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Good morning, and welcome to the Quanta Services Third Quarter 2026 Earnings Call. [Operator Instructions]. 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.

Thank you, and welcome, everyone, to the Quanta Services' Third Quarter 2026 Earnings Conference Call. This 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. This morning, we also posted our third quarter 2026 operational and financial commentary and our 2026 outlook expectation summary on Quanta's Investor Relations website.

While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community. Please remember that information reported on this call speaks only as of today, October 29, 2026, and therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. 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.

Lastly, please sign up for e-mail 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?

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. .

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 multiyear strategy we are executing and the investments we have made in it. Given the solid 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. 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. 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. 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. 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. So 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 multiyear 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 increasingly flexible craft workforce.

Our self-perform model is designed to deliver on time and on budget at scale. 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 former and superintended 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 the 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. 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. We are patient in buying great companies, and we are disciplined around our strategy. We 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 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. We are pacing ahead of the multiyear growth targets outlined at our 2026 Investor Day and our conviction Quanta's ability to compound profitable growth over the longer term continues to strengthen. 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.

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?

Thanks, Duke, and good morning, everyone. The third quarter was an excellent 1 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 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 GAAP diluted earnings per share was $4.55, more than double last year's $2.24. 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 billion and $41.6 billion, 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, 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 9 months of the year, we now expect free cash flow to range between $2.5 billion 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. 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 1.3x, affording us ample capacity to support our strategic initiatives.

Regarding acquisitions, we continue to deploy capital with discipline. Subsequent to our second quarter earnings release, we completed 2 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, enhancing our ability to self-perform more scope and deliver cost and schedule certainty for our customers. We believe our strategy is materializing into improved forward visibility. As of September 30, we had record backlog of approximately $64 billion, a $10 billion sequential increase from June 30, with backlog growth across each of our key markets.

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're happy to take your questions. Operator?

[Operator Instructions] Our first question will come from Ameet Thakkar with BMO Capital Markets.

Congratulations, and thanks for the update. Your Electric continues to run well above kind of your long-term growth framework, kind of given what you're seeing in utility generation and kind of place load center demand. What are the biggest constraints to sustaining this level of growth 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 spring kind of reflects favorable project execution versus kind of a mix or something more structural that we should think about as being sustainable?

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 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's showing up. 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's certainly helping the margin profile of the company.

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 off-site manufacturing, do a lot of different things to increase efficiency in the field. So we're super happy with what we're doing and where it's going, has it fundamentally changed, it's moved up. The UI is still down. I do think we can do much better there. We can get into double digits, the profiles and things of that nature as or burns off, and we started to get into the newer business there. 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. 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. that's in the 10% to 12%, 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, to me, like we watch that a lot what we're doing with return on invested capital, and Jayshree go through the numbers on that at some point. 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. 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've done it for 12 years, well plus 20% growth. So I wouldn't bet against us on growth. And yes, big numbers, but it's been big numbers in my career. So we're just going to continue to compound those.

And when you think about the 2 TAMs, our utility business in the past, if you go back 5 years, we couldn't take advantage of the generation, the fossil generation, even the renewable generation, that wasn't us. We were in T&D. Now we have that whole addressable market. And I think it's a big deal that goes unnoticed of how much TAM we have in the utility business. 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, but the large -- the 5 largest technology companies will spend 3x the capital budget of the utility side. And we can perform the vast majority of that capital other than chips.

So I like our chances to grow. We talked about it's not just next year. It's -- we gave 5-year guidance and we said 10% to 15%, if we can compound it would be 20% plus. We had a hell of a year is setting up. And I'm looking I think we got growth out there as well. 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. But it's super early. I got 5 months. I'm going to take my time.

Our next question will come from Justin Hauke with Baird.

That's with Baird. But that's okay. So obviously, a 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 talk about the NiSource scope, but it looks like there was a lot more beyond that. And there wasn't anything like 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 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 make up of the backlog.

No. Look, it was broad-based backlog growth. I mean our renewable business is fantastic. It went all the way across the segment. We did book the 1 NiSource. But that's a program if you can listen to their capital and what they're doing. It's 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're doing with the largest customers in the industry. We're staying in buying. They want to build fossil. We'll go build fossil. We're super happy to do it. We believe we have a good model to do that and derisk the customer -- the end customer as well as us. And I think that's key for us in that business. And when we look at just straight up, our distribution business is growing nicely, transmission business is growing nicely. So no -- nothing really pulled in. We haven't started really the 765 build. It's much bigger than Texas. We've got Ohio work, you have MISO work. There's a lot of work out there that is not in backlog in many ways, it's just getting started. We said all the time, but I'm not seeing big projects. That's not what's making up the company today. And it's a heck of a growth underneath it without the stocking of those in here yet.

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. 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 we've done a real good job. I think the business 10 years ago, 5 years ago, it was a very transactional and today. I think it's more transformational. And we're running a transformational business that compounds earnings over time, and that backlog is broad-based.

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 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? I'm just curious the contribution of that in the working capital. .

Yes. 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'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. Our DSOs continue to improve. So we're pleased where 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.

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 million to $60 million this year, we look to be at the high end of that, actually higher than that. And our expectation going forward will dip very much on the mix of work around those factors I talked about. But $55 million to $60 million is still the right way to think about adjustment.

Our next question will come from Julien Dumoulin-Smith with Jefferies.

Nicely done. I got 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 put up 2 quarters in a row -- 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, I mean, if I'm hearing you right?

And then related to the another point you made earlier here on ROIC. How do you think about the scope of possible here, economic growing here? I mean you've been putting up 1 point or so every year or maybe even more than that of late. Trajectory-wise, do you think that's the right cadence here through the forecast and as much as you say you're focused on that road metric? Just how do you think about what that trajectory could look like, if not margin expansion, just sees your economic term you're focused on?

I mean, look at better terms 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 it is happening, and we are leaning into some supply chain, Julien, 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. 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. Margins are expanding, use of capital in these lighter capital businesses that we have, such as inside, that's certainly a bigger portion of what we do. So it's going to expand the ROIC. And I -- how fast I'm not sounding up to that quite yet, but it's certainly something that we're highly focused on and the cadence thereof.

As far as backlog expanding, look, I believe we'll set records and continue to set records. There's the timing on that. It gets to lump for us. 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 until it's signed. And so that, for us, some of that kind of $1 billion beat over the last 2 quarters is because it's book-to-bill when moving building to building or job to job without ever hitting backlog. So I'm 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's signed. So that's just how we're going to go about it. And over time, we've been doing it that way tenure. 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. 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's ever moved in my career.

Got it. 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? Is this a partnership like with NiSource, for example, where you have like multiple sites? Or how do you think about moving into that sector. I mean, obviously, stuff beneath the surface, you guys haven't released press release formally already cooking, but how do you think about that TAM and tackling it and what we'll see more visibly?

Yes. I just think we're doing it now. I mean we're providing behind-the-meter generation that's going to utility generation. So utility scale generation today. mean and balance of plant and balance of facilities in multiple areas. So we're doing that today. We just didn't press release we've been say anything about it, we don't need to. We just go up, put the numbers up. And I think that's the key. But the clients in both from the technology side as well as our utility customers, 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 jump in trucks. 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 rate payer. And I just think as we're able to do more, we can certainly help with labor on those sites, those big areas, I mean, you have 5,000, 6,000, 10,000 people. 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. They see it on both sides. We're able to really give them something that they want. They want certainty and they want speed. If that's the 2 things that the [indiscernible] I like our chances. So -- and that's what we're seeing today out there. So I do think, as we see it, we're in the right spot doing the right things, and you'll continue to see more and more. We were about -- if you look at on a megawatt basis for MEP and say it's $15 million a meg everybody has a different classifications. don't see old math whatever you want to call it, but it's $15 million of meg say that the company was getting $3 million or $4 million a meg a year ago. We're able to expand that into $5 million to $7 million. And as it goes further, that will be $7 million to $10 million. So you can see us just capturing more and more of what the spend is per location, and that's not counting generation or utilities behind it. So I just -- we're getting more and more as we move forward. We're creating more verticals in the business. I like our growth patterns. I like our strategies, and we're doing well. So thank you.

Our next question will come from Nick Amicucci with Evercore.

So I just wanted to see, it seems like you guys are, especially this year, positioning for the higher end of that 15% to 20% EPS CAGR growth target through 2030. 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 I'd 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 see the company really going from here?

Yes. Look, we are we're performing well above expectations. If you add -- if you take the 20% onto this year, you're well -- you already into basically low end of the plan. 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. 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 earlier than 5 years because we're going to have to.

I do think as we see it, -- the markets -- there's risk to the markets, there's things that are out there in these long plans. And so that's why we give you a good CAGR basis. And we're ahead. We're certainly above 20%, but we've operated above 20% on a CAGR basis for 12 years. And I think it's 1 thing to say. A lot of people go out and they talk about, talk, talk what they've done. I just say, look at our past, look what we've done and it's predictive of the future.

Definitely fair. And then as we kind of think about the past though, just you guys have always been very prudent on kind of the risk profile kind of contracts. And so 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?

I mean what you define -- I would say our risk profile whether how we define it because you can define what a fixed price, you can have UPIs or some measure that allowed it to be derisked. There's a lot of way to derisk these things. The GMP profile is all the different ways to contract. No matter what you call it, I look at every one of them. And I would say the risk profile of the company is in a better position than it's ever been.

Our next question will come from Steven Fisher with UBS. .

Can you hear me okay?

Yes, Steve.

Just 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? And how should we think about in terms of maybe order of booking, Texas versus Ohio versus MISO? Are those a few that you mentioned? .

Yes. I mean I think we have LNTPs and things like that multiple projects. We have things that we're doing with AEP. So we've talked about that what we're doing some supply agreements and doing some agreements with them. And you can see what they're doing with their capital. And 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. We want to take our time, both sides and need to. The environments are moving, and they have their own customers on the back side. I want to get it right. But we'll be on [ 765 ] in '27, for sure, some of that's not booked already. So it's hard for me to say some are booking earlier, LNTPs, we need to order material places and do some things like that. 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. We're probably farther along in Texas, Ohio, probably be the first 2 to go.

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.

I mean we talked about it in length I mean, Pullswire's transformers, and we thought that those would be the short items, and we're not wrong. So we've leaned into transformer breakers. This quarter, we acquired a pole manufacturing facility and a company -- a nice company that we've been talking to for over 5 years. And I think we see polls coming out in Mexico in various areas that we're waiting on material today. So we're going to solve those problems. I mean it won't be -- our growth will be dependent on OEMs, it will. It always has been. Everyone is worried about our labor constantly, and we grew 26,000 people this year.

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 keep our customers moving and keep the supply chains moving and we're not a manufacturer at heart, but if we need to be, we will be. And we're 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 going to move it forward. It's the right thing for the ratepayer.

Our next question will come from Jamie Cook with Truist Securities.

We'll 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.

Kip, Duke, Jayshree. 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 hyperscale or your thinking about that might cause some delay of slowdowns? Or is it just supply chain and the labor issues that you guys have gotten your handles around and provide that turnkey solution because sometimes the market seems like the risk to the end of the cycle is quite dramatic relative to what a peer's reality is.

Yes. I would just say our inbounds are accelerating as far as what our clients are telling us. I don't -- they're 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're asking us for solutions out to well -- 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 factory in 10 states, something like that, that's going to create close to 1,000 jobs against all these markets. 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.

So the very fungibility of labor, what we see here I don't think labor is going to be the issue. I think it will be supply chain, critical items in supply chain at always lean into the senate and you can see what yesterday or 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. So I like what the manufacturer 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 time frame.

So as long as those things stay intact, 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, that I know the political rhetoric and all the rhetoric that's out there, but reality is, it's a very good thing for people and for teachers and for communities. And 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

We'll now go back to Jamie Cook with Truist Securities. [Operator Instructions]

Can you hear me?

Yes, ma'am.

Perfect. Sorry, got that. All right. Duke, 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 as data center is 1 of the higher growth markets and given where your margin appears are your margins, why wouldn't structurally Quanta's margins improved greater than the 10% to 11% that you target? Is there any like structural reason why your margins can't be where your public peers are?

And then my second question, I just want to understand how you're thinking about the M&A pipeline. 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 talked about 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.

Got it. So for the margins, Jamie, I don't think anyone has a $20 billion utility business that we would be compared to, 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. We're going to stay there. The rate payers, 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. 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 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 we can continue to compound. So that's 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 ace manufacturing. 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%. And I -- when we look at it, I think that's -- because the utility business is growing nicely. Our renewable business is fantastic. And that's under 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 2 businesses and what we're doing from capital and return on invested capital, we're getting the right growth of return. And I think that's the key to it, but it's compounding. And it's not something that's going to have wildly margin increases.

We are enhancing the underground segment. 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, people get scared of heights, instead of dropping out the programs, they can be a plumber bowleraker, 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, we're derisking 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. I just -- 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. I mean, fuels 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. 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 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. We're not buying a pure data center company per se. I look at it constantly to say like the businesses that we acquired, data center business cut in half, what would it do to the company long term. 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. So we can still see growth without data center, our pharmaceutical businesses or what we're doing in power plants. What we're doing across the board. We have 50% of this growth in the utility business is not data center, by the way, like it -- 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. So super excited and it has we like data centers are there, but we're not acquiring against it, for sure.

[Operator Instructions] Our next question will come from Sherif El-Sabbahy with Bank of America.

Duke, you've said you don't expect labor to be the restricting factor going forward and you 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? And if so, where could that go? And what investments do you need to make in training?

And I think will continue to train. I mean, 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 they actually go down some. -- but -- because we're getting some leverage. But look, I don't -- you've got seasonality. You've got that you won't grow as fast as well. I mean the first quarter certainly wasn't like the second and the third. And so you'll come down in some seasonality. We're able to fungibility. You can see our fourth quarter kind of stays flat now to the third. And when you think about it, those -- the people in northern climes are moving around our system and moving to other things, the first quarter still falls a bit naturally does it always has in seasonality.

So I think you'll lose some head count in the first a little bit -- but they're moving around more, we're moving segment to segment. We're moving the company to company, we're moving across our -- what I would consider vertical which is good. So we're getting more efficiencies out of the labor that we're trained, but we still -- I mean, I still see the company kind of in the, call it, 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 gross around, call it, 12,000. 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 of 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 it later.

Our next question will come from Andy Kaplowitz with Citigroup.

I'm 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, but obviously, you delivered strong electric power margin, as you said. So obviously, there's some positive mix. But and maybe to a vertical integrin that's helping you, but maybe you could talk about how much better position Quanta is to handle inflation versus a few years ago where it did kind of show up in your electric market margins. .

Yes. 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 a way by design. 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. The things that are like for us, like health care, insurance, just risk and insurance, things like that have escalated faster than other things. And we have seen inflationary things in the business. We've got a lot of efficiencies. We haven't passed all that had to pass all that through to the client, which is nice.

And so we're -- I think, the good thing is the industry is working the other in a collaborative manner. And as we do that, if we can do that with them, we can off-site manufacture. 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. If we do that and think about it as a solution, we can reduce cost 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've been able to do that, and that's why that inflationary pieces came into the business, because we've been able to absorb it. 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 it means a lot for us, and it means a lot for the business for us to keep continue to scale it.

Our next question will come from Liam Burke with B. Riley Securities. .

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?

Thanks for noticing. Look, it's -- a lot of it -- and a lot of it is the risk profile that we're willing to take on 2 different things. I think we've added our mechanical businesses in it are -- we have some of our civil business, and 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 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. And it's really -- it's incrementally happening. You can see it throughout the quarters of growth. And I think it's getting to -- 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 into next year. So exponentially getting that up into the double-digit range.

Our next question will come from Philip Shen with ROTH Capital Partners.

And 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've spoken very positively about this opportunity. That said, some of our checks suggest some data center work may be slitting or even going dark. Dave, can you give a little bit of color on some of this risk that projects could be slitting -- and then what is the potential for maybe a slowdown or just some pushouts in '27 or '28? Or 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. .

Yes. I mean I think for us, it's much like our renewable business. We said all along when the Scott was following there that we worked for the top 2 best. 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 that is in the most liquid balance sheets that you see in the world. 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. .

All I can do is tell you that 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. All the investments in -- that you see in engines from GE or 3 years out, all the investments that you see in factories that are coming. It's creating businesses as well with farm and things like that. We have fungibility of labor as well. So if they're not on -- we're building chips chip plants or we're building pharmaceuticals. 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 then move across verticals if something was to slow, I'm not concerned at this point.

But the data center demand is there. We see it that's -- 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 you. The cloud-based environment, just the cloud alone, which is the majority of what we do that inference based cloud-based business has been here for 10 years and has done nothing to go vertical. And I continue to believe that's the case. You may get some learning centers slow a little bit. It's very little of our work today. 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 the cloud-based business growing much like our MSA business on the utility side, and we continue to capture more of the spend as we move forward.

So I don't 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. And if it was disclosed, will -- 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.

Our next question will come from Alexa Breno with Goldman Sachs.

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? And then how do we think about that in the context of the scope of the work that you could be doing? .

Yes, they're engaging early. I think a couple of things. The community-based engagement we're seeing our labor, how do we collaborate on labor, how do we collaborate on hiring. 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. So I think just being a part of the industry there. The company is moving in the right direction. We're having great conversations at very highest levels with that size as well. So we're working hard to create the same environment in the same trust that we have. It's a trust thing.

So I do think the company has a long track record and generationally in the utility business. And the same applies, I mean, Cupertino grew up with the industry. And our reputation is there's every bit as good as anyone in the world. 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 see imbalance from the very biggest in the world at the early stages of these projects where we can really make a difference in the community. And certainly, I feel like if we're able to do that, -- that's 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.

Our next question will come from Alex Rygiel with Texas Capital Securities.

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

Good. It was intended to. So thanks, Alex. I think what we're saying is we were really confined to the utility business. And if you can't climb a very difficult to stay in our crop, you can drive trucks, you can do other things. But now like a person that can't climb, but as the intellect from 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 crop because of our expansions in the verticals and inside electrical voltage, bolarmakers, pipe fitters, plumbers we've really expanded the company over the last 2 to 3 years of what craft we have and how big we are in each 1 of them 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? Here's a 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. I just -- it's certainly there. And then when you get into trade, I mean, you can and electricity can go from a power plant all the way through basically to a home. It doesn't matter where if you get in the high-voltage side, yes, they can come down and do some low voltage work, but it's much -- it's just different. They usually don't. And so it's not as fungible.

So I think we've created a fungibility 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. So I just -- we've done a nice job with that training and the way they're correcting in craft and how we think about craft and how important they are to the heartbeat of this company. We value it in I think people will resonate with that, especially in the field that 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.

Our next question will come from Dimpel [indiscernible] with Piper Sandler Companies.

Here. 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. How do you think about leveraging this opportunity to win some of the programmatic work that you could potentially benefit from?

Yes. Look, on the gas side, we're winning where we're doing a nice job there with business. And I do think you're starting to see expansions. 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. We're in that market, we're going to take advantage of. We've got great clients there that we're supporting some of them are on the electric side now, building gas generation. in places. So we're working for them there. And 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 risk we can't control. I can't control the weather. I can't. And so I'm not going to -- I'm not -- we're not going to go into businesses where I have to give you a weather report, not doing it. We haven't done it in 7, 8 years, and I couldn't stand it when we did it in the past.

So we're really trying to derisk the company from weather and things we can't control. So we can control it. We can execute against it. we are 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 risk-tolerant on those things, but the market is there. Going forward, and you're right about what you're saying systematically, you've got to feed on all this cash generation with pipe. It's got to be done.

Our next question will come from Brian Brophy with Stifel..

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?.

Yes. I said it a minute ago. I think we had like 10 states that we're increasing our manufacturing capabilities, whether it be transformers, breakers, all across polls now that we acquired. So 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, 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 long 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.

So we're probably in the top 5 buyer -- we are in the top 5 buyer of the H3 equipment. And so 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, and that's going to be important going forward. as we see constraints. And so we recognize those things, Brian. We're staying in front of them as well as investing capital and where we think we have good backstop, long-standing relationships that we're not just going to go out and build factories without the demand in front of them.

So we're trying to get along on those things, and we've been able to do that primarily to keep the workforce busy and get exponential growth. It's -- the business itself is great. But what it can do for our overall business is 10x what the factory can do. So those expansions are meant to grow the business and a multiplying effect as we move to the field and EPC and all those things. That's really what it's about. It's our ability to go EPC with certainty.

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

I want to thank the men and women in the field that make this possible. They are very best in the world, and 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.

Good morning, and welcome to the Quanta Services Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. If you have any objection, please disconnect this time. I will now turn the call over to Kip Rupp, Vice President, Investor Relations for introductory remarks.

Thank you, and welcome, everyone, to the Quanta Services Second Quarter 2026 Earnings Conference Call. This morning, we issued a press release announcing our second quarter 2026 results, which can be found in the Investor Relations section of our website at quantaservices.com. This morning, we also posted our second quarter 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 operating and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community. Please remember that information reported on this call speaks only as of today, July 30, 2026. And therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call.

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 and financial commentary. Please refer to these statements for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com. To receive notifications of news releases and other information follow Quanta IR and Quanta Services on the social media channels listed on our website.

With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services Second Quarter 2026 Earnings Conference Call. I want to begin by recognizing our people in the field. Everything we are about to discuss starts with our more than 85,000 employees and the execution they deliver for our customers safely, on time and on budget every day. This morning, we reported second quarter results that meaningfully exceeded expectations with strong double-digit growth in revenues, adjusted EBITDA and adjusted earnings per share, robust cash flow and record backlog of $53 billion.

Given when these acquisitions closed, their contribution to the quarter was minimal. The strength you're seeing today reflects broad-based organic strength across our segments, service lines and end markets and the successful execution of our strategy and the investments we have made against it. During the second quarter, in July, we completed the acquisitions of Phalcon, Enerfab, Percheron and PSD, and we welcome each of these excellent companies and their employees to the Quanta family. These acquisitions enhance our geographic presence and continue our strategy to scale self-perform cross-skill capabilities across electrical, mechanical, civil and fabrication and to lean in to the front end of our customers' programs.

But the work takes shape, and we're getting involved early maximizes the value we can deliver. These are companies that have executed successfully for decades and whose owners and leadership came up through the craft with customer relationships often built over generations. These acquisitions strengthen our position in technology and load centers while adding meaningful diversification across end markets we've served for decades. Bone runs it on a culture of absolute performance. and is dedicated to the continuous improvement and the success of our customers. Every acquisition has to fit our strategy and the culture has to fit. That is the first thing we evaluate and something we do not compromise.

When a company that has built its name over 50 or 100 years decide to join Quanta, they are choosing a home that protects their legacy, keeps their management team and gives the people more opportunity than they could create a loan. Our solutions-based model is performing well, creating markets and unlocking growth opportunities because it is a platform that brings our customers industry-leading capabilities, scope and scale, with the largest craft workforce in North America at the center.

The rigor we built over decades serving utilities, the planning, the safety and the programmatic execution is exactly what we are bringing to technology and load center and generation markets. Technology is trying to move as fast as possible. Utilities are working to protect the rate payer, and Quanta sits in the middle of the nexus voting solutions to both. Our customers realize how important speed and certainty is and the trust and track record we have built over decades is what differentiates Quanta.

Quanta's core strategy remains grounded in craft field labor, execution certainty and disciplined capital deployment. Craft is built over time, and we prioritize that investment for well over a decade. We self-perform 80% to 85% of our work, which is what allows us to deliver on time and on budget at scale. That certainty, quarter after quarter and year after year is what our customers count on. is what has produced record adjusted EPS for the last 9 consecutive years and why our customers keep asking us to do more.

As a result of our strong first half, improved visibility into the remainder of the year, and expected contributions from the acquisitions announced this morning, we are significantly increasing our full year 2026 financial expectations across all metrics. The record backlog we reported reflects the demand in front of us but we're still in the early stages. The larger programs look to utility generation and technology load center markets are ahead of us, and we expect them to stack in the years to come.

In many ways, we are just getting started. We remain focused on executing for our customers' success, deploying capital with discipline and compounding earnings and shareholder value over the long 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?

Thanks, Duke, and good morning, everyone. This morning, we reported historically strong second quarter results with revenues of $9.6 billion, net income attributable to common stock of $451 million or $2.96 per diluted share adjusted diluted earnings per share of $4.24 and adjusted EBITDA of $1.1 billion. Those results included approximately $11 million of adjusted EBITDA from acquisitions made during the second quarter. The performance in the first half of 2020 exceeded our initial expectations, led by the strength of our end markets and our strategies in action.

The versatility of our workforce and our customer-centric delivery model are translating to greater scope, better resource utilization, elevated revenues and improved margins. and our customers are increasingly recognizing how the breadth of our capabilities can contribute to their success as evidenced by another quarter of record backlog. Given the strength of our first half performance, improved visibility into the second half and expected contributions from recent acquisitions, we are raising our full year financial expectations.

We now expect revenues to range between $39.3 million and $39.7 billion, adjusted EBITDA to range between $4.1 billion and $4.2 billion, adjusted EPS to range between $16.45 and $16.95 and free cash flow to range between $2 billion and $2.5 billion. As Duke described, subsequent to our first quarter earnings release, we acquired 4 companies for approximately $1.24 billion of upfront consideration, net of cash acquired, plus approximately $242 million of contingent consideration that can be earned based on financial performance in the years following the closing.

Included within our increased full year financial expectations, our $1.2 billion to $1.4 billion of revenues and $120 million to $130 million of adjusted EBITDA from these acquisitions. Importantly, as evidenced by the ratings upgrade by Moody's, our balance sheet and credit profile strengthened even as we deployed capital on the aforementioned acquisitions. As calculated under our senior credit agreement at the end of the second quarter, our debt-to-EBITDA ratio improved to 1.7, down from 1.95x at the end of 2025, and we had total liquidity of approximately $2.8 billion.

The larger programs broader service offerings and multiyear commitment negotiating every day are a direct reflection of the trust our customers place in our ability to execute at scale. Combined with disciplined way, we're allocating capital across our strategic initiatives we believe we're well positioned to keep converting that trust into durable, attractive returns for our shareholders. Additional detail and commentary on our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary both available on our Investor Relations website.

With that, we're happy to take your questions.

[Operator Instructions]

Your first question comes from Steven Fisher with UBS.

Yes. Just congrats on the strong beats across your business in the quarter, but maybe focusing on the strong margin performance. I know you've been Duke a little bit reserved and Jayshree on the margin upside. I guess, to what extent are you now thinking maybe a little bit more positively longer term about the margin potential here, you have more self-perform and you've got more large load projects becoming more of the mix. I guess, any reason why that wouldn't add to some margin upside over the longer term?

Yes. Thanks, Steve. Thanks for the comments about the quarter. I think when we're looking at the margin profile, we said the UI segment had some room, and we felt like it would move up. The businesses that we've acquired and how we look at that is today, the risk we're willing to take certainly is moving that profile up, and you're seeing that in the quarter. And I believe you'll see that on a go-forward basis. So that moved up Electric as well. I think we moved that up as well on the back side.

Look, structurally, fundamentally, the business has changed. We're seeing it change. We have 2 addressable TAMs, both of which are growing I do -- that mix, we're looking at it constantly to make sure that we're giving you good prudent guidance. Yes, I do think we posted a real nice quarter we were printed in the guidance that we gave you in the back half. You're seeing synergies show up. We're seeing a lot of book-to-burn. So I do believe like there is some room in the margins on the backside. We took prudent approach to it. There's no -- you got climbs and Northern [indiscernible] weather. We take everything into risk project slips, all that's already baked into our numbers.

So yes, I think there's upside in the back -- and as we see it, as we see the work mix, as we see the mix in the Electric segment, it's a big segment. So we have to really take into account everything in there. And I think we've done a nice job of that, but I do think there's room for margin improvement in the backside. We've always said that the electric segment has the ability to operate 10 to 12 on the utility side, 12 would be the utmost margins that you would see.

And that's when you stacked in large transmission and all aspects at once, so you get full utilization, you're also training a lot of people. I mean we've added 15,500 people over the year. 7 of which or 8 of which, 7 or 8, I can't remember, is organic. I believe it's. So in saying that, I mean, significant amount of training going in. We're getting better at training. If we can get better at training, we can get scale out of that as well. I do think we have the ability to improve margins. It's still something we're trying to compound it. We have rate payers on the utility side. It's very much regulated.

And so that said, we're doing a nice job on the technology TAM, and we're also getting some sooner data of our training and getting people to the field. So super happy with where we're at.

Your next question will come from Julien Dumolin Smith with Jefferies.

Hopefully, you can hear me okay. Just wanted to ask, one, we've seen a large utility in the west recently indicated for -- at least for their gas generation RFP that they're electing to self-perform because there's inadequate resources. Again, given a backdrop, how do you think about your willingness to participate in the gas generation side of the business? Obviously, you saw a press release from you guys a nice horse earlier. How do you think about leaning further into that? And what would that look like? And as much as a JV structure is not obvious. I'm curious for your thoughts about the Zamarin CPC?

Yes. No. Look, Julian, we're seeing the same thing. I mean I do think some of the utilities, a few of the utilities are trying to self-perform. It sounds easy, it's not. So I think in general, we saw that in the past back in I don't know it was probably 20 years ago, my age myself. Look, we know the risk. We know the risk of the people that we need to employ. Our cross-skill labor is there. We're doing a nice job of building that business. It's something meaningful in the future. We talked about it. As far as like the robust nature of EPC on generation, not only in front of the meter behind the meter, someone was saying not too long ago that we're just in front of the meter, I mean, behind the meter.

So we're on both sides of that. We're seeing some small engines. We're seeing big engines. We're seeing all types of generation. And we're installed at EPC. I like the business. We're just not willing to take the risk on the combined cycle side and some of the single cycle engines. So that's the issue. If we can get the type of contracts that we need to feel comfortable with it, we'll do it.

And certainly, the inbounds and ask of our customers, we did mention the nice words, I do believe a significant amount of that will go into backlog in the third quarter. That's moving nicely. There's some other what I believe, opportunities in that part of the world that we'll continue to compound. And not only them, but every customer we have, we're working with them on their capital plans to build both generation and T&D.

Just a quick 1 on the technology side. Can you speak a little bit to how you're scaling that business? Are you -- is this just laying and expand with existing customers? What exactly is going on within the details, if you can, just -- obviously, it's a nascent business model for folks, you got a lot of new entrants. Just curious, do you have a lot of interest relationships you're hearing about out there. How much of this is new customers and new platforms and what do you intend to do from like a strategic M&A perspective to continue to build this business, too?

A lot through that. So -- we're not -- when we think -- when we thought about it when we acquired Cupertino, we acquired a platform. We talked about the technology customers that we thought that we could take our collaborative approach and build another TAM that's ever as big as our utility TAM. We're doing that. It's showing up to the hyperscaler, direct to the larger customers showing them what we can do, our self-perform capabilities, we show up. We're on time, we're certain, and that's leading to balance of plant type builds in multiple areas. So call it, 80% or of what a division build less chips. And I think 90 maybe.

So we have the abilities to do that. And as people see that we're certain and our projects are on time, on budget, self-perform. More and more addressable market comes our way. So I think we really like what we see, the collaborative nature. We can talk about synergies a lot and we don't put them in anything. But you can see from the quarter, they show up. We're crossing refundable with labor. We're crossing both T and D as well as going into the data centers with our people. You can see the cues on the utility side of substations and all the substations that are out there. We're right in the middle of that.

And I think as that nexus, I'm not sure people understand that nexus and how difficult it is to interconnect to the grid and how much we're right in the middle of that interconnection. So that interconnection along their vertical supply chains the various strategies that we've discussed are showing up and the synergies are right there with them. So I do believe on as we look at technology, we're in a collaborative way helping them be certain on not only cost but getting it done on time. So we really like where we sit.

Your next question will come from Chad Dillard with Bernstein.

So my question is on the modular prefab side of the business. It's increasingly clear that you guys are investing in that organically and inorganically. So I'd be curious to hear what shared your RFPs have that capability? And how do you think about that on the next 5 years? And maybe you can talk about just the labor cost savings that you see when you deliver that and to the extent to which you can value-based price with your customers on that?

Yes. I mean, look, we talked about having 7 million square feet. We just added, call it, 0.5 million square feet with the acquisitions that we've made. So yes, we're adding to that. We've always done some what I would consider fabrication. But I do think this integrated fabrication that we're doing, it's different. It's a solution-based approach. It has a lot of video engineering a lot of technology in front of it.

We can really design from a construction nature and work with the client and what they're trying to accomplish, less water, closed-loop systems, no water, all kinds of things that we're able to really, really work with the client upfront. I think we have some of the best engineers in the world because they've been in the field and they're not a construct. So that allows us to really lean into these projects become much, much more efficient if we work in a collaborative manner with our clients, much like we've done with AEP on 76. I mean I think when we look at it, we work together and if we can do that, the fabrication is exponential.

I don't -- but whether it's cost less or more, it's going to cost less. It's less people to some degree, depending on where you're at and your logistics. So logistics cost a significant amount. So you really need to be close to where you're building, and I think that Northeast environment and what we've done there with the acquisition of Phalcon really gives us a lot of opportunity in the East and the fabrication in the East. But yes, look, it's -- you're certain as well you're inside, and it allows us to really have a certain outcome and the engineering in front of it allows the cost to come down. So yes, the more collaborative the client is with us, the -- what I would consider the total cost goes down significantly for them.

Great. That's helpful. And then have you started to see RFPs for 800-volt work yet. When is that starting? And just from like a labor standpoint, is there any difference in complexity the mix of labor force or even like the use of modular when you're shifting 54 to 804 architecture?

I'll just say it this way. We haven't seen it show up. We're in the middle of engineering with it. We're all over it in the high-voltage side as well as equipment. Anything complicated, anything with the higher voltage, -- the higher the voltage is better for Quanta. So I'll just say it like that. We love complicated high-voltage infrastructure, the more the better.

Your next question will come from Justin Hauke with Baird.

Great. I just got kind of 1 -- obviously, there's a lot of positives on this quarter, but 1 to stand out as well as the free cash flow I just wanted to, I guess, maybe ask, are you seeing changes in kind of maybe like prepayments or other things that are kind of favorable to working capital from some of these large load customers that maybe it's a sustainable dynamic that maybe improves the free cash flow conversion over time? Or is it kind of just a one-off here this quarter?

Justin. No, we're very pleased with what's happening with free cash flow in our business. The first half of the year was very strong. I think it's a real testament to the operators how well they're performing. We are getting favorable contracting terms across the business. But the growth of the MEP business, our EPC business, our Renewables business is contributing to that free cash flow growth. So we believe that we're going to continue to see those types of factors coming into our free cash flow profile. It's improving our working capital, as you said.

Having said that, we do think the right way to think about our business continues to be that conversion rate of around 55%. I talked about it in the Investor Day that we have the opportunities to be higher than that, 55% to 60%. Do I believe that we can be at the high end of that even this year and going forward? I do. I think there's opportunities even to beat it. But growth -- where the growth comes from matters.

The strong utility business has continued to grow in the back end as well. And as you know, that has a slightly different working capital profile and it can pressure free cash flow. We've taken all that into account in our guide. And -- but I think you can expect, Justin, that we have real abilities to be at the high end of those free cash flow ranges and even better.

Your next question will come from Sangita Jain with KeyBanc.

Can I ask 1 on Percheron, if I'm pronouncing that right, the acquisition that you made? How much of the revenue that they do is already revenue from Quanta and how much is third party? And as you bring it in, are you going to focus it more on just working for Quanta? And then does this allow you to do more front-end work with data centers? Or is it purely just a T&D type operation?

Thank you, Sangita. So Percheron, when we looked at that, really, it's right away acquisition. It's things of that nature, none of which is for Quanta. -- very little, if any, was kind of revenue. So it's all outside the customer base would be utilities of hyperscalers. So both sides of that. The way we think about it, anything that from our standpoint, it doesn't allow our field forces to move forward or we can collaborate with the client in a constructability way, we want that to be a part of the solution.

So they were very much a solution for us on the front end. We believe added to Quanta and our constructability, we can work with the client on routes. You hear about permitting quite a bit, land acquisition quite a bit. I'm getting tired of it. So as we see it, we felt like you can either gripe about it or you can fix it. So Percheron will allow us to provide a unique solution to the client on the front end where we believe we can move right away faster and a more economical way to get our people in the field, both on the technology market and actually technology pipeline and Utility T&D. So super proud, great company. I believe we can expense grow that and the synergies are endless.

[Operator Instructions]

Our next question will come from Nick Amicucci with Evercore ISI.

I just had a quick one, too. Just given -- I mean, obviously, it seems like pretty strong organic performance within the quarter. I just wanted to see -- I mean, if we could kind of break that out, how much was that -- was there any kind of pull forward of timing or whether implications in there just given kind of more of a mild spring season?

hattNo, I do think you bring up a good point on seasonality. We used to have a much more pronounced seasonality in the business. with being inside and having kind of the electricians and the places that we're at, I do fabrication facilities -- you're going to see that level out in the fourth and the second, and it will start to level. So it won't be as pronounced as it was in the past. So I do think that's part of it.

But as far as pulling in, I mean, it is different from a standpoint, nothing pulled in at all that I'm aware of, just nothing. But what is happening, we're getting on sites and people are starting to see us perform and they're asking for a immediately -- so we may book and bill $300 million on a site in a quarter, you never see it show up in backlog. That's part of MEP. And that happens quite a bit though that about how to look at those MSAs on the technology side, especially when we're building balance of plant in multiple areas.

We need to look at that internally to decide is a PO against an MSA is it an MSA. So we're following GAAP, but I would tell you the book and burn on that type of work is certainly prevalent in the quarter, and it will be in as far as we can see because we continue to capture more balance of plant opportunities and kind of full-scale data center opportunities, and you'll see us on quite a few sites in the future.

Our next question will come from Adam Thalhimer with Thompson Davis.

Congrats on the another great quarter. and a great day. Duke, I guess I wanted to dial in on your traditional T&D business. How would you say that's other than the obvious that it's good, how would you parse that, how it's trending versus your initial expectations at the beginning of the year? And then I wanted to get an update on your long-term expectations from electric utility customers?

I think we're right on target. We kind of -- you haven't seen the compounding effect. I mean, we're not in backlog on any of the bigger work yet. Even the generation work most of it is, I would say, 95% of it it's not in backlog either. So those big projects, the 765 corridors, 345, 500, all those bigger -- all that bigger work is just starting. A lot of it's in engineering, you'll start to see a hit backlog in the later half of the year throughout what I would consider the decade. So it's a long-term bill well past 2030 on both sides of the business.

So we're seeing those projects today, they'll show up and backlog, we'll go to the field, call it, second half of '17, we'll start to see incremental gain there. And the compounding stacking effect will start to hit the backlog and continue to expect us to have record backlog into the third and probably even into the fourth. But definitely, we see the work there, and it has not started. So kind of what I would say upper single-digit growth in the business as it sits, doing nicely, working with clients.

So I think double-digit type growth there today, and it's going to get much greater than that as we start our compounding big work there. look much like it did, call it, before '15, was it 12 to 15, somewhere in there. We were on a bunch of big projects and started compounding. We see that type of effect. Yes, it's big numbers, but the big numbers are going to compound as well. So we're super excited about where that's going. Early stages, and it will start to show up, call it, in backlog this year in the field next year.

Your next question will come from Liam Burke with B. Riley Securities.

Yes. Thank you, Doug. Just a quick follow-on on what we just discussed on your longer-term planning on the electric side. Going back to your backlog, similar to what you discussed last quarter is more broader based across the businesses rather than you bringing in these larger projects?

That's right. I mean I do think those larger products -- you're going to get some lumpy quarters where you're 1-12, you're going to start to see 1.5, 1.6 as you bring in a big chunks of projects, and it's going to happen. We saw some of it when we brought in 765 you saw a big boost up. It was broad-based, but it also had a big project in it. that's going to happen. It's not going to be straight line. You're going to see some lumpy kind of quarters, but all kind of lower lows, higher highs all the way through the way we see it, because I just think -- we can't predict timing and bookings on that big work.

