EMCOR Group (NYSE:EME) reported what executives repeatedly characterized as a record-setting 2025, capped by a strong fourth quarter marked by double-digit growth in revenue, adjusted earnings, and adjusted operating income. Management pointed to continued strength in data center-related work, broad-based demand across end markets, and disciplined execution as key drivers, while also outlining 2026 guidance that assumes continued healthy demand and a “tight” margin range.
Fourth-quarter results and full-year records
Chairman, President and CEO Tony Guzzi said the company “had an excellent close to the year” as fourth-quarter revenue rose 19.7% to $4.5 billion. Adjusted diluted EPS increased 13.8% year over year to $7.19, and adjusted operating income rose 13.1% to $440 million, producing an adjusted operating margin of 9.7%.
For the full year, EMCOR posted revenue of $16.99 billion, operating income of $1.71 billion, an operating margin of 10.1%, and diluted EPS of $28.19, according to CFO Jason Nalbandian. Excluding transaction costs tied to the Miller Electric acquisition and the U.K. sale, along with the gain on the U.K. sale, the company reported record non-GAAP operating income of $1.59 billion, a record adjusted operating margin of 9.4%, and record adjusted diluted EPS of $25.87.
Management also highlighted full-year operating cash flow of $1.3 billion and said cash conversion remained “exceptional.”
Segment performance and mix trends
Nalbandian said revenue growth in the fourth quarter was driven primarily by the U.S. construction segments, with notable gains tied to network and communications work, particularly data centers.
- U.S. Electrical Construction: Revenue rose 45.8% to a quarterly record $1.36 billion, driven by organic growth and the acquisition of Miller Electric. Nalbandian said revenue in the network and communications sector increased nearly 50% year over year. He added that roughly half of the segment’s growth came from data centers and half from strength in the “traditional” underlying business, including healthcare, institutional, hospitality and entertainment, and higher small-project volumes.
- U.S. Mechanical Construction: Revenue increased 17% to a quarterly record $1.94 billion. Network and communications revenue grew nearly 80% year over year. Nalbandian said Mechanical Construction saw revenue increases in eight of 11 tracked sectors, with the only meaningful decrease in high-tech manufacturing due to completion of certain semiconductor projects. He noted manufacturing and industrial (including food processing) was up just over 50%, institutional rose 55%, and commercial increased 17% as warehousing demand resumed.
- U.S. Building Services: Revenue increased 2.2% to $772.5 million, all organic. Nalbandian said this was the third consecutive quarter of growth since the loss of previously discussed site-based contracts, driven by mechanical services, which grew nearly 5% on strength across projects and retrofits, repair and maintenance, and building automation and controls.
- Industrial Services: Revenue rose 9.1% to $341.1 million. Nalbandian cited a “more robust turnaround schedule,” including work delayed from Q3 into Q4, and progress on a large solar project.
On profitability, EMCOR reported fourth-quarter operating income of $573.8 million (12.7% of revenue). On a non-GAAP basis, operating income was $439.6 million, a quarterly record, and non-GAAP operating margin was 9.7%—the highest of any quarter in 2025, Nalbandian said.
Electrical Construction generated operating income of $173.1 million, up 17%, with operating margin of 12.7%. Nalbandian said the margin was below the prior year’s unusually high 15.8% but remained “well above” historical averages and in line with expectations, noting the comparison was affected by last year’s unusually low SG&A margin and incremental intangible amortization. Mechanical Construction operating income rose 13.6% to $250.5 million, with operating margin of 12.9%.
RPO growth led by data centers and sector diversity
Guzzi emphasized continued growth in remaining performance obligations (RPO), saying EMCOR increased RPO to $13.25 billion at year-end from $10.1 billion, “despite our record revenues.” He said year-over-year RPO growth was modest on a reported basis but materially higher organically, and that sequentially RPO also increased.
Management repeatedly pointed to data center demand as a major driver. Guzzi said RPO in the network and communications category reached a record $4.46 billion at the end of December, up nearly 60% year over year. He added the company saw “no change in the momentum” of customer CapEx plans in that sector and said EMCOR has “good visibility for the next two to three years.”
Other RPO areas cited included institutional work (with demand in education), manufacturing and industrial (including food processing and a renewable energy project), and water and wastewater, which Guzzi said has been driven by work in Florida.
During Q&A, management also discussed how it defines RPO. Nalbandian said EMCOR reports only funded, contracted work and that in multi-phase campuses, such as data centers, the company includes only the funded phase currently under contract. He said 82% of RPO is expected to burn over the next 12 months.
Capital allocation, M&A, and balance sheet priorities
Management said EMCOR maintained a strong balance sheet and continued returning capital to shareholders while investing in acquisitions. Nalbandian said the company ended the quarter with $1.1 billion of cash on hand. EMCOR repurchased about $155 million of shares in the quarter, bringing 2025 repurchases to roughly $580 million, and increased its dividend by 60%. The company also added $500 million of authorization under its share repurchase program.
Guzzi said EMCOR is not focused on maintaining a highly leveraged balance sheet, arguing that large customers and bonding considerations favor a conservative posture. He said the company could consider leverage for the “right” acquisitions, but he would not “borrow a bunch of money to buy back stock.” Nalbandian added that the company typically prefers to keep a minimum cash balance in the “$300 million-$400 million” range.
On M&A, Guzzi said the company’s pipeline is “as good or better” than a year earlier and described it as broader and more diverse. He reiterated EMCOR’s preference for deals aligned with its mechanical and electrical construction and building services focus, and said the company generally avoids auction processes against private equity, preferring long-term strategic fits. He said deal sizes can range from small tuck-ins to transactions as large as Miller Electric.
2026 outlook and operating considerations
For 2026, EMCOR guided to revenue of $17.75 billion to $18.5 billion and diluted EPS of $27.25 to $29.25, with an operating margin between 9% and 9.4%. Guzzi said the company has “a high degree of confidence” in results between the low end and midpoint of the range absent a major economic event, while results toward the high end depend on strong execution and booking 40% to 45% of new work.
In response to questions about margin dynamics, management said project mix and contracting structures can influence results. Guzzi said some fourth-quarter margin variability reflected mix, including a shift toward more target-price or GMP work in certain cases. He added the company aims to protect itself through careful contract negotiation, execution, and compliance.
Management also addressed data center growth differences between mechanical and electrical work. Guzzi said mechanical scope can increase more meaningfully in AI-oriented data centers compared to electrical scope, while Nalbandian noted that, in dollar terms, electrical still grew more but from a larger base. Guzzi also outlined regional positioning and said EMCOR continues to strengthen its footprint in multiple markets, particularly as power availability influences where data centers are built.
About EMCOR Group (NYSE:EME)
EMCOR Group, Inc is a provider of mechanical and electrical construction, industrial and energy infrastructure, and facilities services to commercial, institutional and industrial clients. The company delivers a broad range of services that include design-build and traditional construction of mechanical, electrical and plumbing systems; ongoing facilities maintenance and operations; and specialized industrial services for sectors such as manufacturing, data centers, healthcare and utilities.
EMCOR’s service offerings encompass HVAC, plumbing, electrical installation and maintenance, fire protection, building automation and controls, commissioning, testing and balancing, and energy management solutions.
