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What changed in COMFORT SYSTEMS USA INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of COMFORT SYSTEMS USA INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+257 added−252 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in COMFORT SYSTEMS USA INC's 2025 10-K

257 paragraphs added · 252 removed · 214 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

33 edited+1 added−0 removed78 unchanged
Biggest changeWe seek to ensure that, where possible, we have two employees who hold any such permits or licenses that may be material to our operations in a particular geographic region. 9 Table of Contents Our operations are subject to the federal Clean Air Act, as amended, which governs air emissions and imposes specific requirements on the use and handling of ozone-depleting refrigerants generally classified as chlorofluorocarbons (“CFCs”) or hydrochlorofluorocarbons (“HCFCs”).
Biggest changeOur operations are subject to the federal Clean Air Act, as amended, which governs air emissions and imposes specific requirements on the use and handling of ozone-depleting refrigerants generally classified as chlorofluorocarbons (“CFCs”) or hydrochlorofluorocarbons (“HCFCs”).
Demand for our services is generally higher in the second and third calendar quarters due to increased construction activity and increased use of air conditioning during the warmer months. Accordingly, we expect our revenue and operating results generally will be lower in the first calendar quarter.
Demand for our services is generally higher in the second and third calendar quarters due to increased construction activity and increased use of air conditioning during the warmer months. Accordingly, we expect our revenue and operating results will generally be lower in the first calendar quarter.
Replacing an aging building’s existing systems with modern, energy-efficient systems significantly reduces a building’s energy consumption, carbon footprint, and operating costs while improving air quality and overall system effectiveness. Older commercial, industrial and institutional facilities frequently have poor air quality and provide less comfortable environments, and older HVAC systems result in significantly higher energy consumption than do modern systems.
Replacing an aging building’s existing systems with modern, energy-efficient systems significantly reduces a building’s energy consumption, carbon footprint, and operating costs while improving air quality and overall system effectiveness. Older commercial, industrial and institutional facilities frequently have poor air quality and provide less comfortable environments, and older HVAC systems result in significantly higher energy consumption than modern systems.
These values set the foundation for our Code of Conduct, which applies to all employees, officers, and directors of the Comfort Systems USA family of companies. The Code of Conduct is regularly reinforced to the Company’s employees and management through periodic ethics, equal opportunity employment, and anti-corruption 7 Table of Contents training.
These values set the foundation for our Code of Conduct, which applies to all employees, officers, and directors of the Comfort Systems family of companies. The Code of Conduct is regularly reinforced to the Company’s employees and management through periodic ethics, equal opportunity employment, and anti-corruption 7 Table of Contents training.
We believe that the work we perform to optimize and upgrade systems and controls helps Comfort Systems USA to optimize energy use and fundamentally reduce our nation’s carbon footprint. Strategy At Comfort Systems USA, Inc., our core purpose is to “Build Legacies” with our people, customers, and the companies who join us.
We believe that the work we perform to enhance and upgrade systems and controls helps Comfort Systems to optimize energy use and fundamentally reduce our nation’s carbon footprint. Strategy At Comfort Systems USA, Inc., our core purpose is to “Build Legacies” with our people, customers, and the companies who join us.
Safety —We have established comprehensive safety programs throughout our operations to ensure that all employees comply with safety standards we have established and that are established under federal, state, and local laws and regulations. Safety leadership establishes safety programs and benchmarking to improve safety across the Company.
Safety —We have established comprehensive safety programs throughout our operations to ensure that our employees comply with safety standards we have established and that are established under federal, state, and local laws and regulations. Safety leadership establishes safety programs and benchmarking to improve safety across the Company.
In 2024, we continued our efforts to adhere to voluntary reporting standards by (i) submitting to CDP (formerly the Carbon Disclosure Project), wherein, among other things, we disclosed the results of our annual greenhouse gas emissions inventory, and (ii) publishing our 2023 sustainability report, which followed the Task Force on Climate-related Financial Disclosures and the Sustainability Accounting Standard Board’s standards for the Engineering and Construction Services industry and the Global Reporting Initiative Standards: Core option.
In 2025, we continued our efforts to adhere to voluntary reporting standards by (i) submitting to CDP (formerly the Carbon Disclosure Project), wherein, among other things, we disclosed the results of our annual greenhouse gas emissions inventory, and (ii) publishing our 2024 sustainability report, which followed the Task Force on Climate-related Financial Disclosures and the Sustainability Accounting Standard Board’s standards for the Engineering and Construction Services industry and the Global Reporting Initiative Standards: Core option.
Excel at Modular and Off-Site Construction —We believe that modular and off-site construction – the ability to build superior quality plants and systems away from the construction site – will become increasingly important in complex construction projects. Accordingly, we have invested in that capability through acquisitions, and after acquisition we have further invested in improving and growing that service offering.
Excel at Modular and Off-Site Construction —We believe that modular and off-site construction – the ability to build superior quality plants and systems away from the construction site – has become increasingly important in complex construction projects. Accordingly, we have invested in that capability through acquisitions, and after acquisition we have further invested in improving and growing that service offering.
We make available free of charge on or through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
We make available free of charge on or through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
In many locations we have added or upgraded our capability, and we believe our investments and efforts have provided customer value and stimulated growth in all aspects of our businesses. Seek Growth through Acquisitions —We believe that we can further increase our cash flow and operating income by continuing to opportunistically enter new markets or service lines through acquisition.
In many locations we have added or upgraded our capability, and we believe our investments and efforts have provided customer value and stimulated growth in all aspects of our businesses. 5 Table of Contents Seek Growth through Acquisitions —We believe that we can further increase our cash flow and operating income by continuing to opportunistically enter new markets or service lines through acquisition.
We typically warrant labor for the first year after installation on new MEP systems that we build and install, and we pass through to the customer manufacturers’ warranties on equipment. We generally warrant labor for thirty days after servicing existing MEP systems.
We typically warrant labor for the first year after installation on new MEP systems that we build and install, and we pass through to the customer manufacturers’ warranties on equipment. We generally warrant labor for 30 days after servicing existing MEP systems.
We believe that purchasing decisions in the commercial, industrial, and institutional markets are based on (i) competitive price, (ii) relationships, (iii) quality, timeliness, and reliability, (iv) tenure, financial strength, and access to bonding, (v) range of capabilities, and (vi) scale of operation.
We believe that purchasing decisions in the commercial, industrial, and institutional markets are based on (i) competitive price, (ii) relationships, (iii) quality, timeliness, and reliability, (iv) tenure, financial strength, 8 Table of Contents and access to bonding, (v) range of capabilities, and (vi) scale of operation.
Construction, Installation, Expansion and Renovation Services —Construction, installation, expansion and renovation services consist of “design and build” and “plan and spec” projects. In “design and build” projects, the commercial MEP company is responsible for designing, engineering and installing a cost-effective, energy-efficient system customized to the specific needs of the building owner.
Construction, Installation, Expansion and Renovation Services —Construction, installation, expansion and renovation services consist of “design and build” and “plan and spec” projects. In “design and build” projects, the commercial MEP company is responsible for designing, engineering and installing a cost-effective, energy-efficient 3 Table of Contents system customized to the specific needs of the building owner.
Additionally, our employment screening process seeks to determine that prospective employees have requisite skills, sufficient background references and acceptable driving records, if applicable. Our rate of incidents recordable under the standards of the Occupational Safety and Health Administration (“OSHA”) per one hundred employees per year, also known as the OSHA recordable rate, was 0.97 during 2024.
Additionally, our employment screening process seeks to determine that prospective employees have requisite skills, sufficient background references and acceptable driving records, if applicable. Our rate of incidents recordable under the standards of the Occupational Safety and Health Administration (“OSHA”) per one hundred employees per year, also known as the OSHA recordable rate, was 0.93 during 2025.
Costs and other project terms are normally negotiated 3 Table of Contents between the building owner or its representative and the contracting company. Companies that specialize in “design and build” projects use a consultative approach with customers and tend to develop long-term relationships with building owners and developers, general contractors, architects, consulting engineers and property managers.
Costs and other project terms are normally negotiated between the building owner or its representative and the contracting company. Companies that specialize in “design and build” projects use a consultative approach with customers and tend to develop long-term relationships with building owners and developers, general contractors, architects, consulting engineers and property managers.
Service Growth Initiative —Over the last several years, we have made substantial investments to expand our service and maintenance revenue by increasing the value we can offer to service and maintenance customers. We are actively concentrating managerial and sales resources on training and hiring experienced employees to sell and 5 Table of Contents profitably perform service work.
Service Growth Initiative —Over the last several years, we have made substantial investments to expand our service and maintenance revenue by increasing the value we can offer to service and maintenance customers. We are actively concentrating managerial and sales resources on training and hiring experienced employees to sell and profitably perform service work.
This average project size, when taken together with the approximately 8.9% of our revenue derived from maintenance and service, provides us with a broad base of work in the construction services sector.
This average project size, when taken together with the approximately 7.3% of our revenue derived from maintenance and service, provides us with a broad base of work in the construction services sector.
Commercial, industrial and institutional service agreements usually have terms of one or more years, with automatic annual renewals, and frequently include thirty- to sixty-day cancellation notice periods.
Commercial, industrial and institutional service agreements usually have terms of one or more years, with automatic annual renewals, and frequently include 30- to 60-day cancellation notice periods.
Amounts withheld under this practice are known as retention or retainage. Renovation, Expansion, Maintenance, Monitoring, Repair and Replacement Services for Existing Buildings —Our renovation, expansion, maintenance, monitoring, repair and replacement services in existing buildings comprised approximately 43.3% of our consolidated 2024 revenue. Maintenance and repair services are provided either in response to service calls or under a service agreement.
Amounts withheld under this practice are known as retention or retainage. Renovation, Expansion, Maintenance, Monitoring, Repair and Replacement Services for Existing Buildings —Our renovation, expansion, maintenance, monitoring, repair and replacement services in existing buildings comprised approximately 36.8% of our consolidated 2025 revenue. Maintenance and repair services are provided either in response to service calls or under a service agreement.
We build, install, maintain, repair and replace mechanical, electrical and plumbing (“MEP”) systems throughout our 47 operating units with 178 locations in 136 cities throughout the United States. We operate primarily in the commercial, industrial and institutional MEP markets and perform most of our services in manufacturing, healthcare, education, office, technology, retail and government facilities.
We build, install, maintain, repair and replace mechanical, electrical and plumbing (“MEP”) systems through our 50 operating units with 190 locations in 142 cities throughout the United States. We operate primarily in the commercial, industrial and institutional MEP markets and perform most of our services in manufacturing, healthcare, education, office, technology, retail and government facilities.
Sales and Marketing We have a diverse customer base, with our top customer representing 13.3% of consolidated 2024 revenue. Our largest customer can change from year to year. Management and a dedicated sales force are responsible for developing and maintaining successful long-term relationships with key customers.
Sales and Marketing We have a diverse customer base, with our top customer representing 12.8% of consolidated 2025 revenue. Our largest customer can change from year to year. Management and a dedicated sales force are responsible for developing and maintaining successful long-term relationships with key customers.
To improve our competitive position, we 8 Table of Contents focus on both the consultative “design and build” installation market and the maintenance, repair, and replacement market to develop and strengthen customer relationships.
To improve our competitive position, we focus on both the consultative “design and build” installation market and the maintenance, repair, and replacement market to develop and strengthen customer relationships.
Human Capital Resources Employees —As of December 31, 2024, we had approximately 18,300 employees as compared to approximately 15,800 employees as of December 31, 2023. We have collective bargaining agreements covering 50 employees. We have not experienced and do not expect any significant strikes or work stoppages and believe our relations with employees covered by collective bargaining agreements are good.
Human Capital Resources Employees —As of December 31, 2025, we had approximately 22,700 employees as compared to approximately 18,300 employees as of December 31, 2024. We have collective bargaining agreements covering 9 employees. We have not experienced and do not expect any significant strikes or work stoppages and believe our relations with employees covered by collective bargaining agreements are good.
Construction and Installation Services for New Buildings —Our installation business related to newly constructed facilities, which comprised approximately 56.7% of our consolidated 2024 revenue, involves the design, engineering, integration, installation and start-up of MEP and related systems.
Construction and Installation Services for New Buildings —Our installation business related to newly constructed facilities, which comprised approximately 63.2% of our consolidated 2025 revenue, involves the design, engineering, integration, installation and start-up of MEP and related systems.
Our consolidated 2024 revenue was derived from the following service industries: ​ ​ ​ ​ ​ Percentage of Service Activity ​ Revenue Mechanical Services 78.7 % Electrical Services ​ 21.3 % Total 100.0 % Industry Overview We believe that commercial, industrial, and institutional mechanical and electrical contracting generate annual revenue in the United States of approximately $550 billion.
Our consolidated 2025 revenue was derived from the following service industries: ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Service Activity ​ Revenue Mechanical Services 73.3 % Electrical Services ​ 26.7 % Total 100.0 % Industry Overview We believe that commercial, industrial, and institutional mechanical and electrical contracting generate annual revenue in the United States of approximately $700 billion.
Our distribution of revenue in 2024 by end-use sector was as follows: ​ ​ ​ ​ Technology ​ 33.2 % Manufacturing 27.3 % Education 10.0 % Healthcare 8.3 % Office Buildings 6.0 % Retail, Restaurants and Entertainment 5.4 % Government 5.4 % Multi-Family and Residential 2.0 % Other 2.4 % Total 100.0 % ​ Approximately 91.1% of our revenue is earned on a project basis for installation of systems in newly constructed or existing facilities.
Our distribution of revenue in 2025 by end-use sector was as follows: ​ ​ ​ ​ Technology ​ 45.0 % Manufacturing ​ ​ ​ 22.1 % Healthcare 8.9 % Education 7.3 % Government 5.0 % Office Buildings 5.0 % Retail, Restaurants and Entertainment 3.7 % Multi-Family and Residential 1.4 % Other 1.6 % Total 100.0 % ​ Approximately 92.7% of our revenue is earned on a project basis for installation of systems in newly constructed or existing facilities.
