Comfort Systems USA (FIX) 21 Feb 252024 Q4 Earnings call transcript

Company Profile

Participants

Julie Shaeff	executive
Brian Lane	executive
William George	executive
Brent Thielman	analyst
Adam Thalhimer	analyst
Julio Romero	analyst
Joshua Chan	analyst
Brian Brophy	analyst
Alexander Dwyer	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2024 Comfort Systems USA Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Julie Shaeff, Chief Accounting Officer. Please go ahead.

Julie Shaeff

Marvin. Thanks, morning. Good Systems Earnings Comfort Quarter Full and Welcome USA's XXXX Call. Year to Fourth

to today, our securities Our forward-looking well plans today as comments plans in as expectations actual the upon the results and future What Those will current include be different and those and operations from of materially Comfort is comments. regulations. based of USA. statements uncertainties press risks these meaning activities of expectations Systems the and that applicable laws cause our might and we say within contain releases,

You concerning these most covering can factors in read recent a specific our release detailed press earnings. listing as and in well our our commentary Form as XX-K, risk

is website the the posted section of A at found Relations on companion presentation slide provided and as Investor company's is a comfortsystemsusa.com. remarks, to our

the Joining today and Chief Lane, Executive Operating President George, Trent Brian Chief and are Officer; McKenna, Financial Officer. Chief Bill me Officer; on call

our open remarks. will Brian

Brian Lane

All Last you right. quarter exceptional Thanks, Julie. to our cash the and our teams United flow, we excellent earnings across record night, call States. fourth and superb thanks thank annual joining for by reported execution Good morning, and today.

] to for year earned XXXX. XX% and the $X billion. our XX%, quarter all-time fourth were amazing. in Backlog share for quarter, of margins per $XX.XX at new end grew to We Same-store was $X.X from compared high growth $X.XX revenue [ this the share year, the per and up a last of year the

our we experience demand sectors, continue persistent strength customers. to across backlog from all Our including broadly based, virtually strong and is technology

is year-over-year $XXX XXXX in and of we investment strong trends relationships a began foundation million, our operating our for flow both quarter in underlying cash fourth sequential with XXXX, strong strength customer was cash bookings, same-store ongoing to and execution, strong prospects. indicative continued laying flow growth backlog. and Thanks

added to will contractor established We January, announce company. our is Charlotte they recently well ] [ as revenue year. earn our pleased newest in are and Carolina, of partner and expectations we $XX North that million about mechanical [ surpass acquired based Century to in Century we outstanding, this ], expect we companies Contract an continued

$X.XX a reflects over This I financial share. quarterly our and And performance. dividend will strong flow. We per to shows to shareholders. turn increase a share like but repurchases, of discuss Bill first, also reward business to our I cash $X.XX minutes, few this announced our increase our commitment Bill? review call outlook in our it will to our

William George

this fourth an fantastic year. quarter, year, XXXX a capping for to by was increase compared XXXX are Results XXXX. XX% billion. of $X compared billion, Revenue for Brian. to year the last increased great Full Thanks, XX% $X.X revenue quarter to of

percentage by expansion revenue revenue increased XX%. increased growth. in same-store XX%, Mechanical single-digit revenue increased by or best rise most $X.X full tough substantial growth. construction For service a and that our face segment and by by continue Full estimate, same-store is our in billion. modular acquisitions, likely by XXXX, to XXXX the organic comparable year, helped revenue XX%, in will Electrical segment We'll year high

profit million $XXX a the a to of year $XXX for compared ago. quarter Gross was fourth improvement XXXX, million

compared improved profit to to to XX.X% Margins year, XX.X% Our fourth in XXXX. percentage grew to to in quarter, gross XX.X%, year. quarter to XXXX. gross fourth this XX.X% segment profit increased last this in of our compared the The XX.X% in XX.X% percentage the Mechanical compared quarterly quarter of our for quarter segment also the Electrical

margin XX% to was Full XX% annual year gross and million, XXXX. compared profit in $XXX our by profit increased as gross

XX.X% mechanical XX.X%. was margin was XXXX, while Electrical Our for

quarters strong ranges last optimistic continue year. to in As comparable be are margins profit have gross we we the that look to in will achieved XXXX, we

the the expense million $XXX ] of or ] revenue was quarter [ or million, in fourth XX.X% XX.X% quarter SG&A of of compared ] in [ to same [ $XXX XXXX. revenue,

