10-KPeriod: FY2024

COMFORT SYSTEMS USA INC Annual Report, Year Ended Dec 31, 2024

Filed February 20, 2025For Securities:FIX

Summary

Comfort Systems USA, Inc. (FIX) reported a strong financial performance for the fiscal year ended December 31, 2024, with significant revenue growth driven by both acquisitions and robust same-store activity. The company's strategic focus on core competencies, employee investment, and operational efficiencies continues to yield positive results. The mechanical segment experienced substantial revenue increases, particularly from technology sector projects, while the electrical segment also saw growth in manufacturing and technology sectors. The company's backlog has also seen a healthy increase, indicating a strong demand pipeline for future projects. Management expects continued solid earnings in 2025, despite anticipating ongoing labor cost pressures and supply chain challenges. The company maintained its strong financial position with positive free cash flow generation for the 26th consecutive year and ample liquidity, supported by its credit facility.

Financial Highlights

52 data points
Beta

Revenue

$7.03B

21.0% Gross Margin

Net Income

$522.43M

7.4% Net Margin

EPS (Diluted)

$14.60

Total Assets

$4.71B

Cash & Equivalents

$549.94M

Free Cash Flow

$737.99M

Financial Statements
Beta
Revenue$7.03B
Cost of Revenue$5.55B
Gross Profit$1.48B
SG&A Expenses$730.07M
Operating Income$749.37M
Interest Expense$6.65M
Net Income$522.43M
EPS (Basic)$14.64
EPS (Diluted)$14.60
Shares Outstanding (Basic)35.69M
Shares Outstanding (Diluted)35.77M

Key Highlights

  • 1Revenue increased by 35.0% to $7.03 billion in 2024, driven by acquisitions and strong same-store growth.
  • 2Gross profit increased by 49.1% to $1.48 billion, with gross margin improving to 21.0% from 19.0% in the prior year.
  • 3SG&A as a percentage of revenue decreased to 10.4% from 11.0% due to increased revenue leverage.
  • 4Backlog grew by 16.2% year-over-year to $5.99 billion as of December 31, 2024.
  • 5The company generated $849.1 million in cash flow from operating activities and $743.5 million in free cash flow in 2024.
  • 6Comfort Systems USA maintained a strong balance sheet with no outstanding borrowings on its $850 million credit facility and $770 million available at year-end.
  • 7The company completed several strategic acquisitions in 2024, including Summit Industrial Construction, LLC and J & S Mechanical Contractors, Inc., to enhance its capabilities and market position.

Frequently Asked Questions

The company's revenue increased by 35.0% to $7.03 billion in 2024. This growth was a result of a combination of strategic acquisitions, including Summit Industrial Construction, LLC and J & S Mechanical Contractors, Inc., and strong same-store activity, particularly in the technology sector such as data centers and chip plants.

Gross profit increased significantly by 49.1% to $1.48 billion in 2024, with the gross margin expanding from 19.0% to 21.0%. This improvement was driven by higher revenues and better operational execution, including improved project execution in key operations and a stronger performance in the electrical segment's gross profit margin.

Comfort Systems USA anticipates solid earnings in 2025, expecting continued strong demand, especially from its industrial and technology customers. While acknowledging potential ongoing labor cost pressures and supply chain challenges, management is optimistic about the company's pipeline of opportunities and its ability to navigate these factors.

The company demonstrated strong financial health, generating $849.1 million in operating cash flow and $743.5 million in free cash flow in 2024, marking the 26th consecutive year of positive free cash flow. Comfort Systems USA has a robust liquidity position, with no outstanding borrowings on its $850 million credit facility and $770 million in available credit as of December 31, 2024. This strong financial footing provides flexibility for future operations and strategic initiatives.