01—Abstract
Summary
Summary of the 10-Q filed July 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Comfort Systems USA, Inc. (FIX) demonstrated strong financial performance in its second quarter and first half of 2025, with significant increases in revenue and gross profit.
Revenue surged by 20.1% year-over-year for the quarter, reaching $2.17 billiona, driven by robust demand, particularly in the technology sector and data center construction. The company's backlog also saw substantial growth, increasing by 40.7% year-over-year to $8.12 billion, indicating continued strong business prospects. Profitability improved notably, with gross profit rising by 40.2% for the quarter and operating income more than doubling year-over-year.
This improvement was attributed to higher revenues, better operational execution, and improved gross profit margins in the mechanical segment. Despite increased SG&A expenses due to higher headcount and compensation costs, the company managed to leverage its revenue growth, leading to a slight decrease in SG&A as a percentage of revenue. The company ended the period with a strong liquidity position and ample credit availability.
02—Key points
Key Highlights
- Revenue for Q2 2025 increased by 20.1% year-over-year to $2.17 billion, driven by strong demand in the technology sector.
- Gross profit increased by 40.2% year-over-year to $509.9 million in Q2 2025, with gross profit margin improving from 20.1% to 23.5%.
- Operating income for Q2 2025 more than doubled to $299.9 million, up from $184.7 million in Q2 2024.
- The company's backlog grew significantly by 40.7% year-over-year to $8.12 billion as of June 30, 2025, signaling strong future revenue potential.
- Net income for Q2 2025 was $230.8 million, a substantial increase from $134.0 million in the prior year's quarter.
- Cash provided by operating activities was $164.5 million for the first six months of 2025, though lower than the prior year due to working capital changes and tax payments.
- The company repurchased approximately $112.2 million of its stock during the first six months of 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Comfort Systems USA kept $0.11.
- Revenue$2.17B100.0%
- Cost of revenue−$1.66B76.5%
- Gross profit$509.9M23.5%
- Operating costs−$210.0M9.7%
- Operating income$299.9M13.8%
- Interest, other & tax−$69.0M3.2%
- Net income$230.8M10.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 24, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $2.17B$1.81B | +20.1% |
| Cost of Revenue | $1.66B$1.45B | +15.0% |
| Gross Profit | $509.90M$363.60M | +40.2% |
| SG&A Expenses | $210.47M$179.54M | +17.2% |
| Operating Income | $299.87M$184.67M | +62.4% |
| Net Income | $230.85M$134.01M | +72.3% |
| EPS (Basic) | $6.54$3.75 | +74.4% |
| EPS (Diluted) | $6.53$3.74 | +74.6% |
| Shares Outstanding (Basic) | 35.31M35.75M | −1.2% |
| Shares Outstanding (Diluted) | 35.37M35.83M | −1.3% |
05—Questions
Frequently Asked Questions
What is the primary driver behind the significant revenue growth in Q2 2025?
The primary driver of the 20.1% year-over-year revenue growth in Q2 2025 was strong market conditions and increased demand, particularly in the technology sector, which is a key contributor to data center construction. This demand increase is reflected in both same-store activity and contributions from recent acquisitions.
How did the company manage its costs and expenses in light of increased revenue?
The company experienced a significant increase in gross profit due to higher revenues and improved operational execution, leading to better gross profit margins. While Selling, General, and Administrative (SG&A) expenses increased due to higher headcount and compensation, they grew at a slower pace than revenue, resulting in SG&A as a percentage of revenue decreasing slightly from 9.9% in Q2 2024 to 9.7% in Q2 2025. This demonstrates effective cost management and operational leverage.
What is the company's outlook for the remainder of 2025 and into 2026?
Comfort Systems USA, Inc. anticipates solid earnings for the remainder of 2025 and is well-positioned for continued success in 2026. The company expects supportive conditions, especially in the manufacturing and technology customer segments, to continue. Despite potential economic challenges, the company's substantial backlog and strong market positioning provide confidence in its future performance.
How is the company managing its liquidity and financial resources?
The company ended the period with $331.7 million in cash and cash equivalents and $766.8 million of credit available under its revolving credit facility. While cash provided by operating activities was lower year-over-year due to working capital changes and tax payments, the company has a history of generating positive free cash flow and maintains significant borrowing capacity, indicating a strong liquidity position to fund operations.
06—Continue