XX.X% the was For from in XXXX. full a percentage revenue year, SG&A as of down XX.X%, expense

full a our $XXX the SG&A year same-store basis, investments to activity to due ongoing higher up was much and For on support levels. million

this income operating $XXX the profit Thanks quarter in the an million the X.X% $XXX prior operating percentage to leverage, Quarterly fourth margins year, from income in million our XXXX, XX% SG&A fourth quarter in increase. to gross favorable of for the increased and increased year. to XXXX, of XX.X% from jump

For $XXX percentage of our the and income a operating operating income was year, full remarkable XX.X%. million, we achieved

We XX.X%. approximately rate in XXXX will factors, improvement a rate earnings last of was the quarter net was fourth share. $XXX these share all XXXX from tax $X.XX XX%. or Our for After XXXX is estimate XX% This year. considering that be per million, our per quarterly in tax to XX% income

EPS share XXXX per share so earnings annual year $X.XX were $XX.XX, in is for over by full up year, Our XX%. our compared the prior to per

EBITDA to in this $XXX execution from by the and $XXX our great and XX%, XX%. XXXX by markets. EBITDA fourth EBITDA million million, $XXX Full by our teams margin million EBITDA Same-store in reflecting XXXX. was XX.X%, of year quarter increased over quarter, strong increased demand was

Full year $XXX flow was for a free cash XXXX remarkable million.

earnings again a payments our benefit flow, trailing from to operating XX-month We advanced basis. far $XXX and by on exceeded continue million cash

earnings of our again in cash. ahead So well we are collecting

quarter second our reduce addition, XXXX to of catch-up of ]. of [ allowed Hurricane flow until That defer were was cash Barrel by million lifted $XX for the cash that been flow. and to now due payments February half payment has In we will XXXX tax first approximately made

price shareholders to in $XXX year We at $XXX. $XX.XX, our XXXX to start, its repurchases than over vehicles million our buying support revenue, average of our of or of in paid expenditures over purchase to retired continue price an X.X% an at our little invest increased shares has XXXX service average million operations XX.X we shareholders and million. program in by Capital in investment over $XX business. purchase and share a share and and returned $XXX our XXX,XXX Since million, shares more were this

That's all Brian. I got,

Brian Lane

and our am business All to right. Thanks, outlook. Bill. I discuss going

backlog higher fourth quarter the Since backlog has end by especially last a increase was was up year, or sequential million. by Fourth and strong, last the time sequential our year. at were at both of year-over-year Backlog $XXX up million, now $XXX a our backlog. technology is X% this billion, basis, backlog increased in XX%. $XXX On million, same-store in sector, quarter same-store than $X bookings the and

Our overall broadly in robust is especially and backlog based industrial sector. our

has working good good We with are for workforce. our that selecting conditions variable margins, carefully work

centers over With XXXX, in accounting be we pipeline the our for towards driver continues volume this component of data Our was backlog. a increase fab, of our in from and revenue. sector industrial, XX% revenue is chip of substantial XX% now mix XX% in continues include sector. our the the to and trend technology and to revenue, advanced which of and which largest major prior includes year industrial Technology, a

care small. commercial Institutional also Most is markets our construction active including of our sector now business and health XX% relatively so and revenue for our revenue. service commercial revenue. now about is of commercial government represent are customers, XX% as The strong accounts and of education, is for well

modular building representing accounted XX%, was existing year-to-date XX% buildings and with building Construction XX% remain for of pipelines for our modular of and at XX%. new new Project construction revenue. We our and revenue, unprecedented construction, projects include levels.

X% on But now up absolute growth revenue XX% basis. Service year construction, of in revenue. was this service faster an with total is

reliable of service to overall in $X.X source be revenue growing a Our record and profit service business and flow. a cash continues achieved billion for XXXX and

our especially With persistent onshoring record workforce. demand broad-based healthy backlog, advanced and unmatched pipelines, technology, in

We expect results in XXXX. continuing strong

I dedication. want their by XX,XXX to work hard over thanking employees close our for and

day. now for every it Thank over turn a Our our result will to questions. is that direct serve I the you. success people Marvin of back customers single

Operator

D.A. our [Operator of question Instructions] Brent of Thielman the from And line Davidson. first comes

