Q1 2025 Quanta Services Inc Earnings Call

Operator: Good morning and welcome to Quanta Services first quarter 2025 earnings call.

Good morning, and welcome to the first quarter 2025 earnings call at.

Operator: At this time, all participants are in a listen only mode. A question and answer session will follow management's prepared remarks, and we ask that you please hold all questions until that time. I will then provide instructions for the question and answer session.

At this time.

We are in a listen only mode. A question and answer session will follow management's prepared remarks, and we ask that you. Please hold all questions until that time I will then provide instructions for the question and answer session. As a reminder, this conference is being recorded if you have any objections. Please disconnect at this time I will now turn the call over to Kip Rupp.

Operator: As a reminder, this conference is being recorded. If you have any objections, please disconnect at this time.

Kip Rupp: I will now turn the call over to Kip Rupp, Vice President, Investor Relations for introductory remarks. Thank you and welcome everyone to the Quanta Services first quarter 2025 earnings conference call. This morning we issued a press release announcing our first quarter 2025 results which can be found in the investor relations section of our website at quantaservices.com. This morning we also posted our first quarter 2025 operational and financial commentary and our 2025 outlook expectation summary on Qantas Investor Relations website.

Kip Rupp: Vice President Investor Relations for introductory remarks.

Thank you and welcome everyone to the Quanta services first quarter 2025 earnings conference call.

Kip Rupp: We issued a press release announcing our first quarter 2025 results, which can be found in the Investor Relations section of our website at Quanta services Dot com.

Kip Rupp: We also posted our first quarter 2025, operational and financial commentary and our 2025 outlook expectation summary, all Qantas Investor Relations website.

Kip Rupp: While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community.

Kip Rupp: While management will make brief introductory remarks during this morning's call the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community.

Kip Rupp: Please remember that information reported on this call speaks only as of today, May 1st, 2025, and therefore you are advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements and information intended to qualify under the Safe Harbor from Liability established by the Private Securities Litigation Reform Act of 1995, including statements reflecting expectations, intentions, assumptions, or beliefs about future events or financial performance that do not solely relate to historical or current facts. We should not place undue reliance on these statements, as they involve certain risks, uncertainties, and assumptions that are difficult to predict or beyond Quanta's control and actual results may differ materially from those expressed or implied.

Kip Rupp: Please remember that information reported on this call speaks only as of today may one 2025, and therefore, you're advised that any time sensitive information may no longer be accurate as of any replay of this call.

Kip Rupp: Call will include forward looking statements and information intended to qualify under the safe Harbor from liability.

Kip Rupp: <unk> by the private Securities Litigation Reform Act of 1995, including statements, reflecting expectations intentions assumptions or beliefs about future events or financial performance that do not solely rely relate to historical or current facts.

Kip Rupp: You should not place undue reliance on these statements as they involve certain risks uncertainties and assumptions that are difficult to predict or beyond Qantas control and actual results may differ materially from those expressed or implied.

Kip Rupp: We will also present certain historical and forecasted non-GAAP financial measures. Reconciliations of these financial measures to their most directly comparable GAAP financial measures are included in our earnings release and operational and financial commentary.

Kip Rupp: We will also present certain historical and forecasted non-GAAP financial measures reconciliations of these financial measures to their most directly comparable GAAP financial measures are included in our earnings release and operational and financial commentary. Please refer to these documents for additional information regarding our forward looking statements and non-GAAP financial measure.

Kip Rupp: Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures.

Kip Rupp: <unk>.

Kip Rupp: Lastly, please sign up for email alerts through the Investor Relations section of quantaservices.com to receive notifications of news releases and other information.

Kip Rupp: Lastly, please sign up for E mail alerts through the Investor Relations section of Quanta Services' Dot com to receive notifications of news releases and other information follow Quanta IR in client services on the social media channels listed on our website.

Kip Rupp: Follow Quanta IR and Quanta Services on the social media channels listed on our website.

Duke Austin: With that, I would now like to turn the call over to Mr. Duke Austin, Quanta's President and CEO. Thanks, Kip. Good morning, everyone.

Kip Rupp: With that I would now like to turn the call over to Mr. Duke Austin, <unk>, President and CEO Duke.

Duke Austin: Thanks, Kip good morning, everyone and welcome to the Quanta services first quarter 2025 earnings Conference call. This morning, we reported our first quarter 2025 results, which included robust double digit growth in revenue adjusted EBITDA and adjusted earnings per share along with record backlog of <unk>.

Duke Austin: And welcome to the Quanta Services first quarter 2025 earnings conference call. This morning, we reported our first quarter 2025 results, which included robust double digit growth in revenue, adjusted EBITDA, and adjusted earnings per share, along with record backlog of $35.3 billion, and a number of other record financial metrics. As a result, we have increased our full year 2025 expectations for revenue, adjusted EBITDA, and adjusted earnings per share.

Duke Austin: $35 3 billion and a number of other record financial metrics. As a result, we have increased our full year 2025 expectations for revenue adjusted EBITDA and adjusted earnings per share.

Duke Austin: Quanta's core strategy is built on the foundation of craft skill layers. Execution Certainty, Investment Discipline, and Clear Strategic Rationale. At the heart of Quanta's success is our unmatched craftwork. deliver essential infrastructure solutions with a dedication to safety, quality, and performance. Our execution certainty, combined with strategic investments in talent, technology, and complementary businesses, strengthens Quanta's leadership position across our expanding and addressable market. Our investment decisions are guided by a disciplined, strategic rationale aimed at reinforcing Quanta's differentiated platform, growing customer partnerships, and driving long-term, sustainable value creation. Quanta differentiates itself through a unique, solution-based approach that integrates craft labor with engineering, technology, and program management expertise to deliver comprehensive, self-performed infrastructure solutions.

Duke Austin: <unk> core strategy is built on a foundation of craft skill labor.

Duke Austin: Execution certainty investment discipline and clear strategic rationale at the heart of <unk> success is our unmatched craft workforce deliberate central infrastructure solutions, but their dedication to safety quality and performance.

Duke Austin: Our execution certainty combined with strategic investments in talent technology, and complementary businesses strengthened Qantas leadership position across our expanding and addressable markets.

Duke Austin: Our investment decisions are guided by a disciplined strategic rationale aimed at reinforcing qantas differentiated platform growing customer partnerships and driving long term sustainable value creation.

Duke Austin: On a differentiates itself through a unique solution based approach that integrates craft labor with engineering.

Duke Austin: <unk> and program management expertise to deliver a comprehensive self perform infrastructure solutions.

Duke Austin: Rather than providing isolated services, Quanta partners with customers to solve complex challenges across the full project lifecycle, which creates deeper strategic relationships. Our collaborative model drives higher value for our customers and positions. Quanta is a trusted partner and solutions provider, not a contract.

Duke Austin: Rather than providing isolated services quanta partners with customers to solve complex challenges across the full project lifecycle.

Duke Austin: Which creates deeper strategic relationships.

Duke Austin: Our collaborative model drives higher value for our customers and positions quanta as a trusted partner and solutions provider not a contractor.

Duke Austin: As demand for resilient electric grids, power generation, technology expansion, and energy infrastructure accelerates, Quanta's large addressable markets continue to grow. Quanta has a proven track record of consistent, profitable growth across both favorable and challenging conditions, demonstrating the resilience and sustainability of our business model, which is a testament to the strength of our portfolio approach, a diversified, solution-based strategy that enables us to adapt to evolving industry dynamics while delivering mission-critical infrastructure. The successful execution of our strategic plan, combined with significant financial liquidity, positions us well to not only navigate periods of uncertainty, but emerge stronger.

Duke Austin: As demand for our resilience grit as.

Duke Austin: As demand for our resilient electric grid power generation technology expansion and energy infrastructure accelerates quanta as large addressable markets continued to grow.

Duke Austin: <unk> has a proven track record of consistent profitable growth across both favorable and challenging conditions, demonstrating the resilience and sustainability of our business model, which is a testament to strength to the strength of our portfolio approach a diversified solution based.

Duke Austin: Strategy that enables us to adapt to evolving industry dynamics, while delivering mission critical infrastructure.

Duke Austin: The successful execution of our strategic plan combined with significant financial liquidity positions us well to not only navigate periods of uncertainty and emerge stronger.

Duke Austin: The energy and infrastructure landscape is undergoing a fundamental transformation. and Quanta is positioned at its center. Utilities across the United States are experiencing and forecasting meaningful increases in power demand, which is being driven by the adoption of new technologies and related infrastructure, including data centers and artificial intelligence, policies intended to reinforce domestic manufacturing and supply chain resources and the need for all forms of energy generation. We believe these drivers are leading to what could become the largest investment in an expansion of high-voltage transmission infrastructure in a generation. And that's Quanta's unmasked execution platform and solution-based mindset enable us to capitalize on these expanding opportunities positioning Quanta for sustained leadership and long-term growth.

Duke Austin: The energy and infrastructure landscape is undergoing a fundamental transformation.

Duke Austin: <unk> is positioned at its center utilities across United States are experiencing in forecasting meaningful increases in power demand, which.

Duke Austin: Which is being driven by the adoption of new technologies and related infrastructure.

Duke Austin: Including data centers and artificial intelligence.

Duke Austin: Policies intended to reinforce domestic manufacturing and supply chain resources and the need for all forms of energy generation.

