AI Takeaway
EMCOR Group (EME) delivered strong Q1 2026 results with revenue of $4.63B (+19.7% YoY) and net income of $305.5M (+26.9% YoY), driven by robust operating leverage, though operating cash flow nearly evaporated to just $558K versus $108.5M a year ago.
Revenue
$4.63B
++19.67% YoY
EPS (Basic)
$6.85
++29.98% YoY
Gross Margin
18.7%
-0.02% YoY
Operating Income
$403.85M
++26.69% YoY
Filed · Source: SEC EDGAR 10-Q filing
EME posted Q1 2026 revenue of $4.63B, up 19.7% from $3.87B in Q1 2025, while net income surged 26.9% to $305.5M. EPS (diluted) jumped 30.0% to $6.84, reflecting both earnings growth and the benefit of share repurchases reducing the share count.
Source: Source: 10-Q Income Statement Data
Operating income grew 26.7% to $403.8M, with operating margin expanding approximately 48 basis points to 8.73% from 8.24% in the prior year period. This suggests EME is achieving better cost efficiency and/or favorable project mix even as SG&A rose 13.9% to $460.1M.
Source: Source: 10-Q Income Statement Data
Gross margin remained essentially flat at 18.67% versus 18.69% in Q1 2025, indicating that cost of revenue growth (also +19.7%) kept pace with revenue growth. This stability suggests disciplined project execution and pricing power in the current demand environment.
Source: Source: 10-Q Income Statement & Ratio Data
2 more insights available
Upgrade to unlockOperating cash flow collapsed to near zero ($558K) despite net income of $305.5M, implying a substantial working capital outflow of roughly $305M. As EME scales revenue rapidly, contract assets and receivables likely expanded significantly, creating a cash conversion risk if project billings or collections slow.
Source: Source: 10-Q Cash Flow Statement Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $6.84 versus the $5.95 analyst consensus — a +14.9% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $4.63B | $3.87B | +19.67% |
Cost of Revenue | $3.76B | $3.14B | +19.70% |
Gross Profit | $863.95M | $722.72M | +19.54% |
Operating Income | $403.85M | $318.76M | +26.69% |
Net Income | $305.48M | $240.68M | +26.93% |
EPS (Basic) | $6.85 | $5.27 | +29.98% |
EPS (Diluted) | $6.84 | $5.26 | +30.04% |
SG&A Expense | $460.11M | $403.96M | +13.90% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $9.51B | $8.08B | +17.69% |
Current Assets | $6.07B | $4.91B | +23.69% |
Total Liabilities | $5.64B | $5.13B | +10.02% |
Current Liabilities | $4.82B | $4.22B | +14.19% |
Stockholders' Equity | $3.87B | $2.95B | +31.07% |
Cash & Equivalents | $916.42M | $576.7M | +58.91% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $558,000 | $108.47M | -99.49% |
Investing Cash Flow | $-71.75M | $-875.44M | +91.80% |
Financing Cash Flow | $-124.36M | $-829,000 | -14900.72% |
Share Buybacks | $87.11M | $224.83M | -61.26% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 18.7% | 18.7% | -0.02% |
Operating Margin | 8.7% | 8.2% | +0.48% |
Net Margin | 6.6% | — | — |
ROE | 7.9% | — | — |
ROA | 3.2% | — | — |
Current Ratio | $1.26 | — | — |
Debt to Equity | $1.459 | — | — |
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EMCOR Group (EME) had a strong Q1 2026, with revenue rising 19.7% to $4.63B and net income growing 26.9% to $305.5M. Diluted EPS jumped 30.0% to $6.84, reflecting both earnings growth and the benefit of share buybacks.
EME's operating cash flow collapsed 99.5% to just $558K in Q1 2026, down from $108.5M in Q1 2025, despite reporting net income of $305.5M. This large gap between earnings and cash flow strongly suggests a significant working capital build — likely in receivables or contract assets — driven by the company's rapid 19.7% revenue growth.
The key takeaways are strong top- and bottom-line growth (revenue +19.7%, EPS +30%), stable gross margins (~18.67%), and improving operating margins (8.73% vs 8.24%). The major concern is the near-zero operating cash flow of $558K, which investors should watch closely in Q2 2026 to see if working capital normalizes.
EME's balance sheet strengthened in Q1 2026, with cash growing 58.9% to $916.4M and stockholders' equity rising 31.1% to $3.87B. However, the current ratio of 1.26x is relatively thin and the debt-to-equity ratio of 1.46x indicates meaningful leverage, so the balance sheet is solid but not without risk.
Yes, EME repurchased $87.1M of shares in Q1 2026, though this was 61.3% lower than the $224.8M repurchased in Q1 2025. The reduced buyback pace, combined with near-zero operating cash flow, suggests the company may be conserving cash amid its rapid growth phase.