Quanta PWR Q4 2025 Earnings Call Transcript

Earl C. Austin: Good morning, everyone, and welcome to the Quanta Services, Inc. fourth quarter and full year 2025 earnings conference call. I would like to begin by thanking our exceptional employees for their continued absolute performance mindset, dedication to safety, operational excellence, and delivering mission-critical infrastructure solutions to our customers. Your commitment has once again driven outstanding results and positioned Quanta for sustained success. 2025 was another year of significant achievement and advancement for Quanta. We again delivered record results as we generated double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share along with record free cash flow and backlog.

Quanta has produced record revenues eight of the last nine years, eight consecutive years of record adjusted EBITDA, and nine consecutive years of record adjusted diluted earnings per share. Quanta has clearly established itself as a compounder of profitable growth. These results reflect the strength of our diversified solution-based business model and our portfolio approach, enabling us to adapt to evolving industry dynamics while consistently delivering execution certainty and profitable growth across varied market conditions. Throughout 2025, we continued to enhance our capabilities through strategic, disciplined capital deployment. We completed eight acquisitions during the year, including three significant transactions in 2025.

We acquired Dynamic Systems, a premier turnkey mechanical and process infrastructure provider that strengthens our presence in the attractive and growing technology, semiconductor, healthcare, and load center markets. And in the fourth quarter, the acquisitions of Tri City Group and Wilson Construction Company expanded our craft skill platform to deliver critical path solutions for load-centered facilities and electric utility programs. In the aggregate, the acquisitions we completed in 2025, along with our organic growth, added approximately 11,100 employees, bringing our total workforce to approximately 69,500 at year-end, reinforcing our self-perform capabilities that provide certainty and differentiate Quanta as a solutions provider. Looking ahead, we see substantial momentum building across our end markets, evidenced by our total backlog of $44,000,000,000.

The convergence of the utility, power generation, and large load industries combined with accelerating load growth demands is driving unprecedented infrastructure investment requirements. For example, in October, we announced Quanta’s selection by NiSource to design, procure, and construct generation and infrastructure resources capable of producing approximately 3 gigawatts of power for a large data center campus in Indiana, a project that showcases the breadth of our total solutions platform as well as our support of customer affordability objectives. Additionally, we continue to advance our vertical supply chain solutions through strategically investing approximately $500,000,000 to $700,000,000 over the next several years in our power transformer manufacturing facilities vertical supply chain strategy.

The majority of this investment will build out production for the 345-kilovolt through 765-kilovolt power transformers and breakers, which we believe will create a significant differentiated solution for Quanta and our customers in the high-voltage transmission market. These programs are just a couple of examples of Quanta’s ability to provide total solutions across converging markets that are designed to deliver speed and certainty. In many ways, we believe we are just getting started. We are confident in Quanta’s ability to deliver innovative, craft-based, and supply chain solutions that are designed to meet our customers’ need for certainty and for their success.

As we said last quarter, we believe we are well positioned to achieve record backlog and another year of double-digit earnings per share growth in 2026, and our full-year guidance reflects that conviction. Our strategy remains grounded in craft labor excellence, execution certainty, and disciplined investment. We believe Quanta is uniquely positioned at the center of a multidecade infrastructure transformation, and we are confident in our ability to generate attractive compounding returns and deliver long-term stakeholder value. I will now turn the call over to Jayshree S. Desai, Quanta’s CFO, to provide a few remarks about our results and 2026 guidance, and then we will take your questions. Jayshree?

Jayshree S. Desai: Thanks, Duke, and good morning, everyone. We are pleased to report another quarter of strong execution.

Jayshree S. Desai: Capping a year in which Quanta delivered record results across virtually every key financial metric. For the full year, revenues reached $28,500,000,000, an increase of 20% compared to 2024. Adjusted EBITDA was a record $2,900,000,000, and adjusted diluted earnings per share grew 20% year over year to $10.75. We also generated record cash flow from operations of $2,000,000,000 and record free cash flow of $1,700,000,000. In the fourth quarter specifically, revenues were $7,800,000,000 with adjusted EBITDA of $845,000,000 and adjusted diluted EPS of $3.16, all records for Quanta. Cash flow from operations in the quarter was $1,100,000,000, and free cash flow was $946,000,000, both fourth quarter records.

