Comfort Systems USA NYSE: FIX executives said the company delivered record fourth-quarter and full-year 2025 results, citing strong execution, significant demand from technology customers, and growing modular construction capacity. Management also highlighted a record backlog, robust cash flow, and continued capital returns through a higher dividend and share repurchases.
Record quarter and full-year performance
Chief Executive Officer Brian Lane said the company posted “record earnings and backlog and exceptional cash flow,” pointing to same-store revenue growth of 35% in the fourth quarter and quarterly gross margin exceeding 25% for the first time in company history. Lane said the company reported quarterly earnings of $9.37 per share, up 129% from the prior year, and full-year earnings of $28.88 per share versus $14.60 in 2024.
Chief Financial Officer Bill George said fourth-quarter 2025 revenue rose 42% year over year to $2.6 billion, while full-year revenue exceeded $9 billion, up 30% from 2024. George said gross profit in the fourth quarter was $675 million, with gross margin of 25.5% versus 23.2% a year earlier, driven by “excellent execution within both of our segments.”
For the full year, George said the company’s gross profit margin increased to 24.1% from 21.0% in 2024. He reported full-year segment margins of 26.7% for Electrical and 23.6% for Mechanical. Operating income in the fourth quarter increased to $427 million from $226 million a year earlier, with operating margin expanding to 16.1% from 12.1%. Full-year operating income was $1.3 billion, representing a 14.4% operating margin.
Segment trends, margins, and 2026 revenue outlook
George said Mechanical segment revenue increased 21% for the year, aided by modular expansion and organic construction and service growth. Electrical segment revenue increased 62% in 2025, and overall same-store revenue rose 26%.
Looking ahead, George said the company expects same-store revenue growth in 2026 to be in the “mid-teens to high-teens percent,” with growth “weighed more heavily to the first half of the year.” In response to questions, management explained the cadence was influenced by tougher comparisons in the second half of the year due to a steep ramp in the back half of 2025.
George said the company expects gross profit margins to remain in the strong ranges achieved over recent quarters, while noting that first-quarter margins are typically seasonally lower. He also said the company’s 2026 tax rate is estimated to be around 23%, compared with 20.9% in 2025.
Backlog hits new highs as technology demand drives bookings
Management said backlog rose to an all-time high near $12 billion. President and COO Trent McKenna said backlog at quarter-end was $11.9 billion, and on a same-store basis it increased sequentially and year over year. He said same-store sequential backlog rose by $0.4 billion, or 26%, driven by technology-sector bookings across traditional construction and modular. McKenna added that more than half of the sequential backlog increase came from new modular bookings and that backlog duration is extending as modular and larger project backlog grows.
McKenna said the company’s backlog has doubled over the past year, increasing by $6 billion, and is 93% higher on a same-store basis than the same time last year.
Executives repeatedly pointed to technology—particularly data centers—as the key driver of pipeline and backlog. McKenna said industrial markets (which include technology) represented 67% of 2025 volume, and technology—“dominated by data center work”—was 45% of revenue, up from 33% in the prior year. Institutional markets including education, healthcare, and government represented 21% of revenue, while commercial construction was described as a small portion of overall construction activity.
In response to analyst questions about how backlog relates to hyperscaler capital spending announcements, management emphasized that backlog requires a binding legal commitment with price and scope, and that the company is a “late-cycle player.” George said projects that enter backlog were generally planned one to two years earlier, adding that current commitments by customers would more likely show up in the company’s revenue in 2027 or 2028.
Asked about fourth-quarter bookings, management said the company recorded a $2.6 billion sequential increase in bookings, with a little over half tied to new modular bookings. George said a large portion of that modular work is expected to be performed in 2027, with some in 2026 and some extending into 2028. He also cited strong activity beyond data centers in sectors including manufacturing, pharma, and food processing, while noting that data centers remain the busiest vertical and projects are increasingly large.
Modular expansion, labor strategy, and capital allocation
Lane said the company’s modular capacity is around 3 million square feet and is expected to increase to approximately 4 million square feet by the end of 2026, with planned additions in Texas and North Carolina. On timing, George said capacity would come online gradually, with one significant space procurement expected to close at the end of February and become fully productive toward the end of the year, though some final assembly space could be productive quickly.
On capital spending, George said 2025 capital expenditures were $155 million, about 1.7% of revenue, reflecting investments in modular expansion, operations, and vehicles to support service growth. For 2026, he described 1.7% as a “baseline rate,” but said spending could vary depending on whether the company leases or purchases facilities, noting a large building purchase expected in the first quarter and a potential major North Carolina investment under evaluation.
On labor availability, McKenna said Comfort Systems’ operating companies attract “best-in-class craft professionals,” and he highlighted the company’s growing in-house capacity to provide contract craft professionals on a traveling basis through Kodiak and Pivot. McKenna said Pivot brought a technology stack that has helped scale that effort, giving local leaders more flexibility to pursue projects with larger peak staffing needs or in remote geographies.
Management also discussed capital returns and acquisitions. Lane said the quarterly dividend was increased by $0.10 to $0.70 per share. George said the company returned more than $200 million to shareholders in 2025 through repurchases of more than 440,000 shares at an average price of $489 per share. Lane also noted the acquisition of two electrical companies in the fourth quarter: FC in Michigan and Meisner in Florida.
When asked about deployment of growing cash balances, management said the M&A pipeline is “good,” but cash flow is “relentless,” and stressed a continued focus on conviction and company quality in acquisitions. Executives added that acquisition valuations have increased, which they attributed to the increased value of established teams and skilled labor.
Cash flow strength and business mix
George said 2025 operating cash flow was $1.2 billion and full-year free cash flow was a record $1 billion. McKenna said service revenue increased 12% in 2025, reaching a record $1.2 billion, though service represented 14% of total revenue due to faster construction growth. Overall, construction accounted for 86% of revenue in 2025, including 63% from new buildings (which includes modular) and 23% from existing-building construction. McKenna said modular represented 18% of year-to-date revenue.
In the Q&A, management said potential changes in cooling requirements for next-generation chips were not expected to materially impact the business, with executives stating that data centers will still require piping, water systems, and electrical work.
Lane closed by thanking the company’s more than 22,000 employees and said management was “really excited about 2026,” citing the backlog and project pipeline as supporting factors for continued strong performance.
About Comfort Systems USA NYSE: FIX
Comfort Systems USA, Inc is a U.S.-based mechanical contracting company that provides a range of heating, ventilation and air conditioning (HVAC) services to commercial, industrial and institutional customers. The company focuses on the design, installation, maintenance and repair of HVAC systems, and it supports projects from initial engineering and system selection through long-term service agreements and upgrades.
Its service offerings include new construction and retrofit installations, preventive and corrective maintenance, emergency repair, energy management and building automation systems.
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