Duke Austin: We believe these drivers are leading to what could become the largest investment in the expansion of high voltage transmission infrastructure in a generation.

Duke Austin: And Thats Qantas unmatched execution platform and solutions based mindset enable us to capitalize on these expanding opportunities positioning quanta for sustained leadership and long term growth.

Jayshree Desai: I will now turn the call over to Jayshree Desai, Quanta CFO, to provide a few remarks about our results and 2025 guidance. And then we will take your questions. Jayshree. Thanks, Duke, and good morning, everyone. This morning, we reported strong first quarter results, including revenues of $6.2 billion, net income attributable to common stock of $144 million, or 96 cents per diluted share, and adjusted diluted earnings per share of $1.78. Adjusted EBITDA was $504 million, or 8.1% of revenues. Additionally, we generated healthy cash flows in the first quarter, with cash flow from operations of $243 million and free cash flow of $118 million, both of which include the impact of a $109 million tax payment deferred from 2024.

Speaker Change: I will now I'll turn the call over to Jay <unk> decide Qantas CFO to provide a few remarks about our results in 2025 guidance and then we will take your questions.

Speaker Change: Thanks, <expletive> and good morning, everyone. This morning, we reported strong first quarter results, including revenues of $6 2 billion net.

Jay: Net income attributable to common stock of $144 million 96 per diluted share and adjusted diluted earnings per share of $1 78.

Jay: Adjusted EBITDA was $504 million or eight 1% of revenues.

Jay: Additionally, we generated healthy cash flows in the first quarter with cash flow from operations of $243 million and free cash flow of $118 million.

Jay: Both of which include the impact of a $109 million tax payment deferred from 2024.

Jayshree Desai: Our first quarter performance reflects a continuation of the significant revenue, EBITDA, and EPS growth and the free cash flow generation that we have achieved since 2020. Over that period, we have demonstrated our ability to grow organically and maintain a disciplined approach to acquisitions and short repurchases while improving our cash flow profile and return on invested capital. This track record has facilitated our ability to raise debt capital as an investment-grade borrower and efficiently de-lever following opportunistic capital deployment. Accordingly, during the quarter, S&P Global Ratings upgraded our long-term issuer rating to BBB-flat from BBB-minus and our short-term issuer rating to A2 from A3.

Jay: Our first quarter performance reflects the continuation of the significant revenue EBITDA and EPS growth and free cash flow generation that we have achieved since 2020.

Jay: Over that period, we have demonstrated our ability to grow organically and maintain a disciplined approach to acquisitions and share repurchases, while improving our cash flow profile and return on invested capital.

Jay: This track record has facilitated our ability to raise debt capital as an investment grade borrower and efficiently Delever following opportunistic capital deployment.

Jay: Accordingly during the quarter S&P global ratings upgraded our long term issuer rating to triple B flat from Triple B minus and our short term issuer rating to <unk> from 83.

Jayshree Desai: We believe these credit upgrades lower our borrowing costs, expand our liquidity and financing options, and strengthen our financial position while supporting our long-term growth strategy. As Duke mentioned, our performance in the first quarter, coupled with the momentum we're seeing across our core markets, have led us to increase our 2025 expectations for revenues by $100 million, adjusted EBITDA by $10 million, and adjusted earnings per share by $0.15. In light of the recent trade policy actions and based on what we understand today, we believe the terms and conditions in our contracts limit our exposure to direct cost increases associated with the currently implemented tariffs.

Jay: We believe these credit upgrades lower our borrowing costs and expand our liquidity and financing options and strengthen our financial position, while supporting our long term growth strategy.

Duke Austin: As Duke mentioned our performance in the first quarter, coupled with the momentum we're seeing across our core markets have led us to increase our 2025 expectations for revenues by $100 million adjusted.

Duke Austin: Adjusted EBITDA by $10 million and adjusted earnings per share by <unk> 15.

Duke Austin: In light of the recent trade policy actions and based on what we understand today, we believe the terms and conditions in our contracts limit our exposure to direct cost increases associated with the currently implemented tariffs as a result, we believe we have addressed those potential impacts within a range of X and expectations in our full year 2020.

Jayshree Desai: As a result, we believe we have addressed those potential impacts within our range of expectations in our full year 2025 guide. We are also proactively collaborating with our customers to provide supply chain, process, and value-driven solutions focused on cost optimization and growth. Further, we are adjusting our own supply chain by making strategic advanced purchases, as well as working with existing suppliers and evaluating additional suppliers in an effort to manage material and equipment costs and product availability. In addition, we believe our full-year range of 2025 guidance takes into consideration delays that could result from possible changes to the Inflation Reduction Act, or IRA.

Duke Austin: Five guidance.

Duke Austin: We are also proactively collaborating with our customers to provide supply chain process and value driven solutions focused on cost optimization and growth.

Duke Austin: Further we are adjusting our own supply chain by making strategic advanced purchases as well as working with existing suppliers and evaluating additional suppliers in an effort to manage material and equipment costs and product availability.

Duke Austin: In addition, we believe our full year range of 2025 guidance takes into consideration delays that could result from possible changes to the inflation reduction act our hiring to date, we have seen immaterial shifts in capital plan for more sophisticated and high quality renewable energy customers, we believe of the supply chain.

Jayshree Desai: To date, we have seen immaterial shifts in capital plans from our sophisticated and high-quality renewable energy customers, who we believe have the supply chain expertise and robust development pipeline to weather near-term impacts from policy disruption. Demand for power is increasing rapidly. As such, the need for renewable energy generation and storage is strong, and we remain confident in our multi-year CAGR expectations. We are actively engaged with our customers to provide solutions designed to help them navigate the evolving policy and regulatory environment, combining our craft labor capabilities with our engineering, procurement and domestic manufacturing solutions. We believe our increased 2025 financial expectations demonstrate the strength of our portfolio approach to the business, our commitment to our long-term strategy, favorable end markets, and our partnership approach with our customers.

Duke Austin: Expertise and robust development pipeline to weather near term impacts from policy disruptions Jimmy.

Duke Austin: Demand for power is increasing rapidly.

Duke Austin: As such the need for renewable energy generation and storage is strong and we remain confident in our multi year CAGR expectations.

Duke Austin: We are actively engaged with our customers to provide solutions designed to help them navigate the evolving policy and regulatory environment, combining our craft labor capabilities with our engineering procurement and domestic manufacturing solutions.

Duke Austin: We believe our increased 2025 financial expectations demonstrates the strength of our portfolio approach to the business our commitment to our long term strategy favorable end markets and our partnership approach with our customers.

Jayshree Desai: From January 1st to the date of this earnings release, we have repurchased approximately $135 million of our common stock, leaving us with approximately $365 million remaining under our existing repurchase authorization. Given our cash flow expectations and the strength of our balance sheet, we expect to remain opportunistic with stock repurchases while continuing to support strategic investments to generate incremental returns for our stock market. Additional details and commentary about our 2025 financial guidance can be found in our Operational and Financial Commentary and Outlook Expectation Summary, both of which are posted on our IR website. Also, our first quarter 2025 operational financial commentary includes a new supplemental information table that provides estimated revenue growth opportunities across each of our key markets in 2025, along with the factors influencing those opportunities.

Duke Austin: From January one to the date of this earnings release, we have repurchased approximately $135 million of our common stock, leaving us with approximately $365 million remaining under our existing repurchase authorization.

Duke Austin: Given our cash flow expectations and the strength of our balance sheet, we expect to remain opportunistic with stock repurchases, while continuing to support strategic investments to generate incremental returns for our stockholders.

Duke Austin: Additional details and commentary about our 2025 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both of which are posted on our IR website.

Duke Austin: Also our first quarter 2025 operational and financial commentary include the new supplemental information table that provides estimated revenue growth opportunities across each of our key markets in 2025, along with the factors influencing those opportunities.

Jayshree Desai: Note, this information is a directional estimate that is not intended to replace or exactly align with our guidance for the year. Quanta's strategies are focused on delivering solutions to customers across all of our end markets, and we continue to emphasize the power of our aggregate portfolio of solutions and the cash flow earnings and returns they generate.

Duke Austin: No. This information as a directional estimate that is not intended to replace or exactly aligned with our guidance for the year.

Duke Austin: Qantas strategies are focused on delivering solutions to customers across all of our end markets and we continue to emphasize the power of our aggregate portfolio of solutions and the cash flow earnings and returns they generate.

Operator: With that, we are happy to answer your questions.

Duke Austin: With that we're happy to answer your questions operator.

Operator: Operator? Thank you.

Speaker Change: Thank you we will now move to our question and answer session. We ask that all participants in the Netherlands.

Operator: We will now move to our question and answer session. We ask that all participants limit themselves to one question. If you have additional questions, you may recue and ask those questions with address time permitting.

Speaker Change: Sales to one question. If you have additional questions you may re queue and all things questions addressed time to meeting if you have joined via the webinar. Please use the right hand outcome. We can be found at the bottom of the hole <unk> application. When you I'll call them. Please on mute your line and ask your question, we will now pause a moment to assemble the queue.

Operator: If you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. When you are called on, please unmute your line and ask your question. We will now pause a moment to assemble the queue.

Amit Thacker: Your first question comes from Amit Thacker from BMO Capital Markets. Please unmute your line and ask your question. Can you hear me? Loud and clear. Please go ahead. Sam, thank you very much. Thanks for the time.