Brent Thielman

I schedules year. great I'm for pretty your I on function of finish is you I ability sustain is the new on wondering, margin or XXXX of you across awards? see to elevated Bill, mean, out the laid Congrats see levels comments think a in come kind a territories? notable. in guess, XXXX Brian different terms of that Is on to that the just your these it the continue

you just margins such Just given by standards. strong gives the that, wanting confidence around understand historical to

Brian Lane

Brent. sure, for Yes,

a private selection, evaluating work out good great the And know, a and of So on around It's that's a looking you've you estimating Brent, with spot. and leading our job to wheelhouse, for customers, in been right business time. of a sweet long we're lot that good host this in as there's our projects now, at. working there risk starts of it doing -- things, just the

it. So a good of we're doing executing really job

their in in folks actually comes with But are the hands. tools work field it the doing that all the down to

take fortunate We workforce are care we with the customers. and very the have our do to they

a to do combination things them now. a have are lot all going of right we to we're of of well, doing margins which it's So and drive

Brent Thielman

Yes, XX% roughly revenue, I then in just XXXX. taking looks is up the mean year-to-date on of okay. I XX% mean the And like modular, business it

handle see talk wanted just get of ability there's I that in I you the you're to the Could modular XXXX. just about but in a your growth around 'XX? know to limitations to capacity, continue terms of thinking how in in

William George

Right.

big had orders based that we So giant in Brent, a and reassurances we on XXXX. some in increase 'XX bang got

more square when we'll we now feet, but XXX,XXX put space, will lot automation. that, grow focus on to productivity, continue We we add a and add

just So at I have have grow we see continuing guys. are -- at and to help in you it, with to helping a we really, good incremental that, we're see just you And you'll the to don't gradually, it. But just product just all growth. our just customer them I of stand really just to our guys ] think of and build providing think -- so design not sort excellent really [ continue I to that and great really

Brent Thielman

particular And with automation, put some Okay. margins upward area. presumably on Bill, could mean, on pressure that productivity that that the in fair? focus Is I

William George

And customers. really big I of supportive they These sophisticated think margin. are guys have margins. getting it's good

wouldn't predict. necessarily I So

as grow that I space think that, will a than faster Comfort whole.

they'll growth of projections I same-store -- supportive we do is gave. our the would think achieved we they think margins be 'XX, will that as it of same really every margin we overall, be guidance reason the for rest So the in just margin growth believe But which the can't -- in it them business, 'XX. we see again guidance to every projections have but for our those

Brent Thielman

in I Last here one, if it's could. modular or Bill, something maybe the CapEx stepped mean, Got I up the fourth else. quarter, it. with associated

related to? And that CapEx Just XXXX? thoughts on what -- was in

William George

CapEx, So up, dollars they're up. they're of

a always going almost still that's from sequentially, of look quarter percent you big but of revenue. to quarter, the to fourth If volumes they're down fourth third They're quarter. happen up as the

sequentially. So up a as percentage, they're

get, we where be dollar very every of better. first it use help our is first can our our and say in serve it reinvest company better business use the will I to customers us a

nowadays, occasionally, investing in and to buildings are landlord. opportunistically buildings a they're buildings. the from also do need run frequently building will we're medium-sized most we is special pretty businesses that simply buy really that to -- our often We logical the buy way -- we town just the And in the because those and that they're from

you'll I we'll our that. buy this will probably see So conversations of probably buildings sometimes some -- in lead year. a think to that We're couple

mean, about percentage as And backlog I will so year think I stay I at think next CapEx our year. -- this same the our

Operator

of comes Thalhimer Davis. the Our Adam line from question of next Thompson

Adam Thalhimer

strong wanted to a demand what give just current bidding I environment? Congrats on color And start the from QX. persistent on from maybe technology that? more on you us you're customers. anecdotes the some seeing great little Can a

Brian Lane

Yes.

let demand can a heavy couple and a concern build. the on first particularly lot front. want would and they released. then what Bill us go right ago of I'll have of on data been probably we're There's no add seeing it. But center on But So now, months to activity, to up

we're In fact, sure they've to still in let which in want are. they us all building that make know we that on

no that front. let up we at on Adam, see all, So

William George

in hyperscalers One to been people that the than in have and that forget is start higher announced not ever things the are that's by happened anything, vastly of any year particular, probably with. the the past amounts possible

amount that lower yet. that So even case in going to the definitely people to down, still time build talking the a frames if don't with it pullback, for And a impossible centers they're know data the it's we a there's it's they if slow pull back they're about. that's