It just takes time, and we're in LTPs all over the place and verbals all over the place with lots of clients in a collaborative way. I just really like the collaboration the company is doing really trying to help our clients. And I think giving them certainty working with them, driving the cost down to the rate payer, the company is highly focused on driving the cost down to the rate payer. I think that's a deal we're really working hard with -- throughout on the T&D side.

And I like where that's going. It's certainly given some multiyear, even decade look outward. You can see their capital budgets, something we can point our finger to. We're working hard together like where the industry is going.

Your next question will come from Philip Shen with ROTH Capital Partners.

Congrats on the strong results. I wanted to check in with you on the recent New York state ban or pause on data centers. We published recently that we could see M&A as 10 more states pursue data center bands or pass by the end of this year. What are your thoughts on this potential risk? How could it impact your business? And then when you add data center work to your backlog, have these projects been cleared of all permitting, environmental approvals, community support. I'm guessing the answer is yes. But -- just was wondering if you can go through, is there any risk that some of these state bans or positives could take some of the projects out of backlog?

Sure. So just a couple of things. It's a good question because it gives me an opportunity to freelance a little bit here. What I would say is 15% of the business is technology, call it, 15 to 20 right in there. And that's a spectrum of chips to everything not just data centers. So it's not a huge piece of the business, number one. We've grown that to that range over the last 2 years, which I think is phenomenal. We built a hell of a business already and got a long way to go. So very early stages.

And the quality of the companies that we've acquired is just phenomenal, super proud of the platforms. So in saying that, look, we're involved in lots of data I haven't seen much in New York. Nothing really gets built there. So it's very difficult to build in New York. And having a moratorium in New York doesn't bother me at all. I just hope we can get enough power to continue to keep the lights on PJM. So that's our highly focused there on that.

What I would say is, in general, when we think about data centers, I just -- it's such a fallacy of the amount of water and what it does for an economy. I mean, in rural areas, the school districts and the kids and the teachers, we employ people there I mean it's such a benefit to everyone that is building in those areas. And it's not a 1-year build. These are 8, 10-year areas to build and you're providing jobs. And if you look at Northern Louisiana, where they're building there, yes, they're using a little bit more water than in some other areas. I would say there's better designs today and you can use less water.

But what that's done teachers, teachers were the lowest paid in all Louisiana. They will be the highest paid in Louisiana in that area, all the teachers. All the -- what it does for the rate base, the economies I just don't think it gets suppressed. We're not doing a good enough job talking about the good things about data centers, national security, everything else that I see, it reminds me a lot of the fracking rhetoric that was out there.

So it's just something that I think we have to do a great job to tell the benefits to the industry and how we see it and what it's done to create jobs and good jobs I think you can look at our median wage any, like it's very, very good for us and the economy. So look, we're not seeing any shortage of places to go work. And we're moving forward, really working in local areas to provide jobs. And as long as we do that, and I believe we're on the right side of the rhetoric with data centers is not like where it's going.

Yes. And Phil, just on the backlog, I think it's important to add that we take all those into account. The way we treat our backlog just like we do on the T&D side, just like we do on the generation side, we want to make sure that we have a constructive and prudent way of what goes into backlog. So on the data center side, we tend to put in things that have only and we don't put the rest of it until the project is a go. So I think you can be confident in what we have in our backlog as a result.

Yes. And we're seeing both of your projects, too. So I mean, we're out well beyond 2030.

Your next question will come from Alex Rygiel Rigel with Texas Capital Securities.

Could you speak a bit more about underground and infrastructure and in particular pipelines? And are you seeing any green shoots develop?

Yes. I mean, look, I think -- we certainly have opportunities. I think we're probably -- we booked a little bit of Canada were in the quarter. So a really nice job there with that. So proud about that one. I think we'll book more in Canada. The opportunities, I would say, later half of 2016 and 27 for us are there. That business is getting better. So yes, I mean it's something we're looking at and as kind of how we look at it, we kind of put $500 million in our head, and that's where it's at. We're well past that for the year, probably and beyond.

So we'll look at that as how we guide. But no, Alex, I think all risk. We'll be cognizant of how we look at the risk. And our generation business is growing nicely, some things there. So we're able to use some of those assets and people and project management teams on the generation side. There's a lot of pipe feed in generation that we can bundle that in as well. So that solution-based approach on the technology side applies to the pipeline as well and gives us a lot of opportunity there to do some unique things with the pipe.

And Jayshree, earlier you mentioned contract terms have improved. Can you expand upon that a little bit? And maybe in particular, how they've changed across various end markets?

Yes. We're just -- as we sit here, we're looking at our renewables business, our MEP business, our EPC business on the T&D side, it allows us to have really favorable cash flow terms and the working capital profile and those things are very positive. We're seeing that across our business, not just in certain markets. The the MEP and rubles business and EPC work on our traditional business tends to have the more pronounced favorable working capital profile, and that is getting baked in.

But we've talked about this a lot, right? As we sit here today in these markets and the strength of our portfolio and our ability to help our customers, we're very much focused on compounding and growing with them. And so our contracting terms are a reflection of that. And while we're not necessarily trying to take advantage of our customers in any way. It is allowing us to make sure that we're doing things in the way that allows us to be confident about our execution capabilities and delivering for them in the right manner. So that's what's getting reflected across our business. It's not just on working capital, but it's in terms across the company.

Next question will come from Brian Brophy with Stifel.

Congrats on a really great quarter. Obviously, there is a meaningful uplift in the technology and large load outlook. Curious if there was any notable large booking the integrated fabrication part of the business in the quarter? And if that was a core driver of the upside? Or is it more broad-based in MEP?

I think it's broad based the way we see it certainly MEP business is growing faster than the rest of the business, just percentage-wise, but what I would say is if you look at the whole outlook, I would tell you, it's all of it's pushing upward. Both segments are pushing upward. The Electric segment is moving up. I mean, our renewal business is really good. It's moved up nicely. So I would tell you all things that we discussed are at least double digits, some are double-digit plus, but everything is moving upward at least double digits.

And I'm sure it's CEO, I probably -- it's probably no in some area, but like very close to double digits and some of it much greater sum of the parts, obviously.

Appreciate it. And then just a quick one, if you wouldn't mind. Did you see any notable [indiscernible] closeout benefits in the quarter or anything that was more onetime?

No. I think you can just -- look, closeouts happen all the time. We're so large you're going to have to exclose that. You're going to have project start. There was nothing onetime in our quarterly results.

I do like it when they go up there. I'd rather go up and down. But in general, they typically go up, and it's nothing out of the ordinary. It's normal course.

Your next question will come from Joseph Osha with Guggenheim Partners.

So Duke you've been adding manufacturing capabilities in areas, transformers. You bought a utility pole company. I'm wondering if there are other areas that you're thinking about in terms of where you might want to add capabilities?

Yes. I mean, look, we did the breaker deal with HEICO. I thought that was a critical path for us in the high voltage breakers very difficult to get. So you've seen us build them. You've seen us partner. We certainly have great relationships with the suppliers. Anywhere there's a critical path that we think we can invest capital to move it forward. That's what you've seen us seen us do.

So as we're looking outward, we're taking advantage of areas where there's underinvestment or we believe it's something that is a critical path for us. and we're working with our clients to really innovate as well with R&D and some things we can do there. So that innovation technology, how we look at it, but -- we've made those investments in that vertical supply chain. I think it's showing up in some of the synergies. I think you'll continue to see it.

We'll be selective in how we invest there. That's something that -- we look at it all the time, but we do believe we can do some unique things with our vertical supply chain and have done. So it will be a broad-based investment and things that are what you would consider a critical path.

We see a lot of people buying EBOS companies. Is that something that you think might be a good fit for Quanta?

Yes. Look, -- we're not looking at EBS companies -- that's fine. I mean, look, I'm sure they're great companies and everyone is doing well with them, but it's not something that we're looking at today. We're looking at all kinds of things that it could be a component thereof or whatever it may be. But it's -- traditionally, the core of the business is crafts skill labor, we're focused -- highly focused on crafts skill labor and not to the field in a way that solution-based. If the boss or anything else can help us with the solution. We're certainly leaning into those opportunities.

[Operator Instructions]

Our next question will come from Jamie Cook, Truist.

Congrats on another fantastic quarter. Can you hear me?n

Yes. Thank you.

Good you can hear me. So Duke, I just got 1 question. I mean, I've been beating up on your under brand margins for years. And finally, it sounds these margins are really starting to improve. I guess with some of these acquisitions that you're doing and some of the structural improvements you're making. I'm wondering, over time, although it's not in your sort of longer-term margin targets. Is there a path in particular with some of these higher-margin acquisitions for your underground loads to approach the Electric business? Like is that totally off base?

Yes. I mean there's always opportunity. It just depends on the work mix. I mean some of those margins you can pull up. And it depends on the risk. It depends on some of the fabrication Yes, look, I do think you can pull them up. We got -- let me get to double digits first, and then I'll go from there. But I do think we have opportunities to get at parity to electric. You can do it. It just depends on what the mix looks like.

We're certainly -- I think that's 1 thing the company is highly focused on is increasing our efficiencies, some of the labors are fungible. So it's moving across segments. It's moving over into segment they move back and forth. I mean we can have someone on what I would consider a data center or go to an industrial base come back into compression on gas side.

So we can move electricians in underground folks across multiple segments, which I really like a lot. So it's hard to say because they are making margins in the electric side on 1 side of the business is that labor fungible. But the kind of the outlook on the customer base in the UI segment. Yes, we can move it up, and you'll see that move up and we could get it to parity electric, it's possible.

Your next question comes from Michael Dudas with Vertical Research Partners.

Duke, just your sense of what your customers maybe on the MSA side or even just across the board, how far out in the future are they asking to secure your specialized craft labor generally. And I don't -- I'm sure there's ranges of months to years, how has that changed, say, in the last 12 to 18 months? And do you anticipate to get even further tighter out into the future where you have to allocate these resources a little bit more judiciously?

No, I mean, we're nowhere near capacity. I know that's been something that people are worried about. So look, you've seen us add 15,000 employees in the quarter. And Well, let me back up. 15,000 in the year, a significant amount of which is in the second throughout some acquisitions, some through organic growth, but well over 7,000 in organic growth. We're very much in line with the customer building out programs. We'll go -- we're as far out as their capital plans at least and beyond.

So when you're looking at their capital plans, they're out 5, 7 years, we're helping them with capital. We're helping them all the way through in a collaborative manner across the board, having great collaborative conversations on it. So -- and I would say the inbounds are significant. The company is in a different place than it's ever been. How we sit, how we're viewed. I think the #1 thing is what -- how do people fill with us. And I feel real good about how we sit in the industries we serve. And we've done a real nice job.

The minimum in field are executing at a phenomenal level. And we see decade-plus type arrangements out there.

Your next question comes from Maheep Mandloi with Mizuho.

Maybe just like a level question to Duke. Where are you seeing the bottleneck as you go into data centers or for generation and transmission distribution? Is it still the craft labor? And is there a scenario where you foresee potential competition and oversupply on that aspect few years down the line and maybe they were craft moves from other industries of this so you have more training or more automation?

Look, I -- we're not seeing any shortage -- I mean, we're not seeing any oversupply of craftskill labor for the near future. It takes about 4 years to make a craftsman and adjournment -- we happen to have more journey in all crafts than most. We're probably in the electric side, the MEP side, I would say we're gaining we're very close. And our training facilities, the things that we've invested in over a decade. We spend about $250 million a year in training.

So that's something we're highly focused on and have been for a decade, I know we're making it look a little easy. It is not easy whatsoever. And that it's just -- the fact is we've done this for a long time. And I don't think you're going to see an oversupply in any means in the near future, and we see a lot of money getting thrown on it, takes a journey and to make adjournment, I'll say it again, and it takes multi years and the more years under their belt, the better they are and more productive.

So I think when we look at it now oversupply, the bottlenecks would be generation to some degree, I know the generation is going to say it's EPC. So yes, look, some of it is technical. It is difficult to have the capacity to build combined cycles at the levels that everyone wants to the mat and as quick as they want to build the map. We're working hard to build those capabilities internally. We've done a really nice job. We have what I consider a significant business in front of us in the generation side. So that's organic growth for us.

We really like where it's going. And we're putting the resources and the training and getting great people here that want to work for Quanta. So real happy with the to that. There is bottlenecks here or there. I do think, for the most part, most data centers want to go back to the grid at some point. And not to say that last time I got in trouble for saying something about behind the meter generation or whatever it was, I can't remember what it was, but someone was at.

Look, the faster you can go right now in generation people are going to buy it. But over time, you're going to try to connect to the grid. It balances things out. And so the utility is doing much better than a new one. They've been doing it for gades. So that bottleneck of that queue is extremely important. What does it take to get to the queue? It takes generation and substation. But we're very much involved in both sides of that. And I do think that would be the bottleneck is getting to the -- what I would consider utility scale generation, and they're moving very fast.

So we're working with them all over the place. And I do believe utilities are in a growth mode. They've been underinvested in for a while on generation, and you're starting to see that significant investment and -- if you start an engine today, if you order an engine a day, you're 5 years out, probably 6, where you get them built. So it just shows you the longevity and I'm sure I didn't listen to this call, but I'm confident be had a really nice book, and it's going to continue for a bit here. So we're super happy with where we sit.

Your next question will come from Andy Kaplowitz with Citigroup.

You just added like 10% more employees to the Quanta family again in 1 quarter. through acquisitions. I know how you're going to answer this question, but I'll ask it anyway. At some point, do you worry about the acquisition flywheel moving too fast and maybe you could hurt underlying performance or alternatively, can you keep the pace of the recent acquisition trajectory that you've had over the last few years up as it obviously has been a significant acceleration?

Yes, that's a good question. We're buying great companies. I mean, 1 of them was over 100 years old, maybe 2. We're not passing on great family businesses with great management teams. It will depend on the management teams, do they fit here. we're super excited with the ones we bought. A lot of that, too, is -- I mean I would tell you a couple of them we had talked to you for 36 months, maybe, maybe longer, maybe 5 years about acquisitions. We just can't tell you when exactly how that's going to work out.

Last quarter, we did 0 has closed 4. We're not seeing shortages of people wanting to sell their businesses here. I mean, I do believe culturally, it matters, we view that more so than anything else because if we continue down the path, the cultural path, we get the synergies, they wouldn't work together. People want to work here. We're creating great jobs. I mean, we have a lot of journeyman here that are Executive Vice President, President, CEOs, they're all over. And we have a path for Crahere. -- that's remarkable.

So I do believe if you want to exit your business, on makes tons of sense for you. And we're excited about that. I do think creating those opportunities, watching Craft did very well. We push equity down to 10,000-plus people. I pinch myself on how lucky we are to be in the space we're in and be able to do the things we can do for craft. So I'm super happy and that's why people want to sell their business here.

Your next question will come from Chris Tsung with Wolfe Research.

Just on the acquisitions, can you give us like the annualized EBITDA run rate or the purchase more you on the road, just the 120 to 140 contribution seems like it's just a partial year, and I just want to make sure we're comparing you correctly with the purchase price?

Yes. I think you can just do the math. It's about 6, 7 months worth of what we gave you. So you could annualize it based on just that can give you a good sense of the run rate.

Our last question comes from [indiscernible] from Goldman Sachs.

The guidance revision this quarter was notable. Can you just talk more about the drivers of that revision? What are you seeing in the market in your backlog that gives you confidence in this new guide?

Yes. I mean, look, you can see the headcount is moving up. You can see both electric and gas moving up. Obviously, the contribution from electric, it's a bigger segment. It's going to be up. So it was broad-based. I think the synergies that we have and the things that we saw coming together. We're doing a lot of balance of plant where on the data side and the technology side, but it's not just data centers. I mean, we're involved in not kind of the manufacturing Lillystart and all kinds of different things.

Tesla's got plenty going on. The onboarding, manufacturing -- I mean, kind of onshoring manufacturing Medical across the board, we're picking up on both sides of that. So I would say our T&D business is growing nicely. Our renewable business, I know everyone was worried about that for a while. We're setting records there. So super happy with what they're doing.

So broad-based growth, we will stick with generation and large transmission on the business. and that will be the outward growth and foreseeable future. So you'll start to see that stacking effect as well. We're not on in a lot of big large transmission. We're cleaning a few of them up, and then we're starting a few of them ourselves. But -- in general, I do think that stacking hasn't started yet and it's going to. I think it's probably second half of 2017, you'll start to see us go to the field in a meaningful way, and that will stock on out through the decade. So we're happy with that.

We have no more questions at this time. I will pass it back to Quanta's team for closing remarks.

Thank you. I want to again thank the 85,000-plus men and women in the field their sacrifices to build the infrastructure Amara as noted, and we thank them. So -- and I also want to thank you for participating in our conference call. We appreciate your questions and ongoing interest in Quanta Services. Thank you. This concludes our call.

Okay. Hi, good afternoon, everyone. Thanks for joining us after lunch. So I am really excited to have a conversation with Quanta Services. And joining us from Quanta is Duke Austin, the CEO, and also Jayshree Desai, who is the CFO. And so we'll just have like a fireside chat.

I've got a lot of questions lined up. But for those of you in the room, I'm told there's a blue card here. You hit the QR code. And if you want your questions answered, I've got my trusty iPad, and I'll make sure that happens. But yes, let's -- first of all, thank you. Thank you for joining us. So the first question I have is on just like the portfolio. And so like over the last 5 years, Quanta has done a lot between like the M&A. There's been clearly like a big acceleration in the electrical infrastructure build-out. And so the question I have is just talk about what you've become and why this version of Quanta is right for the moment at hand.

Yes. Thanks, Chad. Thanks for having us. Thanks for the interest. Fundamentally, I think the core of Quanta is the same with the craft. And we've really worked hard to build a perpetual model within craft along all skill sets. But in saying that, I do think as we've evolved as a company and how we look today, it's different. I mean I think we've transformed the company in many ways, and we've become something to the customer where it's a collaboration to get where they want to go.

And we're really having discussions with -- at the client level, at the customer level, which is -- and even to make sure that it's not impacting their customer. So I do think it's different. I think we're in a different spot than we were in the past because of where we sit with craft. And I -- as we have this discussion really around capital budgets, timing, how they interface. I think people really when we have large load on one side and utility on the other, the dynamics are different. One is trying to go as fast as they possibly can and one is trying to make sure the ratepayer is in good shape. So it seems like a model you could -- you meld together and we're doing that. We're seeing those models where one is willing to pay to make sure the ratepayer is okay and the other ones want to build.

And we're in the middle of that nexus. And I think as we see it, we can provide tons of solutions around that. We can work with customers on their capital and I think when I hear our customers say we're going to use Quanta and that's how we're going to get our capital budget done, it means something to me. Years ago, you didn't hear that. And I think that's -- you hear that a lot now. We have common analysts as well and so I hear it on both sides. And I think that's really our goal is to make our customer more successful.

If we do that, we become more successful so I think both sides from our large load technology type TAM to our utility TAM and the renewables in the middle of the generation in the middle of that. So yes, look, I think we're in a unique position, great markets. I think we put the company in the right place from a strategy standpoint to grow with multiple ways to grow. So yes, I think we'll continue to compound earnings.

Okay. So how have all these changes translated your ability to increase the scope of work on a project? Maybe you can talk about maybe 5 years ago, which share of the project could you attack and then with some of the acquisitions that you've done and the investments that you made on the supply chain side and in areas like that, what does that look like now?

I think if we go to the utility TAM, in the past, generationally, it was primarily just kind of T&D build construction and we evolved that into some of the engineering, supply chain, now the generation of both renewable and fossil. So really, unless they're building nuke, which some of them are, most aren't. That whole addressable market they're talking about is really a market that we can help with besides land or things like that.

But that -- when you get into the 90% from 50% on that big addressable market, which I think we have a good moat there on the utility side that allows us to really lean into that and become part of that industry and help so we've not only got ourselves in there, but we have allowed ourselves to take more of that position on the technology side.

You saw a platform acquisition with Cupertino, it really got us into the customer base on technology. They were first movers there, had been with technology for a long time. And now we've built that out to where we've added DSI or mechanical platform as well as Tri-City into that and then also our internal electrification -- that low-voltage electric that we put in there as well against that mode and really built that out. So we were just electric.

Now we can do mechanical. We bought civil early last year, in January. So there's not much we can't do. Actually, we can do it all. It just depends on if we want to. So I do think we were finishing up balance of plant data center today. We still perform 85% of it. So I think the same thing will exist. We're going to do it again. And more and more scope that continues. So as we see these big builds coming out, we'll be able to take that addressable market other than chips, we're not going to mess with those. It's not us. So we'll do the rest.

Got it. Okay. And just maybe sticking with M&A. So for as long as I've covered Quanta, you've had this great flywheel, right, acquired family businesses, reasonable multiples. But as the business has gotten larger, your deal size is going to need to increase to basically maintain the current level of growth. And so the question I have is like how do you keep that flywheel going? What sort of infrastructure are you putting into place to ensure that you can kind of sustain like this pace of M&A to kind of maintain your growth rate?

Yes. Look, I don't think we have to transform the business. I think family businesses, the last 2 are at least 50 years old, I think one is 100 -- 20, 30 maybe. We see a lot of 100-year-old businesses. They want to perpetuate the name, they want to be a part of something different. So we don't really source deals, it's something we do it internally. We're not out trying to make acquisitions, they're coming to us, do they fit the model or not? What does the management team want to do? Are they staying or are they leaving?

So we want people to stay with us, stay with this long term and buy great companies. And I don't -- I think a fallacy is that we need to make acquisitions. We don't. It's inherent. I mean I look at it like it's my money, and it's your money. And I want to spend it in a way where I believe we can get the most growth and we can generate the most cash. So that's what we're trying to accomplish with acquisitions is to make sure we invest free cash in a proper way. And I think we've done that and the synergies are there when we make these acquisitions, we haven't bought companies today where, look, we see the data center market. But the companies that we acquired about 30% of the business was data center. We knew we could grow them because we knew the data center market on the other side, and we knew what they did.

So it's really -- it's a built-in synergy within the business because we have it at the customer level. And we don't have to like press these deals to say there's a synergy. We're very disciplined about it. We owe it to our ownership to be disciplined. So I think we can continue to acquire great companies with great management teams that really fit our model. And I think we've done a nice job seeing markets, the vertical supply chain, the things that we've done there, we can see the markets and where they're going. As long as we can predict where things are going, we're able to lean into great businesses over time and yes, we've done a nice job.

Okay. So one through line that I am picking up on the M&A side is that you're leaning more into like the mechanical, electrical, plumbing side of craft labor, can you just expand on that? And just like how you see that market evolving for Quanta, maybe from like an M&A perspective but also from just like a project-based perspective, right? We're hearing more about these large-scale mega projects and the growing MEP intensity. So maybe spend some time on that, please?

Yes. No. I mean it's a client. I mean, the client is asking us to do more. And so we're listening. And we need platform companies to do that. And so DSI would -- we felt like we needed to be in the mechanical business. It's craft. It's something that fairly we relate nicely, great family. We were able to really lean into that and put some capital in and we're growing out the fabrication facilities today. We're going to double the size of our fabrication and so that's been something that we're able to really meet the customer demand on that.

And it's not just chips. I mean it's from Tesla to Samsung, I just think we've really been able to move that way past just the data center piece of it. And the craft, I think in the middle of that is just growing that craft. What they want is our ability to give curriculum training, the things that we've invested in since 2009. Management, that's my background. And so really being the fourth generation is we've really put the time into craft. And now if we get someone into our facilities that can't climb because they're scared to heights. 100-foot is pretty tall. You ever been up there. It will get a little shaky on you. A lot of people don't want that. They get back down, about 30% fall out on the first pole.

And so now instead of going home, they go to the inside electric or they go to pipe, or welder or plumber. We're able to really move people around and get a lot more people through our trade organizations. And I see -- we see a lot of people that like that will say we'll give you $100 million. That's going to do with money doesn't buy craft. Craft builds craft, journeyman builds journeyman. You can't think you're going to put $100 million into anything today and get craft tomorrow, that ain't going to happen. It takes years to train and we're very proud of the journeymen that we have and the training we've done and it's a fallacy to think we've been investing $200 million a year for the past, I don't know, since 2009 in training, and we're proud of that. So I would just say like not only are we making the acquisitions against it or training the people that allow us to get what I would consider the synergies in the outward growth of the company.

Got it. Okay. So let's actually shift over to talk more about year-on-year end markets. So both Duke you and Jayshree, you spend a lot of time at the highest levels with clients, I'm talking about the utilities, developers, hyperscalers, co-locators. Can you bring us into those conversations? Like what are their concerns? Like what are they asking you for?

I'll let Jayshree go first, she is in there more than me.

Yes. I mean I think it's most -- everyone is really excited about where they fit. It's -- I think it's a once-in-a-generation opportunity for a lot of our customers and for ourselves. So it's generally excitement is what we see. Now having said that, there are challenges that every part of our business is dealing with. You've got affordability concerns. You've got permitting challenges, you've got political challenges, and you've got the speed to market challenges. And at every level that we're working with, you got to be able to address all of those at the same time. And I think that's really a unique position that we can fit in because we have the ability to really affect in some areas more than others, but literally, we affect every one of those areas

And so our ability to help our customers weave through these dynamics has allowed us to really become more of a partner with every one of them and allow us to give you all the certainty of why we're confident about our 5 years and even beyond that and what we're seeing around this infrastructure build. It's really a question of what we're seeing is more when, not if, so how do we accelerate and get more certain around the win is what we're working with mostly with our customers. Well, I'll stop there and let Duke add more to that.

Look. We're in a different spot than we have been. And it's -- we have a sense of responsibility when people say we're going to use Quanta to build this capital and stick to our plan. I mean, I take it personally. So we're discussing it all the time. It showed up in the past year or so where I think the customer is asking us to change them as well. We're trying to change underneath us, where we're no longer just building out infrastructure. We're also being asked to look at it outward 5 years, make sure the supply chain is there, make sure we have right away, help with permitting, help with political, get us where we want to go and stay with me. Help me.

And that discussion is a different discussion than answering RFQ. It's way different. And that's where we're at today is the discussion is more strategic. It's long. We're prudent about it when we look at it, I think it's really -- I commend them for doing it, I do. I think it's something that to get out in front of something and recognize the fact that I'm not going to be able to get this done without help. I mean we have to collaborate ourselves. We're collaborating as well. We need their help to help them. So it's very much 360, the way we're thinking through it with clients today. And the more that we can get involved, the earlier we can get involved, the better we execute in that at the price and at the time frame.

Got it. And then if you look at your utility customers and then your large load customers, how far out are those conversations like extending to?

Yes. I mean, look, we're well past 2030 in places, the utility business, especially, I mean, it's out past 2030. The large load, I would say, even same -- those discussions are ongoing. I mean they're all in different phases. They're all in different time frames, but if you're looking at a combined cycle today, if you order it today, you're 30 months, 30, I don't know what they're saying today, but 30, 36 months, whatever they said, it's over 30 months. And then it takes a couple of years to build it, you're 5 years from today, if you order today. So any orders they have or if they book next quarter, they're 5 years from the next quarter. And so those bookings are pushing outward, so you can see it. You got to build transmission and substations in. It's going to feed something. So I just -- you have a lot of power today that's being done what I would consider a bridge.

And so if you're building 100 megs at times, it's bridge power, it's going to go to the grid. At some point, you got to build a grid back to it. We're on both sides of that. We're building -- sometimes we're building intermittent power and have plans to build the grid. So look, I like where we sit, I think it's much longer than 2030. I don't know why we put 2030 as the time frame, everything stops in 2030, world is going to end. Look, it's still moving forward like well past 2030.

Yes. So we track like the multiyear utility CapEx budgets, right? just only maybe like 1 or 2 years ago, you saw those budgets growing at like 8%, 9% CAGR. And now if you look at, at least like the last quarter, right, these multiyear budgets are growing at like plus 20%. So how do we think about that in the context of when that should translate into an acceleration in Quanta's utility business within electric power?

Okay. I think we're planning for that, that for sure. Today, we see the growth rates in our people and the transmission business, we have a really nice business growing in a normalized way today. That's what it's doing. We have not seen the big project stack on it yet. I think you probably start booking into this year, early next year, start going to construction on some of them. But that's going to elongate. It's going to be broad. We've seen these cycles before, big ones, but I think it's bigger than normal.

So the bigger projects will start to come in, in '27 and really stack on and you got 5-, 7-year build on just what you see. I think it's going to get bigger and go longer than that, of course. But I do think after that, we haven't -- we're in early innings on the bigger stuff that would stack on top. Same with our generation, so there as well the same.

Okay. Well, since you mentioned transmission. Let's jump there. So can you frame up the large transmission opportunity? And at least like from like the projects that we track, there's like a pretty big center of gravity in Texas, right? Like one thing I'm thinking about in Texas is that it's probably a little bit easier from a permitting standpoint to get things done there. There may be a little bit more certainty. I don't know, you tell me. But like -- yes, I guess like how do you think through the stacking of those sorts of projects?

Yes. I mean I would tell you Texas is great, till you go through the wrong piece of property, it's great. You try to go through the wrong piece of property. There's no fun. But yes, look, you got -- we've got to build infrastructure. I think we're making progress regulatorily, Texas, it will start first, I believe, you're seeing MISO come out with projects that people are winning there. I think they continue to have tranches. There's some backlash on whether they weren't competitive or not, they'll go backwards, but they may. I do think it will be a blend of both. Both for the regulated utility to stay there, and then they'll have some competitive like they're doing now. It seems to be the way they're going to go, but we'll see.

Either way, we're on both sides, it doesn't matter to us. We want to build it. So I do see those things moving forward in order to really facilitate kind of what we're trying to do as a country with the load. I mean we're going to double the load in the country. The need for transmission congestion is probably $12 billion to $15 billion a year, somewhere in there of congestion. It's the cheapest form of energy. So we've got to get these lines built. And I think you got to walk it back, and I know I hear a lot about, well, it's only 50% utilized. Well, the national highway system is 35% utilized. You're going to get rid of the highways too? Or you're not going to build any more, I mean, look, it never was meant -- the transmission system was never meant to be 100%, ever. People go to sleep like something will sleep. I mean you got to sleep a little bit. And when you sleep, lights go out, everything goes out, everything is quiet, your bill goes way down and of course, it's 50%. It's not ever going to be more than that and that's a fallacy.

So you got to have that transmission to get it to load centers. And we really need the permitting and the reform and some of the things to help that. You still have a lot at the state. The state got to get behind it. I do think the vertically integrated utilities are probably in a better position in growth. Hopefully, we can do some regulatory things to give both sides of that, some ways to grow generation because we need the generation as well.

So is there anything that maybe makes you more optimistic on like the pace of the build from a regulatory standpoint, there's a recent acquisition of Dominion by NextEra. Like is there anything that kind of makes you a little more confident on that.

We have a lot of smart people trying to build generation and transmission into PJM. We got -- I get some political pressure off and build it in. What I would say is demand is there. The willingness of technology to pay for incremental cost to ratepayers drive the ratepayers, philosophically under any scenario, more generation, more transmission should equal less to the ratepayer. It just -- there's no reason why we can't do that. It's being done in Indiana. In Indiana, if you look at the model in Indiana, where NiSource is building there, it's $7 a month to the ratepayer deduction because of loading. So it can be done. It's easier for the vertical people to do so. But definitely, I think you're going to see scenarios where you're seeing that model get pressed until it will come down. But we've got to have those kind of things happen in order for us to perpetuate where we want to go with the country. And that demand will allow us to do so.

So what makes 765 kV so much more complex than 300 or 500? And can you talk about just what makes Quanta well positioned to win on that part of the cycle?

765 is big and heavy. And in some parts of the construction, you can go pick a block up with your hand. You got to have a 12-ton crane and you got to have a block to pick it up. And you got to pull wire across it. It's [indiscernible] conductor. It's just -- it's a different level of construction. I just -- when you think about it, it's big. And so a lot of capital that gets into that, a lot of planning that goes into it for us. You can -- 25% more right away for 6x load. I mean I sign up for that. Very hard to build DC across North America because it doesn't drop load.

765 allows you to drop load wherever you want so you can do it. You don't get as good a quality, but I won't debate that it's for the engineers. So -- but it is something that I believe like for a backbone infrastructure we needed in the country. It will allow us to really move generation much more economical across large territories. So I think it's going to get -- it's been talked about for, I don't know in my career, 20 years. And it's always been needed. We are just seeing now the demand is going to press it. And either way we're going to build multiple corridors which I don't think we'll do. So we're highly likely to see 765 in a meaningful way across North America.

Okay. And can you talk about with this build-out of 765, like how that creates kind of like a follow-on like spurline opportunities. And so as you think about over the next 10 years, like this is kind of the first wave of building that trunk line. Like how does that cascade out as you're densifying that network?

Yes. I mean look, I think it looks just like a highway. I always like to go to highway because people understand you build 24-lane highway comes down to a loop or you have offshoots all the way once you get a corridor from point-to-point, and so all the lower voltage goes out to feed industrial parks or data center whatever it may be, but you have to have the trunk line to do so. So it's 10:1 normally is what you see. So a big line you get 10 off of it, normal. So it takes time, but over time, that's what you'll see.

Which just extends the capital bill when you think about it, right.

You're basically saying it as a 10x multiplier on...

If you had a mile of 765, you get 10 of everything out, something like that give or take. So -- but I do think when you look at it, we see that. I mean, we see them planning to build those things. If you go back, CREZ wasn't 765, but it was 345 double circuit. The CREZ lines are at capacity. And we had the same debate should we build it. And we also, with the winter storm in Texas had a huge issue with CRES. So yes, we should build it. Look, we have demand outside of data centers and we have demand with industrials. They have demand across the country with the pharmaceuticals.

I can go on and on, industrial and reindustrialization of North America. It's here and we got to wake up and start building the infrastructure.

Got it. That's actually good segue to the next question. I want to talk a little bit more about Cupertino and Dynamic, 2 of your recent acquisitions. And just like how can Quanta, serve those -- serve a large load of customers better now versus before?

It's just a different discussion. I mean both of them are fabricating and different -- obviously, different disciplines. But the engineering, very common, the way we were able to kind of put them together, engineer together, do some things there. I think it's smart. We don't -- I don't think we're doing anything different other than scale, like we can scale across the Lower 48 into Canada if we need to, but that scale of those businesses, we've added Tri-City in there as well. So I think we're just able to see more and take on more of where they're at, build offices, build capabilities.

We had a nice business that was more, I would call it, power plant industrial inside about 1,000 electric. We're taking those 1,000 and put them into those frame -- into that framework on the electric side, the mechanical side, I think as you start to see generation get build from fossil, you'll see heavy mechanical that comes back meaningfully in these type of builds. So it gives us a lot of framework opportunity. We talk about all the time in the portfolio and how the labor is fungible. So you start to see, okay, neither one of these companies were really data center-driven they were doing all kinds of other things so you can see the fungibility of it.

And now you have generation market coming on, it's going to start in a meaningful build on forward-looking. So I just think the opportunity for us to expand their capabilities are there and I like the fact that we're working -- they're both union, they're working together quite a bit. We're not having issues. I mean like type people, and they're both growing as fast as we can grow so really, really great management teams think alike, super proud of those acquisitions.

So maybe a question for you on the generation side. If memory serves me correctly, the vast majority of incremental generation like has been on the renewable side in the last number of years. But how do you see that on a go-forward basis in terms of the mix? And then I know with some of your I think with NiSource, right? You've talked about getting, I guess, back into gas-fired construction at scale selectively. So yes, maybe just kind of map out like how you see that cycle playing out in terms of just that mix? And then how big does Quanta want to be in that cycle?

I mean, that's a good question. The last part. I am out of choice, but -- what I would say, we are -- what I see in renewables, I mean Jayshree can comment, I think she should. You're seeing like we're still growing double-digit type growth in our renewable business. Batteries are coming into play. And then what I'm seeing with batteries is we're seeing longer durations, and I'm seeing it get cheaper. I think Tesla kind of came out with something they believe is kind of revolutionary. I don't know. I haven't really looked up on it. But apparently, like you think -- Elon can see we can get that thing down in half, maybe to cost. I don't doubt him. If you can do that and get longer duration, solar becomes very much what I would consider as good as gas generation at times. So I mean, I see why not.

So I just think, yes, you're going to have gas -- we need all forms, by the way, but when we see that, that's there, and that's what we're doing today. And as we progressed, we were asked to get into the gas-fired generation. It's not my favorite thing to do. But I knew we had the capabilities to do it. We just didn't -- it's not my favorite thing to do. It's very difficult to sync CGTs up. We're getting unit 1 and 2 class some of the turbines, I know that's difficult. And there's very, very good people to do that. But they're busy. They're beyond busy. So the client is asking us to do more there. And I -- we had -- that work with us, had the capabilities, ran a big engineering division before. We have 300 people in Birmingham today, going to 500, 600. And we're getting the front-end capabilities. We decided to do a joint venture on the first one in Indiana and we're able to do that, derisk the company through the construct, the way that we did it while really reducing cost to the client and the ratepayer, the large customer going to offset some risk.

So I think that design is a good design. I think we can continue. And the inbounds on building gas-fired generation are probably every bit as robust as data center or anything else at this point. But we can't build them all, we're not going to try, we're going to have clients that we really want to work with that are asking us to do something in a collaborative way, we'll do it. But it has to be in a collaborative way that we can work together to derisk us as well as enhance the ability to come in on time and on budget. We have the craft.

I thought early in my career that we built one in Alaska. I love them talking into doing it. And man, it was tough. And thinking something at nameplate power is just hard. And so I know it's hard and that's why I'm very concerned and you hear me talk about it, how big can we get? We're only going to get as big as we feel comfortable. And that's one of the reasons that we derisk ourselves with JV is because that's their main business at times and they did a really nice job.

And I felt like it's a great partnership on where we're at today. Single cycle is not too worried about. We can build single cycles. It's not something that is difficult as syncing them up. But look, lots of opportunity. And I do think it's really important when you think through because I get -- we get questions all the time on what if renewables go down. Well, what about our gas generation that we're building that business. And does it -- where does it sit? Because one thing I will say, we have great markets. They're not all going to rise at the same time and they're not going to stay risen forever. They're going to move up and down.

And we'll have things that look great, things that look good and things that are okay. And that's what we want in the portfolio. It allows us to really be flexible to give you long-term guidance, and derisk the investor base on 3 different verticals typically of initiatives the way the company is moving. So I -- look, if we hit them all at once and jackpot, I guess, I don't know. Look, I don't think you'll hit them all at once, that going vertical on them. I just think there's going to be fluctuations, and it really gives us longevity in the markets that we see well past 2030. You should comment on renewables.

You do a great job of it, but not much more to add. I mean you know this, Chad, I'm clearly a bull on renewables, and I will always be because it makes sense. The cost curve is coming down. There is value to it in many markets and the power demand is there. And so we continue to see a really good market there. The technology curves on both those things. I mean I always say don't ever underestimate technology. And both solar panels and batteries are really technology plays and it just keeps getting better and better.

So there's a real need for that as part of the energy mix. In the short term, for sure, because like Duke said, it's very difficult to get a gas plant built in the next 5 years. There will be some, but the majority of the generation buildout will still be renewals. And even beyond 2030, regardless what the politics might be around the tax credits, it will be about market demand and market drivers and where there's an energy need and even some capacity need, you're going to have batteries and solar be part of that.

And wind is a little different. Wind is more challenge for sure, our onshore wind. It will still be part of the mix. It just won't be a big growth driver. But there's value to wind, actually on both sides of that equation on the energy and capacity side. And so there will be markets where especially as more transmission gets built out, which has been the biggest bottleneck to wind. You'll see more wind coming as well. But solar and batteries will still have a nice growth curve to it.

Got it. Okay. So how about behind the meter. I know right now, I think there's a view that it is maybe more like a bridge power solution, but maybe go beyond 2030, right? Think about what the grid looks like with that added element.

Yes. I mean I think there's cases that you can make where it makes some sense to have some form of behind-the-meter generation. Look, I think batteries beyond the meter are going to be there for sure. There'll be other things back up generation, of course. So anything they're doing today will at least become backup generation. The question is, can you sell back into the grid, do you have bidirectional capabilities or not? What can you get out of that? Are we thinking through that well enough now of what can be done later.

