Quanta Services, Inc.

Good morning and welcome to Qantas Service's first quarter 2025 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow management's prepared remarks and we ask that you please hold all questions until that time. I will then provide instructions for the question and answer session. 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 Qantas Services first quarter 2025 earnings conference call. This morning we issued a press release announcing our first quarter 2025 results, which can be found in the investor relations section of our website at QantasServices.com. This morning we also posted our first quarter 2025 operational and financial commentary and our 2025 outlook expectation summary on QANU'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, May 1st, 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 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 QANAS 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 email 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 now like to turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks, Kip. Good morning, everyone, and welcome to the Quantum Services first quarter 2025 earnings conference call. This morning, we reported our first quarter 2025 results, which included robust double-digit growth in revenue, adjusted EBITDA, and adjusted earnings per share, along with record backlog of $35.3 billion and a number of other record financial metrics. As a result, we have increased our full year 2025 expectations for revenue,

adjusted EBITDA, and adjusted earnings per share.

Qantas' core strategy is built on the foundation of craft skill labor, execution certainty, investment discipline, and clear strategic rationale. At the heart of Qantas' success is our unmatched craft workforce. We deliver essential infrastructure solutions with a dedication to safety, quality, and performance. Our execution certainty, combined with strategic investments in talent, technology, and complementary businesses, strengthens Quanta's leadership position across our expanding and addressable markets. Our investment decisions are guided by a disciplined strategic rationale aimed at reinforcing Quanta's differentiated platform, growing customer partnerships, and driving long-term sustainable value creation. Quanta differentiates itself through a unique solution-based approach that integrates craft labor with engineering, technology, and program management expertise to deliver comprehensive, self-performed infrastructure solutions. Rather than providing isolated services, Quanta partners with customers to solve complex challenges across the full project lifecycle, which creates deeper strategic relationships. Our collaborative model drives higher value for our customers and positions Quanta as a trusted partner and solutions provider, not a contractor. As demand for resilient electric grids, power generation, technology expansion, and energy infrastructure accelerates, Quanta's large addressable markets continue to grow. Tawana has a proven track record of consistent, profitable growth across both favorable and challenging conditions, demonstrating the resilience and sustainability of our business model, which is a testament to the strength of our portfolio approach, a diversified solution-based strategy that enables us to adapt to evolving industry dynamics while delivering mission-critical infrastructure. The successful execution of our strategic plan combined with significant financial liquidity, positions us well to not only navigate periods of uncertainty, but emerge stronger. The energy and infrastructure landscape is undergoing a fundamental transformation, and Quanta is positioned at its center. Utilities across the United States are experiencing and forecasting meaningful increases in power demand, which is being driven by the adoption of new technologies and related infrastructures. including data centers and artificial intelligence, policies intended to reinforce domestic manufacturing and supply chain resources, and the need for all forms of energy generation. We believe these drivers are leading to what could become the largest investment in an expansion of high-voltage transmission infrastructure in a generation. And that's Quanta's unmatched execution platform and solution-based mindset enable us to capitalize on these expanded opportunities, positioning KWANA for sustained leadership and long-term growth. I will now turn the call over to Jayshree Desai, KWANA 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 strong first quarter results, including revenues of $6.2 billion, net income attributable to common stock of $144 million or 96 cents per diluted