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    PWR
    Earnings call· Jun 2026(Q2 FY26)

    QUANTA SERVICES Q2 FY26 earnings call PWR

    Jul 30, 2026 Source

    Executive summary

    Quanta Services Q2 FY26 — Record Backlog and Raised Full-Year Outlook

    Quanta Services delivered a strong Q2 FY26, significantly exceeding expectations with robust double-digit growth across key financial metrics and achieving a record $53 billion backlog. The company raised its full-year guidance, reflecting broad-based organic strength, strategic acquisitions, and improved visibility into its technology and utility end markets. Management emphasized its self-perform capabilities and substantial investment in craft labor as foundational to its solutions-based model, driving long-term compounding growth.

    Highlights

    5

    • Reported Q2 FY26 revenues of $9.6 billion, meaningfully exceeding expectations.

    • Achieved adjusted diluted EPS of $4.24, reflecting strong double-digit growth.

    • Reached a record backlog of $53 billion, indicating strong future demand.

    • Raised full-year 2026 revenue guidance to a range of $39.3 billion to $39.7 billion.

    • Improved debt-to-EBITDA ratio to 1.7x, down from 1.95x at the end of 2025.

    Concerns

    1

    • New York State data center ban or pause

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $39.3 billion and $39.7 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $4.1 billion and $4.2 billion
    high materiality
    High
    Full-year 2026 Adjusted EPS
    $16.45 and $16.95
    high materiality
    High
    Full-year 2026 Free Cash Flow
    $2 billion and $2.5 billion
    high materiality
    High
    Long-term Free Cash Flow Conversion Rate
    55% to 60%
    medium materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Electric
    Duke states the Electric segment has the ability to operate at 10-12% margins, with 12% being the utmost when large transmission and all aspects are stacked. It's a big segment, and the mix is constantly evaluated.
    Operating margin potential: 10% to 12%
    		—moving up—10% to 12% (potential operating margin)
    Underground & Infrastructure
    Management aims for double-digit margins and believes it's possible to reach parity with the Electric segment depending on work mix and risk.
    		—moving up—double digits (target)
    Renewables
    Performing very well and setting records.
    		—setting records——
    Technology
    Has grown to 15-20% of the business over the last 2 years, with significant growth potential. Includes data centers, manufacturing, medical.
    		15% to 20% of businessgrowing faster than the rest of the business——
    T&D (Traditional)
    Currently experiencing double-digit growth, with larger projects expected to drive even greater growth in the future, extending well past 2030.
    		—double-digit type growth——

    Operational metrics

    13
    Adjusted Diluted EPS
    $4.24strong double-digit growth
    Q2 FY26

    Exceeded expectations.

    Adjusted EBITDA
    $1.1 billionstrong double-digit growth
    Q2 FY26

    Exceeded expectations, included approximately $11 million from acquisitions made during Q2.

    Net Income Attributable to Common Stock
    $451 million
    Q2 FY26

    Historically strong results.

    Debt-to-EBITDA Ratio (Senior Credit Agreement)
    1.7xdown from 1.95x at the end of 2025
    Q2 FY26

    Balance sheet and credit profile strengthened, leading to a ratings upgrade by Moody's.

    Total Liquidity
    $2.8 billion
    Q2 FY26

    Includes undrawn facilities.

    Self-Perform Work Percentage
    80% to 85%
    current

    Allows for on-time and on-budget delivery at scale, a core strategy.

    Total Employees Added
    15,000
    FY26 YTD

    Includes acquisitions and organic growth.

    Organic Employees Added
    7,000+
    FY26 YTD

    Significant organic growth in workforce.

    Annual Training Investment
    $250 million
    annual

    Investment over a decade to build craft labor.

    Modular/Prefab Capacity
    7 millionadded 0.5 million square feet with recent acquisitions
    current

    Integrated fabrication approach, enhancing solutions.

    Technology Segment Revenue Mix
    15% to 20%grown over the last 2 years
    current

    Includes chips, data centers, manufacturing, and medical, not just data centers.

    Electric Segment Operating Margin Potential
    10% to 12%
    long-term

    12% is the utmost margin when large transmission and all aspects are stacked, with full utilization.

    Underground & Infrastructure Segment Operating Margin Target
    double digits
    long-term

    Management believes there are opportunities to reach parity with the Electric segment, depending on work mix and risk.

    Industry KPIs

    5
    MetricValueDetails
    End market pipeline15% to 20%% of total revenue
    Acquisition contribution$1.2 billion to $1.4 billion (revenue) and $120 million to $130 million (adjusted EBITDA)USD
    Self perform activity mix80% to 85%%
    Same store organic revenue growth—
    Craft skilled labor headcount capacity85,000+employees

    Orderbook & backlog

    2
    Total Backlog$53 billionQ2 FY26

    record

    Reflects demand in front of the company; larger programs in utility generation and technology load center markets are ahead and expected to stack in the years to come. Expected to continue setting records into Q3 and Q4.

    Book-to-burn (Technology/MEP)prevalentQ2 FY26

    In this type of work, $300 million can be booked and billed on a site in a quarter without showing up in backlog, due to the nature of MSAs and rapid project execution.