Speaker Change: Your first question comes from Amit <unk> from BMO capital markets. Please on mute your line and ask your question Amit.

Amit: Good morning can you hear me.

Speaker Change: <unk>. Please go ahead Sir.

Speaker Change: Thank you very much thanks.

Speaker Change: Thanks for the time.

Duke Austin: Just, I got, I guess, a question maybe that's a little bit off the beaten path, but it looked like the Long Island Power Authority has voted down your application to kind of be the grid operator there. I just was wondering, was any of that kind of baked into your guidance for this year? And then the second question is, that sort of kind of grid operator role, is that something you envision doing more of in other jurisdictions? Yeah, thank you. So first off, the LIPA, when we looked at it, you know, look, it's an opportunity where we perform this type of arrangement in Puget Sound as well.

Speaker Change: I guess the question, maybe that's a little bit off the beaten path.

Speaker Change: It looks like the long Island power authority is voted down your application kind of BV grid operator there.

Speaker Change: But I was wondering was any of that kind of baked into your guidance for for this year and then the second question is that sort of kind of grid. Operator role is that something you envision doing more of in other jurisdictions.

Speaker Change: Yeah. Thank you so first off the <unk>.

Speaker Change: When we looked at it look it's an opportunity where we perform this type of arrangement in fusion and Puget sound as well, it's a little different than the one in Puerto Rico, but as we see opportunities to.

Duke Austin: It's a little different than the one in Puerto Rico. But as we see opportunities to, you know, look at these type of arrangements, yes, we will look at them. And I think what the, what they did yesterday was management, the management team voted for Quanta. I thought it was very well done, a very, very good process. The board did not take the recommendation, but gave no remedy. So I think from our standpoint, we'll clarify with the board their concerns, certainly much different than what we faced in Puerto Rico, where we built a utility essentially. So much, much different.

Speaker Change: Look at these type of arrangements, yes, we will look at them and I think what the.

Speaker Change: What they did yesterday was management the management team voted for Quanta I thought it was very well done in a very very good process. The board did not take the recommendation, but gave no remedy so I think from our standpoint, we will.

Speaker Change: We'll clarify what the board their concerns.

Speaker Change: Certainly much different than what we faced in Puerto Rico, where we built a utility essentially.

Speaker Change: So much much different and I think we'll be able to basically given the feedback that it's necessary I can understand where they were coming from.

Duke Austin: And I think we'll be able to basically give them the feedback that it's necessary. I can understand where they were coming from, if not, having not talked to us, and we'll get in front of that and see what happens there. And these opportunities happen, we get asked to do a lot of different things as we differentiate ourselves in the market. So I do think you'll continue to see outliers that you may not hear about every other, every day. But we're not a utility, we understand that, we support them, and there'll be opportunities every now and then that we get involved in these kind of arrangements.

Speaker Change: Having not talk to us and we will get in front of that and see what happens there and these opportunities happen, we'd get us to do a lot of different things as we differentiate ourselves in the market. So I do think you'll continue to see outliers that you may not hear about every other every day, but we're not a utility we understand that we support them.

Speaker Change: And there'll be opportunities every now and then we get involved in these kind of arrangements.

Duke Austin: And yeah, it was not, this was not anticipated in our guide. No. Thank you.

Speaker Change: And yeah. It was not this was not anticipated in our guide.

Speaker Change: Thank you. Our next question is from Andy Kaplowitz from Citi Research, if you'd like to meet yourself and ask your question. Please Andy.

Andy Kaplowitz: Our next question is from Andy Kapolitz from City Research. If you'd like to unmute yourself and ask your question, please, Andy. Hey, good morning, everyone. Hello. Good morning.

Andy Kaplowitz: Hey, good morning, everyone.

Andy Kaplowitz: Hello, Good morning.

Duke Austin: You mentioned the largest expansion of high voltage transmission, I think you said in a generation, maybe you could elaborate on that and how you think this cycle plays out. Do you see a bigger slug of transmission projects starting to actually move forward now, as I'm sure you saw recent developments in Texas with a big line being approved? And would you expect to continue to see sequential backlog growth moving forward despite all the macro uncertainty? Yes, you need transmission in order to move generation. And so we said this all along, I think you have to think about it.

Speaker Change: You mentioned the largest expansion on high voltage transmission I think you said the generation maybe you can elaborate on that and how you think this cycle plays out do you see a bigger slug of transmission projects starting to actually move forward now as I'm sure. You saw recent developments in Texas with a big line being approved and would you expect to.

Speaker Change: Continue to see sequential backlog growth moving forward. Despite all the macro uncertainty out there.

Speaker Change: Yes.

Speaker Change: You need transmission in order to move generation and so we said this all along I think.

Speaker Change: You have to think about it you hear a lot about the grid only at 60% capacity things like that but.

Duke Austin: You hear a lot about the grid only at 60% capacity, things like that. But I go and say, you know, we have a freeway here in Texas, it goes from San Antonio to Houston, it's 24 lanes. Here in Houston, it's about probably 50% full, because you see it in the mornings and the afternoons. If I took eight lanes out, it would back all the way up to San Antonio, I never get into Houston. So you have to look at it like that, that the grid needs the stability of transmission going to load sources and going into data centers, things of that nature.

Speaker Change: I go and say you know we have a free way here in Texas. It goes from San Antonio Houston, It's 24 lanes.

Speaker Change: Here in Houston.

Speaker Change: It's about probably 50% full because you see it in the mornings and the afternoons. If I took eight lanes out there with back all the way up to San Antonio I never get in the East. So you have to look at it like that that the grid needs a stability of transmission go into load sources and going into data centers things of that nature.

Speaker Change: <unk>.

Duke Austin: We continue to see firm demand, and then, you know, hundreds of gigs, honestly, across the board. And so as we see that as it firms up, that's transmission behind it. And I don't think off grid is the answer. I think it will be primarily on grid for our utility customers.

Speaker Change: We continue to see firm demand.

Speaker Change: And then you know.

Hundreds of gigs honestly across the board and so as we see that as it firms up that's transmission behind it and I don't think off grid is the answer I think it will be primarily on grid for our utility customers and this is a big Bill I would relate it back to the seventies. When you had major expansion within your transmission.

Duke Austin: And this is a big bill, I would relate it back to the 70s, when you had major expansion within your transmission system. And that's what we see. I've not seen a line yet that's built in North America, it's not paid itself back very quickly at this point. So you'll see a lot of it for the ultimate customer. It's the right answer. And you'll continue to see a lot of transmission. Thank you. Thank you for your question, Andy.

Speaker Change: <unk> system.

Speaker Change: What we see it's I've not seen a line yet that's built.

Speaker Change: North America has not paid itself back very quickly at this point, so you'll see a lot of it for the ultimate customer is the right answer and you'll continue to see a lot of transmission.

Steve: Thanks, Steve.

Speaker Change: Thank you. Thank you for your question. Our next question is from Phil Shen from Roth capital, if you'd like to meet yourself and ask your question. Please.

Phil Shen: Our next question is from Phil Shen from Roth Capital. If you'd like to unmute yourself and ask your question, please, Phil. If you're dialed in by phone, so if you would press star nine to raise your hand and star six to unmute your line.

Speaker Change: If youre dialing in by saying <unk> <unk> nine.

Speaker Change: Nine to raise your hand now seeks to Amit your line.

Operator: Okay, looks like we're having a problem with Philip there.

Speaker Change: And looks like we're having a publicly.

Joseph Osha: If we could go to Joe Osha from Guggenheim Partners. Unmute yourself and ask your question, please, Joseph. Okay, there we go. Can you hear me? Loud and clear. Please go ahead. Okay. Thank you and good morning.

Speaker Change: We could go to Joe Osha from Guggenheim Partners.

Speaker Change: On mute yourself and ask a question please Joseph.

Speaker Change: Okay. There. We go can you hear me.

Speaker Change: <unk>. Please go ahead okay. Thank.

Speaker Change: Thank you and good morning.

Speaker Change: We have seen a lot in terms of incremental tariffs being imposed on imports or solar modules and this is something that came up one for solar reported earlier this week.

Duke Austin: I've seen a lot in terms of incremental tariffs being imposed on imports for solar modules. And this is something that came up when First Solar reported earlier this week. Is this materializing as a problem for any of your customers at all, to the extent you're hearing about it? Thank you. Thanks for the question. We have not seen that within our customer base. We certainly are keeping our eyes on it. Listen, we're not seeing, we're not seeing pull in, we're not seeing push out per se, I think 25 is baked into 26. So we'll continue to look at it, but it's not affecting us at this point.

Speaker Change: Is this materializing as a problem for any of your customers at all to the extent you are hearing about it. Thank you.

Speaker Change: And thanks for the question, we have not seen that within our customer base. We certainly are keeping our eyes on it and listening.

Speaker Change: We're not seeing we're not seeing pull him or not soon.

Speaker Change: Push out per Se I think 25.

Speaker Change: Baked into 26, so we will continue to look at it but it's not affecting us at this point.

Duke Austin: And I would say this to the companies built to have push outs, it's not the portfolio allows us to have things move along, you know, with service lines and, and our customer base. So it's not an issue of something pushes here or there. It's never the company I've not seen, I wish it would perform at 100%. But we're doing really good if we get 80% kind of online and at the times that we think they're going because you're always going to have pushes and pulls. So the tariffs, if they were to come in and affect us, I do believe the portfolio is such that we could we could weather much of it.

