Q3 2026 Quanta Services Inc Earnings Call

October 29, 2026

Operator: Good morning, and welcome to the Quanta Services Q3 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.

Operator: Good morning, and welcome to the Quanta Services Q3 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: remarks.

Kip Rupp: Thank you, and welcome everyone to the Quanta Services Q3 2026 earnings conference call. This morning, we issued a press release announcing our Q3 2026 results, which can be found in the investor relations section of our website at quantaservices.com. This morning, we also posted our Q3 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 the information reported on this call speaks only as of today, 29 October 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: 2026 earnings conference call. This QUANTA SERVICES third-quarter morning we issued a press release announcing our third-quarter 2026 results, which can be found in the Investor Relations section of our website at quantaservices.com. our third-quarter 2026 operational and financial commentary and our 2026 outlook expectations summary, on Quanta's investor relations website.

Speaker #2: quantaservices.com. This morning we also posted 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, October 29, 2026, and therefore you are advised at any time sensitive information may no longer be accurate as of any replay of this call.

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

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.

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

Speaker #2: Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, please sign up for email alerts through the Investor Relations section of QUANTA SERVICES.com to receive notifications of news releases and other information.

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 will now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Speaker #2: And follow QUANTA IR and QUANTA SERVICES on the social media channels listed on our website. With that, I will now turn the call over to Mr. Duke Austin, Quanta's President and CEO.

Speaker #2: Duke?

Duke Austin: Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services Third Quarter 2026 Earnings Conference Call. I want to begin by thanking our approximately 95,000 employees. Their commitment to safety, to our culture of absolute performance, and to the certainty we deliver for our customers makes everything we will discuss this morning possible. This morning, we reported third quarter results that meaningfully exceeded expectations, with robust double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share, healthy cash flow, and record backlog of $64 billion. These results reflect broad-based strength across our segments, service lines, and end markets, and also the successful multi-year strategy we are executing and the investments we have made in it. Given this outperformance and the expected incremental strength in the fourth quarter, we are significantly increasing our full year 2026 financial expectations across all metrics.

Speaker #3: Thanks, Kip. Good morning. Everyone, and welcome to QUANTA SERVICES third-quarter 2026 earnings conference call. I want to begin by thanking our approximately 95,000 employees, their commitment to safety, to our culture of absolute performance, and to the certainty we deliver for our customers, makes everything we will discuss this morning possible.

Speaker #3: This morning we reported third-quarter results that meaningfully exceeded expectations, with robust double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share, healthy cash flow, and record backlog of 64 billion.

Duke Austin: These results reflect broad-based strength across our segments, service lines, and end markets, and also the successful multi-year strategy we are executing and the investments we have made in it. Given this outperformance and the expected incremental strength in the fourth quarter, we are significantly increasing our full year 2026 financial expectations across all metrics.

Speaker #3: These results reflect broad-based strength across our segments, service lines, and end markets, and also the successful multi-year strategy we are executing and the investments we have made in it.

Speaker #3: Given this out-of-performance, and the expected incremental strength in the fourth quarter, we are significantly increasing our full-year 2026 financial expectations across all metrics. This quarter, again, demonstrated the ability for our operating model to deliver with certainty at scale.

Duke Austin: This quarter again demonstrated the ability for our operating model to deliver with certainty at scale. The breadth of our portfolio, combined with the fungibility of our skilled workforce across multiple end markets, provides a significant competitive advantage. This flexibility allows us to strategically deploy resources where demand is strongest, mitigate exposure to individual market cycles, and deliver more consistent, predictable outcomes for our customers and stockholders. Quanta is embedded in the long-term planning of our industry-leading customers across the utility, power generation, and large load markets, and inbound demand is accelerating. We stay in front of our markets by remaining deeply customer-focused.

Speaker #3: The breadth of our portfolio, combined with the fundability of our skilled workforce across multiple end markets, provides a significant competitive advantage. This flexibility allows us to strategically deploy resources where demand is strongest, mitigate exposure to individual market cycles, and deliver more consistent, predictable outcomes for our customers and stockholders.

Speaker #3: Quanta is embedded in the long-term planning of our industry-leading customers across the utility, power generation, and large load markets, and inbound demand is accelerating.

Speaker #3: We stay in front of our markets by remaining deeply customer-focused. Our customers want a partner that can plan with them for years in advance, align cross-labor and supply chain solutions to their capital programs, and bring certainty to their projects and programs at a reasonable cost and in a way that delivers lasting economic benefits to the communities where these projects are built.

Duke Austin: Our customers want a partner that can plan with them for years in advance, align craft labor and supply chain solutions to their capital programs, and bring certainty to their projects and programs at a reasonable cost and in a way that delivers lasting economic benefits to the communities where these projects are built. Our reputation for delivering and our ability to mobilize people and supply chain quickly is driving the demand for our solutions. That reputation was built in our utility business, which remains the foundation of Quanta. Utilities are being asked to double in size over time, and we believe the need to significantly expand and enhance the power grid for reliability, resiliency, and load growth is visible and necessary.

Speaker #3: Our reputation for delivering and our ability to mobilize people and supply chain quickly is driving the demand for our solutions. That reputation was built in our utility business.

Speaker #3: Which remains the foundation of Quanta. Utilities are being asked to double in size over time, and we believe the need to significantly expand and enhance the power grid for reliability, resiliency, and load growth is visible and necessary.

Duke Austin: We expect additional opportunities, including high voltage transmission, power generation, large load and technology, to stack on top of what we view as long duration, compounding utility base where we continue to extend our leadership position. These opportunities extend our visibility well beyond 2030. We see large transmission programs across the country making positive progress, from permitting and approvals to planning and engineering, and moving closer to contract execution and backlog. Power generation opportunities are also active and in various stages, and we are encouraged by the stacking opportunity we see across our diverse markets building over the coming years. Technology is moving as fast as it can. Utilities are working to protect stakeholders, and Quanta sits at the nexus of facilitating both. The proven success of our operating model on the utility side of the business is also why technology and large load customers are embracing it.

Speaker #3: We expect additional opportunities, including high-voltage transmission, power generation, large load and technology, to stack on top of what we view as long-duration compounding utility base where we continue to extend our leadership position.

Speaker #3: These opportunities extend our visibility well beyond 2030. We see large transmission programs across the country making positive progress, from permitting and approvals to planning and engineering and moving closer to contract execution and backlog. Power generation opportunities are also active, and in various stages.

Duke Austin: Power generation opportunities are also active and in various stages, and we are encouraged by the stacking opportunity we see across our diverse markets building over the coming years. Technology is moving as fast as it can. Utilities are working to protect stakeholders, and Quanta sits at the nexus of facilitating both. The proven success of our operating model on the utility side of the business is also why technology and large load customers are embracing it.

Speaker #3: Technology is moving as fast as it can. Utilities are working to protect stakeholders and And we are encouraged by Quanta sits at the nexus of facilitating both.

Speaker #3: The proven success of our operating model on the utility side of the business is also why technology and large load customers are embracing it.

Duke Austin: The collaborative solution-based approach we have built over decades serving utilities is exactly what we bring to those customers. As evidenced by our results this year, the demand for our solution is significant and growing. In this market environment, our scope and scale, the fungibility of our resources, and the solutions they enable are valuable. Committing our resources to the best overall opportunities has never been more important. We prioritize high quality, well-capitalized, industry-leading customers that value our collaborative long-term approach and have multi-year infrastructure programs. We believe the power of our portfolio is that it does not overly rely on the pace of a single market. It builds on broad, diverse, and resilient base and is supported by an increasingly flexible craft workforce. Our self-perform model is designed to deliver on time and on budget at scale.

Speaker #3: The collaborative, solution-based approach we have built over decades serving utilities is exactly what we bring to those customers. As evidenced by our results this year, the demand for our solution is significant and growing.

Speaker #3: In this market environment, our scope and scale, the fungibility of our resources, and the solutions they enable are valuable. So committing our resources to the best overall opportunities has never been more important.

Speaker #3: We prioritize high-quality, well-capitalized, industry-leading customers who value our collaborative, long-term approach and have multi-year infrastructure programs. We believe the strength of our portfolio is that it does not overly rely on the pace of a single market.

Speaker #3: It builds on broad, diverse, and resilient base and is supported by increasingly flexible craft workforce. Our self-perform model is designed to deliver on time and on budget at scale.

Duke Austin: None of this is possible without our craft labor, and you cannot buy craft, you have to build it. We are investing in curriculum and innovative training programs across our operations and creating industry-leading training environments, which allows us to attract and retain talent. We are growing our foreman and superintendent leadership, which we believe has a multiplier effect on our ability to enhance our craft and self-perform capabilities. Craft builds craft. We have invested heavily in our workforce for more than a decade. With a decade of strong double-digit compound earnings growth, the results speak for themselves. We are also investing in the expansion of our integrated fabrication solutions, which we believe is a workforce multiplier that increases speed and efficiency, quality, and schedule certainty.

Speaker #3: None of this is possible without our craft labor. And you cannot buy craft, you have to build it. We are investing in curriculum and innovative training programs across our operations and creating industry-leading training environments.

Speaker #3: Which allows us to attract and retain talent. We are growing our foremen and superintendent leadership, which we believe has a multiplier effect on our ability to enhance our craft and self-perform capabilities.

Speaker #3: Craft builds craft. We have invested heavily in our workforce for more than a decade. With the decade of strong double-digit compound earnings growth, the results speak for themselves.

Speaker #3: We are also investing in the expansion of our integrated fabrication solutions, which we believe is a workforce multiplier that increases speed and efficiency, quality, and schedule certainty.

Duke Austin: We apply the same absolute performance mindset to our capital deployment decisions. Each high-quality company that has joined Quanta is a relationship often cultivated over many years. We are patient in buying great companies, and we are disciplined around our strategy, with culture and fit a primary criteria. Our recently completed acquisitions are great companies that strengthen our fabrication, engineering, and supply chain capabilities and extend our ability to deliver integrated solutions for customers, and we welcome them to the Quanta family. We are proud of the exceptional results our teams have delivered this year, and the larger programs across the utility, generation, and technology and load center markets are still in front of us. We are pacing ahead of the multi-year growth targets outlined at our 2026 Investor Day, and our conviction in Quanta's ability to compound profitable growth over the longer term continues to strengthen.

Speaker #3: We apply the same absolute performance mindset to our capital deployment decisions. Each high-quality company that has joined our Quanta is a relationship, often cultivated over many years.

Speaker #3: We are patient in buying great companies and we are disciplined around our strategy. The culture and fit, a primary criteria. Our recently completed acquisitions are great companies that strengthen our fabrication engineering and supply chain capabilities, and extend our ability to deliver integrated solutions for customers and we welcome them to the Quanta family.

Speaker #3: We are proud of the exceptional results of our teams have delivered this year. And the larger programs across the utility, generation, and technology and load center markets are still in front of us.

Speaker #3: We are pacing ahead of the multi-year growth targets outlined at our 2026 Investor Day. And our conviction in Quanta's ability to compound profitable growth over the longer term continues to strengthen.

Duke Austin: We see the opportunity to deliver strong double-digit adjusted EPS growth again in 2027, supported by a record backlog and growing workforce. We remain focused on executing our customers' success, deploying capital with discipline, and compounding earnings and stockholder value over the longer term. I will now turn the call 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. Jayshree?

Speaker #3: We see the opportunity to deliver strong double-digit adjusted EPS growth again in 2027, supported by our record backlog and growing workforce. We remain focused on executing our customers' success, deploying capital with discipline, and compounding earnings and stockholder value over the longer term.

Speaker #3: I will now turn the call over to Jayshree Desai, Quanta CFO, to provide a few remarks about our results and 2026 guidance, and then we will take your questions.

Speaker #3: Jayshree?

Jayshree Desai: Thanks, Duke, and good morning, everyone. The Q3 was an excellent one, with record results across the board. Revenue was $12 billion, up 57% from $7.6 billion a year ago. Adjusted EBITDA was $1.4 billion, up 69% from the Q3 of last year. Our adjusted EBITDA margin expanded to 12.1%. Adjusted diluted earnings per share was $6.06, up 82% from $3.33 last year, and GAAP diluted earnings per share was $4.55, more than double last year's $2.24. Q3 operating cash flow was $1.5 billion, and free cash flow was $1.2 billion, both quarterly records. Turning to 2026 guidance, we now expect revenue to range between $41.3 and $41.6 billion, up approximately $1.9 billion at the midpoint from our prior outlook.

