Quanta Services(PWR) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Highlights Quanta Services achieved record Q1 2024 revenues of $5.03 billion, with strong growth in net income, adjusted EPS, and backlog, raising full-year guidance Overall Performance Summary Quanta Services achieved record Q1 2024 revenues, strong net income and adjusted EPS growth, record cash flow, and a $29.9 billion backlog Financial Performance Overview | Financial Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Consolidated Revenues ($ billions) | $5.03 | $4.43 | | Net Income Attributable to Common Stock ($ millions) | $118.4 | $95.0 | | GAAP Diluted EPS | $0.79 | $0.64 | | Adjusted Diluted EPS | $1.41 | $1.24 | | Adjusted EBITDA ($ millions) | $387.3 | $332.4 | | Cash Flow From Operations ($ millions) | $238.0 | $38.4 | Backlog Overview | Backlog Metric | Q1 2024 | | :--- | :--- | | Remaining Performance Obligations ($ billions) | $14.9 | | Total Backlog ($ billions) | $29.9 | - Management highlighted a strong start to the year, with double-digit growth in revenue, adjusted EBITDA, and adjusted EPS[2] - The Electric Power Infrastructure Solutions segment showed better-than-expected profitability due to solid and safe execution[2] Business Outlook and Strategy This section outlines management's perspective on market trends, strategic acquisitions, and the company's updated full-year 2024 financial guidance Management Commentary and Market Trends Management identifies significant growth opportunities driven by increased power demand from AI and data centers, emphasizing the value of grid enhancement solutions - Utilities are forecasting meaningful increases in power demand, a trend not seen in many years[4] - Key drivers for this demand include the adoption of new technologies such as AI and data centers, as well as federal and state policies promoting energy transition and domestic manufacturing[4] Strategic Acquisitions Quanta acquired a leading engineering and manufacturing company in April 2024 to improve access to critical equipment and lower operational costs - Quanta acquired a leading transmission and distribution equipment manufacturing company in April 2024[5] - The acquisition is anticipated to enhance Quanta's access to essential equipment for its services and help reduce operational expenses[5] Full-Year 2024 Guidance Quanta raised its full-year 2024 financial outlook, projecting revenues between $22.5 billion and $23.0 billion and adjusted diluted EPS of $8.15 to $8.65 FY 2024 Financial Guidance | FY 2024 Guidance | Low Range | High Range | | :--- | :--- | :--- | | Revenues ($ billions) | $22.5 | $23.0 | | Net Income Attributable to Common Stock ($ millions) | $867 | $943 | | Diluted EPS | $5.79 | $6.30 | | Adjusted Diluted EPS | $8.15 | $8.65 | | EBITDA ($ billions) | $1.97 | $2.08 | | Adjusted EBITDA ($ billions) | $2.13 | $2.25 | | Net Cash from Operating Activities ($ billions) | $1.75 | $2.15 | | Free Cash Flow ($ billions) | $1.30 | $1.70 | - The outlook considers potential challenges such as weather, permitting, supply chain issues, inflation, and increased interest rates[6] Financial Statements This section presents Quanta Services' condensed consolidated statements of operations, balance sheets, supplemental segment data, and backlog information Condensed Consolidated Statements of Operations Q1 2024 revenues increased 13.6% to $5.03 billion, with gross profit and net income attributable to common stock showing strong growth Income Statement Summary | Income Statement ($ thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $5,031,819 | $4,428,826 | | Gross Profit | $623,494 | $573,195 | | Operating Income | $155,354 | $125,860 | | Net Income Attributable to Common Stock | $118,360 | $95,046 | Condensed Consolidated Balance Sheets As of March 31, 2024, total assets and liabilities decreased, while total equity slightly increased to $6.37 billion Balance Sheet Summary | Balance Sheet ($ thousands) | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $6,583,469 | $7,676,897 | | Total Assets | $15,542,352 | $16,237,225 | | Total Current Liabilities | $4,831,182 | $5,213,116 | | Total Liabilities | $9,175,083 | $9,953,870 | | Total Equity | $6,367,269 | $6,283,355 | Supplemental Segment Data Renewable Energy Infrastructure Solutions drove Q1 2024 revenue growth, while Electric Power remained the largest operating income contributor Segment Revenues | Segment Revenues ($ thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Electric Power Infrastructure Solutions | $2,326,960 | $2,336,037 | | Renewable Energy Infrastructure Solutions | $1,584,164 | $1,008,300 | | Underground Utility and Infrastructure Solutions | $1,120,695 | $1,084,489 | Segment Operating Income | Segment Operating Income ($ thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Electric Power Infrastructure Solutions | $228,025 | $215,149 | | Renewable Energy Infrastructure Solutions | $74,846 | $35,656 | | Underground Utility and Infrastructure Solutions | $46,888 | $61,573 | Remaining Performance Obligations and Backlog Total backlog reached $29.9 