During the fourth quarter, we completed three acquisitions, Tri City Group, Wilson Construction Company, and Billings Flying Service, for aggregate upfront consideration of approximately $1,700,000,000 funded through a combination of cash and Quanta common stock. These businesses complement our strategies and expand our power delivery capabilities for large load center facilities and utility capital programs. Even after deploying this level of capital following the third quarter acquisition of Dynamic Systems, we maintained a leverage ratio below two times, a testament to the strength of our cash generation and our commitment to balance sheet discipline.

Looking ahead, this morning, we provided our full year 2026 financial expectations, which reflect continued double-digit growth in revenues, net income, and adjusted EBITDA, as well as the opportunity to deliver over 20% growth in adjusted EPS. These financial expectations are supported by record backlog at year-end of $44,000,000,000, the strength of which is broad-based, driven by ongoing investment in grid reliability and resilience, growing demand for power generation, and the long-term infrastructure investment required to meet rising electricity consumption across the economy. These are multiyear structural demand drivers that provide us with meaningful visibility heading into 2026 and beyond.

Additionally, we expect free cash flow of $1,800,000,000 at the midpoint of our range, which includes $250,000,000 to $350,000,000 of expected capital expenditures related to the vertical supply chain solutions that Duke described. Our range of free cash flow also contemplates the collection of the remaining balance associated with the large Canadian renewable transmission project discussed in prior calls. Additional details and commentary about our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both of which are posted on our IR website. In summary, 2025 was a year in which Quanta continued to deliver on its commitments, providing certainty to our stakeholders and compounding earnings.

We enter 2026 with record backlog and a strengthening outlook. The convergence of utility modernization, power generation expansion, and large load growth continues to accelerate, and Quanta’s workforce, breadth of solutions, and execution capabilities position us well to serve our customers’ most critical infrastructure needs. We remain focused on disciplined growth, operational excellence, and creating long-term value for our shareholders. With that, we are happy to answer your questions. Operator,

Operator: Thank you. We will now move to our question and answer session. For today’s session, we will be utilizing the raise hand feature via the webinar. If you would like to ask a question, simply click on the raise hand button at the bottom of your screen. If you have dialed in, please press star 9 to raise your hand and star 6 to unmute your line. Once you have been called on, please unmute yourself, and please begin to ask your question. Again, that is star 9 to raise your hand and star 6 to unmute if you have dialed in. We ask that all participants limit themselves to one question.

If you have an additional question, you may requeue, and those questions will be addressed, time permitting. Thank you. We will now pause a moment to assemble the queue. Our first question is from Julien Dumoulin-Smith from Jefferies. Please unmute your line and ask your question.

Earl C. Austin: Hey. Good morning, team. Thank you guys very much. Nicely done. Truly, kudos.

Julien Dumoulin-Smith: Maybe just coming back to the Analyst Day coming up here and a little bit of a preview if I can. How do you think about this setting the tone for a high-teens earnings growth, if you will, the back half of the decade? And specifically within that, can you talk about what is embedded in ’26 guidance as it pertains to data center contracts? And also, obviously, Jayshree, you have just announced or you closed on a number of acquisitions again. Where are you positioned with respect to capturing the data center opportunity? And the, you know, internal versus still needing further external acquisitions to really achieve the scope that you are desiring.

Earl C. Austin: Yeah. Good morning, Julien. So on the data center kind of how we are thinking through it, it is roughly, like, 10% of the business at this point, and then that would be a go-forward basis. Backlog is certainly growing. It is our fastest growing piece of backlog. There is a lot of opportunity there. I continue to see us booking significant backlog this year and beyond. It is a multidecade, probably, the way I see it, at least a decade of growth in that area. So, you know, we are having success there, and I do believe the company is well positioned to, you know, take that growth. And I forgot the other four questions.

What was the other one?

Jayshree S. Desai: Just how do you see the several years? Oh, the several years. Yeah. Look.

Earl C. Austin: I think when we see it, you know, the company has put up, management team has put up a decade of type results. Same management team, same philosophy. Better markets, larger TAMs. I like our chances to continue what we have done in the past.

Operator: Thank you. Our next question is from Steven Michael Fisher from UBS. Please unmute your line and ask your question. Thanks.