Speaker Change: I would say this to the company's built.

Speaker Change: To have push outs, it's not the portfolio allows us to have things move.

Speaker Change: Along with.

Speaker Change: But the service lines and in our customer base. So it's not an issue as something pushes here or there. It's never the company I have not seen I wish it would perform at a 100%, but we're doing really good if we get 80% kind of online and at the times that we think theyre going because you're always going to have pushes and pulls.

Speaker Change: So the terrorists.

Speaker Change: If they were to come in and affect US I do believe the portfolio is such that we could we could weather much of it in.

Duke Austin: And we see multi year builds coming coming at us. And I do think solar is cheapest form of energy for in many ways, and you'll see a lot of solar build and gas and about everything we can build probably. Thank you.

Speaker Change: We see multiyear builds come and are coming out of this and I do think solar is cheapest form of energy for in many ways and you'll see a lot of solar bill and gas in thought everything we can build probably.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from Philip Shen. If you are I mean, you can't if he could go ahead and ask your question. Please.

Phil Shen: Our next question is from Philip Shen. If you are unmuted, if you could go ahead and ask your question, please. Hi, can you hear me? Yes, please go ahead. Okay, great. Hey, sorry about that having trouble with the zoom.

Philip Shen: Hi can you hear me okay.

Speaker Change: Please go ahead.

Speaker Change: Okay great.

Speaker Change: Sorry about that having trouble with zoom.

Phil Shen: So first question is on We recently hosted a webinar with Grid Strategy. And they highlighted that 50 gigawatts of coal plants may not be... This could result in tens of billions of dollars. whole integration points could be at risk.

Speaker Change: So first question is on.

Speaker Change: Yeah.

Speaker Change: Interconnection work, we recently hosted a webinar with grid strategies.

Speaker Change: And they highlighted that 50 gigawatts of coal plants may not be decommissioned.

Speaker Change: And this could result in tens of billions of interconnection work.

Speaker Change: Proximate to coal plants stranded.

Speaker Change: As the renewable projects planning to axis.

Speaker Change: Nicole interconnection points could be at risk.

Duke Austin: What are your thoughts on this potential and how could this impact your backlog?

Speaker Change: Or your thoughts on this potential and how could this impact your backlog and then second one very quick one on the renewables.

Duke Austin: And then second one, very quick one on the renewables. sub-segment if you will. If you were to think about your total megawatts of construction start Now. Thanks for joining us. Have a great day. Thank you.

Speaker Change: Subsegment, if you will.

Speaker Change: If you were to think about your total megawatts of construction starts.

Speaker Change: In 2025, now you expect compared with what you expected.

Duke Austin: 2025 construction starts that year in 24. Has that changed at all or has it remained the same? Yeah, I'll go backwards. Look, I think it's steady. It's certainly not the pace of growth over last year, but but it's steady and climbing. I like where we sit. And with that business, we're doing very well with batteries, solar, even onshore wind. So I like where we're sit. I think the inbounds are good. You know, it's a, if you want power quickly, you're going to you're going to have to look at renewables for the next three years because of the turbine deliveries.

Speaker Change: Of those 2025 construction starts at year end 'twenty four.

Speaker Change: Has that changed at all or has it remained steady thanks guys.

Speaker Change: Yeah I'll go backwards look I think it's steady.

Speaker Change: It's certainly not at the pace of growth over last year, but it's steady and climbing.

Speaker Change: Where we sit.

Speaker Change: With that business, and we're doing very well with batteries solar.

Even onshore wind so <unk> I think.

Speaker Change: The inbounds are good.

So if you want power quickly youre going to Youre going to have to look at renewables for the next three years because of the turbine deliveries in that but I do think it's always going to be a part of the grid.

Duke Austin: But I do think it's always going to be a part of the grid. And we've always said natural gas will be a big piece of it. We've said that for a decade. We're going to catch up a little bit here and it'll be a part. As far as coal, you know, not a lot of investment in coal over the last I'll call it. 10 years and you know it costs a lot of money to run coal plants right now so there's not been that investment in them and most most thought they were going to retire so you've got to keep them going that said yes I do think we're going to either see some co-locations in areas where there's a little gas on a coal site and you're going to need transmission or you're going to continue to see transmission come out of coal facilities to upgrade but you know look at I don't think there's any shortage of projects on the wall, I'll say that.

Speaker Change: We've always said natural gas will be a big piece of it we've said that.

Speaker Change: Decade, we're going to catch up a little bit here and it'll be a part as far as coal.

Speaker Change: Not a lot of investment in coal over the last.

Speaker Change: I'll call it.

Speaker Change: 10 years in.

Speaker Change: It cost a lot of money to run coal plants right now so theres not been an investment in them and most most thought they were going to retire so you've got to keep them going.

Speaker Change: Said, yes, I do think we're going to either see some co locations in areas, where there although gas on a cold site and you're going to need transmission or youre going to continue to see.

Speaker Change: Transmission come out coal facilities to upgrade but you know.

Speaker Change: Look it's.

Speaker Change: I don't think there's any shortage of projects on the wall I'll say that.

Duke Austin: If they all go, then we've got a lot of work for the next two decades. But I think we got it either way. Thank you for your question, Philip.

Speaker Change: I'll go.

Speaker Change: We got a lot of work for the next two decades, so, but I think we got it either way.

Speaker Change: Thank you for your question. Our next question comes from Jamie Cook from <unk> Securities. If he likes on mute yourself and ask your question. Please.

Jamie Cook: Our next question comes from Jamie Cook from Tuis Securities. If you'd like to unmute yourself and ask your question, Jamie, you're the same, you'll need to press star six to unmute your line for your telephone. Hi, sorry, can you hear me now?

Speaker Change: Okay.

Speaker Change: So Neil the same you will need to press down six to Amit Your line via telephone.

Speaker Change: Hi, sorry can you hear me now.

Jamie Cook: That's great, by the way, sorry, sorry about that. So nice quarter and congrats on the transmission upgrade win this morning. I guess just my first question, just as I think about understanding you guys have a targeted margin range for, you know, your electric infrastructure business or what we're calling it now. But just pushing you as you continue to win, you know, larger projects in the mix towards larger CapEx projects versus maintenance sort of continues. Why wouldn't that create, you know, a positive upward momentum, you know, on your margins to some degree, even though you might not want to guide there over the longer term.

Speaker Change: Great.

Speaker Change: Yeah.

Speaker Change: Sorry about that.

Speaker Change: Quarter and congrats on the transmission upgrade when this morning I guess just my first question just as I think about understanding you guys have a targeted margin range for.

Speaker Change: Your electric infrastructure business or what we're calling it now.

Speaker Change: Just pushing you as you continue to win.

Speaker Change: Larger.

Speaker Change: Projects in the mix towards larger capex projects versus maintenance or and if it continues why wouldn't that create.

Speaker Change: Positive upward momentum momentum on your margin to some degree even though they might not want to guide there over the longer term, but I would think in the next sort of 12 to 18 or 24 months the margin trajectory should be higher so just what your pushback would be on that and then my second question I'm, sorry, I'm going through <unk>.

Jamie Cook: But I would think in the next sort of 12 to 18 or 24 months, the margin trajectory should be higher. So just what your pushback would be on that.

Jamie Cook: And then my second question, I'm sorry, I'm going through multiple earnings this morning. I don't think you provided an update on Cupertino, but how that business is doing versus your expectations for 2025. And then Duke, I think last quarter you suggested there are some very large wins on the come as you benefit from synergies with Cupertino and Quanta. I'm just wondering if you could update us on that and any potential wins on a revenue synergy side in 2025.

Speaker Change: Full earnings. This morning, I don't think you provided an update on cupertino about how that business is doing versus your.

Speaker Change: Your expectations for 2025, and then Duke I think last quarter. You suggested there are some very large wins on the come as you benefit from synergies with Cupertino and Quanta I'm. Just wondering if you could update us on that and then any potential wins on our revenue synergy side in 2025. Thank you.

Duke Austin: Thank you. Thanks, Jamie. I think the target margins, you know, they remain what we said. If you're adding 4,000 employees, we're pacing even more than that at this point. You're going to have the training cost in there, and so the training cost will keep the margins about where they're at. They could move a bit here or there in the upper ends of what we've said. I know that's a different segment, but you know, you can infer the electric, what it used to be, and infer some uplift on the segment. But I do think we're executing very well in the field.

Speaker Change: Yeah. Thanks, Jamie I think the target margins. They remain what we said if youre, adding 4000 employees, who are at or pacing, even even more than that at this point youre going to have the training cost in there and so they are training costs will keep the margins about where they are are they could move a bit here or there in the upper ends with what we've said.

Speaker Change: I know that's a different segment, but you can infer electric what it used to be in for some uplift on the segment, but I do think we're executing very well in the field I'm real proud of.

Duke Austin: I'm real proud of, you know, kind of first quarter over last year versus this year and what we've been able to do at scale. So, the biggest thing is to scale the business, and we're doing that nicely now. You are seeing more material pulled through as well at the same margins. Your return on invested capital is going to come through higher. So, I think returns go up as well in this market. But again, I mean, I think we want to be a solution provider and provide more services and create more value along the supply chain.

Speaker Change: First quarter over last year versus this year and what we've been able to do at scale. So the biggest thing is the scale of the business and we're doing that nicely now you are seeing more material pull through as well at the same margins return on invested capital is going to come through higher.

