Financial Data and Key Metrics Changes - The company reported earnings of $8.25 per share for Q3 2025, doubling the earnings from the same quarter last year [4] - Revenue for Q3 2025 was $2.5 billion, an increase of $639 million or 35% compared to the previous year [6] - EBITDA for the quarter reached $414 million, a 74% increase from $238 million in Q3 2024 [9] - Free cash flow for Q3 2025 was $519 million, contributing to a year-to-date total of $632 million [9] Business Line Data and Key Metrics Changes - The electrical segment revenue grew by 71%, while mechanical revenue increased by 26% [6] - Gross profit for Q3 2025 was $608 million, up $226 million from the previous year, with a gross profit percentage of 24.8% [7] - Service revenue increased by 11%, now accounting for 14% of total revenue [14] Market Data and Key Metrics Changes - Industrial customers represented 65% of total revenue in the first nine months of 2025, with technology accounting for 42% of revenue, up from 32% the previous year [12][13] - The backlog at the end of Q3 2025 reached a record $9.4 billion, a 65% increase year-over-year [11] Company Strategy and Development Direction - The company announced the acquisition of two contractors, FZ Electrical and Meisner Electric, expected to generate over $200 million in incremental annual revenue [5][10] - The company plans to continue investing in its workforce and expanding its modular business, aiming for 3 million sq ft of space by early 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continuing growth and strong results in 2025 and 2026, driven by solid bookings and high demand [6] - The company noted that the current market conditions are favorable, with a robust pipeline of projects and strong demand for services [12][93] Other Important Information - The company increased its quarterly dividend by 20% to $0.60 per share [6] - The effective tax rate for the year is expected to be around 23% [9] Q&A Session Summary Question: On technology side, does bidding activity match bookings and revenue growth? - Management confirmed that the pipeline remains robust with more opportunities than can be handled [18] Question: Thoughts on capital allocation and free cash flow? - Management indicated a preference for deploying cash into acquisitions and share buybacks, while also considering accumulating cash if necessary [20][23] Question: Insights on cash flow and any material advance payments in Q3? - Management clarified that the strong cash flow was not due to extraordinary events but reflected good payment terms and ongoing operations [28] Question: Backlog growth and its relation to modular and traditional construction? - Management stated that most new bookings are slated to start within the next year, with modular bookings extending further out [30][31] Question: How critical have internal recruiting efforts been to support growth? - Management emphasized the importance of a good work environment and ongoing recruitment efforts to sustain growth [46] Question: Update on automation investments in modular? - Management highlighted ongoing investments in automation and technology to improve productivity and efficiency [76][80] Question: Insights on pharma project pipeline and onshoring opportunities? - Management noted strong planning and upcoming projects in the pharma sector, particularly in the Mid-Atlantic region [82] Question: Changes in electrical or mechanical scope with large data centers? - Management indicated that the shift to DC power does not materially impact their operations, as the need for skilled electricians remains constant [87]

Financial Data and Key Metrics Changes - The company reported earnings of $8.25 per share, doubling the earnings from the same quarter last year [4] - Revenue for Q3 2025 was $2,500,000,000, an increase of $639,000,000 or 35% compared to the previous year [8] - EBITDA reached $414,000,000, a 74% increase from $238,000,000 in Q3 2024 [13] - Free cash flow for Q3 was $519,000,000, with year-to-date free cash flow at $632,000,000 [13] - Net income for Q3 2025 was $292,000,000 compared to $146,000,000 in Q3 2024 [13] Business Line Data and Key Metrics Changes - The mechanical business saw a 26% increase in revenue, while the electrical segment revenue grew by 71% [8] - Gross profit for Q3 was $620,000,000, with a gross profit percentage of 24.8%, up from 21.1% in Q3 2024 [10] - Service revenue increased by 11%, now accounting for 14% of total revenue [18] Market Data and Key Metrics Changes - Industrial customers accounted for 65% of total revenue, with technology representing 42% of revenue, up from 32% the previous year [16] - The backlog at the end of Q3 reached a record $9,400,000,000, a 65% increase year-over-year [15] - Construction accounted for 86% of total revenue, with new building projects representing 61% [17] Company Strategy and Development Direction - The company plans to continue growth and strong results into 2025 and 2026, supported by solid bookings and high demand [7] - Recent acquisitions include FZ Electrical and Meisner Electric, expected to provide over $200,000,000 in incremental annual revenue [6][14] - The company is focused on maintaining strong margins and operational efficiency while expanding its service offerings [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong demand and a skilled workforce [19] - The company anticipates continued same-store revenue growth in the low to mid-teens for 2026 [10] - Management highlighted the importance of maintaining good relationships with existing customers while exploring new opportunities [70] Other Important Information - The company increased its quarterly dividend by 20% to $0.60 per share [6] - SG&A expenses for the quarter were $230,000,000, or 9.4% of revenue, down from 9.9% in the previous year [12] - The company has a net cash position of $725,000,000 as of September [13] Q&A Session Summary Question: Does the bidding activity match the bookings and revenue growth seen in Q3? - Management confirmed that the pipeline remains robust, with no slowdown in opportunities [22] Question: How is the company thinking about capital allocation given strong free cash flow? - Management indicated a focus on acquisitions and share buybacks, while also considering cash accumulation [24] Question: Can you speak to backlog growth and its relation to modular versus traditional construction? - Management noted that backlog growth is driven by both modular and traditional construction, with modular projects often booked further out [33] Question: How critical have internal recruiting efforts been to support growth? - Management emphasized the importance of a good work environment and ongoing recruitment efforts to sustain growth [55] Question: What is the status of the service revenue growth? - Management highlighted broad strength in the service business, driven by execution and collaboration [84] Question: What is the outlook for the pharma project pipeline? - Management indicated strong planning in the pharma sector, with significant opportunities expected in the future [96]