Our average project takes six to nine months to complete, with an average contract price of approximately $1.8 million. We also perform larger project work, with 1,046 contracts in progress at December 31, 2024 with contract prices in excess of $2 million. Our largest project in progress at December 31, 2024 had a contract price of $168.9 million.
Our average project takes six to nine months to complete, with an average contract price of approximately $2.9 million. We also perform larger project work, with 1,668 contracts in progress as of December 31, 2025 with contract prices in excess of $2 million. Our largest project in progress as of December 31, 2025 had a contract price of $496.9 million.
We expect all employees to be treated with dignity and respect in an environment free from discrimination and harassment regardless of race, color, religion, sex, sexual orientation, gender identity or expression, national origin, age, disability, veteran status, genetic information, or any other protected class. We know that diversity is truly a competitive advantage that helps drive growth and innovation.
We expect all employees to be treated with dignity and respect in an environment free from discrimination and harassment regardless of race, color, religion, sex, sexual orientation, gender identity or expression, national origin, age, disability, veteran status, genetic information, or any other protected class.
Substantially all of our consolidated 2024 revenue was derived from commercial, industrial and institutional customers and multi-family residential projects. Approximately 56.7% of our revenue was attributable to installation services in newly constructed facilities and 43.3% was attributable to renovation, expansion, maintenance, repair and replacement services in existing buildings.
Substantially all of our consolidated 2025 revenue was derived from commercial, industrial and institutional customers and multi-family residential projects. Approximately 63.2% of our revenue was attributable to installation services in newly constructed facilities and 36.8% was attributable to renovation, expansion, maintenance, repair and replacement services in existing buildings.
Our industry can be broadly divided into two categories: ● construction of and installation in new buildings, which provided approximately 56.7% of our revenue in 2024, and ● renovation, expansion, maintenance, repair and replacement in existing buildings, which provided the remaining 43.3% of our 2024 revenue.
Our industry can be broadly divided into two categories: ● construction of and installation in new buildings, which provided approximately 63.2% of our revenue in 2025, and ● renovation, expansion, maintenance, repair and replacement in existing buildings, which provided the remaining 36.8% of our 2025 revenue.
Our Board of Directors and Board committees provide oversight on certain human capital matters, including our diversity and inclusion strategy. Insurance and Litigation The primary insured risks in our operations are bodily injury, property damage and workers’ compensation injuries.
We believe that diversity is a competitive advantage that strengthens our workforce and helps drive growth and innovation. Our Board of Directors (the “Board”) and Board committees provide oversight on certain human capital matters, including our diversity and inclusion strategy. Insurance and Litigation The primary insured risks in our operations are bodily injury, property damage and workers’ compensation injuries.
As of December 31, 2024, we had 7,935 projects in process with an aggregate contract value of approximately $14.35 billion. Our average project takes six to nine months to complete, with an average contract price of approximately $1.8 million.
As of December 31, 2025, we had 8,427 projects in process with an aggregate contract value of approximately $24.17 billion. Our average project takes six to nine months to complete, with an average contract price of approximately $2.9 million.
Our ability to share resources frequently allows us to pursue work that would otherwise not be available to us and allows us to provide a more diversified and steady deployment of our labor. We believe that we have realized scale benefits from coordinated purchasing, technical innovation, insurance, benefits, bonding, and financing activities across our operations.
Our ability to share resources frequently allows us to pursue work that would otherwise not be available to us and allows us to provide a more diversified and steady deployment of our labor.
Added
We seek to 9 Table of Contents ensure that, where possible, we have two employees who hold any such permits or licenses that may be material to our operations in a particular geographic region.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

91 edited+22 added−22 removed82 unchanged
Biggest changeAs such, the adoption and expansion of trade restrictions such as those adopted in response to Russia’s invasion of Ukraine, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has in the past and may continue to adversely impact demand for our services, our costs, our customers, our suppliers, and the United States economy, which in turn could have an adverse effect on our business, financial condition and results of operations. ​ Tax matters, including changes in corporate tax laws and disagreements with taxing authorities, could impact our results of operations and financial condition.
Biggest changeThese changes in U.S. trade policy or in laws and policies governing foreign trade or foreign relations generally, and any resulting negative sentiments towards the United States as a result of such changes, could have an adverse impact on our business, financial condition, results of operations, and cash flows. ​ Tax matters, including changes in corporate tax laws and disagreements with taxing authorities, could impact our results of operations and financial condition.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by such company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
If we are unable to adequately address such ESG matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results. Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.
If we are unable to adequately address such ESG and sustainability matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results. Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.
We experience the results of economic trends well after an economic cycle begins, and therefore have generally continued to experience the results of an economic recession well after conditions in the general economy have improved. 10 Table of Contents The industries and markets in which we operate have always been and will continue to be vulnerable to macroeconomic downturns because they are cyclical in nature.
We experience the results of economic trends well after an economic cycle begins and therefore have generally continued to experience the results of an economic recession well after conditions in the general economy have improved. 10 Table of Contents The industries and markets in which we operate have been and will continue to be vulnerable to macroeconomic downturns because they are cyclical in nature.
If we are not able to react quickly to force majeure events, our operations may be affected significantly, which would have a negative impact on our financial position, results of operations, cash flows and liquidity and could also negatively affect our reputation in the marketplace.
If we are not able to react quickly to force majeure events, our operations may be affected significantly, which would have a negative impact on our business, financial position, results of operations, cash flows and liquidity and could also negatively affect our reputation in the marketplace.
The implementation of new systems and information technology could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, or causing delays or difficulties in transitioning to new systems. In addition, our systems implementations may not result in productivity improvements at the levels anticipated.
The implementation of new IT Systems and information technology could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, or causing delays or difficulties in transitioning to new IT Systems. In addition, our IT Systems implementations may not result in productivity improvements at the levels anticipated.
Our certificate of incorporation authorizes our Board of Directors to issue, without stockholder approval, one or more series of preferred stock having such preferences, powers and relative, participating, optional and other rights (including preferences over the common stock respecting dividends and distributions and voting rights) as the Board of Directors may determine.
Our certificate of incorporation authorizes our Board to issue, without stockholder approval, one or more series of preferred stock having such preferences, powers and relative, participating, optional and other rights (including preferences over the common stock respecting dividends and distributions and voting rights) as the Board may determine.
Our business, financial condition, results of operations or cash flows could be adversely affected by the occurrence of any of these events, which could cause actual results to differ materially from expected and historical results, and the trading price of our common stock could decline.
Our business, financial condition, results of operations and cash flows could be adversely affected by the occurrence of any of these events, which could cause actual results to differ materially from expected and historical results, and the trading price of our common stock could decline.
To the extent we make acquisitions, a number of risks will result, including: ● the assumption of material liabilities (including for environmental-related costs); ● failure of due diligence to uncover situations that could result in legal exposure or to quantify the true liability exposure from known risks; ● the diversion of management’s attention from the management of daily operations to the integration of operations; ● difficulties in the assimilation and retention of employees, in the assimilation of different cultures and practices, in the assimilation of broad and geographically dispersed personnel and operations, and the retention of employees generally; ● the risk of additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls; and 12 Table of Contents ● we may not be able to realize the cost savings or other financial benefits we anticipated prior to the acquisition. ​ The failure to successfully integrate acquisitions could have an adverse effect on our business, financial condition and results of operations.
To the extent we make acquisitions, a number of risks will result, including: ● the assumption of material liabilities (including for environmental-related costs); ● failure of due diligence to uncover situations that could result in legal exposure or to quantify the true liability exposure from known risks; ● the diversion of management’s attention from the management of daily operations to the integration of operations; ● difficulties in the assimilation and retention of employees, in the assimilation of different cultures and practices, in the assimilation of broad and geographically dispersed personnel and operations, and the retention of employees generally; 12 Table of Contents ● the risk of additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls; and ● we may not be able to realize the cost savings, other financial benefits or synergies we anticipated prior to the acquisition. ​ The failure to successfully integrate acquisitions could have an adverse effect on our business, financial condition, results of operations, and cash flows.
Our contract prices are established largely based on estimates and assumptions of our projected costs, including assumptions about: future economic conditions; prices, including commodity prices and inflation; availability of labor, including the costs of providing labor, equipment, and materials; and other factors outside our control.
Our contract prices are established largely based on estimates and assumptions regarding our projected costs, including assumptions about: future economic conditions; prices, including commodity prices and inflation; availability of labor, including the costs of providing labor, equipment, and materials; and other factors outside our control.
All of our insurance policies and programs are subject to high deductibles and retentions; as such, we are, in effect, self-insured for substantially all of our typical claims. We hire an actuary to determine any liabilities for unpaid claims and associated expenses for the three major lines of coverage (workers’ compensation, general liability and auto liability).
All of our insurance policies and programs are subject to high deductibles and retentions; as such, we are, in effect, self-insured for substantially all of our customary claims. We hire an actuary to determine any liabilities for unpaid claims and associated expenses for the three major lines of coverage (workers’ compensation, general liability and auto liability).
Repercussions of severe weather conditions may include: ● curtailment of services; ● suspension of operations; ● inability to meet performance schedules in accordance with contracts and potential liability for liquidated damages; ● injuries or fatalities; ● weather-related damage to our facilities; ● disruption of information systems; ● inability to receive machinery, equipment and materials at jobsites; and ● loss of productivity. ​ Future climate change could adversely affect us.
Repercussions of severe weather conditions may include: ● curtailment of services; ● suspension of operations; ● inability to meet performance schedules in accordance with contracts and potential liability for liquidated damages; ● injuries or fatalities; ● weather-related damage to our facilities; ● disruption of information systems; ● inability to receive machinery, equipment and materials at jobsites; and ● loss of productivity. ​ 14 Table of Contents Future climate change could adversely affect us.
Our 178 locations are located in 27 states, which exposes us to a variety of different state and local laws and regulations, particularly those pertaining to contractor licensing requirements. These laws and regulations govern many aspects of our business, and there are often different standards and requirements in different locations.
Our 190 locations are located in 27 states, which exposes us to a variety of different state and local laws and regulations, particularly those pertaining to contractor licensing requirements. These laws and regulations govern many aspects of our business, and there are often different standards and requirements in different locations.
We may discover in the future that we have deficiencies in the design and operation of our internal controls. In addition, we may acquire companies whose internal controls have design or operational deficiencies, which could impair our ability to integrate those companies into our internal control environment.
We may discover in the future that we have deficiencies in the design and operation of our internal control. In addition, we may acquire companies whose internal control has design or operational deficiencies, which could impair our ability to integrate those companies into our internal control environment.
If we are unable to 17 Table of Contents service our debt obligations or fund our other liquidity needs, we could be forced to curtail our operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could cause holders of our securities to experience a partial or total loss of their investment in us.
If we are unable to service our debt obligations or fund our other liquidity needs, we could be forced to curtail our operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could cause holders of our securities to experience a partial or total loss of their investment in us.
Past and future environmental, social, governance, safety and health regulations could impose significant additional costs on us that could reduce our profits. HVAC systems are subject to various environmental statutes and regulations, including the Clean Air Act and those regulating the production, servicing and disposal of certain ozone-depleting refrigerants used in HVAC systems.
Past, current and future environmental, social, governance, sustainability, safety and health regulations could impose significant additional costs on us that could reduce our profits. HVAC systems are subject to various environmental statutes and regulations, including the federal Clean Air Act and those regulating the production, servicing and disposal of certain ozone-depleting refrigerants used in HVAC systems.
Also, our prior casualty loss history might adversely affect our ability to procure insurance within commercially reasonable ranges. As such, we may not be able to maintain commercially reasonable levels of insurance coverage in the future, which could preclude our ability to work on many projects and increase our overall risk exposure.
Also, our prior casualty loss history might adversely affect our ability to procure insurance within commercially reasonable ranges. As such, we may not be able to maintain commercially reasonable levels of insurance coverage in the future, which could preclude our ability to work on many 17 Table of Contents projects and increase our overall risk exposure.
Claims for damages to property or persons, including claims for bodily injury or loss of life, could result in significant costs and liabilities, which could adversely affect our financial condition and results of operations. Poor safety performance could also jeopardize our relationships with our customers, negatively impact employee morale and harm our reputation.
Claims for damages to property or persons, including claims for bodily injury or loss of life, could result in significant costs and liabilities, which could adversely affect our business, financial condition, results of operations, and cash flows. Poor safety performance could also jeopardize our relationships with our customers, negatively impact employee morale and harm our reputation.
We believe that our practice of placing significant decision-making powers with local management is important to our successful growth and allows us to be responsive to opportunities and to our customers’ needs.
We believe that our practice of placing significant decision-making power with local management is important to our successful growth and allows us to be responsive to opportunities and to our customers’ needs.
This could have a material adverse effect on our business, results of operations and financial condition. Future sales of our common stock may depress our stock price.
This could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Future sales of our common stock may depress our stock price.
If we are unable to manage the conditions required for certain of our jobs, including the availability of sufficient labor, adherence to environmental, health and safety or other standards, and adequately addressing harsh or hazardous conditions, our business and financial condition could be adversely affected. ​ We are susceptible to adverse weather conditions, which may harm our business and financial results.
If we are unable to manage the conditions required for certain of our jobs, including the availability of sufficient labor, adherence to environmental, health and safety or other standards, and adequately addressing harsh or hazardous conditions, our business, financial condition, results of operations, and cash flows could be materially and adversely affected. ​ We are susceptible to adverse weather conditions, which may harm our business and financial results.
Our results of operations are reported based on our determination of the amount of taxes we owe in various tax jurisdictions, and our provision for income taxes and tax liabilities are subject to review or examination by taxing authorities in applicable tax 20 Table of Contents jurisdictions.
Our results of operations are reported based on our determination of the amount of taxes we owe in various tax jurisdictions, and our provision for income taxes and tax liabilities are subject to review or examination by taxing authorities in applicable tax jurisdictions.
Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence and disclosure on topics such as climate change, human capital, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
Diverging and varied governmental and societal attention to ESG and sustainability matters, including expanding mandatory and voluntary reporting, diligence and disclosure on topics such as climate change, human capital, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
Additionally, the adoption of new or revised accounting principles could require that we make significant changes to our systems, processes and controls. We cannot predict the effect of future changes to accounting principles, which could have a significant effect on our reported financial results and/or our results of operations, cash flows and liquidity.
Additionally, the adoption of new or revised accounting principles could require that we make significant changes to our systems, processes and controls. We cannot predict the effect of future changes to accounting principles, which could have an adverse effect on our business, reported financial results, results of operations, and cash flows and liquidity.
Accounting rules and regulations are subject to review and interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various other governing bodies. A change in U.S. GAAP could have a significant effect on our reported financial results.
Accounting rules and regulations are subject to review and interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various other governing bodies. A change in U.S. generally accepted accounting principles could have a significant effect on our reported financial results.
Consequently, during times when less overall bonding capacity is available in the market, surety 13 Table of Contents terms have become more expensive and more restrictive. If we are not able to maintain a sufficient level of bonding capacity in the future, it could preclude our ability to bid for certain contracts or successfully contract with some customers.
Consequently, during times when less overall bonding capacity is available in the market, surety terms have become more expensive and more restrictive. If we are unable to maintain a sufficient level of bonding capacity in the future, it could preclude our ability to bid for certain contracts or successfully contract with some customers.
Costs incurred as a result of warranty claims could adversely affect our operating results and financial condition. 18 Table of Contents Misconduct by our employees, subcontractors or partners or our overall failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.
Costs incurred as a result of warranty claims could adversely affect our business, financial condition, results of operations, and cash flows. 18 Table of Contents Misconduct by our employees, subcontractors or partners or our failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.
Historically, surety market conditions have experienced times of difficulty as a result of significant losses incurred by many surety companies and the results of macroeconomic trends outside of our control, such as the current volatility in the capital markets and the possibility of an extended economic downturn or recession.
Historically, surety 13 Table of Contents market conditions have experienced times of volatility as a result of significant losses incurred by many surety companies and the results of macroeconomic trends outside of our control, such as volatility in the capital markets and the possibility of an extended economic downturn or recession.
Increases in labor costs, such as increases in minimum wage requirements, wage inflation and/or increased overtime, reduce our profitability and that of our customers. Increases in such labor costs for a prolonged period of time could have a material adverse effect on the company’s financial condition and results of operations.
Increases in labor costs, such as increases in minimum wage requirements, wage inflation and/or increased overtime, reduce our profitability and that of our customers. Increases in such labor costs for a prolonged period of time could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Delays in customer payments may require us to make a working capital investment. If a customer defaults in making their payments on a project to which we have devoted resources, it could have a material negative effect on our financial condition and results of operations.
Delays in customer payments may require us to make a working capital investment. If a customer defaults in making their payments on a project to which we have devoted resources, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We cannot guarantee that we will be able to identify acquisitions or that we will be able to consummate transactions on terms and conditions acceptable to us, or that acquired businesses will be profitable. Acquisitions may expose us to additional business risks different than those we have traditionally experienced.
We expect to continue to pursue selective acquisitions of businesses. We cannot guarantee that we will be able to identify acquisitions or that we will be able to consummate transactions on terms and conditions acceptable to us, or that acquired businesses will be profitable. Acquisitions may expose us to additional business risks different than those we have traditionally experienced.
We typically negotiate contract language through which we are granted certain relief from force majeure 21 Table of Contents events in private client contracts and review and attempt to mitigate force majeure events in both public and private client contracts.
We typically negotiate contract language through which we are granted certain relief from force majeure events in private client contracts and review and attempt to mitigate force majeure events in both public and private client contracts.
If we are unable to meet these competitive challenges, we will lose market share to our competitors and experience an overall reduction in our profits. In addition, our profitability would be impaired if we have to reduce our prices to remain competitive. Our recent and future acquisitions may not be successful. We expect to continue pursuing selective acquisitions of businesses.
If we are unable to meet these competitive challenges, we will lose market share to our competitors and experience an overall reduction in our profits. In addition, our profitability would be impaired if we have to reduce our prices to remain competitive. Our recent and future acquisitions may not be successful.
Changes in any of these laws, or any of our subsidiaries’ material failure to comply with them, can adversely impact our operations by, among other things, increasing costs, distracting management’s time and attention from other items, and harming our reputation.
Changes in any of these laws, or any of our subsidiaries’ material failure to comply with them, can adversely impact our business, financial condition, results of operations, and cash flows by, among other things, increasing costs, distracting management’s time and attention from other items, and harming our reputation.
Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies, could increase the costs of projects for our customers or, in some cases, prevent a project from going forward, which could in turn have an adverse effect on our financial condition and results of operations.
Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the federal, state, or local regulatory agencies, could increase the costs of projects for our customers or, in some cases, prevent a project from going forward, which could in turn have a material adverse effect on our business, financial condition, results of operations and cash flows.
Because 5.4% of our revenue for the year ended December 31, 2024 was attributable to projects in the government sector, prohibitions against bidding on future government contracts could have an adverse effect on our financial condition and results of operations.
Because 5.0% of our revenue for the year ended December 31, 2025 was attributable to projects in the government sector, prohibitions against bidding on future government contracts could have an adverse effect on our business, financial condition, results of operations, and cash flows.
Although we have 11 Table of Contents long - standing relationships with many of our significant customers and believe that our portfolio of customers is reasonably diverse, one or a number of significant customers may unilaterally reduce, fail to renew, or terminate their contracts with us in the future.
Although we have long - standing relationships with many of our significant customers and believe that our portfolio of customers is reasonably diverse, one or more of our significant customers may reduce, fail to renew, or terminate their contracts with us in the future.
This instability can make it extremely difficult for our customers, our vendors and us to accurately forecast and plan future business activities, and could cause constrained spending on our services, delays and a lengthening of our business development efforts, the demand for more favorable pricing or other terms, and/or difficulty in collection of our accounts receivable.
This uncertainty has made (and may continue to make) it extremely difficult for our customers, vendors and us to accurately forecast and plan future business activities, and could lead to constrained spending on our services, delays and a lengthening of our business development efforts, the demand for more favorable pricing or other terms, and/or difficulty in collection of our accounts receivable.
However, this practice presents certain risks, including the risk that we may be slower or less effective in our attempts to identify or react to problems affecting an important business than we would under a more centralized structure or that we would be slower to identify a misalignment between a subsidiary’s and the Company’s overall business strategy.
However, this 15 Table of Contents practice presents certain risks, including the risk that we may be slower or less effective in our attempts to identify or react to problems affecting an important business than we would under a more centralized structure or that we would be slower to identify a misalignment between the overall business strategy of the Company and any of our subsidiaries.
We regularly evaluate the need to upgrade or replace our systems and network infrastructure to protect our information technology environment, to stay current on vendor supported products and to improve the efficiency and scope of our systems and information technology capabilities.
We also periodically evaluate the need to upgrade or replace our IT Systems to protect our information technology environment, to stay current on vendor supported products and to improve the efficiency and scope of our IT Systems and information technology capabilities.
We have determined in the past and may again determine in the future that a significant impairment has occurred in the value of our unamortized intangible assets or fixed assets, which could require us to write off a portion of our assets and could adversely affect our financial condition or our reported results of operations.
We have determined in the past and may again determine in the future that a significant impairment has occurred in the value of our unamortized intangible assets, which could require us to write off a portion of our assets and could have an adverse effect on our financial condition and results of operations.
Backlog reflects revenue still to be recognized under contracted or committed installation and replacement project work. Our backlog as of December 31, 2024 was $5.99 billion.
Backlog reflects revenue still to be recognized under contracted or committed installation and replacement project work. Our backlog as of December 31, 2025 was $11.94 billion.
Default under our credit agreement could result in (1) us no longer being entitled to borrow under the agreement; (2) termination of the agreement; (3) acceleration of the maturity of outstanding indebtedness under the agreement; and/or (4) foreclosure on any collateral securing the obligations under the agreement.
Default under our credit agreement could result in (i) us no longer being entitled to borrow under the agreement; (ii) termination of the agreement; (iii) acceleration of the maturity of outstanding indebtedness under the agreement; and/or (iv) foreclosure on any collateral securing the obligations under the agreement.
In such event, investors could lose confidence in the reliability of our financial statements, which may significantly harm our business and cause our stock price to decline. In addition, the failure to maintain effective internal controls could also result in unauthorized transactions. Changes in accounting rules and regulations could adversely affect our financial results.
In such event, investors could lose confidence in the reliability of our financial statements, which may significantly harm our business and cause our stock price to decline. In addition, the failure to maintain effective internal control could also result in unauthorized transactions.
General Risk Factors Failure or circumvention of our disclosure controls and procedures or internal controls over financial reporting could seriously harm our financial condition, results of operations, and our business. We plan to continue to maintain and strengthen internal controls and procedures to enhance the effectiveness of our disclosure controls and internal controls over financial reporting.
Failure or circumvention of our disclosure controls and procedures or internal control over financial reporting could seriously harm our business, financial condition, results of operation, and cash flows. ​ We plan to continue to maintain and strengthen internal controls and procedures to enhance the effectiveness of our disclosure controls and internal control over financial reporting.
Force majeure events, including natural disasters, outbreaks of infectious disease, such as COVID-19, and terrorists’ actions, could negatively impact our business, which may affect our financial condition, results of operations or cash flows.
General Risk Factors Force majeure events, including natural disasters, outbreaks of infectious disease, and terrorists’ actions, could negatively impact our business, which may affect our financial condition, results of operations, and cash flows.
Such extreme weather conditions may limit the availability of resources, increasing the costs of our projects, or may cause projects to be delayed or cancelled. 14 Table of Contents Legislation, nationwide protocols, regulation or other restrictions related to climate change could negatively impact our operations or our customers’ operations.
Such extreme weather conditions may limit the availability of resources, increasing the costs of our projects, or may cause projects to be delayed or cancelled. Evolving legislation, foreign and domestic policy, regulation or other restrictions related to climate change could negatively impact our operations or our customers’ operations.
Additionally, employees, contractors and the public could suffer substantial physical injury from acts of terrorism for which we could be liable. Governmental authorities may also impose security or other requirements that could make our operations more difficult or costly. The consequences of any such actions could adversely affect our financial condition and results of operations.
Additionally, employees, contractors and the public could suffer substantial physical injury from acts of terrorism for which we could be liable. Governmental authorities may also impose security or other requirements that could make our operations more difficult 21 Table of Contents or costly.
We conduct business across the United States and file income taxes in the federal and various state jurisdictions. Significant judgment is required in our accounting for income taxes. In the ordinary course of our business, there are transactions and calculations in which the ultimate tax determination is uncertain.
We conduct business throughout the United States and file income taxes in federal and virtually all state jurisdictions. In the ordinary course of our business, there are transactions and calculations in which the ultimate tax determination is uncertain.
Our business can be highly cyclical and subject to seasonal and other variations that can result in significant differences in operating results from quarter to quarter. Moreover, our business may be adversely affected by severe weather in areas where we have significant operations.
Our business can be highly cyclical and subject to seasonal and other variations that can result in significant differences in operating results from quarter to quarter. Moreover, our business may be adversely affected by severe weather in areas where we have significant operations, which could have a material adverse effect on our financial condition, results of operations, and cash flows.
Changes in tax laws and regulations, in addition to changes and conflicts in related interpretations and other tax guidance, could materially impact our provision for income taxes, deferred tax assets and liabilities, and liabilities for uncertain tax positions.
Changes in tax laws, tax rates and regulations, and/or changes in interpretations of tax laws, regulations or other tax guidance, could also materially impact our provision for income taxes, deferred tax assets and liabilities, and liabilities for uncertain tax positions.
Additionally, difficulties in the insurance markets may adversely affect our ability to obtain necessary insurance. We insure various general liability, workers’ compensation, property and auto risks as well as other risks through a variety of direct insurance policies and a captive insurance company that are reinsured for risks above certain deductibles and retentions.
We insure various general liability, workers’ compensation, property and auto risks as well as other risks through a variety of direct insurance policies and a captive insurance company that are reinsured for risks above certain deductibles and retentions.
Labor shortages, including the recent U.S. labor shortage, increased labor costs or the loss of key personnel may reduce our profitability and negatively impact our business. Further, our relationships with some customers could suffer if we are unable to retain the employees with whom those customers primarily work and have established relationships.
Labor shortages, including the recent U.S. labor shortage, increased labor costs or the loss of key personnel could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Further, our relationships with some customers could suffer if we are unable to retain the employees with whom those customers primarily work and have established relationships.
Our failure to comply with applicable laws or regulations or acts of misconduct could subject us to fines and penalties, harm our reputation, lead to loss of the services of employees or members of management, damage our relationships with customers, reduce our revenue and profits and subject us to criminal and civil enforcement actions.
Our failure to comply with applicable laws or regulations or acts of misconduct could subject us to fines and penalties, harm our reputation, lead to loss of the services of employees or members of management, damage our relationships with customers, have a material adverse effect on our business, financial condition, results of operations, and cash flows, and subject us to criminal and civil enforcement actions.
The market price of our common stock may change significantly in response to various factors and events beyond our control.
These fluctuations are likely to continue in the future, and our stockholders may suffer losses. The market price of our common stock may change significantly in response to various factors and events beyond our control.
Further, to the extent some of our vendors, subcontractors, developers, or general contractors seek bankruptcy protection, such bankruptcy will likely force us to incur additional costs in attorneys’ fees, as well as other professional consultants, and will result in decreased revenue and profit.
Further, to the extent some of our vendors, subcontractors, developers, or general contractors seek bankruptcy protection, we will likely incur additional attorneys’ fees and other professional consultant fees and expenses in connection with pursuing payment in such bankruptcy proceedings, and such increased expenses will likely result in decreased revenue and profit.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, and not absolute, assurances that the objectives of the system are met. Any failure of our disclosure controls and procedures or internal controls over financial reporting could harm our financial condition and results of operations.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, and not absolute, assurances that the objectives of the system are met.
