Comfort Systems USA Reports Fourth Quarter and Full Year 2024 Results

Rhea-AI Summary

Comfort Systems USA (NYSE: FIX) reported exceptional financial results for Q4 and full-year 2024. Fourth quarter net income reached $145.9 million ($4.09 per diluted share), up from $91.6 million in Q4 2023. Q4 revenue increased to $1.87 billion from $1.36 billion year-over-year.

For the full year 2024, the company achieved record earnings with net income of $522.4 million ($14.60 per diluted share), compared to $323.4 million in 2023. Annual revenue grew to $7.03 billion from $5.21 billion. Operating cash flow strengthened to $849.1 million from $639.6 million in 2023.

The company's backlog reached $5.99 billion as of December 31, 2024, showing strong growth from both September 2024 ($5.68 billion) and December 2023 ($5.16 billion). Management expects continued strong performance in 2025, citing robust demand for construction services in advanced technology sectors.

Positive

• Q4 net income increased 59% YoY to $145.9 million
• Full-year revenue grew 35% to $7.03 billion
• Annual net income surged 62% to $522.4 million
• Operating cash flow improved 33% to $849.1 million
• Backlog grew 16% YoY to $5.99 billion

Negative

• None.

Insights

Financial Analyst

Comfort Systems USA's Q4 and FY2024 results reveal a company firing on all cylinders, with several noteworthy achievements that signal robust operational execution. The 61.5% surge in annual net income to $522.4 million significantly outpaces the 35% revenue growth to $7.03 billion, indicating substantial margin expansion and operational efficiency improvements.

The company's backlog dynamics are particularly telling. The sequential increase from $5.68 billion to $5.99 billion in Q4, coupled with same-store backlog growth of $440 million year-over-year, suggests strong organic growth momentum. This is especially impressive given the high base effect from previous quarters and points to sustained demand in key markets, particularly in advanced technology infrastructure.

The standout metric is the exceptional cash flow performance, with annual operating cash flow of $849.1 million. This robust cash generation has enabled the company to pursue a balanced capital allocation strategy, funding both acquisitive growth and share repurchases without compromising financial flexibility. The ability to self-fund growth initiatives while maintaining strong liquidity positions the company advantageously in a high interest rate environment.

The company's focus on advanced technology-related construction services appears particularly prescient, aligning with the broader trend of infrastructure modernization and digital transformation across industries. This strategic positioning, combined with their extensive national footprint across 178 locations, provides a competitive moat and supports sustainable growth prospects.

HOUSTON--(BUSINESS WIRE)-- Comfort Systems USA, Inc. (NYSE: FIX) (the “Company”) today reported results for the quarter and annual period ended December 31, 2024.

For the quarter ended December 31, 2024, net income was $145.9 million, or $4.09 per diluted share, as compared to $91.6 million, or $2.55 per diluted share, for the quarter ended December 31, 2023. Revenue for the fourth quarter of 2024 was $1.87 billion compared to $1.36 billion in 2023. The Company reported operating cash flow of $210.5 million in the current quarter compared to $173.0 million in 2023.

Backlog as of December 31, 2024 was $5.99 billion as compared to $5.68 billion as of September 30, 2024 and $5.16 billion as of December 31, 2023. On a same-store basis, backlog increased from $5.16 billion as of December 31, 2023 to $5.60 billion as of December 31, 2024.

The Company reported net income of $522.4 million, or $14.60 per diluted share, for the twelve months ended December 31, 2024, as compared to $323.4 million, or $9.01 per diluted share in 2023. The Company also reported revenue of $7.03 billion for the twelve months ended December 31, 2024, as compared to $5.21 billion in 2023. Operating cash flow for the twelve months ended December 31, 2024 was $849.1 million, as compared to $639.6 million in 2023.

Brian Lane, Comfort Systems USA’s President and Chief Executive Officer, said, “We are reporting record annual and fourth quarter earnings as our amazing teams across the United States continue their excellent performance. Per share earnings in 2024 were over 60% higher than the spectacular results we achieved in 2023, and our strong quarterly results were also without precedent.”

