This article was written by our expert who is surveying the HVAC industry and constantly updating the business plan for an air conditioning company.
Below is a practical, numbers-first FAQ on average revenue, profit, and margins for an air conditioning (HVAC) company as of October 2025.
Every figure is drawn from current industry benchmarks and reputable sources, then converted into plain, actionable guidance for a new HVAC owner.
If you want to dig deeper and learn more, you can download our business plan for an air conditioning company. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our air conditioning company financial forecast.
Small–to–mid sized HVAC companies average about $598,000 in annual revenue, with typical gross margins of 30–40% and net margins of 5–10% when costs are controlled. EBITDA commonly sits in the 8–14% range, and revenue per employee often falls between $100,000 and $200,000.
Seasonality is pronounced (peak months can be 30–50% higher than troughs), while a healthy mix of installation and service plus 15–30% recurring maintenance revenue helps smooth cash flow. Typical monthly breakeven is $20,000–$30,000.
| Metric | Typical Benchmark | What It Means for a New HVAC Owner |
|---|---|---|
| Average annual revenue (SMB) | ≈ $598,000 | Plan capacity, crew size, and lead flow to support ~$50k/month on average, with peaks and troughs. |
| YoY revenue growth | 3–8% | Assume mid-single-digit growth; accelerate with upsells, maintenance plans, and targeted marketing. |
| Gross margin | 30–40% (best: 50–55%) | Price for margin, not volume; manage parts markups, labor efficiency, and change orders. |
| Net margin | 5–10% (efficient: 17–20%) | Control overhead and dispatch efficiency; avoid discounting that erodes profit. |
| EBITDA margin | 8–14% | Healthy operators land here by keeping labor productivity high and truck rolls tight. |
| Revenue per employee | $100k–$200k | Use this to size your team and set weekly billable hour targets per tech. |
| Recurring revenue (maintenance) | 15–30% of sales | Sell service agreements to stabilize cash flow and protect margins year-round. |
What is the current average annual revenue of an air conditioning company in this market?
The average annual revenue for a small to mid-size HVAC company is about $598,000.
This reflects wide variation by service mix, ticket size, and local demand intensity. New firms typically start lower and scale toward this mark as call volume, close rate, and maintenance memberships increase.
Build your plan on monthly averages around $50,000 while allowing for 30–50% swings between peak and slow seasons. Calibrate headcount, truck utilization, and inventory turns to this throughput.
It’s a key part of what we outline in the air conditioning company business plan.
Track weekly run-rate revenue to stay ahead of seasonal volatility.
What is the typical year-over-year revenue growth rate for companies in this industry?
Typical HVAC YoY growth runs 3–8%.
Regions with rapid housing starts, heat waves, and replacement cycles skew toward the upper band. Maintenance plan penetration, financing offers, and digital lead gen also push growth upward.
Underwrite your base case at 4–6% and set initiatives (memberships, accessories, IAQ upsells) to target 8%+. Guard against over-hiring before demand is proven.
You’ll find detailed market insights in our air conditioning company business plan, updated every quarter.
Reforecast quarterly as weather and lead costs change.
What is the average gross profit margin for an air conditioning company?
Average HVAC gross margin is 30–40%, with top operators at 50–55%.
Hit the target by pricing installs for value, marking up parts consistently, and protecting billable hours on service calls. Track margin by job type (change-out vs. new install vs. repair) to spot leakage.
Adopt menu pricing, enforce change-order discipline, and standardize accessory bundles to raise ticket and margin. Train CSRs and techs on value-based selling rather than discounting.
Get expert guidance and actionable steps inside our air conditioning company business plan.
Review job costing weekly; never wait until month-end.
What is the average net profit margin in this sector after taxes and overhead?
Typical net profit margin is 5–10%.
Efficient, process-driven HVAC companies can reach 17–20% net in strong years, while underperformers may sit near 3%. Overhead control, routing efficiency, and financing fees are common swing factors.
Build a budget that funds marketing (7–10% of revenue) without eroding net, and use technician scorecards to raise first-time fix rates. Lease vs. buy decisions for vehicles also affect net margin.
This is one of the strategies explained in our air conditioning company business plan.
Protect net by measuring contribution margin per crew, not just per job.
What are the most common cost structures, and what proportion of revenue do labor, materials, and overhead usually represent?
Most HVAC P&Ls cluster around clear cost bands for labor, materials, and overhead.
