Comfort Systems USA Inc. (NYSE: FIX) saw its shares climb sharply in after-hours trading Wednesday after reporting first-quarter earnings that more than doubled, fueled by robust demand from technology and data center projects. The Houston-based mechanical and electrical contractor posted net income of $370.4 million, or $10.51 per diluted share, compared to $169.3 million, or $4.75 per share, in the same period a year ago.
Revenue jumped 56.5% to $2.87 billion, with the company highlighting "especially strong" demand from the tech sector, particularly data centers. The results underscore the continuing boom in data center construction, which is driving growth not just for chipmakers and server suppliers but also for the contractors responsible for cooling, wiring, and outfitting these facilities.
Backlog and Dividend Increase
Backlog climbed to $12.45 billion as of March 31, up from $11.94 billion at the end of 2025 and $6.89 billion a year earlier. The company noted that backlog typically signals revenue trends for the coming six to 12 months, though it cautioned that contracted jobs can be modified or canceled. The board also raised the quarterly dividend by 10 cents to $0.80 per share, payable on May 26 to shareholders of record as of May 15.
Segment Performance
Growth was broad-based but heavily weighted toward technology. Mechanical segment revenue reached $2.06 billion, up 47%, while the electrical segment soared 87.5% to $804.7 million. The company attributed much of the improvement to tech-sector work in Texas, Indiana, and North Carolina. Organic revenue—growth from existing operations, excluding acquisitions—rose 51%, according to Chief Executive Brian Lane.
Profitability and Cash Flow
Gross profit expanded to $754.4 million from $403.4 million, with gross margin improving to 26.3% from 22.0% a year ago. The company cited better execution and positive developments in late-stage projects, including change orders. Operating cash flow swung to an inflow of $388.8 million from an $88.0 million outflow in the prior-year period. Free cash flow totaled $242.2 million, compared to negative $109.1 million a year ago.
Market Context
The stock was recently seen at $1,773.91, a gain of $52.18 from its previous close, after hitting an intraday peak of $1,905. The company's market capitalization stood at approximately $62.7 billion. Comfort Systems easily beat the mean LSEG analyst estimate of $6.80 per share, and the average analyst recommendation stood at 1.67 on a scale from sell to strong buy.
Investors are expected to question management about the sustainability of data-center demand translating into lasting margins, especially after a quarter that raised expectations. The company has scheduled a conference call for Friday at 10:00 a.m. Central Time to discuss the results.