Speaker #2: Thanks, Duke, and good morning, everyone. The third quarter was an excellent one, with record results across the board. Revenue was $12 billion, up 57% from $7.6 billion a year ago.

Speaker #2: Adjusted EBITDA was $1.4 billion, up 69% from the third quarter of last year. And our adjusted EBITDA margin expanded to $12.1%. Adjusted diluted earnings per share was $6.06, up 82% from $3.33 last year, and gap diluted earnings per share was $4.55, more than double last year's $2.24.

Speaker #2: Third quarter operating cash flow was $1.5 billion, and free cash flow was $1.2 billion. Both quarterly records. Turning to 2026 guidance, we now expect revenue to range between $41.3 and $41.6 billion.

Speaker #2: Up approximately $1.9 billion at the midpoint from our prior outlook. We expect adjusted EBITDA to range between $4.4 billion and $4.49 billion, with an implied margin profile of 10.7% at the midpoint.

Jayshree Desai: We expect adjusted EBITDA to range between $4.4 and $4.49 billion, an implied margin profile of 10.7% at the midpoint, and adjusted EPS to range between $17.90 and $18.30. Regarding cash flow, after a historically strong first nine months of the year, we now expect free cash flow to range between $2.5 to $3 billion, which would represent another annual record and reflect greater than 60% conversion of adjusted EBITDA at the midpoint. During the quarter, we used our operating and financial strength to bolster our liquidity and financial flexibility, positioning Quanta to continue deploying capital in support of our growth strategies. In July, we upsized our revolving credit facility commitments to $2.98 billion and extended its maturity to July 2031. In August, we issued $2 billion of senior notes, and in September, we prepaid the remaining outstanding balance on our term loan.

Speaker #2: And adjusted EPS to range between $17.90 and $18.30. Regarding cash flow, after a historically strong first nine months of the year, we now expect free cash flow to range between $2.5 to $3 billion.

Speaker #2: Which would represent another annual record and reflect greater than 60% conversion of adjusted EBITDA at the midpoint. During the quarter, we used our operating and financial strength to bolster our liquidity and financial flexibility.

Jayshree Desai: During the quarter, we used our operating and financial strength to bolster our liquidity and financial flexibility, positioning Quanta to continue deploying capital in support of our growth strategies. In July, we upsized our revolving credit facility commitments to $2.98 billion and extended its maturity to July 2031. In August, we issued $2 billion of senior notes, and in September, we prepaid the remaining outstanding balance on our term loan.

Speaker #2: Positioning Quanta to continue deploying capital and support of our growth strategies. In July, we upsized our revolving credit facility commitments to $2.98 billion and extended its maturity to July 2031.

Speaker #2: In August, we issued $2 billion of senior notes, and in September, we prepaid the remaining outstanding balance on our term loan. We ended the quarter with $2.3 billion of cash and had only $20 million drawn on our revolver.

Jayshree Desai: We ended the quarter with $2.3 billion of cash and had only $20 million drawn on our revolver. Total liquidity was $5.2 billion, and our bank-defined leverage ratio was approximately 1.3 times, affording us ample capacity to support our strategic initiatives. Regarding acquisitions, we continued to deploy capital with discipline. Subsequent to our Q2 earnings release, we completed two acquisitions for approximately $245 million of consideration, net of cash acquired. As Duke mentioned, these companies bring leadership and management talent and strengthen our front-end engineering fabrication and supply chain capabilities, enhancing our ability to self-perform more scope and deliver cost and schedule certainty for our customers. We believe our strategy is materializing and to improve forward visibility. As of 30 September, we had record backlog of approximately $64 billion, a $10 billion sequential increase from 30 June, with backlog growth across each of our key markets.

Speaker #2: Total liquidity was $5.2 billion and our bank-defined leverage ratio was approximately 1.3 times. Affording us ample capacity to support our strategic initiatives. Regarding acquisitions, we continued to deploy capital with discipline.

Speaker #2: Subsequent to our second quarter earnings release, we completed two acquisitions for approximately $245 million of consideration, net of cash acquired. As Duke mentioned, these companies bring leadership and management team and management talent and strengthen our front-end engineering fabrication and supply chain capabilities.

Jayshree Desai: As Duke mentioned, these companies bring leadership and management talent and strengthen our front-end engineering fabrication and supply chain capabilities, enhancing our ability to self-perform more scope and deliver cost and schedule certainty for our customers. We believe our strategy is materializing and to improve forward visibility. As of 30 September, we had record backlog of approximately $64 billion, a $10 billion sequential increase from 30 June, with backlog growth across each of our key markets.

Speaker #2: Enhancing our ability to self-perform more scope, and deliver cost and schedule certainty for our customers. We believe our strategy has materializing into improved forward visibility.

Speaker #2: As of September 30th, we had record backlog of approximately $64 billion. A $10 billion sequential increase from June 30th. With backlog growth across each of our key markets.

Jayshree Desai: To close, we delivered a record quarter, significantly raised our full-year expectations, and strengthened our balance sheet, all of which position us well to continue investing our resources from a position of strength. As Duke mentioned, our conviction in our ability to compound profitable growth over the long term continues to strengthen. 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 are happy to take your questions. Operator?

Speaker #2: To close, we delivered a record quarter significantly raised our full-year expectations and strengthened our balance sheet. All of which position us well to continue investing our resources, from a position of strength.

Speaker #2: As Duke mentioned, our conviction in our ability to compound profitable growth over the long term continues to strengthen. Additional detail and commentary on our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary.

Speaker #2: Both available on our investor relations website. With that, we're happy to take your questions. Operator?

Operator: Thank you. We will now move on to the question-and-answer session. For today's session, we will be utilizing the raise hand feature via the webinar. If you would like to ask a question, simply click on the raise hand button on the bottom of your screen. If you have dialed in, please press star 9 to raise your hand and star 6 to unmute. Once you have been called on, please unmute yourself and begin to ask your question. Again, that is star 9 to raise hand and star 6 to unmute if you have dialed in. We ask all participants limit themselves to one question and one follow-up. If you have additional questions, you may re-queue, and those questions will be addressed time permitting. Thank you, and we will now pause a moment to assemble the queue. Our first question will come from Ameet Thakkar with BMO Capital Markets.

Speaker #3: Thank you. We will now move on to the question and answer session. For today's session, we'll be utilizing the raise hand feature via the webinar.

Speaker #3: If you would like to ask a question, simply click on the raise hand button on the bottom of your screen. If you have dialed in, please press star 9 to raise your hand and star 6 to unmute.

Speaker #3: Once you've been called on, please unmute yourself and begin to ask your question. Again, that is star 9 to raise hand and star 6 to unmute if you have dialed in.

Operator: We ask all participants limit themselves to one question and one follow-up. If you have additional questions, you may re-queue, and those questions will be addressed time permitting. Thank you, and we will now pause a moment to assemble the queue. Our first question will come from Ameet Thakkar with BMO Capital Markets.

Speaker #3: We ask all participants to limit themselves to one question and one follow-up. If you have additional questions, you may re-queue, and those questions will be addressed, time permitting.

Speaker #3: Thank you. We will now pause for a moment to assemble the queue. Our first question will come from Amit Thakar with BMO Capital Markets.

Operator: Please unmute your line and ask your question.

Speaker #3: Please unmute your line and ask your question.

Ameet Thakkar: Hi. Good morning. Thanks, and congratulations, and thanks for the update. Your Electric is up around, well, above your long-term growth framework. Given what you are seeing in utility generation and large load center demand, what are the biggest constraints to sustaining this level of growth in 2027? Is it customer spending, labor, or simply available to execute? Then just on margins, how much of the strength reflects favorable project execution versus a mix or something more structural that we should think about as being sustainable? Thank you, guys.

Speaker #4: Hi, good morning. Thanks, and congratulations, and thanks for the update. You know, your electric continues to run well above kind of your long-term growth framework.

Speaker #4: Kind of given what you're seeing in utility generation and kind of case load center demand, what are the biggest constraints to sustaining this level of growth?

Speaker #4: And in 2027, is it kind of customer spending, labor, or simply available to kind of execute? And then just on margins, how much of the strength kind of reflects favorable project execution versus kind of a mix or something more structural that we should think about as being sustainable?

Speaker #4: Thanks, guys.

Duke Austin: Yeah. I think the margin question, we had a great quarter. It is the Q3. We have got some leverage as well. I do think that when you are thinking through it, if you think about the employee count, how much growth we had organically, you are growing 7,000 employees, 6,000 employees on both the previous quarter and this quarter, and then like 25,000, 26,000 this year. It gives you some leverage with our training, and that is showing up. We have always said, "Look, we are pressing margins because of the training," but if we are getting that kind of leverage out of it, which I think is great, it is something that is certainly helping the margin profile of the company. Look, we can operate the utility business 10% to 12%. We have said that all along. We are getting some leverage out of MEP in the business.

Speaker #5: Yeah, I think the margin question we had a great quarter. It's the third quarter. We've got some leverage as well. I do think that when you're thinking through it, if you think about the employee count, how much growth we had, organically, you're growing 7,000 employees, 6,000 employees.

Speaker #5: On both the previous quarter and this quarter, and then like 26, 25, 26,000 this year. It gives you some leverage with our training and that's showing up.

Speaker #5: We've always said, look, we're pressing margins because of the training, but if we're getting that kind of leverage out of it, which I think is great, it's something that certainly helping the margin profile of the company.

Speaker #5: Look, we can operate the utility business 10 to 12. We've said that all along. We're getting some leverage out of MEP. In the business, you're able to do some offsite manufacturing, do a lot of different things doing increased efficiency in the field.

Duke Austin: You are able to do some off-site manufacturing, do a lot of different things to increase efficiency in the field. So we are super happy with what we are doing and where it is going. Has it fundamentally changed? It has moved up. The UI is still down. I do think we can do much better there, that we can get into double digits. The profiles and things of that nature, as old work burns off and we start to get into the newer business there, that should move up. So look, I like where we are going. I do think we can increase some margins, but it is not a margin story. I go back and say we are going to compound the margin profile we have talked about. The utility business is still, call it, $20 billion or so of the Electric segment. That is in the 10 to 12s, call it 11.

Speaker #5: So we're super happy with what we're doing and where it's going. Has it fundamentally changed? You know, it's moved up. The UI is still down.

Speaker #5: I do think we can do much better there. We can get in the double digits. The profiles and things of that nature as old work burns off and we start to get into the newer business there.

Duke Austin: The profiles and things of that nature, as old work burns off and we start to get into the newer business there, that should move up. So look, I like where we are going. I do think we can increase some margins, but it is not a margin story. I go back and say we are going to compound the margin profile we have talked about. The utility business is still, call it, $20 billion or so of the Electric segment. That is in the 10 to 12s, call it 11.

Speaker #5: That should move up. So look, I like where we're going. I do think we can increase some margins, but it's not a margin story.

Speaker #5: I go back and say we're going to compound kind of the margin profile we've talked about, the utility business is still, call it 20 billion or so of the electric segment.

Speaker #5: That's in the 10 to 12s. Call it 11. And then you have the other businesses that we're getting efficiencies out of. I would turn to the ROIC though and look at that growth.

Duke Austin: Then you have the other businesses that we are getting efficiencies out of. I would turn to the ROIC, though, and look at that growth. To me, we watch that a lot, what we are doing with return on invested capital, and Vishry can go through the numbers on that at some point, but I do think that is what is driving that. As far as the growth and what is inhibiting the growth, I think the markets are there. We cannot be everything for everybody. We continue to think that both the TAMs, what gives me a lot of what I would consider optimism of the growth and us keeping that up is that we have done it for 12 years, well plus 20% growth. So I would not bet against us on growth. Yes, big numbers, but it has been big numbers my career, so we are just going to continue to compound those.

Speaker #5: To me, we watched that a lot. What we're doing with return on invested capital—and Jayshree can go through the numbers on that at some point.

Speaker #5: But I do think that's what's driving that. As far as the growth and what's inhibiting the growth, I think the markets are there. We can't be everything for everybody.

Duke Austin: We continue to think that both the TAMs, what gives me a lot of what I would consider optimism of the growth and us keeping that up is that we have done it for 12 years, well plus 20% growth. So I would not bet against us on growth. Yes, big numbers, but it has been big numbers my career, so we are just going to continue to compound those.