    Deals & partnerships

    6
    PhalconAcquisition to enhance geographic presence, scale cross-skill capabilities, strengthen position in technology and load centers, and add diversification.

    One of four companies acquired during Q2 and July 2026. Contributes to fabrication capabilities in the East.

    EnerfabAcquisition to enhance geographic presence, scale cross-skill capabilities, strengthen position in technology and load centers, and add diversification.

    One of four companies acquired during Q2 and July 2026.

    PercheronAcquisition to enhance geographic presence, scale cross-skill capabilities, strengthen position in technology and load centers, and add diversification, specifically focusing on right-of-way and land acquisition services.

    One of four companies acquired during Q2 and July 2026. Provides a unique front-end solution for faster and more economical right-of-way and permitting for both technology and utility T&D projects.

    PSDAcquisition to enhance geographic presence, scale cross-skill capabilities, strengthen position in technology and load centers, and add diversification.

    One of four companies acquired during Q2 and July 2026.

    MultipleTotal consideration for four acquisitions (Phalcon, Enerfab, Percheron, PSD).$1.24 billion of upfront consideration, net of cash acquired, plus approximately $242 million of contingent consideration

    Acquisitions completed subsequent to the first quarter earnings release.

    HEICODeal for high voltage breakers.

    Addresses a critical path in the high voltage infrastructure supply chain.

    Risks & headwinds

    1
    New York State data center ban or pauseCurrent

    Technology segment (including data centers) is 15% to 20% of business.

    Mitigation: Management views the impact as minimal, noting it's already difficult to build in New York. Believes the rhetoric around data centers is a 'fallacy' and that data centers provide significant economic benefits. Backlog projects are cleared of permitting and environmental approvals before inclusion.

    What to watch in Q3 FY26

    4

    Backlog growth and composition

    Q3 FY26, Q4 FY26
    Current$53 billion record backlog
    Targetrecord backlog into the third and probably even into the fourth

    Why it matters

    Backlog health is a key indicator of future revenue and growth, especially with large T&D projects expected to hit.

    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. ... continue to expect us to have record backlog into the third and probably even into the fourth.

    Q&A highlights

    7

    To what extent is Quanta more positive about longer-term margin potential, especially with increased self-perform work and large load projects?

    Duke Austin confirmed that the business has structurally changed, and he sees room for margin improvement, particularly in the Electric segment, which could reach 10-12%. He noted that while guidance is prudent, baking in risks, there is upside potential for margins.

    “Look, structurally, fundamentally, the business has changed. We're seeing it change. We have 2 addressable TAMs, both of which are growing... I do think there's room for margin improvement in the backside.”

    asked by Steven Fisher · answered by Earl Austin

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance & Strategic Execution

    Quanta reported Q2 results significantly exceeding expectations, driven by broad-based organic strength across segments and successful execution of its strategy. The company's solutions-based model, leveraging its large craft workforce and self-perform capabilities (80-85% of work), is creating new markets and growth opportunities, particularly in technology and load center markets. This performance has led to record adjusted EPS for nine consecutive years.

    02

    Acquisitions & Enhanced Capabilities

    Quanta completed four acquisitions (Phalcon, Enerfab, Percheron, PSD) for approximately $1.24 billion upfront, plus $242 million in contingent consideration. These acquisitions enhance geographic presence and scale cross-skill capabilities across electrical, mechanical, civil, and fabrication. They strengthen Quanta's position in technology and load centers, adding diversification and enabling earlier engagement in customer programs to maximize value, with a focus on cultural fit and protecting legacies.

    03

    Technology & Data Center Market Growth

    The technology segment, including data centers, now represents 15-20% of the business and is growing rapidly. Quanta is leveraging its collaborative approach and self-perform capabilities to build balance-of-plant infrastructure for hyperscalers and large customers, ensuring project certainty, on-time delivery, and budget adherence. The company sees significant opportunities in the nexus of grid interconnection for these facilities, with synergies showing up from cross-utilization of labor.

    04

    Modular/Prefabrication Expansion

    Quanta is expanding its modular and prefabrication capabilities, adding 0.5 million square feet to its existing 7 million square feet through recent acquisitions. This integrated fabrication approach, supported by field-experienced engineers, allows for more efficient design and construction. It leads to reduced labor needs and lower overall costs, especially with collaborative clients, by providing certainty and engineering solutions upfront.

    05

    Long-Term T&D Outlook

    The traditional T&D business is performing well with double-digit growth, and significant larger projects (e.g., 765kV corridors, 345kV, 500kV) are in engineering phases. These are expected to hit backlog in late 2026 and field execution in H2 2027. Management anticipates a compounding, decade-long growth trajectory for T&D, similar to pre-2015 periods, driven by underinvestment and utility capital plans, extending well past 2030.

    06

    Craft Labor & Training Investment

    Quanta emphasizes its commitment to craft field labor, having added 15,000 employees in the year (7,000+ organic). The company invests $250 million annually in training, highlighting the long lead time (approximately 4 years) to develop skilled craftsmen. Management notes the fungibility of its labor force across segments (e.g., electricians moving between data centers and gas compression) and does not foresee an oversupply of skilled labor in the near future.

    AI-generated summary of the company’s earnings call. Not investment advice.