Financial Data and Key Metrics Changes - The company reported earnings of $8.25 per share for Q3 2025, doubling the earnings from the same quarter last year [5] - Revenue for Q3 2025 was $2.5 billion, an increase of $639 million or 35% compared to the previous year [7] - EBITDA for the quarter reached $414 million, a 74% increase from $238 million in Q3 2024 [10] - Free cash flow for Q3 2025 was $519 million, with year-to-date free cash flow at $632 million [10] - Net income for Q3 2025 was $292 million, compared to $146 million in Q3 2024 [10] Business Line Data and Key Metrics Changes - The electrical segment revenue grew by 71%, while mechanical revenue increased by 26% [7] - Gross profit for Q3 2025 was $608 million, up $226 million from the previous year, with a gross profit percentage of 24.8% [8] - Service revenue increased by 11%, now accounting for 14% of total revenue [14] Market Data and Key Metrics Changes - Industrial customers represented 65% of total revenue in the first nine months of 2025, with technology making up 42% of revenue, up from 32% the previous year [12][13] - The backlog at the end of Q3 2025 was a record $9.4 billion, a 65% increase year-over-year [12] Company Strategy and Development Direction - The company announced the acquisition of two companies, FZ Electrical and Meisner Electric, expected to provide over $200 million in incremental annual revenue [6][11] - The company plans to continue investing in its modular business, aiming for 3 million square feet of space by early 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continuing growth and strong results in 2025 and 2026, driven by solid bookings and demand [7] - The company expects same-store revenue growth in the high-teens range for Q4 2025 and low to mid-teens for full-year 2026 [8] Other Important Information - The company increased its quarterly dividend by 20% to $0.60 per share [6] - The company has a net cash position of $725 million as of the end of September [11] Q&A Session Summary Question: Does the bidding activity match the bookings and revenue growth seen in Q3? - Management confirmed that the pipeline remains robust, with more opportunities than can be handled [19] Question: How is the company thinking about capital allocation with strong free cash flow? - Management indicated a preference for deploying cash into acquisitions and share buybacks, while also considering accumulating cash if necessary [20][21] Question: Can you provide insights on the backlog growth and its timing? - Management noted that most of the backlog consists of jobs that have already started, with new bookings expected to begin within the next year [68] Question: What is driving the strength in service revenue growth? - The service business is seeing broad strength due to effective execution and investment in Salesforce collaboration [70] Question: How sustainable is the pace of hiring to support growth? - Management indicated that while hiring has been strong, they do not expect to maintain the same growth rate indefinitely, but are focused on training and apprenticeship programs [75]

Core Insights - Comfort Systems USA Inc. stock surged 18% following the release of third-quarter earnings that significantly exceeded analysts' expectations [1] Financial Performance - The company's third-quarter earnings report showcased a substantial increase in revenue and profits, surpassing market forecasts [1] Market Reaction - The stock price increase of 18% indicates strong investor confidence and positive market sentiment towards the company's performance [1]

