Quanta Services, Inc.

Good morning and welcome to the Qantas Services first quarter 2026 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 Kit Rupp, Vice President, Investor Relations, for introductory remarks.

Thank you and welcome, everyone, to the Quantum Services first quarter 2026 earnings conference call. This morning, we issued a press release announcing our first quarter 2026 results, which can be found in the investor relations section of our website at quantumservices.com. This morning, we also posted our first quarter 2026 operational and financial commentary on and our 2026 Outlook Expectations Summary on Quanah's Investor Relations website. While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community. Please remember that information reported on this call speaks only as of today, April 30, 2026. and therefore you 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 intended to qualify under the Safe Harbor from Liability established by the Private Securities Litigation Reform Act of 1995, including statements reflecting expectations, intentions, assumptions, or beliefs about future events or financial performance. You should not place undue reliance on these statements as they involve certain risks, uncertainties, and assumptions that are difficult to predict or beyond QAN's control, and actual results may differ materially from those expressed or implied. We also present certain historical and forecasted non-GAAP financial measures. Reconciliations of these financial measures to their most directly comparable GAAP financial measures are included in our earnings release and operational and financial commentary. Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, please sign up for email alerts to the investor relations section of quantaservices.com to receive notifications of news releases and other information, and follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO.

Duke? Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services first quarter 2026 earnings conference call. I want to begin by thanking our employees for their continued absolute performance mindset, dedication to safety, and commitment to delivering mission-critical infrastructure solutions for our customers. Your work and dedication is what makes everything possible. Quanta is off to a strong start of the year. with our first quarter results reflecting robust double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share, along with record backlog. These results reflect the strength of our diversified solutions-based business model and our portfolio approach, enabling us to adapt to the evolving industry dynamics while consistently delivering execution certainty and profitable growth across varied market conditions. I want to spend a moment on what we shared at our investor day on March 31st, because I think it is the right context for everything we are doing. Quanta has transformed, and our strategy for the next five years is firmly in place. What ran through everything we presented in our investor day was one word, certainty. Execution certainty, labor certainty, supply chain certainty, schedule certainty. That is what our customers need right now, And that is what this company is built to deliver. Utilities are being asked to double in size. Technology customers are demanding speed at scale they haven't dealt with before. Everything we have built over the past decade, our craft workforce, the integrated solutions model, the vertical supply chain investments, it all comes back to delivering that certainty at scale. And that is the conversation we're having with the customers every single day. We listen to our customers, and we are becoming more deeply embedded in the way they plan and execute their capital programs. We are in the rooms where customers are planning their entire multi-year capital spin. We are negotiating much of the work directly. Our success is aligned with their success and with positive outcomes for the ratepayer. That was not the case five years ago. We are there now. The trust we have built over decades, combined with the investments we have made in our craft workforce and integrated solutions model, is how we created a durable, compounding business that is well-positioned to capitalize on large, visible, and durable market opportunities. To that end, on the fourth quarter call, we announced an investment of $500 to $700 million over the next several years in our power transformer manufacturing facilities and vertical supply chain strategy. which will double our power transformer manufacturing capacity. Additionally, we are nearly doubling our off-site manufacturing, fabrication, and logistics facilities over the next several years. For an aggregate of approximately 7.6.7 million square feet of facilities as part of our integrated fabrication and supply chain solutions. We are experiencing significant demand for these services, particularly for data centers, And these programs are just a couple of examples of Quanta's ability to provide total solutions across converging markets that are designed to deliver speed and certainty. The versatility of our craft workforce and our solution-based approach is what de-risks all of us for our customers and for our investors. That fungibility, the ability to move our people across a $2.4 trillion total adjustable market converging around utility and Generation and large load is what allows us to flex across markets, expand scope, and keep delivering. We have outlined an opportunity to more than double the earnings power of this company by 2030. When we look at our 15% to 20% adjusted EPS growth target, with the opportunity to stack above that, I want to be clear. This is not easy, and the strategy has to be in place to deliver those numbers. We believe it is. Our guidance is prudent. It has always been prudent. and the results we reported this morning reflect exactly the kind of execution this plan is built on. I will now turn it over to Jayshree Desai, Quantum's CFO, to provide a few remarks about our results and 2026 guidance, and then we will take your questions. Jayshree.