billion as of March 31, 2024, with RPOs growing to $14.9 billion, driven by key segments Backlog Details | Backlog ($ thousands) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total Backlog | $29,897,911 | $25,274,197 | | 12-Month Backlog | $16,636,100 | $14,628,173 | | Total Remaining Performance Obligations | $14,882,669 | $10,256,586 | Reconciliation of Non-GAAP Financial Measures This section provides detailed reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures for both Q1 2024 and full-year 2024 guidance Q1 2024 Non-GAAP Reconciliations Q1 2024 non-GAAP reconciliations show Adjusted Diluted EPS of $1.41, Adjusted EBITDA of $387.3 million, and Free Cash Flow of $181.2 million Adjusted Net Income and Adjusted Diluted EPS (Q1 2024) GAAP Net Income of $118.4 million was adjusted to $210.8 million, resulting in an Adjusted Diluted EPS of $1.41 for Q1 2024 Adjusted Net Income Reconciliation | Reconciliation ($ thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income attributable to common stock (GAAP) | $118,360 | $95,046 | | Adjustments (Acquisition costs, etc.) | $4,426 | $17,449 | | Non-cash adjustments (Stock comp, Amortization) | $84,562 | $71,430 | | Adjusted net income attributable to common stock | $210,848 | $183,725 | Adjusted Diluted EPS Reconciliation | EPS Reconciliation | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Diluted EPS (GAAP) | $0.79 | $0.64 | | Adjustments | $0.62 | $0.60 | | Adjusted Diluted EPS | $1.41 | $1.24 | EBITDA and Adjusted EBITDA (Q1 2024) Q1 2024 GAAP Net Income of $118.4 million reconciled to EBITDA of $341.9 million and Adjusted EBITDA of $387.3 million EBITDA Reconciliation | EBITDA Reconciliation ($ thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income attributable to common stock (GAAP) | $118,360 | $95,046 | | Interest, Taxes, D&A | $223,551 | $192,411 | | EBITDA | $341,911 | $287,457 | | Adjustments (Stock comp, acquisition costs, etc.) | $45,343 | $44,900 | | Adjusted EBITDA | $387,254 | $332,357 | Free Cash Flow (Q1 2024) Q1 2024 net cash from operating activities was $238.0 million, leading to a positive Free Cash Flow of $181.2 million Free Cash Flow Reconciliation | Free Cash Flow ($ thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $237,955 | $38,409 | | Net capital expenditures | ($56,721) | ($69,568) | | Free (Negative Free) Cash Flow | $181,234 | ($31,159) | Full-Year 2024 Guidance Non-GAAP Reconciliations FY 2024 guidance projects Adjusted Diluted EPS of $8.15-$8.65, Adjusted EBITDA of $2.13-$2.25 billion, and Free Cash Flow of $1.30-$1.70 billion Estimated Adjusted Net Income and Adjusted Diluted EPS (FY 2024) FY 2024 GAAP Net Income of $867.4-$942.8 million reconciles to Adjusted Net Income of $1.22-$1.30 billion, yielding Adjusted Diluted EPS of $8.15-$8.65 FY 2024 Adjusted Diluted EPS Guidance | FY 2024 Guidance Reconciliation | Low Range | High Range | | :--- | :--- | :--- | | Diluted EPS (GAAP) | $5.79 | $6.30 | | Adjustments (Amortization, Stock Comp, etc.) | $2.36 | $2.35 | | Adjusted Diluted EPS | $8.15 | $8.65 | Estimated EBITDA and Adjusted EBITDA (FY 2024) FY 2024 GAAP Net Income guidance reconciles to projected EBITDA of $1.97-$2.08 billion and Adjusted EBITDA of $2.13-$2.25 billion FY 2024 EBITDA Guidance | FY 2024 EBITDA Guidance ($ thousands) | Low Range | High Range | | :--- | :--- | :--- | | Net income attributable to common stock (GAAP) | $867,400 | $942,800 | | EBITDA | $1,966,800 | $2,080,800 | | Adjustments | $165,200 | $165,200 | | Adjusted EBITDA | $2,132,000 | $2,246,000 | Estimated Free Cash Flow (FY 2024) FY 2024 net cash from operating activities is forecast at $1.75-$2.15 billion, resulting in projected Free Cash Flow of $1.30-$1.70 billion FY 2024 Free Cash Flow Guidance | FY 2024 Free Cash Flow Guidance ($ thousands) | Low Range | High Range | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,750,000 | $2,150,000 | | Less: Net capital expenditures | ($450,000) | ($450,000) | | Free Cash Flow | $1,300,000 | $1,700,000 | Other Information This section provides an overview of Quanta Services and important cautionary statements regarding forward-looking information About Quanta Services Quanta Services is a leading provider of specialized infrastructure solutions for utility, renewable energy, communications, and energy industries across North America and Australia - Quanta provides comprehensive infrastructure solutions including design, installation, repair, and maintenance[14] - The company operates primarily in the United States, Canada, and Australia, serving the utility, renewable energy, communications, and energy sectors[14] Forward-Looking Statements This section cautions investors about numerous risks and uncertainties that could cause actual results to differ materially from forward-looking projections - The press release contains forward-looking statements regarding projected financial results, business outlook, and strategic plans[15] - Numerous risks could impact future performance, such as economic conditions, project timing, supply chain disruptions, regulatory issues, and competition[15][16]