Key Highlights

  • Revenue rose 54% to USD 3.77 billion, including 46.3% same-store growth.
  • Operating income rose 65% to USD 624.6 million; Margin was 16.6%.
  • Net income rose 68% to USD 489.0 million, or USD 13.91 per diluted share.
  • Remaining performance obligations stood at USD 17.81 billion.

Quarter Results

Comfort Systems USA (NYSE:FIX) filed its third-quarter 2026 report on Thursday for the period ended Sept. 30. Revenue was USD 3,766.3 million, up from USD 2,451.0 million a year earlier. The 53.7% increase consisted of 46.3% from same-store activity and 7.4% from the Boys Electrical, a Texas modular company, Hunt, Feyen Zylstra and Meisner acquisitions.

The company attributed same-store growth to market conditions, including a larger backlog, with Demand highest in the technology sector, particularly data centers. Cost of services was USD 2,831.8 million, 75.2% of revenue in both years, and Gross Profit was USD 934.5 million, a margin of 24.8% in both years. Over nine months, gross margin was 25.6% against 23.6% and SG&A was 8.8% of revenue against 9.8%. Selling, general and administrative expense was USD 314.2 million, or 8.3% of revenue, against 9.4% a year earlier.

Profitability

Operating income was USD 624.6 million, a margin of 16.6% against 15.5%, up from USD 378.9 million. Interest income was USD 16.0 million, interest expense fell to USD 1.5 million from USD 3.0 million, other income was USD 0.3 million, and the change in the Fair Value of contingent earn-out obligations was a charge of USD 4.3 million, against USD 12.1 million a year earlier. Pretax income was USD 635.1 million and the tax provision was USD 146.0 million.

Net income was USD 489.0 million against USD 291.6 million, or USD 13.91 per diluted share on 35.2 million diluted shares. Over nine months, revenue was USD 9.90 billion against USD 6.46 billion, Operating Income was USD 1.67 billion against USD 887.8 million, and Net Income was USD 1.30 billion against USD 691.8 million.

Backlog and Operating Footprint

Remaining performance obligations were USD 17.81 billion at Sept. 30. The company projects recognizing about 65% to 75% of them over the next 12 months, with the rest thereafter. These figures cover firm orders for which work has not been performed and exclude unexercised contract options.

The company had 52 operating locations at the end of the quarter, up from 50 at year end. It acquired Hunt Electric on May 1 and Boys Electrical and a Texas modular company on Aug. 1, and combined two locations into one. Same-store comparisons exclude those acquisitions and the October 2025 purchases of Feyen Zylstra and Meisner.

Cyclicality and Seasonality

The filing notes that mechanical and electrical contracting follows business cycles, that new installation and replacement can fall in periods of economic weakness, and that demand is typically lower in the first quarter and higher in the second and third quarters. The company also noted ongoing price competition among local and regional participants.

Reference Points

Revenue growth of 54% was accompanied by an Operating Margin gain of 110 basis points, with SG&A falling 110 basis points as a share of revenue and gross margin unchanged. Remaining obligations of USD 17.81 billion equal about 4.7 times the third-quarter revenue. Items to follow include same-store growth against the 46.3% rate, the share of obligations recognized within 12 months, Data Center demand, the integration of the three newest acquisitions, and the gross margin level.