Q1 2026 Quanta Services Inc Earnings Call

April 30, 2026

Operator: Twenty-six earnings call. 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. 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, Vice President, Investor Relations, for introductory remarks.

Speaker #1: 26 earnings call. 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.

Operator: 2026 earnings call. 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. 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, Vice President, Investor Relations, for introductory remarks.

Speaker #1: 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.

Speaker #1: I will now turn the call over to Kip Rupp, Vice President, Investor Relations, for introductory remarks.

Speaker #2: Thank you, and welcome everyone to the QUANTA SERVICES first quarter 2026 earnings conference call. This morning we issue a press release announcing our first quarter 2026 results, which can be found in the Investor Relations section of our website at QUANTASERVICES.COM.

Kip Rupp: Thank you, welcome everyone to the Quanta Services Q1 2026 Earnings Conference Call. This morning, we issued a press release announcing our Q1 2026 results, which can be found in the investor relations section of our website at quantaservices.com. This morning, we also posted our Q1 2026 operational and financial commentary and our 2026 outlook expectation summary on Quanta's investor relations website. 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. Please remember that information reported on this call speaks only as of today, 30 April 2026, and therefore you're advised that any time-sensitive information may no longer be accurate as of any replay of this call.

Speaker #2: This morning we also posted our and financial commentary and our 2026 outlook expectation summary on QUANTA's investor relations website. 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.

Speaker #2: Please remember that information reported on this call speaks only as of today April 30, 2026, and therefore you are advised that any time-sensitive information may no longer be accurate as of any replay of this call.

Speaker #2: This call will include forward-looking statements 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.

Kip Rupp: This call will include forward-looking statements 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. You 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. We 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 measures.

Speaker #2: You 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.

Speaker #2: We also present certain historical and forecasted non-gap financial measures, reconciliations of these financial measures to their most directly comparable gap financial measures are included in our earnings release and operational and financial commentary.

Speaker #2: Please refer to these documents for additional information regarding our forward-looking statements, and non-gap financial measures. Lastly, please sign up for email alerts through the Investor Relations section of QUANTASERVICES.COM to receive notifications of news releases and other information and follow QUANTA IR and QUANTASERVICES on the social media channels listed on our website.

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, and follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Speaker #2: With that, I would like to now turn the call over to Mr. Duke Austin, QUANTA's president and CEO. Duke?

Speaker #3: Thanks, Kip. Good morning, everyone, and welcome to the QUANTASERVICES first quarter 2026 earnings conference call. I want to begin by thanking our employees for their continued absolute performance mindset, dedication to safety, and commitment to delivering mission-critical infrastructure solutions for our customers.

Duke Austin: Thanks, Kip. Good morning, everyone. Welcome to the Quanta Services First Quarter 2026 Earnings Conference Call. I want to begin by thanking our employees for their continued absolute performance mindset, dedication to safety, and commitment to delivering mission-critical infrastructure solutions for our customers. Your work and dedication is what makes everything possible. Quanta is off to a strong start of the year, with our Q1 results reflecting robust double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share along with record backlog. These results reflect the strength of our diversified solutions-based business model and our portfolio approach, enabling us to adapt to the evolving industry dynamics while consistently delivering execution certainty and profitable growth across varied market conditions.

Speaker #3: Your work and dedication is what makes everything possible. QUANTA is off to a strong start of the year, with their first quarter results reflecting robust double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share, along with record backlog.

Speaker #3: These results reflect the strength of our diversified solutions-based business model and our portfolio approach. Enabling us to adapt to the evolving industry dynamics, while consistently delivering execution certainty and profitable growth across varied market conditions.

Speaker #3: I want to spend a moment on what we shared at our Investor Day on March 31, because I think it is the right context for everything we are doing.

Duke Austin: I want to spend a moment on what we shared at our Investor Day on 31 March because I think it is the right context for everything we are doing. Quanta has transformed, and our strategy for the next five years is firmly in place. What ran through everything we presented in our Investor Day was one word: certainty. Execution certainty, labor certainty, supply chain certainty, and schedule certainty. That is what our customers need right now, and that is what this company is built to deliver. Utilities are being asked to double in size. Technology customers are demanding speed at scale they haven't dealt with before. Everything we have built over the past decade, our craft workforce, the integrated solutions model, and the vertical supply chain investments, it all comes back to delivering that certainty at scale. That is the conversation we are having with the customers every single day.

Speaker #3: QUANTA has transformed. And our strategy for the next five years is firmly in place. What ran through everything we presented in our investor day was one word: certainty.

Speaker #3: Execution certainty, labor certainty, supply chain certainty, schedule certainty. That is what our customers need right now, and that is what this company is built to deliver.

Speaker #3: Utilities are being asked to double in size. Technology customers are demanding speed at scale, they haven't dealt with before. Everything we have built over the past decade, our craft workforce, the integrated solutions model, the vertical supply chain investments, it all comes back to delivering that certainty at scale.

Speaker #3: And that is the conversation we are having with the customers every single day. We listen to our customers, and we are becoming more deeply embedded in the way they plan and execute their capital programs.

Duke Austin: We listen to our customers, and we are becoming more deeply embedded in the way they plan and execute their capital programs. We are in the rooms where customers are planning their entire multi-year capital spend. We are negotiating much of the work directly. Our success is aligned with their success and with positive outcomes for the ratepayer. That was not the case five years ago. We are there now. The trust we have built over decades, combined with the investments we have made in our craft workforce and integrated solutions model, is how we created a durable compounding business that is well-positioned to capitalize on large, visible, and durable market opportunities.

Speaker #3: We are in the rooms where customers are planning their entire multi-year capital spend. We are negotiating much of the work directly. Our success is aligned with their success and with positive outcomes for the ratepayer.

Speaker #3: That was not the case five years ago. We are there now. The trust we have built over decades, combined with the investments we have made in our craft workforce and integrated solutions model, is how we created a durable, compounding business that is well positioned to capitalize on large visible and durable market opportunities.

Speaker #3: To that end, on the fourth quarter call, we announced an investment of $500 to $700 million over the next several years in our power transformer manufacturing facilities and vertical supply chain strategy.

Duke Austin: To that end, on the Q4 call, we announced an investment of $500 to 700 million over the next several years in our power transformer manufacturing facilities and vertical supply chain strategy, which will double our power transformer manufacturing capacity. Additionally, we are nearly doubling our off-site manufacturing, fabrication, and logistics facilities over the next several years for an aggregate of approximately 6.7 million sq ft of facilities as part of our integrated fabrication and supply chain solutions. We are experiencing significant demand for these services, particularly for data centers. These programs are just a couple of examples of Quanta's ability to provide total solutions across converging markets that are designed to deliver speed and certainty.

Speaker #3: Which will double our power transformer manufacturing capacity. Additionally, we are nearly doubling our off-site manufacturing fabrication and logistics facilities over the next several years, for an aggregate of approximately $7.67 million square feet of facilities as part of our integrated fabrication and supply chain solutions.

Speaker #3: We are experiencing significant demand for these services, particularly for data centers and these programs are just a couple of examples of QUANTA's ability to provide total solutions across converging markets that are designed to deliver speed and certainty.

Speaker #3: The versatility of our craft workforce and our solution-based approach is what de-risked all of us for our customers and for our investors. That fungibility?

Duke Austin: The versatility of our craft workforce and our solution-based approach is what de-risk all of us for our customers and for our investors. That fungibility, the ability to move our people across a 2.4 trillion total addressable market converging around utility, generation, and large load is what allows us to flex across markets, expand scope, and keep delivering. We have outlined an opportunity to more than double the earnings power of this company by 2030. When we look at our 15% to 20% adjusted EPS growth target with the opportunity to stack above that, I wanna be clear, this is not easy, and the strategy has to be in place to deliver those numbers. We believe it is. Our guidance is prudent. It has always been prudent. The results we reported this morning reflect exactly the kind of execution this plan is built on.

Speaker #3: The ability to move our people across a 2.4 trillion total adjustable market converging around utility, generation, and large load is what allows us to flex across markets, expand scope, and keep delivering.

Speaker #3: We outlined an opportunity to more than double the earnings power of this company by 2030. When we look at our 15 to 20 percent adjusted EPS growth target, with the opportunity to stack above that, I want to be clear.

Speaker #3: This is not easy, and the strategy has to be in place to deliver those numbers. We believe it is. Our guidance is prudent, it has always been prudent.

Speaker #3: And the results we reported this morning reflect exactly the kind of execution this plan is built on. I will now turn it over to Jayshree Desai, QUANTA's CFO, to provide a few remarks about our results and 2026 guidance, and then we will take your questions.

Duke Austin: I will now turn it over to Jayshree Desai, Quanta CFO, to provide a few remarks about our results and 2026 guidance. We will take your questions. Jayshree?

Speaker #3: Jayshree?

Speaker #4: Thanks, Duke, and good morning, everyone. This morning, we reported first quarter results, with revenues of $7.9 billion net income attributable to common stock of 221 million dollars, or $1.45 per diluted share, adjusted diluted earnings per share of $2.68, and adjusted EBITDA of $686 million.

Jayshree Desai: Thanks, Duke. Good morning, everyone. This morning, we reported Q1 results with revenues of $7.9 billion, net income attributable to common stock of $221 million or $1.45 per diluted share, adjusted diluted earnings per share of $2.68, and adjusted EBITDA of $686 million. Based on the continued momentum evidenced by our record $48.5 billion of backlog, the strong performance during the quarter, and improved visibility into the remainder of the year, we are raising our full year financial expectations.

Speaker #4: Based on the continued momentum evidenced by our record 48.5 billion dollars of backlog, the strong performance during the quarter, and improved visibility into the remainder of the year, we are raising our full-year financial expectations.

Speaker #4: We now expect revenues to range between $34.7 and $35.2 billion, adjusted EBITDA to range between $3.49 and $3.65 billion, and adjusted EPS to range between $13.55 and $14.25.

Jayshree Desai: We now expect revenues to range between $34.7 to 35.2 billion, adjusted EBITDA to range between $3.49 to 3.65 billion, and adjusted EPS to range between $13.55 and $14.25. As Duke mentioned, we hosted Investor Day on 31 March and have outlined an opportunity to more than double the earnings power of this company by 2030. This quarter represents a great start to a 20-quarter stretch during which time we intend to deliver against that expectation, along with continued improvement in our consolidated margins and returns.

Speaker #4: As Duke mentioned, we hosted an investor day on March 31st, and outlined an opportunity to more than double the earnings power of this company by 2030.

Speaker #4: This quarter represents a great start to a 20-quarter stretch during which time we intend to deliver against that expectation, along with continued improvement in our consolidated margins and returns.

Speaker #4: Over the course of our five-year plan, we remain committed to maintaining an investment-grade balance sheet and an acquisition strategy that's governed by our target leverage profile of 1.5 to 2 times, and the returns that we would otherwise generate by repurchasing our stock.

Jayshree Desai: Over the course of our 5-year plan, we remain committed to maintaining an investment grade balance sheet and an acquisition strategy that's governed by our target leverage profile of 1.5 to 2 times and the returns that we would otherwise generate by repurchasing our stock. 1 quarter in, the results reflect exactly the kind of disciplined compounding performance we committed to at Investor Day, and we remain focused on delivering that consistency for our stakeholders over the course of this plan. Additional detail and commentary on our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both available on our investor relations website. With that, we're happy to take your questions. Operator.