When appropriate, we establish provisions against possible exposures, and we adjust these provisions from time to time according to ongoing exposure. If our assumptions and estimates related to these exposures prove to be inadequate or inaccurate, we could experience a reduction in our profitability and liquidity and a weakening of our financial condition.
When appropriate, we establish provisions against possible exposures, and we adjust these provisions from time to time according to ongoing exposure. If our assumptions and estimates related to these exposures prove to be inadequate or inaccurate, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
A loss of business from a significant customer, or a number of significant customers, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Rising inflation and/or interest rates may have an adverse effect on our business, financial condition and results of operations. In efforts to combat inflation, the U.S.
A loss of business from a significant customer, or a number of significant customers, could have a material adverse effect on our business, financial condition, results of operations and cash flows. 11 Table of Contents Rising inflation, interest rate volatility and an economic recession or downturn may have an adverse effect on our business, financial condition, results of operations, and cash flows.
Extreme weather conditions (such as storms, droughts, extreme heat or cold, wildfires and floods) may limit the availability of resources, increase our costs, or may cause projects to be cancelled. To the extent climate change results in an increase in extreme weather events and adverse weather conditions, the likelihood of a negative impact on our results of operations may increase.
Extreme weather conditions (such as storms, droughts, extreme heat or cold, wildfires and floods) may limit the availability of resources, increase our costs, or may cause projects to be delayed or cancelled.
Continuing worldwide political and economic uncertainties may adversely affect our revenue and profitability. ​ The last several years have been periodically marked by political and economic concerns, including the COVID-19 pandemic, decreased consumer confidence, the effects of international conflicts such as the wars between Russia and Ukraine and unrest in the Middle East, tariffs, energy costs and inflation.
Continuing worldwide political and economic uncertainties may adversely affect our business, financial condition, results of operations, and cash flows. ​ The last several years have been marked by worldwide political and economic uncertainty resulting from a number of factors, including decreased consumer confidence, the effects of international conflicts such as the wars between Russia and Ukraine and unrest in the Middle East, supply chain disruptions, tariffs, rising energy costs and inflation.
Additionally, because 5.4% of our revenue for the year ended December 31, 2024 was attributable to projects in the government sector, a reduction in federal, state, or local government spending in our industries and markets could result in decreased revenue and profit for us.
Additionally, because 5.0% of our revenue for the year ended December 31, 2025 was attributable to projects in the government sector, a reduction in federal, state, or local government spending in our industries and markets could have an adverse effect on our business, financial condition, results of operations and cash flows.
We are required to assess and report on our internal controls each year. Findings of inadequate internal controls could reduce investor confidence in the reliability of our financial information.
The consequences of any such actions could adversely affect our business, financial condition, results of operations, and cash flows. We are required to assess and report on our internal control over financial reporting each year. Findings of inadequate internal control could reduce investor confidence in the reliability of our financial information .
We also expect increased competition from in-house service providers because some of our customers have employees who perform service work similar to the services we provide. Vertical consolidation could also contribute to competition in our industry.
We expect competition to continue in our industry, presenting us with significant challenges in our ability to maintain strong growth rates and acceptable profit margins. We also expect increased competition from in-house service providers because some of our customers have employees who perform service work similar to the services we provide.
Any failure by us or our third party vendors to maintain the security, proper function and availability of information technology and systems could result in financial losses, interrupt our operations, damage our reputation, cause us to be in default of material contracts and subject us to liability claims or regulatory penalties, any of which could materially and adversely affect our business and the value of our securities. 16 Table of Contents In addition, current and future laws and regulations governing data privacy and the unauthorized disclosure of confidential information may pose complex compliance challenges and result in additional costs.
Any failure by us or our third party vendors to maintain the security, proper function and availability of our IT Systems or Confidential Information could result in financial losses, interrupt our operations, damage to our reputation, cause us to be in default of material contracts and subject us to liability claims or proceedings (such as class actions), regulatory investigations or enforcement actions, fines and penalties, and/or significant incident response, system restoration or remediation and future compliance costs, any of which could materially and adversely affect our business, financial condition, results of operations, cash flows, and the value of our securities.
Further, if a subsidiary location fails to follow the Company’s compliance policies, we could be made party to a contract, arrangement or situation that requires the assumption of large liabilities or has less advantageous terms than is typically found in the market. 15 Table of Contents If we do not effectively manage our backlog and the size and cost of our operations, our existing infrastructure may become either strained or over-burdensome, and we may be unable to increase or sustain revenue growth.
Further, if a subsidiary fails to follow the Company’s compliance policies, we could be made party to a contract, arrangement or situation that requires the assumption of large liabilities or has less advantageous terms than is typically found in the market.
The issuance of this “blank-check” preferred stock could render more difficult or discourage an attempt to obtain control by means of a tender offer, merger, proxy contest or otherwise.
The issuance of this “blank-check” preferred stock could render more difficult or discourage an attempt to obtain control by means of a tender offer, merger, proxy contest or otherwise. Additionally, certain provisions of the Delaware General Corporation Law or even certain provisions of our credit agreement may also discourage takeover attempts that have not been approved by the Board.
A significant portion of our business depends on our ability to provide surety bonds. Any difficulties in the financial and surety markets may adversely affect our bonding capacity and availability. In the past we have expanded, and it is possible we will continue to expand, the number and percentage of total contract dollars that require an underlying bond.
A significant portion of our business depends on our ability to provide surety bonds. Any difficulties in the financial and surety markets may adversely affect our bonding capacity and availability.
Examples of such misconduct include employee or subcontractor theft, personal misconduct and failure to comply with safety standards, laws and regulations, customer requirements, environmental laws and any other applicable laws or regulations. While we take precautions to prevent and detect these activities, such precautions may not be effective and are subject to inherent limitations, including human error and fraud.
Examples of such misconduct include employee or subcontractor theft, personal misconduct and failure to comply with health and safety standards, laws and regulations (including environmental laws), customer requirements, and any other applicable laws or regulations.
As a result, we may be required to expend significant resources to protect against the threat of system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches. Any of these events could damage our reputation and have a material adverse effect on our business, results of operations, financial condition and cash flows.
As a result, we may be required to expend significant resources to protect 16 Table of Contents against the threat of system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches.
Information technology system failures, network disruptions or cybersecurity breaches could adversely affect our business. We use and rely significantly on sophisticated information technology systems, networks, and infrastructure in conducting our day-to-day operations, providing services to certain customers and protecting sensitive Company information.
We use and rely significantly on sophisticated information technology systems and infrastructure, including computer systems, hardware, software, technology and online sites and networks (collectively, “IT Systems”), in conducting our day-to-day operations, providing services to certain customers and protecting sensitive Company information.
Furthermore, the cost of our materials, labor, and services may rise as a result of continued inflation and further interest rate hikes, and we may not be able to offset such higher costs through price increases. Our inability or failure to do so could harm our financial position and results of operations.
The cost of our materials, labor, utilities and other goods and services may continue to rise as a result of inflation and interest rate hikes, and we may not be able to offset such higher costs through price increases. Further, there are concerns that the United States economy could experience a recession.
Projects may remain in our backlog for an extended period of time, or project cancellations or scope adjustments may occur with respect to contracts reflected in our backlog. Such changes may adversely affect the revenues and profit we ultimately realize on these projects.
Projects may remain in our backlog for an extended period of time, or project cancellations or scope adjustments may occur with respect to contracts reflected in our backlog. Such changes could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If our business resources become strained or over-burdensome, our earnings may be adversely affected, and we may be unable to increase revenue growth. Further, we may undertake contractual commitments that exceed our labor, managerial or other resources, which could also adversely affect our earnings and our ability to increase revenue growth and cause material reputational or other harm.
If our business resources become strained or over-burdensome, our earnings may be adversely affected, and we may be unable to increase revenue growth.
The utilization of our workforce is impacted by numerous factors, including: ● our estimate of headcount requirements and our ability to manage attrition; ● efficiency in scheduling projects and our ability to minimize downtime between project assignments; and ● productivity. ​ Increases and uncertainty in our health insurance costs could adversely impact our results of operations and cash flows.
The utilization of our workforce is impacted by numerous factors, including: ● our estimate of headcount requirements and our ability to manage attrition; ● efficiency in scheduling projects and our ability to minimize downtime between project assignments; and ● productivity. ​ Regulatory and Legal Risks Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition.
A few customers have in the past and may in the future account for a significant portion of our revenues. For example, in 2024, one customer represented approximately 13.3% of our consolidated revenue.
The loss of one or a few customers could adversely affect our business, financial condition, results of operations and cash flows. A limited number of customers have in the past and may in the future account for a significant portion of our revenue. For example, in 2025, one customer represented approximately 12.8% of our consolidated revenue.
We have in the past experienced system interruptions and delays and expect that such interruptions and delays may occur in the future, given the increasing diversity and sophistication of cybersecurity threats.
IT Systems failures could disrupt our operations by causing transaction errors, processing inefficiencies, the loss of customers, other business disruptions or the loss of Confidential Information. We have in the past experienced system interruptions and delays and expect that such interruptions and delays may occur in the future, given the increasing diversity and sophistication of cybersecurity threats.
Intense competition in our industry could reduce our market share and our profit. The markets we serve are highly fragmented and competitive. Our industry is characterized by many small companies whose activities are geographically concentrated. We compete on the basis of our technical expertise and experience, financial and operational resources, nationwide presence, industry reputation and dependability.
Our industry is characterized by many small companies whose activities are geographically concentrated. We compete on the basis of our technical expertise and experience, financial and operational resources, nationwide presence, industry reputation and dependability. While we believe our customers consider a number of these factors in awarding contracts, a large portion of our work is awarded through a bid process.
As a result, these conditions have, and they or any similar future conditions may continue to have, significant adverse impacts on our business, financial condition and results of operations. The loss of one or a few customers could adversely affect our business, financial condition and results of operations.
As a result, these conditions have, and they or any similar future conditions may continue to have, an adverse effect on our business, financial condition, results of operations and cash flows. Intense competition in our industry could reduce our market share and our profit. The markets we serve are highly fragmented and competitive.
Systems implementation disruption and any other information technology disruption, if not anticipated and appropriately mitigated, could have an adverse effect on our business. Our insurance policies against many potential liabilities require high deductibles, and our risk management policies and procedures may leave us exposed to unidentified or unanticipated risks.
IT Systems implementation disruption and any other information technology disruption, if not anticipated and appropriately mitigated, could have an adverse effect on our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. Cybersecurity ​ Risk Management and Strategy ​ The Company has adopted processes designed to identify , assess and manage material risks from cybersecurity threats, and the Company’s full Board and management is actively involved in overseeing the risk management process.
Biggest changeITEM 1C. Cybersecurity ​ Risk Management and Strategy ​ The Company has adopted processes designed to identify , assess and manage material risks from cybersecurity threats, and the Company’s full Board and management are actively involved in overseeing the risk management process.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeGenerally, leases range from three to ten years and are on terms we believe to be commercially reasonable. A majority of these premises are leased from individuals or entities with whom we have no other business relationship. In certain instances, these leases are with current or former employees.
Biggest changeGenerally, leases range from 3 to 15 years and are on terms we believe to be commercially reasonable. A majority of these premises are leased from individuals or entities with whom we have no other business relationship. In certain instances, these leases are with current or former employees.
ITEM 2. Properties As of December 31, 2024, we owned 20 properties. Other than these owned properties, we lease the real property and buildings from which we operate. Our facilities are located in 27 states and consist of offices, shops and fabrication, maintenance and warehouse facilities.
ITEM 2. Properties As of December 31, 2025, we owned 25 properties. Other than these owned properties, we lease the real property and buildings from which we operate. Our facilities are located in 27 states and consist of offices, shops and fabrication, maintenance and warehouse facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe net gain of $5.1 million was recorded primarily as an increase in gross profit in our Consolidated Statements of Operations. ​ 24 Table of Contents As of December 31, 2024, we recorded an accrual for unresolved matters, which is not material to our financial statements, based on our analysis of likely outcomes related to the respective matters; however, it is possible that the ultimate outcome and associated costs will deviate from our estimates and that, in the event of an unexpectedly adverse outcome, we may experience additional costs and expenses in future periods.
Biggest changeThe pre-tax gain of $6.8 million was recorded as an increase in gross profit of $6.6 million, a reduction in SG&A of $0.7 million, an increase in interest income of $1.3 million and an increase in the change in fair value of contingent earn-out obligations expense of $1.8 million in our Consolidated Statements of Operations. ​ As of December 31, 2025, we recorded an accrual for unresolved matters, which is not material to our financial statements, based on our analysis of likely outcomes related to the respective matters; however, it is possible that the ultimate outcome and associated costs will deviate from our estimates and that, in the event of an unexpectedly adverse outcome, we may experience additional costs and expenses in future periods. 24 Table of Contents ITEM 4.
Removed
The pre-tax gain of $6.8 million was recorded as an increase in gross profit of $6.6 million, a reduction in SG&A of $0.7 million, an increase in interest income of $1.3 million and an increase in the change in fair value of contingent earn-out obligations expense of $1.8 million in our Consolidated Statements of Operations. ​ In 2022, we recorded a net gain of $5.1 million related to legal matters that merited changes to our assessments of the related accruals in the ordinary course of our business based on information received in 2022.