Kip A. Rupp: Congratulations on the deals. Just wanted to ask

Steven Michael Fisher: you a little bit about the electric margins. Kind of steady for the last few years. Wonder if you could just bridge some of the puts and takes between 2025 and ’26. I imagine there are some things underlying there, you know, in terms of SunZia, and perhaps other things. And maybe just more broadly, about the margin initiatives that you have. I know you have got a number of them. Can you just talk about how you see some of those things coming through in terms of vertical integration, improved resource sharing, mix, etcetera. Thanks.

Earl C. Austin: Yeah. Thanks, Steve. I think when we look at the company, you know, there are large projects that we are continuing to see. But, you know, ’26, we do not anticipate starting any 765 type work. We do not see any major large projects in it. It is really just solid growth across a broad spectrum of markets. There is nothing, there is no SunZia. I got you with the company at $33.5 billion. SunZia is really not going to move the needle at this point. I think you are seeing broad-based type growth that you will continue to see. You know, I think the difference is we are in two verticals.

You have the technology TAM that is well over $1,000,000,000,000 and the utility TAM over $1,000,000,000,000 and growing. So as we look at both those markets and take those opportunities, the company has a significant portfolio of ways to grow well beyond what we should be talking about in SunZia. I think that is past, and we have done a nice job there, commending the team that put that together. But, again, we are happy to build SunZias, and we are happy to do the baseload work of everyday programmatic spend with both our technology and our utility customers. And that is what you see the company focus on.

The large project dynamic comes with that, but, you know, the initiatives of 765, again, like, we talk about it a lot. It is not in backlog yet, and it is not something that we see in 2026.

Operator: Thank you. Our next question is from Jamie Lyn Cook from Turs Securities. Please unmute your line and ask your question.

Jayshree S. Desai: Good morning. Nice print. I guess just

Steven Michael Fisher: to

Jayshree S. Desai: question, since the announcement with NiSource last quarter,

Jamie Lyn Cook: I am just wondering what the path towards doing more CCGT, you know, projects. I am just wondering if additional customers are coming to you now that you sort of dipped your foot in this. As you do this, should we continue to see joint ventures as a path? Then I guess just my follow-up question, margins in Electric Infrastructure, 10.3% at the midpoint, similar to the past couple of years. I am just wondering if investors should think of this as sort of the new margin target and why would there not be opportunities for margin expansion with 765 coming online soon and, you know, just bigger, larger projects should be favorable to margins.

Earl C. Austin: Yeah. Thanks, Jamie. I will go backwards. I think when we look at margins and margins improvement, yes, I mean, we have opportunities to improve that. You know, I think we took a prudent approach to the midpoint of the guidance. And, you know, there are certainly things within it that we can improve. We do, organically we will grow around 6,000 employees. That is pressure on those margins as we have talked about in the past, and we continue to kind of have the same ratios.

So that tempers some of the margins about, you know, still 50% plus of the business is under a regulated environment with our utility customers, and we look more at compounding that over multidecades versus trying to enhance margins a percentage point

Jayshree S. Desai: here or there. Yeah. I do think we can operate better.

Earl C. Austin: We certainly have a mindset to do so. It is also about risk. I mean, I think the company is really working on the quality of earnings and the risk profile. We are unwilling to take the risk you may have seen in the past, but the margins are. And so it is really a compounding story, Jamie. I do not think you are going to see any of these outward margins, and especially in our regulated business. And even in our addressable market with technology, we are working hard with the technology customers to have more of a programmatic look to this. And that is the company. That is who we are.

We want to collaborate and a multidecade look. We are not trying to do anything other than enhance our customers’ ability and the stakeholder. They are a customer from affordability to everything else, we have to be a part of the solution of the industries that we serve. And what I would say, Steve asked something on margins. I want to just go back to that. Sorry. I do think the company has initiatives internally that, from vertical supply chains and all the things that we are doing, sorry, Steve. I did not catch you. That will help us. Also, but you also have healthcare and all kinds of things that are pressing, including

Jayshree S. Desai: what I just discussed with Jamie. So

Earl C. Austin: sorry I missed that part.

Operator: Thank you. Our next question is from Sherif Abdul-Fattah El-Sabbahy from Cantor Fitzgerald. Please unmute your line and ask your question.