Financial Performance - Q3 2025 - Revenue increased to $2.45 billion, a 35.2% increase compared to $1.81 billion in Q3 2024[6, 7] - Gross Profit percentage improved to 24.8% compared to 21.1% in Q3 2024[6] - EPS increased significantly to $8.25 per diluted share, a 101.7% increase compared to $4.09 in Q3 2024[6, 7] - Cash Flow from Operations increased to $553.3 million, an 83.1% increase compared to $302.2 million in Q3 2024[6] Financial Performance - YTD 2025 - Revenue reached $6.46 billion, a 25.1% increase compared to $5.16 billion for the same period in 2024[9, 10] - Gross Profit percentage increased to 23.6% compared to 20.2% for the same period in 2024[9] - EPS increased to $19.52 per diluted share, an 85.6% increase compared to $10.52 for the same period in 2024[9, 10] - Cash Flow from Operations increased to $717.8 million, a 12.4% increase compared to $638.6 million for the same period in 2024[9] Backlog and Balance Sheet - Backlog increased to $9.38 billion compared to $8.12 billion in Q2 2025 and $5.68 billion in Q3 2024[6] - Cash increased to $860.5 million from $549.9 million as of December 31, 2024[8]

Group 1 - Comfort Systems reported a third-quarter profit increase of over 100%, with EPS growing 102% to $8.25 and revenue increasing 35.4% to $2.45 billion, surpassing analyst expectations of $6.29 EPS and $2.16 billion in sales [1] - The stock market, particularly the Dow Jones index, rallied following the release of surprise CPI inflation data, indicating a positive market reaction [2][4] - Other companies in focus include Nvidia and GE Vernova, which are showing resilience amid market fluctuations, particularly in the AI sector [4]

Group 1 - The stock market is experiencing highs, with Dow Jones, S&P 500, and Nasdaq futures showing modest increases [1] - Intel and Comfort Systems reported significant earnings, contributing to the positive market sentiment [1] - CPI inflation data and upcoming trade talks with China are key events to watch [1] Group 2 - Comfort Systems is highlighted as a leading stock, showing strong performance and surpassing earnings expectations [4] - The stock market is hitting record highs, driven by favorable CPI inflation data, which may allow the Federal Reserve to consider further cuts [4] - Tesla and Netflix are among the stocks in focus as the market continues to rise [4]

Core Insights - Comfort Systems (FIX) reported quarterly earnings of $8.25 per share, exceeding the Zacks Consensus Estimate of $6.2 per share, and up from $4.09 per share a year ago [1] - The earnings surprise for the quarter was +33.06%, following a previous surprise of +39.53% [2] - The company achieved revenues of $2.45 billion for the quarter, surpassing the Zacks Consensus Estimate by 13.69% and up from $1.81 billion year-over-year [3] Financial Performance - Comfort Systems has consistently outperformed consensus EPS estimates over the last four quarters [2] - The stock has gained approximately 86.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 13.9% [4] - Current consensus EPS estimate for the upcoming quarter is $5.70 on revenues of $2.16 billion, and for the current fiscal year, it is $23.14 on revenues of $8.32 billion [8] Market Outlook - The company's favorable estimate revisions trend prior to the earnings release has resulted in a Zacks Rank 1 (Strong Buy), indicating expected outperformance in the near future [7] - The outlook for the industry, specifically the Building Products - Air Conditioner and Heating sector, is currently in the bottom 20% of Zacks industries, which may impact stock performance [9] - Another company in the same industry, Watsco (WSO), is expected to report quarterly earnings soon, with a consensus EPS estimate of $4.21, reflecting a year-over-year decline [10]

Core Insights - Comfort Systems USA reported strong financial results for the third quarter of 2025, with net income of $291.6 million, or $8.25 per diluted share, compared to $146.2 million, or $4.09 per diluted share, in the same quarter of 2024 [2][3] - Revenue for the third quarter of 2025 was $2.45 billion, up from $1.81 billion in 2024, indicating significant growth [2][3] - The company achieved operating cash flow of $553.3 million in the current quarter, compared to $302.2 million in 2024, reflecting improved cash generation [2][3] Financial Performance - For the nine months ended September 30, 2025, net income was $691.8 million, or $19.52 per diluted share, compared to $376.6 million, or $10.52 per diluted share, in 2024 [4] - Revenue for the nine months ended September 30, 2025, was $6.46 billion, up from $5.16 billion in 2024 [4] - Operating cash flow for the nine months ended September 30, 2025, was $717.8 million, compared to $638.6 million in 2024 [4] Backlog and Acquisitions - The backlog as of September 30, 2025, was $9.38 billion, an increase from $8.12 billion as of June 30, 2025, and $5.68 billion as of September 30, 2024 [3][4] - The company completed acquisitions of two electrical companies on October 1, 2025, expected to generate over $200 million in incremental annual revenue and $15 to $20 million in incremental annual EBITDA [3][4] Market Outlook - The company expressed optimism for the fourth quarter and 2026, driven by unprecedented demand for its services and a strong backlog [4] - The backlog has increased by $3.4 billion since the beginning of the year, indicating robust growth prospects [4]

