Quanta Services, Inc. (NYSE:PWR) Q3 2025 Earnings Call Transcript

Quanta Services, Inc. (NYSE:PWR) Q3 2025 Earnings Call Transcript October 30, 2025

Quanta Services, Inc. beats earnings expectations. Reported EPS is $3.33, expectations were $3.25.

Operator: 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.

Kip Rupp: 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?

Earl Austin: 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-skilled 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?

Jayshree Desai: 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 2024 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?

Q&A Session

Operator: [Operator Instructions] Our first question is from Steve Fleishman from Wolfe Research.

Steven Fleishman: I will follow the rule and try to stick to one question. 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?

Earl Austin: 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 verbals. We have LNTPs, 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.

Operator: Our next question is from Andy Kaplowitz from Citigroup.

Andrew Kaplowitz: Duke, Jayshree, 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?

Earl Austin: Yes. I mean, great question. When we think about it, we’ve built 8 gigs of generation and Zachary has built 6, so 14 gigs put together. They built 100 CCGTs. So when I think about it, we put a great partnership together. We collaborated significantly with the client not only for us but for the end users, ratepayers as well as the large load customer. So I think when we look at it in a holistic manner at 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 ratepayer the right cost as well as the end user, which is 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 here and I think we’ve done that.

Operator: Our next question is from Steven Fisher from UBS.

Steven Fisher: So 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?

Earl Austin: Yes. Thanks, Steve. Look, I think when you look at the company, nothing’s changed. We certainly believe that craft skill is 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 [indiscernible]. 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 stacking 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. Nor the power plant nor green belt is in our backlog and it will continue to stack. So at the larger projects, LNTPs, no 765 in there. I really like our chances of stacking 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.

Operator: Our next question is from Sangita Jain from KeyBanc.

Sangita Jain: 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 or mechanical work?

Earl Austin: No, Sangita. This is a full CCGT. 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 that they’ll perform really well. So it’s a full JV, a full turnkey project, and it’s electric Scope 2. 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 CCGT 3 gigs and the batteries around it, and that’s what we’re building. I hope I answered your questions.

Operator: Our next question is from Julien Dumoulin-Smith.

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?

Earl Austin: Yes, Julien. I mean, I think we’re down to a shell at this point, and that’s from what I can — you can put a slide and basically build a building. The customers and how we look at it in solution based, if they ask us to build a balance of plan or what I would say the total data center and we can build it. The MEP piece of it, we can go — we can grade. We can do whatever is necessary. I think we’ll have those opportunities. We’ll probably work with a 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.

We want to go fast, one 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. And I do think we have a lot of opportunity to continue to build out scope with technology.

Julien Dumoulin-Smith: Excellent. We’ll hear about it grow next year maybe.

Earl Austin: Yes.

Operator: Our next question is from Jamie Cook from Truist Securities.

Jamie Cook: 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 in 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 dipping your toe and then over time, you would do an acquisition so you could do everything, I guess, by yourself.

Earl Austin: 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 them well, know the family well, a 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 concerning me in these combined cycles. And I believe we’ve done a nice job here of working 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 we 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 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 is to have a complete solution for the client.

Operator: Our next question is from Ati Modak from Goldman Sachs.

Ati Modak: I’m just wondering, as you think about the JV opportunities in general, is there a way to think about the dollar value of the project, 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?

Earl Austin: 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 doing direct with other opportunities there with battery and other things. So I think I would look at it like a SunZia from that standpoint and 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 CCGTs 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 go to market with combined cycles.

Operator: Our next question is from Nick Amicucci from Evercore.

Nicholas Amicucci: 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 — it was 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?

Earl Austin: No. I mean I think we have probably a conversation every day about a piece of pipe. When I think about it, I wouldn’t — when I go into next year, it’s $500 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’re with 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 and that risk, a bunch of different things there. If we can derisk ourselves, we’ll build it all day. And I do think the opportunity is there. It’s a good market, and certainly, you can see it. It’s still tough at the state level in permitting. We’re not past that yet.

Operator: Our next question is Ameet Thakkar from BMO.

Ameet Thakkar: On 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?

Earl Austin: Our renewable business hasn’t let up. We said it last quarter, I’ll say it again. It’s just LNTPs that 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. 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 total 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, 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 CCGT work. So I just think we’re extremely fungible. We’re happy with where we sit. And backlog was broad-based, and we had not put the bigger projects in it.