Speaker #5: We continue to think that both the of what I would consider optimism of the growth and us keeping that up is that we've done it for 12 years.

Speaker #5: Well plus 20% growth. So I wouldn't bet against this on growth. And yes, big numbers, but it's been big numbers my career. So we're just going to continue to compound those.

Duke Austin: When you think about the two TAMs, our utility business in the past, if you go back five years, we could not take advantage of the generation, the fossil generation, even the renewable generation. That was not us. We were in T&D. Now we have that whole addressable market, and I think it is a big deal, and it goes unnoticed, of how much TAM we have in the utility business. So if you look at that TAM, it is there, and then you roll it over into what we are doing very early in our technology business. But the five largest technology companies will spend three times the capital budget of the utility side. We can perform the vast majority of that capital that is in chips. So I like our chances to grow. We talked about it is not just next year. We gave five-year guidance, and we said 10% to 15%.

Speaker #5: And when you think about the two TAMs, our utility business in the past, if you go back five years, we couldn't take advantage of the generation, the fossil generation, even the renewable generation.

Speaker #5: That wasn't us. We were in TND. Now we have that whole addressable market. And I think it's a big deal. It goes unnoticed of how much TAM we have in the utility business.

Duke Austin: So if you look at that TAM, it is there, and then you roll it over into what we are doing very early in our technology business. But the five largest technology companies will spend three times the capital budget of the utility side. We can perform the vast majority of that capital that is in chips. So I like our chances to grow. We talked about it is not just next year. We gave five-year guidance, and we said 10% to 15%.

Speaker #5: So if you look at that TAM, it's there. And then you roll it over into what we're doing very early in our technology business.

Speaker #5: But the five largest technology companies will spend three times the capital budget of the utility side. And we can perform the vast majority of that capital, other than chips.

Speaker #5: So I like our chances to grow. We talked about it's not just next year. We gave five-year guidance and we said 10 to 15, if we can compound, it'd be 20 plus.

Duke Austin: If we can compound it would be 20% plus. We had a hell of a year. We are setting up and I am looking at 2028, 2029. I think we got growth out there as well, and we are not going to give guidance today, but I feel highly comfortable with the 15%, 20%, and we will compound that as well. But it is super early. I got five months. I am going to take my time.

Speaker #5: We had a hell of a year. It's setting up. And I'm looking at 28, 29. I think we got growth out there as well.

Speaker #5: And we're not going to give guidance today, but I feel highly comfortable with kind of the 15, 20% and we'll compound that as well.

Speaker #5: But it's super early. I got five months. I'm going to take my time.

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

Speaker #3: Our next question will come from Justin Hawk with Buy. Please unmute your line and ask your question.

Justin Hauke: It is with Baird, but that is okay. So obviously really strong quarter here. I think the thing that stands out the most is the sequential backlog gain and there was a tiny bit of the contribution from the M&A and you talked about the NiSource scope, but it looks like there was a lot more beyond that and there was not anything specifically quantified as a large project win. Just curious if there was anything chunky, any of the 765 lines you talked about. I know there were some questions on some hearings on some of those in Texas that seemed like they went favorable. But anything you can comment on the contribution makeup of the backlog? Thank you.

Speaker #4: That's with Baird. But that's okay. So obviously really strong quarter here. I think the thing that stands out the most is the sequential backlog gain and there was a tiny bit of the contribution from M&A and you talked about the nice source scope.

Speaker #4: But it looks like there was a lot more beyond that. And there wasn't anything like specifically quantified as a large project win. I'm just curious if there was anything chunky, any of the 765 lines you've talked about.

Speaker #4: I know there was some questions on some hearings, on some of those in Texas that seemed like they went favorable. But anything you can comment on kind of the contribution makeup of the backlog?

Speaker #4: Thank you.

Duke Austin: No. Look, it was broad-based backlog growth. Our renewable business is fantastic. It went all the way across the segments. We did book the one NiSource, but that is a program. If you listen to their capital and what they are doing, it is a larger program. I expect us to book more there against that. It was both T&D and the power plant that we had discussed. And I really like what we are doing with the largest customers in the industry. We are standing by them. They want to build fossil, we will go build fossil. We are super happy to do it. We believe we have a good model to do that and de-risk the end customer as well as us. And I think that is key for us in that business. And then when we look at just straight up to our distribution business is growing nicely. Transmission business is growing nicely.

Speaker #5: No, look, it was broad-based backlog growth. I mean, our renewable business is fantastic. It went all the way across the segments. We did book the one nice source, but that's a program.

Speaker #5: If you can listen to their capital and what they're doing, it's a larger program. I expect us to book more. They're against that. It was both T&D and the power plant.

Speaker #5: That we had discussed. And I really like what we're doing. With the largest customers in the industry, we're standing by them. They want to build fossil, we'll go build fossil.

Duke Austin: We are standing by them. They want to build fossil, we will go build fossil. We are super happy to do it. We believe we have a good model to do that and de-risk the end customer as well as us. And I think that is key for us in that business. And then when we look at just straight up to our distribution business is growing nicely. Transmission business is growing nicely.

Speaker #5: We're super happy to do it. We believe we have a good model to do that and de-risk the customer, the end customer as well as us.

Speaker #5: And I think that's key for us in that business. When we look at just our distribution business, it's growing nicely. The transmission business is also growing nicely.

Duke Austin: Nothing really pulled in. We have not started really the 765 build. It is much bigger than Texas. You have the Ohio work, you have MISO work. There is a lot of work out there that is not in backlog yet. In many ways, it is just getting started. We say it all the time, but I am not seeing big projects. That is not what is making up the company today, and it is a heck of a growth underneath it without the stacking of those in here yet. So, I believe in the future, you will start to see the generation business come into the business as well as the large transmission, which is not in there today. But we talked about growth. That is growth, that is stacking growth that we will see in the outward years. So super happy where we sit. We think that we have done a real good job.

Speaker #5: So no nothing really pulled in. We haven't started really the 765 build. It's much bigger than Texas. You have the Ohio work. You have MISO work.

Speaker #5: There's a lot of work out there that is not in backlog yet. In many ways, it's just getting started. We say it all the time, but I'm not seeing big projects.

Speaker #5: That's not what's making up the company today. And it's a heck of a growth underneath it without the stacking of those in here yet.

Duke Austin: So, I believe in the future, you will start to see the generation business come into the business as well as the large transmission, which is not in there today. But we talked about growth. That is growth, that is stacking growth that we will see in the outward years. So super happy where we sit. We think that we have done a real good job.

Speaker #5: So I believe you'll see in the future, you'll start to see the generation business come into the business as well as the large transmission, which is not in there today.

Speaker #5: But we talked about growth. That's growth. That's stacking growth that we'll see in the outward years. So super happy where we sit. We think that we've done a real good job.

Duke Austin: I think the business 10 years ago, five years ago, was very transactional, and today I think it is more transformational, and we are running a transformational business that compounds earnings over time, and that backlog is broad-based.

Speaker #5: I think the business 10 years ago five years ago was very transactional and today I think it's more transformational. And we're running a transformational business that compounds earnings over time.

Speaker #5: And that backlog is broad-based.

Justin Hauke: If I could just squeeze one more in for Jayshree, just on the cash flow. It looks like there was a decent amount of prepayments in the contract liabilities. Is that maybe just favorable terms on the contracts, or is that really a function maybe of some of the prepayments on some of the modular and the capital investments you have made on the supply chain? I am just curious the contribution of that in the working capital.

Speaker #4: If I can just squeeze one more in for Jayshree just on the cash flow. It looks like there was a decent amount of prepayments in the contract liabilities.

Speaker #4: Is that just maybe just is that favorable terms on the contracts or is that really a function maybe of some of the prepayments on some of the modular and the capital investments you've made on the supply chain?

Speaker #4: I'm just curious the contribution of that in the working capital.

Jayshree Desai: Yeah, thanks, Justin. No, as you can see, our working capital is continuing to improve. That is more of a function of the contract terms we are getting on a significant part of our revenue, especially from our MEP, our EPC business, as well as our renewable business. All of those are contributing to that favorable working capital profile you are seeing. Our DSOs continue to improve. So we are pleased at where our free cash flow is coming in. That is why we raised it for the year. There are some things we are doing around our supply chain as well as Duke mentioned in his prepared remarks around the expansion around our OSM facilities that actually are a use of cash. So, I would just say in general, what we told you in March continues to be the right way to think about our cash flow profile around 55% to 60%.

Speaker #2: Yeah, thanks, Justin. No, as you can see, our working capital is continuing to improve. That is more of a function of the contract terms.

Speaker #2: We're getting on a significant part of our revenue, especially from our MEP, our EPC business, as well as our renewable business. All of those are contributing to that favorable working profile, working capital profile you're seeing.

Speaker #2: Our DSOs continue to improve. So we're pleased. We're our free cash flow is coming in. That's why we raised it for the year. There are some things we're doing around our supply chain as well as the as Duke mentioned in his prepared remarks around the expansion around our OSM facilities that actually are a use of cash.

Speaker #2: So I would just say in general, what we told you in March continues to be the right way to think about our cash flow profile around 55 to 60.

Jayshree Desai: This year, we look to be at the high end of that, actually higher than that, and our expectation going forward will depend very much on the mix of work around those factors I talked about. But 55% to 60% is still the right way to think about it, Justin.

Speaker #2: This year we look to be at the high end of that, actually higher than that. And our expectations going forward will depend very much on the mix of work around those factors I talked about.

Speaker #2: But $55 to $60 million is still the right way to think about adjustment.

Operator: Our next question will come from Julien Dumoulin-Smith with Jefferies. Please unmute your line and ask your question.

Speaker #3: Our next question will come from Julian Dumoulin-Smith with Jefferies. Please unmute your line and ask your question.

Julien Dumoulin-Smith: Hey, good morning, team. Nicely done. I have to hand it to you guys, seriously. I wanted to come back to a couple of things you said. First off, you said inbound interest is accelerating, I think to quote you from the transcript. Yet at the same time, Duke, you have put up two quarters in a row, several quarters in a row, but more to the point, just really exceptional quarters. Is it conceivable that you accelerate on the cadence of backlog additions, if I am hearing you right? Then related to another point you made earlier here on ROIC, how do you think about the scope of possible here, economic ROIC here? You have been putting up a point or so every year or maybe even more than that of late. Trajectory-wise, do you think that is the right cadence here through the forecast?

Speaker #6: Hey, good morning team. Nicely done. I got to hand it to you guys. Seriously. Wanted to come back to a couple of things you said.

Speaker #6: First off, you said inbound interest is accelerating. I think to quote you from the transcript, you had at the same time Duke, you've put up two quarters in a row.

Speaker #6: I mean, well, several quarters in a row, but more to the point, just really exceptional quarters. Is it conceivable that you accelerate on the cadence of backlog additions?

Speaker #6: I mean, if I'm hearing you right, and then related to another point you made earlier here, on ROIC, how do you think about the scope of possible here?

Speaker #6: Economic ROIC here. I mean, you've been putting up a point or so every year, maybe even more than that of late. Trajectory-wise, do you think that's the right cadence here through the forecast in as much as you say you're focused on that ROIC metric?

Julien Dumoulin-Smith: Inasmuch as you say you are focused on that ROIC metric, just how do you think about what that trajectory could look like, if not margin expansion? Just to use your economic term you are focused on.

Speaker #6: Just how do you think about what that trajectory could look like if not margin expansion? Just to use your economic term you're focused on.

Duke Austin: Look at better terms on our contracts. I do think we are generating free cash at a faster pace. Jayshree is probably unwilling to go there in guidance yet, but I do think that is happening. We are leaning into some supply chain, Julien, which I am worried about copper, I am worried about other things. We will use that balance sheet to mitigate risk for our clients. If they cannot see it, I can. I get to see it broad-based. We will lean into some of those supply chain constraints to keep our people busy. Margins are expanding. The use of capital in these lighter capital businesses that we have, such as inside, that is certainly a bigger portion of what we do. So it is going to expand the ROIC. How fast?

Speaker #5: I mean, look, it better turns on our contracts, so I do think we're generating free cash at a faster pace. Jayshree is probably unwilling to go there in guidance yet, but I do think that's happening.

Speaker #5: We are leaning into some supply chain, Julian, which I'm worried about copper. I'm worried about other things. And so we will use that balance sheet to mitigate risk for our clients.

Speaker #5: And if they can't see it, I can. And so I get to see it broad-based. So we'll lean into some of those supply chain constraints to keep our people busy.

