Comfort Systems Stock Sinks 12% Despite Record Quarter and $17.8 Billion Backlog as CFO Exit Rattles Investors

NEW YORK — Comfort Systems USA shares fell 12% in early trading Friday. The building systems contractor reported third-quarter results well ahead of Wall Street forecasts, but also announced its finance chief's retirement and again gave no numerical outlook.

The stock fell $153.35 to $1,126.02. Even after the drop, shares were up about 30% over the past year, a gain driven by heavy demand for its work on data centers and factories.

Houston-based Comfort Systems, which installs heating, cooling, electrical and plumbing systems in large buildings, reported net income of $489 million, or $13.91 per share, for the quarter ended Sept. 30. That compared with $291.6 million, or $8.25 per share, a year earlier and topped the analyst consensus of $12.81.

Revenue rose to $3.77 billion from $2.45 billion, well above expectations of about $3.39 billion.

"Strong ongoing demand and consistent excellence by our teams resulted in extraordinary results across every metric," CEO Brian Lane said in a statement.

Backlog nearly doubles

The company's backlog, the value of work it has been hired to do but not yet completed, reached $17.81 billion. That was up from $14.06 billion at the end of June and $9.38 billion a year earlier.

"Relentless demand, together with our competence and reputation, produced sequential backlog growth of $3.8 billion," Lane said.

Cash generation was also strong. Operating cash flow was $1.01 billion, up from $553.3 million a year earlier, and free cash flow was $805.6 million.

"We also achieved remarkable cash flow exceeding $1 billion in a single quarter," Lane said.

The company recently raised its quarterly dividend to 90 cents per share, from 50 cents a year ago.

What weighed on the stock

Despite the strong numbers, shares fell 6.2% in after-hours trading Thursday and slid further Friday.

The company said Bill George, executive vice president and chief financial officer, will retire after 30 years with Comfort Systems. He will leave after the company files its 2026 annual report. Julie Shaeff, currently senior vice president and chief accounting officer, will succeed him.

Comfort Systems also continued its practice of not giving specific revenue or earnings guidance. Lane said the company expects to grow organically through the end of the year and into 2027.

"We continue to experience robust demand," he said.

Some investors also pointed to gross margin, which held at 24.8%, unchanged from a year earlier. Margins had been expanding over the past two years.

High expectations, weak market

The selloff reflects how high expectations have become for companies tied to the AI data center boom. Comfort Systems is a major contractor for the mechanical and electrical systems that keep data centers running and cool.

Its stock has risen sharply over the past two years as technology companies spent heavily on new facilities. That has left little room for anything that unsettles investors, even in a strong quarter.

The broader market also weighed on the stock. The Nasdaq posted its worst day since June on Thursday, hurt by worries about how big technology companies are funding AI spending. Meta Platforms fell after signaling higher capital spending. AI-linked infrastructure stocks, including power equipment and engineering firms, were among the hardest hit.

Any pullback in data center construction plans would be a risk for companies like Comfort Systems, which depend on a small number of very large projects. So far, the company's backlog suggests demand remains strong.

For the first nine months of 2026, Comfort Systems earned $1.30 billion, or $36.94 per share, on revenue of $9.90 billion.