Speaker #4: One quarter in, the results reflect exactly the kind of disciplined, compounding performance we committed to at investor day. And we remain focused on delivering that consistency for our stakeholders over the course of this plan.

Speaker #4: Additional detail and commentary on our 2026 financial guidance can be found in our operational and financial commentary on Outlook Expectation Summary. Both available on our investor relations website.

Speaker #4: With that, we're happy to take your questions. Operator?

Speaker #5: Thank you. 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 requeue, and those questions will be addressed time permitting.

Kip Rupp: Thank you. 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 re-queue, and those questions will be addressed time permitting. If you have joined via the webinar, please use the raise hand i-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. Our first question is from Nicholas Amicucci from Evercore ISI. Please unmute your line and ask your question.

Operator: Thank you. 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 re-queue, and those questions will be addressed time permitting. If you have joined via the webinar, please use the raise hand i-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. Our first question is from Nicholas Amicucci from Evercore ISI. Please unmute your line and ask your question.

Speaker #5: 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.

Speaker #5: Our first question is from Nick Amicucci from Evercore ISA. Please unmute your line and ask your question.

Nicholas Amicucci: Hi, good morning, guys. How's everyone?

Speaker #6: Hi, good morning, guys. How's everyone? Just wanted to drill in a little bit. Obviously, Duke and Jayshree, you guys had kind of mentioned the opportunity to improve margins on the underground and infrastructure.

Duke Austin: Great.

Nicholas Amicucci: Just wanted to drill in a little bit. Obviously, Duke and Jayshree, you guys had kinda mentioned the opportunity to improve margins on the underground and infrastructure. It seems like that was one of the drivers here in the quarter. Just wanted to see, should we kind of view that as more of a pull forward on that side of the house? Or is that was that somewhat contemplated as we think about just guidance going forward and kind of the 2030 timeline?

Speaker #6: It seems like obviously that was it seems like that was one of the drivers here in the quarter. Just wanted to see, is that kind of should we kind of view that as more of a pull forward on the on that side of the house?

Speaker #6: Or is that was that somewhat contemplated as we think about just guidance going forward and kind of the 2030 timeline?

Speaker #3: Yeah, thanks for the question. When we looked at the underground, the work mix, coming in, you know, with DSI in that segment as well as just broad-based, you know, what I think is execution in the segment, we did a nice job and I do believe that's where your earnings improvement are coming from, from UUI.

Duke Austin: Yeah. Thanks for the question. When we looked at the underground, the work mix, coming in, you know, we with DSI in that segment as well as just broad base, you know, what I think is execution in the segment. We did a nice job, and I do believe that's where your earnings improvement are coming from EUI. You know, not to say we can't improve some of the electric segment, but, you know, as we discussed, that's where you're gonna see the incremental margin improvement. I do think it continues to get higher, and we have the ability to operate in double digits.

Speaker #3: So, you know, not to say we can't improve, some of the electric segment, but the, you know, as we discussed, that's where you're going to see the incremental margin improvement.

Speaker #3: I do think it continues to get higher and we have the ability to operate in double digits.

Speaker #6: Right. And then, Duke, as we kind of think about too, we've heard, you know, just even over the past 30 days, since the investor day, we've seen a lot more I guess rhetoric and just kind of commentary from a lot of whether it's developers or utilities in general or even the hyperscalers, just on this on the notion of kind of more of a bridge power type of approach.

Nicholas Amicucci: Great. Then, Duke, as we kind of think about too, we've heard, you know, just even over the past 30 days, since the Investor Day, we've seen a lot more, I guess, rhetoric and just kind of commentary from a lot of, whether it's developers or utilities in general or even the hyperscalers just on the notion of kind of more of a bridge power type of approach. Is that something that is kind of an incremental opportunity? Just thinking that, you know, we can go first somewhat off-grid, if you would, then kind of provides the opportunity to then build out on the transmission side, so you kinda get 2 bites at the apple. Is that, is that a fair assessment or is that, kind of overstating?

Speaker #6: Is that something that is kind of an incremental opportunity? Just thinking that, you know, we can go first somewhat off-grid, if you would, and then kind of provides the opportunity to then build out on the transmission side.

Speaker #6: So you kind of get two bites at the apple. Is that a fair assessment or is that kind of overstating?

Speaker #3: I mean, everyone has a different solution to the issues of lack of generation. So I think when we look at it, you know, the easiest and I think the best way is connect to the grid.

Duke Austin: I mean, everyone has a different solution to the issues of lack of generation. I think when we look at it, you know, the easiest and I think the best way is connect to the grid. Most of our customers want to go to the grid at some point. There is bridge power solutions. They're out there. You know, there's Bloom and others that we're involved with on jobs, and I do think that is a good bridge power in many ways, and it will end up being backup power for the most part, at some point. To have a microgrid at that scale with that intermittency and the type of learning that the chips have, it's very difficult, and not many people can build those microgrids more and run them.

Speaker #3: And most of our customers want to go to the grid at some point. There is bridge power solutions. They're out there, you know, there's Bloom and others that were involved with on jobs and I do think that is a good bridge power.

Speaker #3: In many ways, and it will end up being backup power for the most part at some point. So to have a microgrid at that scale with that intermittency in the type of learning that the chips have, it's very difficult.

Speaker #3: And not many people can build those microgrids more and run them. Utilities are very good at it and, you know, it's much easier for them to do it than it is to try to run a microgrid from a technology company.

Duke Austin: The utilities are very good at it and, you know, it's much easier for them to do it than it is to try to run a microgrid from a technology company. Yes, it's complicated and the lack of generation is creating some opportunities for us on bridge power and many things. We're involved in all of it. You know, I would tell you, large majority, vast majority are going to the grid at some point.

Speaker #3: So, yes, it's complicated and the lack of generation is creating some opportunities for us on bridge power and many things. But we're involved in all of it.

Speaker #3: You know, I would tell you large majority, vast majority are going to the grid at some point.

Speaker #5: Thank you. Our next question is from Andy Kaplowitz from Citigroup. Please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Andrew Kaplowitz from Citigroup. Please unmute your line and ask your question.

Operator: Thank you. Our next question is from Andrew Kaplowitz from Citigroup. Please unmute your line and ask your question.

Speaker #7: Hey, everyone.

Andrew Kaplowitz: Hey, everyone.

Speaker #5: Hey, Andy.

Kip Rupp: Hey, Andy.

Jayshree Desai: Hey, Andy.

Speaker #6: Good morning.

Duke Austin: Morning.

Andrew Kaplowitz: I'll stick to 1 question maybe in 2 parts. Like you mentioned in your prepared remarks that much of the additions to backlog were new large load facility project awards, and I think it's fair to say that you're seeing much more of these types of awards. Do these awards tend to be over $1 billion relatively consistently? How much of that acceleration that you're seeing is simply that you've just been able to educate your customers that the Quanta can essentially do it all, as you told us? Would you expect large load orders to continue to ramp up from here?

Speaker #7: I'll stick to one question, maybe in a couple of parts. Like you mentioned your prepared marks that much of the additions to backlog were new large load facility project awards.

Speaker #7: And I think it's fair to say that you're seeing much more of these types of awards. So do these awards tend to be Duke, over a billion relatively consistently?

Speaker #7: And how much of that acceleration that you're seeing is simply that you've just been able to educate your customers that the quantum can essentially do it all as we've told us?

Speaker #7: And would you expect large load orders to continue to ramp up from here?

Speaker #3: Yeah, I'm not sure who said that about backlog. It wasn't me. But I would tell you there was a large it was largely across all segments, all disciplines.

Duke Austin: Yeah. I'm not sure who said that about backlog. It wasn't me. I would tell you it was largely across all segments, all disciplines. The backlog went up, including some 765. That was probably less than 25% of the increase, but it was broad-based. It was some large load center, you know, it was a P&D and, you know, across our segments. I would tell you, like it was normal course to me. There was no like something that stood out to say, Oh, this is a large project that drove that beat. I expect our backlog to continue to rise.

Speaker #3: The backlog went up, including some 765 that was probably less than 25% of the increase. But it was broad-based. It was some large load center, but, you know, it was a P&D and, you know, across our segments.

Speaker #3: So I would tell you like that's it was normal course to me. It was no there was no like something that stood out to say, oh, this is a large project.

Speaker #3: It drove that beat. I expect our backlog to continue to rise.

Kip Rupp: Our next question is from Steven Fisher from UBS. Please unmute your line and ask your question.

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

Speaker #5: Our next question is from Stephen Fisher from UBS. Please unmute your line and ask your question.

Speaker #8: Thanks, good morning. I know you guys have just only given 20 or 30 targets, but I wanted to look out maybe even a little bit longer term, because it seems like part of the narrative being reflected in the stock is this longer-term good visibility that you have.

Steven Fisher: Thanks. Good morning. I know you guys just only gave 2030 targets, I wanted to look out maybe even a little bit longer term because it seems like a part of the narrative being reflected in the stock is this longer term good visibility that you have. Duke, I mean, you've made some comments here and there about having some kind of programmatic discussion or opportunities beyond 2030. I was hoping you could perhaps elaborate a little bit on those opportunities. To what extent is this mainly transmission projects? Does it include other data center opportunities directly? Is it renewables? To what extent do you have any more formalized agreements that go out actually that far beyond 2030?

Speaker #8: So, Duke, I mean, you've made some comments here and there about having some kind of programmatic discussion or opportunities beyond 2030. So, I was hoping you could perhaps elaborate a little bit on those opportunities.

Speaker #8: To what extent is this mainly transmission projects? Does it include other data center opportunities directly? Is it renewables? And to what extent do you have any more formalized agreements that go out actually that far beyond 2030?

Speaker #3: I mean, we're looking at work beyond 2030 for sure. I do think you'll see an elongated cycle. You know, I don't think you're looking at something that's stopped in five years.

Duke Austin: I mean, we're looking at work beyond 2030 for sure. I do think you'll see an elongated cycle. You know, I don't think you're looking at something that's, you know, stops in 5 years. You're seeing decades of type. It took us, I don't know, 75, 100 years to build the grid that's there today. I don't think you can double the size of it overnight for sure, not in 5 years. It's gonna take a while to do that. You're seeing orders out on combined cycle engines into 2030, if I'm not mistaken. If you're just getting orders in 2030, it would tell you that the CCGT take 3 years to build once they hit the ground, and you're in 2033 at a minimum on the orders you get today.

Speaker #3: You're seeing decades of type it took us, I don't know, 75, 100 years to build a grid that's there today. I don't think you can double the size of it overnight for sure.

Speaker #3: Not in five years. So it's going to take a while to do that. You're seeing orders out on combined cycle engines into 2030. If I'm not mistaken.

Speaker #3: So if you're just getting orders in 2030, it would tell you that the CGTs take three years to build once they hit the ground.

Speaker #3: And you're in 2033 at a minimum on the orders you get today. So I think when you think through it, the transmission, the infrastructure, and what we see in front of us with robotics, the way the grid's used, the power, electrification, I just see more demand, more demand in generation and the electrification of the world.