Kip A. Rupp: Thank you so much and congrats on a strong quarter.

Sherif Abdul-Fattah El-Sabbahy: Strong year, and obviously, a strong outlook. The question I have, Duke, again, pertains to what is happening in the marketplace. Maybe if you can just give us a sense of, you know, the pricing discipline that is holding in the marketplace combined with potential supply chain dynamics that might be also a potential headwind, as we look at the growth opportunities that you have?

Earl C. Austin: Yeah. I mean, I think when you look at supply chain, you know, you see our announcement this morning. It is really around trying to derisk the supply chain as well as take advantage of what we see in the marketplace. I mean, you know, the $300,000,000 to $500,000,000, probably up in the $700,000,000 over the next three years, is derisking us. If the transformers, breakers, the things that we are building do not show up, we have issues, significant issues. So I think, you know, part of that was a collaboration with the industry and our client AEP on building transformers to their spec.

And that is something that we take very seriously, and we know that our clients want certainty. This company is built on certainty, and building transformers, all the things that you may not think, why are they doing that? We are doing that to derisk this company long term and allow us to be certain as we look at it while addressing affordability to our clients. I think that is a big thing, is affordability. And we are working on those things with our vertical supply chain, which allows us a great sense of certainty. And when we guide, when we tell our customers that we can do something on time, on budget.

And as far as craft, we have invested in craft for two decades. That is who we are. Anytime you have a tight craft labor market, Quanta does very well.

Sherif Abdul-Fattah El-Sabbahy: Thank you. Our next question

Sherif Abdul-Fattah El-Sabbahy: The other question I had was on pricing dynamics in the marketplace.

Earl C. Austin: Yeah. I mean, I think we look at it more in a collaboratory manner,

Steven Michael Fisher: where

Earl C. Austin: you know, we were bidding on a one-year type, two-year type things. Now we are not bidding at all. We are negotiating five-, ten-year type programmatic spends. And that is the difference. It is more longevity, more risk-adjusted type look at the business, solution providing, pull-through, ROIC goes up in these environments. Our return on invested capital because of things that we can do and offer in a solution base. So I really see just a longer

Steven Michael Fisher: term

Earl C. Austin: It is not a margin story. I will say it again.

Operator: Thank you. Our next question is from Mark Strouse from JPMorgan. Please unmute your line and ask your question.

Steven Michael Fisher: Yes. Good morning. Thank you very much

Mark Bianchi: for taking our questions. Duke, I just wanted to follow up on Jamie’s earlier question on gas power generation. Can you just talk about what you are seeing in the pipeline there? How you are expecting that backlog to trend in 2026? And then are you planning to expand beyond the Zachry JV going forward? Thank you.

Earl C. Austin: Yeah. Thanks for reminding me. I missed that. So I do think when we look at our gas generation business, we are certainly looking at the market, listening to the market. They are asking us to build these types of combined cycles, single cycles, all types of generation. And we put together a great team, a great platform, super excited about what we have booked. The opportunities, yes, I do believe when you look at the opportunities, we will book more generation. We will book it both in a JV setting. We will book it with just us. I mean, we are certainly capable internally of building generation and will.

So it is really around the risk where, you know, that is something that we are not going to deviate on.

Mark Bianchi: It is

Earl C. Austin: part of it, and our customer base and anyone that calls asking for generation. It is risk adjusted. We are not getting in a position where, of the past, where we firm fixed price generation, not doing it. So if people want us to build it, it will be risk adjusted. Yes, I believe we will book backlog throughout the year. There is no shortage of inbound calls wanting to build generation. So I am confident you will continue to see that backlog growth, which is not in backlog yet. So the first one is not in backlog. I suspect we will have multiple in backlog before the end of the year.

And, you know, I think it is more of a 2027, 2028, 2029 type build where that is the ramp on it. And it will continue on out. We built a nice platform. I am excited about it.

Operator: Our next question is from Atidrip Modak from Goldman Sachs.

Atidrip Modak: Hey, good morning, team. Duke, in your prepared comments, you talked about strategic initiatives to

Atidrip Modak: programmatic customer relationships. Can you talk about that a little bit more? Give us any color on what you are thinking of and what we should expect there?