So I do think there is obligations for it. It becomes cost at some point, like if you can bring on load and you can bring on utility scale, it will reduce the ratepayer. But it will -- like so you got to think through the cost of something. Right now, it's speed to market, that becomes cost to market that over time as it start to get more generation on these systems, but there's always a place for it. We were investing in a company called Hybar, they build rebars. We take some offtake off the rebar, green rebar in Arkansas. And they have behind-the-meter solar and battery to shape peak and what it does is for the price point of their electricity, they can build -- we can build and manufacture steel rebar much cheaper because of the way that batteries in solar come into play and applying it. I'm amazed what that will do for a company that is pressed on power so that's a situation where you could see behind-the-meter something that works.

It works for the utility and it works for the client. So I don't know there's cases that it works great, and it will be there. But right now, it's just like if you have anything that will generate an electron, go. I mean -- but I just -- I don't think that's going to be that way when you start to see the cycle of gas generation come online.

Okay. Let's actually shift back over to your modular fabrication capabilities. I mean, correct me if I'm wrong, but I think this is a recently acquired capability with Cupertino and Dynamic. What have you learned about these sort of capability and then how do you think about deploying this like at greater scale? And if you can, can you talk about just what share of your work even flows through modular today?

I mean we had it -- if you take into account our vertical factories for transformers, you'll have 7 million square feet under roof with the -- we said we're going to spend $700 million on expansion. We're expanding all the factories. So that includes MEP fab capabilities. So as we look at it today, I mean, if you go back 10 years, Cupertino was a first mover in this. It's always been a good market. It's always been a market that we thought was prevalent. But in saying that, you didn't have the constraint of the workforce that you do today and the cost to move people, the cost to move people into other parts of the country.

So it's much more economical today than it's ever been to modularize because of some constraints on craft skill. And especially the electric side. So I think those constraints -- you've always modularized some of the mechanical, but it's more prevalent now. So I think as you move into like rural areas, Wyoming, New Mexico, places like that where there's just nothing. I mean you're much more economic to fabricate. So we're seeing more and more of it. Your engineering, your video, your Trimble, all the things that you have capabilities of the 3D modularization that's really enhance what you can modularize and it actually fits when it hits the field.

So I think that's the key is we've advanced technology to a point where you're able to have what I would consider world-class quality at your factory that goes to the field, everything kind of syncs up and it cuts that time to build down and it cuts labor down in the field. So yes, I like it. We'll use it as much as possible. I would tell you it's less than 5% of the business, call it.

Yes, roughly.

It's growing. It will move into the expense, it will grow more. It's just -- the business is also getting bigger. So it's hard for me to characterize it against the business because it's just -- our business overall continues to grow.

Well, now I'm going to have to ask about the economics.

Look, I mean, there's players in the industry that are pure play, you can look at them, and I mean our margins are comparable.

Okay. Okay. So you spent a number of years working with the utilities through like a master service agreement. It kind of begs the question with data centers with the long visibility. To what extent should we expect those sort of relationships start to unfold or even on like the industrial side?

Yes. I mean I think they are -- they're unfolding. We're definitely building on that side. And it's a trust issue. In many ways, like we got to continue to perform. If we continue to perform over time, it's already happening, where they realize when they sign -- when we sign up for something, we're going to do it on time and on budget. And the more times we do it, it just keeps building our name and our best commercial is our customer. I mean, I had one the other day. They were talking to one of our larger utility customers and they had given them our name and it wasn't a hyperscaler, it was a co-locator -- a large co-locator.

And they said, "Hey, the utility came back and said, "Hey, they just thanked us for giving them your name. And I was like, oh yes. Thank you." So this -- it's very -- I mean like this thing is very circular. It's a small group, and we just got to perform, I think, and provide the same kind of mindset solutions that we have for utilities on the other side and just not deviate.

Yes. I think we work hard to be long term, and we work hard to be programmatic with our customers. I believe we've done a nice job of that on the utility side and you're seeing that in our results. We have been working towards that on the technology side. It's absolutely making an impact. It's just -- it's early. It's only been 2 years since Quanta really hasn't been leaning in on to the technology side as a Quanta whole, right? I mean, obviously, our operating units have done it for a longer period. But within this whole Quanta holistic total solution approach, we've just begun. And we're seeing -- I believe we're going to see a lot of results of that as our technology customers are seeing the benefits of that. And like Duke said, we got to prove it because, again, they got to trust us to get what they need to do, and we're in the early innings in that.

Got you. Okay. So on the Investor Day, you guys talked about the $13 million per megawatt TAM for data center so I guess, like for like the average project that you're working on today, what does that look like? And what would you need to do organically or inorganically to actually realize that full $13 million TAM?

Yes. So like I think we look at it anywhere between, call it, 25% to 50% in that range the way we think through it. It's really -- depends on where it's at. Like regionally, just structurally, there are some regions of the country that we're just not as heavy, and we don't have the capacity in that part of the world. So it's a matter of us building capacity in different areas, whether it be mechanical or civil or whatever. I mean the high-voltage piece we can cover off, medium voltage we can cover off, I can take it. But you got to think about it. We just started this like kind of this platform 2 years ago. And so we're building on this platform that's already big, big and so I think we'll just continue to add to it, add regionality to it, and then really pick the business up where it's more fulsome.

I would tell you, we're probably averaging 15% now on things because we're building for others out of our facilities, fabrication facilities. We're just doing mechanical on one building versus 10, there's just stock kinds of things. I just -- we can take more market share, we can think through it. But I mean, we'll have top 10 customers there that we're going to service, and we're going to have to be more fulsome to do so. So we continue to talk to them years out, decades out around like what we need to do, and we're going to build against it.

Okay. So now shift over to labor. So can you talk about your strategy to ensure an adequate labor supply like over the next 3 to 5 years? And then specific to the training program, like what do you see is like the biggest bottleneck?

We've done a nice job since 2009, and I do think that continuation is there. I'm not as concerned about the craft skill. I mean I'm concerned, but I'm not as concerned. We have good, what I consider visibility and the growth curves and what we need from a labor curve. So we can see it today the more that we can get in front and plan with our clients on a forward look, the better off we'll service them. So I mean, we're encouraging, like, let's have the conversation early. Let's talk about what you want to do, where you want to do it. that moves all the time. And so like we can say we're going to go to Wisconsin, we end up in Iowa. It happens, and that's okay.

But as long as we have good growth curves with them, we can meet the demand. We're hiring a lot of military, about 25% of our craft comes from the military. I think we owe it to them. Our average -- our median wage is $120,000. Kids coming out of school $75,000, 25% pension easily and, call it, all health and welfare for the family. I just think like we can do some unique things. We pay well. We always have -- I feel good about it. We push equity down to 9,500 people between 9,000 and 10,000 so we're proud of that as well. So we've got to take care of them. We got to take care of craft, it's who we are and our ability to ramp that. 5 years ago, we were at 3,000 kind of organically on the growth rate.

Last year, it was 6,000 organically. We added 10, but that was -- some was through acquisition. So journeymen build journeymen we have more we can build, which is that's the way I feel good about where we can go at craft.

Okay. So maybe just the last minute or so. Let's talk through your margin targets, right? You call for an increase out to 2030. Can you just walk through the levers to get there? And since we're running short on time, I want to throw something in on return on invested capital. That's like another target for you. Maybe just talk through the building blocks there.

Yes. I mean, look, I think when you look at our margin profile, we're going at some. You can see the project mix inside the utility. It came up. I think that will continue as that becomes a bigger piece of the segment. But we've got a lot of -- we probably -- that's the question of the day margin, margin. Look, we self-perform 85%. We have to pay our craft. Our craft moves up, okay? We pay them well. It's going to come up. We are going to increase margins a little bit. But this -- that's not the story. We'll take margin -- we'll take outward look and longevity and stickiness with clients over time and compound earnings invest free cash and do great things with it that we've done in the past for a decade.

When we give a 10-year, 5-year look, we hit it and we've hit it for a decade. And so that's the intent and that's how we do it. We just stay with it, stay and it's not very sexy, but you just compound it over and over again.

I mean it's the same approach, right? I mean our returns, you've seen it grow because of this consistent, deliberate effort on focusing on the long run. I mean there are levers. You've seen our working capital profile improve. We believe we're going to continue seeing that. That's going to be a driver of ROIC, the margin improvements that Duke talked about around some of the areas that we can do around the mix of work and the efficiencies we're going to continue to gain around those. All of those things are going to help drive ROIC. But we are heavily focused on ensuring that at the end of the day, we take on more share of wallet even if it might be not necessarily margin dilutive, but if we're allowed to take on more scope with less capital, we're going to do so, and that's going to be a big driver of our ROIC as well.

Got it. Okay. We're out of time guys. Thank you so much. Appreciate it.

Thanks.

Good morning, and welcome to the Quanta Services First Quarter 2026 Earnings Call. [Operator Instructions]

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.

Thank you, and welcome, everyone, to the Quanta Services First Quarter 2026 Earnings Conference Call. This morning, we issued a press release announcing our first quarter 2026 results, which can be found in the Investor Relations section of our website at quantaservices.com. This morning, we also posted our first quarter 2026 operational and financial commentary and our 2026 outlook expectation summary on Quanta's Investor Relations website.

While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community.

Please remember that information reported on this call speaks only as of today, April 30, 2026, and therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements intended to qualify under the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements reflecting expectations, intentions, assumptions or beliefs about future events or financial performance. You should not place undue reliance on these statements as they involve certain risks, uncertainties and assumptions that are difficult to predict or beyond Quanta's control, and actual results may differ materially from those expressed or implied.

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

Lastly, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com to receive notifications of news releases and other information and follow Quanta IR and Quanta Services on the social media channels listed on our website.

With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services First Quarter 2026 Earnings Conference Call. I want to begin by thanking our employees for their continued absolute performance mindset, dedication to safety and commitment to delivering mission-critical infrastructure solutions for our customers. Your work and dedication is what makes everything possible.

Quanta is off to a strong start of the year with our first quarter results reflecting robust double-digit growth in revenues, adjusted EBITDA and adjusted earnings per share, along with record backlog. These results reflect the strength of our diversified solutions-based business model and our portfolio approach, enabling us to adapt to the evolving industry dynamics while consistently delivering execution certainty and profitable growth across varied market conditions.

I want to spend a moment on what we shared at our Investor Day on March 31 because I think it is the right context for everything we are doing. Quanta has transformed, and our strategy for the next 5 years is firmly in place. What ran through everything we presented in our Investor Day was one word, certainty, execution certainty, labor certainty, supply chain certainty, schedule certainty. That is what our customers need right now, and that is what this company is built to deliver.

Utilities are being asked to double in size. Technology customers are demanding speed at scale they haven't dealt with before. Everything we have built over the past decade, our craft workforce, the integrated solutions model, the vertical supply chain investments, it all comes back to delivering that certainty at scale. And that is the conversation we are having with the customers every single day. We listen to our customers, and we are becoming more deeply embedded in the way they plan and execute their capital programs. We are in the rooms where customers are planning their entire multiyear capital spend. We are negotiating much of the work directly.

Our success is aligned with their success and with positive outcomes for the rate payer. That was not the case 5 years ago. We are there now. The trust we have built over decades, combined with the investments we have made in our craft workforce and integrated solutions model is how we created a durable compounding business that is well positioned to capitalize on large visible and durable market opportunities.

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

The versatility of our craft workforce and our solution-based approach is what derisks all of us for our customers and for our investors. That fungibility, the ability to move our people across a $2.4 trillion total addressable market converging around utility, generation and large load is what allows us to flex across markets, expand scope and keep delivering. We have outlined an opportunity to more than double the earnings power of this company by 2030. When we look at our 15% to 20% adjusted EPS growth target with the opportunity to stack above that. I want to be clear, this is not easy, and the strategy has to be in place to deliver those numbers. We believe it is.

Our guidance is prudent. It has always been prudent. And the results we reported this morning reflect exactly the kind of execution this plan is built on.

I will now turn it over to Jayshree Desai, Quanta's CFO, to provide a few remarks about our results and 2026 guidance. And then we will take your questions. Jayshree?

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

Based on the continued momentum evidenced by our record $48.5 billion of backlog, the strong performance during the quarter and improved visibility into the remainder of the year, we are raising our full year financial expectations. We now expect revenues to range between $34.7 billion to $35.2 billion, adjusted EBITDA to range between $3.49 billion to $3.65 billion, and adjusted EPS to range between $13.55 and $14.25.

As Duke mentioned, we hosted an Investor Day on March 31 and outlined an opportunity to more than double the earnings power of this company by 2030. This quarter represents a great start to a 20-quarter stretch during which time we intend to deliver against that expectation along with continued improvement in our consolidated margins and returns.

Over the course of our 5-year plan, we remain committed to maintaining an investment-grade balance sheet and an acquisition strategy that's governed by our target leverage profile of 1.5 to 2x, and the returns that we would otherwise generate by repurchasing our stock. One quarter in, the results reflect exactly the kind of disciplined compounding performance we committed to at Investor Day, and we remain focused on delivering that consistency for our stakeholders over the course of this plan.

Additional detail and commentary on our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both available on our Investor Relations website.

With that, we're happy to take your questions. Operator?

[Operator Instructions] Our first question is from Nick Amicucci from Evercore ISI.

I just wanted to drill in a little bit. Obviously, Duke and Jayshree, you guys had kind of mentioned the opportunity to improve margins on the Underground and Infrastructure. It seems like obviously, that was -- it seems like that was one of the drivers here in the quarter. I just wanted to see, is that kind of -- should we kind of view that as more of a pull forward on that side of the house? Or is that -- was that somewhat contemplated as we think about just guidance going forward and kind of the 2030 time line?

Yes, thanks for the question. When we looked at the Underground, the word mix coming in with DSI in that segment as well as just broad-based what I think is execution in the segment. We did a nice job, and I do believe that's where your earnings improvement are coming from UI. So not to say we can't improve some of the Electric segment. But as we discussed, that's where you're going to see the incremental margin improvement. I do think it continues to get higher and we have the ability to operate in double digits.

Great. And then as we kind of think about, too. We've heard just even over the past 30 days since the Investor Day, we've seen a lot more, I guess, rhetoric and just kind of commentary from a lot of whether it's developers or utilities in general or even the hyperscalers just on the notion of kind of more of a bridge power type of approach.

Is that something that is kind of an incremental opportunity just thinking that we can go first somewhat off-grid, if you would, and then kind of provides the opportunity to then build out on the transmission side? So you kind of get 2 bites at the apple. Is that a fair assessment? Or is that kind of overstating?

I mean everyone has a different solution to the issues of lack of generation. So I think when we look at it, the easiest to know, I think the best way is to connect to the grid. And most of our customers want to go to the grid at some point. There is bridge power solutions. They're out there. There's Bloom and others that we're involved with on jobs, and I do think that is a good bridge power in many ways, and it will end up being backup power for the most part at some point.

So to have a microgrid at that scale with that intermittency in the type of learning that the chips have, it's very difficult. And not many people can build those microgrids and run them. Utilities are very good at it, and it's much easier for them to do it than it is to try to run a microgrid from a technology company.

So yes, it's complicated and the lack of generation is creating some opportunities for us on bridge power and many things. But we're involved in all of it. I would tell you, large majority, vast majority are going to the grid at some point.

Our next question is from Andy Kaplowitz from Citigroup.

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

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

Our next question is from Steven Fisher from UBS.

I know you guys just only gave 2030 targets, but I wanted to look out maybe even a little bit longer term because it seems like a part of the narrative being reflected in the stock is this longer term good visibility that you have.

So Duke, I mean, you've made some comments here and there about having some kind of programmatic discussion or opportunities beyond 2030. So I was hoping you could perhaps elaborate a little bit on those opportunities. To what extent is this mainly transmission projects? Does it include other data center opportunities directly? Is it renewables? And to what extent do you have any more formalized agreements that go out actually that far beyond 2030?

We're looking at work beyond 2030 for sure. I do think you'll see an elongated cycle. I don't think you're looking at something that's stops in 5 years. You're seeing decades of type -- it took us, I don't know, 70 or 100 years to build the grid that is there today. I don't think you can double the size of it overnight for sure, not in 5 years.

So it's going to take a while to do that. You're seeing orders out on combined cycle engines into 2030, if I'm not mistaken. So if you're just getting orders in 2030, it would tell you that the CCGTs take 3 years to build once they hit the ground and you're in 2033 at a minimum on the orders you get today.

So I think when you think through it, the transmission, the infrastructure, and what we see in front of us with robotics, the way the grid is used, the power electrification, I just see more demand, more demand in generation and the electrification of the world. So I just -- we see it for a decade plus.

Our next question is from Julien Dumoulin-Smith.

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

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

So we're right in the middle of it. We're right there with the client on both sides of that. And again, we talked about [ 5, 7 ] that's growing every day. So we like the area. We NiSource, and I think it will continue to grow.

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

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

So we're right there together. And we have a U.S.-based supply chain that I think derisk us and AEP, and that has led to work and great opportunities together across the board on our system. So we're excited about it, and we're just getting started. It's very early. And I think you'll continue to see building a backlog, and this is just what I would consider the 765 we put in was really in MSA that is normal course. So I'm excited about what we can do there, and we're just getting started.

Our next question is from Ati Modak from Goldman Sachs.

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

It depends on the risk. I think we're comfortable on the single cycle as we're comfortable on many things when it gets to a combined cycle. We'll be prudent about how we take risk on them. And I've been around a long time. I've seen failure, and we're not planning on that. So I believe as the market progresses, as we progress as a company in those type markets, you'll continue to see it grow. We're highly focused on it. It's something that we see as a great addressable market that the inbound calls are daily and I believe we can build them, but we're going to build them under contract structure that makes sense for us and the client and the rate payers.

So it just takes a bit. They're long-cycle type work, and it will take us a while to get to contract, now many of them. But it's something that you can't stick your toe in the water, you've got to jump in, and we're going to execute very, very well. And we're going to make sure that we've derisked ourselves against the market. So it's something we're focused on.

Our next question is from Sangita Jain from KeyBanc.

I have one for Jayshree. Jayshree, you left your free cash flow guidance unchanged. Just wondering why? I know your CapEx went up, but it only went up by like $50 million at the midpoint. So can you help us understand what you're thinking through.

Sangita, really nothing to read into that. We gave a good range when we guided in the fourth quarter about our free cash flow. And yes, while we were pleased with the performance in the first quarter, it's just early. We don't really need -- we didn't feel the need given the expectations where we are today to change that with the $500 million range that we provided you guys in the fourth quarter.

Having said that, yes, do I feel like we have greater confidence about being at the higher end of that cash flow range? Yes, I do. So as the year progresses, you can expect us to update you accordingly.

Our next question is from Brian Brophy from Stifel.

Yes. Congrats on the nice quarter. You talked about meaningfully growing your off-site construction capacity in your opening comments. Can you talk about what you're seeing there that is driving these investments? Did you see any meaningful awards in that business in particular this quarter? Remind us how significant of a business that is and just the margin profile there.

I mean the announcement was supporting both our manufacturing capabilities, I mean, what we -- in the prepared remarks, which would be our transformer manufacturing, which is the majority of the capital. We have increased our size substantially on a prefab and premanufactured type product that Cupertino was a first mover for multi-decades. So we're supporting that. We're growing that business. It's a labor force multiplier, the way I see it, and it allows us to really expand and work with clients across the country. As we see that market, we'll continue to expand it. But it's much more of a programmatic spend, and it's not something that you're going to see as large chunky projects. It just continues to be MSA-type driven programmatic spend against the AI build, both cloud-based and learning-based type products.

So I think when we look at it, we'll continue to expand that due to the fact that labor constraints, and we can force multiply what we have, the fungibility of our labor as well. So we like the area. We're investing in it and the inbounds are daily.

Our next question comes from Steve Fleishman from Wolfe Research.

Can you hear me okay?

Yes, Steve.

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

I mean it's a big market, Steve. So when we look at it, I think capacity, it comes down to cross-skill labor, multi-trade labor that we had. And so we can either work for others or do it ourselves in many ways. We've built a nice programmatic spend in areas that I think will continue. We have others that are coming in. It was not something that the company was focused on 5 years ago. And when the risk gets less and we're able to do it in a prudent way for the ratepayer, and we're derisking certain aspects of those things, the single cycles don't bother us, the combined cycles do. So as we get into that, we look at it from a risk profile and work with the client.

And I think it's the right way to look at it. If you try to fix them, they get expensive. And the risk out 5 years from now is substantial when you start looking at it. So I think we're defining those risks, working contingencies, making sure that everyone is looking at it right. And for the most part, our sophisticated customers we work with realize it's the right way to look at total cost, and we're able to do that in a way that benefits everyone involved.

So we'll continue down that model, and it's worked very well. We're not going to win them all. It wasn't something that we expect to win them all. It's a great business for us. If it -- we have not acquired against that. We built this organically, and we'll size it to the market. It's not something that I think Quanta will grow with or without it.

Great. And then just on utility interconnection issues, just -- I'm curious if you're doing things that would help accelerate that? Is there things that you can -- this 3-mile island restart not being interconnected until 2031 potentially was kind of shocking. Just what are things that can be done and maybe your involvement to kind of accelerate people getting interconnected?

Yes. I think, look, the transformer manufacturing investment matters a ton when you start talking about 36 months on transformers, things like that. And then you have inbounds from Europe that are held up in overseas and things of that nature. We've really derisked the transformer piece of that. So it would help there. We can build large voltage, high voltage line faster than anyone in the world. And I think we've set ourselves up nicely to bring jobs in faster.

That said, I think it's more about the impacts to the ratepayer and getting past that. We need every incremental piece of capital spent for transmission benefits to ratepayer. And that's what we have to do as an industry is make sure that we're telling the right story so we can move these faster permitting reform will certainly help speed that up. But the queues are complicated. We're in the middle of them all the time, and it's a moving target in many ways. So we're constantly in the middle of trying to help expedite that through technology. We have a large planning group that works with utilities. But the target moves and we continue to try to bring it in, in the field.

So that said, the more we're involved upfront, the faster it goes, as far as I'm concerned and benefits the ratepayer all the way through. So we're all looking at permanent reform and ways to mitigate and get these things in the queue quicker, no doubt about it, and we're doing it, I think, in many, many areas.

Our next question comes from Alex Rygiel from Texas Capital.

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

Yes, Alex, I think when we think through generation, our renewable business, we haven't talked much about this morning, we had a nice quarter. We really did. And I think we built backlog on it. So like while we don't say much about it, it becomes a dirty word at times. I really like the solar batteries and even the wind and areas, it makes a lot of sense. And so -- but you've seen us position ourselves nicely in the CCGTs and the gas generation.

So it's all forms of generation now for us, and we're trying to be the solution that people are asking for with the fungibility of craft skill labor across those markets. So we can move across markets. We see markets that no one sees. And we're able to take the labor, build on the front side of it, talk with technology, talk to our customer and we listen. And we're listening to them over this decade of making sure that we can move in the areas that we see provide the most benefit to our people and to the ratepayer and our stakeholders.

So we've done it. We continue to do it. That's one example, telecom. It's growing a bit. We see BEAD. We see that connecting data centers as well. So we'll grow that business. I like our verticals right now and our supply chain as well. So there's not much that we can't solve here. We just have to continue to execute underneath and the shiny objects are the shiny objects, but our execution and the guys, the men and women on the field are just, as far as I'm concerned, are the best in the world.

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

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

Our next question is from Manish Somaiya from Cantor Fitzgerald.

Two questions. One, the demand picture looks fairly robust across the board, but have you seen any signs of potential weakness in any of the markets geographically or end markets by sector? And have any of the constraints changed? I know in the past, we have talked about craft labor, supervision, all that stuff being a challenge. So that's question one.

And then as part of that, if you can just touch on the M&A pipeline. What opportunities are you seeing geographically and by business? And where would you want to do something if the right opportunity arose?

I'll go backwards. So M&A, we see plenty of opportunity there. There's great businesses, 100-year-old companies that have long-standing what I would consider execution across many, many markets. And our ability to execute on M&A as you've seen it over the last decade, you'll continue to see it going forward. The inbounds are strong. People believe in what we're doing, people believe in our strategies, and they want to sell their businesses here. We're happy to have them and happy that they want to be here.

So you'll continue to see that. I think you're starting to see the strategies come together here and the things that we invest in. There's not one market. We have some holes in the business in certain regions. We had the holes in the business in certain -- from my standpoint, certain verticals. So we invest in them. But the great businesses are there. We're not doing this for a labor strategy. We're building labor nicely underneath. We added relatively 5,000 to 6,000 organically last year, and we'll do that again this year plus.

So I've said this before, labor builds labor, a journey makes a journey, and money doesn't do that. The more journey you have, the more you can scale. And we realize that, and we invest in it constantly and have for over a decade, well over a decade. So it's not -- M&A is not a labor strategy for us. So that's out and the rest of it is just we've given, I think, good guidance on what we think for our strategy, and we'll invest against it.

And also, when you think about -- you talked about labor a bit as well. The fabrication facilities, the things that we're doing there, premanufacturing on both sides of that, whether it be DSI, multi-trades, we're using that investment with technology to really expedite what we can do in the field and take risk out of it. I mean you're starting to see the seasonality of the business even change a bit. I can't tell you that, that's what that looks like yet because I haven't got my head around it. But the first quarter, it doesn't fall off as much. And we had some Northern climbs that were tough, and you've seen us operate through those markets this quarter. And I think you're going to build a business that is resilient across 4 quarters and predictable.

So I like what we're doing there. And the end markets continue to -- I have not seen holes in them. There will be stops and starts when we get this big, and we start adding this much backlog and the business grows, we're not going to add the same amount of backlog every quarter. Those things are -- it just moves around, but consistently on a CAGR basis, I expect our backlog to continue to rise for as far as I can see it over time. Now it might not be quarter-over-quarter, but it will certainly be year-over-year at this point. And we like what we see out there, and I'm not seeing holes in the markets that we serve.

Our next question comes from Philip Shen from ROTH Capital Partners.

You took your technology and load center outlook up substantially, increased from 70% to 110% of revenue growth. So we heard a lot of hyperscalers has increased CapEx for the year last night. What do you see for the coming quarters for this end market? Can you give some additional color on your conversations with the hyperscalers? And is there a potential that the segment could grow even faster than what you've laid out?

Yes. Just to comment on the slide that you're discussing, that's directional. And if it was up to me, I wouldn't have that slide. But I'll defer to the team on it, but it is directional. So you're right, it is growing fast, and it is a fast-paced market. We've made acquisitions against it. So you can expect that to grow faster than things that we haven't made acquisitions. It's a great market. We've talked about the technology being $1 trillion-plus TAM. And you can see what the capital being spent from all the larger hyperscalers out there.

So yes, I mean, it's going to grow faster, and we continue to lean into it. The opportunities are daily, and we'll take advantage of those opportunities when they come in from balance of plant data centers to pieces thereof. I just think we're doing a nice job there. We talked about it. We had a strategy. We're executing against it. And we did -- we are looking at 100-plus percent growth in it due to acquisition, due to strategy, due to a lot of things. But organically as well, it's growing nicely, and we'll continue to see it grow. We're early. I think we've only been doing this like 1.5 years. I mean you can see like how big the businesses are already. If you do the math, it's a huge business, and it will continue to grow. I think people have come in here daily because we can execute. We can execute and we're certain and we can do it fast. And we have the craft on the backside. We're not building homes. So we're certainly something that we can do and do well. We're excited about it.

Great, Duke. Second one here. Maybe this is more for Jayshree. Can you give some color on why the '26 EPS guide percentage increase was less than the Q1 EPS beat? How much of the Q1 earnings beat was a pull forward potentially? You guys beat by 30% on the adjusted EPS line on Q1 or in Q1, but the EPS guidance was only raised by 7% in 2026. Were there some one-timers?

Yes. I'm not following that math, Phil, I'll admit. We had a nice -- we raised our EPS. We took forward our beat in the first quarter, and we also raised our guide in the back half, and that's reflected in our adjusted EPS. We had a little bit of a -- most of that was EBITDA strength for the year as well as a little bit of a tax beat that we carry forward. But the beat should be reflective of both the first quarter as well as our views of the back half of the year.

Yes. Look, I would also say, we take sort of an approach to it, Phil. I think when we look at it, we certainly are prudent about it. It's not normal for us to move the back side unless we feel fairly confident about it. The way I did the math, we raised it $50 million past the beat. But maybe I have -- maybe my math is wrong. Anyways, I got to pass CEO math.

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

[Operator Instructions] Our next question is from Jamie Cook from Truist.

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

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

Thanks, Jamie. We look at the portfolio against the strategy constantly. I do think we always try to optimize, whether it's not invested capital, staying in it for the long haul. So we're always looking to optimize our portfolio. And if we can get the right returns on things, if it's the right timing, we have no issues divesting.

That said, we're able to use craft in many ways across segments, across business lines that I think we've done a nice job with where it may look like a pipeline business, but it's not. And so we can do other things there that we have and optimize it all for purpose.

That said, we will continue to look at those things. I think as we look at the small mom-and-pops are now $1 billion. So they went from $100 million to $1 billion in many ways. So there's no longer a small mom-and-pop per se. They're all large businesses now that have grown in markets that we like, especially the good ones. So we're able to really lean into those, and it's the same relationships that we've had for decades and are now $300 million, $500 million businesses. And I don't see us -- I think we transformed this business 5 years ago per se when we started leaning into the front side of the business, when we started leaning into technology, leaning into other markets.

So the transformation has been done. Now it's all additive. And I think we talk about it a lot around here, that flywheel is moving fairly rapidly at a breakneck pace. So as we see that, we're growing organically nicely and we're growing double-digit plus there as well as we're able to see acquisitions that are growing faster than that. So our acquisitions are coming in and growing much faster than the whole and they're not little.

So I think there's no -- we don't see any reason why we can't either buy our stock back or pay a dividend, but more importantly, you'll continue to see us make acquisitions against the strategy is probably the primary use of capital going forward.

Our next question is from Justin Hauke from Baird.

Great. So I've got kind of a 2-part question in one. But really, it's just about, Duke made the point the seasonality is almost changing in your business. And if you look at the revenue this quarter, it was up sequentially, which essentially almost never happens for you because weather-wise, there's just not as much productivity in the winter.

So I guess the 2 parts of the question are, one, what markets or what specifically came in so much stronger than kind of the way that you had expected the quarter to come out? And then the second part of the question would be, the book-to-bill, 1.6x this quarter was also very strong. Usually, you guys will call out something like a big award or anything else, but there wasn't anything in there. So was there anything lumpy in the bookings this quarter or just kind of broad based?

No, it was a broad-based backlog, but I discussed the 765, it's the first like meaningful 765 that came in, it's less than 25% of the beat, so call it less than $1 billion in there. But that was the big -- it was an MSA type over a multiyear period that can grow and expand, not with the client that we've discussed. So I think that said, that's the thing that was in there. But across the board, really. And I think there's opportunities to continue that over time on a CAGR basis, for sure, the CCGT business is growing nicely. We're highly focused on it, and we have nothing in there on that, which I think you guys are seeing the opportunities out there. It's something that could be substantial, and they are chunky.

We talked about things stacking. I think it's going to stack. You're going to start to see it show up in the revenues, show up in the profitability of the company over time. And we look back and we're at 30% EPS growth with no acquisitions in the quarter. I think we've done a nice job to set ourselves up, and you'll see the company stack in the back half and beyond.

Our next question is from Adam Thalhimer from Thompson, Davis.

Great quarter. Congrats. Two questions, I guess. First, on the revenue beat at Electrical was so substantial. Just curious what drove that. And then I'm curious on the Iran war. How your customers are responding to that and higher commodity prices?

Yes. I mean I'm not seeing -- obviously, diesel is up a little bit. But I think when we look at that, it's just such a little piece of our spend. Our guidance contemplates anything like that. And we don't rain diesel, everything is contemplated in our guide. So not concerned with that. Like any other American, I'm worried about the troops, worried about them getting home, and we appreciate what they do over there and keep us free. We're able to do the things that we're doing today. And bless them and our country. But that said, that's all on here, is how do we help the troops, how do we make sure they get home safe and we have jobs for them when they get here. So that's what we're doing on our part.

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

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

Our next question is from Maheep Mandloi from Mizuho. Maheep, please unmute your line and ask your question.

We'll take our next question from Michael Dudas from Vertical Research Partners.

Can you hear me now?

Yes, please go ahead.

Duke, you said in the past when asked about all the market activity and excitement and all the development and such that even if a small percentage of that came through, business would be great. I just want to get your sense, given the visibility on what you guys are seeing across the board. Are some of the orders and development and the discussion is more real now than they would have been 6 or 12 months ago? And even in light of just extraordinary capital expenditure numbers that the hyperscalers are putting out.

Yes. I mean I think you're seeing our utility customers firm up what they believe is real large load request. As that firms up, I've seen it actually pretty steady. I'm not seeing the falloff that others may think that's out there, it's a very real, the load that we see. I think we've got to watch the ratepayer. We've got to make sure that the load that's coming on is beneficial to the ratepayer. We're seeing that show up in rates. We're seeing decreases in rates due to load and infrastructure.

And so as we see that investment on the Northeast and all across the country, it should drive rates down. We've got to talk about it, those impacts. But I think the load is real. I mean, obviously, there's some outliers here or there, but there's growth underneath those. And it's not just data centers. I mean you're seeing onshoring of chips, you're seeing onshoring of robotics. You can see what Elon is doing with robotics. So that's driving load and all the things that support that. And we just see a big market that is not just AI. The fungibility of our craft, both sides of it, both segments, our ability to mechanical as well as electric to move that craft across vertical markets, I think is, from my standpoint, that's what we continue to drive home that compounding of that portfolio over time. And that's what is allowing us to do it is all those markets that we see.

Our next question is from Maheep Mandloi from Mizuho.

Sorry about earlier. Sorry if I missed this earlier, but could you talk about like the -- if M&A is part of the 2026 guidance here? And you didn't do an acquisition in Q1. But any thoughts on how the acquisitions could shape up the guidance for the rest of the year?

Any acquisitions we do on a go-forward basis should be additive to the guidance that we give. And I expect us to do acquisitions over the next 9 months. So you can expect that to be in there, but it's -- we're not contemplating any of that in what you see today. It's exactly what the business looks like today. We made no acquisitions in the first quarter, and that's what the guidance is. The growth on it is 30%, and it's based upon all the things that we did last year as well as setting the company up for the future. So that's what's in there today.

I do expect us to do some M&A over the next 9 months, probably over the next 2 or 3 years. I mean, we continue to see the inbounds that are robust and a way to deploy free cash. So I'm not seeing a slowdown on that. There'll be quarters and there could be years we don't do an acquisition. We're not -- the company can grow nicely without them. When we do see them, it's extremely additive to our approach and the way we look at our portfolio and all the opportunities that we see.

Our next question is from Liam Burke from B. Riley Securities.

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

Yes. I mean I think it's the right answer for the client. When we look at it, you're looking at total cost and things with the large supply, I mean, we're the top 5 buyer of HV equipment, there's ways that we can help there, it's just a smarter way to do business in these markets that you're really discussing total cost and so -- versus having a discussion on a widget.

So I think we've tried to put ourselves as a solution across these verticals, and it's allowing us to negotiate our total cost basis versus a one-off project and be prudent about it. We work with the regulated customers, and we know what that market looks like. They have a tried and true record as well, and we can work together on what's the right answer for each client and tailor it that way. And for the most part, we've always negotiated a lot of work, and I think we're continuing to do so. It's just larger. The programs are bigger. The certainty of labor is something that I think is really important for us to make sure that the client and our clients lean on us for that, and we're able to really deliver that certainty. They have capital spends they need to spend. And we need to get -- the queues are getting backed up, things are pressured, and we're being asked to do a lot. And I think this company has stepped up and is providing those solutions that are necessary to make the infrastructure of North America move. And I'm excited about it, and I'm excited where we sit. And yes, I mean we're looking at total cost all the time, but it's a prudent approach to the ratepayer to drive the rates down.

Our final question is from Chad Dillard from Bernstein.

So what would it take for Quanta to do full turnkey data center builds at scale rather than just doing a few here and there? Is this something you can achieve on an organic basis? Do you need to do more M&A? And then I'd just be curious to understand where that strategy would rank within your set of priorities?

I mean MVP, the type of things that we do in the high-voltage interconnections are the sweet spot for us at this point. We are doing some balance of plant data centers today. If our clients push us that way and asked us to do that, we can do it. We can do it with the people that we have. Yes, if we do it at scale, we need to add. And I think depending on what the client -- how sophisticated the client is on the other side will depend on how much or less we need to add. But from a programmatic spend, project management, QA/QC, all the things that you would expect, we have all that internally, engineering. We probably have 2,000-plus engineers internally. We're able to scale those things. And I think the company will look at all projects coming in and try to deliver on both sides of that, where there's areas that we can be successful, we'll lean into those with customers.

But I think we'll continue to -- we'll evolve it. We're also cognizant of other builds that we need to be on and other customers. So as we look at it, yes, I do think the company will do balance of plant data centers and other things. I just -- we continue to see the inbounds coming in, and it's all due to the fact, the certainty of cross-skilled labor. If you're just someone that does not have it, it's very difficult to say you're going to show up. And I don't have to be there that day if I work for someone else. I don't. I can not show up. And that's the issue that you'll start to see in the markets as they get -- as you start to see constraints.

So I think for us, we just got to continue to deliver on what we know how, and we're very good at specialized craft and providing solutions, we'll do it. And if they want us to build the whole thing, we'll do it, we'll do that as well and provide generation and maintaining it if they want it.

That's helpful. And then just shifting gears a bit. I'd love for you to talk about your Canada operation in electrical infrastructure. Just what you're seeing on the pipeline there? How are you thinking about how that geography unfolds in '26, and then maybe even over the next couple of years?

Yes. I think we had some pipe work last year going on at this time. We don't -- we're not involved in anything right now, but I see over the next few quarters, we'll start to see projects come in on the pipe side. We have a nice team up there that certainly can execute. So I think you'll start to see awards on that. In Canada, our data centers up there are moving around, our renewable business up there is nice. It's just slower. It's slower to recover. We're optimistic. We're using engineering in the U.S. We're doing a lot of different things, a way to leverage that workforce. And the margins are picking up. It's not where we want them to be at this point yet, but neither is the economy.

So we're doing a good job there, mitigating risk and making sure that we're utilizing the labor and what we've invested in Canada for the future and for what's going on in the States here. So yes, we like the market. It's growing. It's certainly not at parity with the U.S. yet, but we continue to see improvement.

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

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

Good morning, everyone. Thank you for joining us for Quanta Services 2026 Investor Day. My name is Kip Rupp. I'm Vice President of Investor Relations for Quanta. I'm joined by Sean Eastman, our Director of Investor Relations who's seated over there.

Before we get started, I wanted to welcome Matt Confer, Quanta's Senior Vice President of Health, Safety Environment for Safety bridging. Good morning. Here at Quanta Services, our people and their safe return home is essential to our success. We demonstrate that through world-class training programs, industry-leading safety systems, and our goal of having an AED with every crew and most recently, our collaboration with MATS & Construction, our mental health and silicide prevention program. Essentially, our measurement of success each day is a safe return to [indiscernible] the men and women out there doing the work to their families. Today is no different. What we really want is a safe return home for all of us in this room. With that, a quick review of the emergency procedures. If we need to leave, there'll be a voice of God come over the screen to give us instructions or overhead speakers to give us the instructions. [Operator Instructions] I have the emergency contract for the New York Stock Exchange. I will make the emergency call. If for some reason, I can't make that call, my back up is Kenny McCardo, sitting in the back of the room, he will make the call. If you see something, please say something, I'll be around all day if there's something I can do to support you or help you, please don't hesitate. Thank you, and have a safe day.

Thanks, [ Matt ]. So we were last here in 2022. And since then, Quanta has delivered on our goals and accomplished a great deal. Today, we're excited to take a deeper dive into our operating model, addressable markets and the strategies and initiatives we have in place to continue to differentiate Quanta from the competition capitalize on the opportunities to properly grow and meet the financial targets we intend to achieve over the next 5 years.