Speaker Change: So I think the returns go up as well in this in this market, but again I mean, I think we want to be a solution provider and provide more more services and create more value.

Speaker Change: Along the along the supply chain. So we're gonna do that Cupertino is ahead of schedule I think you can infer that that backlog and some of the things we're doing there.

Duke Austin: So, we're going to do that. Cupertino's ahead of schedule. I think you can infer that by backlog and some of the things we're doing there. It's ahead. So, you know, we're really, from our standpoint, great business. I've been around a bunch of acquisitions, and I would tell you it's in the top five from my standpoint as far as having a good acquisition that we can lean into and scale. They're there. We're getting synergies all the time. I do think you're going to see big awards out of that because the technology, when we think through it, your total addressable market on technology is, call it 300 billion a year.

It's a head so well.

Speaker Change: Really from our standpoint, great business I've been around a bunch of acquisitions.

Speaker Change: I would tell you it's in the top five for.

Speaker Change: From my standpoint, as far as having a good acquisition that we can lean into and scale. They're there we're getting synergies all the time.

I do think youre going to see Big Awards.

Speaker Change: Out of that because the.

Speaker Change: The technology, when we think through your total addressable market on technologies call. It $300 billion a year at global so called I'll, Let's just call. It 200 in North America and the utility business is about 250 so.

Duke Austin: That's global. So, let's just call it 200 in North America. And the utility business is about 250. So, it's as big as addressable market for us, and we're less than probably 5% in backlog in technology. So, we're just starting. I see opportunity after opportunity. Can we execute it? Can we go get it? I like our chance. Thank you.

As big as the addressable market for us and we're wrong, Les and probably 5% and backlog in technology. So we're just starting.

Speaker Change: I see opportunity after opportunity can we execute it can we go get it.

Speaker Change: Like our chances.

Speaker Change: Thank you. Our next question is from <unk> from Goldman Sachs. Athena, If you got to mute your line and go ahead and ask your question.

Ati Modak: Our next question is from Ati Modak from Goldman Sachs. Ati, if you'd like to unmute your line and go ahead and ask your question. Yeah, thank you. Hey, Duke, you spoke about the transmission opportunity broadly earlier. But in the supplemental disclosure, you kind of noted that the larger projects are becoming increasingly visible. Can you talk about that visibility? What stages do you see these at? And then when should we expect these to show up in the backlog? How should we think about revenue and margin impacts from that? I mean, I think you're hearing it. You know, there's 765 bills across the country.

Speaker Change: Yes. Thank you Duke you spoke about the transmission opportunity broadly earlier.

Speaker Change: But in the supplemental disclosure you kind of noted that the larger projects are becoming increasingly visible can you talk about that visibility what.

Speaker Change: Do you see that and then when should we expect these to show up in the backlog how should we think about revenue and margin impact from that.

Speaker Change: I mean, I think you're hearing.

Speaker Change: There are 765 builds across the country, you've heard that someone just mentioned coal I hadn't heard that one yet so that's good.

Duke Austin: You've heard that. Someone just mentioned coal. I hadn't heard that one yet. So that's good. But I think you have to look at the RTOs of what they're saying, your MISOs, your PJMs. And you can hear in all the auctions that are there, you can hear that as well as the CAPEX spend. And I know there's this disclaimer where generation is going to replace transmission. That couldn't be more false. So, that's just wrong, and I don't know how else to say it. I'm with them every day. I'm on the ground. I hear it. That's wrong.

Speaker Change: But I think you have to look at the RT OS of what they're saying.

Speaker Change: <unk> or P J M.

Speaker Change: And you can hear that all the auctions that are there you can share that as well as the capex spend and I know, there's this disclaimer where generation is going to replace transmission that couldn't be more false.

Speaker Change: That's just wrong.

Speaker Change: I don't know how else to say it I'm with them every day I'm on the ground are here that's wrong.

Duke Austin: So, that's a fallacy. Transmission will be very robust here, and distribution will be fine. It won't grow as fast as transmission, but it's here. And so, those are the places I would point to where you can see large transmission getting built. We're in early stages of it, the very early stages, and I do think you'll continue to see a stack work over the next. Five years.

Speaker Change: So.

Speaker Change: That's that's a policy transmission will be very robust here and distribution will be fine one grows fastest transmission, but it's here and so those are the places I would point to where you can see large transmission getting built we're in early stages of it.

Speaker Change: Early stages and I do think you'll continue to see a stack work.

Speaker Change: Over the next.

Speaker Change: Five years.

Duke Austin: And I'll leave it there. Thank you.

Speaker Change: Now I'll leave it there.

Speaker Change: Thank you Keith next question is from Stephen Snapchat from UBS. Please go ahead and Unmeet yourself and ask your question. Please Stephen.

Steven Fisher: Our next question is from Steven Fisher from UBS. Please go ahead and unmute yourself and ask your question, please, Steven. Thanks. Good morning.

Stephen: Thanks, Good morning.

Duke Austin: I just wanted to ask you, Duke, in terms of your solution strategy, how would you characterize the white space from here, based on kind of what you're hearing from your customers about the solutions that they need? And I guess from a from an M&A perspective, you know, is 2025, you know, more of a kind of a continued fill in the white space kind of gear? Or is this sort of a digest what you have at the moment? Thanks, Steve. I'll go backwards on it. Good question. So I, when we look at M&A, you know, we can't time it.

Stephen: Just wanted to ask you Duke in terms of your solution strategy, how would you characterize the white space from here based on kind of what Youre hearing from your customers about the solutions that they need and I guess from a from an M&A perspective is 2025.

Stephen: More of a kind.

Stephen: Kind of a continued filling the white space kind of year or is this.

Stephen: Digest, what you have at the moment of the year.

Steve: Okay. Thanks, Steve I'll go backwards on good question so I.

Stephen: When we look at M&A.

Duke Austin: And as we see great companies that fit the strategic rationale that we're looking for, we'll lean into them. I can't tell you the pace. I can tell you there's a lot of inbounds that we see really nice companies out there, have opportunities all the time to look at them. So as we see them as if they fit the rationale, you know, we'll certainly try to lean into them. I'm not concerned with our balance sheet at this point. We'll always protect it. But I'm not seeing us stress it at this point. So, so that all things are on the table.

Stephen: Can't time, it and as we see great companies that fit the strategic rationale that we're looking for we'll lean into them I can't tell you. The pace I can tell you. There's a lot of inbounds that we see really nice companies out there.

Stephen: Have opportunities all the time to look at them. So as we see them as if they fit the rationale we will certainly try to lean into I'm not concerned with our balance sheet at this point.

Stephen: But I'm not seeing a stress at this point. So so that all things are on the table you saw about $134 million worth of stock back this year as it got disconnected. We said we would we did.

Duke Austin: You saw us buy $134 million worth of stock back this year as it got disconnected. We said we would, we did. You can expect us to acquire when we see great companies.

Stephen: You can expect us to.

Stephen: Acquired when we see great companies as well.

Duke Austin: And I forgot the first part of the question. I'd say it's around total services. So I think I tried to, in the paragraph, I tried to explain it. I think if you're isolated on a service line, you're a contractor. If you can put them all together and go perform a service, you're providing a solution. So we're looking in areas where the customer's struggling to ramp. And we're able to do multiple service lines for them, whether it be engineering, whether it be procurement. Each customer has a different set of, I guess, needs. And so we're really trying to do more than just be a service line provider or a contractor.

Stephen: And I forgot the first part of the question I'd space.

Stephen: So I think I tried to in the paragraph I tried to explain it.

Stephen: If you're isolated on a service line and your contract or if you can put them altogether in Gulf of pharma service, you're providing the solution. So we're looking in areas, where the customers struggling to ramp and where we're able to do multiple service lines for them, whether it be engineering, whether it be procurement.

Stephen: Each customer has a different set of I guess needs and so we're really trying to do more than just be a service line provider or a contractor and that's in my in my way of saying, that's a solution because I'm going to listen to what they have to offer and collaborate with them get very sticky in their organization.

Duke Austin: And that's in my way of saying that's a solution, because I'm going to listen to what they have to offer, collaborate with them, get very sticky in their organization, and then trust us to go build it on time, on budget with their own labor. I think us self-performing 85% of the business in that self-performed capability and that certainty that we give a client. bankable, as far as investment grade, we checked the boxes and why wouldn't you want to us to do it all is what I would Terrific. Thank you.

And then trust us to go build it on time on budget with their own labor I think sub performing 85% of the business is that self performed capability and that certainty that we give a client.

Stephen: Bankable as far as investment grade, we checked the boxes and why wouldn't you want to us to do it all is what I would say.

Stephen: Terrific. Thank you.

Speaker Change: Thank you. Our next question is from Steve Fleishman from.

Steve Fleishman: Our next question is from Steve Fleishman from Wolf Research. Please unmute yourself and ask your question, please, Steve. Okay, can you hear me? Hey Steve. Loud and clear, please go ahead. Thank you. I'm a little more specific on the transmission.

Speaker Change: Wolfe Research, please UN mute yourself and ask your question. Please Steve.

Steve Fleishman: Okay can you hear me.

Speaker Change: <unk> go ahead.

Steve Fleishman: Thank you.

Steve Fleishman: Little more specific on the transmission.

