Comfort Systems Revenue Jumps 53.7% To $3.77 Billion, Yet Gross Margin Holds At 24.8%
The HVAC and electrical contractor's margin was flat from a year ago while estimate revisions added more to revenue and buybacks surged.
Comfort Systems USA, which installs and maintains heating, cooling, plumbing and electrical systems in commercial and industrial buildings, grew third-quarter revenue 53.7% to $3.77 billion, according to its 10-Q. Gross margin stayed at 24.8%, the same as a year earlier, and a larger slice of revenue came from revisions to estimates on work begun in earlier periods.
Flat margin on a much bigger base
Gross profit rose to $934.5 million in the third quarter, up 53.7% in step with revenue, so the percentage did not move. Management credited a 46.3% rise in same-store revenue and better execution at numerous locations. A $15.5 million bankruptcy-related revenue recognition in 2025 did not repeat.
For the first nine months, gross margin rose to 25.6% from 23.6%. The company points to favorable developments on projects nearing completion in the first quarter, including change orders of about $43.1 million, and to better results in its mechanical segment.
Net income climbed to $489.0 million, or $13.91 per diluted share, from $291.6 million, or $8.25, in the earnings release. Selling and administrative costs fell to 8.3% of revenue from 9.4%.
Estimate revisions add more to revenue
Comfort Systems books revenue as work progresses, so changes in estimates on jobs already underway flow straight into current results. Those revisions added 4.5% to third-quarter revenue, against 4.0% a year earlier. Over nine months they added 6.6%, against 4.6%.
Billed receivables reached $3.84 billion at September 30, from $2.58 billion at year-end. The prior quarter's filing showed $3.28 billion at June 30.
Technology customers, mainly data centers, were 60.8% of third-quarter revenue, against 45.8% a year ago. Backlog reached $17.81 billion, up 26.7% from June 30 and 90.0% from a year earlier. The company says backlog speaks only to revenue direction over the next six to 12 months.
Buybacks surge, CFO to retire
Share repurchases totaled $340.9 million in the third quarter, up from $5.7 million in the second. For the nine months the company bought 0.2 million shares at an average $1,643.85. The stock closed at $1,279.37 on Thursday, for a market value of $49.3 billion.
Cash from operations was $2.54 billion for nine months, against $717.8 million a year earlier. The company had no borrowings on its revolver and $1.01 billion of credit available.
Separately, an 8-K says CFO William George will retire after the 2026 annual report is filed. Chief Accounting Officer Julie Shaeff will succeed him.
The company hosts its conference call Friday at 10:00 a.m. Central Time, and Shaeff becomes CFO once the 2026 annual report is filed.
Sources
- 10-Q Filing — Comfort Systems USA (FIX) — SEC EDGAR
- 10-Q Filing — Comfort Systems USA (FIX), Q2 FY2026 filed 2026-07-23 (comparison basis) — SEC EDGAR
- 8-K Filing — Comfort Systems USA, filed 2026-10-22 (Items 5.02, 7.01, 9.01) — SEC EDGAR
- 8-K Filing — Comfort Systems USA, filed 2026-10-22 (Items 2.02, 8.01, 9.01) — SEC EDGAR
- Earnings release (8-K Item 2.02, fix-ex99d1.htm) — Comfort Systems USA, filed 2026-10-22 — SEC EDGAR
- Can Comfort Systems' Cash Flow Strength Support Its Investment Plans? — Yahoo Finance
- Comfort Systems (NYSE:FIX) reports upbeat Q3 2026 but stock drops — Yahoo Finance
- Brown Advisory Maintains Interest in Comfort Systems USA, Inc. (FIX) — Yahoo Finance
- Comfort Systems GAAP EPS of $13.91 beats by $1.20, revenue of $3.77B beats by $370M (NYSE:FIX) | Seeking Alpha — seekingalpha.com
- Top 3 Industrials Stocks That Could Lead To Your Biggest Gains In Q4 — benzinga.com