For those of you joining us today who may be newer to the Quanta story, Quanta Services is North America's premier critical infrastructure solutions provider to some of the most exciting, visible and long-term secular growth markets. From an investment perspective, we believe Quanta is a unique company, not just domestically but globally. We believe Quanta is the industry leader with a notable competitive moat and differentiated solutions offerings that are highly sought after and valued by our customers.

This slide presents some of the key characteristics that we feel differentiate Quanta from our competition in the eyes of our customers, employees and the investment community. As you'll hear today, we remain focused on providing solutions to our customers through collaboration and continuing to advance our capabilities to meet their needs and to provide them certainty. As our customers' capital programs increase in size, scope and complexity, many are seeking a longer-term and enhanced relationship with Quanta to deliver programs and projects for them safely, on time and on budget. As you can see from the agenda, our discussion today will be led by Duke Austin, Quanta's President and CEO. Duke will also be joined by Karl Studer, Quanta's President of Electric Operations; and Jayshree Desai, Quanta's CFO. We also have a number of senior executives joining us in the room today. Quanta has a strong and experienced corporate and operational leadership team, many of whom you've met over the years, with decades of experience in the industry and many with several generations of family involvement in our industry.

Duke will start the presentation with a reflection of the last decade, and we'll then discuss key elements of our operating model. Karl will join Duke to discuss portions of the operating model, and Duke will dive into our total addressable market opportunities. Jayshree will discuss our long-term financial targets and capital allocation strategy. We'll then have a Q&A session to address any of the topics that we've discussed during the morning. [Operator Instructions] Additionally, those joining us through the webcast have the ability to submit questions during the Q&A session. And I'll try to balance questions coming in through that system with the questions in the room. We expect to conclude the formal and webcasted portion of the event between 11 and 11:30 Eastern Time.

For those in attendance that would like to join the Quanta team informally for lunch that will take place just outside this room in the lobby area. This event is being webcast from our Investor Relations website, and the presentation materials that we'll be discussing today will be available shortly after the conclusion of the event in the Investor Relations section of our website at quantaservices.com. And finally, a brief housekeeping item.

Please remember that information discussed during this [indiscernible] speaks only as of today, March 31, 2026 and therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This Investor Day will include forward-looking statements and information intended to qualify under the safe harbor from liability. You should not place undue reliance on these statements as they involve certain risks, uncertainties and assumptions that are difficult to predict or are beyond Quanta's control, and actual results may differ materially from those expressed or implied. For more information, please refer to the appendix of the presentation. Lastly, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com to receive notifications of news releases and other information and follow a and Quanta Services on the social media channels listed on our website. Before I turn the stage over to Duke, I'd like to get things started with an opening video. Goodbye.

Good morning, everyone. Thanks for being here. We don't take it for granted to have our investors, our stakeholders here. I think it's really important for us to come out today. I've been in this role 10 years. sometimes it's like dog years, but it's certainly been 10. I'm still in all of where we're at in this institution and what we get to do is super fun sometimes. But what I would say is our families -- my family, I'll start everything we do internally and even externally with a picture of my family, 2 reasons.

One, because it keeps growing. I'm having grand babies and so does Quanta. And those little ones there is why I'm here, share there in the middle. He's my reason. He's -- I think it's my duty. If you think I'm not invested in this, you're wrong. It's my duty to make sure that he has the opportunity to work for the greatest infrastructure company in the world. That's my job. That's how I see it. And so I think when we look at it, when we think about where we're going, all the people in the room, I think about this management team. And so I would like for you guys to stand up, you don't mind, just do it. It's an honor to day for us. so back down. It's honored today for us to be here. It is. I think we underestimate the gravity of it sometimes and where we're at as a company. many of us are under dogs.

And our mentality, I don't -- the culture of this company, people ask all the time, what's the culture, what's the culture. It's very hard to explain, but what I would say is you can't buy it. You can't bottle it and you can't copy it. That's what I would tell you. It's just who we are. In many ways under docks. 90% of the time, [indiscernible], 8% of the time, we can't. We're just -- we can't figure out what's going on at 2% of the time, we're happy. So you get all these things where you're just frustrated 8% of the time mainly. And I think it's just -- it's that mindset of just getting better. And when I thought about it, I've got a video that explains it a little bit better, but it's absolute performance, and I'll talk about it because that is our culture.

That's what we're looking for. It's many things that really are who we are. And I'll play a video so you can kind of see it.

[Presentation]

Okay. So a little bit -- I think -- a little bit here we go. All right. So when we think about it, I mean, it starts with the 70,000 people that we have in the field. And it just reverberates up, it's a mindset top to bottom. You can see it, that's the culture. I think it's really important that you understand the culture of this company. And that's it. It's absolute performance. We're known for certainty, and that's how our customers see it. They want us to get it done. And I want to get it done on time, and that's us.

So now you know the culture. I think when I -- before we get started on the strategy, there are some certain points that I want to make sure that we get to you. Number one, we self-perform about 85% of our business. I think it's really important. It's a differentiator for us. It's something that allows us to that certainty. So we need to be able to do that. Second, we've compounded earnings over time. We have a good track record. I'm going to go through some of it, so you can see it and see what we've done over a decade. That compounding of earnings is something that you should think about Quanta when you're thinking about it. We also -- I would say, our addressable markets will double what they have been where they were 2022. So it's not just a utility infrastructure company, supporting utility. We also support technology. We also have a big TAM in the middle with generation. So those 3 things are extremely important when you think about Quanta and our markets and where we're going. So look, that's part of what we're going to say today. I want to make sure you see it. We're a solution company.

We're not a contractor. So I think that when we look at this, this is our history. It's what we've delivered. And when you look at back at I remember it vividly. So I think we were coming off COVID, we were talking about strategies that we had. But you can see our track record. When we think about this, I think about it how far back it goes, but I also think about what we're able to do today because I think that's really important when you think through this. You have a strategy that lasts 5 years really a lot longer than that, 10 plus.

My job right now is really to be thinking about what are we doing in 2031, 2032, 2033. This strategy we're doing today, it's baked. It's there. We have the things and the tools to do it. So my job is to think out farther than that. But you can see what we've done. So I like our chances and our goals, our track record would tell you, you should believe us, your choice. This is kind of the things that we said we would deliver. And when I go back here, we were talking about 3,000 employees. And in 2025, we added 11,000 employees. So you can see what we've done with earnings. You can see the improvements we made in return on invested capital. I think everything we said we would do, we did it. And when we were looking at this plan. We have plenty of time kept me in the room and Jayshree and we quiz and quiz and quiz. And we took it serious. I don't -- we would not put a plan up here that we didn't believe in. And so anything you see today, the numbers you say today, I know Kip said it was just for today and everything is going to go away after today. Look to me, it's personal, okay? I view this as personal. I don't view it goes away today. I view it last. So I want you to know that as well. These are the numbers. We always asked about margin expansion, things of that nature, but we've given a consistent track record of -- you can see 23-plus adjusted EBITDA. You can see all the things we've done. It doesn't just happen. I mean I think we struggle with it because sometimes I feel like we make it look easy. It's very difficult to put these numbers up.

We want the visibility of the earnings stream that you see here. And we want to improve our financial metrics. It's important to us, like I think all these things matter, and we'll continue to deliver on this. But this is what we've done I do think -- not a lot of people can say they've delivered things like this that look like this over this time frame. The management team has some credibility and the people in this room make it happen. Okay. So these are the numbers you really want, and I'm messing around, I agree. Look, we're only as good as what we do tomorrow. And I feel like when we talk about these numbers that you see now, they're big numbers.

I'm looking at them. You got 7% to 10% kind of organic growth. You have 12 to 15 return on invested capital. So I think when you start looking at that and you're doubling the size of the company over the time frame. So you can see the numbers, [21 26 75 ] adjusted EPS, big numbers here. for me. And I think that this is something that it doesn't -- the strategy has to be here to deliver that. And Now Jason will get more into the numbers, talk about cash flows. She's super prudent. So give or make sure you ask a lot of questions. But when you say, I think our acquisition strategy as well. We're going to talk a lot about that. We're going to talk about what -- how we're getting here. I don't think you can just believe it. We have to get here. So when we talk about the model, I think the industry that we're in is transforming. And why are we here today, it's transforming. Utility business, many of our clients they're doubling the size of their companies, all over.

And you can see it because your capital would tell you it's bigger than the market caps. They're a growth company. We're sitting in front of that. We're sitting in front of that market. And you can't just go into the market like you were before, so they're transforming. I believe our company has already transformed. This is not a transformational meeting for Quanta. We've done that. We've already done that. We'll show you the solutions. We'll show you the TAMs. We'll show you all the addressable markets that we can go do, but this company has transformed already. Cross [indiscernible].

But we've invested in this for decades. It's who we are. There are shortages in areas. I hear all the time that about how much someone is going to give to craft, $100 million here, $100 million there. You can't buy craft. Craft builds craft, journeyman build journeyman. We've been doing this for a decade. We spent $100 million to $200 million on the average for a decade. We continue to do that. So anyone that tells you, you can go throw money at craft and it's going to cure it, they're just wrong. It doesn't do it. You have to understand it. You have to build it, you have to build with the partners here, and you can see what we've done, and we'll continue to do it. It takes a journey to make adjournment. It just does.

So I think when you look at us, we got this. We understand it. And if you have that issue and you need craft skill and you need to be certain, you need to call Quanta. That's what you need to do. So that's how we see it, and then you can be certain. So when we think about like all of our capabilities and what we've done, I think supply chain is huge here when you look at this. supply chain started kind of during COVID. And we kind of leaned into it there. But our model and the things that we're doing and how we're going through it, the supply chain is a big piece of this. This model, the service line piece of the model continues here. You can see all the things that we've done against the utilities on the 30% we weren't taking advantage of, we're taking advantage of it now.

And I think -- for us, this is a model that we've built. It's something integrated. But that 3 -- you've seen this go $300 million to $500 million in our supply chain, that investment. That investment differentiates us now -- and so we're in front of that. The service lines are coming through. They're coming through at this integrated model, and each one is doing things a little percentage of the business.

And so -- when you put it all together, you can get the solution that the client needs. And this crosses both addressable markets. And I think that's -- it's big because we started this in utilities, but that same model permeates all throughout this organization, and anything we're getting into any addressable market, we're able to take these -- the very foundations which differentiates us in the marketplace. You can see the kind of an evolution of where we were.

So I think this is really an important point that when we look at this, it's talking to -- it's saying that every person that we have, we've increased revenue against it. What I'll say is illustrative Don't give me market to market. If I go -- don't try to do the math. I don't -- you can't do it that way because it will be different all the time. But it's illustrative and I do think you'll start to see it continue to move upward. I mean that's how I believe it will work out. And it's because of all these investments that we've made in supply chain, we're using technology. We're getting into generation.

It's all the things that we've done to expand our revenue per employee, so that expansion will continue, but I don't think it's something that you can put in a financial model. I don't, for a lot of reasons, West Coast different than Texas, just different. So don't try to do that, but I do think it says a lot about where the company has gone and how much we have expanded our addressable markets. So when we look at it and we think about it, how do we -- has this changed? Has our market changed? Has we fundamentally changed to the customer? And we talk about a solution all the time.

I do think SunZia was a great example of how we changed backward. I think as we talk about NiSource and some other things that we're doing now later in the presentation. I think you'll see how it's going to change going forward. We had 20 companies on SunZia. It was unique. It was a large project, and we're energized and of it. So when I look at it, that was a huge undertaking for the company. We had 20 operating units on it. We integrated nicely, but it continues to evolve. And we've got to work with our customers in a collaborative way. We did here, we'll continue that in the utility model. which we'll talk about. But it's really, really important that you see that we can put all these things together and go and build large projects and be certain for the customer. And we did that.

So when I think about it, and we look at all the things that we're doing, it's to really be certain. It's that certainty. So why are we doing it? Why do we think that's important? Well, if a utility goes out tomorrow and they're given their earning streams and where they're going. They're doing it against capital. They are not going to go to someone that doesn't have the capabilities to be certain. Labor certainty, cost certainty, supply chain certainty all those things that we're talking about. And I think that's the answer. We have those answers. We can do that. We can solve those very issues that they have, whether it's technology or our utility customers. We can solve the issues. So we can't do it with one thing, with one piece of the business, so you need them all.

You need all things like that -- I'll go back to the supply chain. I think it's really important, and I'll talk more about it later, but it gives the certainty of our customers on what they're saying against their model. We'll talk more about the model here in a second. But I think it's important that when we look at it, it's much like a flywheel in many ways, but I say it's our operating model. And it allows us to really go out and compound things, earning streams, customers, all things. And -- but at the very core of it, it's those people. And I -- when I think about that, -- that hasn't changed. That will never change in this company. That cross skill labor, that investment makes us certain. It makes this company move and everything feeds off of it. So you'll continue to see this model evolve. Karl is going to get up and talk about craft and what we're doing there.

I think it's probably at the epicenter of everyone's mind at this point. It should be if it's not. And so we got a little video and then [indiscernible] is going to come up and talk about it. So super excited. But that hasn't changed.

[Presentation]

Good morning. [indiscernible], with Jayshree help oversee the operations for the business, President of Electric Power, that would take just a little bit of a minute to introduce myself, first time up in front of all of you. Look, I had the opportunity to join Quanta a little around 15 years ago when our businesses were acquired. And I'll lean into a little bit of the why that does connect to the culture. And in the core of what the business is, I'm a journeymen alignment by trade. And well, I felt like at a young age, in my young 20s, I felt like I wanted to be part of something bigger and better than where I was working at the time, had the opportunity to start my own business, and we grew that business. .

And we hit a point, this inflection point that took us to this place. We couldn't continue to scale the business. And what we didn't like about it and a partner is that we couldn't continue to offer to our employees, the advancement of what they were trained for and what they were capable of. And when I speak to craft labor and what I mean by that, I mean, I talk to the men and the women in the field. Those that are out there in it every day, the lineman electricians, the operators, the welders, the boiler makers, the list goes on of the trades that are out there and what they do and the infrastructure they build that powers everything for us to benefit from. They're the ones that make the decisions, thousands of decisions out there in the field when things don't go right. And when I say culture, what it really means to me is this is the environment that we create for our employees. This is where we show them the value that we appreciate of them and where we invest into what they do, we're behind what they do. We create this culture that allows them to go further in any other condition or atmosphere in their career than they would without us. The reality is, is you really cannot scale your craft labor without culture behind it. And that's really what made the decision for us that we want to be part of this business. We wanted the opportunity for our employees to sit down in a family of companies and have the chance to continue to grow.

Duke will talk later about how M&A takes place that core acquisition strategy still holds true 15 years later. I continue to get to be a part of that now is on the other side of the fence then. And these businesses hit this inflection point, we hit this inflection point. It's either you go out and take someone else's money or you put yourself into an atmosphere that are going to allow your company to grow and be cared for. It's not a yearly decision. This is a decade decision. And we demand as owners of our businesses that our employees are taking care of, the culture will continue and the training will be there that every 1 of them gets the opportunity. So with Quanta, those businesses have now grown year-over-year at the same growth rate to the rest, well over 3,500 people now well into the billions. It's pretty remarkable when you think of when we started the business and how we got there. We wouldn't have done that without Quanta.

Quanta demands that we listened to the craft from the bottom up that we understand what they go through and that we participate from the top down and build an environment and that culture around what they're capable of. The flywheel -- the craft is the engine that drives that. Our culture is the fuel that continues to allow the growth to take place year-over-year. Duke talked about what the business means to him. I want to tell you what it means to me. This is my son, Kathe disgraduated from line school last week, actually Thursday. Full circle opportunity for me his smile says it all.

I just -- I love saying it. He just graduated from Boise State in December with a finance degree and knew that he he understood that he wanted to go into something that was bigger and he wanted to be part of change in something that was very special and he knew he could do it inside of Quanta. Just yesterday, he called me, he was on his way to his first job, got in the right of way. And he was reporting to employee #3, employee #4 and employee #5 that we started well over 20 years ago. All of this through the same opportunity, the line school that I went through that I was able to be a part of the same NLC. We acquired that business years ago. Why? Because we believed in it. And if you watch that chance that Duke plays all the time, you can fill that -- it teaches that craft and what that's about, you should all remember, that's how they show up every day and the power behind that.

Look, the business is built on the strategy that we continue to differentiate ourselves is around our culture, the capacity, the capability and accelerators that we put on this all set on the foundation of safety and training. Look, our culture is what allows us to retain 28,000 journeymen and [indiscernible] that we have in the field every day. They continue to build thousands of journey through our training programs day in, day out. The capacity is where we take our training platforms, and we continue to scale them, push them into different markets and continue to allow the advancement of our trades, men and women in the field as they grow across all of our campus as the training centers. Look, our capability is based on developing our leaders in the field, not only professionally, but also personally and we believe that we will continue to offer that success and which will lead to those leaders of 1 day sitting in this room with us here.

And the accelerators, the enhancements that we continue to scale our workforce without more people is really around what we do specifically with our integrated fabrication solutions and everything technology and how we use AI to continue to advance that training. Look, we will take advantage of all of these things. We will find a way into this younger generation that learns faster, smarter, quicker, and we will continue to build all on the core of our safety and training that's around us. This is our operating model. This is not something you replicate overnight just started 20-plus years ago. Here's a time line that shows you the dedication over decades to training some key points in this -- the Lazy Q NLC, they really are a benchmark of our campuses across the country. What we do inside those campuses is world-class.

Live-line simulations. Everything we do [indiscernible]. We're working right inside the substations in our training environments. We're creating the environment to train at a pace that no 1 else understands to. We understand that it takes craft to train the craft Craft leaders understand the craft, and we will continue to develop our craft into the business leaders and those that will run the businesses for decades to come. Last year, the Lazy Q, 1 simple fact trained over 16,000 students days in the seats, training, 3,000 days of instructor-led curriculum, that's just 1 of our campuses. We continue to evolve those. [indiscernible] on the numbers, over $100 million annually is what we spend on our workforce development. We take this incredibly seriously and we will continue. Look, we train our trainers. We make sure that as we bring the craft out of the field, they possess the skills that would it takes that they actually understand how to tap into the minds of who they're training. This is important. Not everyone is a born trainer. What we've learned and understand is, is we need a curriculum to sit into the mines. We understand that craft won't sit in the seat for very long. You have to find ways to go to them, to advance the training and keep up at the pace that we need them.

Sherman & Reilly was an M&A acquisition that we did a few years ago around high-voltage strain equipment. One with saves a successful business, gave us a synergy going forward into the transmission build that's coming at us. What we knew it inside of that business was a very foundational platform of training with this equipment into the field. We will continue to advance that and use that against our platforms. This is our 25-year head start on where we're going. You don't replicate it overnight. Safety, as Matt talked this is everything we do who we are. He talked about the I want to hit on a few stats on this. It's important to understand this is where the culture starts. Safety isn't a cost for us. Safety is just simply, it's the right thing to do when we make the investment, and this continues to allow our craft to feel safe and trained to respond when the incidents happened.

Look, they -- we spent over $40 million in putting AEDs out there. The stat you should see there is over 50 lives saved that weren't just our employees. This was the public. This was those that were in the area of our crews. And not only that, it does give witness to what we do with our training and how we teach our teams to respond is as I can give you stories of crews going into burning homes and bringing families out safely. I'll give you a story of cruise responding at a hotel room after hours, saving a drowning child in a pool and resuscitating them.

All that is fundamentally based on how seriously we take training and how we value that. The Lytx cameras. This is a rear-facing technology inside of all of our vehicles, uses AI to talk to the drivers. It trains behavior, and what we found with it is we take that data, it clearly reduces cost by reducing claims and things of that effect. But we take that information and we build curriculum around the train against Look, a lot of all of the apprenticeship programs that exist out have been out there for 40, 50, 60 years, little to known about the most hazardous thing that we ask our employees to do, and that is driving. We've changed that. We will continue to stay up with what's important and use the technology. Look, this is the issue that no 1 wants to talk about.

And for us, it's -- we ask our craft in the field. We ask the men and women that we go out, we work long hours. We travel a long ways from home, lot of time from their families and in conditions that are hard. More than 5x the death than construction-related incidents, as on site. 46 out of 100,000 employees will fail to this. It's important for us that we care not only at the job site, but also after hours and give them a chance to connect to something that they can get this solved. It's important for us. Look, we supply and we drive every day the largest craft scale workforce in North America. And how do we do this? We continue to focus on the training. We advance the training. We have a new hybrid, a printer ship program that's designed around competency base, not only time, and that allows us to train journey man up to 30% faster. Our apprenticeship program enrollments are up over 120% for the year. Our trade partners that you see here lean on us because of our size and our scale, Diabete W, the UA the operators, Launa, boilermakers, plumbers, all of the unions come to us. We collaborate with them to drive forward to get so that we can create an advantage into the marketplace and we continue to compound on our trading environments that we've created. Our Northwest Lineman colleges in the Lazy Q, it's 10 world-class campuses across the country. And all of this continues to compound time over time. We bring our veterans in we offer them entry into our preapprentice classes.

From that, we direct hire [indiscernible] programs into our apprenticeships. Over 20% of our preprinted students are made up by veterans. We're proud of that segment. But this is simply about certainty. As we train 10,000 to 20,000 people internally, we're simply running a large institution of training. We are a training organization. This is what we do. In the tight labor markets, what you'll find is preferred employer status will draw a traction. That's what Quanta is. We will draw in the training, and we will draw on the best leaders that are out there. Those who want to be trained, excuse me. These capabilities, the strategies, all of this is to make our workforce more efficient I'd like to look at it in the way of our solutions-based approach gives us the ability that we're sitting in front of our clients early and often as these programs and these projects continue to come out of a larger scale they ever had, our clients all across our markets need help.

We often -- I refer to it in a way, is don't ask me that you need 100 employees, ask me what we can do with 100 employees, give us the opportunity to find ways to spread our labor in a more efficient, more effective way, give us the opportunity to use our service lines and all of our integrated solutions, our supply chain different methods that we can scale this workforce without just a number of bodies. This is a multiplier for us, it sets us apart. Look, our integrated fabrication solutions as this grows over 4 million square feet, looking to grow to over $5 million this year.

This is not only for our MEP business, this is across all of our trades. We will continue to enhance this not only for the cost predictabilities not only for the schedule condensing that we can create on projects, not only for those efficiencies of what the trade can do in the field, the weather environments, but we will use this as a landing spot for our new hires into our programs, and we will eventually turn these into small training centers that send out into the workforce. Our AI technology, look, this is -- we're using this in a way to derisk the business.

We are -- and we will continue to find ways out on large projects, programs that scale our workforce allow us to move faster out there. We've shown that we can reduce cost the human mind just simply cannot keep up with how fast AI can transmit and organize data. We will lean into this. We're doing it now, and we will continue to do this. As we self-perform 85% of our work, it's important that we continue to derisk the business against that. As we do more, we'll use these technologies. But with all of this, let me be very clear, you cannot replace physical craft labor in the field with technology, but we can make it incredibly efficient, and we will. Look, I believe this is probably the most underrated underestimated value of Quanta right here. Our ability to use our workforce as diverse as it is.

As we sit down and we solve these solutions with our customers and the convergence of what has taken place out with a large load customer that needs the generation and needs the utility interface, these programs are getting larger. The capital budget is getting larger. And for us, as we can move and deploy this labor across its powerful. It's certainly a competitive advantage. 5 years ago, I stood up here, Duke [indiscernible] here and said we will execute all of our labor across all the markets and our trades. And I can tell you we've done that. We will take our transmission resources and deploy them into a solar project. We will take our subsurface teams and moving from horizontal to vertical drilling methods. We will use them to install large DUC bank, depending on the customers' demands. Will we use mechanical and industrial resources inside of wind turbines we have. We can take an electrician that is low voltage Wireman out that is doing a large load center 1 day.

We'll move into a generation facility. We can put them in a solar facility, and we can put them in a substation, all by our integrated approach to how we go about using this diverse labor force. Our Sensia transmission line, it was led the 600 miles of transmission that was actually led by large pipe management team about 80% of them was. And almost the majority of all of the civil that was completed on that Sanjaya project was done by our pipe and gas crews. What is this is how we move across the markets, and we can be flexible with our craft. This is also a powerful retention tool, and you understand craft. Projects start stop, the craft likes to understand that the future is there. They understand the side of our culture. We will take them from 1 project to the next. We will cross-train them across the work and give them opportunity to stay in geographical areas to travel more hours in any part of what they're after. Look, this does give us the strategic positioning against everything that Duke will talk about. This is how we handle the convergence of our markets to our customers. And we are allowed to check all these boxes because we have that flexibility. We've created that. We stayed core to our craft labor and development of them, and we will continue to use that vibrant workforce across our flywheel, our operating model and to create the durable results.

And with that, I'll turn it back over to Duke to talk about the markets. Thank you.

Thanks, Karl. As you can see, our commitment to labor is unwavering, that's going nowhere. I also say that the company does a nice job with our employees being on the road. We're all on the road a lot, 200 days a year, and many of us. It's lonely at times. And I do think the Mates, the programs that we can do for mental health that goes unknowns is something that we need to do as a leader in the industry, and we do, do.

Also, we have a lot of significant others at home that support us. I've got one that's 30, 30 years and going, I think, 5 months. I keep track of that, guys, should do that. And we could not do that without the support we have from our families wouldn't work. So I think -- none of us take that doesn't go unnoticed. All right. Let's get to the markets. super fun to be up here talking about these markets that we have. I look at them, and I'm thinking, wow, it's twice as big as it was in 2020. It's so different, one from the other. We have a utility model, technology model. They're moving super fast on one side and the other ones starting to move super fast. So it's great. I think when I hear this, one of the things that I heard keep hearing, so I'm going to talk about it a little bit. We talk about grid constraint. So I keep hearing that the transmission system -- the system is 50% utilized. I want to talk about that just a second. That's right. How many hours do you sleep at night it. So 33% of the time is not very much a load on that system. Are you only going to run large low customers at night? Are you only going to prepare for night? No.

So in the summer, in the winter, when it's real cold, real hot. Same thing. You get load variations. So in totality, that's what it looks like 50%. But 50% is roughly 90% of what the -- unless you want to black out. And I can tell you, running the grid in Puerto Rico, where it happens because lack of infrastructure, it is not fun. It is not where you want to be as a country. We're not going there. So it's a fallacy and it's -- do you know what the national highway system is utilized that is 30%. .

lSo do you know how congested these streets are out here? Like you said walk, okay? So just think about it like that. It's easy to say, it's not how the system works. It makes for good for us. All right. We talk about the TAM, I think they're significant. And look, you can see, we think it's around $2.4 trillion. It's twice as big as it was before. Large loads are pushing in. So I think when we think about it, all the things you heard about labor, all those things, it's really to address this market. And we're addressing it across both sides with our service lines with all of our capabilities, all of our companies are addressing both sides.

I think about like when you look at the utility partner, that's really core. That's what we've had. That's how we've historically been there. But it's something that the other side starts from technology. you really got to think about this market, where it's going and how they converge with generation, things like that. So our utility customers are extremely important and how the other TAM moves. So they work in unison in many ways, but this part of it, the electrification, our load growth here is significant. We've seen many of our customers double their budgets, even their market caps with the amount of capitalization we've seen. We've got great visibility here.

This is like for us, there is this imbalance at the generation side. So I think you've seen us lean into our generation business start to do more here, but it's what both sides need. So it's creating that growth in both sectors, and it converges right there at generation. So this is talking about really what we need for a large load customer. I do believe it's not just data centers. This is -- when we talk about these large load customers, it's also onshoring, it's also pharmaceutical, many other things. And I think when you look at our backlog, while we talk about this, it's only 10% Jayshree correct me. Okay, close math. It's very close, but that's the fastest-growing thing we have is that large, low customer technology, but it's not just that. So they are complex. These builds are complex. We sit in the center of it. you're hearing many things about it where you're having off-grid solutions, on-grid solutions. We'll get more into that later. But I think in reality, the best way of that most people will -- the large majority will visually connect to the utility grid. It's certainly something that needs to happen. I believe it's the way to do it. And -- but it doesn't mean that these bills aren't complex. So our expanded capabilities and how we're looking at the loads and where we're going, I think we're just getting started here. The momentum is building.

We're talking about it. We've had Cupertino for less than 2 years. And we talked about when we acquired [indiscernible], [indiscernible] is in the back. We'll talk more about it later. But what I would say is we're just learning this customer. And we're just to understand everything they need and the speed and our certainty means everything to them. So our amount of discussions with technology is significant. I mean it's daily. It's just about as much as we do or more than we do with our utility customers. And then we're talking to both of them at the same time in many ways. So it is converging, and we are seeing our position, how we're differentiated in it. is that certainty means everything. And we got -- they want to go faster. You heard me on a video. Let's go fast. I mean, that's us saying, we got to go we got to move. And fast does it mean quality moves down or certainly moves down, moves go faster. So we get a lot on a data center, and I think trying to explain, well, how much of your addressable market is a data center? How much? What can you do? What's the scope? I mean, we think about it like MEP, that's how you see it, mechanical, electrical, high voltage side of it.

But it's around -- when you look at the market we can address, it's about 50% to 60%. And of that, which you can see the numbers up there. It's 13.5% meg, 13.5 million a meg when you look at it. So that's kind of what's possible. I think when we look at it, while we are -- I mean we're on jobs today where we're self-performing full scope, less chips, but full scope. We're on multiple jobs actually. So we don't talk a lot about it. We're down there doing it. And so we can go full scope. But I think it doesn't include the generation, and it doesn't include the high-voltage interconnects that we have from our utility. So it's almost double that if you really think about it, from a generation standpoint, if it's off-grid or your connected generation or we're connecting into [indiscernible], which is not in that scope. So we wanted to give you some context. I think it's important that you see it many times these jobs press on our supply chain to that's another opportunity pulpy chain shows up here in these markets. But I do think we got to talk about this because we've got to give you more visibility in it. We want you to see it.

We want you to see those opportunities. And I'll go back 1 more time and say it's only 10% of our backlog. So it is moving up, though, and it will be the big driver that you see going forward. So when we think about these programmatic spends and we really want you to see the visibility that we have in them. And what I would say is while we're talking 2030, this goes well beyond 2030. We're talking to customers today about 2032, 2034, all the way out today, the programmatic spends that moved well beyond that. This business has not stopped at 2030.

Actually, I think our job is to set this up to continue the compounded growth that you've seen in the past to continue that on a go-forward basis. And some will go faster than others. Some will grow way past what we ever thought. That's why the beauty of this company is a portfolio that we put together. And so that portfolio allows us to operate all the way across these markets. that keep moving forward. But I do believe you're seeing growth in all of them, and it's well beyond 2030, even though we kind of stopped at some here in a 5-year plan, but it's certainly longer. So when we talk about our supply chain, we've done a lot here and to give you -- to go back in time, we started this in our people strategy, which if you look at the room and look how young everyone is, I'm the oldest 1 probably are getting close to our management team, I mean many older in J. So anyways, -- we've done a really nice job with both of those things. And supply chain, one of the things that when we thought about it, you could see it during a cohort, you can see it stop. You can see like all of our crews and everything, it was so hard and the customer was driving us to be different here. That's the why. That's why we got into it. because they asked us to.

They asked us to lean into this. Well, what's your critical components, transformers, breakers, polls, why? That's -- it was the biggest part of our utility business and also technology. That's what we leaned into. So the strategy, it was simple. We were listening to the customer. They were asking us to do it, and we delivered it. We're delivering it today. So when I think about it, we talked about what we had what we've done with labor. You can see the investment Carl talked about it, extremely important. The same investments here. We're just getting started. We'll continue to invest in this solution. We're the top 5 purchaser in the top 5 of havoltage equipment today. We have partnerships. We have vertical supply chain with transformers, we announced a [ $300 million to $500 million -- billion dollar -- million, million, $500 million to $700 million investment ]

Anyways, all right. It's a big number in Jayshree is looking at me, so I know I said it wrong. That, to me, every factory is expanding that we have. It's a business on its own. Those numbers stand alone on their own. What it does for us, the pull-through is what really compounds this model that we're talking about, and it's this integrated service model that continues. And Look, this is a big piece of that, and we're really proud of what we've done here. So how we deliver. We have a vertical supply chain that delivers through our operating units. We have expanded what we can do here at our transformer factories, our breaker factories. So vertically, our partnerships, and then we can distribute. And so it's just starting to grow. I think these full-scale capabilities are extremely important to us as we move forward. How we deliver, how we deliver to ourselves and the customer matters. You can see it like with our 765 expansion, which I'll talk more about it, it came from our transformer facility that had built 765 transformers years ago, the first series of them that now where we've advanced that up to 765 now, where that factory will double in size, doubling capacity. With 765 being the very core of why we did it, it doesn't mean we can't [ be 500 -- 345 ], but we can go all the way to 765. U.S.-based in Pennsylvania. It matters that matters. We talked about SunZia, this is Kip's slide, so I'll just tell you, it's just showing you like the breadth of of what we can do. And I take it for granted that this is what we're supposed to do.

We don't take commodity risk. So typically, all these things are backstopped or we've contracted around it. But you can see how big these numbers are. So that's why you're in the supply chain. The numbers are big. And that's what they're asking us to conquer. Not only the labor, you got 3,000, 4,000 guys out on SunZia given time, men and women. But it's also this behind it. You have to facilitate this as a company to deliver. If we're going to be certain, if we're going to be certain and on time, we have to deliver the supply chain along with that labor. Both of them matter. All right. So we walked through supply chain. We walked through labor, and I was put them together.

So I think when it starts, it goes all the way back to how we -- at the customer level and where we're at there. So when I think about it and we're thinking about it, it's those relationships that we've had for 20-plus years. We have 20,000-plus employees that are on these systems on every day. What does that do? Why are they there? We have built trust with these clients. They trust our companies. They trust us to deliver against all solutions. So that is the very core of how you can put an integrated solution together is a trust. So this is like this on technology as well. I mean Cupertino is named after the city, [indiscernible].

I think Apple is there. I think you have a few more around there in San Jose, those areas. So they've had a long-standing relationship with technology. Same is very much the court. So it builds this trust and value. And I do think we talked about it when we bought Cooper Tino. One of the reasons was for that, not to mention the great pool and the leadership, but it was also the customer base. Tom's and arose to make sure I said that. So when we look at these integrated models, what does it mean? I think it depends on the customer. So we -- you can think about them to be differently in each one. So we model them around what they're asking us to do. I think that's important. It gives us flexibility and our labor is fungible. So we can move around these models. [indiscernible] want EPC. So I want just a procurement. Some might want just construction. It's okay. It's fine. What we're really trying to do is put the right team in the right position. And I think you can see I got challenged on this slide because, well, is your labor really that fungible? Can you move across every market? Can you take the service lines? Yes. I mean, we can move across all these markets. Our labor moves across these markets. So it's they're local. And I do think that local content from our organizations also derisk the investor and the customer.

They're best-in-class. We're delivering the service lines When we talked about it in 2020, the -- we didn't have the 30%, the engineering the procurement, the things that were going on, even up to 50, we didn't have generation either on the fossil side of that utility market. Now when you think about what a utility says from and their capital, we can pretty much, I would tell you, well above 75%, probably in the 80s and 90s percent of that capital is addressable to us. and these service lines are foundational in how we integrate them, it's extremely important. So you have a lead crossing all this that allows Quanta to provide a total solution versus just a contractor locally. So that gives you the solution-based approach. Due to these service lines, it's due to us moving these across. So this is Sonia. We talked about it earlier, what we did there. It was 25 operating units, we sell performed 90% of the project. That self-performed content is something that I think separates us. And we were able to do that with Sonia. This is one of the largest -- or the largest renewable project in North America, the line was extremely difficult to build. The company just blew right through it performed. We did. It wasn't that easy.

It wasn't -- it was like but we did it. And I'm really proud of the team, Kyle teams, some of the teams here that built it. But it's given customers certainty at scale. So we heard from the investor base a little bit, what are you going to do after SunZia, I'm really worried. Well, I don't know, we just gave guidance, I wouldn't be too worried. We never were worried because it looks different. This is just 1 big job. This is just to say we can do it. There's many programmatic spends. There's many other types of jobs that we have, but I do want to show you the breadth of the company and what is possible. This can happen on multiple fronts. This is kind of the old compounding model.

All right. This is a representative of a partnership with a large utility customer. It's something that I'm proud of how we've ingrained ourselves in the very fabric of the customer. If you think about the AEP model, the announcement, it was around transformers. It's around 765, is around all the things that we're doing, that was built on long-standing trust between the 2 companies. And at the very top, we trust each other. They have a $70 billion plus capital budget. We work together on 765 capabilities. We're integrated in many, many ways with them their success and our success are together. And I think this model is way deeper in and it also contemplates day-to-day workforce in that very baseline that we believe is extremely important to have the base business to be able to perform the larger projects. So we're not just contemplating the one-off project. We're contemplating the whole programmatic spend, the whole capital stream of a customer today. That was not the case 5 years ago.

It wasn't -- we weren't there yet. We're there. So we're in those rooms, having those conversations around giving customers capital spends certain. It's a differentiator. We're negotiating 75-plus percent of the things that we do. So when I look at it, I think we're way deeper in. This is a concept. It's not the only place we're doing it. It's multiple, it's across the board actually. We have these deep relationships with many, many, many of our utility clients and moving that way with our large customers and technology. So that's a deep relationships integrated and anticipate supply chain craft skill labor certainty and many other things that we do, engineering, all kinds of service lines. So you've incorporated the whole thing now into the new utility map.

So that's how that works. All right. This is a slide I've been waiting to tell you all the whole time I could have done this hour ago, and we'd probably been fine. But I want to talk to you about NiSource what we did there because I think it's where it all comes together, both sides, both TAMs and all of our service lines. So we talk about NiSource. It's a deep relationship we had with NiSource for, I don't know, a decade at least or more, we were a contractor on their system, $50 million a year to $70 mn, something like that. And so we built trust. As they moved into different markets.

As we see them today, they -- we had the opportunities to build generational generation with them. And we're awarded on those projects, non-backlog as soon as air permits and things come in, put them in backlog. So you expect our backlog to go up. When I look at this, that was just a start because there's also a renewable piece of this with batteries contemplated in it. There's large transmission that's contemplated in this program. And the other side of this is 1 to 3 gigs of large load and another 3 to 6 gigs in a geographic area. So if we have this much labor, -- and this much concentration in a geographic area, we talked about the fungibility. So -- and we talked about what a [indiscernible] was, so now let's talk times it to the 1,000, get to 1 gig. So we're in the gigs and talking to customers about their systems on the other side, the technology, which would be load centers out of centers, all the people that you know. And I really like our chances to build a vast majority of that 50% to 60% that we talked about being in our tangible spend, much like we did with Sensia, very much integrated but now it contemplates both addressable markets. And when we think about it, this is a midsized utility.

There's many midsized utilities out there that we have very good relationships and have built trust with that the other side of our customers, which is the technology piece of this, want that same discussion. And we can deliver that. We are delivering it at the very highest level with them, with a customer. So this has gone from $50 million to what I consider $5 billion to $7 billion type opportunity across a 5- to 7-year period. That's just 1 customer. That's an integrated model. That's an integrated solution. It's probably much more than that. I'm being pretty prudent about it. But I just would tell you, in that geographic area, around that customer, there's that much opportunity due to that concentration of flexibility and fungibility of labor. And more importantly, that drives the rate payer down in Indiana or NiSource $7 to $8 a month for the customer because of the load.

That's what the unknown news. That's what the industry has got to talk about and do a better job talking about is driving a load that creates a negative impact or a positive impact to the rate payer of $7 to $8 per month because of the [indiscernible]. And the same thing has happened in energy with [indiscernible]. We heard it last week. That large loan is creating $2 billion worth of impact to the good for the ratepayer. Just not getting out there like it should. It's got to -- we've got to do a better job as an industry talking about it talking about that data centers are not the issue. The issue that's causing that is the lack of infrastructure. If you build more infrastructure, bills go down, congestion in the United States is, I don't -- it's over $10 billion a year, just due to congestion. So we've got to build infrastructure as a country.