Earl C. Austin: I think when we look at the utilities and we look at the technology customers, it is our job to, you know, certainly help with their builds and make them successful. That is how this company views it. And as we do that, you know, look. People want certainty. They have to have it. And I think what we are known for is execution certainty. And construction risk is not something that we are concerned with primarily on the regulated utilities except gas-fired. So we really think we are just in a good spot there, and the discussions we are having are solution-based discussions, and they have issues with labor, labor constraints, vertical supply chain issues.

We have done a nice job seeing out five, ten years, and putting ourselves in great positions here to take advantage of those things that may have looked funny to Wall Street five years ago, and they are showing up today as something that looks visionary, and I think that is what we are trying to accomplish.

Operator: Thank you. Our next question is from Michael Stephan Dudas from Vertical Research Partners. Please unmute your line and ask your question.

Sherif Abdul-Fattah El-Sabbahy: Yes. Thanks. Good morning, Duke.

Mark Bianchi: Kip, and Jayshree.

Steven Michael Fisher: Morning.

Michael Stephan Dudas: Oh, yeah. Good. Just checking to make sure I am, like, hey. Hey, Duke. Nice decade.

Sherif Abdul-Fattah El-Sabbahy: You. So

Michael Stephan Dudas: looking at the news flow and the demand expectations appear to be off the charts and getting bigger. Any sense of how real the market is with your discussion with utilities on the load factor side? Are there a lot more fluff? Is there reality? And what are some of the hurdles? Are the hurdles becoming less important or more important to execute what the plans of your customers are over the next several years, you know, maybe regulatory or some of those issues there? Thank you.

Earl C. Austin: I mean, anytime you are

Michael Stephan Dudas: really

Earl C. Austin: contemplating doubling the size of, you know, the largest human infrastructure project in the world, I would tell you, like, it is hard. And there are stops and starts and all kinds of different things that you can find out in the, and certainly on social media. Yeah. I think some of it is hype, but even if you discount it 50%, it is still doubling the size of the largest infrastructure project in the world. And I do not see any demand slowdown at all. I do not. And we can see out kind of five years, maybe longer. I mean, we are probably in 2032 now, kind of looking at things and booking things.

So I think it is, you know, way out there. We have to build generation in this country, all forms. And I think it is something that our customer base, our utility customers are, certainly they are regulated in many ways. But I will speak for them. They have a great business, and it goes unnoticed of how the energy business is growing substantially. It is a growth business. And, you know, we are right in the middle of it with them. You are going to get some political windfall, you know, kind of rhetoric here with what I would consider unfounded things that go on with data centers and things like that.

You know, when you look at the Indiana project, it is $7 a month, you know, rebate basically to every ratepayer in NiSource.

Jayshree S. Desai: Maybe more.

Earl C. Austin: So I just think we have to do a better job as an industry promoting how good this industry is. We are trying to do the right thing for the stakeholders while advancing the system and generation capabilities to double the size of what it is today. And I, you know, I am super excited about it. These utilities are super excited about it. They are doing a great job managing through all this political rhetoric, but underneath, I can tell you legs are moving fast, and people are doing things.

Operator: Our next question is from Sangeetha Jain from KeyBanc Capital Markets. Please unmute your line and ask your question.

Jamie Lyn Cook: Good morning. Thank you for taking my question.

Sangeetha Jain: Duke, it looks like the hyperscalers and colos are increasingly looking for financing partnerships for their large projects as the project sizes get bigger. Would you ever consider becoming an investor in a large infrastructure project if the scope of the award measures up against your risk profile?

Earl C. Austin: Yeah. I mean, Sangeetha, we have looked at those things in the past. I would say we never compete with our customer on those type of things. So you get in a situation where if you invest significantly with a colocator, hyperscaler, and things like that, you run the risk of competing with who our client is, and we do not do that. So can we help with supply chain? Can we do some things to help move things along? Sure. We have not taken outside money for any of our expansions. We just have not. I mean, we have been offered, you know, on transformers, all kinds of different things. Do not need capital.

Need capital, but we do not need anyone else’s. We want to control our own destiny. And I think it is extremely important that we have the balance sheet where we can do those things and enhance their ability to accomplish. But as far as at this point, us putting in capital into, you know, an asset such as a data center, I cannot see it. We do, we can do things in other ways. And the company, what we see going forward based on our ability to deploy capital in the core business, I like what I see there much more than trying to invest in something that we do not, you know, that is not core to us.