share and adjusted diluted earnings per share of $1.78. Adjusted EBITDA was $504 million or 8.1% of revenues. Additionally, we generated healthy cash flows in the first quarter with cash flow from operations of $243 million and free cash flow of $118 million. both of which include the impact of a $109 million tax payment deferred from 2024. Our first quarter performance reflects a continuation of the significant revenue, EBITDA, and EPS growth and the free cash flow generation that we have achieved since 2020. Over that period, we have demonstrated our ability to grow organically and maintain a disciplined approach to acquisitions and short repurchases while improving our cash flow profile and return on invested capital. This track record has facilitated our ability to raise debt capital as an investment-grade borrower and efficiently delever following opportunistic capital deployment. Accordingly, during the quarter, S&P global ratings upgraded our long-term issuer rating to BBB flat from BBB minus and our short-term issuer rating to A2 from A3. We believe these credit upgrades lower our borrowing costs, expand our liquidity and financing options, and strengthen our financial position while supporting our long-term growth strategy. As Duke mentioned, our performance in the first quarter coupled with the momentum we're seeing across our core markets have led us to increase our 2025 expectations for revenues by $100 million, adjusted EBITDA by $10 million, and adjusted earnings per share by 15 cents. In light of the recent trade policy actions and based on what we understand today, We believe the terms and conditions in our contracts limit our exposure to direct cost increases associated with the currently implemented tariffs. As a result, we believe we have addressed those potential impacts within our range of expectations in our full year 2025 guidance. We are also proactively collaborating with our customers to provide supply chain, process, and value-driven solutions focused on cost optimization and growth. Further, we are adjusting our own supply chain by making strategic advanced purchases, as well as working with existing suppliers and evaluating additional suppliers in an effort to manage material and equipment costs and product availability. In addition, we believe our full-year range of 2025 guidance takes into consideration delays that could result from possible changes to the Inflation Reduction Act, or IRA. To date, we have seen immaterial shifts in capital plans from our sophisticated, and high-quality renewable energy customers who we believe have the supply chain expertise and robust development pipeline to weather near-term impacts from policy disruptions. Demand for power is increasing rapidly. As such, the need for renewable energy generation and storage is strong, and we remain confident in our multi-year CAGR expectations. We are actively engaged with our customers to provide solutions designed to help them navigate the evolving policy and regulatory environment combining our craft labor capabilities with our engineering, procurement, and domestic manufacturing solutions. We believe our increased 2025 financial expectations demonstrate the strength of our portfolio approach to the business, our commitment to our long-term strategy, favorable end markets, and our partnership approach with our customers. From January 1st to the date of this earnings release, we have repurchased approximately $135 million of our common stock leaving us with approximately $365 million remaining under our existing repurchase authorization. Given our cash flow expectations and the strength of our balance sheet, we expect to remain opportunistic with stock repurchases while continuing to support strategic investments to generate incremental returns for our stockholders. Additional details and commentary about our 2025 financial guidance can be found in our operational and financial commentary and outlook expectation summary. both of which are posted on our IR website. Also, our first quarter 2025 operational financial commentary includes a new supplemental information table that provides estimated revenue growth opportunities across each of our key markets in 2025, along with the factors influencing those opportunities. Note, this information is a directional estimate that is not intended to replace or exactly align with our guidance for the year. QANAS strategies are focused on delivering solutions to customers across all of our end markets, and we continue to emphasize the power of our aggregate portfolio of solutions and the cashflow earnings and returns they generate. With that, we are happy to answer your questions. Operator?