Thanks, Duke, and good morning, everyone. This morning we reported first quarter results with revenues of $7.9 billion, net income attributable to common stock of $221 million, or $1.45 per diluted share, adjusted diluted earnings per share of $2.68, and adjusted EBITDA of $686 million. Based on the continued momentum evidenced by our record $48.5 billion of backlogs, the strong performance during the quarter, and improved visibility into the remainder of the year, we are raising our full-year financial expectations. We now expect revenues to range between $34.7 to $35.2 billion and adjusted EBITDA to range between $3.49 to $3.65 billion, and adjusted EPS to range between $13.55 and $14.25. As Duke mentioned, we hosted an investor day on March 31st and outlined an opportunity to more than double the earning power of this company by 2030. This quarter represents a great start to a 20-quarter stretch during which time we intend to deliver against that expectation, along with continued improvements in our consolidated margins and returns. Over the course of our five-year plan, we remain committed to maintaining an investment-grade balance sheet and an acquisition strategy that's governed by our target leverage profile of one and a half to two times and the returns that we would otherwise generate by repurchasing our stock. One quarter in, the results reflect exactly the kind of disciplined compounding performance we committed to at Investor Day, and we remain focused on delivering that consistency for our stakeholders over the course of this plan. Additional detail and commentary on our 2026 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both available on our investor relations website. With that, we're happy to take your questions. Operator?

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 those questions will be addressed time permitting. If you have joined 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. Our first question is from Nick Amakuchi from Evercore ISA. Please unmute your line and ask your question.

Hi, good morning, guys. How's everyone? Just wanted to drill in a little bit. Obviously, Duke and Jayshree, you guys have kind of mentioned the opportunity to improve margins on the underground and infrastructure. It seems like, obviously, that was one of the drivers here in the quarter. Just wanted to see, should we kind of view that as more of a pull forward on that side of the house? Or is that somewhat contemplated as we think about just guidance going forward and kind of the 2030 timeline?

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

Great. And then, as we kind of think about, too, we've heard, you know, just even over the past 30 days since the investor day, we've seen a lot more, I guess, rhetoric and just kind of commentary from a lot of, whether it's developers or utilities in general or even hyperscalers, just on the notion of kind of more of a bridge power type of approach. Is that something that is kind of an incremental opportunity, just thinking that, you know, we can go first somewhat off-grid, if you would, and then kind of provide the opportunity to then build out on the transmission side so you kind of get two bites at the example? Is that a fair assessment, or is that kind of overstating?

I mean, everyone has a different solution to the issues of lack of generation. So I think when we look at it, you know, the easiest and I think the best way is connect to the grid. And most of our customers want to go to the grid at some point. There is bridge power solutions. They're out there. You know, there's Bloom and others that we're involved with on jobs. And I do think that is a good bridge power in many ways. And it will end up being backup power for the most part at some point. So, to have a microgrid at that scale with that intermittency in the type of learning that the chips have is very difficult, and not many people can build those microgrids and run them. Utilities are very good at it, and, you know, it's much easier for them to do it than it is to try to run a microgrid from a technology company. So, yes, it's complicated, and the lack of generation is creating some opportunities for us on bridge power and many things. But we're involved in all of it. You know, I would tell you the large majority, vast majority are going to the grid at some point.

Thank you. Our next question is from Andy Kaplowitz from Citi Group. Please unmute your line and ask your question. Hey, everyone.

Hey, Andy.

Morning. to one question, maybe in a couple of parts. You mentioned your prepared marks that much of the additions to backlog were new large load facility project awards. And I think it's fair to say that you're seeing much more of these types of awards. So do these awards tend to be over a billion relatively consistently? And how much of that acceleration that you're seeing is simply that you've just been able to educate your customers that the quantum can essentially do it all until thus? And do you expect large load orders to continue to ramp up from here?

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

Our next question is from Steven Fisher from UBS. Please unmute your line and ask your question.

Thanks. Good morning. I know you guys just only gave 2030 targets, but I wanted to look out maybe even a little bit longer term because it seems like a part of the narrative being reflected in the stock is this longer term good visibility that you have. So, Duke, you've made some comments here and there about having some kind of programmatic discussion or opportunities beyond 2030. So, I was hoping you could perhaps elaborate a little bit on those opportunities, to what extent Is this mainly transmission projects? Does it include other data center opportunities directly? Is it renewables? And to what extent do you have any more formalized agreements that go out actually that far beyond 2030?