That is how I see it.

Operator: Thank you. Our next question is from Brian Daniel Brophy from Stifel Nicolaus. If you would like to unmute your line and ask your question.

Steven Michael Fisher: Thanks. Good morning, everybody. Nice quarter. Appreciate you taking the question. Duke, you mentioned previously you are seeing a tight craft labor market. I guess, can you talk about some of the areas of your business where you are seeing more or less tightness currently? Thanks. I mean, it is across the board. You know? I think, you know, we have got to do a good job of getting pipelines of craft in here. I was in DC yesterday with Veterans in Energy, and I can only say, like,

Earl C. Austin: we are working hard at building these pipelines into the company. And we have got to get out and promote it and make sure that we stay in front of it. Our colleges and campuses and all the things, working with our unions and nonunions, everything that we are doing, I think, will help us, but it is tight. I would say anything around the data center stuff is probably the tightest market at this point. You know, utility-type transmission, big transmission, things like that has not really started yet. You will see that in the back half. Distribution is kind of, you know, modest growth in that. Telecom is moving the right direction.

I think you will start to see fiber splashers, things like that, get tight. But in general, it is good. We know where it is going. We see it. We are investing in the right spots, and we will take advantage of those markets.

Operator: Our next question is from Nicholas Amicucci from Evercore. Please unmute your line.

Mark Bianchi: Good morning, guys.

Steven Michael Fisher: Good morning. Just a quick one for me. As

Nicholas Amicucci: we kind of saw at the end of last week, just wanted to get a sense of kind of the ability to kind of push the button on more of the renewables projects, just given that we have now some guidance, preliminary? But on the, on the FIT side, have you guys seen kind of, have the conversations kind of picked up, you know, granted over the past week just with regards to those and just kind of getting those things moving forward?

Earl C. Austin: Yeah. I mean, I will let Jayshree comment as well. But from what I see, you know, we continue and have continued to stay, you know, kind of double-digit type growth plus in our renewable business, and we can see out, you know, through 2030. I am not concerned with that business. It is, you know, there is always going to be a FIT. There is always going to be something in that business that is noisy. And we have to operate through it. When you think about solar and batteries, it is the very fastest thing we can put on the grid right now, in many areas. So we can build it fast.

We do not have to wait on turbines or anything like that. So I do think there is opportunity there, and you will continue to see. And it will be a form of energy for the foreseeable future. Right? You know, wind is getting some bad press, but you will still see wind get built. And not under some sort of political pressure and all kinds of different things, but it is still getting built underneath, and it is needed to fill the generation gap. And, Jayshree, I will let you comment on your

Jayshree S. Desai: No. The only thing I would add is the customers we have been working with, as you know, have been very, very strategic about getting ahead of a lot of these political dynamics with safe harboring and the projects in which they are working and having a robust enough pipeline to deal with some of these things that are just endemic to the renewables industry. So we have continued to work with them on a multiyear basis, and so it has allowed us to be comfortable with where we sit in our renewables expectations. We will, of course, continue to work with them over the next several years as the dynamics around the FIT and other things become more clear.

But as of now, it is, as Duke said, it is just business as usual. We continue to see good growth there. There will be times, of course, where our customers will have to deal with certain political dynamics, but these are customers that are comfortable doing so, and we have intentionally stayed with customers who can do so and who have a track record over a long period of time of managing these things. And the demand continues to be very, very strong for those projects our customers are working on. So it is just business as usual on the renewable side.

Operator: Our next question is from Adam Robert Thalhimer from Thompson Davis and Co. Please unmute your line and ask your question.

Steven Michael Fisher: Hey, good morning, guys. Great quarter.

Julien Dumoulin-Smith: Hey, there was a comment in the prepared remarks about large transmission projects becoming increasingly visible? Can you just compare what is in backlog for large transmission to what you see out there in the bidding environment?

Earl C. Austin: Yeah. I am not sure how to define it.

Atidrip Modak: You know, what is large now?

Earl C. Austin: These days. So I would just say we have no significant 765, no 765, which I consider those large projects, in the backlog. I do not, there is not a lot of large dynamics in there. It is more programmatic spend more so than any kind of main project that I am aware of. It is minimal. I mean, look. We see it coming. We see it stacking. We have talked about it. I think you will see us book later half 2027 significant amount of 765 and other types of work. It is not just 765. It is 345, 500. Data centers, I do not know, generation. It is stacking.