Speaker #5: Margins are expanding. The use of capital in these lighter capital businesses that we have, such as inside, that's certainly a bigger

Speaker #7: portion of what we do. So it's going to expand the ROIC. And I— how fast? I'm not signing up for that quite yet, but it's certainly something that we're highly focused on and the cadence thereof.

Duke Austin: I am not signing up for that quite yet, but it is certainly something that we are highly focused on and the cadence thereof. As far as backlog expansion, look, I believe we will set records and continue to set records. The timing on that, it gets lumpy for us. A lot of MSAs coming in, a lot of good things happening. So what I would say is, we have stayed true to it is not in backlog till it is signed. So that for us, some of that kind-of billion-dollar beat over the last two quarters is because it is book to bill. We are moving building to building or job to job without it ever hitting backlog. So, I am not sure how to classify that. GAAP says for us at least, not GAAP, but the way our SEC requirements and the way we think about it is it is signed.

Speaker #7: As far as backlog expansion, Look, I believe we'll set records and continue to set records. There's the timing on that. It gets lumpy for us.

Speaker #7: A lot of MSAs coming in, a lot of good things happening. So what I would say is, I mean, we've stayed true to — it's not in backlog till it's signed.

Duke Austin: So that for us, some of that kind-of billion-dollar beat over the last two quarters is because it is book to bill. We are moving building to building or job to job without it ever hitting backlog. So, I am not sure how to classify that. GAAP says for us at least, not GAAP, but the way our SEC requirements and the way we think about it is it is signed.

Speaker #7: And so that's that for us. Some of that, you know, kind of billion-dollar beat over the last 2 quarters is because it's book to bill.

Speaker #7: We're moving building to building or job to job without ever, without it ever hitting backlog. So, you know, I'm not sure how to classify that.

Speaker #7: GAAP says for us, at least not GAAP, but the way our SEC requirements and the way we think about it is it's signed. So that's just how we're going to go about it.

Duke Austin: So that is just how we are going to go about it. Over time, we have been doing it that way 10 years. We are not changing now. So it is just going to be that way. I think you are going to get some lumpiness in it. I would say as far as what the outlook of the business and what we see, the inbounds coming in certainly is moving at a faster pace than it has ever moved in my career.

Speaker #7: And over time, we've been doing it that way 10 years, we're not changing now. So it's just going to be that way. And I think you're going to get some lumpiness in it.

Speaker #7: I would say as far as what the outlook of the business and what we see, The imbalance coming in certainly is, you know, moving at a faster pace than it's ever moved in my career.

Julien Dumoulin-Smith: Then just on the data center front real quickly to ask about that, how do you think about the rights to win and what this is going to look like? Is this a partnership like with NiSource example where you have multiple sites? Or how do you think about moving into that sector? Obviously there is stuff beneath the surface. You guys have not released press release formally already cooking, but how do you think about that TAM and tackling it and what we will see more visibly?

Speaker #8: And then just on the data center front, real quickly to ask about that, how do you think about the right to win and what this is going to look like?

Speaker #8: Is this a partnership like with Nysource, for example, where you have like multiple sites, or how do you think about you know, moving into that sector?

Speaker #8: I mean, obviously there's stuff beneath the surface you guys haven't released or press-released formally—stuff that's already cooking. But how do you think about, you know, that TAM and tackling it, and what we'll see more visibly?

Duke Austin: Yeah, I just think we are doing it now. We are providing behind-the-meter generation that is going to utility scale generation today. Balance of plant and balance of facilities in multiple areas. So we are doing that today. We just did not press release it, we did not say anything about it. We do not need to. We just go up, put the numbers up, and I think that is the key. But the clients in both from the technology side as well as our utility customers, we are in the middle of that, building that whole thing out. When you look at it in a geographic area, if we are doing everything in that area with our people, which we self-perform 85%, we have a lot of control of certainty. We do not have people jumping trucks. We do not have the issues that others have.

Speaker #7: Yeah, I just think we're doing it now. I mean, we're You know, we're providing behind-the-meter generation that's going to utility generation, you know, so utility-scale generation today.

Speaker #7: I mean, and balance of plant and balance of facilities in multiple areas. So We're doing that today. We just didn't press release it. We didn't say anything about it.

Speaker #7: We don't need to. We just go up, put the numbers up, and I think that's the key. But the clients, and both from the technology side as well as our utility customers.

Duke Austin: But the clients in both from the technology side as well as our utility customers, we are in the middle of that, building that whole thing out. When you look at it in a geographic area, if we are doing everything in that area with our people, which we self-perform 85%, we have a lot of control of certainty. We do not have people jumping trucks. We do not have the issues that others have.

Speaker #7: We're in the middle of that, building that whole thing out. When you look at it in a geographic area, if we're doing everything in that area, With our people, which we self-perform 85%, we have a lot of control of certainty, and we don't have people jumping trucks.

Speaker #7: We don't have the issues that others have. The scale of the company, the growth of the company, and what we're able to accomplish because we can perform all of it is certainly beneficial to the end user and to the ratepayer.

Duke Austin: The scale of the company, the growth of the company, and what we are able to accomplish because we can perform all of it, is certainly beneficial to the end user and to the rate payer. I just think as we are able to do more, we can certainly help with labor on those sites, those big areas. You have 5,000, 6,000, 10,000 people. If we can control that environment, it is certainly helpful. It keeps the wage pressures down and things like that. Yes, the clients are coming to us. They see it on both sides. We are able to really give them something they want. They want certainty and they want speed. If that is the two things, the criteria, I like our chances. That is what we are seeing today out there.

Speaker #7: And I just think as we're able to do more, we can certainly, you know, help with labor on those sites, those big areas. I mean, you got 5,000, 6,000, 10,000 people.

Speaker #7: If we can control that environment, it's certainly helpful. It keeps the wage pressures down and things like that. So yes, I mean, the clients are coming to us.

Speaker #7: They see it. On both sides, we're able to really give them something they want. They want certainty and they want speed. If that's the 2 things, the criteria, I like our chances.

Speaker #7: And that's what we're seeing today out there. So I do think as we see it, you know, we're in the right spot doing the right things, and you'll continue to see more and more.

Duke Austin: I do think as we see it, we are in the right spot doing the right things, and you will continue to see more and more. If you look on a megawatt basis for MEP and say it is $15 million a meg, everybody has a different classification, so don't CEO math or whatever you want to call it, but it is $15 million a meg. Say that the company was getting $3 million or $4 million a meg a year ago. We are able to expand that into $5 million to $7 million. As it goes farther, that will be $7 million to $10 million. You can see us just capturing more and more of what the spend is per location, and that is not counting generation or the utilities behind it. We are getting more and more as we move forward. We are creating more verticals in the business.

Speaker #7: We were about If you look at it on a megawatt basis for MEP and say it's $15 million a meg, you know, everybody has a different classification.

Speaker #7: CEO math or whatever you want to call it, but it's $15 million a meg. Say that the company was, was getting $3 or $4 million a meg a year ago, but we're able to expand that into 5 to 7.

Speaker #7: And as it goes farther, that'll be 7 to 10. So you can see us just capturing more and more of what the spend is per location.

Speaker #7: And that's not counting generation or utilities behind it. So I just— I— we're getting more and more as we move forward. We're creating more verticals in the business.

Duke Austin: I like our growth patterns, I like our strategies, and we are doing well. Thank you.

Speaker #7: I like our growth patterns. I like our strategies, and we're doing well. So thank you.

Operator: Our next question will come from Nick Amicucci with Evercore. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Nick Amicucci with Evercore.

Speaker #9: Please unmute your line and ask your question. Hey, good morning, everyone. So I just wanted to, just wanted to see, it seems like you guys are, especially this year, kind of positioning for the higher end of that 15 to 20% EPS CAGR growth target through 2030.

Nick Amicucci: Hey, good morning, everyone. I just wanted to see, it seems like you guys are, especially this year, kind of positioning for the higher end of that 15% to 20% EPS CAGR growth target through 2030. Just wanted to see, the probability seems in your favor that you are going to get to that full stack scenario. I would just ask, how do you see the opportunities that would drive the full stack really coming together and where do you see the company really going from here?

Speaker #9: Just wanted to see, like, kind of the probability seems in your favor that you're going to get to kind of that full-stack scenario. So just say, I would just ask, like, how do you see the opportunities that would drive the full-stack really coming together and where do you, where do you see the company really going from here?

Duke Austin: Yeah, look, we are performing well above expectations. If you take the 20% onto this year, you are already into basically the low end of the plan. Very close to it. The acquisition profiles, the companies that we are able to acquire, what we see out there, what we see, and I am not signaling that we are going to go make acquisitions, but we have in the past, and I continue to see opportunities for us to deploy capital in the right places with the right businesses. If we see that and we continue down this path, sure, we are going to be well above plan and probably be talking about something different earlier than five years because we are going to have to. I do think, as we see it, there are risks to the markets, there are things that are out there in these long plans.

Speaker #7: Yeah, look, we are performing well above expectations. If you take the 20% onto this year, you know, you're well, you're already into basically the low end of the plan.

Speaker #7: And so very close to it. And I just— the acquisition profiles, the companies that we're able to acquire, what we see out there, what we see And I'm not signaling that we're going to go make acquisitions, but we have in the past, and I continue to see opportunities for us to deploy capital in the right places with the right businesses.

Speaker #7: If we see that and we continue down this path, sure, we're going to be well above plan and probably be talking about something different.

Speaker #7: Earlier than five years, because we're going to have to. I do think, as we see it, the markets—there's risk to the markets.

Speaker #7: There's things that are out there in these long plans. So that's why we give you a good CAGR basis and we're we're ahead. I— we're certainly above 20, but we've operated above 20 on a CAGR basis for 12 years.

Duke Austin: That is why we give you a good CAGR basis and we are ahead. We are certainly above 20%, but we have operated above 20% on a CAGR basis for 12 years. I think it is one thing to say it. A lot of people go out and they talk, talk about what they have done. I just say, look at our past, look what we have done and it is predictive of the future.

Speaker #7: And I think it's one thing to say it. A lot of people go out and they talk talk, talk, talk about what they've done.

Speaker #7: I just say, look at our past, look what we've done, and it's predictive of the future.

Nick Amicucci: Definitely fair. As we kind of think about the past too, you guys have always been very prudent on the risk profile of contracts. I just wanted to make sure that kind of less than 15% of revenue that was tied to fixed price contracts exceeding $300 million that you guys outlined at the Investor Day, is that still representative, just given the magnitude of the recent awards and your recent acquisitions?

Speaker #9: Definitely fair. And then as we kind of think about the past too, just you guys have always been very prudent on kind of the risk profile of kind of contracts.

Speaker #9: And so just wanted to make sure Um, that, that kind of less than 15% of revenue that was tied to fixed, uh, fixed-price contracts exceeding $300 million that you guys outlined at the Investor Day, um, is that still representative just given the, the magnitude of the recent awards and, and your recent acquisitions?

Duke Austin: The way you define, I would say our risk profile, how we define it, because you can define it in a fixed price. You can have KPIs or some measure that allowed it to be de-risked. There is a lot of ways to de-risk these things. The GMP profiles, all the different ways to contract. No matter what you call it, I look at it, every one of them, and I would say the risk profile of the company is in a better position than it has ever been.

Speaker #7: Yeah, I mean, the way you define— I would say our risk profile, whether— how we define it, because you can define it in what a fixed price, you can have UPIs or units of measure that allowed it to be de-risked.

Speaker #7: There's a lot of ways to de-risk these things. The GMP profiles, all the different ways to contract, um, no matter what you call it I look at it, every one of them, and I would say the risk profile of the company is in a better position than it's ever been.

Nick Amicucci: Perfect. Thanks.

Speaker #7: Perfect. Thanks.

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

Speaker #8: Our next question will come from Stephen Fisher with UBS. Please unmute your line and ask your question.

Steven Fisher: Thanks. Good morning. Can you hear me okay?

Speaker #9: Thanks. Good morning. Can you hear me okay? Next to you.

Duke Austin: Thanks, Steve.

Steven Fisher: Hey. Duke, you mentioned some of the larger transmission projects that you have in the pipeline here. How close do you think we are actually to getting those programs in backlog? How should we think about in terms of maybe order of booking Texas versus Ohio versus MISO? Those are the few that you mentioned.