Financial Performance - Revenue for Q3 2025 reached $2,450,969,000, a 35% increase from $1,812,366,000 in Q3 2024[12] - Gross profit for Q3 2025 was $607,871,000, up 59% from $381,714,000 in Q3 2024[12] - Net income for the nine months ended September 30, 2025, was $691,752,000, compared to $376,563,000 for the same period in 2024, representing an increase of 83%[12] - Operating income for Q3 2025 was $378,874,000, a 87% increase from $202,884,000 in Q3 2024[12] - Basic income per share for Q3 2025 was $8.26, compared to $4.10 in Q3 2024, reflecting a 101% increase[12] - Operating income for the nine months ended September 30, 2025, was $887.85 million, compared to $523.01 million for the same period in 2024, representing an increase of approximately 69.8%[111] - Free cash flow for the first nine months of 2025 was $632.2 million, an increase from $571.8 million in the same period of 2024[172] Assets and Liabilities - Total current assets increased to $3,703,528,000 as of September 30, 2025, from $2,790,241,000 at the end of 2024, a growth of 33%[10] - Total assets grew to $5,777,851,000 as of September 30, 2025, compared to $4,711,088,000 at the end of 2024, marking a 23% increase[10] - Total liabilities increased to $3,544,465,000 as of September 30, 2025, from $3,006,412,000 at the end of 2024, an increase of 18%[10] - Cash and cash equivalents rose to $860,523,000 as of September 30, 2025, up from $549,939,000 at the end of 2024, a 56% increase[10] - Retained earnings increased to $2,271,408,000 as of September 30, 2025, from $1,627,330,000 at the end of 2024, a growth of 39%[10] - Total stockholders' equity as of September 30, 2025, was $2,233,386,000, an increase from $1,704,676,000 at the end of 2024, representing a growth of 30.9%[17] Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $717,816,000, up from $638,594,000 in 2024, indicating a growth of 12.4%[20] - Total cash and cash equivalents at the end of the period reached $860,523,000, compared to $415,583,000 at the end of September 2024, reflecting a significant increase of 106.5%[20] - Cash paid for acquisitions, net of cash acquired, was $128,594,000 for the nine months ended September 30, 2025, down from $235,466,000 in 2024, indicating a decrease of 45.4%[20] - The company repurchased 0.3 million shares for approximately $125.4 million during the nine months ended September 30, 2025, at an average price of $363.15 per share[109] Revenue Segmentation - The mechanical segment generated $1,810.46 million, accounting for 73.9% of total revenue, while the electrical segment contributed $640.51 million, or 26.1%[56] - Revenue from new construction was $1,597.45 million, representing 65.2% of total revenue for the three months ended September 30, 2025[58] - Revenue from technology customers was $1,122.53 million, representing 45.8% of total revenue for the three months ended September 30, 2025[56] - Revenue recognized from contract liabilities for the first nine months of 2025 was $944.5 million, compared to $767.3 million for the same period in 2024, reflecting a year-over-year increase of approximately 23.1%[61] Acquisitions and Goodwill - The company completed several acquisitions in 2025, including Right Way Plumbing & Mechanical LLC for $65 million and Century Contractors, LLC for $84.2 million, enhancing its mechanical segment[71][72] - Goodwill increased to $928.17 million as of September 30, 2025, up from $875.27 million at the end of 2024, primarily due to acquisitions[78] Debt and Financing - Total debt obligations as of September 30, 2025, were $136.0 million, significantly higher than $68.34 million at the end of 2024, with a revolving credit facility of $100 million[80] - The company amended its senior credit facility on August 27, 2025, increasing borrowing capacity from $850 million to $1.1 billion, with an expiration date of October 1, 2030[81] - The weighted average interest rate applicable to borrowings under the revolving credit facility was approximately 5.4% as of September 30, 2025[91] Compliance and Governance - As of September 30, 2025, the company was in compliance with all financial covenants[86] - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report[208] Market Outlook - The company expects high demand levels to continue for manufacturing and technology customers through 2026[136] - The company anticipates ongoing price competition in the industry as local and regional participants vie for customers[139]