Key financial results

  • The company reported net income of $489 million, or $13.91 per share, for the third quarter of 2026, compared to $292 million, or $8.25 per share, in the same period last year.We earned $13.91 per share this quarter, which is $5.66 more than we earned in the same quarter last year.
  • Revenue for the third quarter was $3.8 billion, representing an increase of $1.3 billion or 54% compared to the prior year.revenue for the third quarter of 2026 was $3.8 billion, an increase of $1.3 billion or 54% compared to last year.
  • Gross profit was $934 million for the quarter, an increase of $327 million from the same quarter in 2025.Gross profit was $934 million for the third quarter of 2026. $327 million higher than 1 year ago.
  • Operating income rose 65% to $625 million, with an operating income percentage of 16.6% compared to 15.5% in the prior year.Our operating income increased by 65% from last year from $379 million in the third quarter of 2025 to $625 million for the third quarter of 2026.
  • EBITDA increased 61% to $668 million for the quarter, with a trailing 12-month EBITDA of approximately $2.3 billion.EBITDA increased by 61% and to $668 million this quarter from a strong $414 million in the third quarter of 2025.
  • The year-to-date tax rate was 23%, and management expects this rate to continue for the remainder of 2026 and throughout 2027.

Business segment results

  • Mechanical: Mechanical segment revenue grew by 43%, and gross profit percentage increased to 25.1% from 24.3% in the prior year.
  • Electrical: Electrical segment revenue grew by 85%, though margins slipped to 24.3% compared to 26.2% in the third quarter of 2025.margins in our Electrical segment slipped to 24.3% this quarter as compared to 26.2% in the third quarter of 2025.
  • Service: Service revenue increased by 13% during the quarter and now represents 10% of total revenue.
  • Modular: Modular operations accounted for 17% of year-to-date revenue.
  • Industrial: Industrial customers accounted for 76% of total revenue in the first 9 months of 2026.
  • Technology: Technology sector revenue increased to 59% of total revenue, up from 42% in the prior year.
  • Institutional and Commercial: Institutional markets represented 16% of revenue, while the commercial sector provided 8% of revenue.
  • Construction: Construction accounted for 90% of total revenue, with new building projects representing 75% and existing building construction 15%.

Capital allocation

  • The company increased its quarterly dividend by $0.10 to $1 per share.Today, we increased our quarterly dividend by $0.10 to $1 per share
  • Year-to-date, the company returned $349 million to shareholders and retired approximately 212,000 shares.year-to-date, we've returned $349 million to our shareholders, and we've retired approximately 212,000 shares.
  • The company invested over $100 million in CapEx to expand prefabrication facilities and estimates full year CapEx will be 4% to 5% of revenue.We estimate that full year CapEx will be 4% to 5% of revenue
  • Management expects to continue incurring CapEx at elevated levels during the first half of 2027.
  • The company acquired Boys Electrical and NeoPod on August 1, which are expected to contribute over $100 million in annual revenue.expect that they will contribute over $100 million in annual revenue at good margins.
  • Backlog reached a record $17.8 billion, an increase of $8.4 billion or 90% compared to the same time last year.Our backlog at the end of the third quarter jumped to a record $17.8 billion.
  • Labor availability remains the primary constraint on growth rather than demand.it's a market right now where the governor isn't demand, the governor is really just labor
  • The duration of projects in the backlog has extended to approximately 18 to 24 months.the size of these jobs, the duration of them, where they are has extended the backlog to roughly 18 to 24 months
  • Management noted that power connections for data center projects in the pipeline are generally already resolved.

Competitive landscape

  • The company maintains a disciplined approach to acquisitions, focusing on companies that seek a home for their legacy.we have worked so hard to make Comfort Systems the best place on Planet Earth for somebody who has made their life's work building a great contractor
  • Management emphasized patience in the acquisition process and a refusal to be rushed.I would say the key to our acquisition program is that we refuse to be hurried.
  • The company is selective regarding new customers, prioritizing those with strong financial standing and payment terms.we think there are various considerations as you compare the customers that we do work for.

Macroeconomic environment

  • Management has not seen any material impact on project schedules from data center moratoriums or political rhetoric.I don't know a project where one of these considerations has changed its trajectory.
  • Regional strength: Texas, Georgia, and Utah were highlighted as regions with above-normal strength.

Growth opportunities and strategies

  • Modular expansion: Modular capacity is expected to reach 6 million square feet by the end of 2027, up from 4 million square feet by the end of 2026.
  • Customer strategy: The company continues to prioritize programmatic relationships with customers who provide multiyear volume commitments.
  • Labor strategy: Management is focused on hiring and training to support growth, aiming to remain the preferred employer for craft professionals.

Financial guidance and outlook

  • Same-store revenue is expected to be in the mid-40% range for full year 2026.we expect full year same-store revenue will also be in the mid-40% range.
  • Management estimates full year 2027 same-store revenue will grow in the mid-20% range.We estimate that our same-store full year 2027 revenue will grow in the mid-20% range.
  • The company expects gross profit margins in 2027 to continue in the strong ranges achieved recently.We currently expect that 2027 gross profit margins are likely to continue in the strong ranges that we've achieved

Leadership changes

  • Chief Financial Officer Bill George announced his retirement after 30 years with the company.Last night, we announced Bill's decision to retire from the company after 30 years of amazing service.
  • Julie Shaeff has been promoted to succeed Bill George as Chief Financial Officer.We also announced that Julie will be promoted to CFO as Bill's successor

Q3 2026 results

MetricResultChange
Revenue$3.8 billionup 54%
Net Income$489 millionup from $292 million
EPS$13.91up from $8.25
Operating Income$625 millionup 65%
EBITDA$668 millionup 61%
Backlog$17.8 billionup 90% year-over-year

How management sounded

Positive (+45 on our -100 to +100 scale). Management expressed high confidence in the business, citing record backlog and strong demand, while maintaining a disciplined approach to project selection and labor capacity. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.

Read the analyst Q&A summary and guidance and outlook for this call.

What to watch before the next call

  • The transition of the CFO role from Bill George to Julie Shaeff.
  • The ability to manage labor constraints as the company continues to grow.
  • Potential for new programmatic modular agreements with non-traditional customers.

Earlier calls

  • Q2 2026 (Jul 24, 2026), tone Positive: Comfort Systems USA reported record second quarter results with revenue of $3.3 billion and earnings of $12.53 per share. The company achieved a record $14.1 billion backlog driven by strong demand in the technology sector and modular construction.

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