third quarter 2026
Filed Oct 22, 2026Comfort Systems USA reports third-quarter revenue of $3,766,302 (In Thousands), net income of $489,044 (In Thousands), and operating cash flow of $1,010,126 (In Thousands).
Third-quarter revenue, operating income, net income, diluted earnings per share, operating cash flow, free cash flow and backlog were all higher than the reported prior-year or prior-period comparisons, while profitability margins also expanded in several reported measures.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30GAAP | $3.77B | – | 50% increase |
| Cost of services, three months ended September 30GAAP | $2.83B | – | – |
| Gross profit, three months ended September 30GAAP | $934.5M | – | – |
| Gross margin, three months ended September 30GAAP | 24.8% | – | – |
| SG&A, three months ended September 30GAAP | $314.2M | – | – |
| SG&A as a percentage of revenue, three months ended September 30GAAP | 8.3% | – | – |
| Gain on sale of assets, three months ended September 30GAAP | −$4.25M | – | – |
| Operating income, three months ended September 30GAAP | $624.6M | – | – |
| Operating margin, three months ended September 30GAAP | 16.6% | – | – |
| Interest income, net, three months ended September 30GAAP | $14.50M | – | – |
| Changes in the fair value of contingent earn-out obligations, three months ended September 30GAAP | −$4.29M | – | – |
| Other income, net, three months ended September 30GAAP | $284K | – | – |
| Income before income taxes, three months ended September 30GAAP | $635.1M | – | – |
| Provision for income taxes, three months ended September 30GAAP | $146.0M | – | – |
| Net income, three months ended September 30GAAP | $489.0M | – | – |
| Net income margin, three months ended September 30GAAP | 13.0% | – | – |
| Basic income per share, three months ended September 30GAAP | $13.93 | – | – |
| Diluted income per share, three months ended September 30GAAP | $13.91 | – | 70% jump in per share earnings |
| Dividends per share, three months ended September 30GAAP | $0.900 | – | – |
| Adjusted EBITDA, three months ended September 30non-GAAP | $667.9M | – | – |
| Adjusted EBITDA margin, three months ended September 30non-GAAP | 17.7% | – | – |
| Revenue, nine months ended September 30GAAP | $9.90B | – | – |
| Gross profit, nine months ended September 30GAAP | $2.53B | – | – |
| Gross margin, nine months ended September 30GAAP | 25.6% | – | – |
| Operating income, nine months ended September 30GAAP | $1.67B | – | – |
| Operating margin, nine months ended September 30GAAP | 16.9% | – | – |
| Net income, nine months ended September 30GAAP | $1.30B | – | – |
| Net income margin, nine months ended September 30GAAP | 13.1% | – | – |
| Diluted income per share, nine months ended September 30GAAP | $36.94 | – | – |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $1.79B | – | – |
| Adjusted EBITDA margin, nine months ended September 30non-GAAP | 18.1% | – | – |
| Backlog as of September 30, 2026other | $17.81B | sequential backlog growth of $3.8 billion | year over year backlog increase exceeding $8.0 billion |
| Same-store backlog as of September 30, 2026other | $17.39B | – | – |
| Cash and cash equivalents as of September 30, 2026GAAP | $2.16B | – | – |
| Cash and cash equivalents as of December 31, 2025GAAP | $981.9M | – | – |
| Current maturities of long-term debt as of September 30, 2026GAAP | $5.71M | – | – |
| Long-term debt as of September 30, 2026GAAP | $43.84M | – | – |
| Cash provided by operating activities, three months ended September 30GAAP | $1.01B | – | – |
| Free cash flow, three months ended September 30non-GAAP | $805.6M | – | – |
| Cash provided by operating activities, nine months ended September 30GAAP | $2.54B | – | – |
| Free cash flow, nine months ended September 30non-GAAP | $2.05B | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Dividends per share were $0.900 for the three months ended September 30, 2026, compared to $0.500 for the three months ended September 30, 2025.
- Dividends per share were $2.400 for the nine months ended September 30, 2026, compared to $1.350 for the nine months ended September 30, 2025.
What drove it
- The company cited strong ongoing demand and consistent execution by its teams.
- Backlog was $17.81 billion as of September 30, 2026.
- Management said it continues to experience robust demand.
- The company cited competence and reputation together with workforce dedication and excellence.
Concerns
- The company identified risks that backlog could be adjusted or cancelled and fail to translate into revenue or profits.
- The company identified fixed-price bidding, labor-resource, material-cost, customer-payment, acquisition-integration and cost-to-cost accounting risks.
- The company identified national or regional construction weakness, labor and specialty-material shortages, supply-chain disruptions, and inflation as risks.
What to watch
- Whether backlog of $17.81 billion converts into revenue and profits.