Duke Austin: question just the the Texas just approved the 765 KB plan, any sense on when that would actually be business that could be, you know, backlog and just view of likelihood of you getting a fair share of that? Yeah, Steve, you know, we built a lot of the 765 in the country, the majority of it over time. And so I do believe it's a core competency of ours to build it. So I always like our chances when we're building 765.

Steve Fleishman: Jane just the.

Steve Fleishman: Texas just approved a 765.

The.

Steve Fleishman: And any sense on when that would actually be.

Steve Fleishman: Business that could be backlog.

Steve Fleishman: And just view of likelihood of you getting our fair share of that.

Duke Austin: Yeah, Steve you know, we built a lot of the 765 in the country the majority of it.

Steve Fleishman: Over time, and so I do believe it's a core competency of ours to build it.

Steve Fleishman: So I always like our chances when we're building 765.

Steve Fleishman:

Steve Fleishman: We've been in front of this a long time.

Steve Fleishman: I'm not surprised by the amount of it I'm not surprised by the inbound discussions.

Steve Fleishman: Doing some things there that I think are unique.

Steve Fleishman: With the client so I think we're in good shape.

Steve Fleishman: I would say.

Steve Fleishman: I'd be surprised if it's not in the third quarter, maybe early fourth quarter, you would start to see us have the opportunities to book work.

Duke Austin: What one other quick question since very simple one just Is the upgrade in guidance midpoint for the year, is that just first quarter beating your expectations or anything you'd specifically point to for raising the midpoint? I mean, we were looking at the whole year and how we how we see it laying out. I thought we had a nice quarter. I felt like. You know, we're trying to be prudent about the back half with everything moving around. But the way we see it laying out and the way the work's flowing and the things that we know, I felt comfortable enough to move it a bit just to show confidence in the business and, you know, as well as where we think we're going to end up for the year.

Steve Fleishman: One other quick question very simple one just.

Steve Fleishman: Is.

Steve Fleishman: The upgrade in guidance.

Steve Fleishman: The midpoint for the year.

Steve Fleishman: Just first quarter, beating your expectations or anything you'd specifically point to are raising the midpoint.

Steve Fleishman: I mean, we were looking at the whole year and how we how we see it laying out I thought we'd had a nice quarter I felt like.

Steve Fleishman: We're trying to be prudent about the back half with everything moving around but the way we see it laying out in a way that works flow in the things that we know.

Steve Fleishman: I felt comfortable enough to move it a bit just to show confidence in the business.

Steve Fleishman: As well as where we think we're going to end up for the year.

Steve Fleishman: And I do still think we're prudent about how we're looking at it. I think there's a lot of opportunity for us. If you asked me to kind of look at the high side of the range and the low side of the range, I would lean to the high side for sure. Thank you. Thank you, Steve.

Steve Fleishman: And I do still think we're prudent about how we're looking at it I think theres a lot of opportunity for us.

Steve Fleishman: If you asked me to.

Steve Fleishman: Kind of look at the high side of that range in the low side of the range I would lean to the high side for sure.

Steve Fleishman: Thank you.

Steve Fleishman: Thank you Steve Thank you Steve.

Mike Dudas: Our next question is from Mike Dudas from Vertical Research Partners.

Speaker Change: Next question is from Mike Dudas from vertical research partners. Please Amit yourself and ask your question Michael.

Duke Austin: Please unmute yourself and ask your question, Michael. Good morning, everybody.

Speaker Change: Good morning, everybody.

Speaker Change: Alright.

Duke Austin: Duke, maybe you can share how you've seen the strategic benefits from your increasing your own supply chain access for your clients and as you're looking to help them access elsewhere, you know, what are the dynamics of, because I'm sure everybody plus three is trying to figure out similar solutions, how is that market and the dynamics there and how your internal opportunities are helping you provide more of those solutions, and is that part of what you'll be looking for on the acquisition front over the next several quarters? Thank you.

Speaker Change: Duke.

Speaker Change: Maybe you could share that.

Speaker Change: You've seen the strategic benefits from Youre, increasing your own supply chain access for your clients. As you are looking to help them access elsewhere, what are the dynamics because I'm sure everybody plus three is trying to figure out similar solutions, how is that market and the dynamics there.

Speaker Change: How did your internal opportunities to helping you provide better mobile solutions and is that part of what you'll be looking for on the acquisition front over the next several quarters.

Speaker Change: Yes, Mike.

Speaker Change: The Transformers I think that we acquired it we did it on purpose. It was purposeful it was U S. Based always concern we were concerned with China and the amount of China Transformers that were in utility systems. So that concern, let us to U S based transformers in Pittsburgh.

Speaker Change: The 100 year old company with a lot of IP that allows it loud to expand it had you owe codes across the country, it's not easy to have transformer manufacturing out of the class of call. It the.

Speaker Change: 138 up to 706 five so if we can do that if we can execute through there we're not trying to be a manufacturer per se. We wanted to get the pull through we want to do the work. So we do have great.

Speaker Change: I would consider relationships with other transformer manufacturers breaker manufacturers and we will keep those as well, but we've learned a lot about our supply chain internally.

Duke Austin: with our EPC business. So I do think we're able to really have a solution-based to clients as they come in. It is a core competency. It's something now where it was. It used to be labor equipment, now it's a labor equipment supply chain. And if we continue down the path and get it right over and over again, we'll get better internally and externally. So I really like what we're doing there. I think it's, you know, our clients like it and we're able to really expand the business through that mechanism.

Speaker Change: With our EPC business. So I do think we're able to really have it.

Speaker Change: Our solution base to clients as they come in and it is a core competency, it's something now where it was.

Speaker Change: Used to be labor equipment labor equipment supply chain.

Speaker Change: And if we get if we continue down the path and get it right over and over again, we will get better internally and externally.

Speaker Change: I really like what we're doing there I think it's.

Speaker Change: Our clients like it and we're able to really expand the business through that mechanism.

Duke Austin: Thanks, Steve. Sure. Thanks, Michael.

Steve Fleishman: Thanks, Steve.

Speaker Change: Sure.

Justin Hall: Our next question is from Justin Hall from Robert W. Bird. If you'd like to unmute yourself and ask your question, please, Justin. Yes, great. Thank you. Good morning, everybody.

Michael: Thanks, Michael Our next question is from Justin Hauke from Robert W. Baird. If he got from the South and ask a question. Please testing.

Michael: Yes, great. Thank you good morning, everybody.

Justin Hall: I guess I have one maybe larger question, and then I've got just a small technical one, but I guess on the large 500 kV line that you announced this morning that's starting in mid-2026, I was just hoping maybe you could give us some perspective on kind of the size or scope of that, particularly as that's coming on or starting kind of as you're ramping down on SunZia. So, just trying to understand kind of maybe the relative size between those two. And then also, you know, what's the status and risk on the permitting side, given that that's not starting construction for another year or so?

Michael: Yes.

Michael: One maybe larger question and then just a small technical one.

Michael: But I guess on the large 500 kv line that you announced this morning that starting in mid 2026 I was just hoping maybe you could give us some perspective on kind of the size or scope of that.

Michael: And particularly as that's coming online are starting kind of as you're ramping down on some <unk>. So just trying to understand kind of maybe the.

Michael: Relative size between those two and then also whats the status and risk on the permitting side given that status.

Michael: Starting construction for another year or so I'm, just what needs to happen and in my small tactical one for <unk> I guess is the two acquisitions in the quarter I just wanted to confirm those are the ones you announced last quarter on the earnings release, they werent incremental ones. So are there any incremental acquisitions as part of the guidance increase thank you.

Duke Austin: Just what needs to happen.

Jayshree Desai: And then my small technical one for Jayshree, I guess, is the two acquisitions in the quarter. I just wanted to confirm those are the ones you announced last quarter on the earnings release. They weren't incremental ones. So, are there any incremental acquisitions as part of the guidance increase? Thank you.

Duke Austin: Now, I'll quickly answer that and let Duke answer the other question. But yes, those are the two acquisitions we announced last quarter, and there are no additional ones at this stage. And as far as the LADWP line, that is public, so I'll give you some, you can go look at it, but it's a billion plus, and that's the only reason I'm going to give it to you because it's public, but I'm going to give it to you because it's public. So, I think from that standpoint, you know, I do think the permitting and things like that are on target and we'll be getting into it in 26 days.

Michael: Now I'll quickly answer that and let <expletive>.

Michael: I answer the other question, but yes. Those are the two acquisitions, we announced last quarter and there are no additional ones at this stage.

Michael: Okay.

Michael: And as far as VLA DWP line.

Michael: <unk> is public so I'll give you. Some you can go look at it but it's 1 billion plus.

Michael: That's the only reason I'm going to give it to you because it's public.

Michael: But.

Michael: So I think from that standpoint.

Michael: I do think the permitting and things like that are on target and we'll be getting into in 'twenty six.

Justin Hall: Okay, great. Thank you very much. Thanks for your question, Justin.

Michael: Okay, great. Thank you very much.

Speaker Change: Thanks for your question Justin Our next one is from Adam Thalheimer, If you would like to Amit Your line and asking your question. Please.

Adam Thalhimer: Our next one is from Adam Thalhimer. If you would like to unmute your line and ask your question, please. Good morning, guys. Nice quarter. I wanted to ask about the pipeline market.

Adam Thalheimer: Hey, good morning, guys nice quarter.

Speaker Change: I wanted to ask about the pipeline market are you seeing anything interesting in the.