This is an example where we've done a good job talking to the customer, talking to the customer base, and what you really see is our models coming together in this integrated customer service around fly chain and craft skill labor and what we can do with their utility customers. Super exciting for me at speed, certainty where Quanta really, really drives home who we are. This is it. NiSource it. You can expect more of it. So acquisitions. When we talk about our acquisitions, I mean, many of the room, 70% of the room on our team came from acquisitions. Much of our leadership came from acquisitions. And I think this is really, really important to us.

And sometimes it goes on value because of how we deploy free cash against this. And I would tell you that we have a very good track record of acquiring great companies that allow us to do much more than may be seen just on the face of it. So when we think about it, this is core culture that we have, and I think you saw the absolute performance video. That's what we look for. We look for people like that. I mean we don't build synergies in our models to begin with. So it's not about synergy. It has to go in, has to fit the strategy we're talking about today. So anything we're talking about today, it's on the table for us to look at from a craft to engineering to many, many other things. Our owners stay, we grow together. We've done great things with these companies. We'll show some slides in a minute to tell you how much. But I do think it's important, and nothing is more important than the culture with these businesses. If we value anything, we're valuing that leadership team because I think when we look at it, we're there forever. We're not going to flip it. We're staying with it. So we've got to get that right. I've got a little video here that I want to want you to see.

[Presentation]

Yes. So when we look at it, I really think you can see from our standpoint, the feeling that we get from being able to do this together. And it is a partnership -- we owe it every bit as much to the names that are on those trucks as the management team at Quanta to them as well. We want to permeate that same feeling. We want to make sure it perpetuates through time. that their kids, grandkids have the opportunity to do what they did with Quanta and more. I think when we look at it, we want to make sure those acquisition candidates, everybody underneath them has a chance to do more and be the CEO of an that's the goal. And I think we've done a nice job there. You could see the type of companies that we bought. I will say, Karl mentioned it a bit when we think about it, we talked about some of them.

PTT, when we bought the transformer manufacturing capabilities and Sherman + Reilly, really around 765, nobody saw it, nobody understood what we were doing and why we did it. And there's many more things that fit our strategy. I'm just not going to tell you. Why would I do that? So -- but I do think the opportunities are out there, and you'll continue to see us lean into those type strategies in the future. As we talk about here, we're talking about the growth that you can see on the companies. It's substantial. We get way more growth than you would see us put into the models. We get a lot more synergies on the other side of this. Our consolidated eliminations that we make. We don't put them back up anywhere or try to put them back into service on you're different, like utility or your underground. We don't put them back up in the segments. We just -- we eliminate them. And so I think it's well over $2.5 billion that we're working together in synergies and internally. It's creating way more value than you can even see. So I do think that's really important when we think about it. And something that is driving margins and is driving returns and doing a lot of things together and building certainty for the client ultimately driving down the cost of the ratepayer. So the compounding model, I think we've been through it. You can see how Kraft skill grows this and our acquisitions and capital deployment are extremely important here. what does it look like going forward? I think it looks much of the same. But we will follow those markets. And it drives performance and success and compounds. We've talked a lot about that compound nature, and that's what allows us to do it. So you will continue to see that kind of capital deployment with these acquisitions as it fits into the strategy, it has to fit. So it will be much more of that. And with that, I believe it's Jayshree. So get up here and they've been waiting for you this whole time. So come on.

Okay. All right. Well, hopefully, you've heard the enthusiasm from Duke and Karl. I hope those you found those videos as inspiring as we all do. It does say a lot about who we are and what this culture is and why we believe with the TAM expansion that we have, that integrated solutions approach with our operating model, that dedication to craft and our culture of absolute performance.

This is why we believe we can compound value over the next 5 years and beyond. And we believe we can create durable, consistent financial results over the long run. So I'm going to get into this. I'm going to talk first about why we believe that operating model is so critical in driving those consistent results. I'm going to go through it quickly because I think Duke and Carl actually hit it very, very well, but I do kind of want to bring it back to you all. And then I'm going to talk about our historical track record, what we've done over the last decade and how we performed against the last couple of 5-year plans. Then I'll get into our 5-year performance, what our expectations are going forward. talk about our cash generation profile and our capital allocation strategy.

And then lastly, close with the levers we have to continue compounding adjusted EPS and return on invested capital. So turning to the slides. So as I said, right, we believe we have a very strong operating model that allows us to continue to drive consistent results and derisk the investor base. That's very important to us. We believe our credibility is very important, and we've tried very, very hard. We work really hard to earn that credibility, and we work really hard to try not to lose that credibility. And these are the reasons why, right? Duke and Carl talked a lot about why our craft workforce and how it's been built for versatility and the ability of our best-in-class operators to be able to flex across markets perform through cycles, and kultimately deliver certainty to both our customers and to our investors. We have a strong balance sheet, and we're going to keep that strong balance sheet. We firmly believe that our ability to generate cash and put that cash to work will continue to compound value for this company and for this investor base. That balance sheet, we remain patient.

We keep it flexible so that we can be strategic, and opportunistic and deploying capital. And again, we strongly believe that our balance sheet reflects that patience. Duke talked a lot about why we've invested in our supply chain. It's been a great compound for us in driving revenues and allowing us to capture more scope. But it also allows us to derisk the results for the customer and for our investors, that ability to have control of our supply chain, as Duke described, is very similar strategy as to why we want to self-perform our labor, controlling our supply chain allows us to control our destiny and create consistent results over and over again. Training and safety. I mean, you heard it starting from the way Matt described how safety is important to us. You heard it from Duke.

You heard it from Karl. You're going to hear it from every single person you talk to after we finish this presentation, how critical that training and safety as to who we are. Those dollars that we put up there, those are significant dollars we invest constantly in our future workforce. It's not an expense like Karl said, it is an investment and we treat it that way. And because we treat it that way, you're going to continue to see us, we believe, continue to drive those consistent results that we have had a track record of doing so far. And then lastly, I want to talk about this, right? We are getting more complex. The size and scale of our company is increasing, and we are being asked to do a whole lot more because of the integrated solutions that we've developed and the commitment to craft that we have created, but we are doing so and still making sure that we are taking the appropriate risks. We believe very strongly that not only can we grow our revenues, but we can grow the bottom line, which is how we measure ourselves against. And the NiSource contract is a great example of that. you've talked very well about what all we've been able to capture with NiSource.

But as we talk to you about it when we announced it, we were able to capture so much of that sat scale and scope without creating risks for our customer and for you all as investors. That's very, very important to us. And as a reminder, Less than 15% of our revenues, less than 15% of our revenues comes from fixed price contracts greater than $300 million. That's really important because just as we -- as Duke talked about, our base work creates our ability to capture large work, but our large work allows us to continue to grow our base. And we're very focused on continuing to grow that base work not only because it derisks the investors, but it allows us to continue compounding value over the next 5 years.

So let's go into our track record. Again, words we said a lot of words, but at the end of the day, we got to perform. We've got to put up the numbers for you guys to have that credibility in us. We know that. We firmly believe in that. And I really like this slide because I don't have to talk much to it. The numbers speak for themselves. We've been able to grow revenue over 14%. More importantly, we grew adjusted EBITDA faster than revenue. That said, margin expansion you've seen over that time period as we've scaled in our growth. Backlog has grown faster than revenue, giving us the visibility that we see over the long run, giving you comfort that we have that visibility in the long run. And then most importantly, our adjusted diluted EPS has grown 25% over the last 10 years, 25%.

That's a testament not only to the operating performance of the company. but it's also a testament to our disciplined capital allocation approach. You're going to hear me talk a lot about that. You heard Duke talk a lot about it. We are a company that pride ourselves in not only operating performance but making sure that we are putting your capital to work that drives returns and drives that consistent performance. We're very proud of this, and we believe it's allowed us to earn the credibility that you all expect from us. But we also know that again, words only matter so much. We got to keep performing it. We talked to you last couple of times about our last 5-year plans.

We set some targets. We know how important it is that we do what we say we will do. And so this slide shows you how we've done against the last 2 targets we've set. In 2021, we had a target adjusted EPS of $3.98. Our actuals were $4.91. We exceeded our targets, not only in adjusted EPS, but in return on invested capital as well. We set a target in 2026, of $12 for adjusted EPS and greater than 10% return on invested capital. That $12 was on the high end of our range. We now expect to exceed our targets on both adjusted EPS and return on invested capital. So the point of this slide, right, is just to remind you all that we put something out there, like Duke said, when we put something out there, we are firmly committed to making sure we deliver what we say we're going to do. So now let's go into the next 5 years, what are our expectations for where we're going to be over the next 5 years? As you can see here the numbers for the financial expectations of the consolidated level. We've also given you segment level expectations of revenue CAGR, EBITDA margins and operating income margins.

I do ask you guys, though, and you're going to hear me say this a couple of times, don't over-index on the segment numbers. They're there. This is what we expect to do today. But as Duke and Carl talked about, we move our resources across segments. And so you may have some variations, right, as we make sure we maximize value for our customers and for our investors. As we move those resources around depending on what the work is. So let's focus on the consolidated level. Our expectations are we are going to grow organic revenue by 7% to 10% CAGR, 7% to 10% CAGR and -- just to put that in context, last 3 years, we've grown revenue by a CAGR of around 10%. So the 7% to 10% for us, we feel very doable, especially given all the things you've heard from Duke and Karl around expansion and the stuff we're doing for all of our customers. Adjusted EBITDA margins we see the ability to generate 10% to 11% adjusted EBITDA margins. This is a 30 basis point expansion against the midpoint of 26% guidance and an 80 basis point expansion against the high end of that guidance. Where we see the ability to expand margins is a few reasons. One, we think we're going to have performance improvements across the enterprise but in particular, from our legacy underground operations and our Canadian operations.

We're going to have growing demand for our integrated fabricated solutions and our MEP capabilities. that's going to also help expand margins. And then lastly, operating leverage as we scale, as we take advantage of our supply chain capabilities and as we self-perform across greater scope. As Duke talked about, that $2.5 billion of intracompany revenues that we have to eliminate. Yes, we have to eliminate that. But what that means is we're doing more work for our own sister companies, which allows us to capture more margin that otherwise would have gone someone else. So for those 3 reasons, we think we'll be able to expand margins by 2030. So now giving you guys an overview of where we believe our growth is coming from across 6 key end markets. I want to talk a little bit about this. But before I get into this and before Duke comes in over here and takes this from me and tries to tell me to stop talking about it, I do believe that this is a good way to think about our end markets, but it is directional, directional. So don't get hung up on any one line item as we have said countless times. We have the ability to move across these markets. We can be flexible. We are able to move through cycles as we've demonstrated in the past and we're going to continue doing so forward. But this is a nice view of where we sit today and where we think our key end market growth is going to come from. As Duke talked about, the technology in load center is our fastest-growing market today as the demand for data centers, for large loads and the demand for our MVP capabilities continues to grow. That will be our fastest-growing market as we see it today.

The core of who we are, our electric grid and gas utility business, that's the backbone of our revenue growth and our anchor for our revenue growth. We continue to see very good growth prospects of that as well. Our power generation and storage business. At the midpoint, we're seeing about double-digit growth over the next 5 years coming from both our renewable energy solutions and our gas generation solutions. We continue to see good growth from our customer base around these solutions around generation driven by the large load needs and what our customers are demanding from us. And rounding out this slide, our communications, industrial and pipeline services. As you can see here, we got steady growth around these key markets as well and a lot of -- a potential for upside, especially from our pipeline service business as the growing demand for infrastructure to deliver that gas keeps increasing to deliver that gas to gas generation and LNG facilities. So stepping away for this for a minute. Here's what I want you to take away from this slide. Again, don't overindex on any one line item because of the flexibility we have to move across those markets. What I do want you to see, though, is that we have great growth prospects across all of our markets. We have multiple ways to succeed here because of the end markets we're in and because of the total solutions approach that we've talked about so far.

This ability, we believe, because of what we have set ourselves up, as Duke said, 5 years ago, we set ourselves up to be meet this moment. We believe we are well positioned to be able to capture a fast-growing market that didn't even exist 5 years ago. This is really what's underpinning a lot of our excitement that you're hearing today. So now turning to cash, right? It all comes to cash because cash, we believe very strongly is how we will compound value over the next 5 years. And what we do with that cash. Our cash generation strength and what we do with that cash is how we're going to compound value over the next 5 years. And I'm happy to say that our free cash flow adjusted EBITDA as a percentage continues to go up, continues to improve as our working capital has continued to improve. And we see that trend continuing over the next 5 years. As the demand for our integrated solutions and supply chain solutions increases. So now sitting here today, we expect that we will be able to achieve a 55% to 60% conversion ratio by 2030. Just as a reminder, as I talked about in the fourth quarter call, there will be some pressure on our free cash flow conversion given the manufacturing expansion that we will be doing.

But by end of -- by the end of 2030, we do see the ability to get to that 55% to 60% range and even better. So what that means is we expect to generate $10 billion to $12 billion of free cash flow in this time period. And if you look at the middle of that chart, you can see what that means, that $10 billion to $12 billion. You see our bank leverage ratio coming down, trending downwards as the EBITDA grows as the debt matures and as we generate more cash and the cash builds. Having said that, we are going to maintain an investment-grade balance sheet, and you can see how we're going to be able to do so. And we're targeting a leverage ratio of about 1.5x to 2x.

Now this is -- let me just pause here for a second. We're targeting a leverage ratio of 1.5 to 2x, and we are going to maintain an investment-grade balance sheet. But we don't feel any pressure to force ourselves to stay in those leverage ratios. So what I mean by that is if we've got really great capital opportunities in front of us, and we need to lean into it. Like we did with Blattner like we did with Cupertino, we may stretch above that 1.5, 2x. But if those companies, if we've done those right, and we're buying companies that drive accretive returns very quickly, we will have the ability to rapidly delever post acquisition. That's our approach to how we think about these opportunities that may come in front of us and may push us a little bit above that leverage ratio.

But on the flip side, as I talked about earlier, we are patient deployers of capital. We're not buying capacity. We're not buying growth. We're not buying earnings for earnings sake. We are buying companies that meet our strategic goals, that have -- that meet that and adhere to that core philosophy that Duke talked about. That is very critical to how we deploy capital. And so in this 5-year period, if, for example, we don't have enough opportunities to keep ourselves in that 1.5x. That's fine. We'll be patient, and we'll wait until those opportunities are in front of us to be able to execute on them. We are going to measure our capital deployment strategy the same way we've done for the last 10 years. What I'm about to tell you is going to come to no surprise to those of you who followed Quanta over the last 10 years because we believe it's been critical to our success.

We're going to continue investing in our organic growth, in our people, in our equipment, in our capabilities. We're going to continue to find really great family businesses that can join the Quanta family and continue to drive accretive returns for our shareholders. And then we'll continue to return excess capital to our shareholders in the form of dividends and opportunistically repurchase shares. We are going to measure our ability to buy a great company versus buying our shares back and whatever drives a higher return is how we'll move forward. So one other thing I just want to point out on this slide and just kind of giving you the context of our capital deployment strategy. In the last 4 years, we've generated $5 billion of free cash flow, and we bought $6 billion worth of companies. And in the last 10 years, we've generated $7 billion of free cash flow and have bought $10 billion of great family businesses in that time period, while still increasing returns, while still keeping an investment-grade balance sheet while still returning capital to our shareholders. That's the power we believe of our capital deployment strategy and our ability to continue compounding value.

And just so for those of you who are -- this is very important, right, I want you to realize our dividend strategy, we're going to continue to grow our dividend. We continue to see double-digit dividend growth. We are not -- our dividend growth -- our dividend capital strategy is not a substitute to our investment strategy. It's a complement to it. So we are committed to continue growing our dividends. So bringing this back to what we believe is the most important metric, return on capital. This is what we think we are judged by, and this is what we expect our investors to judge us but are we really creating the value that we say we're going to be able to create. So again, another slide I'm proud of, right? Because, again, this is the testament of whether what we're saying it really makes sense for you all as investors. Over the last 5 years, we've expanded ROIC significantly. And we believe we're going to continue to be able to expand return on investment of capital. And we were able to expand that ROIC even while investing over $6 billion of capital and grade acquisitions.

So we know how to do this. We know how to do this while driving accretive returns. We know how to do this moving forward, and you can expect us to continue having that same philosophy. And as such, we're comfortable standing in front of you saying we're going to continue to expand return on invested capital. we now expect a 12% to 15% by the end of 2030. So now let's bring it down all the way to what our expectations are for adjusted EPS. Like Duke said, this is probably what you've been waiting for, right? So walking you through this slide. Looking at where we are, right? Our expectations are that we will be able to grow 15% to 20% on compound annual growth rate against the $10.75 we achieved in 2025.

So now we're targeting an EPS or adjusted EPS range of $21.60 to $26.75. Note, we have intentionally not given you an organic adjusted EPS growth and organic EPS targets. And we've done that because we believe sitting here that we have the ability to deploy capital and our 15% to 20% target reflects that belief that we will be able to deploy capital and still achieve that 15% to 20% compound annual growth rate. Now having said that, the revenue -- organic revenue targets I gave you as well as the margin expansion. We are comfortable in saying that we will be able to achieve a double-digit EPS growth organically. But we want you to focus on this 15% to 20% because, again, when we sit here today, we are going to be deploying capital, and we believe that's a better view of understanding who we are as a company. So to 20% as a target.

But if the active market opportunities that we're really working on, the 765 transmission build-out, the gas generation solutions, those large load solutions that Duke described, if they all accelerate and we operate at the high end of our targets, we see the ability to grow more than 20%. And that's what you're seeing in that full stack on the right. If those things come together and we execute on the high end of what we've targeted, we should see an adjusted EPS CAGR of north of 20%. And by the way, these are not pie in the sky opportunities, right? As Duke said, we are actively working on. We are embedded with our customers in making every 1 of these market opportunities, a reality as fast as possible. if we're successful with our customers, we should be able to see that growth coming ahead. So in conclusion, right, wrapping it all up here on 1 slide. Here's what we are telling our investors. Here we're signing up with our investors what we can achieve by 2030. 7% to 10% organic CAGR -- organic revenue CAGR, $44 billion to $49 billion.

Adjusted EBITDA margins of 10% to 11%, which at the midpoint at the high end is margin expansion from our 2016 guidance. And adjusted EPS with capital deployment of $21.60 to $26.75 a 15% to 20% CAGR of our 25 results and a return on invested capital of 12% to 15%. Our range range of the $21.60 to $26.75. That's really reflecting our views of how fast that organic growth can come in and the pace of our capital deployment and reflects our views on the multiple ways we have to succeed as I described in that revenue graph. So that was the conclusion on the numbers, but I hope from my presentation, you walk away with 4 key takeaways. One, like we've had a successful track record as I've shown you, we believe very firmly, the credibility matters, and we owe it to you all to continue to be credible. And we hope our track record proves it, but we also are going to do it going forward. Our 25% CAGR that we did over the last 10 years we believe we have the ability to continue compounding value over the next 5 to 10 years. The markets have never been better. The demand for our craft labor, the demand for our integrated solutions has never been stronger and giving us the confidence that's underpinning the growth, the numbers that I've laid in front of you all. Our workforce versatility, we keep bringing this up. not to just bore you with it, but it's really important you understand that. That workforce versatility is derisk this company. It gives us the ability to expand scope, do more for our customers and be flexible as markets can change. That's why we talk so much about it.

That's why we built a portfolio of so many capabilities. It not only allows us to grow the top line, but more importantly, it preserves that bottom line and allows us to increase our returns on invested capital. It's a very critical strategy of who we are and why we do it. And then lastly, cash. Everything we're talking about at the end of the day, if we're not delivering the cash, it's not important, right? It doesn't -- it's not meaningful. Everything we're seeing here today, we believe, is going to continue allowing us to grow our cash generation strength. And what we do with that capital is very important. You have to judge us on whether you believe this management team, those people you meet in the room, do they have the ability to continue investing your capital smartly, driving accretive returns and returning value for the shareholders.

Just stepping back for a second, just stepping back for a second. It took us 28 years to earn a $10.75 adjusted EPS, 28 years. What you're hearing today for me to Carl, this team, we are saying that we have the conviction that we can double that over the next 5 years. that's what we mean when we say we're compounding value and why we believe the next 5 years, we're going to continue to be able to do so and why we think we can do that well beyond that. So I'm going to stop there and turn it back to Duke.

All right. Thanks, Jayshree. That's Kids cartoon. So I feel like that. I'm going to wrap this thing up here, some sort of some takeaways from us. Look, we've taken a prudent approach to guidance, like we always have. I'm wanting to know that. From my standpoint, we've done this multiple times. 2x, sitting in Israel. This is. [indiscernible]. It's alway been prudent.

Our guidance is prudent. So we're going to grow the company 15% to 20% plus. There's a lot of ways we can get to the plus, I like our [indiscernible]. We have a young team. I'm super proud of. I'm super proud of what they've done. They get after it every day. I want to be here with them through the plan. More importantly, we're building Quanta for decades beyond. And the next time that we come up, you'll see the same thing on how we've done on a forward basis. So -- and saying that, as we wrap this up and wrapped it up, which we're going to take some Q&A. I just want you to know that we have conviction to the plan that we couldn't be more excited about what we're going to do in the future to help our customers to collaborate and not only be a part of the market that create markets. I think it's really important because we're creating some markets here. We're creating our own business in many ways and many things that we do. So you'll see us do that through. In wrapping up, I know my mission. I'm going to turn it back over to Kip. So thank you.

Great. Thanks, Duke. So we're going to bring the team, Jayshree, Karl, to the stage for some Q&A. We'll have a couple of mics around the room, it should be.

Well, okay. [Operator Instructions]And then for those on the webcast, there is the opportunity you can kind of message or type in a question. And so I'll try to scan through some of those and incorporate that into the questions as well. So the mics are coming just bear with us just for 1 minute. Okay. And please say your name and the company that you're with. [indiscernible], maybe hit Adam right here?

Adam Thalhimer with Thompson, Davis. I'm curious about the full stack scenario for 2030. What will be the organic revenue growth embedded in that target.

All right. So yes, as we talked about, right, in the 5-year targets, we're targeting a 7% to 10% organic growth rate. So you can expect that the full stack that we should be at the high end or higher in our organic targets. And if we are able to stack everyone what we're talking about in that orange bar.

I mean the full stack would be the high end of the range. I mean it's hard to predict where that would be, but you would expect it to be in the high of the range if you full stock it and roll it up. I mean I do think when you look at that, you also have to say what's the timing? Is the timing on all the kind of the 765 build there is our ability to take advantage of some of the strategies? How do we make acquisitions, how much expansion do we get off the acquisitions and the timing thereof. So there's a lot of things to say when you're out 5 years and you get a full stack. So it's not if, it's when in many cases. But look, I -- we've done 20-plus percent in the past, and you would expect that at the high end of the range is for the...

EPS, adjusted EPS.

Just EPS, sorry, yes. Anyways, we've done both. But when you think through it, I do think that organic number has to be at that somewhat at the higher end of the range.

Yes. I mean we have opportunities, right, definitely performing at that high end. But if all that stack comes in, yes, there's opportunities to be at the high end or greater.

Okay. Great. Maybe Joe right next to Adam. .

Joe Osha from Guggenheim Partners. Duke, you talked a lot about how capital deployment and business development. It's a long process, right? You didn't just show up and buy a company, which is part of why the multiples have stayed at 9% to 10%. But even so people can read the newspaper, right? So I'm wondering when you think about capital deployment, how much upward pressure is there on multiples for private companies right now? How much of a challenge is that?

Yes. Look, I think we do a great job with the way we use equity to attract talent as well as acquisitions. And most acquisitions participate in equity and they get the kind of returns that we've been able to deliver as well. So I think it's a double-edged sword to some degree, yes, you can see that, but you can also see what we've done. And really, when you look at what's out there, we believe we can deploy capital at the framework that's there today with great businesses that believe in a bigger what I could say, it's bigger than just a multiple or a turn or 2 of multiple. So I don't see I see our ability to continue to acquire great companies at this kind of framework.

It will depend whether it's an engineering company or a heavy equipment company. But for the most part, I mean, we all sell for a multiple. We sold our business for 5 I don't feel bad about it at all. Like I love my job. I love what I'm doing. And there's others in the room that were less or more. But we've created value through equity, and we've also -- we pushed about between 7% to people with equity as well a year. And so it allows them to feel much like an ESOP in many ways, probably the largest you saw people ever see. But and then try to buy stock back as we see opportunities along the way to keep the shareholder at parity. So I don't see an issue for us to be able to deploy capital meaningfully into things. There's no I don't -- it's not imminent to us. I came up here ago, we're going to play it because I don't think it's right. I just see the ability for us to do so.

Andy?

Andy Kaplowitz, Citigroup. So NiSource, you announced it a little while ago now. And I would imagine there are other utilities that are going to watch and see sort of how this is going. So like your numbers do $1 billion per year or something like that, again, rough numbers, like how many more of these kind of things are out there like and -- are you making progress towards the is like, oh, this is really efficient. Let's do it like this because I'm sure it's efficient for you guys, too.

Yes. Look, it's not just utilities. I mean midsized utilities, yes. I mean we're talking to bunch of midsized utilities around different things. They're not all that big. Some of them are not contemplating generation, but some of them are could be renewables. And it can be all forms of generation.

So it's also on the other side of that with technology, trying to solve that solution of the same generation as well as the line, the interconnections and the other side. So it's not just utilities, it's also technology, co-locators, hyperscalers as well as our traditional utility customers. So also add to that, and it's a meaningful number. look, I'm not trying to get everyone leathered up here to say, look, it's a big number for us. Now we've got to convert them. We got to do great things. But these numbers are big and their opportunities are 3-, 5-year top opportunities at elongate some. But there's not a week that goes by something doesn't come to us to say, "Okay, can we do this? What does it look like? How do we provide solution to this client and they're meaningful.

Great. Steve real quick up here. [indiscernible].

Steve Fisher, Duke, you said you wanted to grow the revenue per head count over time. I'm wondering how we should think about the growth rate in the craft labor force relative to that 7% to 10% organic growth rate. Presumably, you have some embedded efficiencies in there from the integrated modular solutions from the AI initiatives. Can you just maybe burn us from head count growth to that 7% to 10%?

Yes. I mean in order to get to the numbers you see, I think you need to grow 7,000 to 10,000 a year, at least, craft non-craft just in general, you're going to have to grow that. You'll get some efficiencies through AI. You'll get some efficiencies through premanufacturing and manufacturing capabilities that we have but you're still going to need that core to be growing 7,000 to 10,000 here, same almost the same as what we said as a percentage of organic growth. But it doesn't equate, by the way, but I do believe that's the headcount. There'll be some acquisitions in those numbers as well. .

I do want to jump in, Steve. I don't want you guys to take that as a modeling exercise. It's really important. Duke talked about it. It's a trend, and we're working hard as we are expanding our scope and being -- becoming much more efficient, as Karl described, with our labor and our capabilities. But the right way to think about our business going forward are the metrics that I had out subsequently around our CAGRs and our expansion possibilities around margins. .

Maybe, Mark, in front.

Mark Bianchi with TD Cowen. You had this slide with the pie chart for the craft lead spend on a data center. And I'm curious, which of those categories are you extremely active in right now? And where do you think maybe there's room to improve or increase the amount of business that you're doing there? Does that involve M&A?

Yes. Look, I think when you look at it right now, as far as the electric piece inside the data center would be Coppertone the costs that we have acquired. That's a big piece of it. our mechanical business. We're early. DSI was kind of a platform acquisition we made last year. So we'll continue to expand where we can against that. But when you say that, I mean, those 2 places, you're electric and your mechanical plumbing. So those are the MEP for sure. Then you look at, okay, well, the high-voltage side internally to the center of the load center, that makes -- we're there as well. The interconnection is the utility piece. It's not on there and the generation that's not on there, certainly is in our scope. It's left today.

I think that comes up. But [indiscernible] is the -- where we're leaning into the most and what we're most. I would tell you, have the platform companies to build. When you think about the balance of plant, we're building those capabilities. We have those capabilities today, where we could take full scope, build it out. That wouldn't concern me at all to go build 1 tomorrow, but I do think that we have to be prudent about it. It has to be the right case and look, the GC model that's there today has been there a long time, and we work for a lot of them. So I would say, look, if someone asks us to go build a balance of plant data center tomorrow, we can do it. No question. The thing is that, that has not been something that we've been doing before probably last year that we started building a few. We're on some today, and we built those capabilities internally to do so. It's not that big of a piece of it, but it does allow us to understand where the customer is going to be connected to the customer. There's other models that we can work with GCs where we're connected to that make a lot of sense for us.

We're really just trying to drive the cost down for the ultimate customer and by our models, but the MEPs where we're most concentrated [indiscernible] piece

Chad Albert, Bernstein. So a question for you guys on your integrated fabrication solutions. What are your projects use those capabilities today? Where is that going? What's driving the pace of deployment. And then as you go back to your margin bridge, how much does that generate?

Yes. Look, I think when you look at that, we probably have 4 million to 5 million square feet, something like that. it's across all segments. The majority would be going towards your data center, your load center builds. And then you also have a bunch of transformer capacity in there where you're doing breakers and control rooms, many, many other things that we do. So it's a broad-based build that continues to build out. It's early for us in the mechanical side. .

So that's a big piece of it as well. So that mechanical side will continue to grow. And then we're seeing some, what I would consider joint designs, things like that, that we have the capabilities to do. If you go back in time, Cupertino has been that almost a decade well before anyone else was probably too early, Tom, would say. But that's okay because we have those capabilities now that really, really progresses forward. And Really, what we're doing there is expanding our ability to add labor. It's labor. So we can take in a confined space, build quicker and then go to the field with that and finish up.

So you just really what you do is you help yourself live. So you can do that all across the company. We continue to see where AI plays a role in that, and we get smarter and smarter, we'll be able to do more and more of it, Chad. And I do think it gives you some margin expansion, albeit small, and the answer to the question earlier about acquisitions, yes, I mean, these are the type of things that we look at when we make acquisitions to enhance that strategy quicker. So we're looking at all ways to do that. So the capabilities that you discussed that allow some margin expansion. Certainly, we would lean into those if we found the right companies.

Nick.

Nick Amicucci with Evercore ISI. Duke, I just wanted to try and touch upon too, with the transformer manufacturing capacity expansion, too, it kind of lines up with -- around the time line, we're starting to see the kind of conversion to -- or the new deployments of 800-volt DC. Is there any capability, any kind of thought around entering that type of market. Now I know you had kind of said most things are going to be grid tied and so this would be more behind the meter, but just thoughts around that.

I mean look, we're working with all of our customers on designs. And then there's a lot of opportunities for us, a customer asking us to build capacity or build future capacity. So anything that we're building is against future capacity in our mind. And so we would need to see that. I do -- yes, we're getting asked to do all kinds of things around that. And I do think eventually see us expand into some of those things. We're not a manufacturer. I mean every one of those things have Jayshree, she was on [indiscernible] yesterday because I think like if you just take a transformer and you think about what's possible, so let me just say what's possible, which I think is much probably bigger than this, it's at least 5x if we build it. So if we're going to build a manufacturer, we want to build the outside of it, and we want to really, really get to market quicker, get to set from the technologies asking us to do, and it allows us to expand into building the total solution. That total solution is more important to us than just the manufacturer. But anything you see us doing it stands alone economically, but what we can do is significant from a synergy standpoint. So yes to answer your question a long way.

[indiscernible] Justin, here, please.

Justin Hauke at Robert W. Baird. I just wanted to ask about the M&A strategy because the last several years, it seems like more of them have been about expanding the vertical integration strategy you guys have done, but you're emphasizing the craft labor and the need to grow that. So I guess from here, do you have kind of all the pieces that you want from a manufacturing capacity that there'll be more organic expansions? Or are there other areas that you want to expand and that you're not in right now.

I mean we buy great companies. If we can build it organically fast enough, we will, if we see great family businesses or businesses that fit the model to the mold that we're trying to do and then listening to our customers on the backside of that with what we believe is the business behind it, yes, we'll lean into them. We want this to be where people are fighting for capital on all sides of the business.

We have so much opportunity, and then we can decide. I mean the beauty of a portfolio that we have today, it allows so many ways that we can deploy it. So we'll deploy it, deploy the capital that we have and stay prudent to our balance sheet along the way to what acquisition make the most sense to the shareholder. I mean, if that provides returns because of the strategy that we have, we'll lean into that side of it. But I do think it gives us flexibility on the manufacturing side to create those would I consider unique positions in the marketplace where you have such as the straight today or whatever it may be, there's always something coming from overseas, it's delayed.

If we can do it in North America, like we've done now, I like what we've done on our vertical supply chain, and we would look for opportunities there.

Liam?

Karl, you mentioned in your -- I'm sorry, Liam Burke, B. Riley Securities. Carl, you mentioned in your presentation that you have a great relationship with the unions -- is there any conflict between union labor and being able to cross train your craft force?

Good question. We certainly are in front, collaborating with this, especially a lot of these projects and programs have a multi-trade jurisdictional restriction with them. for us, our customers are coming to us early and helping us asking us to help solve that out in front of that. This will -- geographically, there's constraints, the IBW Launa UAS. As we try to bring them together, we believe we can stay in front of that and solve that, and that's really been our approach is to be in front with them versus being behind it.

Yes. I would say just from my standpoint on the unions of family regeneration performing a 50-year pens in IBW. And those relationships are deep, but the company is 50-50 union, nonunion. And so we're able to really perform and have a great relationship to say the customer is asking us to do something. We either don't have the labor geographically, it doesn't make sense.

But we don't back up from that. We work together with them to create. We're probably the -- I would say, easily the largest we create more jobs for unions than anyone else. So we're creating jobs for them daily, while growing other businesses. And sometimes we'll have nonunion crossover to union. And so I think it's just -- it's a full-scale way to look at labor across all labor unions as well as nonunion.

Kevin Wilson, Truist Securities. In the traditional power gen market, whether that be gas or potentially nuclear, do you think you need to do acquisitions to strengthen your position, manage risk or be able to grow at the market, or will you continue to use the joint venture approach like with [indiscernible] to approach that market?

Yes. I mean I think it was a way for us to enter on the combined cycle side with [indiscernible] and the JV. I think it's all of the above, beyond. Like I think you'll see acquisitions against some of it. I think we'll do some JVs. The simple cycles are a little different. They're not as complicated when you try to sync them up. So we have some simple cycles that we can do. And as we evolve over this 5-year plan, I mean, it's a market we're in a is in the room leading it.

And I think when we think through it, I'll just throw all the questions on you have a good. So I think when we think through it, yes, I mean, we want to be able to be full scale in it. But I will tell you, in my time frame, I've seen many companies that thought they were really good at this. have big issues and building combined cycles, and I'm unwilling to take those risks of the past. Simple. I mean if a customer wants to go with this and they want certainty, I think we can build them every bit as good as bidding them, but for the same man, but we don't -- we can work together, we can define risk. We can do a lot of things.

I just don't think the company needs to take that risk of a combined cycle as it stands today. We'll look for acquisitions. We'll look for ways to enhance that business. But I would say this when we look at any of these acquisitions, it's never just what you see, after. You like when you lean into something it's not just about data centers. In fact, if it was just data centers, we're not going to look at because I don't -- I'm not going to buy on a hockey stick. I'm not spending your money right. Why would I do that? Like -- so we're really -- I'm really concerned with these hockey stick companies that are out there.

There's just not something we're going to lean into. It's not. We won't try and true 50-year-old companies that have longevity against our strategies and mechanical could cross all mechanical plumbing across from a generation station. They can build all kinds of different things besides data centers. So if we see a great heavy mechanical company that it can do multiple things, yes, we'll lean into them, but it's not just going to be 1 like generation or data is going to be all of the above approach and a great company with a great management team.

Maheep.

Maheep Mandloi from Mizuho. Maybe just a follow-up on that. You talked about the risk on CCGTs and maybe new technologies here. As you kind of look for the revenue growth or EPS growth about the target for these new segments, do you anticipate a change in the revenue recognition or the sort of the contract structures from cost plus to fixed cost? Because I think most of the private peers are on the fixed cost for CCGTs, for example, right?

Yes, I assume on fixed cost, but the ones I'm looking at. But I would just say, in general, if it goes to fixed cost and the people that build them, they don't have the labor to build them. So I'm not sure how they're going to do that. And you're going to get -- if you build 70 at once, everybody is building them, who's going to build the data centers on the backside of that.

They're going to do that too. because the people that -- if you look at Bechtel, for example, they build them, they don't have labor. [indiscernible] or they use someone else or they try to go a local hiring hall to do that. They're not there. If someone's going to take labor risk in this market to build a CGT, I mean let them go for it. It's great. We got plenty of opportunity we'll do something else.

We've got 4 ways to stock it, a huge portfolio. That's where we're going. We're not going to take a risk on the CGT. I've seen it, I've watched it. I'm not -- we're not going back. I'm not we're not doing that, just not. You can thank me later.

Brian [indiscernible] with Jefferies. Just a follow-up on the M&A question. When you look at your key 6 markets, where are you seeing the most competition from peers and maybe prime firms that are looking to also expand and leverage their platforms to compound growth. And are there any financial criteria or guardrails we should be aware of as it relates to Quanta.

I mean we can bond anything we can think of. So I'm not worried about that part of it. I'll just say when I think about competition part of that, it depends, but when I look at it, it's more about where we can scale versus competition. So in some places, someone may be better for job 1, and we may be better for 2 through 10. So you'll see some of that. Like I said in the prepared remarks, I mean, we're negotiating 75% kind of what we do. We may firm them up. We may do some things, but the negotiations are around 75%. So we're only really competing on 25% of the business. And I think when you look at the others, they're probably competing on the 75% of the business. So that's how different it is. And I think for us, it's really how do we work with the customer, how do we provide prudency on the regulated side while we're doing that. And yes, there's some low competition but not at scale.

And the financial guardrails, I mean, it's no different from the way we run our business, right, the way we look at acquisitions, the way we invest in organic growth, the types of work we will enter into, it's very much focused on is it going to drive those returns over the long run. That's what we're focused on. We're not focused on some short-term opportunity that may be for an instant, but then it creates some problems down the road that either we worked with the wrong customer. We have trouble collecting our cash or it's not the right risk profile. That's not what we're focused on. We're focused very much on a long duration, durable story.

And I think like -- look, if you look at telecom, we don't have scale there in places. I mean we're the other side of that? So I mean, that's a place where I would tell you like there's plenty of competition in everywhere out there. But we don't have scale and so that's where it sits. Large pipe, same thing. I mean, we're doing great things there. I think there's a lot of opportunity in it.

I do -- but we haven't tried to scale it. We haven't invested in it and -- but the opportunities are there, and we'll grow that business. So there's plenty of competition there.

Questions? Go ahead, Alex.

Alex Rygiel, Texas Capital. Could we come back to the 80 basis points of adjusted EBITDA margin expansion. Can you talk about some of the big primary buckets where you think that will develop from and then highlight any headwinds that maybe you didn't mention yet?

Yes. No. I mean I think we -- I talked about the 3 areas in which we are -- we see the opportunities to expand margin, right? It's performance improvements we have to own up to it. We haven't performed as well as we'd like in certain parts of our operations. We absolutely do see the ability to continue improving in those. We've been -- we feel good about where we're heading in that direction. Our Canadian operations.

The market is getting stronger. We've done a really good job of rightsizing that part of our business to be ready for this opportunity set that's coming in front of us. Our legacy underground business, we see the ability to continue improving margins there, again, improving our performances. And then the growth of the fabrication and MEP capabilities, right, depending on how quickly that can grow, depending on what our customers want, there is ability to get margin expansion from that. But again, to Duke's point, it's still a relatively small portion of our overall revenue. It is the fastest-growing. But if that has the ability to grow even faster, you're going to see more margin expansion from that.

And then the supply chain solutions that we've developed, our vertical supply chain, like Duke said, we're in the top 5 purchaser of high-voltage equipment. That gives us a lot of strength in buying power. And we believe we're going to be able to continue to use that strength very well and continue to expand those margins. I would say those are the 3 big areas that allow us to get closer to that 80 basis points and hopefully even more.