Removed
The largest change resulted from favorable developments related to a dispute with a customer regarding the outcome of a completed project as well as the obligation to perform subcontract work under two executed letters of intent for subsequent projects that we believed were not enforceable.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the year ended December 31, 2024, we repurchased 0.2 million shares for approximately $58.3 million at an average price of $329.14 per share. ​ During the year ended December 31, 2024, we purchased our common shares in the following amounts at the following average prices: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares Maximum Number of ​ ​ ​ ​ ​ ​ ​ Purchased as Part of ​ Shares that May Yet Be ​ ​ Total Number of ​ Average Price ​ Publicly Announced Plans ​ Purchased Under the Plans Period ​ Shares Purchased ​ Paid Per Share ​ or Programs (1) ​ or Programs January 1 - January 31 1,500 ​ $ 196.89 10,257,824 686,301 ​ February 1 - February 29 — ​ $ — 10,257,824 686,301 ​ March 1 - March 31 — ​ $ — 10,257,824 686,301 ​ April 1 - April 30 — ​ $ — 10,257,824 686,301 ​ May 1 - May 31 13,650 ​ $ 307.97 10,271,474 672,651 ​ June 1 - June 30 21,347 ​ $ 311.09 10,292,821 651,304 ​ July 1 - July 31 32,219 ​ $ 305.13 10,325,040 619,085 ​ August 1 - August 31 44,192 ​ $ 315.12 10,369,232 986,319 ​ September 1 - September 30 23,550 ​ $ 314.55 10,392,782 962,769 ​ October 1 - October 31 17,250 ​ $ 388.27 10,410,032 945,519 ​ November 1 - November 30 22,400 ​ $ 395.39 10,432,432 923,119 ​ December 1 - December 31 1,050 ​ $ 428.70 10,433,482 922,069 ​ ​ 177,158 ​ $ 329.14 10,433,482 922,069 ​ (1) Purchased as part of a program announced on March 29, 2007 under which, since the inception of this program, 11.4 million shares have been approved for repurchase. ​ Under our stock incentive plans, employees may elect to have us withhold common shares to satisfy statutory federal, state and local tax withholding obligations arising on the vesting of restricted stock awards and exercise of options.
Biggest changeDuring the year ended December 31, 2025, we repurchased 0.4 million shares for approximately $217.9 million, inclusive of the applicable excise tax, at an average price of $489.40 per share. ​ During the year ended December 31, 2025, we purchased our common shares in the following amounts at the following average prices: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares ​ ​ ​ Maximum Number of ​ ​ ​ ​ ​ ​ ​ Purchased as Part of ​ Shares that May Yet Be ​ ​ Total Number of ​ Average Price ​ Publicly Announced Plans ​ Purchased Under the Plans Period ​ Shares Purchased ​ Paid Per Share ​ or Programs (1) ​ or Programs January 1 - January 31 3,000 ​ $ 426.13 10,436,482 919,069 ​ February 1 - February 28 63,450 ​ $ 378.18 10,499,932 855,619 ​ March 1 - March 31 197,604 ​ $ 338.91 10,697,536 658,015 ​ April 1 - April 30 56,909 ​ $ 309.22 10,754,445 601,106 ​ May 1 - May 31 4,619 ​ $ 429.21 10,759,064 998,900 ​ June 1 - June 30 850 ​ $ 472.27 10,759,914 998,050 ​ July 1 - July 31 — ​ $ — 10,759,914 998,050 ​ August 1 - August 31 5,080 ​ $ 684.30 10,764,994 992,970 ​ September 1 - September 30 13,875 ​ $ 701.04 10,778,869 979,095 ​ October 1 - October 31 — ​ $ — 10,778,869 979,095 ​ November 1 - November 30 74,010 ​ $ 923.67 10,852,879 905,085 ​ December 1 - December 31 25,775 ​ $ 934.21 10,878,654 879,310 ​ ​ 445,172 ​ $ 489.40 10,878,654 879,310 ​ (1) Purchased as part of a stock repurchase program announced on March 29, 2007 under which, since the inception of this program, 11.8 million shares have been approved for repurchase. ​ Under our stock incentive plans, employees may elect to have us withhold common shares to satisfy statutory federal, state and local tax withholding obligations arising on the vesting of restricted stock awards and exercise of options.
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time.
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, including pursuant to Rule 10b5-1 share repurchase plans, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Stock is traded under the symbol FIX on the New York Stock Exchange. As of February 14, 2025, there were approximately 231 stockholders of record of our Common Stock, and the last reported sale price on that date was $391.22 per share.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Stock is traded under the symbol FIX on the New York Stock Exchange. As of February 13, 2026, there were approximately 211 stockholders of record of our Common Stock, and the last reported sale price on that date was $1,337.95 per share.
In addition, our credit agreement may limit the amount of dividends we can pay at any time that our Net Leverage Ratio exceeds 2.75 to 1.00. 26 Table of Contents The following Corporate Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
The following Corporate Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 26 Table of Contents Recent Sales of Unregistered Securities None.
Since the inception of the repurchase program, the Board has approved 11.4 million shares to be repurchased. As of December 31, 2024, we have repurchased a cumulative total of 10.4 million shares at an average price of $31.41 per share under the repurchase program.
As of December 31, 2025, we have repurchased a cumulative total of 10.9 million shares at an average price of $50.15 per share under the repurchase program.
Recent Sales of Unregistered Securities None. ​ 27 Table of Contents Issuer Purchases of Equity Securities On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock.
Issuer Purchases of Equity Securities On March 29, 2007, our Board approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program.
Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On August 7, 2024, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares.
On May 16, 2025, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares. Since the inception of the repurchase program, the Board has approved 11.8 million shares to be repurchased.
We expect to continue paying cash dividends quarterly, although there is no assurance as to future dividends because they depend on future earnings, capital requirements, and financial condition.
We expect to continue paying cash dividends quarterly, although there is no assurance as to future dividends because they depend on future earnings, capital requirements, and financial condition. In addition, our credit agreement may limit the amount of dividends we can pay at any time that our Net Leverage Ratio exceeds 2.75 to 1.00.
Removed
As of December 31, 2024, the Company is no longer included in the Russell 2000 Index. Given that construction-specific indexes include engineering firms, general contractors, and other organizations that derive a majority of their revenue from providing professional services, we do not believe there is an industry specific index that serves as an accurate comparison to our performance.
Removed
While not directly comparable, the Company believes that the S&P 400 Capital Good Index is an appropriate trade or line of business index given that the Company is included within the index and the index includes not only construction and engineering companies, but also companies that manufacture and install building products and electrical equipment.
Removed
We intend to use the S&P 400 Capital Goods Index, rather than the Russell 2000 Index, for the purpose of Item 201(e) of Regulation S-K going forward. In accordance with Item 201(e) of Regulation S-K, the stock performance graph above includes the Russell 2000 Index and the S&P 400 Capital Goods Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCredit Facility Adjusted EBITDA and consolidated interest expense are calculated for purposes of this covenant for the four fiscal quarters ending as of any given quarterly covenant compliance measurement date. ​ Other Restrictions —The Facility (a) permits unlimited acquisitions when the Company’s Net Leverage Ratio is less than or equal to 3.25 to 1.00, (b) expands certain baskets for permitted indebtedness and liens, and (c) permits unlimited distributions, stock repurchases, and investments when the Net Leverage Ratio is less than or equal to 2.75 to 1.00. ​ While the Facility’s financial covenants do not specifically govern capacity under the Facility, if our debt level under the Facility at a quarter-end covenant compliance measurement date were to cause us to violate the Facility’s Net Leverage Ratio covenant, our borrowing capacity under the Facility and the favorable terms that we currently have could be negatively impacted. ​ We were in compliance with all of our financial covenants as of December 31, 2024. ​ Notes to Former Owners As part of the consideration used to acquire eight companies, we have outstanding notes to the former owners of the acquired companies.
Biggest changeThe Facility’s principal financial covenants include: ​ Net Leverage Ratio —The Facility requires that the ratio of (a) our Consolidated Total Indebtedness (as defined in the Facility) minus unrestricted cash and cash equivalents up to $100,000,000, to (b) our Credit Facility Adjusted EBITDA not exceed 3.50 to 1.00 as of the end of each fiscal quarter ; provided that, for the first four fiscal quarters ending after a material acquisition, such maximum Net Leverage Ratio steps up to 4.00 to 1.00. ​ Interest Coverage Ratio —The Facility requires that the ratio of (a) Credit Facility Adjusted EBITDA to (b) consolidated interest expense, defined as all interest paid or accrued on indebtedness during the period excluding amortization of debt incurrence expenses, original issue discount, and mark-to-market interest expense, be at least 3.00 to 1.00. ​ Other Restrictions —The Facility (a) permits unlimited acquisitions when the Company’s Net Leverage Ratio is less than or equal to 3.25 to 1.00 ; or 3.75 to 1.00 for the first four fiscal quarters ending after a material acquisition, (b) expands certain baskets for permitted indebtedness and liens, and (c) permits unlimited distributions, stock repurchases, and investments when the Net Leverage Ratio is less than or equal to 2.75 to 1.00. ​ 37 Table of Contents While the Facility’s financial covenants do not specifically govern capacity under the Facility, if our debt level under the Facility at a quarter-end covenant compliance measurement date were to cause us to violate the Facility’s Net Leverage Ratio covenant, our borrowing capacity under the Facility and the favorable terms that we currently have could be negatively impacted. ​ We were in compliance with all of our financial covenants as of December 31, 2025. ​ Notes to Former Owners We have outstanding notes to the former owners of acquired companies.
Free cash flow may be defined differently by other companies. Share Repurchase Program On March 29, 2007, our Board of Directors approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock.
Free cash flow may be defined differently by other companies. Share Repurchase Program On March 29, 2007, our Board approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock.
Accordingly, we devote considerable attention to operating unit management quality, stability, and contingency planning, including related considerations of compensation and non-competition protection where applicable. 30 Table of Contents Economic and Industry Factors As a mechanical and electrical services provider, we operate in the broader nonresidential construction services industry and are affected by trends in this sector.
Accordingly, 29 Table of Contents we devote considerable attention to operating unit management quality, stability, and contingency planning, including related considerations of compensation and non-competition protection where applicable. Economic and Industry Factors As a mechanical and electrical services provider, we operate in the broader nonresidential construction services industry and are affected by trends in this sector.
These factors may result in revisions to estimated costs and, therefore, revenue. Such revisions are frequently based on further estimates and subjective assessments. Variations from 31 Table of Contents estimated project costs could have a significant impact on our operating results, depending on project size, and the recoverability of the variation from change orders collected from customers.
These factors may result in revisions to estimated costs and, therefore, revenue. Such revisions are frequently based on further estimates and subjective assessments. Variations from 30 Table of Contents estimated project costs could have a significant impact on our operating results, depending on project size, and the recoverability of the variation from change orders collected from customers.
Posting of letters of credit for this purpose is a common practice for entities that manage their self-insurance programs through third-party insurers as we do. While some of these letter of credit commitments expire in 2025, we expect nearly all of them, particularly those supporting our insurance programs, will be renewed annually.
Posting of letters of credit for this purpose is a common practice for entities that manage their self-insurance programs through third-party insurers as we do. While some of these letter of credit commitments expire in 2026, we expect nearly all of them, particularly those supporting our insurance programs, will be renewed annually.
In our electrical business segment, our principal business activity is electrical construction and engineering in the commercial and industrial field. We also perform electrical logistics services and electrical service work. In both our mechanical and electrical business segments, our responsibilities usually require conforming the systems to pre-established engineering drawings and equipment and performance specifications, which we frequently participate in establishing.
In our electrical business segment, our principal business activity is electrical construction and engineering in the commercial and industrial fields. We also perform electrical logistics services and electrical service work. In both our mechanical and electrical business segments, our responsibilities usually require conforming the systems to pre-established engineering drawings and equipment and performance specifications, which we frequently participate in establishing.
We perform the majority of this work with our own employees, with the balance being subcontracted to third parties that meet our performance qualifications. Profile and Management of Our Operations We manage our 47 operating units based on a variety of factors.
We perform the majority of this work with our own employees, with the balance being subcontracted to third parties that meet our performance qualifications. Profile and Management of Our Operations We manage our 50 operating units based on a variety of factors.
Historically, approximately 10% to 20% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or changes in our sureties’ assessment of our operating and financial risk could cause our sureties to decline to issue bonds for our work.
Historically, approximately 10% to 20% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or changes in the sureties’ assessments of our operating and financial risk could cause our sureties to decline to issue bonds for our work.
Additional margins are then added to these two rates. ​ 37 Table of Contents Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs.
Additional margins are then added to these two rates. ​ Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs.
Our average project duration, together with typical retention terms, generally allow us to complete the realization of revenue and earnings in cash within one year. 2024 Compared to 2023 Cash Provided by Operating Activities —Cash flow from operations is primarily influenced by demand for our services and operating margins but can also be influenced by working capital needs associated with the various types of services that we provide.
Our average project duration, together with typical retention terms, generally allows us to complete the realization of revenue and earnings in cash within one year. 2025 Compared to 2024 Net Cash Provided by Operating Activities —Cash flow from operations is primarily influenced by demand for our services and operating margins but can also be influenced by working capital needs associated with the various types of services that we provide.
We have what we consider to be a well-diversified distribution of revenue across end-use sectors that we believe reduces our exposure to negative 29 Table of Contents developments in any given sector.
We have what we consider to be a well-diversified distribution of revenue across end-use sectors that we believe reduces our exposure to negative developments in any given sector.
The substantial majority of these letters of credit are posted with 39 Table of Contents insurers who disburse funds on our behalf in connection with our workers’ compensation, auto liability and general liability insurance program.
The substantial majority of these letters of credit are posted with insurers who disburse funds on our behalf in connection with our workers’ compensation, auto liability and general liability insurance program.
Refer to Note 11 in the Consolidated Financial Statements for a reconciliation of the federal statutory rate to the effective tax rates reflected in our financial statements. 2023 Compared to 2022 For a discussion of the period-to-period comparison of 2023 to 2022, please refer to “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—2023 Compared to 2022” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Refer to Note 11 in the Consolidated Financial Statements for a reconciliation of the federal statutory rates to the effective tax rates reflected in our financial statements. ​ 2024 Compared to 2023 For a discussion of the period-to-period comparison of 2024 to 2023, please refer to “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—2024 Compared to 2023” in our Annual Report on Form 10-K for the year ended December 31, 2024.
We also provide maintenance and repair service under ongoing contracts. Under these contracts, we are paid regular monthly or quarterly amounts and provide specified service based on customer requirements. These agreements typically are for one or more years and frequently contain thirty- to sixty-day cancellation notice periods.
We also provide maintenance and repair services under ongoing contracts. Under these contracts, we are paid regular monthly or quarterly amounts and provide specified service based on customer requirements. These agreements typically are for one or more years and frequently contain 30- to 60-day cancellation notice periods.