Speaker #8: Hey, just, you know, Duke, you mentioned some of the larger transmission projects that you have in the pipeline here. How close do you think we are actually to getting those programs in backlog?

Speaker #8: And how should we think about in terms of maybe order of booking Texas versus Ohio versus MISO? Those are the few that you mentioned.

Duke Austin: Yeah. I think, we have LNTPs and things like that on multiple projects. We have things that we are doing with AEP, so we talk about that, where we are doing some supply agreements and doing some agreements with them. You can see what they are doing with their capital. I think the business is tripling. Super happy to work with our clients. I think I am not rushing them to get them signed. We want to take our time. Both sides need to. The environments are moving, and they have their own customers on the backside. We want to get it right, but we will be on 765 and 27 for sure. Some of that is not booked already. So it is hard for me to say. Some are booking earlier, LNTPs. We need to order material in places and do some things like that.

Speaker #7: Yeah, I mean, I think, you know, we have LNTPs and things like that on multiple projects. You know, we have things that we're doing with AEP.

Speaker #7: So we've talked about that, where we're doing some supply agreements and doing some agreements with them. And you can see what they're doing with their capital.

Speaker #7: I think the business is tripling and super happy to work with our clients. And I think I'm not rushing them to get them signed.

Duke Austin: We want to take our time. Both sides need to. The environments are moving, and they have their own customers on the backside. We want to get it right, but we will be on 765 and 27 for sure. Some of that is not booked already. So it is hard for me to say. Some are booking earlier, LNTPs. We need to order material in places and do some things like that.

Speaker #7: We want to take our time. Both sides need to. The environments are moving and they have their own customers on the backside. We want to get it right, but I, you know, we'll be on 765 and 27 for sure.

Speaker #7: I, you know, some of that's not booked already, so it's hard for me to say Some are booking way— booking earlier. LNTPs, we need to order material in places and do some things like that.

Duke Austin: I think you will see really good bookings, call it H1 of 2027, and even some starts. I am not sure the cadence on that. It is hard to say. We are probably farther along in, I do not know, Texas, Ohio would probably be the first two to go.

Speaker #7: I think you'll see really good bookings, call it first half of '27 and even some starts. I'm not sure the cadence on that. It's hard to say.

Speaker #7: We're probably farther along in I don't know, Texas, Ohio, probably be the first 2 to go.

Steven Fisher: Terrific. Duke, on your mission to provide certainty of delivery, do you think there are still some important big pieces that are missing? Or are you really at this point just filling in the more strategic focus but smaller pieces of it?

Speaker #8: Terrific. And then, Duke, on your mission to provide certainty of delivery, do you think there's still some important big pieces that are missing, or are you really at this point kind of just filling in the more kind of strategic-focused but smaller pieces of it?

Duke Austin: We talked about it in length. I mean, pole, wire, transformers, and we thought that those would be the short items, and we are not wrong. We have leaned into transformer breakers. This quarter, we have acquired a pole manufacturing facility and a nice company that we have been talking to for over 5 years. I think we see poles coming out of Mexico in various areas that we are waiting on material today. We are going to solve those problems. Our growth will be dependent on the OEMs. It will. It always has been. Everyone is worried about our labor constantly, and we grew 26,000 people this year. I am waiting on material. I am hoping they hurry up, and if they do not, we will lean into it. We have to keep our customers moving and keep the supply chains moving.

Speaker #7: I mean, we talked about it at length. I mean, poles, wires, transformers, and I— we thought that those would be the short items, and we're not wrong.

Speaker #7: So, we've leaned into transformers and breakers. This quarter, we acquired a pole manufacturing facility and a nice company that we've been talking to for over five years.

Speaker #7: And I think we see it. We see poles coming out of Mexico in various areas that, you know, we're waiting on material today. So we're going to solve those problems.

Duke Austin: We are going to solve those problems. Our growth will be dependent on the OEMs. It will. It always has been. Everyone is worried about our labor constantly, and we grew 26,000 people this year. I am waiting on material. I am hoping they hurry up, and if they do not, we will lean into it. We have to keep our customers moving and keep the supply chains moving.

Speaker #7: I mean, it won't be— our growth will be dependent on the OEMs. It will. It always has been. Everyone's worried about our labor constantly, and, and we grew 26,000 people this year.

Speaker #7: So I'm waiting on material. I'm hoping they hurry up, and if they don't, we will lean into it. We have to, to get to keep the— keep our customers moving and keep the supply chains moving and You know, we're not a manufacturer at heart, but if we're— if we need to be, we will be.

Duke Austin: We are not a manufacturer at heart, but if we need to be, we will be. We are going to provide the solution to these clients when we see it. If we see issues out there, the company will lean into those issues with our clients and move it forward. It is the right thing for the ratepayer.

Speaker #7: And we're going to provide solutions to these clients when we see it. If we see issues out there, the company will lean into those issues with our clients and move it forward.

Speaker #7: It's the right thing for the ratepayer. Thank you. Fantastic quarter.

Steven Fisher: Thank you. Fantastic quarter.

Duke Austin: Thank you.

Speaker #8: Thank you. Our next question will come from Jamie Cook with Truist Securities. Please unmute your line and ask your question. Jamie, if you were able to unmute your line.

Operator: Our next question will come from Jamie Cook with Truist Securities. Please unmute your line and ask your question. Jamie, if you are able to unmute your line.

Duke Austin: That is a good question.

Speaker #8: That's a good question. We will move on to the next question and potentially come back to Jamie. One moment. Our next question will come from Michael Dudas with Vertical Research Partners.

Operator: We will move on to the next question and potentially come back to Jamie. One moment. Our next question will come from Michael Dudas with Vertical Research Partners. Please unmute your line and ask your question.

Speaker #8: Please unmute your line and ask your question. Good morning, Kip, Duke, Jayshree. Good morning.

Michael Dudas: Morning, Kip, Duke, Jayshree.

Duke Austin: Good morning.

Michael Dudas: Duke, you highlighted. Maybe your thoughts on over the next several quarters, several years, what is the risks to the market or what your utility or hyperscaler they are thinking about that might cause some delays or slowdowns? Or is it just the supply chain and the labor issues that you guys have gotten your handles around provide that turnkey solution? Because sometimes the market seems like the risks to the end of the cycle is quite dramatic relative to what appears reality is.

Speaker #7: Uh, Duke, you highlighted— maybe your thoughts on over the next several quarters, several years, what is the risk to the market, or what your utility or hyperscalers are thinking about that

Speaker #8: Might there be some delays or slowdowns, or is it just the supply chain and labor issues that you guys have gotten your arms around to provide that turnkey solution?

Speaker #8: Because, uh, sometimes the market seems like the, the risk to the end of the cycle is quite dramatic relative to what appears reality is.

Duke Austin: Yeah. I would just say our inbounds are accelerating, as far as what our clients are telling us. They are doing things in years, 2 years kind of time frames, and the demand is there. When you listen to calls, when we listen to them and they are asking us for solutions out to well past 2030. So we are just basically positioning the company for what we are asked by the client. We are staying very close to the customer. I do think when you think about it, if you think about demand that is out there, we are building factory in 10 states, something like that. That is going to create close to 1,000 jobs against all these markets. So, I am waiting on power hookups in 2 or 3 factories. And the people that are building it are the people that are building data centers.

Speaker #7: Yeah, I would just say our inbounds are accelerating, as far as what our clients are telling us. I don't know, they're doing things in years—two-year kind of timeframes—and the demand is there.

Speaker #7: When you, when you listen to calls, when you— when I— we listen to them and they're asking us for solutions out to 20— well past 2030.

Speaker #7: So, we're just basically positioning the company for what we're asked by the client. We're staying very close to the customer. I do think, when you think about it, if you think about demand that's out there, we're building factories in 10 states—something like that—that's going to create close to 1,000 jobs against all these markets.

Speaker #7: So I'm waiting on power hookups in 2 or 3 factories, and the people that are building it are the people that are building data centers.

Duke Austin: The very fungibility of labor, what we see here, I don't think labor's going to be the issue. I think it will be supply chain, critical items in supply chain. It always lean into these things. You can see what GE Vernova did yesterday or the day before, whenever they did that. The criticality of their supply chain, and we have to lean into it as well on the things that we do. I like what the manufacturers are doing. Almost every OEM is expanding. It certainly helps us. It makes me feel more comfortable with where the markets are going and our ability to be certain on the timeframe.

Speaker #7: So the very fungibility of labor—what we see here—I don't think labor is going to be the issue. I think it'll be supply chain, critical items in supply chain.

Speaker #7: It always lean into these things. I mean, you can see what GE did yesterday or day before, whenever they did that, the criticality of their supply chain.

Speaker #7: And we have to lean into it as well on the things that we do. I like what the manufacturers are doing. Almost every OEM is expanding.

Speaker #7: It certainly helps us. It makes me feel more comfortable with where the markets are going and our ability to be certain about the timeframe.

Duke Austin: As long as those things stay intact, and the things that we are doing, the good that we are doing for the country out there with labor and communities and things like that I know the political rhetorics and all the rhetoric that is out there, but what reality is, it is a very good thing for people and for teachers and for communities. It is much like the Industrial Revolution. We are doing great things. The industries are doing great things. We are super proud to be a part of it, and we see growth.

Speaker #7: So as long as those things stay intact, you know, and the things that we're doing—the good that we're doing for the country out there with labor and communities and things like that—I know the political rhetoric and all the rhetoric that's out there, but what reality is, is it's a very good thing for people and for teachers and for communities.

Speaker #7: It's much like the Industrial Revolution. We're doing great things. The industries are doing great things. We're super proud to be a part of it, and we see growth.

Operator: Thanks, Duke. We will now go back to Jamie Cook with Truist Securities. Please press star 6 to unmute your line.

Speaker #7: Thanks, Stu.

Speaker #8: We'll now go back to Jamie Cook with Truist Securities. Please press star 6 to unmute your line. Can you hear me? Can you hear me?

Jamie Cook: Can you hear me?

Duke Austin: Got it.

Jamie Cook: Can you hear me?

Duke Austin: Yes, ma'am.

Speaker #8: Yes, ma'am.

Jamie Cook: Oh, perfect. Sorry about that. All right, Duke, so now you get a tough question because I screwed up on this. I guess my first question, understanding the growth that you are seeing in data centers and looking at the margins relative to some of your public peers. As data center is one of the higher growth markets and given where your margins, it appears are your margins, why would not structurally Quanta's margins improve greater than the 10% to 11% that you target? Is there any structural reason why your margins cannot be where your public peers are? Then my second question, just want to understand how you are thinking about the M&A pipeline. Obviously, it has been focused on getting more in data centers.

Speaker #10: Oh, perfect. Sorry about that. All right, Dukes, now you get a tough question because I screwed up on this. I guess my first question, understanding the growth that you're seeing in data centers and looking at the margins, relative to some of your public peers.

Speaker #10: As data center is one of the higher growth markets and given where your margin, the peers are, your margins, why wouldn't structurally Quanta's margins improve greater than the 10 to 11% that you target?

Speaker #10: Is there any structural reason why your margins can't be where your public peers are? And then my second question, just wanna understand how you're thinking about the M&A pipeline.

Speaker #10: Obviously, it's been focused on getting more in data centers, but I'm just wondering how—if you want to move sort of out of power more so and consider other markets within your large load market that you talk about, like advanced manufacturing, infrastructure—just wondering if we're going to start moving beyond power, whether it's besides utility data center, if that makes sense.

Jamie Cook: But I was just wondering how if you want to move out of power more so and consider other markets within your large load market that you talk about, like advanced manufacturing, infrastructure. Just wondering if we are going to start moving beyond power, whether it is besides utility data center, if that makes sense. Thanks.

Speaker #10: Thanks.

Duke Austin: Yeah, I got it. So for the margins, Jamie, I do not think anyone has a $20 billion utility business that we would be compared to. I do not know who it would be. Maybe all of them put together. That said, if you fundamentally. We are not going above 10% to 12% in there by design. We are going to stay there. The ratepayers is what we are pressing on. We are not doing it. So we will compound it over time. It has been a great business for us. We are part of that industry, and we understand what it takes to be long there. What I would say is I see decades of growth for this company. We have done a nice job staying part of that fabric, and we are not going to get transactional. We are going to stay transformational and continue to compound.

Speaker #7: Yeah, I think I got it. So for the margins, Jamie, I don't think anyone has a $20 billion utility business that we would be compared to.