I mean, we're looking at work beyond 2030 for sure. I do think you'll see an elongated cycle. I don't think you're looking at something that stops in five years. You're seeing decades of It took us, I don't know, 7,500 years to build the grid that's there today. I don't think you can double the size of it overnight for sure, not in five years. So it's going to take a while to do that. You're seeing orders out on combined cycle engines into 2030, if I'm not mistaken. So if you're just getting orders in 2030, it would tell you that the CGTs take three years to build once they hit the ground. and you're in 2033 at a minimum on the orders you get today. So I think when you think through it, the transmission, the infrastructure, and what we see in front of us with robotics, the way the grid is used, the power, electrification, I just see more demand, more demand in generation and the electrification of the world. So I just, we see it for a decade plus.

Thank you. Our next question is from Julian DeMoulin-Spith from Jefferies. Please unmute your line and ask your question. To unmute your line on telephone, please press star six.

Hi, good morning. It's Brian. So long for Julian. uh yeah just um just to follow up on your relationship with nice source uh the totally recently announced um the alphabet genco expansion on top of the original amazon program just curious if that creates incremental scope for quanta and more broadly uh is the general model um generating additional you know pipeline opportunities uh conversations for beyond NYSource, particularly in that Midwest region. You had mentioned an opportunity of about $5.7 billion related to NYSource. Just wondering what your thoughts are on expanding that market opportunity.

Yeah, we continue to expand. You know, that opportunity in the Midwest, I think, you know, you're seeing more demand. And we talked about that early on to be a program. And I think we'll continue to evolve. And none of the CGT or even any of the generation, for the most part, that's been announced is not in our backlog you know we discussed air permits and things like that is is that as we get air permits and things you know as that progresses you'll start to see that come into backlog um probably the later half of the year and beyond but we continue to have a good relationship and and looking at that programmatic spin that you're seeing and they're announcing so we're right in the middle of it we're right there with the client on both sides of that and i Again, we talked about 5.7 that's growing every day, so we like the area, we like NYSORS, and I think it will continue to grow.

Okay, great. And just one follow-up on the backlog. You mentioned 7.65 was, I think, less than 20% of the increase. How should we think about the relationship with the ADP and the cadence of those transmission projects stacking up in the future backlog, you know, over the next 18, 24 months?

They keep announcing, you know, a bigger capital spin and we keep supporting it. So I think you can look at our backlog and look at the way that the relationships are going with utilities and expect us to incrementally grow our backlog along with the utilities. They have a great relationship with AAP. As they announced 765, we're right in the middle of it with them, both on equipment as well. You can see the investment that we made in the equipment in the quarterly week. purposefully put it in the script is to show you that we're moving forward on significant dollars against that 765 bill in the vertical supply chain. So we're right there together. And, you know, we have a U.S.-based supply chain that I think de-risk us and AEP. And that has led to work and great opportunities together across the board on their system. So we're excited about it, and we're just getting started. It's very early, and I think you'll continue to see a building of backlog, and this is just a, you know, what I would consider the 765 we put in was really an MSA that is normal course. So I'm excited about what we can do there, and we're just getting started.

Our next question is from Ati Modak from Goldman Sachs. Please unmute your line and ask your question.

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

It depends on the risk. I think we're comfortable on the single cycles. We're comfortable on many things when it gets to a combined cycle. You know, we'll be prudent about how we take risks on them. And you've been around a long time. I've seen failure. And we're not planning on that. So I believe as the market progresses, as we progress as a company in those tight markets, You'll continue to see it grow. We're highly focused on it. It's something that we see as a great adjustable market, that the inbound calls are daily, and I believe we can build them. But we're going to build them under contract structure that makes sense for us and the client and the ratepayers. So it just takes a bit. They're long cycle type work, and it'll take us a while to get the contract on many of them. But it's something that you can't – stick your toe in the water, you've got to jump in. And we're going to execute very, very well. And we're going to make sure that we de-risk ourselves against the market. So it's something we're focused on.

Thank you, sir.

Thank you. Our next question is from Sangeeta Jain from KeyBank. Please unmute your line and ask your question.

Good morning. Thank you. I have one for Jayshree. Desiree, you left your free cash flow guidance unchanged. Just wondering why. I know your capex went up, but it only went up by like $15 million at the midpoint. So can you help us understand what you're thinking, too?