Operator: Our next question is from Justin Hauke from Robert W. Baird.

Justin Hauke: 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? So kind of those are the questions.

Earl Austin: Yes. As far as who’s performing what, I mean both of us can perform total solutions. So I think they’re better at certain things than we are. And we’ll make sure from an engineering standpoint, they certainly have 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, how 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 self-perform all the mechanical, we can self-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.

Operator: Our next question is from Phil Shen from ROTH Capital.

Philip Shen: 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 ’26? 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 margin accretive or in line with current run rate?

Earl Austin: It’s in line or accretive on the first — on the last question. As far as guidance and where we’re at, I mean, look on ’25, we’re right in line. I see some say $10 million or one way or the other on $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 giving 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.

Operator: Our next question is from Chad Dillard from Bernstein.

Charles Albert Dillard: So a big picture question for you guys. So over the medium and long term, how do you think the power industry evolves to serve large load customers like data centers? Is it [indiscernible] model 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 I would love 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 it competitive? Is it open book? Any color on that would be helpful.

Earl Austin: I mean I think it’s all of the above when you look at these things. Some of it, we’re certain 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. 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.

Operator: Our next question is from Sherif El-Sabbahy from Bank of America.

Sherif El-Sabbahy: 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 able to match the workload that you want to take on in the coming years?

Earl Austin: Yes. I mean we don’t buy for capacity. We never have a 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. We’ve stayed in front of 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’re 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 and 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 then 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 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.

Operator: Our next question is from Brent Thielman from D.A. Davidson.

Brent Thielman: 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 folks out there?

Earl Austin: Yes. I think we’ve added about 6,000 with acquisitions this year, a little over, quarter — year-over-year. So when you think about it, I mean, we’ve invested in that craft-skilled workforce in our colleges and our campuses and everything we’ve done [ via ] 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 wireman.

And 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 inside, but it was predominantly local. So we have to build these locals much, much stronger. And you’ll see us do that. You’ll see us add there. But in general, I would tell you the inside piece of it and the mechanical piece, we’re early. So that’s where the gap is for us and try to enhance that as quick as possible.

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

Michael Dudas: Duke, given the extraordinary demand you’re seeing and the tightness in capacity, are your customers starting to recognize they need to secure your time, your MSA, your 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 ancillary 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 plays through as you’re talking to utilities and your developers?

Earl Austin: Yes. I mean I think affordability is always an issue. Fuel is a big piece of the bill, I mean, 60%, and interest. Interest 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 [ sharing ] 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 NPV-positive, number one. Number two, generation the more generation, you can see it with the NiSource example, where the ratepayer is actually benefiting from the load.

Those models are out there. And I do think technology is going to pay their way. So you’re seeing utilities and technology come together for what I think is the benefit of the ratepayer here. And it’s taken a little bit of time. But as that goes forward, look, we all have to be prudent 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 ratepayer. We all have to be cognizant of.

Operator: Our next question is from Alex Rygiel from Texas Capital Securities.

Alexander Rygiel: Nuclear power is gaining momentum here. Can you talk about how Quanta might get involved in that?

Earl Austin: Yes. I mean, look, as long as we don’t have to go behind that, what I would consider [ NERC-fence and the nuc-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. So 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 the fence. 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.

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

Brian Brophy: 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 would 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 it. Just curious if you can provide any color.

Earl Austin: Yes. I mean, we’re not going to get 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 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. Abbey 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 have built 8 gigs of generation. I’m super happy with how we sit in 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.

Operator: Our next question is from Maheep Mandloi from Mizuho Securities.

Maheep Mandloi: Maybe just one question on the JV and maybe this is for Jayshree. Can you just talk about the accounting here? It seems like 50-50 JV and NiSource talked about like a $6 billion, $7 billion CapEx. Could we assume that $3 billion coming to some backlog here? And in terms of the rev rec, could you share that? Or how to think about that here?

Earl Austin: I think the backlog will be incremental on that. So you can — I would tell you, the larger piece to that is air permits. 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 we look at the thing. And then as far as the combined cycle, it’s 50-50.

Jayshree Desai: Yes. And the accounting on that, as we said, will be proportional. 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.