Speaker #7: I don't know who it would be. Maybe all of them put together. So that said, I mean, if you fundamentally, we're not going above 10 to 12% in there by design.

Speaker #7: We're gonna stay there. The ratepayers, what we're pressing on, we're not doing it. So we'll compound it over time. It's been a great business for us.

Duke Austin: It has been a great business for us. We are part of that industry, and we understand what it takes to be long there. What I would say is I see decades of growth for this company. We have done a nice job staying part of that fabric, and we are not going to get transactional. We are going to stay transformational and continue to compound.

Speaker #7: We're part of that industry, and we understand what it takes to be long there. What I would say is, I see decades of growth.

Speaker #7: For this company, we've done a nice job staying part of that fabric, and we're not going to get transactional. We're going to stay transformational and continue to compound.

Duke Austin: That is going to be there in that business and continue to grow nicely in the utility business. As far as MEP, we are getting some efficiencies with our advanced manufacturing. We are doing some good things there. It is pressing upward on those margins in that segment. It is still only 20% of the business, give or take, probably 15% to 20%. When we look at it, I think that is because the utility business is growing nicely. Our renewable business is fantastic. That is another issue. You got a real nice renewable business, $5 billion to $10 billion of renewables in there. So I think when you look at those two businesses and what we are doing from capital and return on invested capital, we are getting the right growth of return. I think that is the key to it.

Speaker #7: So that's, that's going to be there in that business and continue to grow nicely. Utility business. As far as MEP, we are getting some efficiencies with our advanced manufacturing.

Speaker #7: We're doing some good things there. It is pressing upward. On those margins in that segment, and it's still only 20% of the business, give or take probably 15 to 20.

Speaker #7: And I, when we look at it, I think that's. 'Cause the utility business is growing nicely. Our renewable business is fantastic. And that's another issue.

Duke Austin: Our renewable business is fantastic. That is another issue. You got a real nice renewable business, $5 billion to $10 billion of renewables in there. So I think when you look at those two businesses and what we are doing from capital and return on invested capital, we are getting the right growth of return. I think that is the key to it.

Speaker #7: You know, you've got a really nice renewable business—$5 to $10 billion of renewables in there. So I think when you look at those two businesses, and what we're doing from capital and return on invested capital, we're getting the right growth of return.

Speaker #7: And I think that's That's the key to it. But it's compounding and it's not something that's gonna have wildly margin increases. We are enhancing the underground segment.

Duke Austin: But it is compounding, and it is not something that is going to have wildly margin increases. We are enhancing the underground segment. I do think there is room there. We are improving there. We are getting efficiencies. You can see some leverage coming in. Our training now, when you are looking at training, people get scared of heights and instead of dropping out of the programs, they can be a plumber, a boilermaker, electrician, and stay underground. So we are creating craft, and that creates efficiencies within that. So we are picking up some efficiencies there. But as far as margins, I like what we are doing. We are de-risking the company along the way. Better cash flows, better returns. So I like where it is going. It has got the right trajectory, but as far as pure operating income margin expanding to some astronomical level, I do not see it. I think we will compound it.

Speaker #7: I do think there's room there. We are improving there. We're getting efficiencies. You can see some leverage coming in. Our training now, when you're looking at training, you know, people get scared of heights, and instead of dropping out of the programs, they can be a plumber, a boilermaker.

Speaker #7: electrician and stay on the ground. So we're creating craft and that creates efficiencies within that. So we're picking up some efficiencies there. But as far as margins, I like what we're doing.

Duke Austin: But as far as margins, I like what we are doing. We are de-risking the company along the way. Better cash flows, better returns. So I like where it is going. It has got the right trajectory, but as far as pure operating income margin expanding to some astronomical level, I do not see it. I think we will compound it.

Speaker #7: We're de-risking the company along the way. Better cash flows, better returns. So I like where it's going. It's got the right trajectory, but as far as pure operating income margin expanding to some astronomical level, I don't see it.

Duke Austin: We will continue to increase a little bit. Certainly have room in the UI. But we execute through a lot of different variables that go unnoticed. I mean, fuel is up, insurance is up. I am sure someone will be talking about fuel somewhere. We run right through all that. Never say a word, move along, compound earnings. We make sure that we account for all those things and guidance in the things that we say. If we operate through all that and Canada becomes world-class, like lower 48, yes, margins are going to move up. As far as M&A, I do think, we are very cognizant of the hockey sticks on data center. We are not buying a pure data center company per se.

Speaker #7: I think we'll compound it, we'll continue to increase a little bit, certainly have room in the UI, but we execute through a lot of different variables that go unnoticed.

Speaker #7: I mean, fuel's up, insurance is up, I'm sure someone will be talking about fuel somewhere. It's— we run right through all that, never say a word, move along, compound earnings.

Speaker #7: And we make sure that we account for all those things and guidance in the things that we say. If we operate through all that and Canada becomes world-class like Lower 48, yes.

Speaker #7: Margins are going to move up. And as far as M&A, I do think like we're very cognizant of the hockey sticks on data center.

Speaker #7: We're not buying a pure data center company per se. I look at it constantly to say the businesses that we acquired, our data center business cut in half, what would it do to the company long-term?

Duke Austin: I look at it constantly to say, like, the businesses that we acquired, if our data center business cut in half, what would it do to the company long term? We are in a very good position. Sure, it comes down a little bit, but it does not. We do not fall off a cliff and we continue to still see growth in the business. So we can still see growth without data center. Our Pharmaceutical businesses are what we are doing in power plants, what we are doing across board. You have 50% of the growth in the utility business is not data center, by the way. So we have growth in the utility sector without data center. We have not had that in 20 years. Our distribution business, all the things that we are doing, all the things that they are doing, it is fantastic across the board.

Speaker #7: And it's we're in a very good position. It does, sure, it comes down a little bit, but it does not, we don't fall off a cliff and we continue to still see growth in the business.

Speaker #7: So we can still see growth without data center. Pharmaceutical businesses are, what we're doing in power plants, what we're doing across the board. You have 50% of this growth in the utility business is not data center, by the way.

Duke Austin: You have 50% of the growth in the utility business is not data center, by the way. So we have growth in the utility sector without data center. We have not had that in 20 years. Our distribution business, all the things that we are doing, all the things that they are doing, it is fantastic across the board. Super excited, and we like the fact that data centers are there, but we are not acquiring against it, for sure.

Speaker #7: So we have growth in the utility sector without data center. We haven't had that in 20 years. Our distribution business, all the things that we're doing, all the things that they're doing, It's fantastic, I mean, across the board.

Duke Austin: Super excited, and we like the fact that data centers are there, but we are not acquiring against it, for sure.

Speaker #7: So, super excited, and it has—you know, we like the fact that data centers are there, but we're not acquiring against it, for sure.

Jamie Cook: Thank you.

Speaker #7: Thank you.

Kip Rupp: Matt?

Operator: Moving forward, we ask that participants limit their question to just one and re-queue for any additional questions to allow for remaining questions to be addressed. Thank you. Our next question will come from Sherif El-Sabbahy with Bank of America. Please unmute your line and ask your question.

Speaker #8: Moving forward, we ask that participants limit their question to just one and requeue for any additional questions to allow for remaining questions to be addressed.

Speaker #8: Thank you. Our next question will come from Sharif El-Sabahi with Bank of America. Please unmute your line and ask your question.

Sherif El-Sabbahy: Hi, good morning. Duke, you've said you don't expect labor to be the restricting factor going forward and talked about getting more productivity out of your existing labor base. But with demand the way it is, do you need to accelerate the rate of hiring from the 6,000 or 7,000 a quarter it's at now? If so, where could that go, and what investments do you need to make in training?

Speaker #11: Hi, good morning. You know, Duke, you've said you don't expect labor to be the restricting factor going forward and, you know, talked about getting more productivity out of your existing labor base.

Speaker #11: But with demand the way it is, do you need to accelerate the rate of hiring from the 6,000 or 7,000 a quarter it's at now?

Speaker #11: And if so, where, where could that go and what investments do you need to make in training?

Duke Austin: I think we will continue to train. It's an expense, so that's not going anywhere. We continue to invest in it. I don't think you'll invest any more than we already have and may actually go down some because we're getting some leverage. But look, you've got seasonality, you've got quarters that you won't grow as fast as well. The Q1 certainly wasn't like the Q2 and the Q3. You'll come down in some seasonality. Fungibility, you can see our Q4 kind of stays flat now to the Q3. When you think about it, the people in northern climes are moving around our system and moving to other things. The Q1 still falls a bit because it naturally does. It always has in seasonality. So I think you'll lose some headcount in the Q1, a little bit. But they're moving around more.

Speaker #7: I mean, I think we will continue to train. I mean, it's an expense, so that's not going anywhere. We continue to invest in it.

Speaker #7: I don't think we'll invest any more than we already have. It may actually go down some, because we're getting some leverage. But look, you've got seasonality. You've got quarters where you won't grow as fast, as well.

Speaker #7: I mean, the first quarter certainly wasn't like the second and the third. And so you'll come down in some seasonality. You know, we're able to, you know, fungibility.

Speaker #7: You can see our 4th quarter kind of stays flat now to the 3rd. And when you think about it, you know, those, the people in northern climes are moving around our system and moving to other things.

Speaker #7: The 1st quarter still falls. a bit, but it naturally does. It always has in seasonality. So I think you'll lose some headcount in the first, a little bit, but they're moving around more.

Duke Austin: We're moving segment to segment. We're moving company to company. We're moving across what I would consider verticals, which is good. So we're getting more efficiencies out of the labor that we're training. I still see the company in the, call it, 6,000 to 8,000 a year on the average, and then you'll have outlier years where you're growing like we did this year. Some of it's acquisition. But I still think the organic growth's around, call it, 12,000. So something like that of organic growth. I would say the organic growth of the company, we heard a lot about that organic growth. I hope everyone looks at the numbers of the organic growth of the business, and maybe we can stop talking about that now and talk about what we've done organically. That's because we invested in the labor.

Speaker #7: We're moving segment to segment. We're moving from company to company. We're moving across our, what I would consider verticals, which is good. So we're getting more efficiencies out of the labor that we're training, but we still, I mean, I still see the company

Speaker #12: you know, kind of in the, call it,

Speaker #7: $6,000 to $8,000 a year on the average, and then you'll have outward years where you're growing like we did this year. Some of it's acquisition, but I still think the organic growth around, call it $12,000.

Duke Austin: So something like that of organic growth. I would say the organic growth of the company, we heard a lot about that organic growth. I hope everyone looks at the numbers of the organic growth of the business, and maybe we can stop talking about that now and talk about what we've done organically. That's because we invested in the labor.

Speaker #7: So something like that of organic growth. And I would say the organic growth of the company, we heard a lot about that organic growth, organic growth.

Speaker #7: I hope everyone looks at the numbers of the organic growth of the business and maybe we can stop talking about that now. And talk about, you know, what we've done organically.

Speaker #7: That's because we invested in the labor.

Operator: Our next question will come from Andy Kaplowitz with Citigroup. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Andy Kaplowitz with Citigroup. Please unmute your line and ask your question. Good morning, everyone.

Andy Kaplowitz: Good morning, everyone.

Duke Austin: Good morning.

Speaker #11: Good morning, Duke. I'm going to take your softball about, you know, asking about fuel in a different context. I think this is a quarter that everyone in industrials is concerned about inflation and

Andy Kaplowitz: Duke, I am going to take your softball about asking about fuel in a different context. I think this is a quarter that everyone in industrials is concerned about inflation and price versus cost. Obviously, you delivered strong Electric Power margin, as you said. So obviously, there is some positive mix, and maybe it is your vertical integration that is helping you. Maybe you could talk about how much better positioned Quanta is to handle inflation versus a few years ago, where it did kind of show up in your Electric margins.

Speaker #13: price versus cost, but obviously you delivered strong electric power margin, as you said. So obviously there's some positive mix, but, you know, maybe it's your vertical integration that's helping you, but maybe you could talk about how much better positioned QUANTA is to handle, you know, inflation versus a few years ago where it did kind of show up in your electric market margins.

Duke Austin: Yeah. We have done a nice job with the supply chain as well as just in general. I think we have always had pass-throughs on labor escalations in our utility business just by design. So I think we have done a good job with labor and being able to really, from a risk standpoint, mitigate it. We have done that forever, and it does not show up much. The things that are for us, like healthcare, insurance, just risk and insurance, things like that have escalated faster than other things, and we have seen inflationary things in the business. We have got a lot of efficiencies. We have not had to pass all that through to the client, which is nice. I think the good thing is the industry is working together in a collaborative manner. As we do that, if we can do that with them, we can off-site manufacture.