I feel confident that there will be some chunky awards all the way through the next three to five years. Right? We are just getting started. I know the backlog is growing. I see it too. We are taking market share. We are doing the right things. We are focused on the base business. We are not letting off of it, and the management team is highly focused on not giving up on that base business and back growing it.

Operator: Our next question is from Justin P. Hauke from Baird. Please unmute your line and ask your question.

Jayshree S. Desai: Great.

Mark Bianchi: Morning, everybody. I wanted to ask about

Justin P. Hauke: the custom fab capabilities that came from this acquisition this morning, I guess at Tri City. Is that, I guess, is that all new to you, or did you have some fabrication capabilities from Cupertino or elsewhere before this? And maybe just talk about, you know, the capacity you have there and also, is that all being done for self-performed construction work, or is that something where you are selling those prefabs to others to use? Thank you.

Earl C. Austin: No. Thanks. Yeah. We did have some fab capabilities come in with Tri City, a great group there that, you know, we like what they were doing. That just adds to the 3,000,000 square feet we already have. So we have a significant amount of fabrication prefab. We call it premanufactured because it is manufactured. So I do think when we look at it, it is a little different. Everybody’s specs a little different, so we are fabricating really from a manufacturing-capable engineer-type fabrication. So it is a little unique.

I would go back and tell you Cupertino over a decade ago was first mover in this, and we have a lot of experience with fabrication and prefabrication, what goes wrong and what goes right. And we will continue to work with our customers, whoever the customer may be, we are certainly willing to bat for others if that is what the market is. We say it all the time. It is fungible. In many ways, those facilities are fungible, but there is no shortage of people wanting to shore up capacity for, you know, three-, five-, decade-type arrangements. So we are happy to do that as well.

Operator: Our next question is from Chad Dillard from Bernstein. Please unmute your line and ask your question.

Mark Bianchi: Hey, good morning, guys. So my question is

Justin P. Hauke: on the architecture shift.

Chad Dillard: From 54-volt to 800-volt DC for data centers. Just curious how that changes Quanta’s TAM and, you know, maybe you can talk about whether you see any impacts on front of meter, but probably more so behind the meter. And then secondly, you know, as you reengage in the power generation side for natural gas, can you talk about the opportunities you are seeing, in mix between, you know, front versus behind the meter?

Earl C. Austin: Yeah. So voltage going to DC, some of the architecture that NVIDIA has put out, you know, that is a lot of the learning chips. You can see anyone using NVIDIA going to those type architectures. I believe we are in front of that. I do not see it changing our TAM at all. You may get more medium-voltage type arrangements in there. Still a lot of low-voltage type things. We have done a lot of research on it. We feel good. We work with NVIDIA and others to make sure that we see where they are going, make sure we have the craft that is necessary. So I feel comfortable with that.

But I do not think, like, when you think through it, there is still a lot of the older architecture that will be used throughout. It is something that will have both when we think through it. So both are growing significantly. In front of that architecture, I do think that when you look through the intermittency of the chips, much better to put it on the utility. Let the utility take that intermittency. It is smarter. It is better. It is just the amount of, you know, you have got constraints in the queues and things like that. People are trying to go behind the meter simply because you cannot get to the meter.

So that is, it will be both sides of this. There are some, you know, good things and bad things on both in regulatory environments. We have to get the regulations right and make sure that the ratepayer is not the one that has got the bill, that is, you know, got the tab. That is not happening today. I think the utilities, you can commend them. They have done a fantastic job of regulatory, making sure that the technology is paying their way, and technology wants to pay their way.

So all the nonsense around that is just, you know, what I consider verbiage that is out there today on social media, wherever it is, and normally around some political aspect of it, it is not reality. So, look. We see opportunities on both sides. We will participate either side. I do think most off-grid, a lot of off-grid will be used for your backup power as you move generationally. You will start with 100, 200 max, and then back up for a bit, then come on with utility-type solutions. Mhmm. So that is what I see. As far as natural gas, we have been in natural gas, you know, we are still in there. We have never left.

