) - The company repurchased **0.3 million shares** for approximately **$92.2 million** in Q1 2025, contributing to a cumulative total of **10.7 million shares** repurchased since the program's inception[159](index=159&type=chunk)[160](index=160&type=chunk) [Debt](index=54&type=section&id=Debt) - As of March 31, 2025, the company had no outstanding borrowings on its **$850.0 million** revolving credit facility, with **$766.8 million** of credit available[161](index=161&type=chunk)[163](index=163&type=chunk) - Outstanding notes to former owners totaled **$67.1 million** as of March 31, 2025, with principal payments scheduled through 2028[168](index=168&type=chunk) [Outlook (Liquidity)](index=56&type=section&id=Outlook%20(Liquidity)) - The company expects sufficient liquidity to fund operations for the foreseeable future, supported by a history of positive net free cash flow, significant borrowing capacity, and reasonable cash balances[169](index=169&type=chunk)[170](index=170&type=chunk) [Other Commitments](index=58&type=section&id=Other%20Commitments) - The company is required to post performance and payment bonds for many projects, with strong surety relationships currently supporting bonding needs[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 3—Quantitative and Qualitative Disclosures about Market Risk](index=58&type=section&id=Item%203%E2%80%94Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines the company's exposure to market risks, primarily related to interest rates, and its approach to managing these risks, also discussing the valuation of assets measured at fair value on a nonrecurring basis and contingent earn-out payments - The company's primary market risk exposure is to potential adverse changes in interest rates, particularly under its revolving credit facility, which had no outstanding borrowings as of March 31, 2025[173](index=173&type=chunk)[174](index=174&type=chunk) - Contingent earn-out payments are valued using a probability-weighted discounted cash flow method, reflecting contractual terms, future cash flows, probabilities, and a discount rate[176](index=176&type=chunk) [Item 4—Controls and Procedures](index=58&type=section&id=Item%204%E2%80%94Controls%20and%20Procedures) [Evaluation of Disclosure Controls and Procedures](index=58&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, following an evaluation[177](index=177&type=chunk)[178](index=178&type=chunk) [Changes in Internal Control over Financial Reporting](index=60&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no material changes in internal control over financial reporting during the three months ended March 31, 2025[179](index=179&type=chunk) [PART II—OTHER INFORMATION](index=61&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1—Legal Proceedings](index=61&type=section&id=Item%201%E2%80%94Legal%20Proceedings) This section addresses legal and regulatory claims against the company, stating that any liabilities arising from these matters are not expected to materially affect its financial condition or results of operations - The company is subject to legal and regulatory claims in the normal course of business, with accruals for probable losses deemed immaterial to financial statements[182](index=182&type=chunk)[183](index=183&type=chunk) [Item 1A—Risk Factors](index=61&type=section&id=Item%201A%E2%80%94Risk%20Factors) This section refers readers to the comprehensive discussion of risk factors in the company's Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect its business, financial condition, or future results - Readers should consider risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024, as they could materially affect the business[184](index=184&type=chunk) [Item 2—Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202%E2%80%94Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's equity security transactions, specifically detailing the absence of unregistered sales and providing an update on the ongoing share repurchase program [Recent Sales of Unregistered Securities](index=61&type=section&id=Recent%20Sales%20of%20Unregistered%20Securities) - There were no recent sales of unregistered equity securities[185](index=185&type=chunk) [Issuer Purchases of Equity Securities](index=61&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) - The Board has approved repurchases of **11.4 million shares** since the program's inception; as of March 31, 2025, **10.7 million shares** have been repurchased at an average price of **$39.26 per share**[186](index=186&type=chunk) Common Share Purchases During Q1 2025 | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :---------------------- | :------------------------------- | :--------------------------- | | January 1 - January 31 | 3,000 | $426.13 | | February 1 - February 28 | 63,450 | $378.18 | | March 1 - March 31 | 197,604 | $338.91 | | Total (Q1 2025) | 264,054 | $349.34 | [Item 5—Other Information](index=62&type=section&id=Item%205%E2%80%94Other%20Information) This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the first three months of 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025[191](index=191&type=chunk) [Item 6—Exhibits](index=63&type=section&id=Item%206%E2%80%94Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications (CEO, CFO), and Inline XBRL documents - Exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[193](index=193&type=chunk) [Signatures](index=64&type=section&id=Signatures) This section contains the required signatures from the company's President, Chief Executive Officer and Director, Executive Vice President and Chief Financial Officer, and Senior Vice President and Chief Accounting Officer, certifying the report's submission - The report is signed by Brian E. Lane (President, CEO, and Director), William George (EVP and CFO), and Julie S. Shaeff (SVP and Chief Accounting Officer) on April 24, 2025[196](index=196&type=chunk)[197](index=197&type=chunk)

