Comfort Systems USA added $3.8 billion of backlog in the third quarter, and the Houston mechanical and electrical contractor now holds $17.81 billion of signed work, nearly double the $9.38 billion it carried a year earlier. Its Oct. 22 earnings release showed revenue of $3.77 billion, up 54% from $2.45 billion.
Comfort Systems’ backlog keeps outrunning revenue
Backlog has gone from $9.38 billion a year ago to $14.06 billion at the end of June and $17.81 billion at the end of September. Revenue is growing fast too, just not that fast. At the third quarter’s pace of about $1.26 billion a month, the backlog covers roughly 14 months of work.
Same-store backlog was $17.39 billion, so acquisitions account for only about $420 million of the total. The release didn’t announce any new deals.
CEO Brian Lane credited “relentless demand, together with our competence and reputation.” The release doesn’t break out data centers, but the company’s filings come close. In the second quarter, the technology market, which Comfort Systems reports as a single line, made up 58.7% of revenue, according to its June quarter 10-Q. Manufacturing was a distant second at 16.4%. Healthcare, education and government together came to 16.6%.
Margins held while the work piled up
Gross margin was 24.8%, flat with a year ago. Net income rose 68% to $489 million, or $13.91 a diluted share, from $291.6 million. Operating cash flow nearly doubled to $1.01 billion, and free cash flow was $805.6 million. Dividends for the quarter came to 90 cents a share, up from 50 cents a year earlier.
Through nine months, revenue reached $9.90 billion against $6.46 billion in the same stretch of 2025, and gross margin improved to 25.6% from 23.6%. That’s the part competitors should study. Most contractors growing at 50% a year give up margin to do it.
What a $17.8 billion backlog means for MEP capacity
Lane said the company is “well-positioned to grow organically” through year-end and into 2027, but the release offers no numeric guidance. Demand isn’t the constraint. Staffing is. Comfort Systems has to crew its jobs in the same labor market where about three in four electrical specialty firms say they’re short on craft workers. Every mechanical and electrical sub chasing the same data center and chip-plant work is drawing from that pool.
Concentration is the other risk. With close to 60% of revenue tied to one market, Comfort Systems is exposed to the gap between what hyperscalers announce and what they build. Jefferies expects about 5.86 GW of the nearly 18 GW planned for 2029 to show up. Backlog is signed work, so it’s firmer than a forecast. It isn’t immune to a client slowing a schedule.
The company holds its earnings call Oct. 23. The number to listen for is how much of that $3.8 billion quarterly jump sits with a handful of customers.