Earl Austin: There’s parts of the it with the battery and things like that are straight to Quanta and parts of it that are part of the JV.

Jayshree Desai: 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 air 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 pickup. And as Duke was saying, it starts in the back half of ’26 and really more into ’27 and ’28.

Earl Austin: Yes. There won’t be anything meaningful — I mean as far as going to construction or revenues in ’26.

Jayshree Desai: Correct.

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

Adam Thalhimer: Guys, nice quarter.

Jayshree Desai: Thank you.

Adam Thalhimer: If you can comment on the Dynamic acquisition, how the integration is going? What kind of demand you’re seeing generally in Texas? And what would be your appetite for more mechanical construction acquisitions?

Earl Austin: I mean I think we’re extremely pleased with the acquisition. We bought a great family business, long-standing, everything that we thought, we do it 10 times over. I feel like as far as how it’s integrated with our offering now, I mean the inbounds and what we can do certainly picked up on the mechanical side. We’re addressing and investing them. We can do a lot from fabrication. They already had large facilities and broad-based service offering. So we’ll expand it very quickly, much like we’ve done with Cupertino and Blattner. So I think you can see that type of expansion with DSI. As far as mechanical, look, it’s trades — as long as it fits the profiles and the trades, we would look at it. It’s something we’re starting.

We’ll work with DSI to look at opportunities as they come in. Nothing imminent, but we’ll continue to look at that offering. I like the business. It’s obviously — we have peers there, and they’ve done a really nice job. They’re ahead of us, but we’re catching up pretty quick. And I like where we’re going.

Operator: Next from Joe Osha from Guggenheim Partners.

Joseph Osha: Lots of talk about combined cycle gas. I’m a little curious, we hear a lot about single cycle going inside the fence alongside some of these big data centers to complement [ grid ] scale renewables. I’m wondering if that’s perhaps part of the work that you’re seeing or perhaps contemplating.

Earl Austin: Yes. I mean we said that before. I mean when we started putting this group together, it was really around the single cycle. So we felt like that was something right down the road for us. But it’s led to where we’re at today and having more of a total solution to it. But we have a nice group that we’re looking at it all. I mean, I think it’s important for us not only for the technology or the large load customer on the other side, but the utility as well and how we interface that and speed this process up. Everyone right now is around speed. And I think we can provide a unique solution with the moat around the utility and helping both sides of this. So like I said, it comes together at generation and craft skill, which we check both boxes and the certainty thereof.

And can we move faster with single cycles? It’s speed to market, whether it’s solar, batteries, single cycle, the combined cycle lead times, if you have the engines, just all those things matter here. It’s a race. And I think in general, for generation, and we’re right in the middle of it. So I’m pleased with where we sit.

Operator: Our last question is from Laura Maher from B. Riley.

Laura Maher: My question is, are there — the utility seeing any regulatory pushback to fund T&D growth?

Earl Austin: I mean I think you would see affordability issues that are in certain places. But most of the commissions are really as long as it’s a positive to the ratepayer. And like I said, I mean, most transmissions NPV positive. Every commission is different and every state is different, so they approach it in different ways. But for the most part, I mean, everyone the need for infrastructure is there, and we want a modern, robust grid. I mean, in order to have an economy that we see today, the grid has to be modern. And not only are we seeing these new projects, but just you still have an ongoing — I mean, we performed very nicely for 3 decades in negative load growth. And that business is still there. I mean we still have to operate these systems.

And so you have that ongoing with the load in front of it, and it’s broad-based. So I think the commissions we’re there to serve, and we’re going to make sure that the affordability of the ratepayer is there as an industry and everyone is cognizant of that. And fuel, how do you purchase fuel, your fuel source, taking risk on larger projects. I mean, I think everyone is looking at risk on the outer years in stranded assets, all kinds of different things that you can get into. And that’s why you’ve seen the pace be a little slower with technology because they want to make sure that the stranded assets are not at the ratepayer. But as you see, I believe the models are there that will move much faster now that the models are in place to solidify the fact that the ratepayer benefits in most cases.

Operator: Thank you. We have no further questions at this time. I will turn the call back over to management for closing remarks.

Earl Austin: I want to thank the 68,176 men and women in the field who make these calls possible and our field leadership who continue to make us look good. And thank you for participating in our conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you. This concludes our call.