Yes. I would say as well as what Jayshree said, the 2 platform companies that are inside that business today from last year, which would be DSI and our Civil business, but we are [indiscernible], sorry. There's another company in [indiscernible]. So [indiscernible] in there. I think in general, those 2 are performing very nicely, giving us a lot of flexibility on multiple builds that have a lot of synergies in there. It gives us a lot of conviction on moving those underground margins up into the ranges that Jayshree talked about. .

Banesh Soma from Cantor. Two questions. One, do perhaps this is an easy one for you. What percentage of the employee base is cross-trained right now? And is that a target that you have in mind?

Yes. I mean we don't really keep track of that -- like in underground, they can really cross almost all segments. So there's an underground business. it's significant. Where I would tell you where you're getting -- where you struggle is like a welder being alignment is probably not going to happen, a welder will be a welder. .

Where it does happen is you can have like high-voltage come down into live. So we have a lot of cross training in some of those fields. It's more difficult to go from global ties in the high voltage just because of the complexity of some of the things that you need to do there. But it's not to say that we're not -- what I would tell you even more so that's important is when people come into the pre-apprenticeships where you would not even have opportunities for 50%. Now you can say, oh, the first thing you do with day 1 is you climb, Usually, it's 100 foot.

And if you're scared, probably not your deal. And so then you go, "Hey, how about inside electric? How about mechanical. And we can provide way more opportunities with our pre-apprenticeships. And what we've done, as Carl said, with this training. So we can really cross-train early there. But not to say that we're not doing that. I would say, if I just had to guess, I'm a pure gas, it's probably 30%, Carl.

I think it's important you got to realize our customers, we're in front of so many things and so many negotiations, even not only with the unions to that question, but into this regard, we're planning years in advance of what this looks like. So we can ramp up the training programs, the scale to the geographic areas that our customers are being asked to hit on these points from Duke. But also, we'll go out with the different operating units in those areas, regions, however it looks, or if you take many builds that start to stack on top of each other, we can change our linear approach to how we're building some of these projects, whether it's in the buildings out of the buildings, many different ways to go about it. .

Okay. And then just on leverage. Jayshree, you mentioned 1.5 to 2x. What's sort of the peak leverage you would get to for an acquisition that you would make?

I think a good example is what we did when we acquired Blattner. We got to around -- I have the number up there, but it's like 2.5 to 7 in that range. You can see us pushing closer to 3. If it's a company that we believe very firmly and that we can get behind, and also the ability to rapidly delever after that, right? That's very critical and our willingness to go beyond that 2x.

Yes. And is worth clarifying what we mean by fungibility of labor, so let's just take Indiana. If you're building -- if you're an electrician, tournament electrician, you can be on a power plant, you can be on the battery, you can be on solar. You can be on control the station in the stations. You can be in the data center. .

So if you can see all the markets and the fungibility of 1 or attrition, that would be apprentices, everyone around there that they can move theirselves around. Just to give you some example of how that -- what that looks like.

[indiscernible] from Goldman Sachs. Jayshree, maybe this a question for you on the active market opportunities that you highlighted on your EPS ladeck. I just want to make sure I understand properly. You said that that's not included in the guidance that you're providing there, but it's in the full stack. Is that going to be like the 765 kV lines, I would have imagined it's closer to the organic side of the equation versus inorganic. Can you help us understand where that lands?

Well, I think you should look at this as we have a multiple way getting to our targets and opportunities to grow beyond that, right? And we're talking about these active market opportunities that you've heard about that very closely involved with our customers. .

The timing of those things can be still a little bit up in the air, and we're working very closely with our customers, as I was saying, as Duke was saying, to accelerate those things. But we want to take into account, we want to give you guys guidance around these larger, more exciting opportunities, but have some things that have to get through the regulatory process or you got to get through the permitting, whatever can happen when you're building large energy infrastructure. So sure, there -- I would think about it in several ways, right? The -- those market opportunities, if they all come in together, allows us the ability to stack beyond what we've shown in the targets, but it also allows you to think about our targets as a way to sort of derisk that range we're giving. I would look at it in both ways. But the way we sit here today, given the visibility we have with our target growth aspects, we believe that these are stacking opportunities, but allows us to derisk our targets. If for whatever reasons, projects move. I mean we've talked about this. We're in the infrastructure business. We're super excited about where we're going.

We still have the abilities for margin expansion, but we're much more focused on that bottom line. And there may be times when we will give up some margin to ensure that we have that long-term visibility and durable earnings profile. And we recognize that things can happen, projects can move we keep ourselves an efficiency rate of around 80%.

We plan for that as maybe a better way of saying that because things can happen. Things just do -- you're going to have a tariff situation, you've got a political situation, you're going to have a permitting situation, but we believe we've built a portfolio where we can manage through those cycles and give you the comfort of what we're telling you around our targets with opportunities for upside.

And I wouldn't -- like if you think about $765, if you hear about 10 and 8 go, it just means the other 2 500 lines that have a high degree of likelihood of building as well. So like I don't get to kind of AMR. It's a way, I believe we can stock. There's multiple ways, as Jayshree said. And so just to give you some context. .

Chris?

Chris Sung over at Wolfe Research. I wanted to just ask about the CAGR for key markets on the power generation and energy. Like how many nice horse like generation projects is embedded in that 7.5% to 12.5% growth CAGR?

Yes. I mean so we've talked about what we've announced publicly with NiSource. We have that -- that is baked into our projections. But as Duke talked about, there's opportunities for more. And if those come to fruition, that will just stack on top. Okay. Any other questions?

I should say when they come to fruition.

I would say like if it's -- we have multiple opportunities there. If it's not an ice source, it will be someone else. Like I don't -- we used some examples today. And is that predicated on those examples, what happens if 1 doesn't happen? When we go to the next one. I still stand by what you're seeing with or without NiSource. Does that answer your question? .

Philip Shen with ROTH Capital Partners. There are a number of major banks right now that are on pause or partially or in full on the Section 48 EITC. So for your renewables business, this is important a lot of the volume we're seeing for 2026 is the Section 48 ITC. And the 48s really are not going to start construction until 2026 -- sorry, 2027 to 2028, and the uncertainty is really driven by this guidance delay. So I know you guys have Tier 1 customers, they can pivot to other sources of capital. The reality is, though, a lot of supply is going away as it relates to tax equity or at least on pause. So just curious, how are you guys dealing with the situation? And how do you adjust, if at all, are you even seeing it yet?

Yes. No, yes, we're well aware of those tariff complexities. I will tell you that we are working with customers who are really getting in front of this. So as we sit here today, we do not see any concerns around what I've shown you is around our growth profile around the power generation and storage side. We continue to see a lot of activity with those customers. I agree with you that, that is out there and that is a risk, but it's no different from the risks. It's a different type of risk. But again, if you work with the right customers who know about these things and get ahead of it, we feel it gives us the comfort of giving you the numbers that we've set in front of you. So right now, as I see it, we still see good growth opportunities in our renewables portfolio.

And normally, when you look at what we're giving kind of -- if we give you a broad-based guidance like this, you're going to expect about 80% of it to be right. Like there's going to be 20% that moves to the rider, it fluctuates a little bit here or there. One thing may look different. The portfolio of Quanta gives us that flexibility to work through that. If we get 90% right, those numbers are higher, like it just start. So like the portfolio and how we've approached it in a prudent manner, it's like 80% get to it, right? So you're going to have some things that delay or all kinds of things along the way. We expect that .

Did you have a question? I'll hand [indiscernible]. Any other questions?. Brian?

Brian Brophy, Stifel. I appreciate you guys doing this. You talked a lot about providing a solution. Presumably, that comes with accelerating schedules for the customer, creating a lot of certainty for the customer. When you think about pricing and the ability to command pricing, presumably that's something a customer would be willing to pay for, particularly in this environment, so when you're thinking about driving pricing versus kind of revenue certainty and getting visibility, how do you think about that trade-off?

Yes. I mean I think there's some -- on our regulated side of the business, I wouldn't expect anything more than what you've seen. Like it's just we're working with prudency, we're working with regulators. We already have an issue on what's the cost of rate payer. So like that we have to actually work with them to show them a better total cost than they would have got independently. If we can do that and create margin headroom, yes, sure. But the total cost of ratepayer with us doing a solution to go down, just it should.

And we can do that in a collaborative manner with the client and we're doing it in many cases. So in saying that on the other side of technology, if there's something there that they want faster or we have the flexibility or it's going to cost more or there's risk, it's really pricing risk in these things. So as we price risk, if there's risk to it, yes, you can expect more margins. I still say -- it's a multi-decade compounding of earnings story with margin improvements along the way that are kind of what we've laid out in the framework. That's still how we look at the company. There is opportunities.

Okay. Any other questions? Okay. Great. So for those in the room, we've got kind of an informal lunch outside. Quanta management team will be there. So you can circulate pick their brain, talk to them, as you will. Plenty of great swag out there, everybody come on.

I want to say from my standpoint and us and this management team keep it shown. They work extremely hard to make this safe for you. And I can only say they're world-class everybody as much as our execution capabilities in the field and the ladies, thank you for what you all do to as well. So thank you, and thanks for being here. .

And thanks to everybody on the webcast who joined us. We certainly appreciate it.

All right. We're live. All right. Excellent. All righty. Well, folks are getting themselves settled in. It's nice to see everyone here again.

Julien Dumoulin-Smith, Jefferies. So we are on the webcast here. So good afternoon, everyone, online. And with that said, thank you, team, for joining us here again. It's nice to have you guys back.

[indiscernible] having us.

Of course, absolutely. Well, look, again, as usual, folks across the crowd here can chime in later with questions, but maybe at the outset, do you guys want to open up any comments, questions -- comments, reactions, post 4Q thoughts, perspectives by all means.

Otherwise, you know I'm ready. So again, I'll give you an open shot here.

No, thanks. Look, I think from our standpoint, we had a good '25. We set up '26 nicely. We see long-term growth in our businesses and addressable markets that are all growing. And I think for us, you pinch yourself to be in this business with these growth addressable markets in front of us and super happy to execute on them.

Awesome. All right. Well, let's get right after it. You guys have had an incredible year and one of the points seem poised to have an incredible year prospectively here. You guys have a little bit of an update coming ahead. I know I pressed you guys a little bit on this call, but any thoughts you'd care to share as to like what's the point of doing the Analyst Day here, right? Again, and I ask a little facetiously because I get that it's been a few years. But why are you getting everyone together, right? If you want to put it that way or put it initially here?

Yes. I mean I think for us, we wouldn't do it if we didn't think the company had fundamentally changed over a 5-year period. We do believe we've fundamentally changed and where we're going is much different than where we've been. And so as we see that, we need to lay it out properly and show you the opportunity set that we see. I think it's important for us internally that when we give goals, like we intend to hit them.

And so it's not something that we take lightly either as a management team. We're not just saying it. I mean we have a plan. We want you to see it and want you to see the opportunities above the plan. And I don't think we can do that with numbers. I think we need to address it and address it in a public forum and hold ourselves accountable to what we say. And I think it's time because like if you look at what we've built and where we go forward, I don't think you can see it until we can just show it to you and outline it. And we've got to do a good job of that and all the pressure is on Jayshree.

Not feeling it.

Not feeling. A cool comment like as always. Par for the course. I mean nothing gets you off, right?

Maybe just let's talk about it, like how do you think about the data center strategy here? Again, I'd love to hear how you guys think about this. So you guys have been evolving your approach to the market for a little bit. Folks, look, I wasn't shocked one iota by your announcement with NIPSCO. Like I felt very much like on brand with your expansion. But how do you frame or scope out this data center strategy? And tackling it from its all different avenues. You have been very careful and diligent in building this out on a multiyear basis already.

Yes. I mean I think when you look at it, Julien, I mean, the industry is short generation. We know this. And I think the things that -- the very -- what I would consider critical paths, we can help solve. And if you look at the addressable markets of technology and utilities, we're kind of in the middle of that. So we're seeing all the issues on both sides.

And I think when we think about it, can we address generation from all kinds of forms? Yes. Can we build it all? Yes. And so how do we connect going back to the grid or not or whatever they're trying to accomplish to our customer base. And our job is to collaborate with both sides and then bring someone to the middle. And I do think if you look at our utility companies, they are all like moving forward and addressing the market differently than they have in the -- over the last decade because they have to, just like we've had to. So that when that comes together, we have a lot of solutions to provide both sides.

And the main thing I think we offer is certainty, like with our vertical supply chain, with the way we look at craft, with self-perform capabilities well above 85% or Let's call it, 80% to 85% at this point. So that's important to both sides that we do what we say we're going to do. And we do think that with craft being where it's at, that having someone like Quanta that you can point to and say, that's who's building my projects, that's a sense of responsibility for us to go and deliver it. And that's what we've set the company up to do is deliver those solutions that are necessary to power America in the future in AI.

It's nice to say it. I got to say, I mean, let's talk about this because you've started to really own this. This NIPSCO announcement, I mean, look, it's thoughtful beyond just the obvious like, look, you guys have been very diligent in waiting into incremental risk. But I think it's really thoughtful in approaching a mid-cap utility and saying, we will help you in particular, right? Because being a mid-cap utility like that's probably where they're taking the counterparty risk. You say, like, look, we want Quanta because we don't have the ability to absorb as a more modest-sized balance sheet, the risk of development either. So I think it's really intriguing.

Can you talk about taking that paradigm, the structure that you've employed there in transposing it to other examples here? And how swiftly can you get pull that off? Because it seems like the GenCo structure for NIPSCO itself is novel and people want to follow that too.

Yes. I mean look, I think mid-caps are obviously something most of the utilities that are in that space, yes, we can help them. But it doesn't -- like we're talking to all utilities around different models and model sets around this. It doesn't necessarily have to look like exactly like NIPSCO. I mean there's behind-the-meter solutions that get to the -- eventually to the meter that you have opportunity sets that are with there. We're talking to our clients about on any given day.

And I think in general, we're facilitating -- it's more like a technology customer saying, I want to be in this city, can you help me? Or I want to go faster, can you help me? Do you have transformers? Do you have -- what's the interconnection queue look like? And so I think that facilitation to try to move the industry forward and it's broad-based, I would say, yes, Indiana, but you have multiple utilities in Indiana that we work for all of them.

And not only just there, but it doesn't matter where you're at. I think all of our top 10, top 20 clients have the same issue. Some of them want to move faster than others. Some of them don't want to get out of territory. Some of them do. And everyone is different. So I think how we approach it is certainty. What are you trying to accomplish? And if people want to come into your territory, what do you want us to say?

You want to speak a little -- actually, that's a good point you brought up on BTM, right? Like I think you guys have been -- somewhere hidden in filings talking about you guys doing some BTM stuff. So it's not just focused on traditional utility constructs, right? We should be expecting you guys to show up across the power development landscape, right, in different...

For sure. I mean I do think there's other ways that we're happy to be behind the meter, we can build it.

Yes. Definitely. As long as it's a good balance sheet counterparty, right?

Yes. That's right.

Yes, absolutely, versus -- with that said, let's -- one of the issues that comes up -- one of the questions, not issues that comes up a lot is your outlook. People are worried at times, how much is inorganic versus organic. Jayshree I'm sure you get this a lot.

And people even today are saying, well, even in spite of the more robust set of outlook, people are still asking constantly product. How do you -- what do you say back to this? Because to be fair, you guys have done a string of acquisitions. I mean the quantity of people you added to the organization last year was enormous at the same time.

Yes. I mean I'd push back a little bit on it because a lot of it has to do with we're outpacing -- those acquisitions are outpacing the models significantly, and we're also pushing work over into those models that would normally be done inside and taking on other work. So I don't necessarily think that's accurate and that's why you see me push back on it going. That's not exactly how to look at it. And when you look how we consolidate, we consolidate -- we don't consolidate -- we consolidate in this segment. So the segment has already got the consolidation in it in any segment you're looking at.

So -- and then -- so that's an issue as far as how you think through it. But in general, if we can throw the free cash that we think we can throw, we can invest it appropriately on a go-forward basis. When you want to have a business like Quanta with a private equity model there that you could just invest in and you don't have to worry that we can go out and acquire and integrate and build the solution base that we've built, I mean I think it's a great way to look at the company and you get 2 for 1 as far as I'm concerned. So look, I'm not saying we'll acquire like we have in the past either. But I do see a good pipeline of great businesses that want to be a part of our organization and the platforms that we're in and the opportunity sets there. So I do believe we can repeat it.

Yes. And I think there's -- well, I mean, there's not much more to add to that. I totally agree with Duke. I think there's a -- maybe a little bit underappreciated or misunderstanding about our capital allocation approach. And we very much are focused on our strategies first. We have a strong filter around the types of companies that we want to bring into the fold. And there's -- and we work years around this. This isn't about trying to fill a niche in any one quarter or any 1 year. These are things that we've been thinking about for years. I mean Cupertino is a great example. It was a company that was identified.

When I joined the company 6 years ago, Duke and I spoke about how much he valued Cupertino and how they approach the market and how they're thinking through their strategies as well before anybody was talking about an AI boom, right? But it was a highly qualified strong management team, been around decades, that execute extremely well and have a craft-first culture. And -- but they weren't ready to move. And that was okay. And you didn't see us go chase another sort of inside electric operation just to say we have an inside electric operation. We waited very patiently when that time came.

And we can't time some -- we absolutely are not able to time as well as maybe some people think around when these families are willing to change ownership. But if we've been really careful about how we do it and very thoughtful around our capital allocation strategy, make sure we have the firepower and the balance sheet to move when those things come, we should be able to keep putting capital to work in a way that should be very, very accretive, obviously, to the bottom line, but more importantly, very much driving the strategies around long term. You're hearing us saying this more and more about being a compounder long-term relationship-based approach with our customers.

And I don't think that will slow down for sure. I think we're going to continue to do so. And part of what you guys -- I think the investor base should understand is, to Duke's point, we are very much focused on operating, being a customer customer-centric service provider first, but our capital allocation strategy has won -- to our long-term growth profile.

Yes, absolutely. How would you -- just to the point on this, would you say that there -- you should continue to expect some degree of cadence? Is there a way that you'd bucket out the inorganic piece of this equation in any specific way to put it in a box or leave it to the side?

No, I think that's kind of my point. I don't want us to be thinking about it sort of bucketizing because, again, keep the firepower, keep generating the free cash flow, keep thinking about it around our strategies. We should be able to put it to work. But as soon as you start saying, oh, I'm going to do X dollars, and x number of acquisitions, we believe that's where you start going down a bad path, the slippery slope around long-term returns.

Yes. And I do think like -- there's 2 separate discussions on this. EPS growth organically versus top line growth organically. And I -- one to me is way more important than the other. And so our EPS growth organically is what I'm worried about and what does that look like. And then you can talk about stacking on the balance sheet to that, and I think that's more important to me. Like we can grow the business double digits plus at the top line.

And if you give me like quality earnings, all that, throw all that out the window and just grow and that's easy. I mean it's a quality of earnings story that compounds over time that we're seeing out 10, 12, we have a track record of delivering that compound earnings profile. And I -- like we don't talk about weather, we don't talk about -- we derisk the business so that we're able to like have those discussions that are long term.

And so I think that's really important clarification of EPS growth versus top line growth, which I do believe organically, look, we'll be kind of in the framework we've been talking about.

Yes. Actually, maybe this is a good time to talk about this, right? And as much as like the utilities, right? A lot of utilities here. Having increasingly long duration of their visibility, exceptional duration and growth, right? And again, you guys are kind of a proxy in many ways. Do you want to talk about your -- you guys as kind of an extension of the utility model and your relationships, whether MSAs or otherwise? Because I think it's really important to kind of lean into that because they formally extended all their guidances already, right?

No, I think their capital budgets, we lean into what they say. I mean, we're able to do some generation now. So it's even more important in what they're saying. So all that growth I mean they're dependent on us to deliver or someone like us to deliver that growth. And they're not internally building up capacity to do that. And so as I'm not saying they're not growing some, but like we're certainly in the middle of all those programmatic spends that they have in discussing that certainty with them.

The one thing they can't do is not spend the capital that they say when they say it or they'll have a problem. And it's our job to make sure that when they ask us to go build something we understand that certainty. I've been in the 4 generations and understand it from rates to generation to house plug and how to build it. So I think when I -- when we think about it, it's like are the people that we collaborate the most with equity doing good or not. And if they're not, then we're not doing our job. We want everyone that we're involved with in any significant way to have a 52-week high every week. That's our job is to make them successful.

And so understanding how they work and understanding that model and growing with them, we'll grow right with them. We always have.

Coming back to that point, right, like derisking the utility model is one thing, right? Like a company that's had 3 or 5 years of visibility having 7 or 8 years is incredible. But for you guys and the entire sector, it seems particularly relevant to get this kind of long duration and visibility, right? People at times worry about the cyclicality in your business in other sectors, you guys hear, and it's incredible. How do you think about kind of articulating that back to the street at times?

Well, I think it's how we build the basis of what you can look at to understand our utility rate base type construct growth. I mean it's part of the segment, but that growth is tied to capital in many, many ways. If they're growing their capital, you can expect us to grow with them. And probably outwardly because they're not going to -- they have a certain amount of internal resources that will do some capital. But the incremental growth of capital, they're going to lean more and more our way on that. And look, I think our job is to give them certainty that go to sleep, you're okay, we got this.

And like because we've done the investments to make sure that we can accomplish your goals as well as what we're trying to, and they line up nicely. And in the middle is the hyperscalers or the large load customers they want to move really fast. And so you're balancing all these things at once.

Absolutely. And I'll give people opportunity to ask question. Yes, go for it.

[indiscernible]

Yes. Look, I think when we say that we have 2,500 plus engineers or that, when we look at AI, like in what it can do, we believe that we'll continue to hire engineers. We just don't need to expand it any more than our ability to hire in AI will get up to 30%, even 50% in most cases on the things that we work on.

Now standardization goes higher, all those things matter. You got to have really smart engineers, and I think the firms are fine. I'm just for us, we engineer to build for the most part. So when you engineer to build, you want it to be highly productive and we can build more if we can design to 30% and then get -- what I got 30% to 50% and then I just don't see us needing that platform to lean into some big firm that's doing that. There's nothing wrong with the ones that are out there and the guys that are acquiring them, I wish them well. But for us, that's not who we are and not what we're trying to be.

And I think we can do everything we want to do with AI, and we're proving it out internally. And from our standpoint, we're using technology all the way through and have been for 36 months or more on AI.

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I think -- it's going to be right-of-way type discussions on it. That's where it always bogs down. For the most part, that will be where you see delays in this and that because it will take longer to get right away. From a constructability standpoint, where you have a partnership to build the transformers with AEP. And I think we've leaned into those things from that standpoint.

And I think we positioned ourselves with the North American supply chain that I'm confident we're building against. We announced the capital against some of the -- majority of that capital that we announced was -- but those initiatives. So I think we have what I would consider derisk that bill both from an internal standpoint. So all forms of construction and supply chain has been derisked. Now you're down the right away.

Let me come back to -- a couple of people have ping me on this, and it's been an ongoing question. How do you think about managing labor inflation and material inflation right now? How do you think about that being part of the top line at the same time? And then related, how does it differentiate you here versus peers, et cetera, right? Because obviously, you've got this entrenched effort to try to mitigate and address craft availability.

I mean I think that's who we are at the core is craft and like tight labor markets are good for us because we've invested so much in it over time. And like I think when we look at it, labor is always kind of -- my career has been between 3.5% and 6% escalation is always, like you're never going to go below 3.5% and you can get up in the 6s, but it stays in that range most normally.

And we've got great teams. We pushed down equity, deepen the organization, like 9,000 employees. We buy back on the backside. So that being part of a bigger company and being part of the ownership is a big deal for a foreman in the field. And many of them have done very, very well with Quanta. And I want them to. I mean I think that's the goal is to make everyone successful and be a part of something that's different. And they're able to look at ticker symbol and be proud of what they're accomplishing every day. And -- we've -- I'm from craft, was raised there generationally and most of our management team is the same and they either bought family businesses or have been around it. It's what we focus on.

So I do think -- they want to be there. We're able to retain and keep craft with us because we treat them well, not necessarily because wage inflation, and I'm confident we can manage that. As far as commodities, we don't take a lot of commodity risk. We usually derisk anything from still to gas to whatever it may be, that would be our risk for us. We work with the client on that.

And usually normally, we'll build those rates into a multiyear project or it will be a pass-through on MSAs, things like that.

Another one of the embedded questions. You've got it before, but I'd love to hear how you think about it now. Like given the cyclicality of renewables and you guys having the kind of a view on a multiyear basis, how do you think about this being a contributor to growth or a document versus growth over time? Like how do you think about the renewals bucket? Obviously, for years, we've been focused on Blattner and what it could produce.

And obviously, there was a synonym with NextEra at times that people used as a kind of a proxy for your business. But how do you think about that cyclicality here? They updated their a couple of months ago. How does that fit into your outlook at this point? Obviously, near term, it looks pretty decent.

I mean I think the growth there, it's not the hour growth, but like double-digit type growth in that business, we see it. And I think like we're seeing things behind beyond 2030 already, which is a good sign, and it's going to continue. I think demand is going to continue for one thing. And I just -- we see -- in renewables if you fill the lineup of batteries in renewables and things like that and you back with gas and other things, it's the right way to look at something. So I do think it's economical in a sense that if you fill the lineup with all forms of energy and the utility business has always said, like, we need all forms. It's the right way to look at it because of the way you think. So I like it. I mean Jayshree can comment. She's been it longer than I have. So I'll let her opine an on my dissertation there?

No. I mean I don't have much more to add to that. I mean, I think as long as I've been in the renewable industry, it's been a long time. You see it's there's always these sort of maybe 1 year, 2 year issues that you might have to manage. But in general, it's been an upward trend, right, a significant upward trend. And just because the economics now continue to be stronger and stronger with the demand side. So we're not seeing any slowdown. We were particularly careful when we bought Blattner. If you remember, I told you Julien specifically, don't be running up the numbers on this.

You know how renewables is. It's going to be a nice double-digit growth, and some folks got a little too hyperbolic on how they think about renewables, but those of us who are in the business and really understand why it's part of the mix and how developers think about it and the utilities and because of that, we've been standing behind a 10% growth rate and that still continues to be the case that we're seeing right now. And it's too early to say what happens beyond 2030. But I'm not -- with the customers we're having, they're not sitting here saying, oh, no, the sky falls when the [ OBB ] expires. We've had none of those concerns at this point because, again, the backstop of demand continues to be very, very strong.

And how do you think, one of the concerns out there for you all relative to this is that the ESS business, the battery business has less scope for you guys to be involved with, right? How do you think about that? It's been one of the pushbacks here as the composition of what's being built in the renewable space evolves, if you will?

We're involved in all of that still. I mean it's a big part of our growth story on renewables. That's not a concern for us. And I think the other thing I would also add is the flexibility of our resources when you have sort of a dislocation in any one period because of something that happens in the renewable space. It's always subject to something, a permitting issue, supply chain issue, a tariff issue. You've seen Quanta be able to manage through those pretty comfortably because those resources are valuable in some of the other parts of our business.

And so I think as long as we are managing the growth rate at the right -- at the appropriate way, instead of believing some of the hyperbole, we're able to be flexible with that growth with our customers. I mean if it's batteries now, we're able to flex into that. If it's solar, we're obviously in it, well into it. Wind, wind continues to be a part of our mix. It's not the growth story right now and probably won't be but it's not going away, and we continue to see resources being effectively used across that as well.

I think one of the fallacies is with batteries, is it a big substation component? It's probably the most complicated piece of it. I would say like that's our capabilities there on the substation. So big substations on the battery build, it's nice, what I see good long-term growth.

So -- but just to put a finer point on double-digit growth through the decade.

Yes. I mean on batteries, I think so.

No, no, no, not on batteries, but just the overall renewal segment. You talk about hyperbolic growth, I'm like I'm giving you an opportunity to...

I'm saying for the -- we see -- I'm not going to put a time frame it, Julien. Don't ask me to do that. But we see good solid growth in renewables.

Okay. So I gave you the opportunity to pull it back.

So let's take the 2 steps back. If you think about what this company is, right, people keep pinging me here in different ways. Renewables one segment of it, it's gotten a lot of attention to your point, Jayshree, for a second, okay, fine. Put it aside, data centers put it on the side. How do you think about the pillars of what this company looks like over the years here? How do you think about the composition of what this company is because it's meaningfully changed, right? We talked about Blattner a few years ago. I mean, it really, Cupertino, et cetera, you've really seen an evolution.

Yes. I mean look, we said it earlier, I mean the technology piece that came into the business and that market that's created for all of this from utilities to ourselves. It's a huge opportunity for us to see outward growth. That takes a whole different discipline and it takes a whole different teams. And I think we've made the right capital allocations along the way and built platforms that are exceptional at what they do.

And the solution-based approach to it, I think, is what we'll lay out in a month or whenever that is. It flies by, so probably next week. But anyways, like whenever we do that, I think that's the key to it is we have twice the market we had 5 years ago. And we're in early stages of it. And the company has to look different to capitalize on that. I don't think -- if you look at everything and it's all built around craft, it stays around craft and exceptional execution in the field.

But on the top of that, there's way more opportunity there for us to execute on things and we have way more what I would consider craft skill capabilities across that from mechanical to batteries, renewables that we didn't have in the past and other things that allow us to really take off and grow with various customers across that kind of vertical. And I don't think that slows down. I think it's actually speeding up and our ability to obtain as much as we can in that market as we move forward, we'll be kind of how we're thought about. And I do think we've got to stay nimble.

The one thing I would caution on it is you can sit there and look at $20 billion of opportunity across 4 or 5 different things. And I would caution everyone to not stack that. That derisk you. We do not expect to stock every one of them and say, okay, $60 billion and plus what you're doing today, and that's that kind of company. It continues to derisk the company in Florida at a higher level. While we have more opportunity sets of each, each one of those will have a time in the life cycle that you'll hear bad press, like that's we know that already.

We build on every single model we have. You never really hear us talk about a project cancellation or a weather report or whatever. I mean I think the business is much, much different than that and we move forward on it. You won't see us do that. And it's because of like the strength of the portfolio.

Yes. I mean when you talk about the business -- the scope being twice as large as it was, is that principally as a function of data centers? Or is that literally...

I mean I think it -- that's in the inside business against that backdrop for sure. I mean you have onshoring, you have pharmaceuticals.

I mean I'm almost questioning, whether it's more than twice, but that's...

Yes. Well, I mean I don't doubt that. It is. But I think in general, there's a bunch of different areas that labor is fungible across. And we're not -- like I said, data centers is not -- wasn't that big of a number in backlog, but it has that potential to really ramp. I mean there's a lot of opportunities there. Pharmaceuticals same way. I mean we're seeing Eli Lilly move all across. We're seeing technology onshore. And I think the more unrest you see in the world, the more you'll see onshoring.

I mean we were talking about putting data centers that had our data in the Middle East. I'm pretty sure that, that's not going to be like what we think about tomorrow. It's a risk. And so I think you're going to continue to see onshoring. That's what -- that's Duke's view of the world. Don't hold me to...

No, but I hear -- the point is also at the same time, while the scope of the opportunity is wider, your willingness to engage in these other end markets too, is there, right? Like I think that's exactly your point...

Sure. Absolutely.

Right. It's not that you're afraid to get into these end markets. You've been adjacent to them for a bit.

And look, the generation is just starting and it has mechanical capabilities. We're doing some balance of plan. It has all the skill sets that we've created internally. And I mean the self-perform capabilities and how much of that or -- if you don't have your -- like your own superintendents, your own foreman, if you think you're going to go to a union hall in Indiana and grab people, you're sadly mistaken. Yes.

Well, let me ask you this, right? So in as much as when we talk about the business and the risks through it, how do you think about margin expansion? You've been very consistent on this. Some of your larger -- some of your other large peers are now openly talking about being concerned about margin compression on labor inflation, some of them.

Again, others talk about, you know what, if they're engineering exposed, they talk about not being too concerned. How do you -- where do you guys come out on this, right, in terms of the trajectory on this. I hear a really wide range, but I suppose in aggregate, the ability to pass along in the extent of the labor availability has really gotten the sector on edge. Our utilities are on edge about it, right? It's palpable at this point. Maybe that's an opportunity for you guys, frankly.

Yes. I think we've always been fairly disciplined about how we think through our regulated workforce. And we work together in many areas on it. We'll continue to do so.

What about the margin piece of it?

Yes. Like I think that's part of it. Scale allows us to move across starts and stops. And so I think, what we do for utility is it doesn't always go as planned. The more scale we have in any given area, we can move across risk. So like if they have a problem with a piece of land or whatever it may be, we can go do something else. And it's not a charge, and we make the same margins on doing a $765 line or $500 or $345 doesn't matter. And we've really given them the flexibility to move their portfolio around without exponentially charging the rate payer, which we should all be concerned with what we charge a rate payer.

And that's what my focus is, is try to keep that price pressure down on the rate payer for our clients and doing our job and are part of it in this industry to do that. So yes, I think the regulated piece of the business, the margin stays kind of where it's at. I mean you have -- because your growth on it is the problem. Like you're going to have to add the same amount of employees as a percentage on a go-forward basis that we have in -- you're not getting scale out of our training and all the things that we've done because it's exponential growth across multi-disciplines. I do think our UI segment comes up, and it continues to grow because we've added mechanical in there for the most part. And our gas business in there is some long-haul pipe opportunities and we've talked about some of Alaska, but...

And all of that is margin enhancing...

Yes. For sure. Yes. It's -- so those opportunities are all out there for us. And we still have a great relationship with those clients, and that will enhance that margin. So there's some margin hands. But if you look at our return on invested capital and you look at that, I mean, it grows nicely throughout our models. Like I think even when I looked at it, I was like, oh, it's outpacing our operating income growth.

Wow, that's excellent. Right. And that is a function of mix in addition to -- principally mix.

It is. It's the way we're contracting as well as the type of capital that's -- you got to back out some of that plan expansion until you get moving with it. But after you're moving with it and you look at the model out, you can see that return because of the things that we are doing and revenue per employee goes way up to -- and that's also creating that same environment with that -- I mean, margin is a big piece of any kind of return. But like I do think we're able to do that without increasing margins exponentially. I mean, Jayshree, you can comment.

Yes. No, it's definitely a lot of that is how we -- the cash flow with our customers and turns we're getting there that's helping us quite a bit on ROIC. The other thing is just the share of wallet we were able to capture by being there earlier and working with them from the get-go around planning the supply chain, what we can do from the procurement strategies, taking some of that work. It may not be margin accretive, but it's...

Scope.

It's scope that flows to the bottom line, which helps your returns. And to Duke's point, it's -- we're really much more focused on the ROIC over a long run. And so if you can get in earlier with them and given them confidence around their capital spend over the next several years, you can help take on more of that scope, which allows for a lot more certainty around where we're going to be over the next 5, 10 years, plus improving ROIC at the same time.

If we to take a quote from someone that we just spoke to, if it's a sugar high and trying to just take pricing at this point, that's not going to give you that visibility and comfort around that multiyear period that we're looking at.

I always said you guys sound like a utility. With that said, just if I come back to -- channel this a little bit more. I mean it feels that the $765 piece are really gravitating to it as evidenced by the question before. But that's just -- am I hearing you right by insinuating that's expanding the scope with your customers?

Yes. Sure.

Yes. I mean, for sure. I mean, I think we tried to do that. When we looked at it, I mean, we built a factory. We build a lot of things around that, knowing we could expand. I mean I do think you're going to see more and more $765 versus $500 get billed now because that's going to be your backbone infrastructure, it's necessary if we're going to get the load that we have. I mean, I just continue to believe that's the right answer in any cases.

So if I were to pull this all back together, you guys have an incredible, remarkable, consistency in your track record, right? I mean hard to find any company, even utilities that mirrors what you guys have done in consistency. How do you think about rolling that forward? Is this just about doing more of the same?

No. Look, I think we want to be better, right? Like we want to be better at the things that we do. And it will be craft-skill but as that craft skill spins out opportunities, we've got to execute on them, and it will be how we deploy free cash. I mean we got to make sure that we're disciplined in how we deploy free cash against great backdrops and companies and I like our chances on it. I do believe it gets way more opportunity than we've ever had to execute on a plan. And it's exciting times for us. We're super happy to be there. We want to compound earnings and grow them. So I think it's...

You want to do better. That's pretty, that's impressive. There we go. I love it. Jayshree is laughing. Love it.

Jayshree, needs that. But look, that's how we should wake up and we got to get better. Absolutely.

It's great to see you guys. Thank you for the time, right? As always.

Thanks a lot.

Thank you.

Good morning, and welcome to the Quanta Services Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] As a reminder, this conference call 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.

Thank you, and welcome, everyone, to the Quanta Services Fourth Quarter and Full Year 2025 Earnings Conference Call. This morning, we issued a press release announcing our Fourth Quarter and Full Year 2025 Results, which can be found in the Investor Relations section of our website at quantaservices.com. This morning, we also posted our fourth quarter and full year 2025 operational and financial commentary and our 2026 outlook expectation summary on Quanta's Investor Relations website. While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community.

Please remember that information reported on this call speaks only as of today, February 19, 2026. And therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements and information 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 or that do not solely relate to historical or current facts. 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 and financial commentary. Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, please sign up for e-mail 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'll turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services Fourth Quarter and Full Year 2025 Earnings Conference Call. I'd like to begin by thanking our exceptional employees for their continued absolute performance mindset, dedication to safety, operational excellence and delivering mission-critical infrastructure solutions to our customers. Your commitment has once again driven outstanding results and position Quanta for sustained success.

2025 was another year of significant achievement and advancement for Quanta. Again, we delivered record results as we generated double-digit growth in revenues, adjusted EBITDA and adjusted earnings per share, along with record free cash flow and backlog. Quanta has produced record revenues, 8 of the last 9 years. 8 consecutive years of record adjusted EBITDA and 9 consecutive years of record adjusted diluted earnings per share. Quanta has clearly established itself as a compounder of profitable growth. These results reflect the strength of our diversified solution-based business model and our portfolio approach, enabling us to adapt to evolving industry dynamics while consistently delivering execution certainty and profitable growth across very market conditions.

Throughout 2025, we continue to enhance our capabilities through strategic disciplined capital deployment. We completed 8 acquisitions during the year, including 3 significant transactions in the second half of 2025. We acquired Dynamic Systems, a premier turnkey mechanical and process infrastructure provider that strengthens our presence in the attractive and growing technology semiconductor, health care and load center markets. And in the fourth quarter, the acquisitions of Tri-City Group and Wilson Construction Company expanded our [ Cross-sale ] platform to deliver critical past solutions for load centered facilities and electric utility programs.

In the aggregate, the acquisitions we completed in 2025, along with our organic growth, added approximately 11,100 employees, bringing our total workforce to approximately 69,500 at year-end, reinforcing our self-perform capabilities that provide certainty and differentiates Quanta as a solutions provider.

Looking ahead, we see substantial momentum building across our end markets as evidenced by our total backlog of $44 billion. The convergence of the utility, power generation and large load industries combined with accelerating load growth demands is driving unprecedented infrastructure investment requirements. For example, in October, we announced Quanta selection by NiSource to design, procure and construct generation and infrastructure resources capable of producing approximately 3 gigawatts of power for our large data center campus in Indiana. A project that showcases the breadth of our total solutions platform as well as our support customer affordability objectives.

Additionally, we continue to advance our vertical supply chain solutions through strategically investing approximately $500 million to $700 million over the next several years in our power transformer manufacturing facilities and vertical supply chain strategy. The majority of this investment will build out production for the 345-kilovolt through 765-kilovolt power transformers and breakers which we believe will create a significant differentiated solution for Quanta and our customers in the high-voltage transmission market. These programs are just a couple of examples of Quanta's ability to provide total solutions across converging markets that are designed to deliver speed and certainty.

In many ways, we believe we are just getting started. We are confident in Quanta's ability to deliver innovative, crop-based and supply chain solutions that are designed to meet our customers' need for certainty and for their success. As we said last quarter, we believe we were well positioned to achieve record backlog and another year of double-digit earnings per share growth in 2026, and our full year guidance reflects that conviction. Our strategy remains grounded in craft labor excellence, executed certainty and disciplined investment. We believe Quanta is uniquely positioned at the center of a multi-decade infrastructure transformation, and we are confident in our ability to generate attractive compounding returns and deliver long-term stakeholder value.