These seasonal trends are sometimes offset by changes in the timing of major projects, which can be impacted by the weather, project delays or accelerations and other economic factors that may affect customer spending. We generated $849.1 million of cash flow from operating activities during 2024 compared to $639.6 million during 2023.
These seasonal trends are sometimes offset by changes in the timing of major projects, which can be impacted by the weather, project delays or accelerations and other economic factors that may affect customer spending. We generated $1.19 billion of net cash flow from operating activities during 2025 compared to $849.1 million during 2024.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this annual report on Form 10-K. Also see “Forward-Looking Statements” discussion.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K.
Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On August 7, 2024, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares.
Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On May 16, 2025, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares.
The Facility expires in July 2027 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and the equity of, and assets held by, certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds.
The Facility expires on October 1, 2030 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and the equity of, and assets held by, certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds.
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time.
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, including pursuant to Rule 10b5-1 share repurchase plans, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time.
Approximately 91.1% of our revenue is earned on a project basis for installation services in newly constructed facilities or for replacement of systems in existing facilities.
Approximately 92.7% of our revenue is earned on a project basis for installation services in newly constructed facilities or for replacement of systems in existing facilities.
As of December 31, 2024, we had no outstanding borrowings on the revolving credit facility, $80.0 million in letters of credit outstanding and $770.0 million of credit available. ​ There are two interest rate options for borrowings under the Facility, the Base Rate Loan (as defined in the Facility) option and the Secured Overnight Financing Rate (“SOFR”) Loan option.
As of December 31, 2025, we had $100.0 million of outstanding borrowings on the revolving credit facility, $79.0 million in letters of credit outstanding and $921.0 million of credit available. ​ There are two interest rate options for borrowings under the Facility, the Base Rate Loan (as defined in the Facility) option and the Secured Overnight Financing Rate (“SOFR”) Loan option.
We have been generally successful in maintaining productivity and in procuring needed materials despite ongoing challenges. ​ We have a good pipeline of opportunities and potential backlog. Considering our substantial advance bookings, we currently anticipate solid earnings in 2025.
We have been generally successful in maintaining productivity and in procuring needed materials despite ongoing challenges. ​ We have a good pipeline of opportunities and potential backlog. Considering our substantial advance bookings, we anticipate high ongoing demand leading to solid earnings in 2026.
These margins are frequently less than fixed-price contract margins because there is less risk of unrecoverable cost overruns in cost-plus or time and materials work. As of December 31, 2024, we had 7,935 projects in process. Our average project takes six to nine months to complete, with an average contract price of approximately $1.8 million.
These margins are frequently less than fixed-price contract margins because there is less risk of unrecoverable cost overruns in cost-plus or time and materials work. 28 Table of Contents As of December 31, 2025, we had 8,427 projects in process. Our average project takes six to nine months to complete, with an average contract price of approximately $2.9 million.
Since the inception of the repurchase program, the Board has approved 11.4 million shares to be repurchased. As of December 31, 2024, we have repurchased a cumulative total of 10.4 million shares at an average price of $31.41 per share under the repurchase program.
Since the inception of the repurchase program, the Board has approved 11.8 million shares to be repurchased. As of December 31, 2025, we have repurchased a cumulative total of 10.9 million shares at an average price of $50.15 per share under the repurchase program.
These fees range from 0.15% to 0.25% per annum, based on the Net Leverage Ratio. ​ Interest expense included the following primary elements (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Interest expense on notes to former owners ​ $ 3,616 ​ $ 1,365 ​ $ 1,139 ​ Interest expense on borrowings and unused commitment fees ​ 1,434 ​ 7,507 ​ 10,955 ​ Interest expense (income) on interest rate swaps ​ ​ — ​ ​ — ​ ​ (332) ​ Interest expense on finance leases ​ ​ — ​ ​ — ​ ​ 4 ​ Letter of credit fees ​ 911 ​ 724 ​ 800 ​ Amortization of debt financing costs ​ 687 ​ 685 ​ 786 ​ Total ​ $ 6,648 ​ $ 10,281 ​ $ 13,352 ​ ​ The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply.
These fees range from 0.15% to 0.25% per annum, based on the Net Leverage Ratio. ​ Interest expense included the following primary elements (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Interest expense on notes to former owners ​ $ 3,149 ​ $ 3,616 ​ $ 1,365 ​ Interest expense on borrowings and unused commitment fees ​ 3,832 ​ 1,434 ​ 7,507 ​ Letter of credit fees ​ 1,010 ​ 911 ​ 724 ​ Amortization of debt financing costs ​ 1,018 ​ 687 ​ 685 ​ Total ​ $ 9,009 ​ $ 6,648 ​ $ 10,281 ​ ​ The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply.
We operate our business in two business segments: mechanical and electrical. Nature and Economics of Our Business In our mechanical business segment, customers hire us to ensure HVAC systems deliver specified or generally expected heating, cooling, conditioning and circulation of air in a facility.
Nature and Economics of Our Business In our mechanical business segment, customers hire us to ensure heating, ventilation and air conditioning (“HVAC”) systems deliver specified or generally expected heating, cooling, conditioning and circulation of air in a facility.
Although we are preparing for a wide range of future challenges and economic circumstances, including a potential recession, we currently expect that supportive conditions for our industry, especially for our industrial and technology customers, are likely to continue in 2025. 35 Table of Contents Liquidity and Capital Resources ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 2022 ​ ​ (in thousands) ​ Cash provided by (used in): ​ ​ ​ ​ ​ Operating activities ​ $ 849,057 ​ $ 639,568 ​ $ 301,531 ​ Investing activities ​ (343,509) ​ (193,008) ​ (97,178) ​ Financing activities ​ (160,759) ​ (298,624) ​ (205,915) ​ Net increase (decrease) in cash and cash equivalents ​ $ 344,789 ​ $ 147,936 ​ $ (1,562) ​ Free cash flow: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash provided by operating activities ​ $ 849,057 ​ $ 639,568 ​ $ 301,531 ​ Purchases of property and equipment ​ (111,071) ​ (94,838) ​ (48,359) ​ Proceeds from sales of property and equipment ​ 5,538 ​ 5,951 ​ 2,858 ​ Free cash flow ​ $ 743,524 ​ $ 550,681 ​ $ 256,030 ​ Cash Flow Our business does not require significant amounts of investment in long-term fixed assets.
Although we are preparing for a wide range of future challenges and economic circumstances, including a potential recession, we currently expect that supportive conditions for our industry, especially for our industrial and technology customers, are likely to continue in 2026. ​ ​ 34 Table of Contents Liquidity and Capital Resources ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ (in thousands) ​ Net cash provided by (used in): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 1,186,356 ​ $ 849,057 ​ $ 639,568 ​ Investing activities ​ (467,272) ​ (343,509) ​ (193,008) ​ Financing activities ​ (287,125) ​ (160,759) ​ (298,624) ​ Net increase in cash and cash equivalents ​ $ 431,959 ​ $ 344,789 ​ $ 147,936 ​ Free cash flow: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ $ 1,186,356 ​ $ 849,057 ​ $ 639,568 ​ Purchases of property and equipment ​ (154,903) ​ (111,071) ​ (94,838) ​ Proceeds from sales of property and equipment ​ 3,695 ​ 5,538 ​ 5,951 ​ Free cash flow ​ $ 1,035,148 ​ $ 743,524 ​ $ 550,681 ​ Cash Flow Our business does not require significant amounts of investment in long-term fixed assets.
Taken together, projects with contract prices of $2 million or more totaled $12.78 billion of aggregate contract value as of December 31, 2024, or approximately 89%, out of a total contract value for all projects in progress of $14.35 billion. Generally, projects closer in size to $2 million will be completed in one year or less.
Taken together, projects with contract prices of $2 million or more totaled $22.44 billion of aggregate contract value as of December 31, 2025, or approximately 93%, out of a total contract value for all projects in progress of $24.17 billion. Generally, projects closer in size to $2 million will be completed in one year or less.
As a percentage of revenue, gross profit increased from 19.0% in 2023 to 21.0% in 2024, primarily due to the factors discussed above and improvements in our electrical segment gross profit margin. ​ Selling, General and Administrative Expenses (“SG&A”) —SG&A increased $155.6 million, or 27.1%, to $730.1 million for 2024 as compared to 2023.
As a percentage of revenue, gross profit increased from 21.0% in 2024 to 24.1% in 2025, primarily due to the factors discussed above and improvements in our mechanical segment gross profit margin. ​ Selling, General and Administrative Expenses (“SG&A”) —SG&A increased $153.2 million, or 21.0%, to $883.3 million for 2025 as compared to 2024.
Our provision for income taxes for 2024 was $144.1 million with an effective tax rate of 21.6%, as compared to the provision for income taxes of $64.8 million with an effective tax rate of 16.7% for 2023.
Our provision for income taxes for 2025 was $270.9 million with an effective tax rate of 20.9%, as compared to the provision for income taxes of $144.1 million with an effective tax rate of 21.6% for 2024.
Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances or their useful lives. ​ 32 Table of Contents Results of Operations (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 2023 2022 ​ Revenue ​ $ 7,027,476 100.0 % $ 5,206,760 100.0 % $ 4,140,364 100.0 % Cost of services ​ 5,551,065 79.0 % 4,216,251 81.0 % 3,398,756 82.1 % Gross profit ​ 1,476,411 21.0 % 990,509 19.0 % 741,608 17.9 % Selling, general and administrative expenses ​ 730,072 10.4 % 574,423 11.0 % 489,344 11.8 % Gain on sale of assets ​ (3,030) — ​ (2,302) — ​ (1,585) — ​ Operating income ​ 749,369 10.7 % 418,388 8.0 % 253,849 6.1 % Interest income ​ 11,554 0.2 % 3,492 0.1 % 46 — ​ Interest expense ​ (6,648) (0.1) % (10,281) (0.2) % (13,352) (0.3) % Changes in the fair value of contingent earn-out obligations ​ (88,146) (1.3) % (23,607) (0.5) % (4,819) (0.1) % Other income ​ 432 — ​ 202 — ​ 134 — ​ Income before income taxes ​ 666,561 9.5 % 388,194 7.5 % 235,858 5.7 % Provision (benefit) for income taxes ​ 144,128 ​ ​ ​ 64,796 ​ ​ ​ (10,089) ​ ​ ​ Net income ​ $ 522,433 ​ ​ ​ $ 323,398 ​ ​ ​ $ 245,947 ​ ​ ​ ​ 2024 Compared to 2023 We had 44 operating locations as of December 31, 2023.
Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances or their useful lives. ​ ​ ​ 31 Table of Contents Results of Operations (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ Revenue ​ $ 9,101,641 ​ ​ ​ 100.0 % $ 7,027,476 ​ ​ ​ 100.0 % $ 5,206,760 ​ ​ ​ 100.0 % Cost of services ​ 6,905,742 75.9 % 5,551,065 79.0 % 4,216,251 81.0 % Gross profit ​ 2,195,899 24.1 % 1,476,411 21.0 % 990,509 19.0 % Selling, general and administrative expenses ​ 883,284 9.7 % 730,072 10.4 % 574,423 11.0 % Gain on sale of assets ​ (1,974) — ​ (3,030) — ​ (2,302) — ​ Operating income ​ 1,314,589 14.4 % 749,369 10.7 % 418,388 8.0 % Interest income ​ 21,604 0.2 % 11,554 0.2 % 3,492 0.1 % Interest expense ​ (9,009) (0.1) % (6,648) (0.1) % (10,281) (0.2) % Changes in the fair value of contingent earn-out obligations ​ (33,473) (0.4) % (88,146) (1.3) % (23,607) (0.5) % Other income (expense) ​ (258) — ​ 432 — ​ 202 — ​ Income before income taxes ​ 1,293,453 14.2 % 666,561 9.5 % 388,194 7.5 % Provision for income taxes ​ 270,895 ​ ​ ​ 144,128 ​ ​ ​ 64,796 ​ ​ ​ Net income ​ $ 1,022,558 ​ ​ ​ $ 522,433 ​ ​ ​ $ 323,398 ​ ​ ​ ​ 2025 Compared to 2024 We had 47 operating locations as of December 31, 2024.
The effective rate for 2024 was slightly higher than the 21% federal statutory rate primarily due to net state income taxes (3.9%) and nondeductible expenses (1.5%), partially offset by the credit for increasing research activities (the “R&D tax credit”) (4.1%).
The effective rate for 2025 was slightly lower than the 21% federal statutory rate primarily due to a $30.5 million credit for increasing research activities (“R&D tax credit”) (2.4%) partially offset by $30.3 million of net state income taxes (2.3%).
Of this increase, $619.8 million resulted from the acquisition of Summit, J&S, and DECCO, and $961.8 million was attributable to same-store activity.
Of this increase, $169.3 million resulted from the acquisition of Right Way, Century, Summit and J&S, and $976.8 million was attributable to same-store activity.
Outlook We experienced strong ongoing demand in 2024, although we continue to experience increased labor costs and impacts from supply chain shortages, including delays in delivery of certain materials and equipment.
Outlook We experienced an unprecedented demand environment in 2025, and we continue to experience increased labor costs and intermittent supply chain shortages, including delays in delivery of certain materials and equipment.
Cash Used in Investing Activities —Cash used in investing activities was $343.5 million for 2024 compared to $193.0 million during 2023.
Net Cash Used in Investing Activities —Cash used in investing activities was $467.3 million for 2025 compared to $343.5 million during 2024.
While we believe our general operating and financial characteristics would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenue and profits to decline in the near term.
While we believe our general operating and financial characteristics would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenue and profits to decline in the near term. ​ 38 Table of Contents Material Cash Requirements ​ Our material cash expenditures consist of normal operating expenditures, such as personnel costs, as well as the items noted in the following table.