Yeah. Hi, Sangeeta. Really nothing to read into that. We gave a good range when we guided in the fourth quarter about our free cash flow. And, yes, while we were pleased with the performance in the first quarter, it's just early. We don't really need – we didn't feel the need, given the expectations where we are today, to change that with the $500 million range that we provided you guys in the fourth quarter. Having said that, yes, do I feel like we have greater confidence about being at the higher end of that cash flow range? Yeah, I do. So as the year progresses, you can expect us to update you accordingly.

Thank you.

Thank you. Our next question is from Brian Brophy from Stifle. Please unmute your line and ask your question.

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

I mean, the announcement was supporting both our manufacturing capabilities. I mean, in the prepared remarks, which would be our transformer manufacturing, which is the majority of the capital. We have increased our size substantially significantly. our prefab and pre-manufactured type product that Cupertino was the first mover for multi-decades. So we're supporting that. We're growing that business. It's a labor force multiplier the way I see it, and it allows us to really expand and work with clients across the country as we see that market will continue to expand it. But it's much more of a programmatic spend, and it's not – something you're going to see these large chunky projects. It just continues to be MSA type driven programmatic spend against the AI build, both cloud-based and learning-based type products. So I think when we look at it, we'll continue to expand that due to the fact that labor constraints and we can force multiply what we have, you know, the fungibility of our labor as well. So we like that. We like the area. We're investing in it. And, you know, the inbounds are daily.

Appreciate it. Thank you.

Our next question comes from Steve Flashman from Wolf Research. Please unmute your line and ask your question.

Yeah, thank you. Can you hear me okay? Yeah, I hear Steve. Hi, good morning. So, I guess two questions. First, just on the gas plant opportunities, I know you mentioned you're going to be careful on your risk controls on the combined cycle. Just how confident are you that you can get significant share with while also being careful? You know, are you losing business to competitors that are not necessarily as risk averse? Just any thoughts on that?

I mean, it's a big market, Steve. So when we look at it, I think capacity, it comes down to craft skill labor, multi-trade labor that we have. And, you know, So we can either work for others or do it ourselves in many ways. We built a nice programmatic, you know, spend in areas that I think will continue. We have others that are, you know, coming in. It was not something that the company was focused on five years ago. And when the risk gets less and we're able to do it in a prudent way for the ratepayer, And we're de-risking certain aspects of those things. You know, the single cycles don't bother us. The combined cycles do. So as we get into that, we look at it from a risk profile and work with the client. And I think it's the right way to look at it. If you try to fix them, they get expensive. And the risk out five years from now is substantial when you start looking at it. So I think we're defining those risks, working contingencies, making sure that Everyone is looking at it, right and I for the most part our sophisticated customers We work with realize it's the right way to look at total cost and we're able to do that in a way that Benefits everyone involved so we'll continue down that model and it's worked very well You know, we're not going to win them all it wasn't something that we expect to win them all it's a great business for us if it We we have not acquired against that we built this organically and And we'll size it to the market. It's not something that I think one will grow with or without it.

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

Yeah, I think, you know, look, the transformer manufacturing investment matters a ton when you start talking about 36 months on transformers, things like that. And then you have, you know, inbounds from Europe that are held up overseas and things of that nature. We've really de-risked the transformer piece of that. So we've helped there. We can build large voltage, high voltage lines faster than anyone in the world. And I think we've set ourselves up nicely to bring jobs in faster. That said, I think it's more about the impacts to the ratepayer and getting past that we need every incremental piece of capital spent for transmission benefits the ratepayer. And that's what we have to do as an industry is make sure that We're telling the right story so we can move these faster. Permitting reform will certainly help speed that up. But the cues are complicated. We're in the middle of them all the time. And it's a moving target in many ways. So we're constantly in the middle of trying to help expedite that through technology. We have a large planning group that works with utilities. But the target moves and we continue to try to bring it in in the field. So That said, the more we're involved up front, the faster it goes, as far as I'm concerned, and benefits the ratepayer all the way through. So we're all looking at permanent reform and ways to mitigate and get these things in the queue quicker, no doubt about it, and we're doing it, I think, in many, many areas.

Thank you. Our next question comes from Alex Rigel from Texas Capital. Please unmute your line and ask your question.