Duke Austin: I think when you think through it, the transmission, the infrastructure and what we see in front of us with robotics, the way the grid's used, the power electrification, I just see more demand, more demand and generation and the electrification of the world. We see it for a decade plus.

Speaker #3: So I just we see it for a decade plus.

Speaker #5: Thank you. Our next question is from Julian Dumoulin-Smith from Jefferies. Please unmute your line and ask your question. To unmute your line on telephone, please press star six.

Kip Rupp: Thank you. Our next question is from Julien Dumoulin-Smith from Jefferies. Please unmute your line and ask your question. To unmute your line on telephone, please press star six.

Operator: Thank you. Our next question is from Julien Dumoulin-Smith from Jefferies. Please unmute your line and ask your question. To unmute your line on telephone, please press star six.

Speaker #3: Hi, good morning. It's Brian Russo. I'm for Julian.

Brian Russo: Hi, good morning. It's Brian Russo for Julian.

Speaker #5: Please go ahead.

Kip Rupp: Please go ahead.

Duke Austin: Please go ahead.

Brian Russo: Okay. Yeah, just to follow up on your relationship with NiSource. The utility recently announced the Alphabet GenCo expansion on top of the original Amazon program. Just curious if that creates incremental scope for Quanta. And more broadly, is the GenCo model generating additional, you know, pipeline opportunities, conversations beyond NiSource, particularly in that Midwest region? You had mentioned an opportunity of $5.7 billion related to NiSource. Just wondering what your thoughts are on expanding that market opportunity.

Speaker #3: Yeah, just to follow up on your relationship with Nice Source. The utility recently announced the Alphabet GenCo expansion on top of the original Amazon program.

Speaker #3: Just curious if that creates incremental scope for Quanta, and more broadly, is the GenCo model generating additional pipeline opportunities or conversations beyond NiSource, particularly in that Midwest region? You had mentioned an opportunity of about $5.7 billion related to NiSource.

Speaker #3: Just wondering what your thoughts are on expanding that market opportunity.

Speaker #8: Yeah, we continue to expand that opportunity in the Midwest. I think you're seeing more demand and we talked about that early on to be a program.

Duke Austin: Yeah, we continue to expand, you know, that opportunity in the Midwest. I think, you know, you're seeing more demand, and we talked about that early on to be a program, and I think we'll continue to evolve. None of the CGT, or even any of the generation for the most part that's been announced is not in our backlog. You know, we discussed air permits and things like that. As we get air permits and things, you know, as that progresses, you'll start to see that come into backlog, probably the later half of the year and beyond. We continue to have a good relationship and looking at that programmatic-spend that you're seeing and they're announcing. We're right in the middle of it.

Speaker #8: And I think we'll continue to evolve and none of the CGT or even any of the generation for the most part that's been announced is not in our backlog.

Speaker #8: We discussed air permits and things like that. Is that as we get air permits and things is that progresses, you'll start to see that come into backlog probably the later half of the year and beyond.

Speaker #8: But we continue to have a good relationship and looking at that programmatic spin that you're seeing in their announcement. So we're right in the middle of it.

Speaker #8: We're right there with the client on both sides of that. And I again, we talked about five, seven that's growing every day. So we like the area.

Duke Austin: We're right there with the client on both sides of that. Again, we talked about 5, 7, that's growing every day. We like the area, we like NiSource, and I think it'll continue to grow.

Speaker #8: We like Nice Source. And I think it'll continue to grow.

Speaker #3: Okay, great. And just one follow-up on the backlog. You mentioned 765 was, I think, less than 20% of the increase. How should we think about the relationship with the AEP and the cadence of those transmission projects stacking up in the future backlog over the next 18, 24 months?

Brian Russo: Okay, great. Just one follow-up on the backlog. You mentioned 765 was, I think, less than 20% of the increase. How should we think about the relationship with the AEP and the cadence of those transmission projects stacking up in the future backlog, you know, over the next 18, 24 months?

Speaker #8: They keep announcing a bigger capital spin and we keep supporting it. So I think you can look at our backlog and look at the way that the relationships are going with the utilities and expect us to incrementally grow our backlog along with the utilities.

Duke Austin: They keep announcing, you know, a bigger capital spend, and we keep supporting it. I think you can look at our backlog and look at the way that the relationships are going with utilities and expect us to incrementally grow our backlog along with the utilities. We have a great relationship with AEP. As they announce 765, we're right in the middle of it with them, both on equipment. You can see the investment that we made in the equipment in the quarterly. We purposefully put it in the script to show you that we're moving forward on significant dollars against that 765 build in the vertical supply chain.

Speaker #8: We have a great relationship with AEP. As they announce 765, we're right in the middle of it with them. Both on equipment as well as you can see the investment that we made in the equipment in the quarter we purposefully put it in the script to show you that we're moving forward on significant dollars against that 765 bill and the vertical supply chain.

Speaker #8: So we're right there together and we have a US-based supply chain that I think de-risk us and AEP and that has led to work and great opportunities together across the board on their system.

Duke Austin: We're right there together and, you know, we have a US-based supply chain that I think de-risk us and AEP, and that has led to work and great opportunities together across the board on their system. We're excited about it, and we're just getting started. It's very early, and I think you'll continue to see building a backlog. This is just a, you know, what I would consider the 765 we put in, it was really an MSA that is normal course. I'm excited about what we can do there, and we're just getting started.

Speaker #8: So we're excited about it and we're just getting started. It's very early and I think you'll continue to see it building a backlog and this is just a what I would consider the 765 we put in was really an MSA that is normal course.

Speaker #8: So I'm excited about what we can do there and then we're just getting started.

Speaker #5: Our next question is from Attimodac from Goldman Sachs. Please unmute your line and ask your question.

Kip Rupp: Our next question is from Atidrip Modak from Goldman Sachs. Please unmute your line and ask your question.

Operator: Our next question is from Atidrip Modak from Goldman Sachs. Please unmute your line and ask your question.

Speaker #3: Yeah, hey, Duke. I guess on the orders you mentioned orders duration for CCGTs can you help us understand if the gas generation opportunity is something you expect to actively lean into and grow as a core focus over the years?

Atidrip Modak: Yeah. Hey, Duke. I guess on the orders, you mentioned orders duration for CCGTs. Can you help us understand if the gas generation opportunity is something you expect to actively lean into and grow as a core focus over the years? Or should we think of that as more of an as opportunities come through, from the JV-type solution? I guess we're trying to understand what the scale of that opportunity could look like for you specifically.

Speaker #3: Or should we think of that as more of an opportunity has come through from the JV type solution? I guess we're trying to scale and understand what the scale of that opportunity could look like for you specifically.

Speaker #8: It depends on the risk. I think we're comfortable on the single cycles. We're comfortable on many things when it gets to a combined cycle.

Duke Austin: It depends on the risk. I think we're comfortable on the single cycles. We're comfortable on many things. When it gets to a combined cycle, you know, we'll be prudent about how we take risk on them. You've been around a long time, I've seen failure, and we're not planning on that. I believe as the market progresses, as we progress as a company in those type markets, you'll continue to see it grow. We're highly focused on it. It's something that we see as a great, adjustable market, that the inbound calls are daily, and I believe we can build them. We're gonna build them under contract structure that makes sense for us and the client and the rate payer. It just takes a bit.

Speaker #8: We'll be prudent about how we take risk on them. And I've been around a long time. I've seen failure. And we're not planning on that.

Speaker #8: So I believe as the market progresses, as we progress as a company in those type markets, you'll continue to see a growth. We're highly focused on it.

Speaker #8: It's something that we see as a great addressable market that the inbound calls are daily. And I believe we can build them. But we're going to build them under contract structure that makes sense for us and the client and the rate payer.

Speaker #8: So it just takes a bit that they're long cycle type work and it'll take us a while to get the contract on many of them.

Duke Austin: They're long cycle type work, and it'll take us a while to get the contract on many of them. It's something that you can't stick your toe in the water, you gotta jump in. We're gonna execute very, very well, and we're gonna make sure that we've de-risked ourselves against the market. It's something we're focused on.

Speaker #8: But it's something that you can't stick your toe in the water. You've got to jump in. And we're going to execute very, very well.

Speaker #8: And we're going to make sure that we de-risk ourselves against the market. So it's something we're focused on.

Speaker #9: Thanks, sir.

Atidrip Modak: Thank you, sir.

Speaker #5: Thank you. Our next question is from Sangita Jain from KeyBank. Please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Sangita Jain from KeyBank. Please unmute your line and ask your question.

Operator: Thank you. Our next question is from Sangita Jain from KeyBank. Please unmute your line and ask your question.

Sangita Jain: Good morning. Thank you. I have one for Jayshree. Jayshree, you left your free cash flow guidance unchanged. Just wondering why. I know your CapEx went up, but it only went up by, like, $50 million as a midpoint. Can you help us understand what you're thinking through?

Speaker #10: Good morning. Thank you. I have one for Jayshree. Jayshree, you left your free cash flow guidance unchanged—just wondering why. I know your CapEx went up, but it only went up by, like, $50 million at the midpoint.

Speaker #10: So can you help us understand what you're thinking through?

Speaker #11: Yeah, hi, Sangita. Not really nothing to read into that. We are we gave a good range when we guided in the fourth quarter about our free cash flow.

Jayshree Desai: Yeah. Hi, Sangita. Not really nothing to read into that. We gave a good range when we guided in Q4 about our free cash flow. And yes, while we were pleased with the performance in Q1, it's just early. We didn't feel the need, given the expectations where we are today, to change that with the $500 million range that we provided you guys in Q4. Having said that, yes, do I feel like we have greater confidence about being at the higher end of that cash flow range? Yeah, I do. As the year progresses, you can expect us to update you accordingly.

Speaker #11: And yes, while we were pleased with the performance in the first quarter, it's just early. We didn't really feel the need, given the expectations where we are today, to change that with the $500 million range.

Speaker #11: That we provided you guys in the fourth quarter. Having said that, yeah, it's a do I feel like we have greater confidence about being at the higher end of that cash flow range?

Speaker #11: Yeah, I do. So as the year progresses, you can expect us to update you accordingly.

Sangita Jain: Got it. Thank you.

Speaker #10: Got it. Thank you.

Speaker #5: Thank you. Our next question is from Brian Brophy from Stifel. Please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Brian Brophy from Stifel. Please unmute your line and ask your question.

Operator: Thank you. Our next question is from Brian Brophy from Stifel. Please unmute your line and ask your question.

Speaker #12: Yeah, thanks. Good morning. Congrats on the nice quarter. You talked about meaningfully growing your offsite construction capacity and your opening comments. Can you talk about what you're seeing there that is driving these investments?

Duke Austin: Yeah, thanks. Good morning. Congrats on the nice quarter. You talked about meaningfully growing your off-site construction capacity in your opening comments. Can you talk about what you are seeing there that is driving these investments? Did you guys see any meaningful awards in that business in particular this quarter? Remind us how significant of a business that is and just the margin profile there. Thanks. I mean, the announcements was supporting both our manufacturing capabilities. I mean, in the prepared remarks, which would be our transformer manufacturing, which is majority of the capital. We have increased our size, you know, substantially on our prefab and pre-manufactured type product that Cupertino was a first mover for multi-decades. We are supporting that. We are growing that business.