Mr. Lane continued, “Cash flow was extraordinary throughout 2024 as we succeeded in organically funding our investments in new companies and also significant share purchases. We believe that our strong earnings, cash flow, and robust backlog indicate continued strength in our execution, customer relationships, and prospects. Fourth quarter bookings were strong, and we ended the year with same-store growth in both sequential and year-over-year backlog. With an unprecedented and broadly based backlog, healthy project pipelines, persistent demand for construction services relating to advanced technology, and an unmatched workforce, we expect continuing strong results in 2025.”

The Company will host a webcast and conference call to discuss its financial results and position on Friday, February 21, 2025 at 10:00 a.m. Central Time. To register for the call, please visit https://register.vevent.com/register/BI8cd852271e8c433cb4d799af8715623d. Upon registering, participants will receive dial-in information and a unique PIN to join the call. The call and the slide presentation to accompany the remarks can be accessed on the Company’s website at www.comfortsystemsusa.com under the “Investor” tab. A replay of the entire call will be available on the Company’s website on the next business day following the call.

Comfort Systems USA^® is a leading provider of commercial, industrial and institutional heating, ventilation, air conditioning and electrical contracting services, with 178 locations in 136 cities across the nation. For more information, visit the Company’s website at www.comfortsystemsusa.com.

Certain statements and information in this press release may constitute forward-looking statements regarding our future business expectations, which are subject to applicable securities laws and regulations. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historic in nature. These forward-looking statements are based on the current expectations and beliefs of Comfort Systems USA, Inc. and its subsidiaries (collectively, the “Company”) concerning future developments and their effect on the Company. While the Company’s management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Company will be those that it anticipates, and the Company’s actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of our results or developments in subsequent periods. All comments concerning the Company’s expectations for future revenue and operating results are based on the Company’s forecasts for its existing operations and do not include the potential impact of any future acquisitions. The Company’s forward-looking statements involve significant risks and uncertainties (some of which are beyond the Company’s control) and assumptions that could cause actual future results to differ materially from the Company’s historical experience and its present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the use of incorrect estimates for bidding a fixed-price contract; undertaking contractual commitments that exceed the Company’s labor resources; failing to perform contractual obligations efficiently enough to maintain profitability; national or regional weakness in construction activity and economic conditions; rising inflation and fluctuations in interest rates; shortages of labor and specialty building materials or material increases to the cost thereof; the Company’s business being negatively affected by health crises or outbreaks of disease, such as epidemics or pandemics (and related impacts, such as supply chain disruptions); financial difficulties affecting projects, vendors, customers, or subcontractors; the Company’s backlog failing to translate into actual revenue or profits; failure of third party subcontractors and suppliers to complete work as anticipated; difficulty in obtaining, or increased costs associated with, bonding and insurance; impairment to goodwill; errors in the Company’s cost-to-cost input method of accounting; the result of competition in the Company’s markets; the Company’s decentralized management structure; material failure to comply with varying state and local laws, regulations or requirements; debarment from bidding on or performing government contracts; retention of key management; seasonal fluctuations in the demand for mechanical and electrical systems; the imposition of past and future liability from environmental, safety, and health regulations including the inherent risk associated with self-insurance; adverse litigation results; an increase in our effective tax rate; a material information technology failure or a material cyber security breach; risks associated with acquisitions, such as challenges to our ability to integrate those companies into our internal control environment; our ability to manage growth and geographically-dispersed operations; our ability to obtain financing on acceptable terms; extreme weather conditions (such as storms, droughts, extreme heat or cold, wildfires and floods), including as a result of climate change, and any resulting regulations or restrictions related thereto; and other risks detailed in our reports filed with the Securities and Exchange Commission (the “SEC”).

For additional information regarding known material factors that could cause the Company’s results to differ from its projected results, please see its filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether because of new information, future events, or otherwise.