Use the table below to benchmark and set guardrails for quoting, staffing, and admin spending.
| Cost Bucket | Typical % of Revenue | Operator Notes (Controls & Watch-outs) |
|---|---|---|
| Direct labor (techs & installers) | 20–30% | Raise billable utilization; tighten dispatching; incentivize first-time fixes; monitor overtime and callbacks. |
| Materials & equipment | 30–35% | Negotiate vendor terms; standardize SKUs; enforce parts markups; avoid rush fees; forecast demand ahead of heat waves. |
| Overhead (rent, admin, insurance, vehicles) | 20–25% | Right-size office and fleet; track fuel/maintenance per truck; automate scheduling; keep AR days low with financing options. |
| Marketing / CAC spend | 7–10% | Diversify channels; measure CPL to booked-job; cut channels with weak close rates; protect brand bidding terms. |
| Warranty & callbacks | 1–3% | Root-cause analysis on returns; improve install QC; stock common failure parts; track by crew. |
| Financing & payment fees | 1–3% | Offer financing selectively; bake fees into pricing; reconcile processor costs monthly. |
| Owner compensation (if applicable) | Variable | Separate market-rate salary from profit distributions to keep margins transparent. |
What is the typical EBITDA margin range for a small to medium HVAC company?
Typical EBITDA margin ranges from 8–14%.
Companies with strong maintenance bases, tight inventory, and high technician utilization skew to the high end. Price discipline and fewer no-charge revisits preserve EBITDA.
Use weekly dashboards for gross margin by job type, labor utilization, and average ticket to manage EBITDA in real time. Align bonuses to EBITDA targets, not just revenue.
We cover this exact topic in the air conditioning company business plan.
Protect EBITDA by locking vendor pricing ahead of peak season.
What revenue per employee is generally expected in this industry?
- Benchmark revenue per employee: $100,000–$200,000 depending on mix and maturity.
- Field-heavy shops with strong install volume tend to push toward the upper band.
- High service density with memberships boosts per-employee revenue via repeat visits.
- Low dispatch efficiency and high windshield time drag the metric down materially.
- Track weekly: booked hours per tech, average ticket, and conversion from estimate to install.
What is the average customer acquisition cost relative to lifetime customer value?
- Marketing spend typically lands at 7–10% of revenue, yielding sustainable CACs.
- Healthy LTV/CAC ratios are ≥ 5:1 in mature HVAC firms with memberships.
- Aim for CAC recovery within the first profitable job or within 90 days for services.
- Memberships, financing, and accessory upsells lift LTV materially over 24–36 months.
- Cut channels with weak booked-job rates; reallocate budget to highest LTV cohorts.
What are the usual seasonal fluctuations in revenue, and how big are they?
Seasonality is pronounced in HVAC.
Expect summer peaks (and sometimes winter heating spikes) to run 30–50% above your slowest months depending on climate and install backlog.
| Season | Typical Revenue vs. Trough | Operational Focus to Capture Margin |
|---|---|---|
| Late spring | +15–25% | Pre-sell change-outs; stock common condensers; tighten estimate-to-install lead time. |
| Summer peak | +30–50% | Maximize technician utilization; triage calls; prioritize high-margin installs and accessories. |
| Early fall | +5–15% | Run tune-ups; convert one-time customers to memberships; clear lingering installs. |
| Winter (warm regions) | Flat to +10% | Promote IAQ and duct work; cross-train crews; maintain response SLAs. |
| Winter (cold regions) | +10–30% | Heating change-outs; emergency service pricing; maintain on-call rotation efficiency. |
| Rainy/shoulder weeks | -10–20% | Push maintenance visits; outbound scheduling; run local promos to fill the board. |
| Overall annual swing | 30–50% peak-to-trough | Buffer cash with memberships; stagger inventory buys; use flexible staffing. |
What is the average service-to-installation revenue mix?
Typical HVAC revenue splits 35–45% service and 55–65% installation.
Use the table to set your target mix and understand how each side supports margin and cash flow.
| Mix Scenario | Service Share | Implications for Cash Flow & Margin |
|---|---|---|
| Service-lean | 35–40% | Higher average tickets on installs; lumpier cash flow; strong gross margin if pricing is disciplined. |
| Balanced | 40–45% | Smoother seasonality; steady truck rolls; recurring maintenance stabilizes labor utilization. |
| Service-heavy | 45–55% | Lower volatility; more memberships; margin resilient in slow install months; requires tight routing. |
| New shop (year 1) | 30–40% | Build service base aggressively; offer tune-ups; gather reviews to boost close rates. |
| Replacement cycle surge | 25–35% | Capitalize on heat waves and financing; pre-buy inventory; protect install pricing. |
| Commercial skew | 50–60% | More PM contracts; longer AR cycles; negotiate multi-site agreements to stabilize workload. |
| Residential skew | 35–45% | Faster cash; seasonal spikes; heavy on reviews and local SEO for lead flow. |
What level of recurring revenue from maintenance contracts is typical?