Brian Brophy: Yeah, thanks. Good morning. Congrats on the nice quarter. You talked about meaningfully growing your off-site construction capacity in your opening comments. Can you talk about what you are seeing there that is driving these investments? Did you guys see any meaningful awards in that business in particular this quarter? Remind us how significant of a business that is and just the margin profile there. Thanks.

Speaker #12: Did you guys see any meaningful awards in that business in particular this quarter? Remind us how significant of a business that is and just the margin profile there.

Speaker #12: Thanks.

Speaker #8: Yeah, I mean, the announcement was supporting both our manufacturing capabilities. I mean, what we—in the preparable marks, which would be our transformer manufacturing, which is the majority of the capital.

Duke Austin: I mean, the announcements was supporting both our manufacturing capabilities. I mean, in the prepared remarks, which would be our transformer manufacturing, which is majority of the capital. We have increased our size, you know, substantially on our prefab and pre-manufactured type product that Cupertino was a first mover for multi-decades. We are supporting that. We are growing that business.

Speaker #8: We have increased our size substantially on our prefab and pre-manufactured type product that Cooper's Cupertino was the first mover for multi-decades. So we're supporting that.

Speaker #8: We're growing that business. It's a labor force multiplier the way I see it. And it allows us to really expand and work with clients across the country as we see that market will continue to expand it.

Duke Austin: You know, it's a labor force multiplier, the way I see it, and it allows us to really expand and work with clients across the country. As we see that market, we'll continue to expand it. It's much more of a programmatic spend, and it's not something you're gonna see these large chunky projects. It just continues to be MSA type driven programmatic spend against the AI build both cloud-based and learning-based type products. I think when we look at it, we'll continue to expand that due to the fact that labor constraints and we can force multiply what we have, you know, the fungibility of our labor as well. We like that. We like the area. We're investing in it and, you know, the inbounds are daily.

Speaker #8: But it's much more of a programmatic spend, and it's not something where you're going to see these large, chunky projects. It just continues to be MSA-type driven, programmatic spend against the AI.

Speaker #8: Build both cloud-based and learning-based type products. So I think when we look at it, we'll continue to expand that due to the fact that labor constraints and we can force multiply what we have the fungibility of our labor as well.

Speaker #8: So we like that. But we like the area. We're investing in it. And the inbounds are daily.

Speaker #12: Appreciate it. Thank you.

Brian Brophy: Appreciate it. Thank you.

Speaker #5: Our next question comes from Steve Fleischman from Wolf Research. Please unmute your line and ask your question.

Kip Rupp: Our next question comes from Steve Fleishman from Wolfe Research. Please unmute your line and ask your question.

Operator: Our next question comes from Steve Fleishman from Wolfe Research. Please unmute your line and ask your question.

Speaker #13: Yeah, thank you. Can you hear me okay?

Steve Fleishman: Yeah, thank you. Can you hear me okay?

Speaker #11: Yeah, hey, Steve.

Duke Austin: Yeah. Hey, Steve.

Steve Fleishman: Hi, good morning. I guess two questions. First, just on the gas plant opportunities. I know you mentioned you're going to be careful on your risk controls on the combined cycle. Just how confident are you that you can get significant share while also being careful? You know, are you losing business to competitors that are not necessarily as risk-averse? Just any thoughts on that?

Speaker #13: Hi, good morning. So, I guess two questions. First, just on the gas plant opportunities—I know you mentioned you're going to be careful on your risk controls on the combined cycle.

Speaker #13: Just how confident are you that you can get significant share with while also being careful? Are you losing business to competitors that are not necessarily as risk-averse?

Speaker #13: Just any thoughts on that?

Speaker #8: I mean, it's a big market, Steve. So when we look at it, I think capacity it comes down to craft skilled labor, multi-trade, labor that we have.

Duke Austin: I mean, it's a big market, Steve Fleishman. When we look at it, I think capacity, it comes down to cross-skill labor, multi-trade labor that we have. You know, so we can either work for others or do it ourselves in many ways. We've built a nice programmatic, you know, spends in areas that I think will continue. We have others that are, you know, coming in. It was not something that the company was focused on five years ago. When the risk gets less and we're able to do it in a prudent way for the rate payer, and we're de-risking certain aspects of those things, you know, the single cycles don't bother us. The combined cycles do. As we get into that, we look at it from a risk profile and work with the client.

Speaker #8: And so we can either work for others or do it ourselves. In many ways, we've built a nice programmatic spends in areas that I think will continue.

Speaker #8: We have others that are coming in. It was not something that the company was focused on five years ago. And when the risk gets less and we're able to do it in a prudent way for the rate payer, and we're de-risking certain aspects of those things, the single cycles don't bother us.

Speaker #8: The combined cycles do. So as we get into that, we look at it from a risk profile and work with the client. And I think it's the right way to look at it.

Duke Austin: I think it's the right way to look at it. If you try to fix them, they get expensive, and the risk out 5 years from now is substantial when you start looking at it. I think we're defining those risks, working contingencies, making sure that everyone is looking at it right. For the most part, our sophisticated customers we work with realize it's the right way to look at total cost, and we're able to do that in a way that benefits everyone involved. We'll continue down that model, and it's worked very well. You know, we're not gonna win them all. It wasn't something that we expect to win them all. It's a great business for us that if it, we have not acquired against that.

Speaker #8: If you try to fix them, they get expensive. And the risk out five years from now is substantial when you start looking at it.

Speaker #8: So I think we're defining those risks, working contingencies, making sure that everyone is looking at it right. And for the most part, our sophisticated customers we work with realize it's the right way to look at total cost.

Speaker #8: And we're able to do that in a way that benefits everyone involved. So we'll continue down that model and it's worked very well. We're not going to win them all.

Speaker #8: It wasn't something that we expect to win them all. It's a great business for us that if it we have not acquired against that, we built this organically.

Duke Austin: We built this organically, and we'll size it to the market. You know, it's not something that I think Quanta will grow with or without it.

Speaker #8: And we'll size it to the market. It's not something that I think Quantum will grow with or without it.

Speaker #13: Right. And then just on utility interconnection issues, just I'm curious if you're doing things that would help accelerate that. Is there things that you can this three-mile island restart not being interconnected till 2031 potentially was kind of shocking.

Steve Fleishman: Right. Just on utility interconnection issues, I'm curious if you're doing things that would help accelerate that. Is there things that you can. You know, this Three Mile Island restart not being interconnected till 2031 potentially was kind of shocking. What are things that can be done and maybe your involvement to kind of accelerate, you know, people getting interconnected?

Speaker #13: Just what are things that can be done and maybe your involvement to kind of accelerate people getting interconnected?

Speaker #8: Yeah, I think look, the transformer manufacturing investment matters a ton when you start talking about 36 months on transformers, things like that. And then you have inbounds from Europe that are held up in the overseas and things of that nature.

Duke Austin: Yeah, I think, you know, look at the transformer manufacturing investment matters a ton when you start talking about 36 months on transformers, things like that. Then you have, you know, inbounds from Europe that are held up in the, you know, overseas and things of that nature. We've really de-risked the transformer piece of that. We've helped there. We can build large voltage, high voltage line faster than anyone in the world. I think we've set ourselves up nicely to, you know, bring jobs in faster. That said, you know, I think it's more about the impacts to the ratepayer and getting past that we need every incremental piece of capital spent for transmission benefits the ratepayer.

Speaker #8: We've really de-risked the transformer piece of that. So we've helped there we can build large voltage high-voltage line faster than anyone in the world.

Speaker #8: And I think we've set ourselves up nicely to bring jobs in faster. That said, I think it's more about the impacts to the rate payer and getting past that we need every incremental piece of capital spent for transmission benefits to rate payer.

Speaker #8: And that's what we have to do as an industry is make sure that we're telling the right story so we can move these faster permitting reform.

Duke Austin: That's what we have to do as an industry, is make sure that we're telling the right story so we can move these faster. Permitting reform will certainly help speed that up. The queues are complicated. We're in the middle of them all the time, and it's a moving target in many ways. We're constantly in the middle of trying to help expedite that through technology. We have a large planning group that works with utilities, but the target moves and we continue to, you know, try to bring it in in the field. That said, the more we're involved up front, the faster it goes as far as I'm concerned and benefits the ratepayer all the way through.

Speaker #8: We'll certainly help speed that up. But the queues are complicated. We're in the middle of them all the time, and it's a moving target in many ways.

Speaker #8: So we're constantly in the middle of trying to help expedite that through technology. We have a large planning group that works with utilities. But the target moves and we continue to try to bring it in in the field.

Speaker #8: So that said, the more we're involved upfront, the faster it goes as far as I'm concerned. And the benefits to rate payer all the way through.

Speaker #8: So we're all looking at permanent reform and ways to mitigate and get these things in the queue quicker. No doubt about it. And we're doing it, I think, in many, many areas.

Duke Austin: We're all looking at permanent reform and ways to mitigate and get these things in the queue quicker, no doubt about it. We're doing it, I think, in many, many areas.

Speaker #13: Thank you.

Steve Fleishman: Thank you.

Kip Rupp: Our next question comes from Alex Rygiel from Texas Capital. Please unmute your line and ask your question.

Operator: Our next question comes from Alex Rygiel from Texas Capital. Please unmute your line and ask your question.

Speaker #5: Our next question comes from Alex Reigel from Texas Capital. Please unmute your line and ask your question.

Speaker #14: Thank you and congratulations on a nice quarter. Government policies and regulations have a tendency of shifting market opportunities. Can you talk about the few that are most relevant to you today and how you're positioned to take advantage of or sort of reposition yourself for change?

Alex Rygiel: Thank you. Congratulations on a nice quarter. Government policies and regulations have a tendency of shifting market opportunities. Can you talk about the few that are most relevant to you today and how you're positioned to take advantage of or sort of reposition yourself for change?

Speaker #8: Yeah, Alex, I think when we think through generation, our renewable business, we haven't talked much about this morning. We had a nice quarter. We really did.

Duke Austin: Alex, I think when we think through generation, our renewable business, we haven't talked much about this morning. We had a nice quarter. We really did, I think we built backlog on it. While we don't say much about it becomes a dirty word at times. I really like the solar batteries and even the wind in areas. It makes a lot of sense. You've seen us position ourselves nicely in the CCGT and the gas generation. It's all forms of generation now for us, we're trying to be the solution that people are asking for with the fungibility of cross-skill labor across those markets. We can move across markets.

Speaker #8: And I think we built backlog on it. So while we don't say much about it, it becomes a dirty word. At times, I really like the solar batteries and even the wind in areas.

Speaker #8: It makes a lot of sense. And so but you've seen us position ourselves nicely. And then the CGTs and the gas generation. So it's all forms of generation now for us.

Speaker #8: And we're trying to be the solution that people are asking for with the fungibility of craft skilled labor across those markets. So we can move across markets.

Speaker #8: We see markets that no one sees. And we're able to take the labor, build on the front side of it, talk with technology, talk to our customer.

Duke Austin: We see markets that no one sees, we're able to take the labor, build on the front side of it, talk with technology, talk to our customer, and we listen. We're listening to 'em over this decade of making sure that we can move in the areas that we see provide the most benefit to our people and to the ratepayer and our stakeholders. We've done it, we continue to do it. That's one example. Telecom, you know, it's growing a bit. We see BEAD, we see the, you know, connecting data centers as well. We'll grow that business. I like our verticals right now and our supply chain as well. There's not much that we can't solve here.