Adam Thalhimer

Helpful. And have you you are getting? then do to what guys into would say you extent visibility, XXXX? Or

William George

other than compared question time Well, to have you asked any would that usual, right? more

Brian Lane

XXXX at than backlog Comfort we -- the in Systems. more we've actually It's ever have had book

William George

away. year a still is XXXX

Brian Lane

ways still Yes, away. a

William George

At big. some fully year point, project as year And for as the had never next as and into very are are we no, now. We've we've I sold mean as much the coming visibility never the been we've sizes really, had.

frequently multiyear. So they can be

that thing are you long. you've one lumpy, The starts followed happens us -- been for And is right. so the

is But to our know You as of starts start being that that. like much got some delayed, because starting they're kind going subsidiary those right delayed. of of they've for a it's frequently, a on on when relief count so now,

Brian Lane

it's But how you do this we also much there, that work year. out see because into XXXX and know work is have Adam, for of lot that workforce a great our to this work see they that coming

good really So too. it's folks field, the the a sign for in

Adam Thalhimer

how is just quickly, tax Bill, then big that QX Nice. payment? And

William George

year. been paid have So paid we should million $XX last that

year. that disaster area, tax payments basically and XXXX interest. no of didn't fourth we'll shareholders, that. we to need third this paid penalty of that have X for And quarter gave a making took ago so advantage on last be been make the So or code your still And declared relief should our quarter. of And was they or so if your payment tax you a paid quarterly million federally behalf the $XX estimated week you we in with ZIP --

payment tax right very profits now. estimated normal for Our high our

and acquisitions of And earn-outs you're $XX on acquisition-related of also flow. you pay cash where amounts so out last earnouts, Once when from we some accrue the you we shifting they a this that to make go you go quarter, for the ]. have doing [ estimated, the their -- above staff year. that well first of literally year payouts when through payments, that's cash start in that So flow some million operating earnouts the to are these

earned cash does because It is the the more characteristics flow. it change definition, they by but money, of self-funding

there So displacement they flow direction, so. have year some which of is our shareholders, we'll same kind some of all we payments, of cash the but quarter, think displacement, the to great but at really temporal especially all some of this the were the first for benefit were

Operator

comes next Romero Company. the Sidoti from line Julio & of Our question of

Julio Romero

Yes.

served other data obviously, offering center you're about the give that thinking concern you a a and the Just of demand modular from if -- in that comprise maybe modular served your they And they by could on seeing. lot data if maybe can just the now, modular currently aside the future? be But markets us centers? end about don't mix refresher they're not

William George

for business, was modular and we in first when our pharmaceutical it had historically, data like towards So bought always center it to [ the I'd focused ] years, XXXX -- component it. builds. really many the pharmaceutical

to we to give much that said, essentially stuff capacity. big we pretty center need really customers some to and them. that good we we want data the to grew, As data would terms the us and came cooperation, about your the and center, whole the would talked And need them

have So -- we're do not bigger. XX%, of now more, We XX%, continue we've given if to -- our they capacity. much probably

we a continue rely keeping of -- us for still that's fivefold, chunk more in reserve -- XX% of capacity grew the to number a that grown customers our XX% other So in a So big it's it's of XX% than number. to on And verticals. who mind right? XX%

are people of build the to kind this the is, for of kinds data -- of data And think -- this math centers? building going in the such verticals. modular people center it data well, really, and centers, useful is construction would for way ask good big. would all data people just right be is in who demand We a all be, now so center kinds people know think it's be we But

something work is that expect down we a that or doing adjustment that the reality have data the work slows really I every an be -- would approach. build They're foreseeable happens, much The for and centers taking we'd center. see way data the center going there way to all an or is future, which stops, We it's know. we're period. we're of obviously, And to think if is there's to don't build above replace don't data possible

Brian Lane

of as This have done the construction great a solution a hospitals Julio, country. very it this Yes. runway, in in -- long well, will beginning we've a et for module It's at we're in it's application labor, construction, risk. which but long, terrific solution. is cetera,

William George

be places capacity -- There's out where And it what's very, modular of a amazing telecom. could just what like what's Yes. of be like very lot applications of the X% like is small right? there, done is But done a today, fraction in would modular. there's

Julio Romero

Very helpful there. stages early Yes. agreed. we're No, in definitely and color,

said just not center demand Can [ also ] you on as just [indiscernible] talk data for some this maybe is also well. you -- about You a that do center work but data built modular, stick trends side?