- Management's stated objective to grow organically through year end and for 2027.
- Maintenance of high levels of profitability and solid ongoing cash flow, as stated by management.
- Capital spending, which was $(210,600) (In Thousands) in the third quarter and $(499,437) (In Thousands) for the nine months ended September 30, 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $2,158,027 (In Thousands) as of September 30, 2026, compared to $981,898 (In Thousands) as of December 31, 2025.
- Billed accounts receivable, net were $3,837,245 (In Thousands) as of September 30, 2026, compared to $2,577,858 (In Thousands) as of December 31, 2025.
- Total assets were $9,805,283 (In Thousands) as of September 30, 2026, compared to $6,441,169 (In Thousands) as of December 31, 2025.
- Current maturities of long-term debt were $5,710 (In Thousands) and long-term debt was $43,845 (In Thousands) as of September 30, 2026.
- Cash provided by operating activities was $1,010,126 (In Thousands) for the third quarter and $2,538,380 (In Thousands) for the nine months ended September 30, 2026.
- Purchases of property and equipment were $(210,600) (In Thousands) for the third quarter and $(499,437) (In Thousands) for the nine months ended September 30, 2026.
Analysis
Comfort Systems USA reported a strong third quarter ended September 30, 2026. Revenue was $3,766,302 (In Thousands), compared with $2,450,969 (In Thousands), and the company described this as a 50% increase. Net income was $489,044 (In Thousands), compared with $291,615 (In Thousands), while diluted income per share was $13.91 compared with $8.25. Operating income was $624,570 (In Thousands), compared with $378,874 (In Thousands).
Profitability remained elevated. Gross margin was 24.8%, unchanged from 24.8%, while operating margin was 16.6% compared with 15.5% and net income margin was 13.0% compared with 11.9%. SG&A was 8.3% of revenue compared with 9.4%. Adjusted EBITDA was $667,858 (In Thousands), or 17.7%, compared with $413,866 (In Thousands), or 16.9%.
Cash generation was a central feature of the reported period. Operating cash flow was $1,010,126 (In Thousands), compared with $553,271 (In Thousands), and free cash flow was $805,623 (In Thousands), compared with $519,027 (In Thousands). For the nine months ended September 30, 2026, operating cash flow was $2,538,380 (In Thousands) and free cash flow was $2,047,172 (In Thousands). Purchases of property and equipment were $(499,437) (In Thousands) for the nine-month period.
Backlog reached $17.81 billion as of September 30, 2026, compared with $14.06 billion as of June 30, 2026 and $9.38 billion as of September 30, 2025. Same-store backlog was $17.39 billion, compared with $9.38 billion as of September 30, 2025. Management characterized demand as robust and stated that the company is well-positioned to grow organically through year end and for 2027, while maintaining high profitability and solid ongoing cash flow.
The balance sheet showed $2,158,027 (In Thousands) of cash and cash equivalents, $5,710 (In Thousands) of current maturities of long-term debt and $43,845 (In Thousands) of long-term debt as of September 30, 2026. Dividends per share were $0.900 in the quarter, compared with $0.500 in the prior-year quarter. The release did not provide formal quantitative forward guidance, segment results, or share repurchase data.
Management, verbatim
Strong ongoing demand and consistent excellence by our teams resulted in extraordinary results across every metric this quarter. As compared to the same quarter last year, Comfort Systems USA is reporting a 50% increase in revenue and a 70% jump in per share earnings. We also achieved remarkable cash flow exceeding $1 billion in a single quarter. Our teams continue their superb execution, providing great outcomes for our customers and communities.
Brian Lane, Chief Executive Officer
Relentless demand, together with our competence and reputation, produced sequential backlog growth of $3.8 billion, and a year over year backlog increase exceeding $8.0 billion. We continue to experience robust demand, and thanks to the dedication and excellence of our workforce, we believe that through year end and for 2027 we are well-positioned to grow organically, and to maintain high levels of profitability and solid ongoing cash flow.
Brian Lane, Chief Executive Officer
Not in the filing
stated, not guessed- Formal quantitative forward guidance for revenue, gross margin, operating expenses and tax rate was not provided.
- Previous outlook was not provided.
- Segment revenue and segment profitability were not provided.
- Share repurchases were not provided.
- A reported effective tax rate was not provided.
- Basic income per share for the nine months ended September 30, 2026 was reported, but is not included in key metrics.
- Cost of services, SG&A, gain on sale of assets, interest income, changes in fair value of contingent earn-out obligations, other income, income before income taxes, provision for income taxes, basic income per share, shares used in computing income per share, amortization and depreciation for the nine-month period are not all individually included in key metrics.
- Full balance-sheet line-item coverage was not included in key metrics; the filing reports additional current assets, noncurrent assets, liabilities and stockholders' equity line items.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.