However, same-store SG&A, excluding amortization, is not considered under generally accepted accounting principles to be a primary measure of an entity’s financial results, and accordingly, should not be considered an alternative to SG&A as shown in our Consolidated Statements of Operations. 34 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 ​ (in thousands) ​ SG&A ​ $ 730,072 ​ $ 574,423 ​ Less: SG&A from companies acquired ​ (21,951) ​ — ​ Less: Amortization expense ​ (55,369) ​ (38,234) ​ Same-store SG&A, excluding amortization expense ​ $ 652,752 ​ $ 536,189 ​ Interest Income —Interest income increased $8.1 million, or 230.9%, in 2024 as compared to 2023.
However, same-store SG&A, excluding amortization, is not considered under generally accepted accounting principles to be a primary measure of an entity’s financial results, and accordingly, should not be considered an alternative to SG&A as shown in our Consolidated Statements of Operations. 33 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ (in thousands) ​ SG&A ​ $ 883,284 ​ $ 730,072 ​ Less: SG&A from companies acquired ​ (22,729) ​ — ​ Less: Amortization expense ​ (60,908) ​ (55,369) ​ Same-store SG&A, excluding amortization expense ​ $ 799,647 ​ $ 674,703 ​ Interest Income —Interest income increased $10.1 million, or 87.0%, in 2025 as compared to 2024.
Accordingly, backlog represents only a portion of our revenue for any given future period, and it represents revenue that is likely to be reflected in our operating results over the next six to twelve months.
Service agreement revenue, service work and short duration projects, which are generally billed as performed, do not flow through backlog. Accordingly, backlog represents only a portion of our revenue for any given future period, and it represents revenue that is likely to be reflected in our operating results over the next six to twelve months.
The Facility also provides for an accordion or increase option not to exceed the greater of (a) $250 million and (b) 1.0x Credit Facility Adjusted EBITDA (as defined below), as well as a sublimit of up to $175.0 million issuable in the form of letters of credit.
The Facility also provides for an accordion or increase option not to exceed the greater of (a) $500 million and (b) 1.0x Credit Facility Adjusted EBITDA (as defined below), in the form of additional revolving commitments or incremental term loans.
The same-store increase in gross profit was primarily driven by both higher revenues in the current year as well as improved execution in our operations, including improvements in project execution at our Texas electrical operation ($90.8 million) and one of our South Carolina operations ($19.9 million).
The same-store increase in gross profit was primarily driven by both higher revenues in the current year as well as improved execution in our operations, including increased volumes at our Texas electrical operation ($161.5 million), one of our North Carolina operations ($71.6 million) and one of our Indiana operations ($76.0 million).
On July 22, 2024, due to Hurricane Beryl, the Internal Revenue Service announced tax relief that extended the due dates for our federal tax payments until February 3, 2025. We thus made an $80.0 million federal tax payment in the first quarter of 2025 that otherwise would have been paid in the second half of 2024.
We made an $80.0 million federal tax payment in the first quarter of 2025 that otherwise would have been paid in the second half of 2024, as a result of tax relief from the Internal Revenue Service due to Hurricane Beryl.
The following table presents our operating segment backlog (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 Backlog: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mechanical Segment ​ $ 4,687,619 78.2 % ​ $ 4,027,927 78.1 % Electrical Segment ​ 1,306,347 21.8 % ​ 1,129,449 21.9 % Total ​ $ 5,993,966 100.0 % ​ $ 5,157,376 100.0 % ​ Backlog as of December 31, 2024 was $5.99 billion, a 5.5% increase from September 30, 2024 backlog of $5.68 billion and a 16.2% increase from December 31, 2023 backlog of $5.16 billion.
The following table presents our operating segment backlog (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ December 31, 2024 ​ ​ ​ Backlog: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mechanical Segment ​ $ 9,026,661 ​ ​ ​ 75.6 % ​ $ 4,687,619 78.2 % Electrical Segment ​ 2,917,940 24.4 % ​ 1,306,347 21.8 % Total ​ $ 11,944,601 100.0 % ​ $ 5,993,966 100.0 % ​ Backlog as of December 31, 2025 was $11.94 billion, a 27.4% increase from September 30, 2025 backlog of $9.38 billion and a 99.3% increase from December 31, 2024 backlog of $5.99 billion.
Together, these notes had an outstanding balance of $67.6 million as of December 31, 2024. 38 Table of Contents At December 31, 2024, future principal payments of notes to former owners by maturity year are as follows (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ Range of Stated ​ December 31, 2024 ​ Interest Rates 2025 ​ $ 5,968 ​ 2.3 - 2.5 % 2026 ​ ​ 30,625 ​ 2.5 - 5.5 % 2027 ​ 26,000 ​ 5.5 % 2028 ​ ​ 5,000 ​ 5.5 % Total ​ $ 67,593 ​ ​ ​ ​ Outlook We have generated positive net free cash flow for the last twenty-six calendar years, much of which occurred during challenging economic and industry conditions.
At December 31, 2025, future principal payments of notes to former owners by maturity year were as follows (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ Range of Stated ​ ​ ​ ​ December 31, 2025 ​ Interest Rates 2026 ​ $ 6,125 ​ 2.5 - 5.5 % 2027 ​ 24,200 ​ 4.0 - 5.5 % 2028 ​ ​ 14,250 ​ 4.3 - 5.5 % Total ​ $ 44,575 ​ ​ ​ ​ Outlook We have generated positive net free cash flow for the last 27 calendar years, much of which occurred during challenging economic and industry conditions.
The increase in demand has been particularly strong in the technology sector such as data centers and chip plants.
The increase in demand has been especially strong in the technology sector, particularly for data centers.
A stratification of projects in progress as of December 31, 2024, by contract price, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Aggregate ​ ​ ​ ​ Contract ​ ​ No. of ​ Price Value Contract Price of Project ​ Projects ​ (millions) Under $2 million 6,889 ​ $ 1,564.7 ​ $2 million - $10 million 726 ​ 3,236.6 ​ $10 million - $20 million 138 ​ 1,947.4 ​ $20 million - $40 million 114 ​ 3,253.0 ​ Greater than $40 million 68 ​ 4,343.3 ​ Total 7,935 ​ $ 14,345.0 ​ ​ In addition to project work, approximately 8.9% of our revenue represents maintenance and repair service on already installed HVAC, electrical, and controls systems.
A stratification of projects in progress as of December 31, 2025, by contract price, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aggregate ​ ​ ​ ​ Contract ​ ​ No. of ​ Price Value Contract Price of Project ​ Projects ​ (in millions) Under $2 million 6,759 ​ $ 1,723.7 ​ $2 million - $10 million 1,215 ​ 4,631.8 ​ $10 million - $20 million 194 ​ 2,751.1 ​ $20 million - $40 million 140 ​ 3,936.7 ​ Greater than $40 million 119 ​ 11,122.4 ​ Total 8,427 ​ $ 24,165.7 ​ ​ In addition to project work, approximately 7.3% of our revenue represents maintenance and repair service on already installed HVAC, electrical, and controls systems.
The $150.5 million increase in cash used primarily relates to an increase in cash paid (net of cash acquired) for acquisitions in the current year compared to 2023. ​ Cash Used in Financing Activities —Cash used in financing activities was $160.8 million for 2024 compared to $298.6 million during 2023.
The $123.8 million increase in cash used primarily relates to an increase in cash paid (net of cash acquired) for acquisitions and purchases of property and equipment in the current year compared to 2024. ​ 35 Table of Contents Net Cash Used in Financing Activities —Cash used in financing activities was $287.1 million for 2025 compared to $160.8 million during 2024.
The increase primarily resulted from an increase in activity in the technology sector at our Texas electrical operation ($158.0 million) and in the manufacturing sector at one of our South Carolina operations ($41.4 million). ​ 33 Table of Contents Backlog reflects revenue still to be recognized under contracted or committed installation and replacement project work.
The same-store revenue increase primarily resulted from an increase in activity in the technology sector at our Texas electrical operation ($649.3 million). ​ Backlog reflects revenue still to be recognized under contracted or committed installation and replacement project work. Project work generally lasts less than one year.
(“DECCO”), which was acquired on October 2, 2023, and one month of results for Eldeco, Inc (“Eldeco”), which was acquired on February 1, 2023. An operating location is included in the same-store comparison on the first day it has comparable prior year operating data, except for immaterial acquisitions that are often absorbed and integrated with existing operations.
(“J&S”), which was acquired on February 1, 2024. An operating location is included in the same-store comparison on the first day it has comparable prior year operating data, except for immaterial acquisitions that are often absorbed and integrated with existing operations. Revenue —Revenue increased $2.07 billion, or 29.5%, to $9.10 billion in 2025 compared to 2024.
The following table presents our operating segment revenue (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mechanical Segment ​ $ 5,527,604 78.7 % ​ $ 3,946,022 75.8 % Electrical Segment ​ 1,499,872 21.3 % ​ 1,260,738 24.2 % Total ​ $ 7,027,476 100.0 % ​ $ 5,206,760 100.0 % ​ Revenue for our mechanical segment increased $1.58 billion, or 40.1%, to $5.53 billion in 2024 compared to 2023.
The following table presents our operating segment revenue (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mechanical Segment ​ $ 6,673,745 ​ ​ ​ 73.3 % ​ $ 5,527,604 78.7 % Electrical Segment ​ 2,427,896 26.7 % ​ 1,499,872 21.3 % Total ​ $ 9,101,641 100.0 % ​ $ 7,027,476 100.0 % ​ Revenue for our mechanical segment increased $1.15 billion, or 20.7%, to $6.67 billion in 2025 compared to 2024.
On a same-store basis, excluding amortization expense, SG&A increased $116.6 million, or 21.7%. The same-store increase is primarily due to higher same-store revenue and increased compensation costs ($90.7 million), largely attributable to increased headcount and increased cost of labor. Amortization expense increased $17.1 million during the period primarily as a result of the Summit, J&S and DECCO acquisitions.
On a same-store basis, excluding amortization expense, SG&A increased $124.9 million, or 18.5%. The same-store increase is primarily due to higher same-store revenue and increased compensation costs ($96.6 million), largely attributable to increased headcount and increased cost of labor.
The same-store revenue increase primarily resulted from an increase in activity in the technology sector at two of our Texas operations ($321.2 million), our North Carolina operation ($147.5 million) and one of our Virginia operations ($129.4 million). ​ Revenue for our electrical segment increased $239.1 million, or 19.0%, to $1.50 billion in 2024 compared to 2023.
The same-store revenue increase primarily resulted from an increase in activity in the technology sector at one of our North Carolina operations ($267.5 million), our Texas modular operation ($206.5 million), one of our Indiana operations ($137.2 million) and one of our Virginia operations ($109.7 million). 32 Table of Contents ​ Revenue for our electrical segment increased $928.0 million, or 61.9%, to $2.43 billion in 2025 compared to 2024.
The $137.8 million decrease in cash used is primarily due to higher net repayments of debt 36 Table of Contents in the prior year as operating cash flows were used to pay down outstanding debt, partially offset by increased share repurchases of $36.7 million in the current year. 2023 Compared to 2022 For a discussion of the period-to-period comparison of 2023 to 2022, please refer to “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—2023 Compared to 2022” in our Annual Report on Form 10-K for the year ended December 31, 2023.
These increases were partially offset by higher net borrowings of debt in the current year compared to 2024. 2024 Compared to 2023 For a discussion of the period-to-period comparison of 2024 to 2023, please refer to “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—2024 Compared to 2023” in our Annual Report on Form 10-K for the year ended December 31, 2024.
The increase in interest income is due to both an increase in our average cash balance and higher interest rates compared to the prior year. Interest Expense —Interest expense decreased $3.6 million, or 35.3%, in 2024 as compared to 2023.
The increase in interest income is due to an increase in our average cash balance compared to the prior year. Interest Expense —Interest expense increased $2.4 million, or 35.5%, in 2025 as compared to 2024. The increase in interest expense is primarily due to an increase in our average outstanding debt balance compared to the prior year.
As discussed in Note 11 “Income Taxes,” included in our Consolidated Balance Sheet at December 31, 2024 is $30.1 million of liabilities for uncertain tax positions, or unrecognized tax benefits. We believe it is reasonably possible that a reduction of up to $5.3 million in unrecognized tax benefits could occur within the next twelve months.
As discussed in Note 11 “Income Taxes,” included in our Consolidated Balance Sheet at December 31, 2025 is $37.1 million of liabilities for uncertain tax positions, or unrecognized tax benefits.
Revenue —Revenue increased $1.82 billion, or 35.0%, to $7.03 billion in 2024 compared to 2023. The increase included a 12.1% increase related to the Summit, J&S, DECCO, and Eldeco acquisitions, as well as a 22.9% increase in revenue related to same-store activity. The same-store revenue growth was largely driven by strong market conditions, including the increase in our backlog.
The increase included a 3.4% increase related to the Feyen Zylstra , Meisner, Right Way, Century, Summit and J&S acquisitions, as well as a 26.1% increase in revenue related to same-store activity. The same-store revenue growth was largely driven by strong market conditions, including the increase in our backlog.
Introduction and Overview We are a national provider of comprehensive mechanical and electrical installation, renovation, maintenance, repair and replacement services within the mechanical and electrical services industries. We operate primarily in the commercial, industrial and institutional markets and perform most of our work in manufacturing, healthcare, education, 28 Table of Contents office, technology, retail and government facilities.
We operate primarily in the commercial, industrial and institutional markets and perform most of our work in manufacturing, healthcare, education, office, technology, retail and government facilities. We operate our business in two business segments: mechanical and electrical.
The increase included a $86.8 million, or 8.8%, increase related to the Summit, J&S, DECCO, and Eldeco acquisitions, as well as a $399.1 million, or 40.3%, increase on a same-store basis.
The increase included a $44.8 million, or 3.0%, increase related to the Feyen Zylstra , Meisner, Right Way, Century, Summit and J&S acquisitions, as well as a $674.6 million, or 45.7%, increase on a same-store basis.
As a percentage of revenue, SG&A decreased from 11.0% in 2023 to 10.4% in 2024 due to leverage resulting from the increase in revenue. We have included same-store SG&A, excluding amortization expense, because we believe it is an effective measure of comparative results of operations.
We have included same-store SG&A, excluding amortization expense, because we believe it is an effective measure of comparative results of operations.
