• Revenue: Fourth quarter revenue increased by 38% to $1.9 billion; full year revenue was $7 billion, up 35% from 2023.
• Same-Store Revenue Growth: Fourth quarter same-store revenue growth was 22%; full year same-store revenue increased by 23%.
• Gross Profit: Fourth quarter gross profit was $434 million, with a gross profit margin of 23.2%.
• Net Income: Fourth quarter net income was $146 million, or $4.09 per share, a 60% increase from last year.
• EBITDA: Fourth quarter EBITDA increased by 85% to $261 million; full year EBITDA was $892 million with a margin of 12.7%.
• Operating Cash Flow: Full year operating cash flow was $849 million.
• Free Cash Flow: Full year free cash flow was $744 million.
• Backlog: End-of-year backlog reached $6 billion, a 16% increase from last year.
• SG&A Expense: Fourth quarter SG&A was $208 million, or 11.1% of revenue.
• Dividend: Quarterly dividend increased by $0.05 to $0.40 per share.
• Share Repurchases: $58 million returned to shareholders in 2024 through share repurchases.

• Warning! GuruFocus has detected 2 Warning Signs with FIX.

Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Comfort Systems USA Inc (NYSE:FIX) reported record annual and fourth quarter earnings with exceptional cash flow.
• Same-store revenue growth for the fourth quarter was 22%, with earnings per share up 60% from last year.
• Backlog reached a new all-time high of $6 billion, indicating strong demand across various sectors.
• The company announced a quarterly dividend increase, reflecting strong cash flow and commitment to shareholder returns.
• Recent acquisitions have surpassed expectations, contributing positively to revenue and growth.

Negative Points

• Facing tough comparables in 2025, with expectations of high single-digit percentage growth in same-store revenue.
• First quarter cash flow will be reduced due to a deferred $80 million tax payment related to Hurricane Barrel.
• Increased SG&A expenses due to ongoing investments to support higher activity levels.
• Potential challenges in maintaining the elevated margin levels achieved in 2024.
• The company is turning down work due to capacity constraints, indicating potential limitations in workforce availability.

Q & A Highlights

Q: Can you explain the factors contributing to your confidence in maintaining elevated margin levels in 2025? A: Brian Lane, President and CEO, explained that the confidence stems from a combination of factors including good project selection, strong customer relationships, and excellent execution by their workforce. The company is focusing on projects that align with their strengths and ensuring high-quality execution, which is driving strong margins.

Q: How do you foresee growth in your modular business in 2025, given its significant increase in 2024? A: William George, CFO, stated that while there was a substantial increase in 2024 due to large orders, future growth will be more gradual. The company plans to focus on productivity and automation to support continued growth, and they expect modular to grow faster than the overall company.

Q: Can you provide more details on the strong demand from technology customers, particularly in the data center sector? A: Brian Lane noted that demand, especially for data centers, remains robust with no signs of slowing down. William George added that the announced investments by hyperscalers are significantly higher than in previous years, and even if there is a pullback, the demand will still be substantial.

Q: How is the company managing its workforce to meet the demand and ensure quality execution? A: Brian Lane emphasized the company's commitment to recruiting and training, highlighting their extensive training programs and partnerships that provide access to temporary labor. This approach helps manage peaks and valleys in demand while maintaining a skilled workforce.

Q: What is the outlook for M&A activity, and how does it fit into your growth strategy? A: William George mentioned that the M&A pipeline is healthy, and the company remains optimistic about continuing their strategy of acquiring businesses that align with their goals. They focus on conviction and availability rather than meeting a quota, ensuring that acquisitions are strategic and beneficial.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.