Quanta Services(PWR) - 2025 Q2 - Quarterly Results

Q2 2025 Performance Overview Financial Highlights Quanta Services achieved record Q2 results with $6.8 billion revenues, strong EPS growth, and a $35.8 billion record backlog Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Revenues | $6.77B | $5.59B | +21.1% | | Net Income Attributable to Common Stock | $229.3M | $188.2M | +21.8% | | GAAP Diluted EPS | $1.52 | $1.26 | +20.6% | | Adjusted Diluted EPS | $2.48 | $1.90 | +30.5% | | Adjusted EBITDA | $668.8M | $523.2M | +27.8% | Six Months Ended June 30, 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Revenues | $13.01B | $10.63B | +22.4% | | Net Income Attributable to Common Stock | $373.5M | $306.5M | +21.8% | | GAAP Diluted EPS | $2.47 | $2.05 | +20.5% | | Adjusted Diluted EPS | $4.25 | $3.31 | +28.4% | - The company achieved record Remaining Performance Obligations (RPO) of $19.2 billion and a record Total Backlog of $35.8 billion[2] - Year-to-date cash flow from operations was $538.9 million, with free cash flow of $288.2 million[2] Management Commentary Management attributes strong H1 performance to resilient demand and the Dynamic Systems acquisition, raising full-year outlook - Management cites resilient demand fueled by customers' multi-year programs to build out infrastructure supporting load growth from technology adoption and manufacturing reshoring[3] - The recent acquisition of Dynamic Systems (DSI) is highlighted as a key strategic move to strengthen capabilities for technology, manufacturing, and other load center markets[5] - As a result of strong Q2 results and the DSI acquisition, the company is increasing its full-year 2025 financial expectations[5] Business and Strategic Developments Acquisitions and Investments Quanta expanded capabilities via strategic acquisitions, including Dynamic Systems for $1.35 billion and a Bell Lumber minority interest - Completed the acquisition of Dynamic Systems (DSI) in July 2025 for upfront consideration of approximately $1.35 billion, providing turnkey mechanical, plumbing, and process infrastructure solutions[6] - Acquired a minority interest in Bell Lumber and Pole Company in May 2025 to expand its portfolio of core utility infrastructure equipment and enhance supply chain solutions[8] Major Project Awards and Recognition Quanta secured the 300-mile, 500-kilovolt Boardman to Hemingway project and was named 2025 Top Solar Contractor - Selected by Idaho Power for the Boardman to Hemingway electric transmission line project, an approximately 300-mile, 500-kilovolt line, with full completion expected in late 2028[8] - Named the 2025 Top Solar Contractor by Solar Power World, having installed over 10,000 MW of solar generating capacity and over 1,200 MW of energy storage capacity in 2024[8] Capital Deployment Quanta acquired two companies for $226.8 million and repurchased $134.6 million in shares, with $365.1 million remaining for buybacks - In Q2 2025, acquired two companies for an aggregate of $226.8 million, specializing in civil solutions and electric utility construction[8] - Year-to-date, repurchased 538,559 shares of common stock for $134.6 million, with approximately $365.1 million remaining available under the stock repurchase program as of July 30, 2025[8] Full-Year 2025 Outlook Updated Financial Guidance Quanta raised its full-year 2025 financial guidance, reflecting strong Q2 performance and the Dynamic Systems acquisition Full-Year 2025 Guidance | Metric | Expected Range | | :--- | :--- | | Revenues | $27.4B - $27.9B | | Net Income Attributable to Common Stock | $978.5M - $1.07B | | Diluted EPS Attributable to Common Stock | $6.47 - $7.07 | | Adjusted Diluted EPS | $10.28 - $10.88 | | EBITDA | $2.50B - $2.63B | | Adjusted EBITDA | $2.76B - $2.89B | | Net Cash from Operating Activities | $1.70B - $2.25B | | Free Cash Flow | $1.20B - $1.70B | - The outlook considers uncertainties such as weather, regulatory issues, supply chain challenges, and macroeconomic conditions like inflation and interest rates[9] Segment Performance Electric Infrastructure Solutions Electric Infrastructure Solutions segment revenues grew 21.6% to $5.46 billion, operating income rose 29.5% to $552.6 million, and operating margin improved to 10.1% Electric Segment Performance (in thousands) | Period | Revenues ($K) | YoY Change | Operating Income ($K) | YoY Change | Operating Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $5,458,074 | +21.6% | $552,620 | +29.5% | 10.1% | | Q2 2024 | $4,486,880 | - | $426,581 | - | 9.5% | | H1 2025 | $10,402,465 | +23.9% | $960,784 | +31.7% | 9.2% | | H1 2024 | $8,398,004 | - | $729,452 | - | 8.7% | Underground Utility and Infrastructure Solutions Underground Utility and Infrastructure Solutions revenues rose 18.7% to $1.31 billion, operating income increased 11.2% to $90.7 million, but operating margin slightly compressed to 