Duke Austin: Are you seeing anything interesting in the long-term bidding or planning, Duke, that would make you think that 2026 could be a recovery year for large Look, I think there's more opportunity for certain. You're hearing it. You're hearing the president get behind more pipe. more drilling, more pipe, more drilling. So I do think that's, that's out there. You know, obviously, shippers are our pipeline customers, we've maintained all kinds of discussions going on. I don't think it, you know, from my standpoint, we need some pipe, obviously, with the amount of natural gas on the books for, you know, combined cycles, things of that nature, especially on the eastern seaboard.

Speaker Change: Long term bidding or planning, Duke that would make you think that 2026 could be a.

Speaker Change: A recovery year for large pipe.

Speaker Change: Sure.

Speaker Change: Look I think there's more opportunity for certain youre hearing that youre hearing the president and get behind more pipe.

Speaker Change: We're drilling more pipe more drilling.

Speaker Change: So I do think that's a that's out there obviously the shippers are in our pipeline customers we've maintained.

Speaker Change: All kinds of discussions going on I don't think from my standpoint, we need some pie obviously with the amount of natural gas on the book books for.

Speaker Change: Combined cycles things of that nature, especially on the eastern Seaboard. So I do think you'll get some bill I don't I. Just don't think the business is going to be Super I mean, LNG takeaways, it's good it'll be better and we're looking forward to capturing some of that work but.

Duke Austin: So I do think you'll get some built. I don't, I just don't think the business is going to be super, I mean, LNG takeaways, it's good. It'll be better. And we're looking forward to capturing some of that work. But I, you know, again, I think very difficult still to build, you know, linear construction pipelines. Thanks, Stu. Thank you for your question.

Speaker Change: Again, I think very difficult still to build.

Speaker Change: Linear construction pipelines.

Thanks, Dan.

Speaker Change: Yes.

Speaker Change: Thank you for your question. Our next question is from Sanjay <unk> from Keybanc, if you like from the SaaS and asking a question. Please on data.

Sangita Jain: Our next question is from Sangita Jain from KeyBank. If you'd like to unmute yourself and ask your question, please, Sangita. Hi, can you, I'm not sure if you can hear me yet, but We can hear you, please go ahead. Thank you. Just a couple questions.

Hi.

Speaker Change: Can you I'm not sure if you can hear me yet.

Speaker Change: We can hear you. Please go ahead great. Thank you.

Speaker Change: Just a couple of questions.

Duke Austin: One, maybe for Duke, some companies have recently alluded to the lack of a good workforce to execute a natural gas generation project on time and on budget. Since you have the largest draft labor force, would you consider, or what would you need to consider branching out into natural gas generation EPC to help your company? Yeah, I mean, I thank you for the question. I do think it's something that is not you know, it's needed. We have the what I'll consider a contractor approach where we have the sum of the parts. We've built them before. We can certainly have a resume to build them.

Speaker Change: One maybe for you some companies have recently alluded to the lack of workforce to execute on natural gas generation project.

Time and on budget since you have the largest best neighbor.

Speaker Change: Would you consider our workload.

Speaker Change: You need to consider branching out into natural gas generation to help your customers.

Speaker Change: Yes.

Speaker Change: Thank you for the question I do think it's something that.

Speaker Change: As you know it's needed we have the what I'll consider the contractor approach where we are.

Speaker Change: The sum of the parts.

Speaker Change: We built them before we can certainly have a resume to build on what.

Duke Austin: The way I would characterize it is if we decide to do that and if we lean into them, we're not taking risk. There's too much risk on the unknowns of the new turbines and things of that nature. We'll just shy away from the risk. And we can grow the business nicely without the That's how I would look at it.

Speaker Change: The way I would characterize it.

Speaker Change: If we decided to do that and if we lean into lean into them.

Speaker Change: We're not taking risk there's too much risk on.

The unknowns are the new turbines and things of that nature will just shy away from the risk and we can grow the business nicely without the risk.

Speaker Change: That's how I would look at it.

Jayshree Desai: Thank you so much.

Jesse: Alright, and then another one maybe it's for Jesse.

Jayshree Desai: And another one, maybe it's for Jayshree. So your revenue performance this quarter was really strong. Book-to-bill was kind of one, and I'm wondering if that is a sign of the times that your customers are more willing to do faster turnaround projects versus taking longer to book large projects? No, I don't think you should read anything into that, Sangita. I think it's just normal timing around our backlog. We're pleased with how the backlog is growing. As Duke talked about, the relationships with our customers just keep getting stronger and stronger. And so we see growth across project-based, MSA work.

Jesse: Our revenue performance this quarter was really strong.

Jesse: Book to Bill was kind of one and I'm wondering if that is a sign of the times that your customers are more willing to do faster turnaround projects versus taking.

Jesse: Number two what large projects.

Jesse: No I don't think you should read anything into that thinking and I think it's just normal timing around our backlog.

Jesse: We're pleased with how the backlog is growing.

Jesse: Talked about the relationships with our customers just keeps getting stronger and stronger and so we see we see growth across project based and MSA work. It's it's it's across the board and so I think there's nothing more to read into it than just timing around those things.

Jayshree Desai: It's across the board. And so I think there's nothing more to read to it than just timing around those things. I also think, you know, some of the work that Cupertino books, you know, when you look at it, it's very programmatic, almost based business-type work, and it's booked a bill almost in months. So nice jobs, you know, but it comes in, you know, $10 million to $50 million type spurts, and that's the way that business is gone. So they can book a bill quite a bit in a given quarter. And, you know, you get a lot of that that happens.

Jesse: I also think.

Jesse: Some of the some of the work that Cupertino books.

Jesse: When you look at it it's very programmatic almost base business type work and its book to Bill Mudd almost in months, so a nice jobs.

Jesse: But it comes in.

Jesse: $10 million $50 million type spurts, and that's the way that businesses. It's gone. So they can book to bill quite a bit in a given quarter and.

Jesse: That's the same with most of the businesses, you'll get a lot of that.

Jayshree Desai: But I still believe you'll see a lot of programmatic MSA renewals are there. They're larger. So I continue to think that the backlog will be at record levels. Thank you.

Jesse: It happens, but I still believe you'll see a lot of programmatic MSA renewals are there they're larger.

Jesse: So I continue to think that the backlog will be.

Jesse: Be at record levels.

Jesse: Thank you.

Operator: Thank you for your question.

Thank you for your question. Our next question is from Jay Chamberlain from J P. Morgan if he'd like finally airlines here and ask your question. Please.

Drew Chamberlain: Our next question is from Drew Chamberlain from J.P. Morgan. If you'd like to unmute your line, Drew, and ask your question, please. Yeah, good morning. Thank you for taking the question.

Jay Chamberlain: Yeah. Good morning, Thank you for taking my question.

Duke Austin: I just want to look a little deeper into what's hitting the backlog on the power generation side. And can you kind of talk through what's coming in between solar storage and wind? And then, you know, how have conversations with customers maybe changed since the tariffs have been announced, particularly on storage? And I appreciate that 2025 probably has some pretty good visibility on what's going to be installed and put in place. But are you worried at all about the tariff impact to 26, 27 projects where equipment's not yet in the States? Yeah, look, I worry about everything.

Jay Chamberlain: When I look a little deeper into what's hitting the backlog on the power generation side and kind of talk through what's coming in between solar and storage and wind in that.

Speaker Change: How have conversations with customers, maybe change that tariffs have been announced particularly on storage.

Jay Chamberlain: Appreciate that 2025, probably has some pretty good visibility on what.

Jay Chamberlain: I'm gonna be installed and put in place, but you are you worried at all about the tariff impact to 'twenty six 'twenty seven projects, where equipment is not yet in the states.

Jay Chamberlain: Yeah look I.

Duke Austin: And so but I would tell you the business is set well past 26. And so I'm worried about 27, 28, 29. And I think what we see is a good visibility and supply and And that supply side is not going to match demand without renewables. It's not going to get close. And you need the renewables to match. the demand. You need them.

Jay Chamberlain: I worry about everything and so but I would tell you the business as well.

Jay Chamberlain: Well past 26, so I'm worried about 27 28 29.

Jay Chamberlain: And I think what we see is a good visibility and supply and demand and.

Jay Chamberlain: And that supply side is not going to match demand without renewables.

Jay Chamberlain: Clothes, and you need the renewables to match that.

Jay Chamberlain: The demand you need them and I just under any scenario you can see yourself not building.

Duke Austin: And I just, under any scenario, you can't see yourself not building solar and scale and utility scale solar for a long period of time here. It makes so much sense. Batteries are shaving peak. I looked at some load growth and some graphs in Texas of how it's shaving peak quite a bit in Texas. So it's making a lot of sense and you can see it showing up. And so from a flexibility standpoint to the grid, if you can back it with natural gas and you can have a natural gas, solar, wind even, and battery on it, it's the lowest cost of energy to the consumer.

Jay Chamberlain: Solar.

Jay Chamberlain: And scale and utility scale solar for a long period of time here. It makes so much sense batteries are shaving peak I looked through some load growth and some graphs in Texas of how it shaping peak quite a bit in Texas.

Jay Chamberlain: It's making a lot of sense and you can see it showing up and so from a flexibility standpoint to the grid. If you can back it with natural gas and you can have a line with natural gas solar wind even in battery on it it's the lowest cost of energy to the consumer and Thats, what youre really you'll hear a lot about addressed.

