Quanta Services, Inc. Q2 FY2025 earnings call

Mr. Duke Austin, President and CEO, noted strong double-digit growth in revenue, adjusted EBITDA, and adjusted earnings per share in Q2 2025, along with a record backlog of $35.8 billion. The acquisition of Dynamic Systems, a premier turnkey mechanical, plumbing, and process infrastructure solutions provider, was announced, strengthening Quanta's craft-skilled led critical path capabilities. An investment in Bell Lumber and Pole Company was also made. Quanta's core strategy is based on craft-skilled labor, execution certainty, investment discipline, and clear strategic rationale. The company differentiates through a unique solution-based approach that integrates craft labor with engineering, technology, and program management expertise to deliver comprehensive self-perform infrastructure solutions.

Second quarter 2025 results showed revenues of $6.8 billion, net income attributable to common stock of $229 million (or $1.52 per diluted share), adjusted diluted earnings per share of $2.48, and adjusted EBITDA of $669 million. Cash flow from operations was $296 million and free cash flow was $170 million.

Quanta is increasing its full-year 2025 financial expectations. Revenues are expected to range between $27.4 billion and $27.9 billion, adjusted EBITDA between $2.76 billion and $2.89 billion, and adjusted EPS between $10.28 and $10.88.

Actual results may differ materially from forward-looking statements due to certain risks, uncertainties, and assumptions that are difficult to predict or beyond Quanta's control, including regulatory environment variability.

Q: Obviously, this quarter, there's been some noise with the big beautiful bill and some increased politics out there. But of course, AI-related CapEx continues to ramp up. Would you say even with the bill and its impact that you're more confident in sequential backlog growth for Quanta, as you did again in Q2, really on the strength of the incremental transmission bookings you're seeing.

A: Yes. I think when you look at the company, it's 20-plus growth in actuality. What we're talking about is the ability to do that. And at the midpoint and tend to derisk everyone. So I want to be clear on that, the company over the 9-year, 10-year period that we've seen, it's 20-plus. So yes, I do believe the things that we're doing today set us up for the future, '26, '27, '28 and '29. What we've done is, we basically built platforms against TAMs that compound. And when we make acquisitions, it starts day one and compounds for the future. And I think it's our ability to acquire companies, great companies, great family businesses. And into the TAMs that we're addressing certainly is a strategic rationale around the company, and it's something that I believe goes unnoticed about how we compound free cash into earning streams. And we've done it. We've done it over and over again. And when we talk about TAMs of technology, the $300 billion or so of capital, you see it going up. The calls that I'm listening to on the utilities, such as AEP, others, every one of them basically have gone up in their CapEx as well. And I don't see anything other than the upper trend of the business. The demand on power is exponential. It continues to come in. AI continues to prove out, both economically as well as what we see from power demand under any scenario. And if we're going to lead the country in the world, you have to have power and we're right in the middle of the infrastructures on both the largest TAMs that create the AI of the future.

Q: Your backlog has continued to build fairly consistently. And just with the obviously large amount of work out there, has this changed the bidding process at all? Are terms becoming more favorable? And are you able to increasingly be selective on your projects.

A: Man, when we're looking at it, we're really trying to provide solutions. And so I think the strategic rationale around the solutions is something different where it's longer term in nature. It's programmatic in nature, and there is constraints in certain areas of craft. And our self-perform capabilities are what separates is 80%, 85% of what we're doing is self-perform. So our ability to have certainty, if you think about quantity, you should think about certainty. And that certainty in the marketplace to be able to deliver on time, on budget is something that allows us to have a different discussion. And I would say, yes, it's longer in nature. We're talking about '26, '27, '28 type time frames of growth and CAGR growth and EPS growth and EBITDA growth and our ability to continue to compound. So you can't do that without having longer-term discussions. And I would say it's better and better as we move forward, those discussions.