Speaker #8: We listen. And we're listening to them over this decade, making sure that we can move in the areas that we see provide the most benefit to our people, to the rate payer, and our stakeholders.

Speaker #8: So we've done it. We continue to do it. That's one example. Telecom it's growing a bit. We see BEAD. We see that connecting data centers as well.

Speaker #8: So we'll grow that business. I like our verticals right now. And our supply chain as well. So there's not much that we can't solve here.

Speaker #8: We just have to continue to execute underneath and the shiny objects or the shiny objects. But our execution and the guys and men and women in the field are just as far as I'm concerned, the best in the world.

Duke Austin: We just have to continue to execute underneath and the shiny objects are the shiny objects, but our execution and the guys, the men and women in the field are just, you know, as far as I'm concerned, the best in the world.

Speaker #14: And then secondly, obviously, plenty of opportunities domestically. But international, obviously, is feeling the same kind of opportunities develop. At what point does Quanta get more aggressive in that international market?

Alex Rygiel: Then secondly, obviously plenty of opportunities domestically, but international obviously is feeling the same kind of opportunities develop. At what point does Quanta get more aggressive in the international market?

Duke Austin: You know, we kept our Australian assets and they've done a really nice job there. We can jump from Australia, if need be, to, you know, really Europe and across the world. I don't see that any timeframe in the near future, but it's certainly maybe for the next guy or lady. It's very difficult to go international, and we have plenty of growth that we see here for a period of time. We're certainly set up to do that if need be.

Speaker #8: We kept our Australian assets and they've done a really nice job there. And we can jump from Australia need be to really Europe and across the world.

Speaker #8: I don't see that any time frame. In the near future. But it certainly maybe for the next guy. Or lady. It's very difficult to go international.

Speaker #8: And we have plenty of growth that we see here for a period of time. But we're certainly set up to do that if need be.

Speaker #14: Thank you.

Alex Rygiel: Thank you.

Speaker #8: Sure.

Duke Austin: Sure.

Speaker #5: Thank you. Our next question is from Manish Samaya from Cantor Fitzgerald. Please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Manish Sawhney from Cantor Fitzgerald. Please unmute your line and ask your question.

Operator: Thank you. Our next question is from Manish Sawhney from Cantor Fitzgerald. Please unmute your line and ask your question.

Manish Sawhney: Thank you so much for taking my question. Duke, two questions. One, the demand picture looks fairly robust across the board. Have you seen any signs of potential weakness in any of the markets geographically or end markets by sector? Have any of the constraints changed? I know in the past we have talked about craft labor, supervision, all that stuff being a challenge. That's question one. Then, as part of that, if you can just touch on the M&A pipeline, what opportunities are you seeing geographically and by business? And where would you wanna do something if a right opportunity arose? Thank you.

Speaker #15: Thank you so much for taking my question. Duke, two questions. One, the demand picture looks fairly robust across the board. But have you seen any signs of potential weakness in any of the markets geographically or end markets by sector?

Manish Somaiya: Thank you so much for taking my question. Duke, two questions. One, the demand picture looks fairly robust across the board. Have you seen any signs of potential weakness in any of the markets geographically or end markets by sector? Have any of the constraints changed? I know in the past we have talked about craft labor, supervision, all that stuff being a challenge. That's question one. Then, as part of that, if you can just touch on the M&A pipeline, what opportunities are you seeing geographically and by business? And where would you wanna do something if a right opportunity arose? Thank you.

Speaker #15: And have any of the constraints changed? I know in the past we have talked about craft labor, supervision, all that stuff being a challenge.

Speaker #15: So that's a question one. And then as part of that, if you can just touch on the M&A pipeline, what opportunities are you seeing geographically and by business?

Speaker #15: And where would you want to do something? If a right opportunity arose. Thank you.

Speaker #8: Yeah, I'll go backwards. So M&A, we see plenty of opportunity there. There's great businesses, 100-year-old companies that have long-standing what I would consider execution.

Duke Austin: I'll go backwards. M&A, we see plenty of opportunity there. There's great businesses, hundred-year-old companies that have long-standing, you know, what I would consider execution across many, many markets. Our ability to execute on M&A. You've seen it over the last decade. You'll continue to see it going forward. The inbounds are strong. You know, people believe in what we're doing, people believe in our strategies, and they wanna sell their businesses here. We're happy to have them and happy that they wanna be here. You'll continue to see that. I think you're starting to see the strategies come together here and the things that we invest in. There's not one market. We have some holes in the business in certain regions.

Speaker #8: Across many, many markets. And our ability to execute on M&A has you've seen it over the last decade. You'll continue to see it going forward.

Speaker #8: The inbounds are strong. People believe in what we're doing. People believe in our strategies. And they want to sell their businesses here. We're happy to have them.

Speaker #8: And happy that they want to be here. So you'll continue to see that. I think you're starting to see the strategies come together here and the things that we invest in.

Speaker #8: There's not one market. We have some holes in the business in certain regions. We have the holes in the business in certain from my standpoint, certain verticals.

Duke Austin: We have the holes in the business in certain, from my, from my standpoint, certain verticals, so we invest in them. The great businesses are there. We're not doing this for a labor strategy. We're building labor nicely underneath. We added, you know, relatively 5,000 to 6,000 organically last year, and we'll do that again this year plus. I've said this before, you know, labor builds labor. A journeyman makes a journeyman. Money doesn't do that. The more journeymen you have, the more you can scale. We realize that, and we invest in it constantly and have for over a decade. Well over a decade. You know, M&A is not a labor strategy for us.

Speaker #8: So we invest in them. But the great businesses are there. We're not doing this for a labor strategy. We're building labor nicely underneath. We added relatively five to six thousand organically last year.

Speaker #8: And we'll do that again this year plus. So I've said this before. Labor builds labor. A journeyman makes a journeyman. Money doesn't do that.

Speaker #8: The more journeyman you have, the more you can scale. And we realize that. And we invest in it constantly and have for over a decade.

Speaker #8: Well, over a decade. So it's not—M&A is not a labor strategy for us, so that's out. And then the rest of us, we've given, I think, good guidance on what we think for our strategy.

Duke Austin: That's out, and the rest of it's just, you know, we've given, I think, good guidance on what we think for a strategy, and we'll invest against it. And also when you think about, you talked about labor a bit as well, and the fabrication facilities, the things that we're doing there, pre-manufacturing on both on both sides of that, whether it be DSI, multi-trades, we're using that investment with technology to really expedite what we can do in the field and take risk out of it. I mean, you're starting to see the seasonality of the business even change a bit. I can't tell you that that's what that looks like yet because I haven't got my head around it. The Q1, you know, it doesn't fall off as much.

Speaker #8: And we'll invest against it. And also when you think about we talked about labor a bit as well. And the fabrication facilities, the things that we're doing there, pre-manufacturing on both sides of that, whether it be DSI, multi-trades, we're using that investment with technology to really expedite what we can do in the field and take risk out of it.

Speaker #8: I mean, you're starting to see the seasonality of the business even change a bit. I can't tell you that that's what that looks like yet because I haven't got my head around it.

Speaker #8: But the first quarter it doesn't fall off as much. And we had some Northern climbs that were tough. And you've seen us operate through those markets this quarter.

Duke Austin: We had some northern climbs that were tough, and you've seen us operate through those markets this quarter. I think you're gonna build a business that is resilient across four quarters and predictable. I like what we're doing there. The end markets continue to, you know. I've not seen holes in them. There will be stops and starts when we get this big, and we start adding this much backlog and the business grows. We're not gonna add the same amount of backlog every quarter. Those things are, you know, it just moves around. Consistently on a CAGR basis, I expect our backlog to continue to rise for, you know, as far as I can see it over time.

Speaker #8: And I think you're going to build the business that is resilient across four quarters. And predictable. So I like what we're doing there. And the end markets continue to I've not seen holes in them.

Speaker #8: There will be stops and starts when we get this big and we start adding this much backlog. And the business grows. We're not going to add the same amount of backlog every quarter.

Speaker #8: Those things are it just moves around. But consistently on a Keger basis, I expect our backlog to continue to rise for as far as I can see it over time.

Speaker #8: Now, it might not be quarter over quarter. But it'll certainly be year over year at this point. And we like what we see out there.

Duke Austin: Now, it might not be quarter over quarter, but it'll certainly be year over year at this point. We like what we see out there, and I'm not seeing holes in the markets that we serve.

Speaker #8: And I'm not seeing holes in the markets that we serve.

Speaker #15: Thank you.

Manish Sawhney: Thank you.

Manish Somaiya: Thank you.

Kip Rupp: Our next question comes from Philip Shen from Roth Capital Partners. Please unmute your line and ask your question.

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

Speaker #5: Our next question comes from Philip Shen from Roth Capital Partners. Please unmute your line and ask your question.

Speaker #16: Hey, guys. Thanks for taking my questions. You took your technology and load center outlook up substantially increased from 70% to 110% of revenue growth.

Duke Austin: Hey, guys. Thanks for taking my questions. You took your technology and load center outlook up substantially, increased from 70% to 110% of revenue growth. We heard, you know, a lot of the hyperscalers increase CapEx for the year last night. What do you see for the coming quarters for this end market? Can you give some additional color on your conversations with the hyperscalers?

Philip Shen: Hey, guys. Thanks for taking my questions. You took your technology and load center outlook up substantially, increased from 70% to 110% of revenue growth. We heard, you know, a lot of the hyperscalers increase CapEx for the year last night. What do you see for the coming quarters for this end market? Can you give some additional color on your conversations with the hyperscalers?

Speaker #16: So, we heard a lot of the hyperscalers increase CapEx for the year last night. What do you see for the coming quarters for this end market?

Speaker #16: Can you give some additional color on your conversations with the hyperscalers? And is there a potential that the segment could grow even faster than what you've laid out?

Philip Shen: Is there a potential that the segment could grow even faster than what you've laid out?

Speaker #8: Yeah. Just to comment on the slide that you're discussing, that's directional. And if it was up to me, I wouldn't have that slide. But I'll defer to the team on it.

Duke Austin: Yeah. Just to comment on the slide that you're discussing, that's directional. If it was up to me, I wouldn't have that slide, but I'll defer to the team on it, but it is directional. You're right, it is growing fast, and it is a, you know, fast-paced market. We made acquisitions against it, you can expect that to grow faster than things that we haven't made acquisitions. It's a great market. It, we talked about the technology being a, you know, trillion-plus TAM, and you can see what the capital being spent from all the larger hyperscalers out there. Yes, I mean, it's going to grow faster, and we continue to lean into it. The opportunities are daily, and we'll take advantage of those opportunities when they come in.

Speaker #8: But it is directional. So you're right. It is growing fast. And it is a fast-paced market. We made acquisitions against it. So you can expect that to grow faster than things that we haven't made acquisitions.

Speaker #8: It's a great market. We've talked about the technology being a trillion-plus TAM. And you can see what the capital is being spent from all the larger hyperscalers out there.

Speaker #8: So yes, I mean, it's going to grow faster and we continue to lean into it. The opportunities are daily. And we'll take advantage of those opportunities when they come in.