thank you we will now move to our question and answer session we ask that all participants limit themselves to one question if you have additional questions you may re-queue and ask those questions with address time permitting if you have joined the via the webinar please use the raise hand icon which can be found at the bottom of your webinar application when you are called on please unmute your line and ask your question we will now pause a moment to assemble the queue Your first question comes from Amit Thakkar from BMO Capital Markets. Please unmute your line and ask your question, Amit.

Good morning. Can you hear me?

Loud and clear. Please go ahead.

thank you very much um thanks for the time um just i got i guess a question maybe that's a little bit off the beaten path but it looked like the long island power authority um has voted down uh your application to kind of be the grid operator there um i just was wondering was any of that kind of baked into your guidance for uh for this year and then the second question is that sort of kind of grid operator role is that something you envision doing more of in other jurisdictions thanks

Yeah, thank you. So first off, the LIPA, when we looked at it, look, it's an opportunity where we perform this type of arrangement in Puget Sound as well. It's a little different than the one in Puerto Rico, but as we see opportunities to look at these type of arrangements, yes, we will look at them. And I think what they did yesterday was Management, the management team voted for Quanah. I thought it was very well done, a very, very good process. The board did not take the recommendation, but gave no remedy. So I think from our standpoint, we'll clarify with the board their concerns. Certainly much different than what we faced in Puerto Rico, where we built a utility, essentially. So much, much different. And I think we'll be able to basically give them the feedback that it's necessary. I can understand where they were coming from if not having not talked to us. And we'll get in front of that and see what happens there. And these opportunities happen. We get asked to do a lot of different things as we differentiate ourselves in the market. So I do think you'll continue to see. outliers that you may not hear about every other every day but we're not a utility we understand that we support them and there'll be opportunities every now and then that we get involved in these kind of arrangements and yeah it was not uh this was not anticipated in our guide no

Thank you. Our next question is from Andy from City Research. If you'd like to unmute yourself and ask your question, please, Andy.

Hey, good morning, everyone.

Hello.

Good morning. You mentioned the largest expansion of high voltage transmission, I think you said in a generation. Maybe you could elaborate on that and how you think this cycle plays out. Do you see a bigger slug of transmission projects starting to actually move forward now, as I'm sure you saw recent developments in Texas with a big line being approved? And would you expect to continue to see sequential backlog growth moving forward despite all the macro uncertainty out there?

yes i i you need transmission in order to move generation and so we've said this all along i think you have to think about it you hear a lot about the grid only at 60 capacity things like that but i i go and say you know we have a freeway here in texas it goes from san antonio to houston it's 24 lanes um here in houston it's about probably 50 percent full Because you see it in the mornings and the afternoons. If I took eight lanes out, it would back all the way up to San Antonio. I'd never get into Houston. So you have to look at it like that, that the grid needs the stability of transmission going to load sources and going into data centers, things of that nature. We continue to see firm demand. and then hundreds of gigs, honestly, across the board. And so as we see that as it firms up, that's transmission behind it. And I don't think off-grid is the answer. I think it will be primarily on-grid for our utility customers. And this is a big build. I would relate it back to the 70s when you had major expansion within your transmission system. And that's what we see. I've not seen a line yet that's built In North America, it's not paid itself back very quickly at this point. So you'll see a lot of it. For the ultimate customer, it's the right answer and you'll continue to see a lot of transmission. Thank you. Thank you.

Thank you for your question, Andy. Our next question is from Phil Shen from Roth Capital. If you'd like to unmute yourself and ask your question, please, Phil. If you're dialed in by phone, Phil, if you would press star nine to raise your hand and star six to unmute your line. It looks like we're having a problem with Philip there. If we could go to Joe Osher from Guggenheim Partners. Unmute yourself and ask your question, please, Joseph.

OK, there we go. Can you hear me?

Loud and clear, please go ahead.

Thank you, and good morning. We have seen a lot in terms of incremental tariffs being imposed on imports for solar modules, and this is something that came up when First Solar reported earlier this week. Is this materializing as a problem for any of your customers at all to the extent you're hearing about it? Thank you.

Thanks for the question. We have not seen that within our customer base. We certainly are keeping our eyes on it. Listen, we're not seeing we're not seeing pull in. We're not seeing push out per se. I think 25 is baked into 26. So we'll continue to look at it, but it's not affecting us at this point. And I would say this to the company's built. to have push-outs. The portfolio allows us to have things move along with service lines and our customer base. So it's not an issue if something pushes here or there. I wish it would perform at 100%, but we're doing really good if we get 80% kind of online and at the times that we think they're going, because you're always going to have pushes and pulls. So the tariffs, if they were to come in and affect this, I do believe the portfolio is such that we could weather much of it. And we see multi-year builds coming at us. And I do think solar is the cheapest form of energy in many ways. And you'll see a lot of solar built and gas and about everything we can build probably.

Thank you.

Thank you.

Thank you. Our next question is from Philip Shen. If you are unmuted, if you could go ahead and ask your question, please.

Hi, can you hear me okay?

Yes, please go ahead.

