Summary
Comfort Systems USA, Inc. (FIX) reported a strong third quarter for 2023, demonstrating significant growth across key financial metrics. Revenue increased by 23.0% year-over-year to $1.38 billion, driven by robust demand in both the mechanical and electrical segments, including contributions from recent acquisitions. This revenue growth translated into a substantial increase in gross profit, up 37.2% to $277.5 million, with gross margin improving from 18.1% to 20.1%. Net income also saw a significant rise of 70.9% to $105.1 million, or $2.93 per diluted share. The company highlighted strong backlog growth, up 31.9% year-over-year to $4.29 billion, indicating a healthy pipeline of future projects. Management expressed confidence in continued solid earnings and cash flow through the remainder of 2023 and into 2024, despite ongoing challenges in labor costs and supply chain constraints. The company also reported a strong operating cash flow and a healthy available credit facility, underscoring its financial stability and operational execution.
Financial Highlights
52 data points| Revenue | $1.38B |
| Cost of Revenue | $1.10B |
| Gross Profit | $277.50M |
| SG&A Expenses | $142.94M |
| Operating Income | $135.14M |
| Interest Expense | $1.89M |
| Net Income | $105.13M |
| EPS (Basic) | $2.93 |
| EPS (Diluted) | $2.93 |
| Shares Outstanding (Basic) | 35.82M |
| Shares Outstanding (Diluted) | 35.92M |
Key Highlights
- 1Revenue surged by 23.0% to $1.38 billion in Q3 2023 compared to Q3 2022, driven by strong performance in both mechanical and electrical segments, and contributions from acquisitions.
- 2Gross profit increased by 37.2% to $277.5 million, with gross margin expanding from 18.1% to 20.1%, reflecting improved revenue and project execution.
- 3Net income grew substantially by 70.9% to $105.1 million, translating to diluted EPS of $2.93, up from $1.71 in the prior year's quarter.
- 4Backlog reached $4.29 billion as of September 30, 2023, representing a significant 31.9% increase year-over-year, indicating robust future demand.
- 5Operating cash flow was exceptionally strong, generating $466.6 million for the first nine months of 2023, a significant increase from $169.5 million in the same period last year.
- 6The company ended the quarter with $137.6 million in cash and cash equivalents, up from $57.2 million at the end of 2022, reflecting strong cash generation.
- 7Acquisitions, notably Eldeco, Inc. in February 2023, are contributing to revenue growth and expanding the company's service capabilities and geographic reach.