With that, I will now turn the call over to Jayshree Desai, on our CFO to provide a few remarks about our results and 2026 guidance, and then we will take your questions. Jayshree?

Thanks, Duke, and good morning, everyone. We are pleased to report another quarter of strong execution, capping a year in which Quanta delivered record results across virtually every key financial metric. For the full year, revenues reached $28.5 billion, an increase of 20% compared to 2024. Adjusted EBITDA was a record $2.9 billion and adjusted diluted earnings per share grew 20% year-over-year to $10.75. We also generated record cash flow from operations of $2.2 billion and record free cash flow of $1.7 billion. In the fourth quarter specifically, revenues were $7.8 billion, with adjusted EBITDA of $845 million and adjusted diluted EPS of $3.16, all records for Quanta. Cash flow from operations in the quarter was $1.1 billion, and free cash flow was $946 million, both fourth quarter records.

During the fourth quarter, we completed 3 acquisitions: Tri-City Group, Wilson Construction Company and Billings Flying Service for aggregate upfront consideration of approximately $1.7 billion funded through a combination of cash and Quanta common stock. These businesses complement our strategies and expand our power delivery capabilities for large loads center facilities and utility capital programs. Even after deploying this level of capital following the third quarter acquisition of Dynamic Systems, we maintained a leverage ratio below 2x, a testament to the strength of our cash generation and our commitment to balance sheet discipline.

Looking ahead, this morning, we provided our full year 2026 financial expectations, which reflects continued double-digit growth in revenues, net income and adjusted EBITDA as well as the opportunity to deliver over 20% growth in adjusted EPS. These financial expectations are supported by record backlog at year-end of $44 billion, the strength of which is broad-based, driven by ongoing investment in grid reliability and resilience, growing demand for power generation and the long-term infrastructure investment required to meet rising electricity consumption across the economy. These are multiyear structural demand drivers that provide us with meaningful visibility heading into 2026 and beyond.

Additionally, we expect free cash flow of $1.8 billion at the midpoint of our range which includes $250 million to $350 million of expected capital expenditures related to the vertical supply chain solution that Duke described. A range of free cash flow also contemplates the collection of the remaining balance associated with the large Canadian renewable transmission project discussed in prior calls. Additional details and commentary about our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both of which are posted on our IR website.

In summary, 2025 was a year in which Quanta continued to deliver on its commitments, providing certainty to our stakeholders and compounding earnings. We entered 2026 with record backlog and a strengthening outlook. The convergence of utility modernization, power generation expansion and large load growth continues to accelerate, and Quanta's workforce, breadth of solutions and execution capabilities position us well to serve our customers' most critical infrastructure needs. We remain focused on disciplined growth, operational excellence and creating long-term value for our shareholders.

With that, we are happy to answer your questions. Operator?

[Operator Instructions] Our first question is from Julien Dumoulin-Smith from Jefferies.

Very much nicely done. Truly, kudos. Maybe just coming back to the Analyst Day coming up here and a little bit of a preview if I can. How do you think about this setting the tone for a high teens earnings growth, if you will, through the back half of the decade? And specifically within that, can you talk about what's embedded in '26 guidance as it pertains to data center contracts? And also, obviously, Jayshree, you've just announced or you closed on a number of acquisitions. Again, where are you positioned with respect to capturing the data center opportunity and the internal versus still needing further external acquisitions to really achieve the scope that you're desiring?

So in the data center, kind of how we're thinking through it, it's roughly like 10% of the business at this point, and that would be a go-forward basis. Backlog is certainly growing. It's our fastest-growing piece of backlog. There's a lot of opportunity there. I continue to see us booking significant backlog this year and beyond. It's a multi-decade, probably the way I see at least a decade of growth in that area. So we're having success there, and I do believe the company is well positioned to take that growth. And I forgot the other 4 questions. What was the other?

How do you see the several years?

Several years. Yes. Look, I think when we see it, the company has put up management teams put up a decade of type results. Same management team, same philosophy, better markets, larger TAMs. I like our chances to continue what we've done in the past.

Our next question is from Steven Fisher from UBS.

Congratulations on the deal. Just wanted to ask you a little bit about the electric margins kind of steady for the last few years. I wonder if you could just bridge some of the puts and takes between 2025 and '26, I imagine there's some things underlying there in terms of SunZia and perhaps other things. And maybe just more broadly, about the margin initiatives that you have? I know you've got a number of them. Could you just talk about how you see some of those things coming through in terms of vertical integration, and pre-resource sharing mix, et cetera.

Yes. Thanks, Steve. I think when we look at the company, there are large projects that we're continuing to see. But 26, I -- we don't anticipate starting any 765 type work. We don't see any major large projects in it. It's really just solid growth across a broad spectrum of markets. There's nothing -- there's no SunZia I got to with the company at $33.5 billion. SunZia is really not going to move the needle at this point. I think you're seeing broad-based type growth that you'll continue to see. I think the difference is we're in 2 verticals, you have the technology TAM that's well over $1 trillion and the utility TAM over $1 trillion and growing.

So as we look at both those markets and take those opportunities, the company has a significant portfolio of ways to grow well beyond what we should be talking about in SunZia, I think that's passed, and we've done a nice job there, come in and the team that put that together. But again, we are happy to build SunZia, and we're happy to do the baseload work of everyday programmatic spin with our -- both our technology and our utility customers, and that's what you see the company focus on. The large project dynamic comes with that. But the initiatives of 765 again, we talk about it a lot, it's not in backlog yet and it's not something that we see in '26.

Our next question is from Jamie Cook from Truist Securities.

Nice print. I guess just Duke question since the announcement with NiSource last quarter. I'm just wondering what the path towards doing more CCGT projects. I'm just wondering if additional customers are coming to you now that you sort of dipped your foot in this. And as you do this, should we continue to see joint ventures a path?

And then I guess just my follow-up question. Margins in electric infrastructure, 10.3% at the midpoint similar to the past couple of years. I'm just wondering if investors should think of this as sort of the new margin target? And why wouldn't there be opportunities for margin expansion with 765 coming online soon and just bigger, larger projects should be favorable to margins.

Yes. Thanks, Jamie. I'll go backwards. I think when we look at margins and margins improvement. Yes, I mean we have opportunity to improve that. I think we took a prudent approach to the midpoint of the guidance. And there's certainly things within it that we can improve. We do organically, we'll grow around 6,000 employees. That's pressure on those margins, as we've talked about in the past, and we continue to kind of have the same ratios. So that tempers some of the margins about still 50% plus of the business is under a regulated environment with their utility customers, and we look more at compounding that over multi-decades versus trying to enhance margin percentage point here or there.

Yes, I do think we can operate better. We certainly have a mindset to do so. It's also about risk. I mean I think the company is really working on the quality of earnings and the risk profile. We're unwilling to take the risk. You may have seen in the past, but the margins are there. And so it's really a compounding story, Jamie. I don't think you're going to see any of these outward margins and especially in our regulated business. And even in our addressable market with technology. We're working hard with the technology customers to have more of a programmatic look to this. And that's the company. That's who we are. We want to collaborate and multi-decade look, we're not trying to do anything other than enhance our customers' ability and the stakeholder, their customer from affordability to everything else, we have to be a part of the solution of the industries that we serve.

And I would say [indiscernible] ask something on margins. I want to go back to that, sorry. I do think the company has initiatives internally that from vertical supply chains and all the things that we're doing, sorry, Steve, I didn't catch you, that will help us, but you also have health care and all kinds of things that are pressing including what I just discussed with Jamie. So Sorry, I missed that part.

Our next question is from [ Sumaya ] from Cantor Fitzgerald.

Congrats on a strong quarter, strong year and obviously a strong outlook. The question I have to again pertains to what's happening in the marketplace. Maybe if you can just give us a sense of the pricing discipline that's holding in, in the marketplace combined with potential supply chain dynamics that might be also a potential headwind as we look at the growth opportunities that you have?

Yes. I mean I think when you look at supply chain, you see our announcement this morning, it's really around trying to derisk the supply chain as well as take advantage of what we see in the marketplace. I mean you got $300 million to $500 million, probably up in the $700 million over the next 3 years is derisking us. The transformers breakers, the things that we're building don't show up, we have issues, significant issues. So I think part of that was a collaboration with the industry and our client and [ AEP ] on building transformers to their spec. And it's something that we don't -- we take very seriously. And we know that our clients want certainty. This company is built on certainty and billings transformers, all the things that you may not think why are they doing that? We're doing that to derisk this company long term and allow us to be certain as we look at it while addressing affordability to our clients.

And I think that's a big thing is affordability. And we're working on those things with our vertical supply chain, which allows us a great sense of certainty when we guide and when we tell our customers that we can do something on time, on budget. And as far as craft, we've invested in craft for 2 decades. That's who we are. Any time you have a tight craft labor market, Quanta does very well.

The other question I had was on pricing dynamics in the marketplace.

Yes. I mean, look, I think we look at it more in a collaboratory manner where we were bidding on a 1-year type, 2-year type things. Now we're not bidding at all. We're negotiating 5, 10-year type programmatic spend. And that's the difference. It's it's more longevity, more risk-adjusted type look at the business solution providing pull-through. ROIC goes up in these environments, our return on invested capital because of things that we can do and offer in a solution base. So I really see just a longer term. It's not a margin story. I'll say it again.

Our next question is from Mark Strouse from JPMorgan.

Duke, I just wanted to follow up on Jamie's earlier question on gas power generation. Can you just talk about what you're seeing in the pipeline there? How you're expecting that backlog to trend in 2026? And then are you planning to expand beyond the Zachry JV going forward?

Thanks for reminding me, I missed that. So I do think when we look at our gas generation business, we're certainly looking at the market, listening to the market. They're asking us to build these types of combined cycles, single cycles, all types of generation. And we put together a great team, a great platform. We're super excited about what we have booked. The opportunities, yes, I do believe when you look at the opportunities we will book more generation. We will book it both in a JV setting, we'll book it with just us. I mean, we're certainly capable internally of building generation and will.

So it's really around the risk where that's something that we're not going to deviate on. It's part of it and our customer base and anyone that calls asking for generation it's risk-adjusted. We're not getting in a position where the past where we firm fixed price generation, not doing it. So people want us to build it. It will be risk-adjusted. And yes, I believe we'll book backlog throughout the year. There is no shortage of inbound calls on a quantity to build generation. So I'm confident you'll continue to see that backlog growth, which is not in backlog yet.

So the first one is on in backlog. I suspect we'll have multiple in backlog before the end of the year. And I think it's more of a '27, '28, '29 type build, where that's the ramp on it, and it will continue on out. We've built a nice platform, and I'm excited about it.

Our next question is from Atidrip Modak from Goldman Sachs.

In your prepared comments, you talked about strategic initiatives to expand programmatic customer relationships. Can you talk about that a little bit more, give us any color on what you're thinking of and what we should expect there?

I mean I think when we look at the utilities and we look at the technology customers, it's our job to certainly help with their builds and make them successful. That's how this company views it. And as that -- as we do that, look, people want certainty. They want to -- they have to have it. And I think that's what we are known for is execution certainty and construction risk is not something that we're concerned with on primarily on the regulated utilities, except gas fire. So we're really -- I think we're just in a good spot there.

And the discussions we're having are solution-based discussions and they have issues with labor, labor constraints, vertical supply chain issues. We've done a nice job seeing down -- seeing out 5, 10 years and putting ourselves in great position here to take advantage of those things. It may have looked funny to Wall Street 5 years ago. And they're showing up today is something that looks visionary, and I think that's what we're trying to accomplish.

Our next question is from Mike Dudas from Vertical Research Partners.

Yes. Thanks, and good morning, Duke, Kip and Jayshree. Just checking to make sure I'm like -- hey, Duke nice decade. So looking at the news flow and the demand expectations appear to be off the charts and getting bigger. Can you sense of how real the market is? Like discussion with utilities on the load factor side, are there a lot more fluff in the market? Is there a reality? And what are some of the hurdles? Are there hurdles becoming less important or more important to execute what the plans of your customers are over the next several years, maybe regulatory or some of those issues there.

I mean any time you're really contemplating doubling the size of the largest human infrastructure project in the world. I would tell you like it's hard. And there's stops and starts and all kinds of different things that you can find out in the marketplace and certainly on social media. Yes, I think some of it is high. But even if you discount it it's still doubling the size of the largest infrastructure project in the world. And I don't see any demand slowdown at all, I don't. And I can -- we can see out kind of 5 years, maybe longer. I mean, we're probably in 2032 now kind of looking at things and booking things.

So I think it's way out there. We have to build generation in this country, all forms. And I think it's something that our customer base, our utility customers are certainly -- they're regulated in many ways, but I'll speak for them. They had a great business, and it goes unnoticed of how the energy business is growing substantially. It's a growth business. And we're right in the middle of it with them. You're going to get some political windfall kind of rhetoric here with what I would consider unfounded things that go on with data centers and things like that.

When you look at the Indiana project, it's $7 a month rebate basically to every rate payer in NiSource, maybe more. So I just -- I think we have to do a better job as an industry promoting how good this industry is. We're trying to do the right thing for the stakeholders while advancing system and generation capabilities to double the size of what it is today. And I'm super excited about it. These utilities are super excited about it. They're doing a great job managing through all this political rhetoric. But underneath, I can tell you, legs are moving fast and people are doing things.

Our next question is from Sangita Jain from KeyBanc Capital Markets.

Duke, it looks like the hyperscalers and co-locators are increasingly looking for financing partnerships for large projects as the project sizes get bigger. Would you ever consider becoming an investor in a large infrastructure project if the scope of the award measures up against your risk profile?

Yes. I mean, Sangita, we've looked at those things in the past. I would say we never compete with our customer on those type of things. So you get in a situation where if you invest significantly with co-locator hyperscaler and things that like that, you run the risk of competing with who our client is and we don't do that. So can we help with supply chain? Can we do some things to help move things along? Sure. We have not taken outside money for any of our expansions. We just haven't. I mean, we've been offered on transformers, all kinds of different things. We don't need capital. We need capital, we don't need anyone else's. We want to control our own destiny.

And I think it's extremely important that we have the balance sheet where we can do those things and enhance what they're able to accomplish. But as far as, at this point, us putting in capital into an asset such as a data center, I can't see it. We can do things in other ways. And the company, what we see going forward based on our ability to deploy capital in the core business, I like what I see there much more than trying to invest in something that we don't -- that's not core to us. That's how I see it.

Our next question is from Brian Brophy from Stifel, Nicolaus.

Nice quarter. Duke, you mentioned previously, you're seeing the tight craft labor market. I guess, can you talk about some of the areas of your business where you're seeing more or less tightness currently?

I mean, it's across the board. I think we've got to do a good job of getting pipelines of craft in here, and I was in D.C. yesterday with Veterans in Energy. And I can only say like we're working hard at building these pipelines into the company. And we've got to get out and promote it and make sure that we stay in front of it and our colleges and campuses and all the things working with our unions and nonunions. Everything that we're doing I think, will help us.

But it is high. I would say anything around the data center stuff is probably the tightest market at this point. The utility type transmission, big transmission, things like that hasn't really started yet. You'll see that in the back half. Distribution is kind of modest growth in that. Telecom is moving in the right direction. I think you'll start to see fiber splices, things like that get tight.

But in general, it's good. we know where it's going. We see it. We're investing in the right spots, and we'll take advantage of those markets.

Our next question is from Nick Amicucci from Evercore.

Just a quick one for me. As we kind of saw at the end of last week, I just wanted to get a sense of kind of the ability to kind of push the button on executing on more renewables projects, just given that we have now some guidance, albeit preliminary, but on the [ FX ] side. Have you guys seen kind of -- have the conversations kind of picked up granted over the past week, just with regards to those and just kind of get moving those things forward.

Yes. I mean, I'll let Jayshree comment as well. But from what I see, we continue and have continued to stay kind of double-digit type growth plus in our renewable business, and we can see out through 2030. I'm not concerned with that business. It's there's always going to be a fee out. There's always going to be something in that business that's [indiscernible]. And we have to operate through it. When you think about solar and batteries, it's the very fastest thing we can put on the grid right now in many areas. So we can build it fast. We don't have to wait on urbans or anything like that.

So I do think there's opportunity there, and we'll continue to see that, and it will be a form of energy for the foreseeable future, right? [ Wind ] is getting some bad press, but you'll still see [ Wind ] get built and not under some sort of political pressure and all kinds of different things, but it's still getting built underneath and it's needed to fill the generation gap.

And Jayshree, you want to let you comment on this?

Yes. The only thing I would add is the customers we've been working with, as you know, is we've been -- they've been very, very strategic about getting ahead of a lot of these political dynamics with safe harboring and the projects in which they're working and having a robust enough pipeline to deal with some of these things that are just endemic to the renewables industry. So we have continued to work with them on a multiyear basis. And so it's allowed us to be comfortable with where we sit in our renewables expectations.

We'll, of course, continue to work with them over the next several years as the dynamics around the [ Peak ] and other things become more clear. But as of now, it's as Duke said, it's just business as usual. We continue to see good growth there. There will be times, of course, where our customers will have to deal with certain political dynamics, but there -- these are customers that are comfortable doing so, and we've intentionally stayed with customers who can do so and we have a track record of over a long period of time of managing these things. And the demand continues to be very, very strong for those projects our customers are working on. So it's just business as usual on the renewable side.

Our next question is from Adam Thalhimer from Thompson, Davis & Co.

There was a comment in the prepared remarks about large transmission projects becoming increasingly visible. Can you just compare what's in backlog for large transmission to what you see out there in the bidding environment?

Yes. I'm not sure how to define it. What's large now these days, so I would just say we have no significant 765, no 765, which I consider those large projects in the backlog. I don't -- there's not a lot of large dynamics in there. It's more programmatic spend more so than any kind of main project that I'm aware of. It's minimal.

It's -- I mean, look, we see it coming. We see it stacking. We've talked about it. I think you'll see us book later half of 2027, a significant amount of 765 and other types of work. It's not just 765, it's 345, 500. Data centers, I don't know, generation, it's stacking. I feel confident that there will be some chunky awards all the way through the next 3 to 5 years. We're just getting started. I know the backlog is going. I see it too. We're taking market share. We're doing the right things. We're focused on the base business. We're not letting off of it, and the management team is highly focused on not giving up on that base business, in fact, growing it.

Our next question is from Justin Hauke from Baird.

Great. I wanted to ask about the custom fab capabilities that came from this acquisition this morning at Tri-City, is that -- I guess, is that all new to you? Or did you have some fabrication capabilities from Cupertino or elsewhere before this? And maybe just talk about the capacity you have there and also, is that all being done for self-performed construction work? Or is that something where you're selling those prefabs to others to use?

Yes, we did have some fab capabilities come in with Tri-City, the great group there. We like what they were doing. That just adds to the 3 million square feet we already have. So we have significant amount of fabrication prefab. We call it premanufactured because it is manufactured. So I do think when we look at it, it's a little different. Everybody specs a little different. So we're fabricating really from a manufacturing engineered type fabrication. So it's a little unique.

I would go back and tell you Cupertino over a decade ago was the first mover in this and we have a lot of experience with fabrication and prefabrication, what goes wrong and what goes right, and we'll continue to work with our customers, whoever the customer may be, we're certainly willing to fab for others, if that's what the market is. That -- we say it all the time, it's fungible. In many ways, those facilities are fungible, but there's no shortage of people willing to shore up capacity for 3-, 5-decade type arrangement. So we're happy to do that as well.

Our next question is from Chad Dillard from Bernstein.

So my question is on the architecture shift from 54-volt to 800-volt DC for data centers. Just curious how that changes Quanta's TAM. And maybe you can talk about whether you see any impacts on the front of meter, but probably more so behind the meter. And then secondly, as you reengage in the power generation side for natural gas. Can you talk about the opportunities you're seeing in the mix between front versus behind the meter?

Yes. So voltage going to DC, some of the architecture that NVIDIA has put out, that's -- a lot of the learning chips are you can see anyone these NVIDIA go into those type of architectures. I believe we're in front of that I don't see it changing our TAM at all. You might get more medium voltage type arrangements in there. Still a lot of low voltage type things. We've done a lot of research on it. We feel good. We work with NVIDIA and others to make sure that we see where they're going and make sure we have the craft necessary. So I feel comfortable with that.

But I don't think like when you think through it, there's still lot of the older architecture that will be used throughout. It's something that we'll have both when we think through it. So both are growing significantly. We're in front of that architecture. I do see -- I do think that when you look through to the intermittency of the chips, much better to put it on the utility let the utility take that intermittency. It's smarter, it's better. It's just an amount of -- you've got constraints in the Qs and things like that. People are trying to go behind the meter simply because you can't get to the meter.

So that -- it will be both sides of this. There are some good things and bad things on both in regulatory environments. We've got to get the regulations right and make sure that the ratepayer is not the one that's got the bill that's got the tab. That is not happening today. I think the utilities you can come in and they've done a fantastic job of regulatory, making sure that the technology is paying their way and technology wants to pay their way. So all the nonsense around that is just what I consider [indiscernible] out there today on social media, wherever it is and normally around some political aspect of it. It's not reality.

So look, we see opportunities on both sides. We'll participate either side. But I do think most off-grid , a lot of off-grid will be used for your backup power as you move generation on. So you'll start with 100. 200 MAX and then back up for a bit and then come on with utility type solutions. That's what I see.

As far as natural gas -- natural gas, we're still in there. We've never left. It will be a part of the business that we see it and it's certainly backing up some of these -- we're getting involved in them where they're backing up some of the hyperscalers and data centers.

Our next question is from Liam Burke from B. Riley.

Thank you. Good morning In 2026 on the M&A pipeline Duke, are you seeing sufficient opportunities to either add to your base business or large enough to actually make a difference as the business continues to get critical [indiscernible]?

Yes. And I would say every acquisition makes a difference. But when I think about it, yes. We see opportunities as far out as we can see as far as good businesses. I can't tell you the cadence, both businesses that I didn't -- we've known -- I've known the Wilson family, my whole career and super family, Happy to have him here. They fit here culturally very excited. They give us some underground capabilities out in the East, which I think is fantastic as well as shore up some things in the West. Some of these things you don't see coming. We have a good reputation where, I believe, culturally we want a certain type of company.

There's no shortage of people wanting to sell their businesses on any given day, I promise, like they're out there. How we look at it, we're very selective. And we'll all of our strategies, we'll lay it out in April, March, I guess, he won't let me talk about it much. But I'm in general, pretty excited about that as well of talking about kind of what we see. And I see the same type of cadence. It may be lumpy along the way. We may not do a deal in a year. I don't -- I just think we'll continue to be selective and follow the path to provide the solutions to our clients.

When we're looking at this, someone is asking us to do something typically, and we needed the platform to provide the solutions. You saw us invest organically in our vertical supply chain, it's needed. We need to do it. We're going to do it. It's something that's what I feel like the demand is coming in and we have to make sure that we can meet the demand. So that said, we're taking opportunities to both organically invest as well as look at acquisitions from platforms to bolt-ons.

Our next question is from Philip Shen from ROTH Capital Partners.

You're building so much of the infrastructure for AI. Can you talk through any initiatives you guys have to take advantage of AI to lower OpEx. Can AI meaningfully change your outlook for OpEx in the coming year or 2? And then as it relates to bidding and booking dynamics, I think you're sharing that you guys are booked out through 2030 for renewables. I was wondering if you might be able to share kind of similar color for the other segments? And then ultimately, how much work are you guys turning down?

Yes. I want to clarify, I don't think I said we're booked ou,t, I said we're booking through just to make sure that we get on the same page there. We're certainly taking advantage of we can stack and we're not booked by any means, we'll take all comers on renewables. What was the other question? Sorry, you got me off on that one. Yes, look, we would have our head in the sand. If we weren't looking at AI, what it can do for the company. We're already seeing ways to -- I think when we look at M&A, we're not looking at engineering anymore because I think AI is going to be significant there. And it's going to really affect the way -- we have 2,000-plus engineers and we'll definitely incorporate AI into it.

And so I think there's a lot of things that will change. And we're in front of that. It's something that I'm highly focused on, both from cost and the way that we can get more productive in the field. There's a social aspect of this as well. I think when you really look at what the impacts are on these companies, it's -- there's hard decisions to make, and we're trying to make sure we're a growth company I won't really fire people. We grow people, hire people. And so we've got to make sure as we displace that we have avenues for people to move into different skill sets, and that's what we're doing here. So I think every bit of savings you get, we're pouring back into AI initiatives.

That was our final question. I will now hand back to Kip Rupp, Vice President, Investor Relations, for closing remarks.

I'll be Kip. I want to think I'm a women in the field. They're very best in the world. They have an absolute performance mindset and they are [indiscernible]. And I want to thank you for participating in our conference call. We appreciate your questions and ongoing interest in Quanta Services. Thank you. This concludes our call.

Okay. I think we're good to go here. Good morning. Thanks, everybody, for joining. I'm Steve Fisher, UBS Machinery, Engineering Construction and U.S. Building Materials analyst. Really thrilled to have the management of Quanta Services with us here today. We have CEO, Duke Austin; CFO, Jayshree Desai. We have Kip and Sean here and a couple of other members of management.

Just before we get started, one disclosure here. As a research analyst, I am required to provide certain disclosures relating to the nature of my own relationships and that of UBS with any company, which we express a view during this discussion today. You can find those disclosures at ubs.com/disclosures or you can reach out to me after the session, I can get them to you.

So with that, Duke, Jayshree, thanks for being here. Duke, maybe to start off here, when I think about Quanta, I think your solutions provider, leveraging a skilled, fungible workforce that's been developed at scale now that allows you to do things and do things in a way that others really can't. Would you agree with that sort of framing of Quanta? And is there anything that you think investors really just don't appreciate about what you're trying to do with the company at this point?

Yes, I've been trying to get you to say that for a long time. So yes, I agree with you. So yes, look, I think when you think about our addressable markets, we have a great utility business, the moat around the company as well as now an addressable market with technology. And the technology piece is pressing on the utility piece for generation as well as labor, which are labor is fungible, which I think is at the core is that labor piece. But those 2 -- the pressure points are really around generation and labor certainty. And as that comes together, that's where the solutions are. And so I think our ability to be certain with capital to be certain with when generation comes online, whether it be a combined cycle or a single cycle, however you want to look at it, renewables, batteries, everything that all-encompassing and provide that total solution to a client on both sides.

It's not only technology, it's also utility and how we play in the middle of that really is where I believe is what's the unknown is NiSource shows up this year but that's been -- we've been working on those relationships for decades. And you see the announcement on some of the other things that we're doing. So I just think as the company has built a great labor strategy, it's allowed us to really provide solutions that others can't and somewhat -- it goes unnoticed the fungibility of the labor, how we can move from market to market.

Makes sense. Now I imagine your strategy kind of gets tweaked and refined every year based on how the world changes. How would you describe the tweaks that you've made to your strategy in this past year? And then somewhat related but as you make moves strategically, they open up new paths for going forward. So how would the changes -- how would you say the changes you've made this year will alter your strategy going forward?

Yes. I mean I think if you take a step back, you look at what we've done with supply chain, we went vertical. We bought transformer facilities. We bought poles. I mean we've invested in things that we believe that we're going to be short in supply that allowed us to have flexibility with our ability to provide solutions. So as we've done that, I mean, I think every year, that creates opportunities. And as we've invested in that, we take advantage of the opportunities that we see. Really, the client has always driven us whether early years, I mean, you would go on a storm and you would do a good job for a customer and you'd stay. So I think much of it is us listening to the customer and then understanding the global markets of how things really, whether it be tariffs, whether it be short supply of transformers or listen to the customer base and understanding what's giving the industry an issue and trying to solve it.

So I think that collaboratory back and forth as we sit with each other allows us to move every year or really any time and be much more nimble because I think you have to be nimble in the business today because it moves so fast. And you have technology that wants it tomorrow and the utilities are slower. And so there's just once 5 seconds and once 5 years. And that we play in the middle of that whole pendulum and trying to go from that fast pace to somewhat of a slower pace. And I think that's what the fungibility of labor allows us to do.

And I don't think the strategies change as much as the solutions do. And so when I -- it's really craft skill, craft skill, craft skill, focus, focus, focus, add engineering, add great companies that I think when we make acquisitions, we make acquisitions on companies that aren't necessarily in a market that you see. I mean we didn't buy Dynamic Systems around AI. We bought Dynamic Systems because it was a 50-year-old company that was providing -- they started with Texas Instruments and chips and semiconductors. They were mainly a semiconductor or clean room in hospitals.

So I thought the synergy with it when we looked at it was AI, data center type colocators, whatever it may be, and their fabrication ability on mechanical. So that's kind of how we move across the market because we need to be flexible, but that doesn't mean that they can't go right back if there's a cliff or there's something in the market that gets dysfunctional, we can move right back into hospitals and will and stay there, clean rooms, chips, whatever it may be.

So the fungibility of labor in their markets, I think, are really important for us. And we really want to be a compounder of earnings. And we -- in order to be a compounder of earnings, you have to look out multi-years, decades to see and to stay in front of that compounding nature of the business.

So building off of that, as a solutions provider with an objective to be a compounder, with what you envision for the next, let's say, 3 to 5 years, how much white space do you think is left on the page in terms of the solutions that you're not providing yet to your customers today that you see a need for?

It's a great question. Look, there's more white space than the management team can attack. When I say that, like we can see out a decade and see opportunities all along the way to create the next decade. Look, we'll pace the company and the balance sheet around that. But there's a lot of white space right now. And I think in general, I mean, the markets are good, and we're attacking some of them faster than others. Not to say that -- I mean, if we see something that there's a disconnect and that we're not like -- because internally, I think the biggest thing that we face is internally you have to get up every morning and reinvent yourself and not get complacent.

And so our ability to make sure that we motivate this management team to win. And if you want to be on this team, you want to win. And like we want to win every day, we want to win every year and every decade. In order to do that, you have to drive yourself and drive the company culturally to go out and attack the markets that you can't see. So I do think we're doing a good job there but like there's a lot of white space out there.

Okay. We'll stay tuned on that. So now as a -- obviously, we've talked about the fungible workforce and that, I think, is key to your growth. So how would you say that how fast you can actually grow that workforce every year and how is that different from what the industry can grow?

And I think when you look at it, part of the growth internally, if you just look at our business without acquisition, traditional business, we're growing probably 8%, between 5% to 8%, something like that. The acquisitions are growing much faster than that. So in general, normally, when you make an acquisition, we can grow those exponentially in the first 12 months. And so you can grow -- I mean, the latest acquisitions, we've grown 50% for the most part, at least, probably much more. This, I have CEO [indiscernible]. So I won't even try it but it's at least that. I'll stay there.

And so that -- in that first 12 months and then all of a sudden in the third quarter, as you saw this last quarter, you see, well, double-digit growth. That's because we have 12 months' worth of Cupertino, and we have been growing Cupertino exponentially, and then it shows up in the third quarter is organic growth. But that doesn't mean we haven't been growing that exponentially. So I do think part of it is how we acquire, part of it is internally that we're growing around 6,000 employees, give or take, every year on an organic basis and whether it be through acquisition growth or internally. But we have the ability, the colleges, the campuses, the framework, curriculum to grow substantially. I mean, I'm not seeing us inhibited by labor at this point.

And in terms of being able -- that notion of being able to grow the headcount at your acquisitions by so much when you take them on, is that a reflection of the fact that you have your training resources and your trade schools, et cetera, that others in the industry just don't have, and that's how you populate it?

Yes. I mean I also think the families of the businesses, they're also -- their money, it's -- they're investing. They're growing as fast as they can. There's bonding. There's all kinds of different things that come into play with growth. But underneath, I mean, I think when you sell to Quanta, it's a bigger -- it's much bigger because they're selling to us, they see the market, and they want to perpetuate their business in the market. So we're able to really take the underlying management teams and put them in with training and curriculum and things that they haven't had in the past or really give opportunities to employees that maybe they didn't have enough space or they're heavy in this area and not this area.

So I just -- our ability to expand of what a company has already. And usually, you're buying a 50-, 100-year-old company that has a lot of -- I mean, my company, our family business, it was a $10 million company and now doing $1.5 billion. I mean it's just -- you're able to really kind of take it and say, okay, here's the synergies and the synergies are your addressable markets. And so as you go into these addressable markets, you can see it. We have the customer bases, and we can take that same employee base very -- I mean, you can take Indiana for an example, and you can be building solar one day, combined cycle with the same people, go over and do a battery job, go over and do some industrial job.

I mean you can take that fungibility and really move companies throughout the organization. And I think Carl and the team underneath has done a really nice job of staying flat and then expanding those markets for incoming acquisitions.

Great. I want to talk a little bit about Dynamic, and you mentioned before about how they've done other things and now it's data centers, AI and can do other things in the future. But just curious, any other thoughts you have on that deal? Any points you want to make? And I know it's only been a few months but any doors that you've seen it sort of opening yet?

Well, I mean, look, we see the mechanical businesses to be a great business long term. The margins are good, and they do a lot of -- they're more advanced in prefabrication, a lot of them, a lot of technology more so than we were on other pieces of the business. So we're able to take some of that technology and really helps us develop on the electrical side on our prefabrication as well. So I think there's a lot of commonality in the prefabric. We're about 3 million square feet under roof now. And I do believe that business is a great business. It's accretive to the profile of the segment. For sure.

And I really like the business. I mean, you can -- we have peers in that part of the business that are doing better in margins than we are certainly in that segment. So you can expect us to be in that framework on that piece of business and really expand it.

Great. One of the things as a solutions provider, you can fill many different roles for your customer and different contracting types. Can you talk about how that is evolving and the different contracting roles that you can use, be it general contractor or subcontractor? Is that as a GC, a role that you've not had in the past that you're seeing increasing more? And how important is vertical integration as you're a general contractor bringing other subs in? Is that sort of a margin enhancement? what do you see on Vertical integration there?

Yes. I mean look, there's all kinds of models, all kinds of clients want different models. But in general, what I would say is we still self-perform about 85% of the business, between 80% and 85% of the business. I don't think that changes. I think we continue that. Now in saying that, there's a lot more equipment involved with our vertical supply chain, such as transformers. And I would say on the solar side, there's our trackers and NEXTracker and array and all the customers there that you're pulling through all that supply chain. So the better we are in our supply chain, I think it helps us increase returns. And -- we can also provide supply chain type arrangements to other customers, which I like a lot.

And I do think we're growing nicely in that business. We've done a good job internally of expanding that market. So it does give us some flexibility as we look at the addressable markets that we serve. And on the high-voltage side, I mean, like transformers, our ability to have that facility and the things that we can do with it are substantial, and that will continue.

Great. Shifting over to Cupertino. It's been about a year now. Can you talk about what some of the successes have been there, kind of what's going right and what's still ahead? And I guess from a kind of a pace of bookings, what should we expect there? Anything big there on the horizon?

Yes. I mean we're booking work. I would say we still do a lot of colocations, $100 million jobs that are cloud-based stuff that's not these mega projects but we also are involved in the bigger projects. But I see like in that market, you'll start on 1 building of 10 and you really -- incrementally, you'll do 5 or 6. And -- but your contract may say it starts with 1 and it ends up being 5 or 6 buildings on the data center side. So I do think it's a weird booking mechanism because you're not booking as one large project. And I think it's really more sustainable. It's been that way for a long time. And the -- like as we've gotten deeper and deeper into the technology market, I think the company has done a good job with them of they realize that we are craft.

I don't know if anyone -- I'm sure everyone's been involved in some sort of homebuilding or some building where you had a general contractor locally that doesn't show up with labor, and it's very irritating, don't build a home. So like if you've done that, like it's very much like a general contractor, if you don't like self-perform. So I think our ability to do that and what the customer really wants is that certainty, whether it's utilities or technology, they want labor certainty. They want generation, too. But labor certainty is so important now.

And I think our -- where we sit in that dynamic has put us in a different position. So we have all different types of arrangements. And -- but typically, whether we're working with a GC, through a GC, we're at the end user. ultimately because we're talking to them first and they may marry us up or we may do it ourselves or other ways. We certainly have all the capabilities a general contractor would have. The model is used typically because you have smaller companies regionally that they -- for bonding capabilities, cash, whatever it may be, that's why the model has been used in the past. But for us, I mean, I think we can play a different role if we need to.

But as it stands, I mean, we do a lot with some of the larger GCs all the time but the end users are the clients telling us who we're going with and where we're going. So it's really kind of a dual model.

Great. Shifting gears a little bit. You brought up NiSource before. Can we talk a little bit about this opportunity set? How did this agreement come about in the sense that it may shed some light on how you're actually running your business at the moment. And obviously, investors have a lot of questions about the underlying nature of the contract and some of the risk terms and conditions. And I think you've been pretty clear that the risk is very manageable. So maybe you can just talk about that, what comfort you can give investors around this opportunity set.

Yes. I mean, look, I think the company has had a history with fixed price combined cycles. It wasn't good, like I was there. So we were very hesitant in the market to get in the generation space on the combined cycles. We were doing some single cycle work doing nicely in the business but on a combined cycle is very complicated on the engineering and commissioning. So we felt like if we were going to do that, we needed to derisk it contractually or through some project or both. And so really, from our standpoint, we believe we've derisked ourselves and give the client what they ask for and also the large load low customer on the other side of that. And so we work with both really to help develop the project to help to make sure that we derisk it in a way that Quanta is happy, and I can talk to our investor base with certainty and say we've derisked it.

And so I think in general, that was from our standpoint, long-standing customer too that we've had decades of relationship with on the other side. And so we're comfortable with the relationship, comfortable with Indiana. I mean I think Indiana is a state where for us, we have a good concentration of labor. I mean we're building solar in Indiana. We're building batteries. We're building line T&D. We're building battery, I mean, all kinds of generation. And so it's not a state that we're not comfortable with. So we're comfortable with labor there but we have offices in Indiana, quite a bit of critical mass.

So I feel like, we listen to the client, both sides and where we come in is, again, I mean, the 2 things that you hear the most is generation and labor, and we could provide both for the client and provide that whole solution. It's big. I mean there's a battery component in there that's not part of that. There's some line in there that's not part of that JV. The JV is just one piece of a broad, broad -- I think it's going to be a multiyear, multi-project type situation with us and the client because we've done a nice job together to develop something that the large load customer wanted.

It's -- what's great about it, which is phenomenal, which is the way it should be is that the ratepayer, it's about $7 for their customer deduction a month in Indiana. I think it's a great model. And I think it can be -- you can do it over and over again because the large load customer is more than willing to pay their fair share, and it should create economic benefit for the ratepayer, which is what happened in Indiana.

And you mentioned just now that it's a multiyear, multi-project kind of company, can you talk about the timing of this? What are the next steps and how that's going to play out?

Yes. I mean we started some of the engineering. I think late '26, it will start to ramp in '27, '28 will be the big build. And it will go further along and probably longer than that when we really look at it. That whole program, I believe we will go to 2030, and there will be a multitude of things that happen there. It's one of many. I mean, we're involved in these kind of solutions across the board. And then this happens to be one that we're able to talk about if we've brought it to fruition. But I do think the company -- what you don't know is like these things are out there and they show up. And it's because we have the labor certainty on the backside, the scalability of the company, and we put the work in long ago, and I think that's what we keep trying to say is like when you said earlier, why are you a total solution? That's why.

Because you can't see it until like we put it out there. I'm not going to sit up here and say, this is where I'm fishing, and I caught a lot of fish today because guess what, everybody is going to be fishing where I'm fishing, and I don't want that. So like we're not going to sit and say like everything that we're doing, what we're trying to say is we're providing these solutions off that very craft skilled labor that the scarcity that we've invested for a decade, and it's our background.

Great. Maybe shifting gears again in terms of growth, you've given some directional framework for 2026, sounds like you continue to bank the growth on earnings between 10% to 20%. Can you talk about some of the factors that give you confidence in that? And sort of a mid-teens a good base case starting assumption for next year?