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

Yeah, I think when we think through generation, you know, our renewable business we haven't talked much about this morning, we had a nice quarter. We really did, and I think we built backlog on it. So, like I While we don't say much about it, it becomes a dirty word at times. I really like the solar batteries and even the wind in areas. It makes a lot of sense. But you've seen us position ourselves nicely in the CGTs and the gas generation. So it's all forms of generation now for us, and we're trying to be the solution that people are asking for with the fungibility of craft skill labor across those markets. So we can move across markets. We see markets that no one sees. And we're able to take the labor, build on the front side of it, talk with technology, talk to our customer, and we listen. And we're listening to them over this decade of making sure that we can move in the areas that we see provide the most benefit to our people and to the rate payer and the stakeholders. So we've done it. We continue to do it. That's one example. Telecom, you know, it's growing a bit. We see VEED. We see that, you know, connecting data centers as well. So we'll grow that business. I like our verticals right now and our supply chain as well. So there's not much that we can't solve here. We just have to continue to execute underneath and the shiny objects are the shiny objects. But our execution, the guys, the men and women in the field are just, you know, as far as I'm concerned, the best in the world.

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

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

Thank you. Our next question is from Manish Samaya from Cantor Fitzgerald. Please unmute your line and ask your question.

Thank you so much for taking my question. Two questions. The demand picture looks fairly robust across the board, but have you seen any signs of potential weakness in any of the markets geographically or end markets by sector? And have any of the constraints changed? I know in the past we have talked about craft labor, supervision, all that stuff being a challenge. That's question one. And then as part of that, if you can just touch on the M&A pipeline, what opportunities are you seeing geographically and by business? And then where would you want to do something if a right opportunity arose? Thank you.

I'll go backwards. So M&A, we see plenty of opportunity there. There's great businesses, 100-year-old companies that have longstanding, you know, what I would consider execution opportunities. across many, many markets. And our ability to execute on M&A, you've seen it over the last decade. You'll continue to see it going forward. The inbounds are strong. People believe in what we're doing. People believe in our strategies, and they want to sell their businesses here. We're happy to have them and happy that they want to be here. So you'll continue to see that. I think You're starting to see the strategies come together here and the things that we invest in. There's not one market. We have some holes in the business in certain regions. We have the holes in the business in certain, from my standpoint, certain verticals. So we invest in them. But the great businesses are there. We're not doing this for a labor strategy. We're building labor nicely underneath. We added relatively 5,000 to 6,000 organically last year, and we'll do that again this year plus. So I've said this before, labor builds labor. A journeyman makes a journeyman. Money doesn't do that. The more journeymen you have, the more you can scale. And we realize that, and we invest in it constantly and have for over a decade, well over a decade. So M&A is not a labor strategy for us. So that's out, and the rest of it is, you know, we've given, I think, good guidance on what we think for a strategy, and we'll invest against it. And also, when you think about, you talked about labor a bit as well, and the fabrication facilities, the things that we're doing there, pre-manufacturing on both sides of that, whether it be DSI, multi-trades, We're using that investment with technology to really expedite what we can do in the field and take risk out of it. I mean, you're starting to see the seasonality of the business even change a bit. I can't tell you that that's what that looks like yet because I haven't got my head around it. But the first quarter – You know, it doesn't fall off as much. And we had some northern climbs that were tough. And you've seen us operate through those markets this quarter. And I think you're going to build a business that is resilient across four quarters and predictable. So I like what we're doing there. And the end markets continue to, you know, I'm not seeing holes in them. There will be stops and starts when we get this big and we start adding this much backlog and the business grows. We're not going to add the same amount of backlog every quarter. Those things are, you know, it just moves around. But consistently on a catered basis, I expect our backlog to continue to rise for as far as I can see it over time. Now, it might not be quarter over quarter, but it will certainly be year over year at this point. And we like what we see out there, and I'm not seeing holes in the markets that we serve. Thank you.

Our next question comes from Philip Shen from Roth Capital Partners. Please unmute your line and ask your question.

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

Yeah, just to comment on the slide that you're discussing, that's directional. And if it was up to me, I wouldn't have that slide. But I'll defer to the team on it. But it is directional. You're right, it is growing fast, and it is a fast-paced market. We've made acquisitions against it, so you can expect that to grow faster than things that we haven't made acquisitions. It's a great market. We talked about the technology being a trillion-plus TAM, and you can see what the capital being spent from all the larger hyperscalers out there. So, yes, I mean, it's going to grow faster, and we continue to lean into it. The opportunities are daily, and we'll take advantage of those opportunities when they come in, from balance of plant data centers to pieces thereof. I just think we're doing a nice job there. We talked about it. We had a strategy. We're executing against it. We are looking at 100-plus percent growth in it due to acquisitions, due to strategies, due to a lot of things, but organically as well. It's growing nicely, and we'll continue to see it grow. We're early. I think we've only been doing this like a year and a half. I mean, you can see how big the business is already. If you do the math, it's a huge business, and it will continue to grow. I think people come in here daily because we can execute. We can execute, and we're certain, and we can do it fast. We have the craft on the back side. We're not building homes. So we're certainly something that we can do and do well. We're excited about it.

