Comfort Systems USA grew Q2 2026 revenue 50.3% to $3.27B and diluted EPS 91.9% to $12.53, driven mostly by same-store data-center work, with backlog up 73.1% to $14.06B.
Revenue
$3.3B
+50.3% YoY
Net income
$442M
+91.3% YoY
Diluted EPS
$12.53
+91.9% YoY
Operating margin
17.1%
Revenue up 50%, profit nearly doubled, as data-center work took over the order book
Comfort Systems USA installs and maintains the "guts" of large buildings: heating, cooling, plumbing and piping (its Mechanical segment) and electrical systems (its Electrical segment). In the second quarter of 2026 (April–June), revenue rose 50.3% to $3.27 billion and net income rose 91.3% to $441.6 million, or $12.53 per diluted share versus $6.53 a year earlier.
The growth came overwhelmingly from existing businesses, not purchases. Of the 50.3% revenue increase, 43.8 points were "same-store" — operations the company already owned a year ago — and only 6.5 points came from acquisitions (R.C. Hunt Electric, bought May 1, 2026, and Feyen Zylstra and Meisner Electric, both bought October 1, 2025). The 10-Q attributes the same-store growth to strong market conditions and a larger backlog, and says demand "has been especially strong in the technology sector, particularly for data centers."
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$3,265.7M
$2,173.3M
+50.3%
Gross margin
25.9%
23.5%
+2.4 pts
Operating income
$558.0M
$299.9M
+86.1%
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Gross margin is the share of revenue left after the direct costs of doing the work (labor, equipment, subcontractors). Operating margin is what's left after overhead too, before interest and tax.
First half of 2026: revenue $6.13 billion (+53.1%), operating income $1.04 billion (17.0% margin vs. 12.7%), net income $812.0 million (+102.9%), diluted EPS $23.03 vs. $11.28 (+104.2%).
Segments: both grew fast; Electrical grew faster, Mechanical widened margins more
Segment
Q2 2026 revenue
Q2 2025 revenue
YoY
Q2 2026 operating income
Q2 2025 operating income
Op. margin 2026 vs 2025
Mechanical
$2,296.7M
$1,638.7M
+40.2%
$426.7M
$237.9M
18.6% vs 14.5%
Electrical
$969.0M
$534.6M
+81.2%
$154.1M
$80.1M
15.9% vs 15.0%
Mechanical added $658.0 million of revenue, of which $649.6 million was same-store (only $8.4 million came from the Right Way acquisition). The 10-Q names three main sources of growth, all technology-sector work: a Texas operation (+$219.4 million), an Indiana operation (+$123.6 million) and a North Carolina operation (+$115.5 million). Mechanical gross margin rose to 25.6% from 22.9%, and management specifically credits "improvements in our mechanical segment gross profit margin" for the company-wide margin gain.
Electrical added $434.3 million, of which $132.6 million came from the three acquired electrical contractors and $301.7 million was same-store — mostly one business, the Texas electrical operation (+$186.6 million from technology work). So a large share of Electrical's 81% headline growth is bought: stripping out acquisitions, the segment grew roughly 56%. Its gross margin improved more modestly, to 26.4% from 25.3%.
Where the revenue comes from: concentration in technology
Customer type
Q2 2026
Share
Q2 2025
Share
YoY
Technology
$1,917.4M
58.7%
$934.2M
43.0%
+105.2%
Manufacturing
$535.4M
16.4%
$473.0M
21.8%
+13.2%
Healthcare
$230.8M
7.1%
$200.3M
9.2%
+15.2%
Education
$168.3M
5.1%
$194.8M
8.9%
−13.6%
Government
$145.5M
4.4%
$107.8M
5.0%
+35.0%
Office buildings
$92.5M
2.8%
$110.5M
5.1%
−16.3%
Technology customers (the filing's category that includes data centers) now account for nearly three of every five revenue dollars, up from 43% a year ago. Technology revenue alone grew by $983 million — about 90% of the company's total $1.09 billion revenue increase. Outside technology the picture is ordinary: manufacturing and healthcare grew in the low-to-mid teens, while education and office work shrank.
