EMCOR's Data-Center Flywheel and Record Backlog Signal More Upside
Headline results and a record backlog
EMCOR delivered an exceptional second quarter, with revenue up 19.8% to $5.15B, operating income up ~32% to $547M, and diluted EPS up 35% to $9.06. As Tony Guzzi put it, “EMCOR delivered another outstanding quarter, highlighted by exceptional organic growth, strong conversion of revenue into operating income and cash flow, continued booking strength and record remaining pro forma obligations or RPOs.” — Anthony Guzzi, CEO · 2026-07-30 The record RPO position — up 44% year-over-year to $17.14B — provides rare multi-quarter visibility, especially as 95% of the growth was organic. Jason Nalbandian noted that revenue growth was broad-based, with mechanical construction growing 31% and electrical construction 24%, each posting new quarterly records. Operating margin reached 10.6% in the quarter, a 100-basis-point expansion year-over-year, driven by favorable project mix and disciplined execution.
The data-center engine and the M&A flywheel
The most striking element is the sustained momentum in data center market demand. Tony's response to a question about customer discussions was emphatic: “Short answer, none. The demand profile remains the same.” — Anthony Guzzi, CEO · 2026-07-30 He also highlighted the expanded geographic footprint, including Texas, Ohio, and Northwest Indiana — all areas where EMCOR has invested ahead of demand. The company's M&A strategy, exemplified by the recent acquisition of five electrical contractors (including Schmidt and Connelly), is designed to feed this flywheel. As Jason explained, “These businesses will all be included in our Electrical Construction segment... we do anticipate funding the acquisitions through a combination of cash on hand and to the extent necessary, the borrowing capacity provided by our credit facility.” — Jason Nalbandian, CFO or Senior Financial Officer · 2026-07-30 The M&A pipeline remains robust, with a cumulative and compounding impact in mind. Tony emphasized the proven ability to pivot well-run mid-market contractors into higher-growth areas, a hallmark of EMCOR's playbook.
That's one of the benefits of being a union contractor. Because of the demand in some of these states there's a capacity to bring in people from -- they will travel themselves... We're finding creative ways to serve Texas, whether it's through more prefabrication on the job and then subcontracting some of the installation or doing it ourselves.
This labor flexibility, combined with the record backlog, underpins the confidence in the raised 2026 guidance of $20–$20.5B revenue and EPS of $32–$33.25. The company is betting on continued absorption of fixed costs and SG&A leverage as revenue accelerates — a theme that has been a consistent thread in prior calls. In the April 2026 call, Tony noted, “We continue to see no slowing of demand, especially in data centers and really across other key market sectors.” — Adam Thalhimer, Analyst · 2026-04-29 That thesis has now been validated by a record quarter and a second consecutive RPO surge.
Guidance raise and the longer view
The guidance raise, while strong, is framed by management as reflective of the first-half momentum and improved visibility, but not without caveats. As Jason noted, “One of the biggest factors is you can see the acceleration we've had in revenue... with that new revenue guidance, we feel better about the operating margins because we're going to continue to see that absorption.” — Jason Nalbandian, CFO or Senior Financial Officer · 2026-07-30 The acquisitions will contribute $250–$275M in back-half revenue but are expected to be modestly dilutive to EPS near-term due to amortization. Over the next 12–18 months, however, they are positioned to become accretive as backlog amortization rolls off.
This is a classic EMCOR story: a diversified but well-executed construction powerhouse riding the AI infrastructure wave while maintaining a backlog amortization mindset that keeps cash flows healthy. The company's long-term track record of outperforming nonres construction, combined with the current data-center multiplier, suggests the flywheel still has room to turn. As Tony summarized, “We're thrilled to have you as part of our electric team, and we look forward to closing Schmidt and Connelly here in the third quarter.” — Anthony Guzzi, CEO · 2026-07-30 With the stock trading at roughly 21x forward earnings, the market is beginning to price in this sustained growth, but the record RPOs and disciplined capital allocation argue that EMCOR remains a name to watch.