6.9% Underground and Infrastructure Segment Performance (in thousands) | Period | Revenues ($K) | YoY Change | Operating Income ($K) | YoY Change | Operating Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $1,314,933 | +18.7% | $90,703 | +11.2% | 6.9% | | Q2 2024 | $1,107,507 | - | $81,593 | - | 7.4% | | H1 2025 | $2,603,876 | +16.9% | $167,570 | +30.4% | 6.4% | | H1 2024 | $2,228,202 | - | $128,481 | - | 5.8% | Backlog and Remaining Performance Obligations (RPO) Quanta's total backlog reached a record $35.8 billion as of June 30, 2025, with RPO at $19.2 billion, largely from the Electric segment's $30.3 billion Backlog and RPO as of June 30, 2025 (in thousands) | Metric | Electric Segment ($K) | Underground & Infra Segment ($K) | Total ($K) | | :--- | :--- | :--- | :--- | | RPO | $17,963,215 | $1,197,644 | $19,160,859 | | Total Backlog | $30,283,298 | $5,561,237 | $35,844,535 | - Total backlog increased to $35.8 billion at the end of Q2 2025, compared to $34.5 billion at the end of 2024 and $31.3 billion at the end of Q2 2024[36] Financial Statements Condensed Consolidated Statements of Operations Q2 2025 revenues grew 21.1% to $6.77 billion, gross profit increased 24.2% to $1.01 billion, and net income attributable to common stock rose 21.8% to $229.3 million Q2 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 ($K) | Q2 2024 ($K) | YoY Change | | :--- | :--- | :--- | :--- | | Revenues | $6,773,007 | $5,594,387 | +21.1% | | Gross Profit | $1,007,574 | $811,331 | +24.2% | | Operating Income | $370,282 | $307,230 | +20.5% | | Net Income Attributable to Common Stock | $229,250 | $188,159 | +21.8% | Condensed Consolidated Balance Sheets As of June 30, 2025, Quanta's total assets reached $19.89 billion, total liabilities $12.02 billion, and total equity $7.87 billion, reflecting acquisition-driven asset growth Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 ($K) | Dec 31, 2024 ($K) | | :--- | :--- | :--- | | Total Current Assets | $8,177,557 | $7,851,033 | | Total Assets | $19,891,264 | $18,683,894 | | Total Current Liabilities | $5,977,256 | $6,028,513 | | Total Liabilities | $12,022,490 | $11,354,177 | | Total Equity | $7,868,774 | $7,329,717 | Reconciliation of Non-GAAP Financial Measures Reconciliation of Adjusted Net Income and EPS (Q2 & YTD) Q2 2025 GAAP Net Income of $229.3 million was adjusted to $373.6 million non-GAAP, primarily due to amortization and stock-based compensation, yielding Adjusted Diluted EPS of $2.48 Q2 2025 Reconciliation of Net Income to Adjusted Net Income (in thousands) | Description | Amount ($K) | | :--- | :--- | | Net Income Attributable to Common Stock (GAAP) | $229,250 | | Amortization of intangible assets | $113,178 | | Non-cash stock-based compensation | $44,071 | | Acquisition and integration costs | $24,599 | | Other adjustments & tax impacts | ($37,484) | | Adjusted Net Income Attributable to Common Stock | $373,614 | Reconciliation of EBITDA and Adjusted EBITDA (Q2 & YTD) Q2 2025 GAAP Net Income of $229.3 million was reconciled to Adjusted EBITDA of $668.8 million, with EBITDA at $589.4 million after standard add-backs and non-cash adjustments Q2 2025 Reconciliation to Adjusted EBITDA (in thousands) | Description | Amount ($K) | | :--- | :--- | | Net Income Attributable to Common Stock (GAAP) | $229,250 | | Interest, Taxes, Depreciation & Amortization | $360,840 | | EBITDA | $589,390 | | Non-cash stock-based compensation | $44,071 | | Acquisition and integration costs | $24,599 | | Other adjustments | $10,702 | | Adjusted EBITDA | $668,762 | Reconciliation of Free Cash Flow (Q2 & YTD) For H1 2025, Quanta generated $538.9 million in net cash from operations, resulting in $288.2 million Free Cash Flow after $250.7 million net capital expenditures Free Cash Flow Reconciliation - Six Months Ended June 30 (in thousands) | Description | 2025 ($K) | 2024 ($K) | | :--- | :--- | :--- | | Net cash provided by operating activities | $538,909 | $629,267 | | Less: Net capital expenditures | ($250,721) | ($189,419) | | Free Cash Flow | $288,188 | $439,848 | Reconciliation of Full-Year 2025 Guidance (Non-GAAP) Quanta reconciled full-year 2025 guidance, adjusting GAAP Net Income to Adjusted Net Income and EBITDA, and operating cash flow to Free Cash Flow - The guidance for FY2025 GAAP Diluted EPS of $6.47 - $7.07 is reconciled to Adjusted Diluted EPS of $10.28 - $10.88, with key adjustments including amortization of intangible assets ($3.39) and non-cash stock-based compensation ($1.16)[59] - The FY2025 GAAP Net Income guidance of $978.5 million - $1.07 billion is reconciled to Adjusted EBITDA guidance of $2.76 billion - $2.89 billion[64] - The FY2025 Net Cash from Operating Activities guidance of $1.7 billion - $2.25 billion is reconciled to Free Cash Flow guidance of $1.2 billion - $1.7 billion by subtracting estimated net capital expenditures of $500 million - $550 million[67]