Comfort Systems USA(FIX) - 2025 Q1 - Quarterly Results

First Quarter 2025 Earnings Release Q1 2025 results show strong revenue and net income growth, strategic cash flow shifts, and robust backlog expansion Financial Highlights 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] - 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] Management Commentary 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] - Backlog grew significantly, with over $800 million in sequential same-store growth, indicating strong execution and customer relationships[4] - The negative operating cash flow was attributed to a long-expected normalization of working capital following substantial payments to a key customer[4] Financial Statements This section presents detailed unaudited Q1 2025 financial results, including statements of operations, balance sheets, and cash flow data Consolidated Statements of Operations 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 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 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 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] Forward-Looking Statements 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] - 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]