Okay, great. Hey, sorry about that. Having trouble with the Zoom. So first question is on interconnection work. We recently hosted a webinar with Grid Strategies. And they highlighted that 50 gigawatts of coal plants may not be decommissioned. And this could result in tens of billions of interconnection work proximate to coal plants stranded as the renewable projects planning to access the coal interconnection points could be at risk. What are your thoughts on this potential and how could this impact your backlog? And then second one, very quick one on the renewables sub-segment, if you will. If you were to think about your total megawatts of construction starts in 2025 now that you expect compared with what you expected for those 2025 construction starts that year in 2024, has that changed at all or has it remained steady? Thanks, guys.

Yeah, I'll go backwards. Look, I think it's steady. It's certainly not the pace of growth. over last year, but it's steady and climbing. I like where we sit with that business. We're doing very well with batteries, solar, even onshore wind. So I like where we sit. I think the inbounds are good. If you want power quickly, you're going to have to look at renewables for the next three years because of the turbine deliveries. But I do think it's always going to be a part of the grid. We've always said natural gas will be a big piece of it. We've said that for a decade. We're going to catch up a little bit here, and it'll be a part. As far as coal, you know, not a lot of investment in coal over the last, I don't know how to call it, 10 years and you know it costs a lot of money to run coal plants right now so there's not been that investment in them and most most thought they were going to retire so you've got to keep them going that said yes i do think we're going to either see some co-locations in areas where they'll build gas on a coal site and you're going to need transmission or you're going to continue to see transmission come out of coal facilities to upgrade but you know look it's I don't think there's any shortage of projects on the wall. I'll say that. If they all go, then we've got a lot of work for the next two decades. But I think we got it either way.

Thank you for your question, Philip. Our next question comes from Jamie Cook from Truist Securities. If you'd like to unmute yourself and ask your question, please. Jamie, you're the same. You'll need to press start six to unmute your line for your telephone.

Hi, sorry. Can you hear me now? That's great. Fire away. Sorry about that. So nice quarter and congrats on the transmission upgrade win this morning. I guess just my first question, just as I think about understanding you guys have a targeted margin range for your electric infrastructure business or what we're calling it now. But just pushing you as you continue to win, you know, larger projects in the mix towards larger CapEx projects versus maintenance sort of continues. Why wouldn't that create, you know, a positive upward momentum, you know, on your margins to some degree, even though you might not want to guide there over the longer term, but I would think in the next sort of 12 to 20, 18 or 24 months, the margin trajectory should be higher. So just what your pushback would be on that. And then my second question, I'm sorry, I'm going through multiple earnings this morning. I don't think you provided an update on Cupertino, but how that business is doing versus your expectations for 2025. And then Duke, I think last quarter you suggested there are some very large wins on the come as you benefit from synergies with Cupertino and Quanta. I'm just wondering if you could update us on that and any potential wins on revenue synergy side in 2025. Thank you.

Yeah, thanks, Jamie. I think the target margins, they remain what we've said. If you're adding 4,000 employees We're pacing even more than that at this point. You're going to have a training cost in there. And so the training costs will keep the margins about where they're at. They could move a bit here or there in the upper ends of what we've said. I know that it's a different segment, but, you know, you can infer the electric, what it used to be and infer some uplift on the segment. But I do think we're executing very well in the field and real proud of, you know, kind of first quarter over last year versus this year and what we've been able to do at scale. So the biggest thing is to scale the business, and we're doing that nicely now. You are seeing more material pull through as well at the same margins. Your return on invested capital is going to come through higher. So I think returns go up as well in this market. Again, I mean, I think we want to be a solution provider and provide more services and create more value along the supply chain. So we're going to do that. Cupertino's ahead of schedule. I think you can infer that by backlog and some of the things we're doing there. It's ahead. So, you know, we're really, from our standpoint, great business. I've been around a bunch of acquisitions, and I would tell you it's in the top five. From my standpoint, as far as having a good acquisition that we can lean into and scale, they're there. We're getting synergies all the time. I do think you're going to see big awards out of that because the technology, when we think through it, your total addressable market on technology is call it $300 billion a year. That's global. So let's just call it $200 billion in North America. And the utility business is about $250 billion. so it's a as big as an addressable market for us and we're on less than probably five percent in backlog in technology so we're just starting um i see opportunity after opportunity can we execute it can we go get it i i like our chances thank you our next question is from atti modak from goldman sachs if you'd like to unmute your line and go ahead and ask your question

Yeah, thank you. Hey, Duke, you spoke about the transmission opportunity broadly earlier, but in the supplemental disclosure, you kind of noted that the larger projects are becoming increasingly visible. Can you talk about that visibility? What stages do you see these at? And then when should we expect these to show up in the backlog? How should we think about revenue and margin impacts from there?

