Comfort Systems Usa (FIX 22.37%), a major provider of mechanical and electrical contracting services in North America, reported its second quarter 2025 results on July 24, 2025. The headline figures: the company smashed Wall Street estimates, reporting GAAP earnings per share (EPS) of $6.53, compared to the expected $4.84, and GAAP revenue of $2.17 billion, well above the consensus forecast of $1.97 billion. Both revenue and net income saw double-digit year-over-year gains. The quarter was highlighted by record GAAP EPS of $6.53 and a backlog that points to ongoing momentum.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $6.53 | $4.84 | $3.74 | 74.6 % |
| Revenue (GAAP) | $2.17 billion | $1.97 billion | $1.81 billion | 20.1 % |
| Operating Cash Flow | $252.5 million | $189.9 million | 33.0 % | |
| Adjusted EBITDA | $334.1 million | $222.7 million | 50.1 % | |
| Backlog | $8.12 billion | $5.77 billion | 40.7 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Understanding Comfort Systems Usa's Business
Comfort Systems Usa specializes in mechanical, electrical, and plumbing contracting for commercial, institutional, and industrial facilities. Its services range from designing and installing heating, ventilation, and air conditioning (HVAC) systems to ongoing maintenance, electrical work, and modular/off-site construction. Projects often include large-scale builds for data centers, hospitals, schools, and manufacturing plants.
In recent years, the company has focused on several growth pillars: operational excellence, workforce development, technological innovation, and market diversification. Key factors for success include its ability to recruit and retain skilled labor, leverage advanced construction techniques like modular building, and diversify its customer mix across fast-growing sectors such as advanced technology and healthcare. A disciplined approach to acquisitions also adds new capabilities and market reach.
Quarterly Highlights and Financial Developments
The latest quarter saw a clear acceleration in both financial and operational results. Net income (GAAP) jumped to $230.8 million, up 72.2% year-over-year. Operating income surged 62.4% to $299.9 million compared to Q2 2024, marking a substantial boost in profitability. Gross profit margin improved to 23.5%, up from 20.1% in Q2 2024. Management credited its “superior execution in the field” as a key factor behind the improved margins, while also noting that further margin expansion may be harder to achieve from here.
Operating cash flow climbed to $252.5 million, representing a 33.0% increase year-over-year. Free cash flow rose to $222.2 million. The company cited normalization in operating cash as some earlier benefits from large advance customer payments and deferred tax timing have now run their course.
Backlog -- the total value of contracted work not yet completed -- reached a record $8.12 billion at period-end, rising $1.23 billion from the prior quarter and $2.35 billion from a year ago. This jump signals significant demand ahead, especially from advanced technology (such as data centers and chip fabrication), healthcare, and institutional markets. Advanced technology is currently the company’s largest revenue driver, with healthcare representing 8.3% of the business in 2024.
Service revenue, generated from maintenance and repair rather than new construction, made up 15% of overall sales. Modular construction -- building components or entire systems in off-site facilities for later assembly at the final location -- comprised 19% of sales. This approach improves the company’s efficiency.
The company completed its acquisition of Century Contractors in January. This mechanical contracting specialist is expected to contribute roughly $90 million in annual revenue for 2025. Management described its approach to acquisitions as disciplined, with a focus on deals that support long-term strategic goals rather than quick expansion.
A notable one-time factor within free cash flow (non-GAAP) was the impact of unwinding advance customer payments and a deferred tax payment, with leadership stating that cash flow should now “go back to just cash flowing our net income.”
Comfort Systems USA raised its quarterly dividend by 50% to $0.45 per share. For the first half of 2025, total dividend payments per share rose 54.5% compared to the first half of 2024. Management’s willingness to boost dividends points to confidence in the company’s cash generation and underlying business trends.
Looking Ahead: Outlook and Investor Themes
The company did not provide explicit guidance for the next quarter or the full year. However, management maintained a tone of optimism, referencing robust visibility in its project pipeline for fiscal 2026. Despite this, recent results may not set a new baseline for margins.
Investors should keep an eye on the company’s performance. The company also signaled it would continue to pursue acquisitions, but only with a high level of strategic fit and confidence.
FIX pays a quarterly dividend, which was raised 50% compared to Q2 2024, to $0.45 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