Yes. I mean I don't want to give guidance, Steve. I wouldn't discount it, but I would be doing a disservice if I said that, and it's really 20%. So I don't -- I haven't -- we haven't got that far yet. But what I would say I'm comfortable in the kind of the mid-teens to even past in the 20s. Like it's going to be in that framework on a compounded basis for what I see in the next 5 to 10 years is like we're able to compound those earnings in that framework, the 10% to 20% of adjusted EPS as long as we get all the balance sheet. We have great markets. I feel comfortable. I'm super excited about in '26, '27, '28 and beyond. We're really looking out into 2030. So I feel really good about our markets. We can see them. You can see the capital budgets of our utility customers moving up. We've got to do a good job on affordability issues that you may hear as an industry.

We've got to continue to say all the infrastructure that we're building really reduces the rates over time because of generation, it allows flexibility in generation. So we've got to do a good job there or you get backlash. But I think as we see it, the need for generation has not deviated, demand from technology, we're in the early stages of the company in that addressable market. So I like the white space there that we can really grow the business.

And so yes, it's big numbers, but the company is much broader than it's ever been, and our addressable markets are much bigger than they've ever been. So super excited about it. And like I said, I don't really want to give earnings yet in '26 but I expect them to be good. I mean I expect us to have good visibility in it, and I think our investor base will be pleased.

And you said that you expect to achieve record backlog in 2026. Is that specifically tied to this NiSource opportunity? Or is it more broadly?

We have broad-based backlog growth. I mean it's across the board. I feel like we haven't seen really any our 765 projects that I believe that we'll be successful with in backlog. I don't think you'll see them probably until mid-'26 and maybe earlier. But in general, I just -- we just see a lot of backlog growth here. It's a culmination of just the work that's been put in from the team over the last 24 months and then the people in the field, it's just -- it's starting to show up and the solutions are starting to resonate. The companies that we work with are starting to see where labor is coming from, and we're in a good place. I really like what we see.

Great. Well, that's a good transition to you mentioned the 765. So I want to talk about the AEP partnership. Can you talk about this a little bit more, the significance of it, how you see it playing out? Is this going to start with specifically Texas high-voltage lines? Or could it be other parts of the country? How should we see this sort of playing out?

Yes. I mean Texas is easier to build. So I suspect that will probably go first. Some of the Texas projects will probably go first. As far as AEP, the largest utility in the country, 40,000 miles of transmission, 2,000 miles of 765 have a lot of technology there. We felt like it was a great collaboration between us to build transformers together. They have a great engineering platform and great -- what I think will really benefit us that we didn't have. And so we could really do some things together. as peers and work hard at it.

And so I think we've really done something substantial for the industry, not just AEP and us. I mean we've really proliferated the ability to build 765 together. It's not just AEP. I mean that's one example of a customer, but it's a multitude of all those builds that are really supporting these -- our clients across the IOUs in these builds. So we have to be extremely cognizant of how we support this. And I think the company -- as companies in these RTOs and things like that are in there, we really have worked with AEP to make sure that we can deliver those capabilities across the board, not just for AEP. But that -- the contract itself and what we said, I mean, they have a $70 billion capital budget that they need certainty in.

And I feel like that collaboration between us both was substantial to not only derisk them but to help us plan and it's the right answer for the ratepayer. And so I really like the whole thing. It allowed us to do a lot of things that benefits the ratepayer and AEP and Quanta. So it's just a win-win for us all. And I think it's not just 765, it's a broad against the capital budget that you see agreement.

Great. And when we think about some of the growth drivers of the company, if we think about maybe the last 5, 10 years, it seems to me that we've had a big driver in terms of renewables, sort of generation via renewables. And I'm sort of thinking that maybe we're now going to be shifting into a transmission cycle, not that you haven't had transmission projects in the last several years, you have but maybe it's more of a transmission cycle, data centers, natural gas, kind of shifting from renewables or maybe renewables sort of plateaus a little bit. Is that the right way to think about kind of market growth drivers?

Look, I think we'll grow renewables double digits. I'll let Jayshree comment a little bit. She's closer on the renewable side, but I don't see any reason why we won't grow our renewable business double digits.

Yes, I agree. I mean the renewable business, we continue to see customer demand, especially with the load growth that's happening and the speed to power that only renewables can answer. So at this point, we're not seeing plateauing on the renewable side of things. And I would agree with the premise that at the same time, you're going to see more growth on the T&D side, the data center side, generation as a whole with labor being the critical component for all of those things. And so as we sit here thinking through our next 5 to 10 years, whatever form that may take, with labor certainty as a big driver and load growth continue to be the biggest market driver, we're flexible as to how we're going to meet those client needs.

Those 2 things being the fundamental drivers of growth gives us longer-term visibility than worrying about any sort of maybe 1-year issue around a renewable tariff policy or a PTC/ITC issue. This is a much longer infrastructure build-out that takes all of this with labor being in the middle of it.

And from a size of project perspective in light of larger transmission projects and some of the natural gas now data centers, is there an increasing mix that we're going to start to see in terms of bigger projects in your overall mix?

I mean you're going to see some stocking. I mean, like you're going to see bigger projects start stocking. But I don't -- the underlying business, if you build a 765 line, like this 10:1, like the lines coming underneath, there'll be 10 lines to 1, 765 line. So there's still -- we did this in the past where we built a lot of projects and part of the whole dynamic of building the base business back over the last decade was we left it in kind of '11 and '12, we just left the business somewhat underneath and the clients were pushing work to others.

And this time, I mean, we take a real strategic approach to this where we want to keep the base and then stack the larger projects. So it's been staying at the same kind of 80% to 85% base business. I don't see that changing much as we move forward. The top side will grow but the base is going to grow.

Great. I'll ask one more question here, and then I'll turn it over to the audience if anyone has any questions. We get a lot of questions often about your margin expansion potential. And just curious how -- we've identified some of the margin opportunities. But if you want to maybe just talk a little bit about how you guys see the margin expansion opportunities from here.

Yes. I mean, look, I think the fabrication that we can do on technologies allowing us -- will allow some expansion on that side of the business to expand. But our traditional utility business will be in the same framework that it's always been in. It's regulated. I mean, I think from our standpoint, that's the framework of that business. So it's there. I do think as we get better at our supply chain, as we get pull-through, returns will move on up. There is some ability to move margins. But the training cost and the things that we do with labor to continue to train drags it down some when you think through it.

So I just think if we're growing at the pace we're growing at, you pressure margins because of training. But I think it's the right answer for the investor and there's some incremental margin you may get, you wouldn't be able to take advantage of the organic growth that you're going to have. So I think that continuing training will be there. There's places that we can expand, and I expect us to. But I don't -- I just don't -- we want to compound the earnings at the pace we're compounding them at over decades. And so I think if we can do that, we'll be happy. I mean I think we're well -- we're above 20% on a compound basis on adjusted EPS for the past decade. I'm not saying we're going to do that going forward. I'm hedging, trust me.

But I do think it's in the 10% to the 20s, and it may be 20%. So I just -- we give ourselves that ability to do that as long as we can continue to be certain to the clients and collaborate like we have, which is key to the markets that we serve.

Great. Anyone in the room have any questions? No?

Okay. If not, then I will continue on here. In terms of perhaps cash flow, capital allocation, maybe for you, Jayshree, what are some of the key accomplishments over the last year on cash flow? And what do you have planned further in 2026?

Yes. I mean I think we've done a really good job of keeping a fortress balance sheet. That's very important to us. It allows us to give certainty to the investor base around why we feel we are a durable story around long-term earnings growth. You've seen us put capital to work in really good, strong family-owned businesses that give us a comfort level that it's not a flavor of the day in which that those businesses grown. They've grown through cycles. They have management teams that have lived through good and bad times. They have created a culture that fits our company very, very -- our Quanta company very well. So we want to keep that flexibility in the balance sheet to ensure that when those opportunities come up, we can take advantage of those things.

So I think you've seen -- I think it's one of the things we're very proud of what we've worked through over the last decade plus to ensure that balance sheet strength. You've seen us reach investment grade. We've also been -- the rating agencies has -- we've increased a notch on that. Our operators are doing an excellent job of converting faster our AR, and you're going to see more of that as we work through those things.

But having said that, we're much more focused on ensuring long-term durability with that customer. That utility base is driven by self-performed work -- it's our labor, our equipment working on these systems for multiple years, that can be a drag on working capital. And so depending on where the growth of our company is coming from, if it's that utility MSA self-perform work, you'll see some of that cash flow pressures continue. But as we're doing more work on the EPC side with the nonutility customer base like Blattner, Cupertino, Dynamic have done, you're going to see a cash flow profile that's more accretive. And that allows us to give a good balance around why we think our conversion ratio continues to be in that 45% to 55% range.

Absolutely opportunities to be above that as we've shown in the last few years, depending on where that growth is coming from. But there will be times when we're going to use that free cash flow to invest in our growth. You'll see that in our manufacturing side as we continue to expand our vertical supply chain. That may pressure a little bit of cash flow profile in the near term. But if we're doing that right, you're going to see that translate into more base business work and more certainty over the next several years.

So as long as we continue to focus on keeping that balance sheet as flexible as possible, I think you're going to be -- you're going to -- you're going to see us continue to say that durability of our earnings growth will continue.

Yes. And I think as far as capital allocation, there's great businesses out there that 50-, 100-year-old businesses that's not in a trend. I mean we're not buying companies because of a trend. I think that's a fallacy. Like we have a strategy. We know the companies that we would acquire. we're not out looking as companies for whatever reason, want to divest or generationally for whatever reason, there's all kinds of reasons out there. We know who they are. And when we see them, we'll lean into them. And I expect us to do that. I do. I think the market -- I've said that we see a great pipeline of companies out there that we believe that will come to market at some point.

And when they do, we will lean into them. And I want flexibility of the balance sheet to be able to lean into them. If our stock gets disconnected, we'll buy our stock back. We have no issues with that either, and we try to stay agnostic to our compensation plan.

So in general, I think those are the ways that we will continue to allocate capital. But I don't -- our ability to invest free cash and the way we've done it in the past with the growth of the companies that we've acquired, I mean, we would do them all day. And so I think it makes a lot of sense for us as we look at the markets. But I think it's also important to know that the companies we've acquired weren't data center driven. I mean, both Dynamic and Cupertino, I mean it was a little bit of the business but it was not 50% of the business.

So if there is some sort of cliff or there is some sort of movement in the market, we're fine. I mean we'll still grow the businesses nicely. It was the synergies that we see today and what's driving some of the outward growth, but it doesn't mean the companies won't grow and be great businesses long term. That's the companies that we're looking for.

Great. Maybe in the last minute here, you have an Investor Day coming up in March.

So I can't talk about it, but I will anyway.

Okay. I mean it seems like you've talked about double-digit earnings growth rate, the solutions provider strategy, major growth opportunities. Anything I'm missing that you'd want to preview that Kip won't let you talk about?

Look, I think we're excited about the business, and I think we're different. And one of the reasons we're excited about having an Investor Day because I think the company is so different. And we've got to explain it. We've got to do a good job of laying it out on a 5-year plan, and we will. But our ability to really of where we're going over the next decade is substantial to me and I think our investor base what we see in like today, yes, big numbers but also way more opportunity. We're in a different space than we've ever been in. Technology will play a huge role in it.

So I think our ability to lay that out to our investor base and stakeholders and talk about it. I'm excited about it. I know Jayshree, I kind of -- we were talking about last night. So it's not something that I take lightly. And when we lean into it, we're going to lean into it and do a good job, and we're excited to do that in March.

Fantastic. Jayshree, thank you so much. Really appreciate it, and best of luck.

Thank you.

Yes. Great questions.

Good morning, and welcome to Quanta Services Third Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference call 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.

Great. Thank you, and welcome, everyone, to the Quanta Services Third Quarter 2025 Earnings Conference Call. This morning, we issued a press release announcing our third quarter 2025 results, which can be found in the Investor Relations section of our website at quantaservices.com. This morning, we also posted our third quarter 2025 operational and financial commentary and our 2025 outlook expectation summary on Quanta's Investor Relations website.

While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community. Please remember that information reported on this call speaks only as of today, October 30, 2025. And therefore, you are advised that any time-sensitive information may no longer be accurate as of any replay of this call.

This call will include forward-looking statements and information 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 or that do not solely relate to historical or current facts. 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 and financial commentary. Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures.

Lastly, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com to receive notifications of news releases and other information and follow Quanta IR and Quanta Services on the social media channels listed on our website.

With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks, Kip. Good morning, everyone. Quanta delivered another quarter of strong results, achieving double-digit growth in revenue, adjusted EBITDA and adjusted EPS compared to the prior year, along with record backlog of $39.2 billion and a number of other record financial metrics. These results reflect accelerating demand in our Electric segment, robust activity across our end markets and positive momentum headed into 2026. They demonstrate the strength of our portfolio, the capability of our craft skilled workforce and our ability to provide certainty through world-class execution as customers modernize and expand critical infrastructure.

Our performance continues to be powered by Quanta's core drivers, craft-skilled labor, execution certainty, and disciplined investment, which are critical to how we operate and create long-term value. Our craft workforce remains the foundation of our business, executing with safety, quality, reliability across diverse infrastructure solutions. Execution certainty reinforces our reputation as a trusted partner capable of consistent high-quality project delivery and disciplined investment ensures capital is allocated toward opportunities that strengthen our platform, deepen customer relationships and support sustainable growth.

Quanta's integrated solution-based model continues to differentiate our platform. By combining craft labor with engineering, technology and program management expertise and critical supply chain capabilities, we deliver comprehensive self-perform solutions across the full infrastructure life cycle. This approach deepens customer partnerships and positions Quanta as a long-term collaborator, not a traditional contractor.

Quanta operates at the center of a fundamental transformation in the energy and infrastructure sectors. The convergence of the utility power generation, technology and large load industries is driving increased demand for resilient grids, expanded generation and storage and new infrastructure to support electrification, data centers and domestic manufacturing. These structural drivers are fueling a generational investment cycle and critical infrastructure. And Quanta's diversified scalable platform is well positioned to capitalize on these opportunities.

To that end, this morning, we announced the expansion of our Total Solutions platform that builds upon our world-class craft-skill labor capabilities and history of constructing more than 80,000 megawatts of power generation through our industry-leading renewable energy and battery energy storage solutions as well as other forms of generation. Our Total Solutions power generation platform leverages these capabilities to address growing generation and infrastructure needs due to the rapidly increasing demand for electricity from data centers, manufacturing and reshoring, industrialization, electrification and power grid expansion. This platform is focused on providing a fully integrated solution to high-quality customers for their generation development strategies.

As a demonstration of this platform strength and scalability, NiSource has engaged Quanta's for a design, procurement and construction execution of generation and infrastructure resources capable of producing approximately 3 gigawatts of power for a large load customer. This project highlights the strength of our total solutions platform, spanning power generation, battery energy storage, transmission, substation and underground infrastructure and underscores the value of our collaborative approach and builds on our relationship with NiSource and strong presence in Indiana.

We believe these announcements reinforce our strategy to lead in large converging markets where utilities, power consumers and industrial operators require scalable integrated solutions. We expect to achieve record backlog and another year of double-digit earnings per share growth in 2026. Our strategy remains focused on delivering certainty to customers, investing in talent and technology and expanding our addressable markets through disciplined strategic growth.

Quanta's resilient solution-based model has performed well through varying market conditions. Our strong execution, disciplined investment and commitment to safety and quality continue to differentiate our platform and support sustainable value creation for our shareholders.

I will now turn it over to Jayshree Desai, Quanta's CFO, to provide a few remarks about our results and 2025 guidance, and then we will take your questions. Jayshree?

Thanks, Duke, and good morning, everyone. This morning, we reported third quarter results with revenues of $7.6 billion, net income attributable to common stock of $339 million or $2.24 per diluted share adjusted diluted earnings per share of $3.33 and adjusted EBITDA of $858 million.

Based on our continued backlog momentum and strong revenue growth during the quarter, we are raising our full year revenue expectations to a range of $27.8 billion to $28.2 billion. We are also raising our full year free cash flow expectations to $1.5 billion at the midpoint, driven by another quarter of healthy free cash flow, which totaled $438 million.

During the quarter, we issued $1.5 billion of notes to recapitalize the balance sheet and enhance our liquidity position following the acquisition of Dynamic Systems. The interest rate on these notes was approximately 40 basis points lower than our issuance in the third quarter reflecting the benefit of our recent ratings upgrade and the stability of our earnings outlook. This transaction reinforces our ability to support operations, maintain financial flexibility and deploy capital strategically while preserving our investment grade rating.

Our customers continue to value Quanta's differentiated self-perform craft labor solutions, and we are expanding our platform for growth as evidenced by the power generation platform we announced today. These dynamics, coupled with another quarter of record backlog give us confidence in our ability to drive sustained revenue and earnings growth over the coming years.

As we look toward 2026, the end market momentum and our consistent execution position us to deliver another year of double-digit adjusted EPS growth and attractive returns. We believe the opportunities ahead represent the next phase of a generational investment cycle in critical infrastructure, and Quanta is well positioned to lead through it, delivering consistent performance disciplined capital deployment and long-term value creation for our stakeholders. Additional detail and commentary on our 2025 financial guidance can be found in our operational and financial commentary and outlook expectation summary both available on our Investor Relations website.

With that, we're happy to take your questions. Operator?

[Operator Instructions] Our first question is from Steve Fleishman from Wolfe Research.

Can you hear me?

Please go ahead.

Yes, we can.

Yes. Okay. Great. Appreciate it. Okay. I will follow the rule and try to stick to 1 question. The -- Yesterday, we heard from AEP talking about a potential partner for their high-voltage transmission opportunities. Maybe I'd be curious if you could comment on whether that would likely be you? And then also just how much of the kind of high voltage transmission that's being discussed in Texas, PJM is kind of already in any backlog? Or is that all mainly to come? And when might we see it?

Yes. Thanks, Steve. With AEP, look, they're a large customer of ours have been for many, many years. We have great relationships there. And I do think we're collaborating on [ 765 ] capabilities and doing a lot of different things together. So I do -- there's more to come there with us. But as we sit today, none of the 765 is in our backlog. We have lots of discussions, lots of vertical, LNDPs, all kinds of different things, but none of that is in the backlog at this point. It's something that we're taking our time with to make sure we get it right.

We're setting the resources and making sure internally that we have the training done and working with the clients on this in a collaborative manner. I do think there's opportunities for us. We've made investments in our transformer facility and done some things there collaboratively with our clients. So yes, we have a great relationship there, probably more to come, and I like our chances on the 765.

Our next question is from Andy Kaplowitz from Citigroup.

Duke, just, obviously, the Total Solutions platform announced today, I think, can provide a whole new driver of backlog growth. But how do you think about execution risk for these larger total solution jobs that include power generation. I don't think you ever really left power generation, but Duke, as you know, when you've focused on bigger power generation, you've had a little more variable performance. So can you get favorable terms and conditions and get comfortable? How do you protect Quanta as you enter these larger jobs?

Yes. I mean, great question. When we think about it, we've built 8 gigs of generation and Zachary's built 6, so for [indiscernible] together. They built 100 CGT. So when I think about it, we put a great partnership together. We collaborated significantly with the client or not only for us but for the end users, rate payers as well as the large load customer. So I think when we look at it in a holistic manner and total solutions, we were able to put together what I consider derisk both sides here on cost escalations and things of that nature. We've said publicly that we're not taking risk on these kind of projects. And I think we've done a great job of working with the client here in a collaborative manner to what I consider to give the rate payer, the right cost as well as the end user but to a large load customer the right cost. So it's really -- I think when we plan -- when we get in front of these things, we can give a total cost solution and derisk everyone in the value chain after we've done that.

Our next question is from Steven Fisher from UBS.

So to -- in 2019, you rolled out this Utility Services model, which reduced the reliance on larger discrete projects and focused I guess it was around 80% plus or so more on kind of Utility Services. And I think that's obviously been a very, very successful strategy. And I'm just curious how we should think about your overall strategy. I know, obviously, it's very heavily focused on being a solutions provider in this new platform. I think you would say is clearly part of providing solutions. But just curious how we should think about framing the strategy between being sort of this more base-level recurring services type strategy versus more of a discrete EPC project delivery that may be a little bit lumpier?

Yes. Thanks, Steve. Look, I think when you look at the company, nothing's changed. We certainly believe that craft skills at the core it's fungible. We'll move across different platforms from MSAs to larger projects and solve the solution-based approach to the client. We're not going to turn down because it's a large project, I mean I think that's part of this and projects are getting bigger. But we're working for clients that we work for decades. And that hasn't changed. We continue to do that. We're also discussing technology as attainment. And I do believe we're addressing that. And so our clients there, we work for decades.

So as we look at both sides of this, and I would tell you that we're still around 80% of base business even with what you see today. Now we've talked about this before, I do believe you're going to get in a period where you start stocking large projects on top of that base. And I've been consistent in that. You're just now starting to see it go up. So I would expect the backlog to continue to increase I would expect us to stack and continue to.

The power plant nor Greenbelt is in our backlog and will continue to stack. So at the larger projects, LNTPs, no 765 in there. I really like our chances of stocking this for decades or more. And we're giving long-term growth profiles. We're doing the things that we need to do to be a consistent compounding earnings platform.

Our next question is from Sangita Jain from KeyBanc.

So can I ask a follow-up on the JV that you announced this morning for the large load center. I'm assuming that this is mostly all your basic high voltage work that you do. But I'm wondering if there's a potential to add further scope to this with the customer itself for low-voltage electrical and mechanical work?

No, this is a full CGGT. I mean it's a full build. That's -- it's a 50-50 partnership. Certainly, we have aspects of this that will perform that internally and then Zachary has aspects of this open really well. So it's a full JV, a full turnkey project, and it's electric scope, too. I think you'll see in the program itself with NiSource, we'll continue to see some stacking there with other things and opportunities. But in general, what you see is us building out that platform of what I consider from the CGT 3 gigs and the battery is around it, and that's what we're building. I hope I answered your questions.

Our next question is from Julien Dumoulin-Smith.

Look, if I could follow up a little bit on this question of scope of business. Obviously, you guys are expanding into the -- more of the generation side. But how do you think about expanding more into the data center side, specifically, right? You're talking about pursuing generation here, specifically for large loads how about getting sort of inside the house. Obviously, you guys have done a couple of acquisitions here. It would seem germane to your strategy to continue to ramp and expand the scope more directly here. How do you think about that and the rate of growth there in specifically?

Yes, Julian. I mean, I think we're down to a shell at this point, and that's from what I can -- you can log and basically build a building. the customers and how we look at it is solution based, if they ask us to build a balance of plan or what I would said the total data center and we can build it. We -- the MEP piece of it, we can grade. We can do whatever is necessary. I think we'll have those opportunities, we'll probably work with general here or there on that. But look, we're in a position where we can build basically the whole data center. We can build a generation behind it, all the way to rack. So I feel real comfortable with how we've positioned ourselves to take advantage of these opportunities when we go fast, 1 person, and we can do that.

So -- it's also working with the client, the utility as well and how that converges, I think, is where the real opportunities for us is that convergence of generation, labor certainty and where we sit in that sphere there. So I like it that we're in front of it. I do think we have a lot of opportunity to continue to build out scope with technology.

Excellent. We'll hear about it grow next year maybe.

Yes.

Our next question is from Jamie Cook from Truist Securities.

Can you hear me?

Loud and clear.

Great. I finally figured it out this time. Anyway, So Duke, I just want to build on your announcement this morning with the total solutions power generation platform and the joint venture with Zachary to build power plants. I guess just taking this a step further, this is sort of unlike you to sort of joint venture with someone. So I'm just thinking longer term, is this sort of you dipping your toe and power generation and getting more comfortable. To what degree do you think you need to do an acquisition and acquire someone to do full EPC power plants? Like is this a step in at dipping your toe and then over time, you would do an acquisition so you could do everything, I guess, by yourself.

Yes, Jamie, I look at it like we're listening to our customer and they're asking us to expand our services. And I believe we've got the capabilities to do so. So we're working with select customers on this and long-standing customers on power generation. I do think it's a great business for the foreseeable future. Zachary was a great company, very much valued the same as us, know well, the family well. great opportunity for us to work together on some things that they do better than us. And we have the capabilities internally to do everything so do they. We felt like this was a great venue for us in Indiana to work together to build this plan.

Risk is always concerned me in these combined cycles. And I believe we've done a nice job here of a collaborative with the client. So I feel real comfortable with that. Yes, we can expand here. It can be a large what I consider opportunity for the company, and we'll take advantage of it. But in select cases, I'm not going to get pressured to go sign up 10 combined cycles. It's just not who are and we'll make sure that we limit ourselves to strategic partners and people that will collaborate with us on a total solution. This is a large program. It's very much a solution for us.

And I think we've done it the right way with the JV to mitigate some risk for the client and ourselves. So I think it's a smart way to kind of -- for us to go into Indiana and the other places, other kind of machines, we would look at it differently. But for this one, this was a great opportunity for us. And I think what we've leveraged our capabilities along with Zachary to have a complete solution for the client.

Our next question is from Ati Modak from Goldman Sachs.

I'm just wondering, as you think -- as you think about the JV opportunities in general, is there a way to think about the dollar value of the projects, maybe on a gigawatt basis or whatever way you would like to guide us. And what's the view on the total market opportunity that you have for CCGTs as it stands today? And what is a reasonable market share for you longer term.

I think how to look at the JV is just kind of when we think about our portion of it, it's -- the whole thing is similar to SunZia. I mean I think that's how you have to look at this and how we're looking at it, we have half the CCGT, but on the other side of that, Quanta with other opportunities there with battery and other things. So I think I would look at it like a SunZia from a standpoint from our revenue base. Although the JV will be half, we're 50-50 on that, and Jayshree can walk through the accounting, but it's 50-50.

And as far as the market, look, I wouldn't get it all lathered up that we're going to go after all the CCGT that are out there. That's not who we are. We're really going to -- we're focused on our customers and in certain programs and where it can be more a total solution, much like what you've seen with NiSource in Indiana. We want that total solution. We're not going to -- if it's a one-off I do not believe you'll see us in that arena unless we can -- unless it makes total sense, but I doubt it. So I think we're going to be extremely selective here on how we -- a good market with combined cycles.

Our next question is from Nick Amicucci from Evercore.

Guys, can you hear me?

Yes.

Right. Perfect. I just wanted to kind of touch upon. So just given kind of the massively increased demand for natural gas as the feed fuel. I mean, have you guys been having some conversations. Obviously, the pipeline business is kind of targeted to be down this year. Just kind of thinking about the available infrastructure currently within the United States and then the need -- the inevitable need for some more. Just wanted to get a sense of are people starting to talk about that? Or is it still very early innings?

I mean I think we have probably a conversation every day about a piece of pie. When I think about it, I wouldn't -- when I go into next year, it's [ $50 million ]. That's what we're going to guide. And we're not going to -- unless we have book work against it, we're not going to get ourselves in a position where that's something that the company is focused on, and we'll build it. We certainly see it. We have great customers there. It will be selective. The risk profiles and everything else on a large diameter pipe, and it's lumpy. We're trying to be a compounder of earnings and give good guidance for multi years and decades in fact. So it's hard to do when you the lumpiness of big pipe. It's just not us.

And so I think, yes, we can build billions in pipe. It's just a matter if the client needs us to do it, and we'll have to do it in a way that we can derisk ourselves. I don't like the weather risk, the mat risk, a bunch of different things there. If we can do it ourselves, we'll build it all day. do you think the opportunity is there. It's a good market, and certainly, you can see it. It's still tough at the state level and permitting. We're not passed that yet.

Our next question is Ameet Thakkar from BMO.

One of your earnings supplements, I think kind of said that your solar and storage backlog increased pretty significantly versus last quarter. I was just wondering if you guys could provide a little bit more color on how much did it increase? And then what do you guys see as the kind of drivers of that? Is that more from the legislative and safe harbor certainty? Or is this kind of just more follow-through from kind of the power demand environment that's out there.

Nothing new, business hasn't let up. We said it last quarter, I'll say it again. It's just LNTP are coming into FNTPs. Nothing new. I think we're growing the business. Obviously, power is in need and if you can build it faster with renewables and batteries, that's what's happening. And the fastest thing in the market right now is we'll be all encompassing in power and generation. The fact that we put in this what I consider as other solution now, it will continue. And I think backlog in the renewables side has been great. The inbounds are great. And I don't think it's pull-in I think it's just the normal course. And we're seeing a nice market there. We continue to see it. Battery storage business is fantastic. We're happy with where we sit in the market. And now that we can provide a larger solution, I think it's great. And you'll continue to see us follow our customers.

I mean if you look at our bigger customers and look at what they're saying, I think we're right there in front of them or right there with them. And it's important to us to be able to say yes to a customer app when they ask us to do something and they ask us to go with them that we can say yes and have the capabilities to do so. The 67,000, 68,000 employees we have out there they're fungible in many ways that we can move them around. We have to do a great job up here of making sure that we have the -- what I consider the end markets to move to, and we can be more selective and we have been.

So that renewable piece is a part of it. We're building a lot of renewables in Indiana. And so that same workforce will move over and do some CGT work. So I just think we're dimly fungible. We're happy with where we sit. And backlog was broad-based, and we had not put the bigger projects in it.

Our next question is from Justin Hauke from Robert W. Bird.

Great. I guess I just wanted to build on Jamie's question. The thing, I guess, you guys have always self-performed so much of your work and that's sort of a way that you've mitigated risk. And so just with the joint venture, maybe you can clarify kind of what's in your wheelhouse that you'll be doing and what's in Zachary's in terms of the combined cycle gas plants. And then also just on the margin profile. I know you're not looking to do kind of discrete one-off plants. But I guess, how we would think about it is historically, the margins on those have been a little bit lower than the grid work just because the utilities, the ROEs are lower on that CapEx versus the spend on grid with some of the adders. So anything different from the margin profile on the work that would be coming in on that kind of those are the questions.

Yes. As far as who's performing, what I mean both of us can perform total solution. So I think they're bare certain things than we are. And we'll make sure from an engineering standpoint, they're certainly the engineering staff and the capabilities there. So the front end side of it, the back end side of it makes a lot of sense for Zachary and then, of course, we'll balance each other across the plant, whether it's internal subcontract however we decide to do it. But we're capable of doing the whole thing. I think what the right answer is, how do we -- we continue to use local content in Indiana. We have a great presence there. We'll work with the client on that to make sure that we're pulling in local content into the state as well as we have offices there. We can sell, perform all the mechanical, perform all the electric. Basically can do it all. I just -- it's kind of a '27, '28 build with the ramp in '28 -- '27, '28, and we'll just have to see where we're at there. But -- and we have all those capabilities internally. We'll just balance each other there. As far as margin profile, I would tell you it's at parity or better in the segment.

Our next question is from Phil Shen from ROTH Capital.

Guys, can you hear me okay?

Yes.

Please go ahead.

Guys, can you hear me okay?

Loud and clear.

Okay. Great. I know you haven't given guidance for '26. But as we wind down '25, can you share what the growth trajectory for organic growth might look like for perhaps comments on the different outlook for Electric Infrastructure and UUI. If you can't take that, perhaps you can comment on the margin profile, the expanded total solutions platform compared to the current electric power margins is the deal with NiSource or margin accretive or in line with current run rate?

It's in line or accretive on the first -- on the last question. And as far as guidance and where at. I mean, look on '25, we're in line see some save $10 million or 1 way or the other around $2.8 billion. I wouldn't get worked up about it. We hit it down the middle and I think we've taken into account a lot of things and getting conservative guidance. More importantly, when we look at guidance, I mean, I'm looking in '28, '29, what we're saying, we floored it at 10% and kind of 15% EPS -- adjusted EPS at the midpoint, given all levers of the balance sheet and 20% is what we've done. So I don't know. I think I've given you 5-year guidance as far as I'm concerned, outward -- and so I don't -- that's the guidance. And it will be somewhere in there when we go to the street.

Our next question is from Chad Dillard from Bernstein.

So a big picture question for you guys. So over the medium and long term. How do you think the power misty evolves to serve large lot customers like data centers? Is it the [ J-code ] like we're seeing with NiSource, is it behind the meter? Is it traditional grid connection? I know it's a combination of all the above, but to get a sense for like how you think that mix evolves? And then I guess, secondly, when it comes to the JV just announced, how do we think about the contract structure, and just like how you guys are thinking about bidding is this competitive? Is it in book? Any color on that would be helpful.

I mean I think it's all of the above when you look at these things. Some of it, we're starting on. We don't have any issues with. We can -- as long as we can scope it and feel good about it. We're happy to have lump sum on things. It doesn't -- we can do that. But if it's stuff that we don't understand and we'll derisk ourselves. You can expect that. I mean I've said it publicly, we're not going to take risk on these larger projects with our labor and our labor force and everything we have for certainty, it's not the right answer for the client. And so I think us working together preplanning early and upfront is extremely important for us when we look at the future of how we build things, especially today.

Our next question is from Sherif El-Sabbahy from Bank of America.

I just wanted to touch on M&A a bit. Just as your backlog builds on multiyear demand, would you ever consider shifting your M&A focus to complement your craft labor pool by acquiring smaller service providers? Or do you feel that the steps you've taken internally to grow the labor pool are you able to match the workload that you want to take on in the coming years?

Yes. I mean we don't buffer capacity. We never have its strategy totally. And so when we think about it, we're filling a strategic gap you could expect us to do so. I think we've done a nice job with that. stayed in front vertical supply chain. We don't talk about that much, but I think we've done a really nice job of our vertical supply chain and what we can do with that. We continue to add there. I think we have probably 10 projects ongoing that are enhancing our vertical supply chain that doesn't get talked about.

And so we were going to -- from our standpoint, we're filling the needs of the solution-based approach for our clients. And we'll continue to do so. We're adding fabrication. We're adding just about everywhere, but it's all strategic around the client. And look, I would say we're ahead in that, and we'll continue to buy great family companies make huge difference in how we think about it. The culture and the company means so much more than anything else. And then we start there and does it fit the strategies next and then the financials will be after.

But as far as I'm concerned, we pay a nice, what I consider multiple for a great company. And we've -- you've seen us go from civil to transformers to other things. They all have a purpose and they all have a strategy. We'll continue to leverage that strategy as we move forward in great markets that we have with technology and utilities.

Our next question is from Brent Thielman from D.A. Davidson.

Okay. Great. Do a bit of a follow-on to that last question. But when you look across this sort of massive craft workforce you've accumulated here. Are there trades in particular where you see real scarcity such that it's actually somewhat of a limiting factor to our growth. The growth has been good, obviously. And maybe where you're especially focused on sort of recruiting talented -- out there?

Yes. I think we've added about 6,000 with acquisitions. So this year, a little over. So quarter -- year-over-year -- so when you think about it, I mean, we've invested in that craft-skilled workforce and our apologies, our campuses in everything we've done their curriculum. We can move that curriculum into all phases of craft. Now I mean we're early in our technology piece, Cupertino acquisition was a great platform. That inside wireman like as far as I'm concerned, is scarce, it's probably where you see scarcity. We've been able to add fabrication. We continue to add premanufacturing, let's call it, premanufactured products that are allowing us to scale it.

But I think that's probably when I think through it, we'll continue to beef that program up and add faster to our inside arm. And then now we're in plumbing mechanical all kinds of trades there from our mechanical business. So that's next, and we'll continue to add curriculum some kids don't want to get in the air. And some of these businesses are more local than others. So on our high voltage, we travel, we can't -- they're starting to do more of that on the end side, but it was predominantly local. So we have to build these levels much, much stronger. And you'll see us do that. You'll see us add there. But in general, I would tell you that the inside piece of it in the mechanical piece, we're early. So that's where the gap is for us and try to enhance that as quick as possible.

Our next question is from Mike Dudas from Vertical Research Partner.

Duke, given the tertiary demand you're seeing and the tightness in capacity, are your customers starting to recognize they need to secure your time your MSA, our resources at a more quicker rate? And does that lead to maybe better scale and execution on margins as we move forward? And maybe an answer to that, any concern on how the industry is going to pay for all this capacity that's coming through, certainly living in New Jersey, we've been seeing a lot of issues on rates going up, et cetera. Just wanted to get your thoughts on how that's a place or as you're talking to utilities and your developers?

Yes. I mean I think affordability is always an issue. Fuel is a big piece of the bill, I mean, 60% interest and is going down, you got to look at your fuel as well. And so that's -- those 2 are big pieces of a bill. Now I do think you're going to see large transmission get built and things of that nature, PJM is shares sharing of infrastructure. So there's different models out there. But I'll go back to -- I think if you look at technology and look at where the loads coming, you haven't built the transmission line in the United States, it's not MPV-positive, number one.

Number two, generation the more generation, you can see it with the NiSource example, where the rate payer is actually benefiting from the load. Those models are out there. And I do think technology is willing to pay their way. So you're seeing utilities and technology come together for what I think is the benefit of the rate payer here. And it's taken a little bit of time -- but as that goes forward, look, we all have to be put in and watch the affordability piece of this, but the NPV on the other side of it is a downward trajectory. So I like what I see. I think we'll get there, and you'll see a positive effect to the rate payer, we all have to be cognizant of.

Our next question is from Alex Rigel from Texas Capital Securities.

Nuclear power can -- momentum here. Can you talk about how Quanta might get involved in that?

Yes. I mean, look, as long as we don't have to go behind that, what I would consider nerves and the new fence. We're good. I mean I think once you get behind there, we have to derisk ourselves and think hard about it. It's not something that the company is jumping up and down to take a risk on. We're always around the edges on things. And I think as long as we can do the things that we know how to do and stay out of the nuclear fence. We feel real comfortable that we're not the reactor person, and we're not the person inside defense. There's a lot of ancillary things we can do and will do. But once we cross the line of that fence, it's not us.

Our next question is from Brian Brophy from Stifel, Nicolaus.

Just following up on the NiSource project. Curious if you can comment on whether that is structured as a cost plus or a fixed price project. I assume it's fixed price, but I think you've alluded to in the past, potentially structuring those on a cost-plus basis to derisk. I'm just curious if you can provide any color.

Yes. I mean, we're involved in what kind of contract structure we have. But I would just say, look, I'll stand by my comments previously that the company on these type of projects are not -- we're not going to take certain kinds of risk on them. And so I feel comfortable with where we sit there. I feel comfortable with the conduct and I can look, everyone all the investors in the eyes and say everything I've said about risk on a combined cycle, we have not taken that. So I'm happy with where we sit, happy with the contract structure that's -- it's a collaborative structure with the client that allows both to come out in a way that we can derisk both of ourselves and give the right answer to the ratepayer as well as a large load customer.

So I like where it sits I'm not going to get into exactly what the structure looks like. Abby did a great job there, and I'm extremely pleased with where we sit. And we have a great offering with Zachary built 100 plants and ourselves a bit gigs generation. I'm super happy with how we sit and Indiana and what we're doing there for the local economy. It's a great partnership with NiSource. I hope it continues and it should.

Our next question is from Maheep Mandloi from Mizuho Securities.

Maybe just 1 question on the JV and maybe this for Jayshree. So can you just talk about the accounting here. It seems 50-50 JV and NiSource talked about like a $6 billion, $7 billion CapEx. Could we assume that $3 billion coming through to some backlog here and in terms of the rev rate, could you share that? Or how to think about that here?

I think the backlog will be incremental on that. So you can -- I would tell you, the larger piece to that is air permit, it will hit second half of next year that will come into backlog. And you should look at our piece of it similar to SunZia, how it kind of stacked up, and that's how I would look at the thing. And then as far as the combined cycle, it's 50-50.

Yes. And the accounting on that, as we said, will be portion. So we'll just -- the income statement will reflect our share of that work on -- from the revenue all the way down to the profit and balance sheet as well.

There's parts of the battery and things like that are straight to Quanta and parts of it that are part of the JV.

Yes. And just to make sure that, as Duke said earlier, we -- the backlog will reflect as the work progresses. So we're in LNTP phase now. We'll move forward in those things. As Duke mentioned, there's an [ error ] permit that has to get has to be obtained middle of next year. That's when it really hits FNTP. So you can expect most of the revenue and as Duke was saying, is it starts in the back half of '26 and really more into '27 and '28.

Yes. There won't be anything meaningful -- I mean as far as going to construction or revenues in '26.

Correct.

Our next question is from Adam Thalhimer from Thompson, Davis.