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

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

Yeah, look, I would also say we took a certain approach to it. I think when we looked at it, we certainly were prudent about it. It's not normal for us to move the backside unless we're fairly confident about it. And the way I did the math, we raised it $50 million past the beat. But maybe my math's wrong. But anyways, I got to pass to you on that.

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

Thanks, guys.

Thank you. As a reminder, if you could please ask one question at a time and then re-queue for any extra questions. Our next question is from Jamie Cook from Truist. Please unmute your line and ask your question.

Can you hear me? Congrats on a nice quarter. I guess, Duke, a lot of the questions to you are more sort of on the acquisition front, which you guys have been very successful about. I guess, you know, my question is more on potential for portfolio optimization on the investors' side. You and I have talked about businesses that perhaps – or I've asked you about businesses perhaps that detract from growth margins or returns and need to come more of this, you know, broader power play. I'm just wondering if there's parts of the portfolio that aren't meeting the Financial metrics, you know, where there's an opportunity there, I guess, to, you know, enhance the growth of margins of return to other businesses or just lower margin of return. And I guess just my second question, you know, a lot of the acquisitions you've done have been more small mom and pop companies that you've known for years. To what degree do you see something more? perhaps transformational happening in the space or the need for that to happen just given, you know, how fast the market is growing and the ability to just do something quicker to, you know, be able to meet customer demand that's out there. Thank you.

Thanks, Jamie. We look at the portfolio against the strategy constantly. I do think, you know, we always try to optimize it, whether it's not invest capital in it, stay in it for the long haul or, So we're always looking to optimize our portfolio. And if we can get the right returns on things, if it's the right timing, we have no issues divesting. That said, we're able to use craft in many ways across segments, across business lines that I think we've done a nice job with where it may look like a pipeline business, but it's not. And so we can do other things there that we have and optimize it all for purpose. That said, We'll continue to look at those things. I think as we look at, you know, the small mom and pops are now a billion dollars. So they went from $100 million to a billion in many ways. So there's no longer a small mom and pop, per se. They're all large businesses now that have grown in markets that we like, especially the good ones. So we're able to really lean into those, and it's the same. relationships that we've had for decades that are now, you know, three, $500 million businesses. And I don't see us, I think we transformed this business five years ago, per se, when we started leaning into the front side of the business, when we started leaning into technology, leaning into other markets. So the transformation's been done. Now it's all additive. And I think, you know, we talk about it a lot around here, that flywheel's moving fairly rapidly at a breakneck pace. So as we see that, We're growing organically nicely and we're growing double digit plus there as well as we're able to see acquisitions that are growing faster than that. So our acquisitions are coming in and growing much faster than the whole and they're not little. So I think there's no We don't see any reason why we can't either buy our stock back or pay a dividend. But more importantly, you'll continue to see us make acquisitions against the strategy is probably the primary use of capital going forward.

Thank you. Our next question is from Justin Hawke from Baird. Please unmute your line and ask your question.

Great. I've got kind of a two-part question in one, but really it's just about, you know, Duke, you made the point how, you know, the seasonality is almost changing in your business. And if you look at the revenue this quarter, it was up sequentially, which, you know, essentially almost never happens for you because, you know, weather-wise, there's just not as much productivity in the winter. So I guess the two parts of the question are, you know, one – What markets or what specifically came in, you know, so much stronger than kind of the way that you had expected the quarter to come out? And then the second part of the question would be the look to bill 1.6 times this quarter was also very strong. Usually, you know, you guys will call out something like a big award or anything else, but there wasn't anything in there. So was there anything lumpy in the bookings this quarter or just kind of broad-based? Thank you.

