Comfort Systems USA, Inc.

What they do

Comfort Systems USA provides mechanical and electrical contracting services, including HVAC, plumbing, piping, controls, fire protection, and electrical installation and servicing. It operates through 50 operating units with 206 locations in 150 cities across the United States. The company performs installation in new construction (63.2% of 2025 revenue) and renovation, maintenance, repair, and replacement in existing buildings (36.8%). Its mechanical segment generates 73.3% of revenue, and electrical services account for 26.7%.

Revenue drivers

• Mechanical Services — Largest segment, contributing 73.3% of 2025 revenue. Includes HVAC, plumbing, piping, controls, off-site construction, monitoring, and fire protection for commercial, industrial, and institutional facilities.
• Electrical Services — Contributes 26.7% of 2025 revenue. Provides electrical construction, engineering, and service work primarily in commercial and industrial fields.
• Installation in New Construction — Accounts for 63.2% of 2025 revenue from design-build and plan-spec projects for newly constructed facilities.
• Renovation and Replacement — Accounts for 36.8% of 2025 revenue from renovation, expansion, maintenance, repair, and replacement services in existing buildings.

Recent performance

For Q2 2026, revenue was $3.27 billion, up from $2.17 billion in Q2 2025. Net income was $441.6 million ($12.53 diluted EPS) versus $230.8 million ($6.53) a year ago. Operating cash flow reached $1.14 billion in Q2 2026, compared to $252.5 million in Q2 2025. For the six months ended June 30, 2026, revenue was $6.13 billion, net income was $812.0 million ($23.03 diluted EPS), and operating cash flow was $1.53 billion. Backlog was $14.06 billion at June 30, 2026, up from $8.12 billion a year earlier.

Strategy

Management emphasizes strong execution and a skilled workforce to capture demand in data centers, manufacturing, healthcare, and other sectors. The company focuses on design-build and plan-spec project delivery, leveraging building information modeling to improve efficiency. It grows organically and through acquisitions, though forward-looking statements exclude the potential impact of future acquisitions. The company maintains a decentralized structure with 50 operating units to manage geographically dispersed operations.

Risks

• Economic cyclicality — Demand depends on construction activity; economic downturns reduce project availability and can lead to price competition and lower revenue.
• Fixed-price contract risk — Incorrect cost estimates or cost overruns on fixed-price contracts can reduce profits or cause losses, as cost overruns may not be fully recovered through change orders.
• Labor and material shortages — Shortages of labor or specialty materials, or increased costs, could impair project execution and profitability.
• Customer and subcontractor financial risk — Financial difficulties of customers, vendors, subcontractors, or general contractors could lead to unpaid work, delays, and increased legal costs.

Outlook

Management expressed optimism about results for the remainder of 2026 and into 2027, citing strong ongoing demand, capabilities, and reputation. Backlog growth on a same-store basis increased from $8.12 billion at June 30, 2025 to $13.70 billion at June 30, 2026. The CEO highlighted 'unmatched execution' and record results in virtually every aspect of the business.