Duke Austin: From balance of plant data centers to pieces thereof. I just think we're doing a nice job there. We talked about it. We had a strategy. We're executing against it. You know, we did. We are looking at 100+% growth in it, due to acquisitions, due to strategy, due to a lot of things, but organically as well, it's growing nicely, we'll continue to see it grow. We're early. I mean, we've only been doing this, like, a year and a half. I mean, you can see, like, how big the business is already. If you do the math, it's a huge business, and it'll continue to grow. I think people are coming in here daily because we can execute. We can execute, we're certain, we can do it fast.

Speaker #8: From balance of plant data centers to pieces thereof, I just think we're doing a nice job there. We talked about it. We had a strategy.

Speaker #8: We're executing against it, and we did. We are looking at 100-plus percent growth in it, due to acquisition, due to strategy, due to a lot of things.

Speaker #8: But organically as well, it's growing nicely. And we'll continue to see it grow. We're early—I think we've only been doing this, like, a year and a half.

Speaker #8: I mean, you can see how big the businesses are already. If you do the math, it's a huge business. And it'll continue to grow.

Speaker #8: I think people are coming here daily because we can execute. We can execute. And we're certain. And we can do it fast. And we have the craft on the backside.

Duke Austin: We have the craft on the backside. We're not building homes. We're certainly something that we can do and do well. We're excited about it.

Speaker #8: We're not building homes. So we're certainly something that we can do and do well. We're excited about it.

Speaker #16: Great. Thanks, Duke. Second one here. Maybe this is more for Jayshree. Can you give some color on why the 26 EPS guide percentage increase was less than the Q1 EPS beat?

Philip Shen: Great. Thanks, Duke. Second one here. Maybe this is more for Jayshree. Can you give some color on why the 2026 EPS guide percentage increase was less than the Q1 EPS beat? How much of the Q1 earnings beat was a pull forward, potentially? You know, you guys beat by 30% on the adjusted EPS line on Q1 or in Q1, but the EPS guidance was only raised by 7% in 2026. Were there some one-timers? Thanks, guys.

Speaker #16: How much of the Q1 earnings beat was a pull-forward, potentially? You guys beat by 30% on the adjusted EPS line in Q1.

Speaker #16: But by 7% in 2026. Were there some one-timers? Thanks, guys.

Speaker #17: Yeah. I'm not following that not following that math, Bill. I'll admit. We had a nice we raised our EPS. We took forward our beat in the first quarter.

Jayshree Desai: I'm not following that, not following that math, Bill, I'll admit. We raised our EPS. We took forward our beat in Q1, and we also raised our guide in H2, and that's reflected in our adjusted EPS. We had a little bit of a, most of that was EBITDA strength for the year, as well as a little bit of a tax beat that we carried forward. The beat should be reflective of both Q1 as well as our views of H2.

Speaker #17: And we also raised our guide in the back half. And that's reflected in our adjusted EPS. We had a little bit of a most of that was EBITDA strength.

Speaker #17: For the year, as well as a little bit of a tax beat that we carried forward. But the beat should be reflective of both the first quarter as well as our views of the back half of the year.

Speaker #8: Yeah, I would also say we took a certain approach to it, Bill. I mean, I think when we looked at it, we certainly were prudent about it.

Duke Austin: Yeah. Look, I would also say we took a prudent approach to it, Bill. I mean, I think when we looked at it, we certainly were prudent about it. It's not normal for us to move the backside unless we're, you know, feel fairly confident about it. The way I did the math, we raised it $50 million past the beat, maybe my math's wrong. Anyways, I gotta pass CEO math.

Speaker #8: It's not normal for us to move the backside unless we're fairly confident about it. And the way I did the math, we raised it 50 million past the beat.

Speaker #8: But maybe my math's wrong. But anyways, I get a pass, CEO math.

Speaker #17: That's right. Anyway, I think we're good.

Jayshree Desai: That's right. Anyway, I think we're good.

Speaker #16: Thanks, guys.

Philip Shen: Thanks, guys.

Speaker #5: Thank you. As a reminder, if you could please ask one question at a time. And then requeue for any extra questions. Our next question is from Jamie Cook from Truist.

Kip Rupp: Thank you. As a reminder, if you could please ask one question at a time and then re-queue for any extra questions. Our next question is from Jamie Cook from Truist. Please unmute your line and ask your question.

Operator: Thank you. As a reminder, if you could please ask one question at a time and then re-queue for any extra questions. Our next question is from Jamie Cook from Truist. Please unmute your line and ask your question.

Speaker #5: Please unmute your line and ask your question.

Speaker #18: Can you hear me? Congrats on a nice quarter. I guess Duke a lot of the questions to you are more sort of on the acquisition front, which you guys have been very successful about.

Jamie Cook: Can you hear me? Congrats on a nice quarter. I guess, Duke, a lot of the questions here are more sort of on the acquisition front, which you guys have been very successful about. I guess, you know, my question is more on potential for portfolio optimization on the divestiture side. You and I have talked about businesses that perhaps or I've asked you about businesses perhaps that detract from growth margins or returns. As we become more of this, you know, broader power play, I'm just wondering if there's parts of the portfolio that aren't meeting financial metrics, you know, where there's an opportunity there, I guess, to, you know, enhance the growth in margins or returns as these other businesses are just lower margin in return.

Speaker #18: I guess my question is more on potential for portfolio optimization on the divestor side. You and I have talked about businesses that perhaps or I've asked you about businesses perhaps that detract from growth margins or returns.

Speaker #18: And as we've become more of this broader power play, I'm just wondering if there's parts of the portfolio that aren't meeting financial metrics where there's an opportunity there, I guess, to enhance the growth or margins or returns as these other businesses are just lower margin and return.

Speaker #18: And I guess just my second question a lot of the acquisitions you've done have been more small mom-and-pop companies that you've known for years.

Jamie Cook: I guess just my second question, you know, a lot of the acquisitions you've done have been more small mom and pop companies that you've known for years. To what degree do you see something more perhaps transformational happening in the space or the need for that to happen, just given, you know, how fast the market is growing and the ability to just do something quicker to, you know, be able to meet customer demand that's out there? Thank you.

Speaker #18: To what degree do you see something more perhaps transformational happening in the space or the need for that to happen just given how fast the market is growing and the ability to just do something quicker to be able to meet customer demand that's out there?

Speaker #18: Thank

Speaker #8: Thanks, Jamie. We look at the portfolio against the strategy constantly. And I do think we always try to optimize it, whether it's not in best capital and it's staying in it for the long haul.

Duke Austin: Thanks, Jamie. We look at the portfolio against the strategy constantly. I do think, you know, we always try to optimize it, whether it's not invest capital in it, stay in it for the long haul. We're always looking to optimize our portfolio. If we can get the right returns on things, if it's the right timing, we have no issues divesting. That said, we're able to use craft in many ways across segments, across business lines that I think we've done a nice job with, where it may look like a pipeline business, but it's not. We can do other things there that we have and optimize it all for purpose. That said, we will continue to look at those things. I think as we look at.

Speaker #8: So we're always looking to optimize our portfolio. And if we can get the right returns on things, if it's the right timing, we have no issues divesting.

Speaker #8: That said, we're able to use craft in many ways across segments, across business lines that I think we've done a nice job with where it may look like a pipeline business, but it's not.

Speaker #8: And so we can do other things there that we have and optimize it all for purpose. That said, we'll continue to look at those things.

Speaker #8: I think as we look at the small mom-and-pops are now a billion dollars. So they went from 100 million to a billion. In many ways.

Duke Austin: You know, the small mom and pops are now $1 billion, so they went from $100 million to $1 billion in many ways. There, there's no longer a small mom and pop per se. They're all large businesses now that have grown in markets that we like, especially the good ones. We're able to really lean into those, and it's the same relationships that we've had for decades that are now, you know, 3 $500 million dollar businesses. I think we transformed this business 5 years ago, per se, when we started leaning into the front side of the business, when we started leaning into technology, leaning into other markets. The transformation's been done.

Speaker #8: So there's no longer a small mom-and-pop per se. They're all large businesses now that have grown in markets that we like, especially the good ones.

Speaker #8: So we're able to really lean into those and it's the same relationships that we've had for decades that are now three, five hundred million dollar businesses.

Speaker #8: And I don't see us—I think we transformed this business five years ago, per se, when we started leaning into the front side of the business, when we started leaning into technology, leaning into other markets.

Speaker #8: So the transformation's been done. Now it's all additive. And I think we talk about it a lot around here, that flywheel's moving fairly rapidly at a breakneck pace.

Duke Austin: It's all additive, and I think, you know, we talk about it a lot around here that flywheel is moving fairly rapidly at a breakneck pace. As we see that, we're growing organically nicely, and we're growing double digit plus there as well as we're able to see acquisitions that are growing, you know, faster than that. Our acquisitions are coming in and growing much faster than the whole, and they're not little. I think there's no, you know, we don't see any reason why we can't either buy our stock back or pay a dividend. More importantly, you'll continue to see us make acquisitions against the strategy is probably the primary use of capital going forward.

Speaker #8: So, as we see, we're growing organically nicely, and we're growing double-digit plus there, as well as we're able to see acquisitions that are growing faster than that.

Speaker #8: So our acquisitions are coming in and growing much faster than the whole and they're not little. So I think there's no we don't see any reason why we can't either buy our stock back or pay a dividend, but more importantly, you'll continue to see us make acquisitions against the strategy is probably the primary use of capital going forward.

Speaker #18: Thank you.

Jamie Cook: Thank you.

Speaker #5: Our next question is from Justin Hawk from Baird. Please unmute your line and ask your question.

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

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

Speaker #19: Great. So I've got kind of a two-part question in one. But really, it's just about Duke made the point in the seasonality is almost changing in your business.

Justin Hauke: Great. I've got kind of a two-part question in one, really it's just about, you know, Duke made the point how, you know, the seasonality is almost changing in your business. If you look at the revenue this quarter, it was up sequentially, which, you know, essentially almost never happens for you because, you know, weather-wise, there's just not as much productivity in the winter. I guess the two parts of the question are, you know, one, what markets or what specifically came in, you know, so much stronger than kind of the way that you had expected the quarter to come out? The second part of the question would be the book to bill 1.6 times this quarter was also very strong.

Speaker #19: And if you look at the revenue this quarter, it was up sequentially, which essentially almost never happens for you because weather-wise, there's just not as much productivity in the winter.

Speaker #19: So I guess the two parts of the question are one, what markets or what specifically came in so much stronger than kind of the way that you'd expected the quarter to come out?

Speaker #19: And then the second part of the question would be the book-to-bill 1.6 times this quarter was also very strong. Usually, you guys will call out something like a big award or anything else.

Justin Hauke: Usually, you know, you guys will call out something like a big award or anything else, but there wasn't anything in there. Was there anything lumpy in the bookings this quarter or just kind of broad-based? Thank you.

Speaker #19: But there wasn't anything in there. So, was there anything lumpy in the bookings this quarter, or was it just kind of broad-based? Thank you.

Speaker #8: No, it was a broad-based backlog. But I discussed the 765 as a first meaningful 765 that came in. It was less than 25% of the beat.