No, it was a broad-based backlog. But, you know, I discussed the 765, the first, like, meaningful 765 that came in, less than 25% of the beat. So, you know, call it less than a billion in there. But that was the biggest. It was an MSA type over a multi-year period that can grow and expand, not with a client that we've discussed. So I think... That said, that's the thing that was in there. But across the board, really, and I think there's opportunities to continue that over time on a CAGR basis, for sure. The CGT business is going nicely. We're highly focused on it, and we have nothing in there on that, which I think you guys are seeing the opportunities out there. It's something that could be substantial, and they are chunky. We talked about things stacking. I think it's going to stack. You're going to start to see it show up in the revenue, show up in the profitability of the company over time. We look back and we're at 30% EPS growth with no acquisitions in the quarter. I think we've done a nice job to set ourselves up. You'll see the company stack in the back half and beyond.

Thank you. Our next question is from Adam Salama from Thompson Davis. Please unmute your line and ask your question.

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

Yeah, I mean, I'm not seeing, you know, obviously diesel's up a little bit, but, you know, I think when we look at that, it's just such a little piece of our spin. Our guidance contemplates anything like that, and we don't drain diesel. Everything's contemplated in our guide, so not concerned with that. Yeah. Like any other American, I'm worried about the troops, worried about them getting home, and we appreciate what they do over there and keep us free. We're able to do the things that we're doing today, and God bless them and our country. But that said, that's all I'm hearing is that how do we help the troops? How do we make sure they get home safe? And we have jobs for them when they get here. So that's what we're doing on our part. I'm not hearing anything. You know, obviously there's certain areas that you're hearing, but nothing that would affect us or what we're doing. Our supply chain looks good. There's a little stuff running around, but we're able to execute around those things. And I'm not seeing anything that would impact our customer or ourselves at this point as we see it. I mean, look, natural gas, LNG exports, I think it's a form of national security. You're going to continue to see LNG. You know, that energy is national security. And we're going to build it. We're going to drill here. We're going to drill for gas. We're going to do a lot of different things here while we have renewables and other things as well. So I think the national security aspect of what we do for energy matters and it's showing up more so than ever, which is good for our business on both sides. The natural gas business, pipeline business is great. So we're excited about it all. And I'm not seeing an impact to customers.

Thank you. Our next question is from Mahit Manloy from Nizuho. Please unmute your line and ask your question. Mahit, please unmute your line and ask your question. We'll take our next question from Michael Dudas from Vertical Research Partners. Please unmute your line and ask your question. Michael Dudak from Vertical Research Partners. Please unmute your line and ask your question.

Thank you. Can you hear me now?

Yes.

Please go ahead. Thank you. Yes. Hi, Katri and Duke. You said in the past when asked about all the market activity and excitement and all the development and such that even if a small percentage of that came through, this would be great. Just want to get your sense, given the visibility and what you guys are seeing across the board, are some of the orders and development and the discussion is more real now than they would have been six or 12 months ago, even in the light of just the extraordinary capital expenditure numbers that the hypersales are putting out.

I mean, I think you're seeing our utility customers firm up what they believe is real large load requests. As that firms up, I've seen it actually Pretty steady. I'm not seeing, you know, the fall off that others may think that's out there. It's very real, the load that we see. You know, I think we've got to watch the rate payer. We've got to make sure that the load that's coming on is beneficial to the rate payer. We're seeing that show up in rates. We're seeing, you know, decreases in rates due to load and infrastructure. And so as we see that investment on the Northeast and all across the country, it should drive rates down. We've got to talk about it. impacts. But I think the load's real. I mean, obviously there's some outliers here or there, but there's growth underneath those. And it's not just data centers. I mean, you're seeing on-shoring of chips. You're seeing on-shoring of robotics. You can see what Elon's doing with robotics. So that's driving load. And all the things that support that. And we just see a big market that is not just AI. You know, the fungibility of our craft, both sides of it, both segments, our ability, mechanical as well as electric, to move that craft across vertical markets, I think is, from my standpoint, that's what we continue to drive home, that compounding of that portfolio over time. And that's what is allowing us to do it is all those markets that we see. Thanks, Chris.

Our next question is from the heat man boy from Mizuho. Please unmute your line.

Hey, sorry about that earlier. Thanks for the question. Sorry if I missed this earlier, but can you talk about like the, if M&A is part of the 2026 guidance here? I know you didn't run acquisitions in Q1, but any thoughts on how the acquisitions could shape up the guidance for the rest of the year? Thanks.