[First Quarter 2025 Earnings Release](index=1&type=section&id=First%20Quarter%202025%20Earnings%20Release) Q1 2025 results show strong revenue and net income growth, strategic cash flow shifts, and robust backlog expansion [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Q1 2025 highlights include strong revenue and net income growth, with a notable shift in operating cash flow Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1.83 billion | $1.54 billion | +19.1% | | Net Income | $169.3 million | $96.3 million | +75.8% | | Diluted EPS | $4.75 | $2.69 | +76.6% | Backlog Growth | Date | Total Backlog (in billions) | Same-Store Backlog (in billions) | | :--- | :--- | :--- | | Mar 31, 2025 | $6.89 | $6.84 | | Dec 31, 2024 | $5.99 | N/A | | Mar 31, 2024 | $5.91 | $5.91 | - Operating cash flow saw a significant reversal, with an **outflow of $88.0 million** in Q1 2025 compared to an **inflow of $146.6 million** in Q1 2024[2](index=2&type=chunk) - The Q1 2025 income tax provision included a **benefit of $0.25 per diluted share** related to interest income on a prior year tax refund[2](index=2&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Brian Lane highlighted record Q1 performance and strong backlog growth, attributing negative operating cash flow to planned working capital normalization - Q1 2025 earnings per share of **$4.75** were more than **75% higher** than Q1 2024 and exceeded every past quarter, a notable achievement for a historically weak season[4](index=4&type=chunk) - Backlog grew significantly, with **over $800 million** in sequential same-store growth, indicating strong execution and customer relationships[4](index=4&type=chunk) - The **negative operating cash flow** was attributed to a long-expected normalization of working capital following substantial payments to a key customer[4](index=4&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents detailed unaudited Q1 2025 financial results, including statements of operations, balance sheets, and cash flow data [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 revenue grew 19.1% YoY, with improved margins driving a 75.8% rise in net income and increased dividends per share Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $1,831,286 | $1,537,016 | | Gross Profit | $403,416 | $297,363 | | Operating Income | $209,098 | $135,460 | | Net Income | $169,289 | $96,319 | | Diluted EPS | $4.75 | $2.69 | | Dividends per share | $0.400 | $0.250 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased due to reduced cash, while total liabilities also declined, leading to increased stockholders' equity Balance Sheet Comparison (in thousands) | Metric | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $204,758 | $549,939 | | Total current assets | $2,597,499 | $2,790,241 | | Total assets | $4,569,218 | $4,711,088 | | Total current liabilities | $2,411,244 | $2,582,770 | | Total liabilities | $2,792,205 | $3,006,412 | | Total stockholders' equity | $1,777,013 | $1,704,676 | [Selected Cash Flow Data](index=7&type=section&id=Selected%20Cash%20Flow%20Data) Q1 2025 saw a significant shift to negative operating cash flow, resulting in a negative free cash flow for the quarter Q1 Cash Flow Comparison (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash from operating activities | $(87,950) | $146,557 | | Cash from investing activities | $(96,783) | $(221,648) | | Cash from financing activities | $(160,448) | $(29,267) | | Free cash flow | $(109,063) | $122,619 | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA and Free Cash Flow as key non-GAAP metrics, with Adjusted EBITDA increasing while free cash flow turned negative in Q1 2025 Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $169,289 | $96,319 | | Adjustments | $73,378 | $73,488 | | **Adjusted EBITDA** | **$242,667** | **$169,807** | | Adjusted EBITDA as % of Revenue | 13.3% | 11.0% | - Free cash flow is defined as cash flow from operating activities less capital expenditures, plus proceeds from asset sales; in Q1 2025, it was **$(109.1) million**[14](index=14&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section contains a standard legal disclaimer on forward-looking statements, noting that actual results may differ due to various risks and uncertainties - The report contains forward-looking statements regarding future business expectations, which are not historical facts and are subject to significant risks and uncertainties[6](index=6&type=chunk) - Readers are directed to the company's SEC filings (Form 10-K, 10-Q, 8-K) for a more detailed discussion of material risk factors that could cause actual results to differ from projections[7](index=7&type=chunk)

Group 1 - The article promotes iREIT on Alpha as a source for in-depth research on various income alternatives including REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] - It highlights the positive feedback from users, with 438 testimonials, most of which are rated 5 stars, indicating high satisfaction [1] Group 2 - The article includes a disclosure from the analyst stating a beneficial long position in shares of specific companies, indicating a vested interest in the performance of ODFL, FIX, REXR, and DHR [2] - It clarifies that the opinions expressed are personal and not influenced by compensation from any company mentioned [2] Group 3 - The article emphasizes that past performance does not guarantee future results, indicating a cautionary note regarding investment outcomes [3] - It states that Seeking Alpha does not provide personalized investment advice and that the views expressed may not represent the platform as a whole [3]

Company Performance - Comfort Systems (FIX) ended the latest trading session at $356.21, reflecting a +1.31% adjustment from the previous day's close, outperforming the S&P 500's daily loss of 0.17% [1] - The company has gained 1.52% in share price over the past month, while the Construction sector lost 5.56% and the S&P 500 lost 3.94% during the same period [1] Upcoming Earnings - The upcoming EPS for Comfort Systems is projected at $3.66, indicating a 36.06% increase compared to the same quarter of the previous year [2] - Revenue is estimated to be $1.7 billion, reflecting a 10.81% rise from the equivalent quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are projected at $17.87 per share and revenue at $7.55 billion, representing changes of +22.4% and +7.42% respectively from the prior year [3] - Recent changes in analyst estimates are important as they reflect near-term business trends, with positive revisions indicating a favorable business outlook [3] Valuation Metrics - Comfort Systems is currently trading with a Forward P/E ratio of 19.67, which is lower than the industry average Forward P/E of 27.43, suggesting that the company is trading at a discount [6] - The Building Products - Air Conditioner and Heating industry, to which Comfort Systems belongs, has a Zacks Industry Rank of 167, placing it in the bottom 33% of over 250 industries [6] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a proven track record of outperformance, with 1 stocks returning an average of +25% annually since 1988 [5] - Currently, Comfort Systems holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining stagnant over the past month [5]