Duke Austin: No, it was a broad-based backlog, I, you know, I discussed the 765, the first, like, meaningful 765 that came in, less than 25% of the beat. You know, call it less than USD 1 billion in there. That was the biggest. It was an MSA type over a multi-year period that can grow and expand, not with the client that we've discussed. I think, that said, that's the thing that was in there. Across the board, really, I think there's opportunities to continue that, you know, over time on a CAGR basis for sure. The CGT business is growing nicely. We're highly focused on it, we have nothing in there on that, which I think you guys are seeing the opportunities out there.

Speaker #8: So call it less than a billion. And but that was the biggest it was an MSA type over a multi-year period that can grow and expand.

Speaker #8: Not with a client that we've discussed. So I think that said, that's the thing that was in there. But across the board, really, and I think there's opportunities to continue that.

Speaker #8: Over time, on a CAGR basis, for sure. The CGT business is growing nicely. We're highly focused on it. And we have nothing in there on that, which I think you guys are seeing the opportunities out there.

Speaker #8: It's something that could be substantial. And they are chunky. We talked about things stacking. I think it's going to stack. You're going to start to see it show up in the revenue, show up in the profitability of the company over time.

Duke Austin: It's something that could be substantial, and they are chunky. We talked about things stacking. I think it's gonna stack. You're gonna start to see it, you know, show up in the revenue, show up in the profitability of the company over time. You know, we look back and we're at 30% EPS growth with no acquisitions in the quarter. I think we've done a nice job to set ourselves up. You'll see the company stack in H2 and beyond.

Speaker #8: And we look back and we're at 30% EPS growth. With no acquisitions in the quarter, I think we've done a nice job to set ourselves up.

Speaker #8: And you'll see the company stack. And the back half and beyond.

Speaker #5: Thank you. Our next question is from Adam Thalamer from Thompson Davis. Please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Adam Thalhimer from Thompson Davis & Co. Please unmute your line and ask your question.

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

Speaker #20: Hey, good morning, guys. Great quarter. Congrats. Two questions, I guess. First, on the revenue beat at electrical was so substantial, just curious what drove that.

Adam Thalhimer: Hey, good morning, guys. Great quarter. Congrats. 2 questions, I guess. First, on the revenue beat at electrical was so substantial. Just curious what drove that. I'm curious on the Iran war, how your customers are responding to that and higher commodity prices.

Speaker #20: And then I'm curious on the Iran war, how your customers are responding to that and higher commodity prices.

Speaker #8: Yeah. I mean, I'm not seeing obviously, diesel's up a little bit, but I think when we look at that, it's just such a little piece of our spin.

Duke Austin: Yeah, I mean, I'm not seeing, you know, obviously diesel's up a little bit, but it, you know, I think when we look at that, it's just such a little piece of our spend. Our guidance contemplates anything like that. We don't rein diesel. Everything's contemplated in our guide, not concerned with that. I, like any other American, I'm worried about the troops, worried about them getting home, and we appreciate what they do over there and keep us free. We're able to do the things that we're doing today and, God bless them and our country. That said, that's all I'm hearing is that how do we help the troops? How do we make sure they get home safe? We have jobs for them when they get here.

Speaker #8: Our guidance contemplates anything like that. And we don't rein diesel everything's contemplated in our guide. So not concerned with that. Look, like any other American I'm worried about the troops, worried about them getting home.

Speaker #8: And we appreciate what they do over there and keep us free. We're able to do the things that we're doing today. And God bless them.

Speaker #8: And our country. But that said, that's all I'm hearing is, how do we help the troops? How do we make sure they get home safe?

Speaker #8: And we have jobs for them when they get here. So that's what we're doing on our part. I'm not hearing anything obviously, there's certain areas that you're hearing, but nothing that would affect us or what we're doing, our supply chain looks good.

Duke Austin: That's what we're doing on our part. I'm not hearing anything. You know, obviously there's certain areas that you're hearing, but nothing that would affect us or what we're doing. Our supply chain looks good. There's a little stuff running around, but we're able to execute around those things, and I'm not seeing anything that would impact our customer or ourselves at this point as we see it. I mean, I look, natural gas, LNG exports, I think it's a form of national security. You're gonna continue to see LNG. You know, that energy is national security, and we're gonna build it. We're gonna drill here. We're gonna drill for gas. We're gonna do a lot of different things here while we have renewables and other things as well.

Speaker #8: There's a little stuff running around, but we're able to execute around those things. And I'm not seeing anything that would impact our customer or ourselves at this point.

Speaker #8: As we see it, I mean, look, natural gas, LNG exports, I think it's a form of national security. You're going to continue to see LNG.

Speaker #8: That energy is national security. And we're going to build it. We're going to drill here. We're going to drill for gas. We're going to do a lot of different things.

Speaker #8: Here, while we have renewables and other things as well. So I think the national security aspect of what we do for energy matters and it's showing up more so than ever, which is good for our business on both sides, the natural gas business, pipeline business is great.

Duke Austin: I think the national security aspect of what we do for energy matters, and it's showing up more so than ever, which is good for our business on both sides. The natural gas business, pipeline business is great. We're excited about it all, and I'm not seeing it impact the customer.

Speaker #8: So we're excited about it all. And I'm not seeing an impact to customers.

Speaker #5: Thank you. Our next question is from Mahit Mandaloy from Mizuho. Please unmute your line and ask your question. Mahit, please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Maheep Mandloi from Mizuho. Please unmute your line and ask your question. Maheep, please unmute your line and ask your question. We'll take our next question from Michael Dudas from Vertical Research Partners. Please unmute your line and ask your question. Michael Dudas from Vertical Research Partners, please unmute your line and ask your question.

Operator: Thank you. Our next question is from Maheep Mandloi from Mizuho. Please unmute your line and ask your question. Maheep, please unmute your line and ask your question. We'll take our next question from Michael Dudas from Vertical Research Partners. Please unmute your line and ask your question. Michael Dudas from Vertical Research Partners, please unmute your line and ask your question.

Speaker #5: We'll take our next question from Michael Dudas from Vertical Research Partners. Please unmute your line and ask your question. Michael Dudas from Vertical Research Partners, please unmute your line and ask your question.

Speaker #21: Thank you. Can you hear me now?

Michael Dudas: Thank you. Can you hear me now?

Speaker #22: Yes.

Kip Rupp: Yes. Please go ahead.

Operator: Yes. Please go ahead.

Speaker #5: Please go ahead.

Speaker #21: Oh, thank you. Yes. Hi, Jayshree and Duke. Duke said in the past when asked about all the market activity and excitement and all the development and such, that even if a small percentage of that came through the business, it would be great.

Michael Dudas: Thank you. Yes. Hi, Kip, Petrie, and Duke. Duke, you said in the past when asked about all the market activity and excitement and all the development and such, that even if a small percentage of that came through, business would be great. Just want to get your sense, given the visibility and what you guys are seeing in across the board. Are some of the orders and development and the discussions more real now than they would have been 6 or 12 months ago? Even in the light of just the extraordinary capital expenditure numbers that the hyperscales are putting out.

Speaker #21: Just want to get your sense, given the visibility and what you guys are seeing across the board, are some of the orders and development and the discussions more real now than they would have been six or twelve months ago and even in the light of just the extraordinary capital expenditure numbers that the hyperscales are putting out?

Speaker #8: Yeah, I mean, I think you're seeing our utility customers, pharma, what they believe is real large load requests. As that firms up, I've seen it actually pretty steady.

Duke Austin: Yeah, I mean, I think you're seeing our utility customers firm up, you know, what they believe is real large load requests. As that firms up, I've seen it actually pretty steady. I'm not seeing, you know, the fall off that others may think that's out there. That it's very real, the load that we see. You know, I think we've got to watch the ratepayer. We've got to make sure that the load that's coming on is beneficial to the ratepayer. We're seeing that show up in rates. We're seeing, you know, decreases in rates due to load and infrastructure. As we see that investment on the northeast and all across the country, it should drive rates down. We've gotta talk about it, those impacts. I think the load's real.

Speaker #8: I'm not seeing the falloff that others may think that's out there that's very real, the load that we see. I think we've got to watch the rate payer.

Speaker #8: We've got to make sure that the load that's coming on is beneficial to the rate payer. We're seeing that show up in rates. We're seeing decreases in rates due to load and infrastructure.

Speaker #8: And so as we see that investment on the Northeast and all across the country, it should drive rates down. We've got to talk about it.

Speaker #8: Those impacts. But I think the load's real. I mean, obviously, there's some outliers here or there, but there's growth underneath those. And it's not just data centers.

Duke Austin: I mean, I, you know, obviously there's some outliers here or there, but there's growth underneath those. It's not just data centers. I mean, you're seeing onshoring of chips. You're seeing onshoring of robotics. You know, you can see what Elon's doing with robotics. That's driving load and all the things that support that. We just see a big market that is not just AI. You know, the fungibility of our craft, both sides of it, both segments, our ability, mechanical as well as electric, to move that craft across vertical markets, I think is, from my standpoint, that's what we continue to drive home, that compounding of that portfolio over time. That's what is allowing us to do it, is all those markets that we see.

Speaker #8: I mean, you're seeing onshoring of chips. You're seeing onshoring of robotics. You can see what Elon's doing with robotics, so that's driving load, and all the things that support that.

Speaker #8: And we just see a big market that is not just AI. The fungibility of our craft, both sides of it—both segments—our ability, mechanical as well as electric, to move that craft across vertical markets, I think is, from my standpoint, that's what we continue to drive home: that compounding of that portfolio over time.

Speaker #8: And that's what's allowing us to do it, is all those markets that we see.

Speaker #21: Thank you.

Michael Dudas: Thank you.

Speaker #5: Our next question is from Mahit Mandaloy from Mizuho. Please ask your unmute your line.

Kip Rupp: Our next question is from Maheep Mandloi from Mizuho. Please unmute your line.

Operator: Our next question is from Maheep Mandloi from Mizuho. Please unmute your line.

Speaker #8: Hey, sorry about that earlier. Thanks for the question. Sorry if I messed this earlier, but could you talk about the if M&A is part of the 2026 guidance here?

Maheep Mandloi: Hey, sorry about that earlier. Thanks for the question. Sorry if I missed this earlier, but, could you talk about like the, if M&A is part of the 2026 guidance here? I know you're doing acquisitions in Q1, but, any thoughts on how the acquisitions could shape up the guidance for the rest of the year? Thanks.

Speaker #8: I know you didn't do an acquisition in Q1, but any thoughts on how the acquisitions could shape up the guidance for the rest of the year?

Speaker #8: Thanks. Any acquisitions we do on a go-forward base would be additive to the guidance that we get. And I expect us to do acquisitions over the next nine months.

Duke Austin: Any acquisitions we do on a go-forward base will be additive to the guidance that we give. I expect us to do acquisitions over the next 9 months, so you can expect that to be in there. We're not contemplating any of that in what you see today. It's exactly what the business looks like today. We made no acquisitions in Q1, and that's what the guidance is. It's, you know, the growth on it is 30%, and it's based upon all the things that we did last year, as well as setting the company up for the future. That's what's in there today. I do expect us to do some M&A over the next 9 months, probably over the next 2 or 3 years.

Speaker #8: So you can expect that to be in there. But we're not contemplating any of that. And what you see today is exactly what the business looks like today.

