Quanta Services Q2 Earnings Call Highlights

Quanta Services (NYSE:PWR) reported second-quarter 2026 results that Chief Executive Officer Duke Austin said “meaningfully exceeded expectations,” citing double-digit growth in revenue, adjusted EBITDA and adjusted earnings per share, robust cash flow and record backlog.

The company reported quarterly revenue of $9.6 billion, net income attributable to common stock of $451 million, or $2.96 per diluted share, adjusted diluted EPS of $4.24, and adjusted EBITDA of $1.1 billion. Chief Financial Officer Jayshree Desai said the quarter included about $11 million of adjusted EBITDA from acquisitions completed during the period.

Quanta ended the quarter with record backlog of $53 billion. Austin said the reported performance primarily reflected broad-based organic strength across the company’s segments, service lines and end markets, as the contributions from recently closed acquisitions were minimal during the quarter.

Full-Year Outlook Raised

Following stronger-than-expected first-half performance, improved visibility for the second half and anticipated contributions from recent acquisitions, Quanta raised its full-year 2026 expectations.

• Revenue: $39.3 billion to $39.7 billion
• Adjusted EBITDA: $4.1 billion to $4.2 billion
• Adjusted EPS: $16.45 to $16.95
• Free cash flow: $2 billion to $2.5 billion

Desai said Quanta expects the four acquisitions completed after its first-quarter earnings release to contribute $1.2 billion to $1.4 billion of revenue and $120 million to $140 million of adjusted EBITDA during 2026. The company paid approximately $1.24 billion of upfront consideration, net of cash acquired, plus up to $242 million of contingent consideration based on future financial performance.

The acquired companies were Phalcon, Enerfab, Percheron and PSD. Austin said the additions expand Quanta’s self-perform capabilities across electrical, mechanical, civil and fabrication work, while extending its involvement in the early stages of customer programs, including planning, constructability, routing and permitting-related services.

Focus on Self-Perform Work and Margin Opportunities

Austin said Quanta self-performs approximately 80% to 85% of its work, which he described as central to its ability to deliver projects on time and on budget. He said the company has added about 15,500 employees during the year, including more than 7,000 through organic growth, while continuing to invest in training and craft labor.

On margins, Austin said Quanta sees room for further improvement, particularly in its electric segment and its underground and infrastructure business. He said the company’s electric utility operations have the ability to operate at margins of 10% to 12%, with the higher end dependent on favorable project mix, including large transmission work and high workforce utilization.

Management also pointed to the company’s fabrication and modular capabilities as a source of efficiency. Quanta has about 7 million square feet of fabrication capacity and added roughly 500,000 square feet through its latest acquisitions, according to Austin. He said integrated fabrication can support earlier-stage design collaboration, reduce project costs and improve delivery certainty, though logistics and proximity to construction sites remain important considerations.

Technology, Generation and Utility Demand

Austin said Quanta continues to expand its technology and large-load business, including direct work with hyperscalers and other large customers. He said the company’s capabilities can support much of a data center’s balance-of-plant construction and that its workforce can move between transmission and distribution work and technology projects.

Management said technology-related activities accounted for roughly 15% to 20% of the business, encompassing a range of markets beyond data centers. Austin said Quanta is seeing opportunities in manufacturing, battery plants, medical facilities and other infrastructure projects.

Desai said the company takes a conservative approach to data-center backlog. Quanta includes work supported by limited notices to proceed but does not include the remainder of a project until it is considered ready to proceed, she said.

On utility transmission and distribution, Austin said the business is tracking in line with expectations and that larger transmission, generation and utility programs remain in early stages. He expects some projects to enter backlog later in 2026 and more meaningful field activity to begin during the second half of 2027, with work extending through the decade.

Quanta also sees a growing opportunity in generation, including both behind-the-meter and front-of-the-meter projects. However, Austin said the company remains selective about the risks it accepts on combined-cycle and certain single-cycle generation projects. He said Quanta would pursue such work when contract structures provide acceptable risk allocation.

Cash Flow, Balance Sheet and Capital Deployment

Desai said free cash flow benefited from favorable contract terms and the growth of Quanta’s mechanical, electrical and plumbing, engineering, procurement and construction, and renewable-energy businesses. She said management continues to view free-cash-flow conversion of around 55% as the appropriate framework, while seeing opportunities to operate at the high end of a 55% to 60% range.

The company’s debt-to-EBITDA ratio under its senior credit agreement improved to 1.7 at the end of the second quarter, from 1.95 at the end of 2025. Quanta had approximately $2.8 billion in total liquidity. Desai noted that Moody’s upgraded the company’s ratings during the period.

Austin said Quanta will remain selective in acquisitions, emphasizing cultural fit, management quality and strategic value. He said the company is focused on investments that address critical paths in infrastructure delivery, including its prior investments involving high-voltage breakers, transformers and utility poles, while maintaining craft-skilled labor as the core of its operating model.

About Quanta Services (NYSE:PWR)

Quanta Services, Inc is a leading specialty contractor that provides comprehensive infrastructure solutions for the electric power, pipeline and energy, and communications markets. Headquartered in Houston, Texas, the company delivers engineering, procurement, construction, installation, maintenance and repair services that support the development, modernization and ongoing operation of critical energy and communications networks.

In the electric power sector, Quanta works on transmission and distribution systems, substation construction and grid modernization projects that include integration of renewable generation and energy storage.