I mean, I think you're hearing it. You know, there's 765 builds across the country. You've heard that. Someone just mentioned coal. I hadn't heard that one yet, so that's good. But I think you have to look at the RTOs of what they're saying, your MISOs, your PJMs, and you can hear all the auctions that are there. You can hear that as well as the CapEx spend. And I know there's this disclaimer where generation is going to replace transmission. That couldn't be more false. So that's just wrong. I don't know how else to say it. I'm with them every day. I'm on the ground. I hear it. That's wrong. That's a fallacy. Transmission will be very robust here and distribution will be fine. It won't grow as fast as transmission, but it's here. And so those are the places I would point to where you can see large transmission getting built. We're in early stages of it, the very early stages. And I do think you'll continue to see a stack work over the next five years. And I'll leave it there.

Thank you. Our next question is from Stephen Fisher from UBS. Please go ahead and unmute yourself and ask your question, please, Stephen.

Thanks. Good morning. Just wanted to ask you, Duke, in terms of your solution strategy, how would you characterize the white space from here based on kind of what you're hearing from your customers about the solutions that they need and I guess from an M&A perspective, you know, is 2025, you know, more of a kind of a continued fill in the white space kind of year? Or is this sort of a digest what you have at the moment kind of year?

Thanks, Steve. I'll go backwards on it. Good question. So when we look at M&A, you know, we can't time it. And as we see great companies that fit the strategic rationale that we're looking for, we'll lean into them. I can't tell you the pace. I can tell you there's a lot of inbounds that we see really nice companies out there. have opportunities all the time to look at them. So as we see them, if they fit the rationale, we'll certainly try to lean into them. I'm not concerned with our balance sheet at this point. We'll always protect it, but I'm not seeing us stress it at this point. So all things are on the table. You saw us buy $134 million worth of stock back this year as it got disconnected. We said we would, we did. You can expect us to acquire when we see great companies as well. And I forgot the first part of the question. So I think I tried to, in the paragraph, I tried to explain it. I think if you're isolated on a service line, you're a contractor, if you can put them all together and go perform a service, you're providing a solution. So we're looking in areas where the customer's struggling to ramp and we're able to do multiple service lines for them, whether it be engineering, whether it be procurement. Each customer has a different set of requirements. you know, I guess needs. And so we're really trying to do more than just be, you know, a service line provider or a contractor. And that's in my way of saying that's a solution because I'm going to listen to what they have to offer and collaborate with them, get very sticky in their organization and then trust us to go build it on time, on budget with their own labor. I think us self-performing 85% of the business and that self-perform capability and that certainty that we give a client bankable, as far as investment grade. We check the boxes, and why wouldn't you want us to do it all, is what I would say.

Terrific. Thank you.

Thank you. Our next question is from Steve Fleischman from Wolf Research. Please unmute yourself and ask your question, please, Steve.

Okay. Can you hear me? Yes, Steve.

Loud and clear. Please go ahead.

Okay. Thank you. A little more specific on the transmission question, just the Texas just approved the 765 KV plan. Any sense on when that would actually be business that could be backlog and just view of likelihood of you getting a fair share of that?

