Comfort Systems USA ((FIX)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Comfort Systems USA’s latest earnings call painted a picture of robust growth and strategic success. The company reported record earnings and significant revenue growth across its segments, driven by a strong backlog and strategic acquisitions. Despite some challenges with increased SG&A expenses and a decline in manufacturing revenues, the overall sentiment was positive, highlighting strong demand and effective capital allocation as key drivers for future growth.
Record Earnings per Share
Comfort Systems USA achieved a remarkable milestone in the third quarter of 2025, earning $8.25 per share. This figure represents a doubling of earnings compared to the same quarter in the previous year, showcasing the company’s strong financial performance and effective strategies.
Significant Revenue Growth
The company reported a substantial 35% increase in revenue, reaching $2.5 billion in Q3 2025. This growth was particularly pronounced in the electrical segment, which saw a 71% increase, while the mechanical segment grew by 26%, reflecting the company’s strategic focus on expanding these areas.
Remarkable Backlog Growth
Comfort Systems USA’s backlog reached a new high of $9.4 billion, marking a 65% year-over-year increase. This growth in backlog, which is $3.7 billion more than the previous year, underscores the company’s strong market position and the demand for its services.
Strong Free Cash Flow
The company generated over $500 million in free cash flow during the quarter, with a total of $519 million in Q3 2025. Year-to-date free cash flow stands at $632 million, highlighting the company’s efficient cash management and operational strength.
Successful Acquisitions
Comfort Systems USA’s acquisition of FZ Electrical and Meisner Electric added over $200 million in incremental annual revenue and $15-$20 million in annual EBITDA. These acquisitions are expected to enhance the company’s market presence and financial performance.
Increased Dividend
Reflecting its strong financial health, the company increased its quarterly dividend by 20% to $0.60 per share, rewarding shareholders and demonstrating confidence in its ongoing profitability.
Increased SG&A Expenses
SG&A expenses rose to $230 million, representing 9.4% of revenue, compared to 9.9% in Q3 2024. This increase is mainly attributed to investments in personnel, which are expected to support future growth initiatives.
Challenges in Manufacturing Revenue
While manufacturing revenues declined on a percentage basis, the demand remains strong. However, more compelling opportunities in the data center sector have overshadowed manufacturing, indicating a strategic shift in focus.
Forward-Looking Guidance
Comfort Systems USA remains optimistic about its growth prospects for 2025 and 2026, driven by continued strength in the industrial and technology sectors. The company expects ongoing strong performance, supported by its strategic acquisitions and robust backlog.
In summary, Comfort Systems USA’s earnings call highlighted a period of strong growth and strategic success. The company’s record earnings, significant revenue growth, and strategic acquisitions underscore its robust market position. Despite some challenges, the overall sentiment remains positive, with a strong outlook for future growth driven by effective capital allocation and strategic focus.