— Financial tables follow —

Comfort Systems USA, Inc.
Consolidated Statements of Operations
(In Thousands, Except per Share Amounts)
		Three Months Ended																Twelve Months Ended
		December 31,																December 31,
		(Unaudited)
		2024				%				2023				%				2024				%				2023				%
Revenue		$	1,867,804			100.0		%		$	1,357,566			100.0		%		$	7,027,476			100.0		%		$	5,206,760			100.0		%
Cost of services			1,434,066			76.8		%			1,077,881			79.4		%			5,551,065			79.0		%			4,216,251			81.0		%
Gross profit			433,738			23.2		%			279,685			20.6		%			1,476,411			21.0		%			990,509			19.0		%
SG&A			207,635			11.1		%			160,026			11.8		%			730,072			10.4		%			574,423			11.0		%
Gain on sale of assets			(252	)		—					(619	)		—					(3,030	)		—					(2,302	)		—
Operating income			226,355			12.1		%			120,278			8.9		%			749,369			10.7		%			418,388			8.0		%
Interest income (expense), net			3,286			0.2		%			650			—					4,906			0.1		%			(6,789	)		(0.1	)	%
Changes in the fair value of contingent earn-out obligations			(43,712	)		(2.3	)	%			(9,400	)		(0.7	)	%			(88,146	)		(1.3	)	%			(23,607	)		(0.5	)	%
Other income, net			109			—					201			—					432			—					202			—
Income before income taxes			186,038			10.0		%			111,729			8.2		%			666,561			9.5		%			388,194			7.5		%
Provision for income taxes			40,168								20,148								144,128								64,796
Net income		$	145,870			7.8		%		$	91,581			6.7		%		$	522,433			7.4		%		$	323,398			6.2		%
Income per share
Basic		$	4.10							$	2.56							$	14.64							$	9.03
Diluted		$	4.09							$	2.55							$	14.60							$	9.01
Shares used in computing income per share:
Basic			35,601								35,752								35,689								35,802
Diluted			35,692								35,852								35,775								35,895
Dividends per share		$	0.350							$	0.250							$	1.200							$	0.850

Supplemental Non-GAAP Information — (Unaudited) (In Thousands, Except per Share Amounts)
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
		2024			2023			2024			2023
Net income		$	145,870		$	91,581		$	522,433		$	323,398
Tax gains related to prior years			—			—			—			(10,761	)
Tax-related SG&A costs, net of tax			—			—			—			1,063
Net income excluding tax gains		$	145,870		$	91,581		$	522,433		$	313,700
Diluted income per share		$	4.09		$	2.55		$	14.60		$	9.01
Tax gains related to prior years			—			—			—			(0.30	)
Tax-related SG&A costs, net of tax			—			—			—			0.03
Diluted income per share excluding tax gains		$	4.09		$	2.55		$	14.60		$	8.74

Note: Net income excluding tax gains and diluted income per share excluding tax gains are presented because the Company believes they reflect the results of the core ongoing operations of the Company, and we believe they are responsive to frequent questions we receive from third parties. These amounts, however, are not considered primary measures of an entity’s financial results under generally accepted accounting principles, and accordingly, they should not be considered an alternative to operating results as determined under generally accepted accounting principles and as reported by the Company.

Supplemental Non-GAAP Information — Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) — (Unaudited) (In Thousands)
		Three Months Ended													Twelve Months Ended
		December 31,													December 31,
		2024				%		2023				%			2024				%		2023				%
Net income		$	145,870					$	91,581						$	522,433					$	323,398
Provision for income taxes			40,168						20,148							144,128						64,796
Other expense (income), net			(109	)					(201	)						(432	)					(202	)
Changes in the fair value of contingent earn-out obligations			43,712						9,400							88,146						23,607
Interest expense (income), net			(3,286	)					(650	)						(4,906	)					6,789
Gain on sale of assets			(252	)					(619	)						(3,030	)					(2,302	)
Tax-related SG&A costs			—						—							—						1,345
Amortization			22,042						11,131							97,266						43,404
Depreciation			12,842						10,445							48,219						38,162
Adjusted EBITDA		$	260,987			14.0	%	$	141,235			10.4	%		$	891,824			12.7	%	$	498,997			9.6	%

Note: The Company defines adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) as net income, provision for income taxes, other expense (income), net, changes in the fair value of contingent earn-out obligations, interest expense (income), net, gain on sale of assets, goodwill impairment, other one-time expenses or gains and depreciation and amortization. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is presented because it is a financial measure that is frequently requested by third parties. However, Adjusted EBITDA is not considered under generally accepted accounting principles as a primary measure of an entity’s financial results, and accordingly, Adjusted EBITDA should not be considered an alternative to operating income, net income, or cash flows as determined under generally accepted accounting principles and as reported by the Company.