Yeah, Steve, you know, we built a lot of the 765 in the country, the majority of it over time. And so I do believe it's a core competency of ours to build it. So I always like our chances when we're building 765. We've been in front of this a long time. I'm not surprised by the amount of it. I'm not surprised by the inbound discussions. We're doing some things there that I think are unique. um with the client so i i think we're in good shape i i would say i'd be surprised if it's not in the third quarter or maybe early fourth quarter you would start to see us have the opportunities to book work what one other quick question since very simple one just

Is the upgrade in guidance midpoint for the year, is that just first quarter beating your expectation? Is there anything you'd specifically point to for raising the midpoint?

We were looking at the whole year and how we see it laying out. I thought we had a nice quarter. I felt like we're trying to be prudent about the back half with everything moving around, but the way we see it laying out and the way the work's flowing and the things that we know, I felt comfortable enough to move it a bit just to show confidence in the business and as well as where we think we're going to end up for the year. And I do still think we're prudent about how we're looking at it. I think there's a lot of opportunity for us. If you ask me to kind of look at the high side of the range and the low side of the range, I would lean to the high side for sure. Thank you. Thank you, Steve.

Thank you, Steve. Our next question is from Mike Dudas from Vertical Research Partners. Please unmute yourself and ask your question, Michael.

Good morning, everybody. Good morning. Duke, maybe you could share how you've seen the strategic benefits from You're increasing your own supply chain access for your clients. And as you're looking to help them access elsewhere, what are the dynamics of, because I'm sure everybody plus three is trying to figure out similar solutions. How is that market and the dynamics there and how your internal opportunities are helping you provide more of those solutions? And is that part of what you'll be looking for on the acquisition front over the next several quarters? Thank you.

Yeah, Mike. So the transformers I think that we acquired, we did it on purpose. It was purposeful. It was U.S.-based. I was concerned. We were concerned with China and the amount of China transformers there were in utility systems. So that concern led us to U.S.-based transformers in Pittsburgh. It was a 100-year-old company with a lot of IP. It allowed to expand. It had UL codes across the country. It's not easy to have transformer manufacturing of the class of call it 138 up to 765. So if we can do that, if we can execute through there, we're not trying to be a manufacturer per se. We want to get the pull through. We want to do the work. So we do have great what I would consider relationships with other transformer manufacturers, breaker manufacturers, and we'll keep those as well. But we've learned a lot about our supply chain internally. you know, with our EPC business. So I do think we're able to really have a, you know, a solution base to clients as they come in. And it is a core competency. It's something now where it was, it used to be labor equipment, now it's labor equipment supply chain. And if we get, if we continue down the path and get it right over and over again, we'll get better internally and externally. So I really like what we're doing there. I think it's a, you know, our clients like it, and we're able to really expand the business through that mechanism.

Thanks, Stu.

Sure.

Thanks, Michael. Our next question is from Justin Hawke from Robert W. Bird. If you'd like to unmute yourself and ask a question, please, Justin.

Yes, great. Thank you. Good morning, everybody. I guess I have one maybe larger question, and then I've got just a small technical one. But I guess on the large 500 KV line that you announced this morning that's starting in mid-2026, I was just hoping maybe you could give us some perspective on kind of the size or scope of that, particularly as that's coming on or starting kind of as you're ramping down on SunZia. So just trying to understand kind of maybe the relative size between those two. And then also, you know, what's the status and risk on the permitting side, given that that's not starting construction for another year or so, just what needs to happen. And then my small technical one for JSTRE, I guess, is the two acquisitions in the quarter. I just wanted to confirm, those are the ones you announced last quarter on the earnings release. They weren't incremental ones. So are there any incremental acquisitions as part of the guidance increase? Thank you.

I'll quickly answer that and let Duke answer the other question. But yes, those are the two acquisitions we announced last quarter and there are no additional ones at this stage.

And as far as the LADWP line, that is public. So I'll give you some, you can go look at it, but it's a billion plus. And that's the only reason I'm going to give it to you because it's public. But so I think from that standpoint,

you know i do think the permitting and things like that are on on target and we'll we'll be getting into it in 26. okay great thank you very much thanks for your question justin our next one is from adam thauheimer if you would like to unmute your line and ask your question please uh good morning guys nice quarter

I wanted to ask about the pipeline market. Are you seeing anything interesting in the long-term bidding or planning, Duke, that would make you think that 2026 could be a recovery year for large pipe?

