Quanta Services, Inc. (PWR) | The Buildout — AI Infrastructure
The Verdict
Quanta Services designs, engineers, procures, constructs, upgrades, and repairs physical infrastructure for electric utilities, power generators, pipelines, and large load centers. Its part in the AI buildout is to deliver the front-of-meter grid, substation, interconnection, and generation work, plus behind-the-meter electrical and mechanical scope, that connects AI data centers to reliable power.
| Market Cap | — |
| Revenue (TTM) | $32.8B |
| Revenue Growth | +25.8% |
| EBITDA Margin (TTM) | 9.1% |
| Net Debt | $6.1B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Total backlog reached a record $53.4B at June 30, 2026, up from $48.47B at March 31, 2026.
- Backlog growth was broad-based; the first meaningful 765kV MSA was under $1B and less than 25% of the Q1 increase.
- Q1 2026 book-to-bill was about 1.6x; Q2 revenue rose 41.2% year over year to $9.56B.
- A $500M–$700M investment to double power transformer manufacturing capacity at 345kV–765kV.
- Plans to nearly double off-site fabrication to ~6.7M sq ft; workforce was ~69,500 at year-end 2025 adding 5,000–6,000 per year.
What We’re Watching
- Announced CCGT/generation was not in backlog as of Q1 2026; management expects multiple projects by year-end 2026.
- The first 765kV MSA was 'not with the client that we've discussed,' leaving the counterparty unclear.
- Canada margins are 'not where we want them to be at this point yet.'
- Australia remains a small bridge to possible international expansion, with no near-term expansion expected.
The thesis is strengthening on the available record: backlog and RPO set records, guidance was raised twice, and the first 765kV MSA arrived earlier than previously indicated. The open question is whether announced gas-generation awards enter backlog in H2 2026 as management expects.
Earnings Beat
Q2 FY2026 revenue was $9.56 billion, up from $6.77 billion in Q2 FY2025, with gross margin of 16.2% and net income attributable to common stock of $451.4 million. Adjusted EBITDA was approximately $1.1 billion, and cash flow from operations was approximately $1.1 billion.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $9.6B | $7.9B | $6.8B | +41.1% |
| Gross margin | 16.2% | 14.1% | 13.2% | +300bps |
| EBITDA | $969M | $600M | $602M | +60.8% |
| EPS | $2.96 | $1.52 | $1.52 | +95.0% |
| Total backlog | $53.4B | $48.47B | n/a | — |
Management tone: No Q2 2026 earnings call is included in the source material; the latest call transcript is Q1 2026.
Management Guidance
The Q2 2026 press release said Quanta was 'Significantly Increasing 2026 Financial Expectations Across All Metrics,' but the revised FY2026 revenue, adjusted EBITDA, and adjusted EPS ranges were not included in the provided source excerpt. The last explicit ranges are from Q1 2026: revenue of $34.7B–$35.2B, adjusted EBITDA of $3.49B–$3.65B, adjusted EPS of $13.55–$14.25.
Trajectory
Revenue accelerated to $9.56 billion in Q2 FY2026, up 21.4% sequentially from $7.87 billion in Q1 FY2026 and up from $6.77 billion in Q2 FY2025. Gross margin expanded to 16.2% from 14.1% in Q1 FY2026, and EBITDA margin rose to 10.1% from 7.6%. Source drivers include broad-based backlog growth, the DSI mix, and stronger execution and premanufacturing.
The Model
The model projects FY+1 revenue of $35.5 billion and EBITDA of $3.408 billion (9.6% margin), with FY+2 revenue of $42.5 billion and EBITDA of $4.335 billion (10.2% margin). The near-term is anchored by record backlog and programmatic MSA conversion; FY+2 assumes continued expansion across transmission, distribution, large-load, and generation work.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $28.4B | $35.5B | $42.5B |
| YoY Growth | — | +25.2% | +19.7% |
| EBITDA | $2.5B | $3.4B | $4.3B |
| EBITDA Margin | 8.8% | 9.6% | 10.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 6.9% above analyst consensus.