Comfort Systems USA, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
		December 31,			December 31,
		2024			2023
Cash and cash equivalents		$	549,939		$	205,150
Billed accounts receivable, net			1,861,212			1,318,926
Unbilled accounts receivable, net			95,786			72,774
Costs and estimated earnings in excess of billings, net			91,681			28,084
Other current assets, net			191,623			286,166
Total current assets			2,790,241			1,911,100
Property and equipment, net			277,180			208,568
Goodwill			875,270			666,834
Identifiable intangible assets, net			434,417			280,397
Other noncurrent assets			333,980			238,680
Total assets		$	4,711,088		$	3,305,579
Current maturities of long-term debt		$	6,042		$	4,867
Accounts payable			654,943			419,962
Billings in excess of costs and estimated earnings and deferred revenue			1,149,257			909,538
Other current liabilities			772,528			386,838
Total current liabilities			2,582,770			1,721,205
Long-term debt			62,293			39,345
Other long-term liabilities			361,349			267,200
Total liabilities			3,006,412			2,027,750
Total stockholders’ equity			1,704,676			1,277,829
Total liabilities and stockholders’ equity		$	4,711,088		$	3,305,579

Selected Cash Flow Data (Unaudited) (In Thousands)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
Cash provided by (used in):
Operating activities		$	210,463			$	173,008			$	849,057			$	639,568
Investing activities		$	(39,489	)		$	(73,883	)		$	(343,509	)		$	(193,008	)
Financing activities		$	(36,618	)		$	(31,598	)		$	(160,759	)		$	(298,624	)
Free cash flow:
Cash from operating activities		$	210,463			$	173,008			$	849,057			$	639,568
Purchases of property and equipment			(40,676	)			(25,264	)			(111,071	)			(94,838	)
Proceeds from sales of property and equipment			1,927				858				5,538				5,951
Free cash flow		$	171,714			$	148,602			$	743,524			$	550,681

Note: Free cash flow is defined as cash flow from operating activities less customary capital expenditures, plus the proceeds from asset sales. Other companies may define free cash flow differently. Free cash flow is presented because it is a financial measure that is frequently requested by third parties. However, free cash flow is not considered under generally accepted accounting principles as a primary measure of an entity’s financial results, and accordingly, free cash flow should not be considered an alternative to operating income, net income, or cash flows as determined under generally accepted accounting principles and as reported by the Company.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250220702100/en/

Julie Shaeff, Chief Accounting Officer

ir@comfortsystemsusa.com; 713-830-9687

675 Bering Drive, Suite 400

Houston, Texas 77057

713-830-9600

Source: Comfort Systems USA, Inc.

FAQ

What was Comfort Systems USA's (FIX) Q4 2024 earnings per share?

Comfort Systems USA reported Q4 2024 earnings of $4.09 per diluted share, compared to $2.55 per diluted share in Q4 2023.

How much revenue did FIX generate in full-year 2024?

Comfort Systems USA generated $7.03 billion in revenue for the full year 2024, up from $5.21 billion in 2023.

What is Comfort Systems USA's (FIX) current backlog as of December 2024?

FIX reported a backlog of $5.99 billion as of December 31, 2024, up from $5.16 billion at the end of 2023.

How much operating cash flow did FIX generate in 2024?

Comfort Systems USA generated $849.1 million in operating cash flow for 2024, compared to $639.6 million in 2023.

What was FIX's net income growth in 2024 compared to 2023?

FIX's net income grew from $323.4 million in 2023 to $522.4 million in 2024, representing a 62% increase.