Look, I think there's more opportunity for certain. You're hearing it. You're hearing the president get behind more pipe, more drilling, more pipe, more drilling. So I do think that's out there. Obviously, shippers and our pipeline customers, we've maintained all kinds of discussions going on. I don't think, from my standpoint, we need some pipe, obviously, with the amount of natural gas on the books for combined cycles, things of that nature, especially on the eastern seaboard. So, I do think you'll get some built. I just don't think the business is going to be super. I mean, LNG takeaways is good. It'll be better. And we're looking forward to capturing some of that work. But again, I think very difficult still to build linear construction pipelines. Thanks, dude.

Thank you for your question. Our next question is from Sanjita Jam from KeyBank. If you'd like to unmute yourself and ask your question, please, Sanjita.

Hi, can you I'm not sure if you can hear me yet, but. We can hear you, please go ahead. Thank you. Just a couple of questions. One, maybe for Duke, some companies have recently alluded to the lack of a good workforce to execute on natural gas generation projects on time and on budget. Since you have the largest craft labor force, would you consider or what would you need to consider branching out into natural gas generation EPC to help your customers?

Yeah, I mean, thank you for the question. I do think it's something that It's needed. We have what I would consider a contractor approach where we have the sum of the parts. We've built them before. We can certainly have a resume to build them. The way I would characterize it is if we decide to do that and if we lean into them, we're not taking risk. There's too much risk on the unknowns of the new turbines and things of that nature. We'll just shy away from the risk. And we can grow the business nicely without the risk. That's how I would look at it.

And another one, maybe it's for Jesse. So your revenue performance this quarter was really strong. Book-to-bill was kind of one, and I'm wondering if that is a sign of the times that your customers are more willing to do faster turnaround projects versus taking longer to book large projects?

No, I don't think you should read anything into that, Sangeeta. I think it's just normal timing around our backlog. We're pleased with how the backlog is growing. As Duke talked about, the relationships with our customers just keep getting stronger and stronger, and so we see We see growth across project-based MSA work. It's across the board. And so I think there's nothing more to read to it than just timing around those things.

I also think, you know, some of the work that Cupertino books, you know, when you look at it, it's very programmatic, almost based business type work. And it's booked a bill almost in months. So nice jobs, you know, but it comes in months. 10 million, 50 million type spurts. And that's the way that business is gone. So they can book the bill quite a bit in a given quarter. And that's the same with most of the businesses. You'll get a lot of that that happens. But I still believe you'll see a lot of programmatic. The MSA renewals are there. They're larger. So I continue to think that the backlog will be at record levels.

Thank you.

Thank you for your question. Our next question is from J.J. Millen from J.P. Morgan. If you'd like to unmute your line, Drew, and ask your question, please.

Yeah, good morning. Thank you for taking the question. I just want to look a little deeper into what's hitting the backlog on the power generation side and kind of talk through what's coming in between solar storage and wind and then, you know, How have conversations with customers maybe changed since the tariffs have been announced, particularly on storage? And I appreciate that 2025 probably has some pretty good visibility on what's going to be installed and put in place. But are you worried at all about the tariff impact to 26, 27 projects where equipment's not yet in the States?

Yeah, look, I worry about everything. But I would tell you the business is set well past 26. So I'm worried about 27, 28, 29. And I think what we see is a good visibility in supply and demand. And that supply side is not going to match demand without renewables. It's not going to get close. And you need the renewables to match the demand. You need them. And I just, under any scenario, you can't see yourself not building renewables solar and scale and utility scale solar for a long period of time here. It makes so much sense. Batteries are shaving peak. I looked at some load growth and some graphs in Texas of how it's shaving peak quite a bit in Texas. So it's making a lot of sense. And you can see it showing up. And so from a flexibility standpoint to the grid, if you can back it with natural gas and you can have a line with natural gas, solar, wind, even, and battery on it, it's the lowest cost of energy to the consumer. And that's what you're really, you'll hear a lot about addressable spending. You can say, hey, we're going to put coal on, but no one looks at the cost. Or we're going to put nuke on, but the cost is going to be a factor here at some point. And so we've got to look at the most economical ways to fill the lineup. And I think if you have a blended resource like we've had for the last five decades, as long as you look at it, all forms of energy, you'll be in good shape. But when you ask us what we're booking, we're booking all of it. Repowers, energy. And the wind side, some wind work. It's probably off a bit, but our solar is more robust and our batteries is even more robust than our solar. So I like where we sit in the business.

