Comfort Systems USA Inc Strong Orders Reinforce Growth Trajectory

Research evidence excerpt

Comfort Systems USA Inc Strong Orders Reinforce Growth Trajectory

stimate). From To % ch Cons.

Q1 10.51 10.51 0 10.51

EBITDA was $600m, above consensus of $509m and our estimate of $536m. Q2 10.68 12.53 17 10.46

EBITDA margin was 18.4%, up 300bps yoy and ahead of our 17.6% estimate. Q3E 10.98 13.23 20 11.00

Q4E 11.11 12.84 16 11.64

For an overview of quarterly results, see our initial note. 12/26E 43.27 49.10 13 43.63

12/27E 53.94 60.64 12 54.17

Quarter Highlighted by Strong Orders

12/28E 59.38 66.67 12 68.46

Robust backlog/orders key Q2 highlight. Backlog was +70% yoy organically

to $14.1B, and increased sequentially from $12.5B. Notably, implied orders were Joshua Chan, CFA

+43% yoy at $4.9B, accelerating from +24% in Q1 and exceeding our view of Analyst

buyside bar of ~$3.7B. This was the biggest point of concern for investors (and us) joshua.chan@ubs.com

+1-212-713 9957

entering the print, and the orders easily cleared the bar. Approximately $1B of

orders were related to the modular business, but this implies that orders related to Karandeep Singhania

traditional construction was quite strong as well. Book-to-bill amounted to Associate Analyst

karandeep.singhania@ubs.com 1.5X (vs. 1.2X in Q1), ahead of seasonal norms.

+1-212-713 4211

Revenue/margin upside in Q2. Q2 organic growth was +44% yoy, above our Brianna Kamdoum

estimate of +35%. EBITDA margin was 18.4%, above our estimate of 17.6% and Associate Analyst

up 300bps yoy. We sense that relative to buyside expectations, organic growth brianna.kamdoum@ubs.com

was relatively in line with margins exceeded slightly. In rationalizing the stock +1-212-882 5027

move, some investors pointed to these beats being more narrow than in recent

quarters. Encouragingly, FIX raised 2026 organic growth guidance to mid/high-