Brian Lane

robust. extremely It's Yes.

talking Texas There's but You're -- could bill as for Mississippi. on, I about regular we're doing work up. go great that down in full we're there's as example. turning on actually opportunities opportunities we're turning down as just one of well. alone We're a plenty and

William George

The of center do do modular. work as same the Yes. we amount we in is nonmodular that's almost revenue data

big a think us. opportunities it. of about I set It's for

Julio Romero

me first Contractors that any benefit about there facility. you or close Really talked be this Century to quarter. any more with seems just is to in Century helpful. ] then Is of And EAS [ to facility, one the contractors? you component The made modular kind acquisition your pretty for location synergy here

William George

miles -- industrial or like XXX work. X where -- capability at So really, but good there have pipe, that's fit really of if sort of you to they X within doing are it's and for that businesses do, we already got really fit we and look really, stuff for a complex -- wonderful were good that a

could If something, if what guys one have said of you'd these capability do. thing a would if, been it have little have could and -- more and I more I have one

So we're start. optimistic member really great of that already to that great this will and ecosystem, be off a a they're really,

Operator

question of Our the Chan UBS. comes line from of next Josh

Joshua Chan

strength know unusual? quarter. magnitude that I benefit of fairly great like contextualize QX's anything but the gross the there on is you help Congrats Was this kind could margin anything gross of closeout QX, us the just Any usually in margin? strong that? in

William George

Brian, did in... you margins we have gross think good

Brian Lane

question quality back because a really really execution. the look #X, I It we're really It's we're superb good get -- say -- the it we to field. we're And Yes. interesting, -- comes good good at, the saw work really for can't work enough out It's Josh. when we we twice. so. really we of really and getting took getting helps in margin, work we're getting we're in looking really,

William George

year never broad-based X but there, might of kind X industrial more be than there through where really This become -- modular, honestly, or special of first so closeouts running month quarter be or handful was every a of X, that It the any quarter, or there a a that. revenue like much not -- And we've could so great broad-based. wasn't particular margins. you -- bunch all, in those and right? a round closeout built now this could there's are at where point closeouts. projects and really small It's that the just reached And goes usual. strength was of that special here drove a I have

Brian Lane

] [ The continues billion one-off last Josh, year. $X to our We did other thing, grow. service business

your the really call-out you et at parts service where change, of really [indiscernible] cold work, that cetera. in temperature the significant you look back accelerates got end get If country of

well. our margins that helps So as

Joshua Chan

on a then -- I That's That's the point. business. your Yes. encouraging. And guess fair people-based really

people the relative outlook? do the you talk can and a little apprentices. going about that's hiring bit training you demand to your progress of feel behind How So

Brian Lane

programs training, I training bringing on to all Well, trades where the job, folks organization got is training terrific up here, the going recruiting. mean, leadership we organization. in in doing constantly got way a skilled outstanding this every week We from

labor and brought outstanding we ], lot valleys a years example, in helped Codiak talent. that to companies for of The us us [ temporary and manage that's peaks access really given our here ago. has

the XXX% on. So the to We're lot will recruiting got stop training. totally recruits we'll down country. stop. We constant, will throughout never in committed not never slow training. that a And effort's That's something of that

Joshua Chan

And of That's I How And one. great. through maybe to you last one does the kind do expect how year? ask M&A can the that contribute look? pipeline

William George

really biggest deal. So pipeline our great very we years I is are ever. -- deals off really did would M&A the We healthy, coming year, say we and did notable of but ] where another X [ deal last we did

availability. rush right a are keep We'll optimistic year. to we ever or just that conviction less are do we thing given things to we or doing what in won't So been on and good. quota. based doing continue do can we've one now, But more try any is The fill

Operator

Our the next question from of Stifel. Brian line comes of Brophy

Brian Brophy

a on to for I wanted nice quarter. very the comments Congrats ask XXXX. of growth sales same-store around some on

comments It from single-digit bit mentioned of sounds a quarter. some last high like a of your You range. it's little change

So versus sense can mentioning? you what give us you changed for were just what a

William George

It's it math get. we it our what is. do in fourth expect process, quarter. we the planning to we the did did from We through we comes organic revenue When on roll gave an that revenue, where guidance not just is quite

made numbers, as full much bigger -- So bigger percentage percentage we not same the as bigger that big the with year as number fourth just quarter the number is as in -- bigger fourth ever, the up quarter. the that came it's that in as that,

is just So a...