The Q2 2026 press release said Quanta was 'Significantly Increasing 2026 Financial Expectations Across All Metrics,' but the revised FY2026 revenue, adjusted EBITDA, and adjusted EPS ranges were not included in the provided source excerpt. The last explicit ranges are from Q1 2026: revenue of $34.7B–$35.2B, adjusted EBITDA of $3.49B–$3.65B, adjusted EPS of $13.55–$14.25.
What Could Go Right — and Wrong
- Multiple gas-generation projects enter backlog by year-end 2026, adding a 2027–2029 construction ramp.
- 765kV transmission awards scale faster than the prior later-half-2027 language.
- Technology/load-center revenue sustains the 70–110% growth management calls directional.
- Transformer manufacturing and off-site fabrication come online on schedule, easing supply constraints.
- M&A closes in the next 9 months and is additive to guidance.
- Generation bookings slip past year-end 2026, delaying the 2027–2029 ramp.
- Permitting, interconnection, or regulatory delays push utility and hyperscaler build-out to the right.
- Labor or transformer supply cannot scale with the order book, capping growth or pressuring margins.
- Canada margins remain below management's target.
- Data-center/hyperscaler demand cools, directly hitting the ~10% data-center exposure.
Looking Ahead
The next 12 months center on whether announced gas generation enters backlog in H2 2026, whether 765kV awards scale ahead of the prior later-half-2027 expectation, and whether M&A closes in the next nine months. Quanta has also embedded $250M–$350M of 2026 capital spending on its transformer vertical supply chain.
- H2 2026Gas-generation awards enter backlog — Management expects multiple projects by year-end; air permits and contract structure gate entry.
- 2026Transformer manufacturing capex — $250M–$350M of vertical supply-chain capex embedded in guidance.
- Next 9 monthsM&A closings — Management expects acquisitions additive to guidance.
- Later half 2027Large 765kV wave — Prior guidance pointed to a significant amount of 765kV and other work.
- By 2030Earnings-power doubling target — Investor Day plan to more than double earnings power by 2030.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $23.7B | $28.4B | $32.8B | +19.8% |
| Gross Margin | 13.1% | 13.0% | 14.4% | 12bps |
| EBITDA | $2.1B | $2.5B | $14.1B | +19.4% |
| EBITDA Margin | 8.8% | 8.8% | 9.1% | 3bps |
| Net Income | $905M | $1.0B | $1.3B | +13.6% |
| Free Cash Flow | $1.5B | $1.6B | $7.5B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)14.4%
- EBITDA Margin (TTM)9.1%
- Net Margin (TTM)4.1%
- ROIC10.2%
- FCF Conversion79.8%
- SBC / Revenue0.7%
The Company
Quanta Services designs, engineers, procures, constructs, upgrades, and repairs infrastructure for electric and gas utilities, power generation, large load centers, manufacturing, communications, and pipelines. The company's work is the physical layer between power demand and power supply: transmission lines, substations, interconnections, gas-fired generation, and electrical/mechanical scope inside large-load facilities.
Quanta operates through two segments: Electric Infrastructure Solutions and Underground Utility and Infrastructure Solutions. It is expanding domestic transformer manufacturing at facilities in Pennsylvania, North Carolina, and New York; building craft labor through Northwest Lineman College and the Quanta Advanced Training Center; and shifting from one- and two-year bid work to negotiated five- and ten-year programmatic MSAs.
Business Segments
Competitive Landscape
Quanta manages competition through risk discipline and vertical integration. Management says the model has shifted from bidding one- and two-year jobs to negotiating five- and ten-year programmatic MSAs. Quanta says it will not repeat past-style fixed-price generation and does full turnkey data centers only on risk-adjusted terms.
- MYR GroupNamed as an early 765kV award beneficiary in cross-stack theme MASTER-15; no further discussion in the provided source.
Supply Chain
Quanta sits between utilities and large-load customers on one side and equipment, materials, and craft labor on the other. AEP and Cipher Mining directly named Quanta in third-party commentary; many other supply-chain links are inferred.