Speaker #8: We made new acquisitions in the first quarter. And that's what the guidance is. It's the growth on it is 30%. And it's based upon all the things that we did last year, as well as setting the company up for the future.

Speaker #8: So that's what's in there today. I do expect us to do some M&A over the next nine months. Probably over the next two or three years.

Speaker #8: I mean, we continue to see the imbalance that are robust and a way to deploy free cash. So I'm not seeing a slowdown on that.

Duke Austin: I mean, we continue to see the inbounds that are robust and a, and a way to deploy free cash. I'm not seeing a slowdown on that. There'll be quarters and there could be years we don't do an acquisition. We're not. The company can grow nicely without them. When we do see them, it's extremely additive to our approach and the way we look at our portfolio and all the opportunities that we see.

Speaker #8: There'll be orders, and there could be a year as we don't do an acquisition where we're not. The company can grow nicely without them.

Speaker #8: When we do see them, it's extremely additive to our approach and the way we look at our portfolio and all the opportunities that we see.

Speaker #5: Thank you. Our next question is from Liam Burke from B. Riley Securities. Please unmute your line and ask your question.

Kip Rupp: Thank you. Our next question is from Liam Burke from B. Riley Securities. Please unmute your line and ask your question.

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

Speaker #23: Yes. Thank you. Duke, you mentioned in your prepared comments that many projects now are being negotiated. Is this an increasing trend in the business?

Liam Burke: Yes, thank you. Duke, you mentioned in your prepared comments that many projects now are being negotiated. Is this an increasing trend in the business? This would imply that it's pressing your competitive advantage even further.

Speaker #23: And would imply that it's pressing your competitive advantage even further.

Speaker #8: Yeah. I mean, I think it's the right answer for the client. When we look at it, you're looking at total cost and things with a large supply.

Duke Austin: Yeah, I mean, I think it's the right answer for the client. When we look at it, you are looking at total cost and things that with the large supply. I mean, we are the top 5 buyer of HV equipment. There is ways that we can help there. It is just a smarter way to do business in these markets, that you are really discussing total cost versus having a discussion on a widget. I think we have tried to put ourselves as a solution across these verticals, and it is allowing us to negotiate our total cost basis versus a one-off project and be prudent about it. We work with re-regulated customers, and we know what that market looks like.

Speaker #8: I mean, we're the top five buyer of HV equipment. There are ways that we can help. It's just a smarter way to do business in these markets, where you're really discussing total cost.

Speaker #8: And so, versus having a discussion on a widget, I think we've tried to put ourselves as a solution across these verticals. And it's allowing us to negotiate our total cost basis versus a one-off project.

Speaker #8: And be prudent about it. We work with regulated customers. And we know what that market looks like. We have a they have a tried and true record as well.

Duke Austin: They have a tried and true record as well, and we can work together on what's the right answer for each client and tailor it that way. For the most part, we've always negotiated a lot of work, and I think we'll continue to do so. It's just larger. The programs are bigger. The certainty of labor is something that I think is really important for us to make sure that the client and our clients lean on us for that, and we're able to really deliver that certainty. They have capital spends they need to spend, and we need to get, you know, the queues are getting backed up. Things are pressures, and we're being asked to do a lot.

Speaker #8: And we can work together on what's the right answer for each client and tailor it that way. And for the most part, we've always negotiated a lot of work.

Speaker #8: And I think we're continuing to do so. It's just larger the programs are bigger. The certainty of labor is something that I think is really important for us to make sure that the client and our clients lean on us for that.

Speaker #8: And we're able to really deliver that certainty. They have capital spends. They need to spend. And we need to get the Qs are getting backed up.

Speaker #8: Things are pressures, and we're being asked to do a lot. And I think this company has stepped up and has provided those solutions that are necessary to make this infrastructure of North America move.

Duke Austin: I think this company has stepped up and is providing those solutions that are necessary to make this, the infrastructure of North America move. I'm excited about it, and I'm excited where we sit. Yes, I mean, we're looking at total cost all the time. It's a prudent approach to the ratepayer to drive the rates down.

Speaker #8: And I'm excited about it. And I'm excited where we sit. And yes, I mean, we're looking at total cost all the time. But it's a prudent approach to the rate payer to drive the rates down.

Speaker #24: Great. Thank you, Duke.

Liam Burke: Great. Thank you, Duke.

Speaker #21: Sure.

Duke Austin: Sure.

Speaker #5: All fine. No question. This is from Chad Dillard from Bernstein. Please unmute your line and ask your question.

Kip Rupp: Our final question is from Chad Dillard from Bernstein. Please unmute your line and ask your question.

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

Speaker #25: Hey. Good morning, guys. So what would it take for QUANTA to do full turnkey data center builds at scale? Rather than just doing a few here and there.

Chad Dillard: Hey, good morning, guys. What would it take for Quanta to do full turnkey data center builds at scale, rather than just doing, you know, a few here and there? Is this something you can achieve on an organic basis? Do you need to do more M&A? I'd just be curious to understand, you know, where that strategy would rank within your set of priorities.

Speaker #25: Is this something you can achieve on an organic basis? Do you need to do more M&A? And that just be curious to understand where that strategy would rank within your set of priorities.

Speaker #8: I mean, MEP the types of things that we do in a high-voltage interconnections are the sweet spot for us at this point. We are doing some balance of plant data centers today.

Duke Austin: I mean, MEP, the types of things that we do in the high voltage interconnections are, you know, the sweet spot for us at this point. We are doing some balance of plant data centers today. If our clients push us that way and ask us to do that, we can do it. We can do it with the people that we have. Yes, if we do it at scale, we need to add. I think, you know, depending on how sophisticated the client is on the other side will depend on how much and/or less we need to add. From a programmatic spend, project management, QA, QC, all the things that you would expect, we have all that internally. Engineering, we probably have 2,000 plus engineers internally.

Speaker #8: If our clients push us that way and asked us to do that, we can do it. We can do it with the people that we have.

Speaker #8: Yes, if we do it at scale, we need to add. And I think depending on what the client how sophisticated the client is on the other side, will depend on how much and or less we need to add.

Speaker #8: But from a programmatic spin—project management, QA/QC, all the things that you would expect—we have all that internally. Engineering, we probably have 2,000-plus engineers internally.

Speaker #8: We're able to scale those things. And I think the company will look at all projects coming in and try to deliver on both sides of that where there's areas that we can be successful.

Duke Austin: We're able to scale those things and, you know, I think the company will look at all projects coming in and try to deliver on both sides of that. Where there's, you know, areas that we can be successful, we'll lean into those with customers. I think you'll continue. We'll evolve it. We're also, you know, cognizant of other builds that we need to be on, and other customers. As we look at it, yeah, I do think the company will do balance of plant data centers and other things. We continue to see the imbalance coming in, and it's all due to the fact the certainty of cross-skill labor. If you're just, someone that does not have it's very difficult to say you're gonna show up.

Speaker #8: We'll lean into those. With customers. But I think you'll continue. We'll evolve it. We're also cognizant of other builds that we need to be on.

Speaker #8: And other customers. So as we look at it, yeah, I do think the company will do balance of plant data centers and other things.

Speaker #8: I just we continue to see the imbalance coming in. And it's all due to the fact the certainty of craft skilled labor. If you're just someone that does not have it, it's very difficult to say you're going to show up.

Duke Austin: I don't have to be there that day if I work for someone else. I don't. I cannot show up. That's the issue that you'll start to see in the markets as they get, you know, as you start to see constraints. I think for us, we just got to continue to deliver on what we know how, and we're very good at specialized craft and providing solutions. We'll do it. If they want us to build the whole thing, we'll do it. We'll do that as well and provide generation and maintain it if they want it.

Speaker #8: And I don't have to be there that day. If I work for someone else, I don't. I cannot show up. And that's the issue that you'll start to see in the markets as they get—as you start to see constraints.

Speaker #8: So I think for us, we just got to continue to deliver on what we know how. And we're very good at specialized craft and providing solutions.

Speaker #8: We'll do it. And then, if they want us to build the whole thing, we'll do it. We'll do that as well and provide generation and maintain it if they want it.

Speaker #25: I think that's helpful. And then just shifting gears a bit, I'd love for you to talk about your Canada operation in electrical infrastructure. Just what you're seeing on the pipeline there.

Chad Dillard: That's helpful. Then just shifting gears a bit, I'd love for you to talk about your Canada operation in electrical infrastructure. Just what you're seeing on the pipeline there, you know, how are you thinking about how that geography unfolds in 2026 and then, you know, maybe even over the next, like, couple of years?

Speaker #25: How are you thinking about how that geography unfolds in ’26, and then maybe even over the next couple of years?

Speaker #8: Yeah, I think that we had some pipe work last year going on at this time, that we don't—we're not involved in anything right now.

Duke Austin: Yeah, I think, you know, we had some pipe work last year going on at this time. We're not, you know, involved in anything right now. I see over the next few quarters, we'll start to see projects come in on the pipe side. We have a nice team up there that, you know, certainly can execute. I think you'll start to see awards on that in Canada. Our data centers up there are moving around. Our renewable business up there is nice. It's just slower. It's slower to recover. We're optimistic. We're using the engineering in the US. We're doing a lot of different things, a way to leverage that workforce. The margins are picking up.

Speaker #8: But I see over the next few quarters, we'll start to see projects come in on the pipe side. We have a nice team up there that certainly can execute.

Speaker #8: So I think you'll start to see awards on that. In Canada, data centers up there are moving around. Our renewable business up there is nice.

Speaker #8: It's just slower. It's slower to recover. We're optimistic. We're using the engineering in the U.S. We're doing a lot of different things. The way to leverage that workforce, and the margins are picking up.

Duke Austin: you know, it's not where we want them to be at this point yet, but neither is the economy. We're, we're doing a good job there mitigating risk and making sure that we're utilizing the labor and, and what we've invested in Canada, you know, for the future and for what's going on in the States here. Yeah, we like the markets. It's, it's growing. It's certainly not at parity to the US yet, but we continue to see improvement.

Speaker #8: It's not where we want them to be at this point yet. But neither is the economy. So we're doing a good job there, mitigating risk and making sure that we're utilizing the labor and what we've invested in in Canada for the future and for what's going on in the states here.

Speaker #8: So yeah, we like the markets. It's growing. It's certainly not a parity to the US yet. But we continue to see improvement.

Speaker #5: Thank you. There are no more questions at this time. I'd now like to turn the call back over to management for closing remarks.

Kip Rupp: Thank you. There are no more questions at this time. I'd now like to turn the call back over to management for closing remarks.

Operator: Thank you. There are no more questions at this time. I'd now like to turn the call back over to management for closing remarks.

Speaker #8: And we want to thank the men and women in the field. They're the very best in the world. They make these numbers. And they are the ones that deserve the credit.

Duke Austin: Yeah. We want to thank the men and women in the field. They're the very best in the world. They make these numbers, and they are the ones that deserve the credit. We'd also like to thank you all for participating in the conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you. This concludes our call.

Speaker #8: We'd also like to thank you all for participating in the conference call. We appreciate your questions and your ongoing interest in QUANTA. Services. Thank you.

Q1 2026 Quanta Services Inc Earnings Call

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