Brian Lane

work. for not less out there. it's work of Yes, There's plenty

William George

such big in a quarter. the just revenue It's fourth number

Brian Brophy

And that's the look when then mechanical at down a Yes, implied those a orders, year I bit helpful. were little versus Understood. ago.

modular there of driving else that's Or that? timing the anything regarding anything with orders? do to have it Does is

William George

in not bookings in longer -- we good modular but the and seeing smarter did fourth of we change get we slowdown, you're I full am. particular, quarter, got in mean we it's net really booked XXXX. been. like we there's we It's gigantic a There also -- not step a be the December of We what and I seeing are than to but seem plants and don't the than say we're ever that plant. doesn't orders -- about full, of we that I had got think not increase orders I sort bigger December had. modular But it's would a -- in 'XX,

Brian Lane

I to too going that And and new work we know important what's look our you're loading cash at level curves. much not sure is whenever us. is because But we Brian, Make are a relatively take work that high really profit really to flow take we're do here manpower we can't execute important. at margins,

a So we lot about when we the coming. can time work work spend what of handle and is

William George

to is in our our no we of backlog number in do. work. started is increase element backlog backlog. could There's not extending work to we couldn't of the if [indiscernible] take to our We more a if lot we double just next they're our do days simply goal There or -- XXX being consideration work

Brian Brophy

a of And then power, getting Yes, helpful. that's We've centers. versus lot for other guess really on training cooling I needs. inferencing one that potentially means What data centers questions Understood. one. been data

much of you different builds types talk about some how is centers date, And broadly, AI data at intensity more of activity cloud-based and versus some data centers? your data center of centers then data terms when of Can electrical differences to you're looking these the between in today? just mechanical

William George

dense They into building to -- things. not center more some I'm we same an footprint more are data really way electricity. They're years clear or centers. X, There's compute if right. trying but not were So all not put I'll center no There's X color really that building about more expert, bringing data more than we're ago. X little give power copper, today in data way a here's of that's that, no bit

draws. The smaller Comfort chips power true smart me. AI at people They ago. started data will based on starting. what centers have footprint But few months the just are They delivered only belt will have being a tell a actually black barely even probably unbelievable

scheduled them servers, be next into the gotten right. in are to have ones first and delivered most year of year after, The

So that is its in really infancy.

-- on redesign the that The it. so to built, done was of the everything increase true for was build that was everything work being density block,

as building our much we've extent, centers. think material don't to guys true a to don't the started, they talk you really think as we've If But started I could. AI data I

that's yet it's think out. that, And come. to think I being I of still figured because

Brian Brophy

terms me margins versus Understood. contract here. ago? flow this And in any assume year essentially should Have changes today one free seen conversion guys I And we think same of terms how for you year? impacting or then that cash a last and would better? they're about the

William George

we great -- We getting a we X that's So are really years sooner. honestly, getting ago. already payment payment we are but need terms, constant money right? a great And were terms don't year and trade-off,

Generally -- speaking, wide now. you're generous payment need very just terms, you accept. if you a all -- there's range If of payment terms the that somebody they're if we'll has right the money in world and you

underlying you no that opportunity at as as the can As we're a far to this to provisions, say affords things. us busy, imagine contractual the when time

that. of So unreasonable forms. very at the have GCs margin, we're There doing who some are

it's get their affecting just not I know I know Actually, not their that's subcontractors -- affecting know but it's they it, subcontract. us. ability to think get may with I and ability to

like But in ultimately, more the a that and there's forms than this for is you important if the practice. time words of them in almost standard used that have And are are a business around long been great partner and than have a that people, the most a important with rather would over know. I that's better long-term I over work don't trust, terms with the thing. average with same you contract do people

Operator

KeyBanc Our Capital Markets. next Dwyer Alex question from of comes line of the

Alexander Dwyer

the kind to margin and 'XX. And versus just the about back the come in to could the in environment wanted what guidance upside is I -- drive execution, this, project harder 'XX risks So to biggest the walk and or to inflation to here? flat of year that this there it it's like execute make anything closeouts, resources? share pricing, different can Whether a cost or through

think seems modular the story of is there And margin and efficiencies just in amount amortization It such I improving a great supply-demand off. that rolls there's gross acquisition with good this like just a imbalance.