Speaker #7: Yeah, you know, we've done a nice job with the supply chain as well as just in general. I think we've always had pass-throughs on labor escalations in our utility business, just the way by design.

Speaker #7: So I think we've done a good job. with labor and being able to really from a risk standpoint mitigated. We've done that forever and it doesn't show up much.

Duke Austin: The things that are for us, like healthcare, insurance, just risk and insurance, things like that have escalated faster than other things, and we have seen inflationary things in the business. We have got a lot of efficiencies. We have not had to pass all that through to the client, which is nice. I think the good thing is the industry is working together in a collaborative manner. As we do that, if we can do that with them, we can off-site manufacture.

Speaker #7: I guess the things that are like for us, like healthcare, insurance, just risk and insurance, things like that have escalated faster than other things.

Speaker #7: And we have seen inflationary things in the business. We've got a lot of efficiencies. We haven't had to pass all that through to the client.

Speaker #7: Which is nice. And so we're— I think the good thing is the industry's working together in a collaborative manner. And as we do that, if we can do that with them, we can offsite manufacture, we can we can do a lot of things that make tons of sense where we both don't have to add people and what I would consider supply chain initiatives, all kinds of different things that we can do together.

Duke Austin: We can do a lot of things that make tons of sense where we both do not have to add people and what I would consider supply chain initiatives, all kinds of different things that we can do together. If we do that and think about it as a solution, we can reduce costs for the client, and for us, it increases top line as well as our margin profiles in many ways on these solution-based approaches. So we have been able to do that, and that is why that inflationary piece has not came into the business because we have been able to absorb it. I do think, look, scale matters. It matters in the utility business. It matters in every business. We continue to create scale within the business, and I would not underestimate that.

Speaker #7: If we do that and think about it as a solution, we can reduce costs for the client. And for us, it increases top line as well as our margin profiles in many ways on these.

Speaker #7: solution-based approaches. So we've been able to do that, and that's why that inflationary piece hasn't came into the business, because we've been able to absorb it.

Speaker #7: But I do think Look, scale matters. It matters in the utility business. It matters in every business. We continue to create scale within the business, and I wouldn't underestimate that.

Duke Austin: It means a lot for us, and it means a lot for the business for us to continue to scale it.

Speaker #7: It means a lot to us, and it means a lot for the business, for us to keep continuing to scale it. Appreciate the color.

Andy Kaplowitz: Appreciate the color.

Operator: Our next question will come from Liam Burke with B. Riley Securities. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Liam Burke with B. Riley Securities. Please unmute your line and ask your question. Thank you. Good morning, Duke.

Liam Burke: Thank you. Good morning, Duke.

Duke Austin: Good morning.

Liam Burke: Duke, the Underground Infrastructure segment is seeing very steadily improving operating margins both from Q4 last year and then sequentially. Could you give us some color as to what is driving that improvement?

Speaker #11: Good morning, Duke. The underground infrastructure segment is seeing very steadily improving operating margins, both from the fourth quarter last year and then sequentially. Could you give us some color as to what's driving that improvement?

Duke Austin: Yeah, thanks for noticing. Look, it's work mix. A lot of it is the risk profiles that we're willing to take on it. Two different things. I think we've added our mechanical business is in it. We have some of our civil business in it. It's on both sides of it. Those additions are certainly something that are pushing it up. We'll continue to grow our mechanical business faster than anything else. We'll get some growth in our traditional business, not as much. So what I see is the work mix is changing as such that you can get into double digits fairly quickly. It's incrementally happening. You can see it throughout the quarters of growth, and I think it's getting to a sustain.

Speaker #7: Thanks for noticing. Look, it's work mix, a lot of it, and a lot of it is the risk profiles that we're willing to take on.

Speaker #7: Two different things. I think, you know, we've added our mechanical businesses in it. We have some of our civil business in it. It's on both sides of it.

Speaker #7: Those additions are certainly something that are pushing it up. We'll continue to grow our mechanical business faster than anything else. Some growth in our traditional business, not as much.

Speaker #7: So what I see is that the work mix is changing in such a way that you can get into double digits fairly quickly, and it's incrementally happening.

Speaker #7: You can see it throughout the quarters: the growth. And I think it's getting to a sustained— you'll have some seasonality in the first quarter, but I do think in the next year, you could see us in double digits in quarters and get on a run rate there in the next year.

Duke Austin: You'll have some seasonality in Q1, but I do think, in the next year, you could see us in double digits and quarters and get on a run rate there in the next year. So exponentially getting that up into the double-digit range.

Speaker #7: So, exponentially getting that up into the double-digit range. Thank you, Dave.

Liam Burke: Thank you, Duke.

Duke Austin: Sure.

Speaker #8: Sure. Our next question will come from Philip Shen with Roth Capital Partners. Please unmute your line and ask your question.

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

Philip Shen: Hey, thanks for taking my questions. Congrats on your strong bookings in the quarter. I wanted to explore the data center outlook some more. I know inbounds have never been greater, and you have spoken very positively about this opportunity. That said, some of our checks suggest some data center work may be sliding or even going dark. Duke, can you give a little bit of color on some of this risk that projects could be sliding? What is the potential for maybe a slowdown or just some push outs in 2027 or 2028? Are you able to just backfill some of the things that are pushing out? So a little bit of color on some of the if you can lift the hood a bit so we can see, that would be great. Thanks.

Speaker #11: Hey, thanks for taking my questions and congrats on your strong bookings in the quarter. I wanted to explore the data center outlook some more.

Speaker #11: I know inbounds have never been greater, and you've spoken very positively about this opportunity. That said, some of our checks suggest some data center work may be sliding, or even going dark.

Speaker #11: Dude, can you give a little bit of color on some of this risk that projects could be sliding? And then, you know, what is the potential for maybe a slowdown or just, you know, some pushouts in '27 or '28, or are you able to just backfill some of the things that are pushing out?

Speaker #11: So a little bit of color on some of the You know, if you can lift the hood a bit so we can see, that'd be great.

Speaker #11: Thanks.

Duke Austin: Yeah. I think for us, it is much like our renewable business. We said all along when the sky was falling there that we work for the top 10 best. From a developer standpoint, I would say the same applies to the data centers. We are working for the very best in the world at this, and the most liquid balance sheets that you see in the world. All I can say is we cannot even get to 25% to 30% of what they have in front of us, and we are having to basically look out five years and see how much we can take at this point. All I can do is tell you the inbounds that we see, and when we sign contracts, we put it in backlog. Our backlog is growing nicely, not only 12 months, but beyond 12.

Speaker #7: Yeah, I mean, I think for us, it's much like our renewable business. We said all along, when the sky was falling there, that we work for the top 10 best.

Speaker #7: And from a developer standpoint, I would say the same applies to the data centers. I mean, we're working for the very best in the world at this and the most liquid balance sheets that you see in the world.

Speaker #7: And all I can say is we can't even get to 25% to 30% of what they have in front of us, and we're having to basically look out 5 years and see how much we can take at this point.

Speaker #7: All I can do is tell you the inbounds that we see. When we sign contracts, we put it in backlog. Our backlog is growing nicely—not only for 12 months, but beyond 12.

Duke Austin: All the investments that you see in engines from GE that are three years out, all the investments that you see in factories that are coming, it is creating businesses as well with farm and things like that. We have fungibility of labor as well. We are building chip plants, or we are building pharmaceutical businesses, or we are doing a lot of different things with that same workforce if we are not. So we are able to move across segments and move across verticals. If something was to slow, I am not concerned at this point, but the data center demand is there. We see it. All I can say is what we see on a daily basis, the inbounds that we get at the very highest level of everyone that we talk to.

Speaker #7: All the investments that you see in engines from GE that are 3 years out, all the investments that you see in factories that are coming.

Speaker #7: It's creating businesses as well with farms and things like that. We have fungibility of labor as well. So if they're not on—if they're not, you know, we're building chips.

Speaker #7: Chip plants, or we're building pharmaceuticals, or we're doing a lot of different things with that same workforce if we're not— so we're able to move across segments and move across verticals.

Speaker #7: If something was to slow, I'm not concerned at this point, but the data center demand is there. We see it. You know, that's all I, all I can say is what we see on a daily basis, the inbounds that we get at the very highest level of everyone that we talk to.

Duke Austin: The cloud-based environment, just the cloud alone, which is the majority of what we do, that inference-based, cloud-based business has been there for 10 years and has done nothing but go vertical. I continue to believe that is the case. You may get some learning centers that slow a little bit. It is very little of our work today, and I am not as concerned as the market may perceive it at this point. We still see large projects, and we see the cloud-based business growing much like our MSA business and utility side, and we continue to capture more of the spend as we move forward. I do not know. I think for early stages for us, we are creating something like we did in the utility side, and it is coming from the technology side now. If it was to slow, the company will capture more of the spend anyway.

Speaker #7: The cloud-based environment, just the cloud alone, which is the majority of what we do, that inference-based cloud-based business has been there for 10 years and it has done nothing but go vertical.

Speaker #7: And I continue to believe that's the case. You may get some learning centers that slow a little bit—there's very little of that work today.

Speaker #7: And I just I'm not as concerned as the market may perceive it at this point. We still see large projects and we see, you know, the cloud-based business growing much like our MSA business on the utility side, and we continue to capture more of this spin as we move forward.

Duke Austin: We still see large projects, and we see the cloud-based business growing much like our MSA business and utility side, and we continue to capture more of the spend as we move forward. I do not know. I think for early stages for us, we are creating something like we did in the utility side, and it is coming from the technology side now. If it was to slow, the company will capture more of the spend anyway.

Speaker #7: So I don't know, you know, I think we're early stages for us, we're creating something like we did in the utility side, and that's coming from the technology side now.

Speaker #7: And if it was too slow, the company will capture more of the spend anyway. So, I don't know, it's growth on growth right now, and I don't see it stopping.

Duke Austin: So I do not know. It is growth on growth right now, and I do not see it stopping.

Philip Shen: Great. Thanks for the color.

Speaker #7: Great, thanks for the color.

Duke Austin: Sure.

Operator: Our next question will come from Alexa Brenno with Goldman Sachs. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Alexa Brenno with Goldman Sachs. Please unmute your line and ask your question.

Alexa Brenno: Hey, good morning, team, and thanks for taking our question. Can you just talk a little bit about what the dialogue looks like on the hyperscaler side? Are you seeing them engage with you earlier in the development process similar to your utility relationships? Then how do we think about that in the context of the scope of the work that you could be doing?

Speaker #10: Hey, good morning, team, and thanks for taking our question. Can you just talk a little bit about what the dialogue looks like on the hyperscaler side?

Speaker #10: Are you seeing them engage with you earlier in the development process, similar to your utility relationships? And then, how do we think about that in the context of the scope of the work that you could be doing?

Duke Austin: Yeah, they are engaging early. I think a couple things. Community-based engagement. We are seeing our labor, how do we collaborate on labor? How do we collaborate on hiring? Yes, it is early. We can help a lot with the dialogue of actually what is going on with the workforce and the community. I think just being a part of the industry there, company is moving in the right direction. We are having great conversations at very highest levels with that side as well. We are working hard to create the same environment and the same trust that we have, and it is a trust thing. I do think the company has a long track record generationally in the utility business, and the same applies. Cupertino grew up with the industry, and their reputation is every bit as good as anyone in the world. They do a great job and very customer-focused.

Speaker #7: Yeah, they're engaging early. I think a couple of things, community-based engagement, we're seeing our labor partners How do we collaborate on labor? How do we collaborate on hiring?

Speaker #7: So yes, it's early. We can help a lot with the dialogue of actually what's going on with the workforce in the community. I think just being a part of the industry there, you know, the company's moving in the right direction.

Speaker #7: We're having great conversations at very high levels with that side as well. So we're working hard to create the same environment and the same trust that we have.

Duke Austin: We are working hard to create the same environment and the same trust that we have, and it is a trust thing. I do think the company has a long track record generationally in the utility business, and the same applies. Cupertino grew up with the industry, and their reputation is every bit as good as anyone in the world. They do a great job and very customer-focused.