Maintenance contracts usually contribute 15–30% of total sales.
Target the upper half of this range to stabilize labor, raise average lifetime value, and feed the install pipeline. Use memberships to generate priority service, IAQ add-ons, and scheduled replacements.
Price plans for margin, include seasonal tune-ups, and build auto-renew into your CRM. Track churn and add save-offers at renewal to protect the base.
This is one of the many elements we break down in the air conditioning company business plan.
Set a monthly membership sales goal per CSR and per tech.
What are the standard breakeven points in monthly or annual revenue?
Typical HVAC breakeven is $20,000–$30,000 per month, or $240,000–$360,000 per year.
Your exact figure depends on fixed overhead, tech count, average ticket, and gross margin by job mix.
| Scenario | Assumed Gross Margin | Breakeven Revenue & Key Levers |
|---|---|---|
| Lean startup (2 techs) | 38–42% | $20–22k/month; keep overhead light; maximize billable hours; outsource after-hours calls. |
| Growing shop (3–4 techs) | 35–40% | $24–28k/month; add memberships; standardize install kits; reduce unpaid drive time. |
| Install-heavy crew | 32–36% | $28–30k+/month; watch equipment discounts; enforce change orders; limit discounting. |
| Service-heavy crew | 38–45% | $20–24k/month; route density matters; sell IAQ and accessories; lift average ticket. |
| Commercial skew | 30–35% | $30k+/month; longer AR; negotiate PM contracts; maintain cash buffer for payroll. |
| High overhead market | 35–38% | $30k/month; sublease bays; share warehousing; push financing to increase close rate. |
| Owner-operator | 40–45% | $16–20k/month; pay yourself a market salary separately from profit distributions. |
What is the typical EBITDA margin range for an air conditioning company of small to medium size?
EBITDA margin typically falls between 8% and 14% for SMB HVAC companies.
Operators surpassing 14% are usually strong at pricing, routing, inventory control, and accessory attachment rates. Under that band, look for leakage in unbilled time and discounts.
Run a weekly EBITDA bridge (price, volume, mix, cost) to isolate drivers and act fast. Tie manager bonuses to EBITDA thresholds with clawbacks for excessive callbacks.
We cover this exact topic in the air conditioning company business plan.
Guard EBITDA by booking memberships during slow weeks.
What revenue per employee is generally expected in this industry? (Drivers at a glance)
Revenue per employee is best managed by focusing on the operational drivers below.
Use this checklist to diagnose and raise output without adding headcount.
- Billable utilization per tech (target 70–80%+ of paid hours).
- Average ticket (service accessories, IAQ, extended warranties).
- Conversion rates (CSR booking, estimate-to-install, financing adoption).
- Routing efficiency (miles per job, jobs per day, zone scheduling).
- Callback rate and warranty cost containment.
What is the average customer acquisition cost relative to lifetime customer value? (Benchmarks at a glance)
Use these benchmarks to keep CAC in line with LTV as you scale your air conditioning company.
They help you decide when to press the gas on paid channels versus investing in memberships and referrals.
- Marketing spend: 7–10% of revenue (varies by growth stage and channel mix).
- LTV/CAC: ≥ 5:1 target in mature shops; ≥ 3:1 minimum while proving channels.
- CAC payback: ≤ 90 days for service-led funnels; ≤ one profitable install job for install-led funnels.
- Share of booked jobs from organic & referrals: 35–50% in steady-state reduces blended CAC.
- Membership penetration: 20–35% of active customers meaningfully raises LTV and reduces CAC per job.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Want more HVAC operator benchmarks?
Explore maintenance pricing, install close rates, and membership KPIs in our in-depth guides tailored for air conditioning company owners.
Sources
- Workyard — HVAC Facts & Statistics
- Statista — Air Conditioners Market
- ConsumerAffairs — HVAC Industry Statistics
- Yahoo Finance — HVAC Services Market Analysis
- FieldEdge — HVAC Profit Margins
- ShareWillow — HVAC Profit Margins
- Dojo Business — Average HVAC Profit Margin
- Jobber — HVAC Industry Trends
- First Page Sage — HVAC EBITDA & Valuation Multiples
- Amra & Elma — HVAC Marketing Statistics