It will be a part of the business. We see it, and, you know, it is certainly backing up some of these. We are getting involved in them where they are backing up some of the hyperscalers and data centers.

Atidrip Modak: So yeah.

Operator: Our next question is from Liam Dalton Burke from B. Riley. Please unmute your line and ask your question.

Julien Dumoulin-Smith: Thank you. Good morning.

Liam Dalton Burke: In 2026, on the M&A pipeline, are you seeing sufficient to either add to your base business or large enough to actually make a difference as the business continues to get critical mass here.

Earl C. Austin: Yeah. I would say every acquisition makes a difference, but when I think about it, yes, we see opportunities as far out as we can see, as far as good business. I cannot tell you the cadence. Both businesses that I did not, you know, we have known, I have known the Wilson family my whole career, and super family. Happy to have them here. They fit here culturally. Very excited. They give us some underground capabilities out in the East, which I think is fantastic, as well as shore up some things in the West. Some of these things you do not see coming. We have a good reputation, I believe, culturally. We want a certain type of company.

There is no shortage of people wanting to sell their businesses on any given day. I promise. Like, they are out there. How we look at it, we are very selective. And we will follow our strategies. We will lay it out in April. March, I guess, Kip will not let me talk about it much. But, in general, pretty excited about that as well, talking about kind of what we see. And I see it the same type of cadence. It may be lumpy along the way. We may not do a deal in a year. I do not.

So I just think we will continue to be selective and follow the path that provides the solutions to our clients. When we are looking at this, someone is asking us to do something typically. And we need the platform to provide the solutions. You saw us invest organically in our vertical supply chain. It is needed. We need to do it. We are going to do it. It is something that, you know, I feel like the demand is coming in and we have to make sure that we can meet the demand. So that said, we are taking opportunities to both organically invest as well as look at acquisitions from platforms to bolt-ons.

Atidrip Modak: They all add up.

Sangeetha Jain: Our next question

Operator: is from Philip Shen from Roth Capital Partners. Please unmute your line and ask your question.

Steven Michael Fisher: Good morning, Duke, Jayshree. Thanks for taking my questions.

Philip Shen: You are building so much of the infrastructure for AI. Can you talk through any initiatives you guys have to take advantage of AI to lower your OpEx? Can AI meaningfully change your outlook for OpEx in the coming year or two? And then as it relates to, you know, bidding and booking dynamics, you know, I do think you were sharing that you guys are booked out through 2030 for renewables. Was wondering if you might be able to share kind of similar color for the other segments. And then ultimately, how much work are you guys turning down?

Sangeetha Jain: Yeah. I want to clarify. I do not think I said

Earl C. Austin: we are booked out. I said we are booking through. Just to make sure that we get on the same page there. We will certainly take advantage of, we can stock, and we are not booked by any means. We will take all comers on renewables. What was the other question? Sorry. You got me off. No. Oh, yeah. So AI. Yeah. Look. We would have our head in the sand if we were not looking at AI, what it can do for the company. We are already seeing ways to, you know, I think when we look at M&A, we are not looking at engineering anymore. Because I think AI is going to be significant there.

And it is going to really affect the way we, we have 2,000 plus engineers. And we will definitely incorporate AI into it. And so I just think there is a lot of things that will change, and we are in front of that. It is something I am highly focused on both from cost and the way that we get more productive in the field. You know, there is a social aspect to this as well. I think, you know, when you really look at what the impacts are on these companies, it is, there are hard decisions to make, and, you know, we are trying to make sure we are a growth company.

Michael Stephan Dudas: I

Earl C. Austin: do not really fire people. We grow people, hire people. So we have got to make sure as we displace that we have avenues for people to move into different skill sets, and that is what we are doing here. So I think every bit of savings you get, we are pouring back into AI initiatives.

Operator: That was our final question. I will now hand back to Kip A. Rupp, Vice President, Investor Relations, for closing remarks.

Michael Stephan Dudas: I will be Kip.

Earl C. Austin: I want to thank our men and women in the field. They are the very best in the world. They have an absolute performance mindset. And they are Quanta. I want to thank you for participating in our conference call. Appreciate your questions and ongoing interest in Quanta Services, Inc. Thank you. This concludes our call.

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Quanta PWR Q4 2025 Earnings Call Transcript was originally published by The Motley Fool