The effective rate for 2023 was lower than the 21% federal statutory rate due to the R&D tax credit (6.3%) and an increase in the R&D tax credit for the 2022 tax year (2.8%). These R&D tax credit benefits were partially offset by net state income taxes (3.7%) and nondeductible expenses (1.5%).
The effective rate for 2024 was slightly higher than the 21% federal statutory rate primarily due to $21.6 million of net state income taxes (3.2%) partially offset by a $23.2 million R&D tax credit (3.5%).
The $209.5 million increase in cash provided by operating activities was primarily driven by higher earnings before non-cash expenses such as amortization of intangible assets in the current year and a $366.4 million benefit from increases in accounts payable and accrued liabilities driven by the size and timing of payments, including postponement of federal tax payments.
The $337.3 million increase in cash provided by operating activities was primarily driven by higher earnings before non-cash expenses such as amortization of intangible assets in the current year and an $877.9 million benefit from changes in billings in excess of costs and estimated earnings and deferred revenue driven by the timing of customer billings and payments.
We experienced increasing demand in 2022, 2023 and 2024 and we expect that the demand environment, especially for manufacturing and technology customers, will remain at high levels leading into 2025. While the impacts from the supply chain shortages have improved, we continue to experience increased labor costs and delays in delivery of certain materials and equipment.
We currently expect that the demand environment, especially for manufacturing and technology customers, will remain at high levels during 2026. Over the last several years, we have also experienced increases in labor costs and delays in delivery of certain materials and equipment.
The decrease in interest expense is primarily due to a decrease in our average outstanding debt balance compared to the prior year. Changes in the Fair Value of Contingent Earn-out Obligations —The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings.
Changes in the Fair Value of Contingent Earn-out Obligations —The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings. Expense from changes in the fair value of contingent earn-out obligations decreased $54.7 million, or 62.0%, in 2025 compared to 2024.
We have experienced periods of time when economic weakness caused a significant slowdown in decisions to proceed with installation and replacement project work. Operating Environment and Management Emphasis In 2020, the advent of a global pandemic led to some delays in service and construction, including delayed project starts and air pockets or pauses during 2020 and 2021.
We have experienced periods of time when economic weakness caused a significant slowdown in decisions to proceed with installation and replacement project work. Operating Environment and Management Emphasis We have experienced increasing demand since 2022, culminating in an unprecedented overall demand environment in 2025.
As discussed at greater length in “Results of Operations” below, we expect price competition to continue as local and regional industry participants compete for customers. We will continue to invest in our service business, to pursue the more active sectors in our markets, and to emphasize our regional and national account business.
We believe that the relative size and strength of our Balance Sheet and surety relationships, as compared to most companies in our industry, represent competitive advantages for us. As discussed at greater length in “Results of Operations” below, we expect price competition to continue as local and regional industry participants compete for customers.
Same-store year-over-year backlog increased primarily due to increased project bookings in the technology sector at our Texas electrical operation ($206.3 million) and at one of our Texas operations ($183.2 million), in the healthcare sector at our Mississippi operation ($76.6 million) and in the education sector at one of our Florida operations ($74.0 million).
Same-store sequential backlog increased primarily due to increased project bookings and strong market conditions in the technology sector at our Texas modular operation ($1.20 billion) and one of our Texas operations ($539.9 million) and in the manufacturing sector at one of our North Carolina operations ($372.2 million).
As of December 31, 2024, we had $770.0 million of credit available to borrow under our credit facility. We have strong surety relationships to support our bonding needs, and we believe our relationships with the surety markets are strong and benefit from our operating history and financial position.
We have strong surety relationships to support our bonding needs, and we believe our relationships with the surety markets are strong and benefit from our operating history and financial position. We have generated positive free cash flow in each of the last 27 calendar years and will continue our emphasis in this area.
The year-over-year backlog increase included the acquisitions of Summit ($297.9 million) and J&S ($97.0 million) as well as a same-store increase of $441.6 million, or 8.6%.
The year-over-year backlog increase included the acquisitions of Right Way ($106.2 million), Century ($91.6 million), Feyen Zylstra ($90.9 million) and Meisner ($72.5 million), as well as a same-store increase of $5.59 billion, or 93.2%.
We expect that constraints and delays in our supply chain will continue to abate in the near term; however, we anticipate that pressure on cost and availability, especially for skilled labor, will continue in 2025. We have a credit facility in place with terms we believe are favorable that does not expire until July 2027.
We anticipate that cost pressures and intermittent delays in our supply chain will persist over the next several quarters. We have a credit facility in place with terms we believe are favorable that does not expire until October 2030. As of December 31, 2025, we had $921.0 million of credit available to borrow under our credit facility.
The year-over-year backlog increase was partially offset by the completion of project work in the manufacturing sector at our North Carolina operations ($68.9 million) and in the manufacturing and technology sectors at one of our Indiana operations ($67.1 million). ​ Gross Profit —Gross profit increased $485.9 million, or 49.1%, to $1.48 billion in 2024 as compared to 2023.
Same-store year-over-year backlog increased primarily due to increased project bookings and strong market conditions in the technology sector at our Texas modular operation ($1.48 billion), one of our North Carolina operations ($1.26 billion), one of our Indiana operations ($901.1 million), one of our Texas operations ($850.2 million) and at our Texas electrical operation ($803.4 million). ​ Gross Profit —Gross profit increased $719.5 million, or 48.7%, to $2.20 billion in 2025 as compared to 2024.
The table below summarizes current and long-term material cash requirements as of December 31, 2024, which we expect to fund primarily with operating cash flows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Months Ending December 31, ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Thereafter Total Notes to former owners ​ $ 5,968 ​ $ 30,625 ​ $ 26,000 ​ $ 5,000 ​ $ — ​ $ — ​ $ 67,593 ​ Other debt ​ ​ 74 ​ 72 ​ 29 ​ 22 ​ 545 ​ — ​ 742 ​ Interest payable ​ 3,314 ​ 2,485 ​ 1,038 ​ ​ 56 ​ 3 ​ — ​ 6,896 ​ Operating lease obligations ​ 41,442 ​ 37,819 ​ 33,246 ​ 29,286 ​ 25,518 ​ 170,630 ​ 337,941 ​ Total ​ $ 50,798 ​ $ 71,001 ​ $ 60,313 ​ $ 34,364 ​ $ 26,066 ​ $ 170,630 ​ $ 413,172 ​ As of December 31, 2024, we have $80.0 million in letter of credit commitments, of which $56.1 million will expire in 2025 and $23.9 million will expire in 2026.
The table below summarizes current and long-term material cash requirements as of December 31, 2025, which we expect to fund primarily with operating cash flows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Months Ending December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ Thereafter ​ ​ ​ Total Revolving credit facility ​ ​ ​ $ — ​ ​ ​ $ — ​ ​ ​ $ — ​ ​ ​ $ — ​ ​ ​ $ 100,000 ​ ​ ​ $ — ​ ​ ​ $ 100,000 ​ Notes to former owners ​ ​ 6,125 ​ ​ 24,200 ​ ​ 14,250 ​ ​ — ​ ​ — ​ ​ — ​ ​ 44,575 ​ Other debt ​ ​ 38 ​ 46 ​ 22 ​ 545 ​ — ​ — ​ 651 ​ Interest payable ​ 6,969 ​ 6,421 ​ 5,227 ​ ​ 4,969 ​ 3,725 ​ — ​ 27,311 ​ Operating lease obligations ​ 53,668 ​ 49,622 ​ 43,633 ​ 37,828 ​ 34,395 ​ 266,684 ​ 485,830 ​ Total ​ $ 66,800 ​ $ 80,289 ​ $ 63,132 ​ $ 43,342 ​ $ 138,120 ​ $ 266,684 ​ $ 658,367 ​ As of December 31, 2025, we have $79.0 million in letter of credit commitments, of which $60.7 million will expire in 2026 and $18.3 million will expire in 2027.
Acquisitions are included in our results of operations from the respective acquisition date. The same-store comparison from 2024 to 2023, as described below, excludes Summit, which was acquired on February 1, 2024, J&S, which was acquired on February 1, 2024, nine months of results for DECCO, Inc.
The same-store comparison from 2025 to 2024, as described below, excludes Feyen Zylstra, which was acquired on October 1, 2025, Meisner, which was acquired on October 1, 2025, Right Way, which was acquired May 1, 2025, Century, which was acquired on January 1, 2025, one month of results for Summit Industrial Construction, LLC (“Summit”), which was acquired on February 1, 2024 and one month of results for J & S Mechanical Contractors, Inc.
In the first quarter of 2024, we split one of our operating locations into two separate operating locations. Additionally, we completed the acquisitions of Summit Industrial Construction, LLC (“Summit”) and J & S Mechanical Contractors, Inc. (“J&S”), which both report as separate operating locations. We had 47 operating locations as of December 31, 2024.
In the fourth quarter of 2025, we completed the acquisitions of Feyen-Zylstra Holdings, LLC (“Feyen Zylstra”) and Meisner Electric, Inc. (“Meisner”), which both report as separate operating locations. We had 50 operating locations as of December 31, 2025. Acquisitions are included in our results of operations from the respective acquisition date.
During the year ended December 31, 2024, we repurchased 0.2 million shares for approximately $58.3 million at an average price of $329.14 per share. Debt Revolving Credit Facility We have an $850.0 million senior credit facility (the “Facility”) provided by a syndicate of banks, which is composed of a revolving credit line guaranteed by certain of our subsidiaries.
During the year ended December 31, 2025, we repurchased 0.4 million shares for approximately $217.9 million, inclusive of the applicable excise tax, at an average price of $489.40 per share.
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We have generated positive free cash flow in each of the last twenty-six calendar years and will continue our emphasis in this area. We believe that the relative size and strength of our Balance Sheet and surety relationships, as compared to most companies in our industry, represent competitive advantages for us.
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Also see “Forward-Looking Statements” discussion. 27 Table of Contents Introduction and Overview We are a national provider of comprehensive mechanical and electrical installation, renovation, maintenance, repair and replacement services within the mechanical and electrical services industries.
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Project work generally lasts less than one year. Service agreement revenue, service work and short duration projects, which are generally billed as performed, do not flow through backlog.
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In the first quarter of 2025, we completed the acquisition of Century Contractors, LLC (“Century”), which reports as a separate operating location. In the second quarter of 2025, we combined two operating locations into one operating location. Additionally, we completed the acquisition of Right Way Plumbing & Mechanical LLC (“Right Way”), which reports as a separate operating location.
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The sequential backlog increase was primarily a result of increased project bookings and strong market conditions in the technology sector at one of our Texas operations ($345.8 million). The sequential backlog increase was partially offset by the completion of project work in the technology sector at our Texas electrical operation ($52.6 million).
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Of this increase, $66.8 million resulted from the acquisition of Feyen Zylstra and Meisner, and $861.2 million was attributable to same-store activity.
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Two of our Texas operations achieved both higher volumes and improvements in project execution ($131.7 million). Additionally, we achieved increased volumes at one of our Virginia operations ($28.0 million), one of our Tennessee operations ($22.6 million) and our North Carolina operation ($19.8 million).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table presents principal amounts (stated in thousands) and related average interest rates by year of maturity for our debt obligations at December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Months Ending December 31, ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Thereafter Total Fixed Rate Debt ​ $ 6,042 ​ $ 30,697 ​ $ 26,029 ​ $ 5,022 ​ $ 545 ​ $ — ​ $ 68,335 ​ Average Interest Rate ​ 5.0% ​ 5.3% ​ 5.5% ​ 5.5% ​ 6.0% ​ — ​ 5.4% ​ There were no outstanding borrowings on the revolving credit facility as of December 31, 2024 and 2023.
Biggest changeThe following table presents principal amounts (stated in thousands) and related average interest rates by year of maturity for our debt obligations at December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Months Ending December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ Thereafter ​ ​ ​ Total Fixed rate debt ​ $ 6,163 ​ $ 24,246 ​ $ 14,272 ​ $ 545 ​ $ — ​ $ — ​ $ 45,226 ​ Average interest rate ​ 4.8% ​ 4.8% ​ 4.7% ​ 6.0% ​ — ​ — ​ 4.8% ​ Variable rate debt ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 100,000 ​ $ — ​ $ 100,000 ​ The weighted average interest rate applicable to the borrowings under the revolving credit facility was approximately 5.0% as of December 31, 2025.
We are not exposed to any other significant financial market risks, including commodity price risk, or foreign currency exchange risk from the use of derivative financial instruments. At times, we use derivative financial instruments to manage our interest rate risk. We have exposure to changes in interest rates under our revolving credit facility.
We are not exposed to any other significant financial market risks or foreign currency exchange risk from the use of derivative financial instruments. We have exposure to changes in interest rates under our revolving credit facility. Our debt with fixed interest rates consists of notes to former owners of acquired companies and acquired notes payable.
We measure certain assets at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. We did not recognize any impairments in the current year on those assets required to be measured at fair value on a nonrecurring basis.
There were no outstanding borrowings on the revolving credit facility as of December 31, 2024. 39 Table of Contents We measure certain assets at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired.
The valuation of the Company’s contingent earn-out payments is determined using a probability weighted discounted cash flow method.
We did not recognize any impairments in the current year on those assets required to be measured at fair value on a nonrecurring basis. The valuation of the Company’s contingent earn-out payments is determined using a probability weighted discounted cash flow method.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risk primarily related to potential adverse changes in interest rates, as discussed below. We are actively involved in monitoring exposure to market risk and continue to develop and utilize appropriate risk management techniques.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risk primarily related to potential adverse changes in interest rates. At times, we use derivative financial instruments to manage our interest rate risk. There is some market risk from fluctuations in the prices of certain commodities and materials due to tariffs or other macroeconomic factors.
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Our debt with fixed interest rates consists of notes to former owners of acquired companies and acquired notes payable.
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In many cases, these increased costs are recoverable, and we do not expect these potential cost increases to have a material impact on our results of operations. We are actively involved in monitoring exposure to market risk and continue to develop and utilize appropriate risk management techniques.

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