Speaker #7: It's a trust thing. So I do think the company has a long track record generationally in the utility business, and the same applies. I mean, Cupertino grew up with the industry, and their reputation is is every bit as good as anyone in the world.

Speaker #7: They do a great job and very customer-focused. So the whole company is customer-focused, and as long as we stay like that, we'll continue to you know, see inbounds from the very biggest in the world at the early stages of these projects where we can really make a difference in the community.

Duke Austin: The whole company is customer-focused, and as long as we stay like that, we will continue to see inbounds from the very biggest in the world at the early stages of these projects where we can really make a difference in the community. Certainly, I feel like if we are able to do that is what creates us to be a part of that fabric as well and create the moat that we have on the utility side, is make sure that we are enhancing our customers' ability to build and perform much like we are.

Speaker #7: And certainly, I feel like if we're able to do that, that's what allows us to be a part of that fabric as well and create the moat that we have on the utility side—making sure that we are enhancing our customers' ability to build and perform, much like we are.

Alexa Brenno: Thank you.

Speaker #7: Thank you.

Operator: Our next question will come from Alex Rygiel with Texas Capital Securities. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Alex Reigel with Texas Capital Securities. Please unmute your line and ask your question.

Alex Rygiel: Duke, I was curious about your reference to increasingly flexible craft workforce. What do you mean by increasingly flexible, and what is kind of different today versus, say, 5 to 10 years ago? Because obviously you have had a pretty tremendous training program in place for many, many years. But the comment of increasingly flexible kind of caught my ear.

Speaker #7: Duke, I was curious about your reference to increasingly flexible craft workforce. What do you mean by increasingly flexible and what's kind of different today versus

Speaker #14: say 5 to 10 years ago? Because obviously you've had a pretty tremendous training program in place for many, many years, but the comment of increasingly flexible kind of caught my ear.

Duke Austin: Good. It was intended to, thanks, Alex. I think what we are saying is, we were really confined to the utility business and if you cannot climb, it is very difficult to stay in our craft. You can drive trucks, you can do other things, but now, like a person that cannot climb, but has the intellect from math and the things that you need on the Electric side or even plumbing, we are able to put them in a different craft because of our expansions in the verticals, in the inside electrical, low voltage, boilermakers, pipefitters, plumbers. We have really expanded the company over the last 2 to 3 years of what crafts we have and how big we are in each one of them as we moved in. I think the flexibility for us to take a person and say, "Where do you want to sit in this?

Speaker #7: Good. It was intended to, so thanks, Alex. I think what we're saying is, we were really confined to the utility business, and, you know, if you can't climb, it's very difficult to stay in our craft.

Speaker #7: You can drive trucks, you can do other things, but now a person that can't climb but has the intellect, for math and the things that you need for on the electric side or even plumbing, I— we're able to put them in a different craft because of our expansions in the verticals and the, you know, inside electrical voltage.

Speaker #7: Pole makers, pipefitters, plumbers. We've really expanded the company over the last 2 to 3 years of what crafts we have and how big we are in each one of them.

Speaker #7: As we moved in. So I think the flexibility for us to take a person and say, where do you want to sit in this?

Duke Austin: Here are the wage profiles and here is where you can go across the country." As we recruit, we can move people all the way through and our recruitment goes way up because of the things that we can do. It is certainly there. When you get in the trade, an electrician can go from a power plant all the way through basically to a home. It does not matter. Where if you get in the high voltage side, yeah, they can come down and do some low voltage work, but it is just different. They usually do not, so it is not as fungible. I think we have created the fungibility of a craftsman to move across the system, and if they do not want to be in the high voltage arena, we can move them into low voltage, or we can move them across.

Speaker #7: Here are the wage profiles, and here’s where you can go across the country. As we recruit, we can move people all the way through, and our recruitment goes way up because of the things that we can do.

Speaker #7: I just— it's certainly there. And then when you get in the trade, I mean, You can— an electrician can go from a power plant all the way through basically to a home.

Speaker #7: It doesn't matter. Where if you get in the high voltage side, yeah, they can come down and do some low voltage work, but it's much— it's just different.

Duke Austin: Where if you get in the high voltage side, yeah, they can come down and do some low voltage work, but it is just different. They usually do not, so it is not as fungible. I think we have created the fungibility of a craftsman to move across the system, and if they do not want to be in the high voltage arena, we can move them into low voltage, or we can move them across.

Speaker #7: They usually don't, and so it's not as fungible. So I think we've created the fungibility of a craftsman to move across the system. And if they don't want to be in the high voltage arena, we can move them into low voltage or we can move them across.

Duke Austin: We have done a nice job with that training and the way the curriculum craft and how we think about craft and how important they are to the heartbeat of this company. We value it, and I think people resonate with that, especially in the field. They just resonate with our ability to create an environment for them that they can go as far as they want in this company, and we are going to continue to do that.

Speaker #7: So I just We've done a nice job with that training and the way the curriculum craft and how we think about craft and how important they are to the heartbeat of this company.

Speaker #7: I— we value it and I think people resonate with that, especially in the field. They just resonate with our ability to create an environment for them that they can go as far as they want in this company, and we're going to continue to do that.

Alex Rygiel: Thank you.

Speaker #7: Thank you.

Operator: Our next question will come from Dimple Gosai with Piper Sandler Companies. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Dimple Gosai with Piper Sandler Companies. Please unmute your line and ask your question.

Dimple Gosai: Hi. Good morning, guys. Thank you for taking my question here. We have heard a lot of commentary just about large data centers that have spoken about risk of just getting physical gas pipelines to data centers today. How do you think about leveraging this opportunity to win some of the programmatic work that you could potentially benefit from?

Speaker #15: Hi, good morning, guys. Thank you for taking me— taking my question here. You know, we've heard a lot of commentary just about large data centers that have spoken about risk of just getting physical gas pipelines to data centers today.

Speaker #15: How do you think about leveraging this opportunity to win some of the programmatic work that you could potentially benefit from?

Duke Austin: Yeah, look, on the gas side we are winning. We are doing a nice job there. We are in the business and I do think you are starting to see expansions. You are going to need gas pipe. It is going to expand. I think that market, I am confident in 2027 you are going to see expansion of pipe and things like that. We are in that market. We are going to take advantage of it. We got great clients there that we are supporting, and some of them are on the Electric side now building gas generation in places. So we are working for them there and we are not giving up on it. We are going to be cognizant of the risk, and we do not want risk we cannot control. I cannot control the weather. I cannot. So we are not going to go into businesses where I have to give you a weather report. Not doing it.

Speaker #7: Yeah, look, on the gas side, we're winning. We're, we're doing a nice job there. We're in the business, and I do think you're starting to see expansions.

Speaker #7: You're going to need gas. Pipe. It's going to expand. I think that market, if it's not— I'm confident in '27 you're going to see expansion of pipe and things like that.

Speaker #7: We're in that market. We're going to take advantage of— we got great clients there that we're supporting. Some of them are on the electric side now, building gas generation in places.

Duke Austin: We got great clients there that we are supporting, and some of them are on the Electric side now building gas generation in places. So we are working for them there and we are not giving up on it. We are going to be cognizant of the risk, and we do not want risk we cannot control. I cannot control the weather. I cannot. So we are not going to go into businesses where I have to give you a weather report. Not doing it.

Speaker #7: So we're working for them there. We're not giving up on it. I just— we're going to be cognizant of the risk. And I don't— we don't want risks we can't control.

Speaker #7: I can't control the weather. I can't. And so I'm not gonna— I'm not— we're not gonna go into businesses where I have to give you a weather report.

Duke Austin: We haven't done it in seven, eight years, and I couldn't stand it when we did it in the past. We're really trying to de-risk the company from weather and things we can't control. If we can control it, we can execute against it, we have the very best craft in the world, I'm not concerned. But we got to be able to control it. We'll be risk-tolerant on those things. But the market's there going forward, and you're right about what you're saying. In a systematic way, you've got to feed all this gas generation with pipe. It's got to be done.

Speaker #7: I'm not doing it. We haven't done it in 7, 8 years, and, um, I couldn't stand it when we did it in the past.

Speaker #7: So we're really trying to de-risk the company from weather and things we can't control. So if we can control it, we can execute against it.

Speaker #7: We have the very best craft in the world. I'm not concerned, but we've got to be able to control it. So we'll be, you know, risk tolerant on those things.

Speaker #7: But the market's there. Going forward. And you're right about what you're saying. In a systematic way, you've got to feed all this gas generation with pipe.

Speaker #7: It's got to be done.

Operator: Our next question will come from Brian Brophy with Stifel. Please unmute your line and ask your question.

Speaker #8: Our next question will come from Brian Brophy with Stifel. Please unmute your line and ask your question.

Brian Brophy: Yeah. Thanks, and congrats on the very good quarter. A couple of quarters ago, you mentioned $500 million to $700 million of incremental manufacturing-related CapEx over the next few years. Just curious how your views have changed here given some of the supply chain constraints that you mentioned and any other opportunities you're seeing on that front. Thanks.

Speaker #9: Yeah, thanks. Congrats on the very good quarter. A couple of quarters ago, you mentioned $500 to $700 million of incremental manufacturing-related CapEx. Over the next few years.

Speaker #9: Just curious how your views have changed here, given some of the supply chain constraints that you mentioned and any other opportunities you're seeing on that front.

Speaker #7: Thanks. Yeah, that was, you know, I said it a minute ago. I think we have like 10 states that we're increasing our manufacturing capabilities, whether it be transformers, breakers, you know, all across poles now that we acquired.

Duke Austin: Yeah. I said it a minute ago. I think we have 10 states that we're increasing our manufacturing capabilities, whether it be transformers, breakers, all across poles now that we acquired. I don't think it's going to be a huge part of the business. We're certainly going to lean into where we need to make sure we stay in front of the demand. We're also having great conversations with the OEMs to be good partners and to try to get along on things that we need to with them and partner with them. I think that's really important as well. They're important to us. We value what they do. We are in the top five buyer of the HV equipment.

Speaker #7: So, I don't think it's going to be, you know, a huge part of the business. We're certainly going to lean into where we need to.

Speaker #7: To make sure we stay in front of the demand. We're also having great conversations with the OEMs to be good partners and to try to go along on things that we need to with them and partner with them.

Speaker #7: I think that's really important as well. You know, they, they're important to us. We value what they do. So we're all— we're probably in the top 5 buyer of— we are in the top 5 buyer of HP equipment.

Duke Austin: I think that is important that not only are we building and putting capital in, we are also partnering and doing some things with our OEM providers that allow us to be certain on projects. That is going to be important going forward as we see constraints. We recognize those things, Brian, and we are staying in front of them as well as investing capital in them where we think we have good backstop, long-standing relationships that we are not just going to go out and build factories without the demand in front of them. We are trying to get long on those things. We have been able to do that and primarily to keep the workforce busy and get exponential growth. The business itself is great, but what it can do for our overall business is 10 times what the factory can do.

Speaker #7: And so, you know, I think that's important that not only are we building and putting capital in, we're also partnering and doing some things with our OEM providers that allow us to be certain on projects.

Speaker #7: And that's going to be important going forward as we see constraints. And so we recognize those things, Brian, and we're staying in front of them as well as investing.

Speaker #7: capital in them where we think we have good backstop, longstanding relationships that, you know, we're not just going to go out and build factories without the demand in front of them.

Speaker #7: So we're getting— trying to get long on those things and We've been able to do that and primarily to keep the workforce busy and get exponential growth.

Speaker #7: It's really, you know, the business itself is great, but what it can do for our overall business is 10 times. what the factory can do.

Duke Austin: Those expansions are meant to grow the business in a multiplying effect as we move to the field and EPC and all those things. That is really what it is about. It is our ability to go EPC with certainty.

Speaker #7: So those expansions are meant to grow the business in a multiplying effect as we move to the field and EPC and all those things.

Speaker #7: That's really what it's about. It's our ability to go EPC with certainty. Appreciate it.

Brian Brophy: Appreciate it.

Duke Austin: Cool.

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

Speaker #8: There are now no more questions at this time. I'd now like to turn the call back over to management for closing remarks.

Duke Austin: I want to thank the men and women in the field. They make this possible. They are the very best in the world. We want to thank our shareholders for participating in the conference call. We appreciate your questions and ongoing interest in Quanta Services. Thank you. This concludes our call.

Speaker #7: I want to thank the men and women in the field. They make this possible. They're the very best in the world. And we want to thank our shareholders and for participating in the conference call.