Duke Austin: And that's what you're really, you'll hear a lot about addressable spending. You can say, hey, we're going to put coal on, but no one looks at the cost. Or we're going to put nuke on, but the cost is going to be a factor here at some point. And so we got to look at the most economical ways to fill the lineup. And I think if you have a blended resource like we've had for last five decades, as long as you look at it, all forms of energy, you'll be in good shape.

Jay Chamberlain: We'll spend it you can say hey, we're gonna put colon, but no one looks at the cost or are we going to put nuke on but the cost is going to be a factor here at some point and so we got to look at the most economical ways to fill the lineup and I think if you have a blended resource like we've had for the last five decades.

Jay Chamberlain: As long as you look at it all forms of energy you'll be in good shape, but when you ask us what we're booking were book and all of it re powers.

Duke Austin: But when you ask us what we're booking, we're booking all of it, repowers and the wind side, some wind work. It's probably off a bit, but our solar is more robust and our batteries is even more robust than our solar. So I like where we sit in the business.

Jay Chamberlain: And the wind side some win work, it's probably off a bit but our solar is more robust and our batteries is even more robust and or solar so I like where we sit in the business.

Duke Austin: Thank you. Thank you, Drew.

Jay Chamberlain: Thank you.

Speaker Change: Thank you J. Our next question comes from Brian <unk> from Stifel Nicolaus, if you'd like to <unk>. Your line and ask your question Keith Bryan.

Brian Brophy: Our next question comes from Brian Brophy from Stifel Niklas. If you'd like to unmute your line and ask your question, please, Brian. Thanks. Good morning. Can you hear me? Good morning. We can. Please go ahead. Thank you.

Speaker Change: Thanks, Good morning.

Speaker Change: Can you hear me good morning.

Speaker Change: Please go ahead.

Speaker Change: Thank you.

Jayshree Desai: Under the new kind of key market disclosure, there's a technology and load center bucket there. Can you help us understand what is all in there? Is that primarily Cupertino? And what's driving that particularly strong growth rate this year? Yeah, that is a lot of the work that Cupertino is doing. It's around, but it's also some of the work we at Legacy Quanta around our inside electric work and data centers, semiconductors, chip plants. It's all of that will be captured in that in that bucket.

Speaker Change: Under the new kind of key market disclosure, there's a technology and load center bucket. There can you help us understand what is all in there is that primarily cupertino and what's driving that particularly strong growth rate. This year. Thanks.

Speaker Change: Yeah that is a lot of the work that cupertino is doing.

Speaker Change: Around but it's also some of the work we are.

Speaker Change: Legacy quanta around.

Speaker Change: Our inside electric work in data centers and semiconductor chip plans, it's all of that will be captured in that in that bucket.

Jayshree Desai: Yeah, I think that's the kind of the when we talked about TAM earlier, we were saying it was, you know, kind of 300 billion, which I think is a remarkable number that technology on infrastructure is going to spend $300 billion this year, and probably more next. So in saying that, that's that Thanks, I'll pass it on. Thank you.

Speaker Change: Yes, I think that's the kind of the when we talked about Tam earlier, we were saying it was.

Speaker Change: Kind of a 300 billion, which I think is a remarkable number that technology on infrastructure is going to spend $300 billion this year and probably more next.

Speaker Change: And saying that that's that bucket.

Speaker Change: Thank you I'll pass it on.

Speaker Change: Thank you. Our next question is from Noah <unk> from B Riley, if he'd like to Amit Your line and ask your question Laura.

Laura Mayer: Our next question is from Laura Mayer from B Reilly. If you'd like to unmute your line and ask your question, please, Laura. Hi, can you hear me okay? We can, please go ahead. Thanks for taking the question. Two questions.

Noah: Hi can you hear me okay.

Laura: We can please go ahead, thanks for taking the question.

Laura Mayer: My first one is just with the growth of data centers, which stages of data center build are you seeing the most activity in?

Speaker Change: Two questions. My first one is just with the growth of data centers, which pages of data center build or are you seeing the most activity and then a second one would just be.

Duke Austin: And then a second one would just be, could you provide any color on the underground business and particularly how it relates to potential tailwinds ramping up with the new administration and the pull away from renewables? Yeah, so I would say on the last part of the question, I missed the first maybe just rehearsed, but On the underground side of the business, there's opportunities in large diameter pipe. You're hearing the administration get behind that. I do think natural gas is coming back in certain places where we are building natural gas. We never really stopped, but I do think you can plan a bit better that natural gas will be here for a long period of time.

Speaker Change: Could you provide any color on the underground business and particularly how it relates to potential tailwind for Athene app within the administration and the Paul.

Speaker Change: From renewables.

Speaker Change: Yeah, So I would say on the last part of the question.

Speaker Change: I missed the first new tissue hernia, but.

Speaker Change: On the underground side of the business there is theres opportunities in large diameter pipe and administration get behind that I do think natural gas is coming back to uncertainty in certain places where.

We are building because we never really stopped.

Speaker Change: But I do think you can plan a bit better that natural.

Speaker Change: On that will be a source of energy in our LDC business is nice will continue to give people options, it's not going to be all electric.

Duke Austin: That'll be a source of energy. Our LDC business is nice. We'll continue to give people options. It's not going to be all electric. They'll have natural gas options. I do see that as continuing to be a nice piece of the business.

Speaker Change: They'll have natural gas options. So so I do see that as continuing to be a nice piece of the business, Canada year over years off on the gas on a big pipe. So it's down I do see Canada coming back in this market I mean given.

Duke Austin: Canada, year over year, is off on a big pipe. It's down. I do see Canada coming back in this market. Given the fact that the terrorists woke Canada up, we do need infrastructure in Canada. They do need to build energy sources. I think you'll see a more robust Canada over the next few years. That business will come back. Like what I see up there as well, it's certainly incrementally better than it was.

Speaker Change: Given the fact that the terrorists devote Canada up that we do need infrastructure in Canada, They do need to build energy sources.

Speaker Change: You'll see a more robust Canada over the next few years that that business will come back so I could see up there as well.

Speaker Change: I mean, it's sort of incrementally better.

Speaker Change: Then it was.

Duke Austin: Our industrial business performed probably at record levels in the first quarter, very close to it. It was a nice quarter. So I like the quarter from that standpoint. There's growth there. We like it. We'll continue to invest in it.

Our industrial business performed probably at record levels in the first quarter very close to it.

Speaker Change: Nice quarter.

Speaker Change: So I liked the quarter.

Speaker Change: From that standpoint, there's growth there we like it.

Speaker Change: We will continue to invest in it and the first part I am sorry, I missed the first part is around data center growth if I heard that right was it where it's at.

Duke Austin: And the first part, I'm sorry, I missed it. I think the first part is around data center growth, if I heard that right. Was it where it's at, the data center growth? Is that the question? Are you seeing the most activity in with data center builds? Oh yeah, I mean it's broad-based, you know, I would say anywhere you can find a... A line that has... 300 megawatts at one data center. So Ohio, Indiana, Virginia, all the way through Arizona, Cal, I mean, even California, if you look at it, if you go off grid, I was out in the West, if you are if you're off grid, it's extremely expensive.

Speaker Change: The data center growth is that was that the question.

Speaker Change: Are you seeing.

Speaker Change: Seeing the most activity and with data center.

Speaker Change: Oh, Yeah, I mean, it's broad based.

Speaker Change: I would say anywhere you can find a.

Speaker Change: A line that has.

Speaker Change: 300 megawatts.

Speaker Change: They want a dozen or so.

Speaker Change: Indiana, Virginia, all the way through Arizona, I mean, even in California. If you look at it if you would.

Speaker Change: Go off grid I was out in the West if you are if you're off grid.

Speaker Change: Hum.

Duke Austin: So California has a lot of a lot of areas where you could put data centers. It's not near as expensive in California. than off-grid. So it makes sense to build in California even. So we're seeing a lot of a lot of it to the west.

Extremely expensive so, California has a lot of a lot of the areas, where you could put data centers, it's not near as expensive in California.

Speaker Change: Then off grid. So it makes sense to build in California, and so we're seeing a lot of love it to the west.

Speaker Change: But theres not a place that I know of.

Duke Austin: But there's not a place that I know of that we, you know, provide services to that doesn't have data center builds planned or planned and paid for, for that matter. Thank you, Laura.

Speaker Change: We provide.

Speaker Change: <unk> provides services to that doesn't have data center builds planned or planned and paid for for that matter.

Speaker Change: Yeah.

Speaker Change: Thanks.

Speaker Change: Thank you Laura and there are no more questions at this time I would now like to turn the call back over to management for any closing remarks.

Operator: There are no more questions at this time.

Duke Austin: I'd now like to turn the call back over to management for any closing remarks. Thank you.

Speaker Change: Yes. Thank you I want to thank our 61000 plus employees through the very best in the World and we couldn't do this without them.

Duke Austin: I want to thank our 61,000 plus employees, who are the very best in the world. We couldn't do this without them. They make our lives easy and make our jobs easy.

Speaker Change: Make our lives easier and make our jobs.

Duke Austin: And I want to thank everyone participating on the conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you.

Speaker Change: And I want to thank everyone.

Speaker Change: Everyone participating on the conference call. We appreciate your questions and your ongoing interest in Quanta services. Thank you. This concludes our call.

Operator: This concludes our call.

Speaker Change: Okay.

Speaker Change: [music].