this couldn't any just on actually versus why last So year expand thoughts year? margins

William George

never would we [indiscernible] say couldn't. that they

they printed couple.., margins I is that were our to hesitation think a that we predict would just

Brian Lane

never We've before. done

William George

of couple been a hundred us wall ago. A we literally how know don't don't world. happens to possible much going we people how basis -- points This wires yet. would it's the than can't stuff in hasn't year higher were other put that And We have know rain, around we a you real -- in right? thought built

people good. but a bet we've as each are at So high in we really to eye hard maintain Really, said, think looked other to But of taking we of doing great right us it's looked is job other the don't there's that we a really, think all we environment of it's keep doing margin know, lot to the going say -- can we I and We this. we work work. amount guys. for against wouldn't a each that honestly, the as -- not I the with had, not -- our They're science it.

Brian Lane

We'll go for it.

Alexander Dwyer

quarter? to XQ heavy quarters? achieve and in XQ sequentially to should out are backlog the XXXX how helpful. to the And net cadence again a then trend then you grow similar just could think Okay. backlog we play it tough to summer quarterly? the Got could bookings wanted I year, like it. year those easier where And this like like That's ask in through expect about be And this

William George

Yes.

this schedule it burn up Brian morning where fourth at were a backlog years the and X our was ago was in this I ago in The jumped in XXXX. half what quarter. quarter, years X So looking

we're capital, part level we can that amount not human have And attained on So of a have be busy. a high what so there's right, and going worked such hours finite people. kill of of sort you is and

And kind so it's I the I -- our but backlog, on crazy take there. aren't In over the the average, think time, just it. of on over ups -- general, would doubling

the see It's And Comfort, for you fourth you're As years, ran it time-space seasonality, of far way XX net mass years, the years, less going XX in what burn. the the us to of weather. and quarter. a more XX or is of as just to the over first going if you're X more backlog because bookings X like proportionately see company

our big to changed, would be So really and at look a like, should off electrical I what have said, Texas, about you're I we far away much It's work is who living work. -- from you in no -- they so as backlog to and believe we'll slowdown so that they're we're us we yes. our watching backlog signs who because backlog us people that we somebody talk nothing's anybody -- for better is looking And think the there's for world and looking worry listing in way wouldn't if the of really does it. they're that whether a is -- think there at when turning that if thinking the

Alexander Dwyer

like of just as Okay. to markets versus in ask Got it. shift there of what's sub-end about And I manufacturing then last sciences, we I your last year And -- in within like question, your food of my life for revenue. business chips Is guess plan XXXX. there portion between kind think the the and any and that any wanted beverage? about backlog mix those is mix

change [ get could slate forward of in at projects? theme going Like changes that opportunities we Like Act you if it like all? construction then versus the think really do And addition reshoring does your the TIPS of retrofit new Or it and the how ] change to much? mix that funding? not tariffs

Brian Lane

the [ terms have consumer we pharma, usage pretty the you product we going. lot got with in of No, health a But there. where a solar it, care. were part consistent We've in mix like in first year there a get few Yes. job LEGOLAND of is -- last in of the ]

So these there's a around of that of that we'll stick lot to I be increase doing. mix think is going tariffs manufacturing

William George

I like I storing Yes. on you to -- have mean it's is -- beginning. at feels the it mean begin really

stuff, in and here -- even their But current a towards is are look didn't on new So still people to they sandwiches compute people pictures the and and sort streaming, data industrial. food center [indiscernible] still right? at There's there and and then taking push. a dogs, people quit but the they of want still a people world, definitely dog feed sit their putting

course if why one of source to -- then, you're of demand, after some we're already there you destruction, was as seeing the over sources is the put of that years back that that way demand. and a are And So crisis, right? underinvestment not financial X/XX the and an all of can't It's existing lot up. the have displaced there of that's of XX COVID, course, supply outcomes think you're new incremental and supply but of unprecedented scrambling you demand I seeing in that then catch fact all extraordinary of top and to on the of

Operator

Our line Ritchie of Group. Ritchie next question ] the Kadir [ of Capital ] from comes [