Thank you.

Thank you, Drew. Our next question comes from Brian Brophy from Stifle Niklaus. If you'd like to unmute your line and ask your question, please, Brian.

Thanks. Good morning. Can you hear me? Good morning.

Yes. We can. Please go ahead.

Thank you. Under the new kind of key market disclosure, there's a technology and load center bucket there. Can you help us understand what is all in there? Is that primarily Cupertino? And what's driving that particularly strong growth rate this year? Thanks.

Yeah, that is a lot of the work that Cupertino is doing. It's around, but it's also some of the work we at Legacy Quanta are around our inside electric work and data centers, semiconductors, chip plants, it's all of that will be captured in that bucket.

Yeah, I think that's the kind of the, when we talked about TAM earlier, we were saying it was, you know, kind of 300 billion, which I think is a remarkable number that technology on infrastructure is going to spend $300 billion this year and probably more next. So in saying that, that's that bucket.

Thank you.

Our next question is from Laura Mayer from B Reilly. If you'd like to unmute your line and ask your question, please, Laura.

Hi, can you hear me OK?

We can. Please go ahead.

Thanks for taking the question. Two questions. My first one is just with the growth of data centers, which stages of data center build are you seeing the most activity in? And then a second one would just be, could you provide any color on the underground business and particularly how it relates to potential tailwinds ramping up with the new administration and the pull away from renewables?

Yeah, so I would say on the last part of the question, I missed the first, maybe just re-heard it, but on the underground side of the business, there's opportunities in large diameter pipe. You're hearing the administration get behind that. I do think natural gas is coming back in certain places where we are building natural gas. We never really stopped. But I do think you can plan a bit better that natural gas will be here for a long period of time. That'll be a source of energy. And, you know, our LDC business is nice. We'll continue to give people options. It's not going to be all electric. They'll have natural gas options. So I do see that as continuing to be a nice piece of the business. Canada, year over year, is off on the big pipe. So it's down. I do see Canada coming back in this market. I mean... Given the fact that the tariffs that woke Canada up, that we do need infrastructure in Canada, they do need to build energy sources. And I think you'll see a more robust Canada over the next few years and that business will come back. So like what I see up there as well. Yeah, I mean, it's certainly incrementally better than it was. Our industrial business performed probably at record levels in the first quarter, very close to it. And it's a nice quarter. So I like the quarter. from that standpoint. There's growth there. We like it. We'll continue to invest in it. And the first part, I'm sorry, I missed it.

I think the first part is around data center growth, if I heard that right.

Was it where it's at, the data center growth? Is that the question?

Which stages are you seeing the most activity in with data center builds?

Oh, yeah. I mean, it's broad-based. I would say anywhere you can find a line that has... 300 megawatts, they want a data center. So, Ohio, Indiana, Virginia, all the way through Arizona. I mean, even California, if you look at it, if you go off-grid, I was out in the West. If you're off-grid, it's extremely expensive. So, California has a lot of areas where you could put data centers. It's not near as expensive in California as than off grid. So it makes sense to build in California even. So we're seeing a lot of it to the west. But there's not a place that I know of that we provide services to that doesn't have data center builds planned or planned and paid for, for that matter.

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

Yeah, thank you. I want to thank our 61,000 plus employees who are the very best in the world. We couldn't do this without them. They make our lives easy and make our jobs easy. And I want to thank everyone participating on the conference call. We appreciate your questions and your ongoing interest in Qantas services. Thank you. This concludes our call.