Comfort Systems USA Inc at Sidoti December Virtual Small-Cap Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Excellent. Thanks very much for the rundown. I'll hop right in. Maybe just starting off with, what you guys are seeing on the demand front across your in-markets, industrial, institutional, and commercial, and then, also, if you could touch on from your seat, kind of how you view the pace of data center and AI related construction projects over the next several years.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Excellent. And you talked about your backlog and your project pipelines, your backlogs at a record high, [9.4 billion]. Your project pipeline, which goes out beyond the reported backlog is historically high as well. And from an in-market perspective, it's obviously skewing towards LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Super cool --

Question: Julio Romero - Sidoti & Company LLC - Analyst : Great, thank you for highlighting, Julie, and you've talked about project selection for a while, but, I keep hearing more about, like, your ability to, your preference for customers or repeat customers you've worked with in the past. What do you look, what makes a good repeat customer, aside from, like, getting paid early, and what makes a good, like, long standing relationship with that customer?

Question: Julio Romero - Sidoti & Company LLC - Analyst : Excellent. I wanted to dive a little bit into, some AI related trends, and your viewpoints on some aspects that we often get inquiries on from investors about how it relates to comfort systems. The first one is on generative AI is, as that becomes more mainstream, using from a business aspect, used by creators, Disney today had an announcement, about an agreement with OpenAI. As that becomes more mainstream, are you seeing any inflection points or derivatives in demand related to the broader use of AI tools within your business?

Question: Julio Romero - Sidoti & Company LLC - Analyst : Super helpful there, and then maybe even a little bit from a different angle there, maybe from a broader, aside from internal perspective, but from a demand perspective. I know you have plenty of work out there, but does that, does generative AI becoming more mainstream and more used by a broader array of applications, does that, has that created any kind of inflection or change in terms of more people knocking on your door for your services?

Question: Julio Romero - Sidoti & Company LLC - Analyst : And I'll say that's interesting. I mean, the fact that it's so much you can't even.

Question: Julio Romero - Sidoti & Company LLC - Analyst : That's extremely helpful. And, you talked about that even if you freeze, earlier when we were talking about internal uses, you were talking about that even if you freeze, models, the LLMs where they are now, right, there's still a ton of runway for it to be applied internally. I assume that also extends to your customers who are asking, for services too. Maybe aside from the model's perspective, The chip technology continues to advance, right? You hear about these tensor processing chips that are being designed more for machine learning. If the data centers that are being built, if the chip technology changes internally, do you guys have to do anything differently with regards to electrical requirements or cooling requirements, and are you seeing any of that show up in like designs or scopes or anything of that nature? Yeah, I mean. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Super helpful. I guess, as you're thinking again, that shifting back to implementing AI and automation internally within comfort systems and the workforce, what can help, that integration? Is it just, in more focus on AI internally? Is it a combination of maybe adding on some companies like Kodiak, which had help from, like, craft labor location standpoint. Just talk about that broadly, about how you can kind of, become more efficient and, other things of that nature internally.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Super helpful. Maybe shifting to modular a little bit. I know that, I think last call you mentioned you'll be at 3 million of square footage by early '26. And I think Trent, you also mentioned on the last call that, you prudently consider adding more, you, based on, strong demand. Can you maybe dive into that a little bit more to the extent that you can just, it, well, would talk about the bar that would be needed to be cleared to kind of think about adding more modular capacity beyond here. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Makes sense. You mentioned earlier, Trent, your largest single booking in the past couple quarters was in pharma. I thought that was notable. Can you maybe expand a little bit into the current pharma landscape and what you're seeing there at the moment?

Question: Julio Romero - Sidoti & Company LLC - Analyst : Right, cause you mentioned in the past the longer lead times and, longer planning stages it takes to get to that. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Yeah.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Absolutely, and. Maybe some other in-markets, healthcare, education. Can you maybe just touch a little bit on those in markets and what you're seeing there?

Question: Julio Romero - Sidoti & Company LLC - Analyst : Makes sense, but you do see some of that on the service front, I believe, right? And then.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Got you. Julie, you touched on it earlier on, capital allocation historically been pretty consistent. Can you dive into that a little bit more and talk about your priorities for cash? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Yeah, have you guys ever, you've ever bought anything from private equity, right? I.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Got you. It's just been relationship based like you said, and it's probably the right time to. Yeah.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Yeah, that's the secret sauce, if you will. Just a quick thirty seconds on what aspects of the story, you feel investors maybe should H1 in on as we look to '26.

Question: Julio Romero - Sidoti & Company LLC - Analyst : Building legacies as you guys have mentioned in the past. Right, thank you guys so much for taking the time.