Unknown Analyst

hope understand AI clear pipeline and if the question. almost that stock. the Systems think characterization an space as is to in introduction headlines. market But space. seems fair. center I with feel of Comfort data recent DeepSeek around stomach about the view volatility that like can another the I -- the other impossible you type It's with you or wondering like the And demand comment that I'm AI

you how decisions highest the simply in make Is -- can? other opportunities? And taking the versus hour? there it on balancing per sector approach Or that an about portfolio? all you man work do margin so backlog more is take you on But to

William George

-- of XX% so And is center. One XX% Well, we're data a advanced so is so technology. X/X over -- that two is XX that, say. things of Comfort industrial, I'd little

So revenue is Comfort -- a our XX% is data center. not data right? low company, center And of

considerations. jobs. labor there because profit is though reality of be how good really worked, labor, say, right, a a good parking? view picked there Is same project most the job having said but all they spreadsheet my people, attractive being of ultimate we workers? point the prequalification of our is of a from process the run field for where a and per for of measure keep not per and go how will, job that, or this they But -- the profitability good muddy? sort there's of today, is the Gross is GC $XXX And Does this from hour is

had ultimately us get can I decades, for we've them of and get workers, But instantly. leave job some them are they our can because multigenerational. -- a mean, they

job to on #X we to so honestly, like people treat this our people? good And to it is our for consideration, with? be know go they that with know launch Is it is, people a Are going well. the people they

owner right we who afford intermediaries the and the for? we to are are work that can is we picky be now. the GC job and the especially they doing people consideration #X trust, on like The people The other the good can because

for the of the then those the we're by third what's best labor best or is sort and will good X #X that hour considerations for we're that profit consideration giving to the are per gross the X X. not is, always to And limited news them. up and answer the answer Almost worked independent. And be

for selling So question. AI, on in guess based their and us very really that stocks so to answer than different about we're buying sitting living the that is is world what somebody even it's hard

Brian Lane

contractors. part curve other The mechanical is that electrical we're

where we type in build. guys, their to sheet finished of work skills that electricians, So metal can plumbers pipe building any want you our

easily end is work available. one transferable. industry in only at work of It's market the will, the some dictates the not can skill it's So specialist day, that in what

Unknown Analyst

But a was a fundamentals surprised really back fundamental for think, it and of data Yes. the and it something AI me well. by like and the I there it changed step equation DeepSeek well, actually centers. was okay, take as if made

curious maybe was insulated shift it to time really I the different. are grow is in patterns you so hyperscalers made And spending related me -- don't this just and trees And the it how about to the sky.

it is some would that Is was you But work if out just big Or and there? that? would a there demand already go the replace to do have shift? --

William George

an the on was around America has any America, on any conference for for something before artificial intelligence [indiscernible] call, that do, words any in Well right? not public was been company to in there mentioned -- electrician

frenzied economics, economics problem. demand ever the right, XX, outcomes single the gets really pricing ever every We've Obviously, been is So the every demand flow year existed. course We've single the we've -- -- and basic wanes, demand demand existed, so took There supply there. who anybody and right. if earned cash better. money positive have becomes is we don't a year we've of effect, if

should they year the those right? And nonresidential of building, years were devastated worst crisis, the is years, were COVID, real, a good really They the and some be be real, you worth that point, not But money. a really we if bad right? we obviously, after Some of X/XX, is more. are were we is earn question at after year more can reshoring financial worth onshoring company think

going are need worth data we're actually centers, people think you If more. to

'XX, about The whole last thing has we've the and centers center I say stuff is, want experience been since our data building 'XX. data to been --

say, way when They when to they with enough do okay, just less, more, or a is way want more. to find experience they compute. don't Our find they make well, a we have

at move under and on draw a that our line staring to Let's logo.

if a they don't get a -- find want after is more, I the It's what thing grab, land they they want they to way that? right? know More. mean, what You And more. guess

Unknown Analyst

you I'd appreciate comment we've admired My that really employees. is Systems your It's Yes. for That's about loyalty great. something to your last your fight employees. always how and Comfort just

on congratulations the and congratulations So that, on quarter.

Operator

it time. closing I'm showing questions no turn at for Brian now to like would this remarks. Lane further I to back

Brian Lane

All want the everyone, call today. closing, really Thank our I grateful right. you. joining employees you, thank again. to amazing to very In We're for

XXXX weekend, about once a in opportunities forward to and and We excited look thanks has Hope again. great facing the year. we're very are everyone the

Operator

participation in program. the Thank conference. This you your does today's conclude for

may disconnect. You now

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