The mix also shifted toward new buildings. New construction was 75.1% of revenue ($2.45 billion, nearly double last year's $1.26 billion), while work on existing buildings fell 20.4% to $483.5 million. Service — maintenance, repair and monitoring, which is steadier, repeat business — grew in dollars (service calls/maintenance/monitoring +12.5% to $183.4 million) but fell to about 10% of revenue from about 14%.
Backlog: $14.06 billion and still climbing
Backlog is signed or committed project work not yet performed — a rough preview of revenue over the next 6–12 months (the company notes it excludes service work and short jobs, so it covers only part of future revenue).
June 30, 2026
Dec 31, 2025
June 30, 2025
Mechanical
$10.06B
$9.03B
$5.81B
Electrical
$4.00B
$2.92B
$2.31B
Total
$14.06B
$11.94B
$8.12B
Backlog grew 12.9% in the quarter alone (from $12.45 billion at March 31) and 73.1% year over year. Acquisitions explain little of it: same-store backlog rose $5.58 billion, or 68.7%, year over year. The sequential jump was driven by technology bookings at the Texas electrical operation ($1.00 billion) and the Texas modular operation ($510.2 million) — modular meaning building system components off-site in a factory and shipping them to the job. Over the full year, the Texas modular operation added $1.87 billion of backlog, the single largest contributor.
Cash flow: customers are paying up front
Operating cash flow for the first half was $1.53 billion, versus $164.5 million a year earlier, and free cash flow (operating cash minus routine capital spending, plus asset-sale proceeds) was $1.24 billion versus $113.1 million. The 10-Q attributes $684.7 million of the improvement to "billings in excess of costs" — money customers paid ahead of the work, including "more net advance payments" — and $535.6 million to higher payables and other liabilities. Two prior-year tax items cut in opposite directions: an $80.0 million federal tax payment deferred into Q1 2025 by hurricane relief depressed last year's cash flow, while a $107.1 million federal tax refund received in April 2025 boosted it.
The advance payments show up on the balance sheet: billings in excess of costs reached $3.23 billion at June 30, up from $2.12 billion at year-end. That is cash in hand, but it is also work owed; as those projects are built out, this source of cash reverses. Cash stood at $1.85 billion against total debt of $54.1 million, with nothing drawn on the $1.10 billion credit line.
Capital spending is rising: $288.8 million in the half (vs. $53.5 million), including $188.9 million of building purchases "to support growth in our modular business," and the company expects full-year 2026 capex to be above its recent average. Share buybacks were minimal ($8.2 million in the half, at an average of $1,438.19 per share).
Takeaway: Comfort Systems' results are now a data-center story: technology customers supplied about 90% of the quarter's revenue growth and account for 59% of sales, and most of the growth came from businesses it already owned. Profit grew faster than revenue because margins widened in the core Mechanical segment, not because of acquisitions or one-offs — but the company's fortunes are more tightly tied to one customer group than it was a year ago.
What to watch
Management's outlook (from the 10-Q): the company says it has "a good pipeline of opportunities and potential backlog" and, given its "substantial advance bookings," anticipates "high ongoing demand leading to solid earnings for the remainder of 2026," expecting supportive conditions "especially for our manufacturing and technology customers." It also flags continuing labor-cost increases and intermittent supply-chain delays, which it says it is pricing into jobs and mitigating by ordering materials earlier. No numeric revenue or earnings guidance is given in the filing.
Our read:
Margin durability. Q1 2026 benefited from about $43.1 million of favorable project close-outs and change orders; Q2's 25.9% gross margin was only slightly below Q1's roughly 26.3% (derived from the year-to-date figures) without a similar item being called out, which suggests the improvement is mostly execution rather than one-time gains. Whether 25–26% holds as the big data-center backlog is worked through is the key question.
Concentration risk. With 59% of revenue from technology and the largest backlog additions concentrated in a handful of Texas, Indiana and North Carolina operations, a pause in data-center spending would hit harder than a broad construction slowdown would have a few years ago.
Cash reversal. The $3.23 billion of customer prepayments has inflated 2026 cash flow; expect operating cash flow to normalize as that work is performed.
Near-term revenue visibility is strong: a $14.06 billion backlog is about four times the quarter's $3.27 billion revenue, and second- and third-quarter seasonality typically favors the company.