Any acquisitions we do on a go-forward basis, we added it to the guidance that we get, and I expect us to do acquisitions over the next nine months, so you can expect that to be in there, but we're not contemplating any of that in what you see today. It's exactly what the business looks like today. We made no acquisitions in the first quarter, and that's what the guidance is. It's The growth on it is 30%, and it's based upon all the things that we did last year as well as setting the company up for the future. So that's what's in there today. I do expect us to do some M&A over the next nine months, probably over the next two or three years. I mean, we continue to see the imbalances that are robust and a way to deploy free cash. So I'm not seeing a slowdown on that. There will be quarters and there could be years we don't do an acquisition. We're not. The company can grow nicely without them. When we do see them, it's extremely additive to our approach and the way we look at our portfolio and all the opportunities that we see.

Thank you. Our next question is from Liam Burke from B. Riley Securities. Please unmute your line and ask your question.

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

Yeah, I mean, I think it's the right answer for the client. When we look at it, you're looking at total cost and things with the large supplies. I mean, we're the top five buyer of HV equipment. There's ways that we can help there. It's just a smarter way to do business in these markets and You're really discussing total cost versus having a discussion on a widget. So I think we've tried to put ourselves as a solution across these verticals, and it's allowing us to negotiate our total cost basis versus a one-off project and be prudent about it. We work with regulated customers, and we know what that market looks like. They have a tried-and-true approach. record as well, and we can work together on what's the right answer for each client and tailor it that way. And for the most part, we've always negotiated a lot of work, and I think we'll continue to do so. It's just larger, the programs are bigger. The certainty of labor is something that I think is really important for us to make sure that the client and our clients lean on us for that, and we're able to really deliver that certainty. They have capital spends they need to spend, and We need to get, you know, the queues are getting backed up. Things are pressures, and we're being asked to do a lot. And I think this company has stepped up and is providing the solutions that are necessary to make this infrastructure of North America move. And I'm excited about it, and I'm excited where we sit. And, yes, I mean, we're looking at total costs all the time. But it's a prudent approach to the rate payer to drive the rates down.

Great. Thank you, Jeff. Thanks.

Our final question is from Chad Dillard from Bernstein. Please unmute your line and ask your question.

Hey, good morning, guys. So what would it take for Quanta to do full turn to the data center adults at scale, rather than just doing, you know, a few here and there? You know, is this something you can achieve on an organic basis? Do you need to do more M&A? And I'd just be curious to understand where that strategy would rank within your set of priorities.

I mean, MEP, the types of things that we do in the high voltage interconnections are the sweet spot for us at this point. We are doing some balance of plan data centers today. If our clients push us that way and ask us to do that, we can do it. We can do it with the people that we have. Yes, if we do it at scale, we need that. And I think You know, depending on how sophisticated the client is on the other side will depend on how much or less we need to add. But from a programmatic spin, project management, GAC, all the things that you would expect, we have all that internally. Engineering, we probably have 2,000-plus engineers internally. We're able to scale those things. And, you know, I think the company will look at all projects coming in and try to deliver on both sides of that. Where there's, you know, areas that we can be successful, we'll lean into those with customers. But I think it will continue. We'll evolve it. We're also, you know, cognizant of other builds that we need to be on. And other customers. So as we look at it, yeah, I do think the company will do balance of plant data centers and other things. We continue to see the imbalance coming in. And it's all due to the fact, the certainty of craft skill labor. If you're just someone that does not have it, it's very difficult to say you're going to show up. And I don't have to be there that day if I work for someone else. I don't. I cannot show up. And that's the issue that you'll start to see in the markets as they get, you know, as you start to see constraints. So I think for us, we just got to continue to deliver on what we know how and we're very good at specialized craft and providing solutions, we'll do it. And if they want us to build the whole thing, we'll do it. We'll do that as well and provide generation and maintain it if they want it.

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

Yeah, I think we had some pipe work last year going on at this time. We're not involved in anything right now, but I see over the next few quarters we'll start to see projects come in on the pipe side. We have a nice team up there that certainly can execute, so I think you'll start to see awards on that in Canada. Our data centers up there are moving around. Our renewable business up there is nice. It's just slower. It's slower to recover. We're optimistic. We're using engineering in the U.S. We're doing a lot of different things to leverage that workforce. And the margins are picking up. It's not where we want them to be at this point yet, but neither is the economy. So we're doing... a good job there mitigating risk and making sure that we're utilizing the labor and what we've invested in Canada, you know, for the future and for what's going on in the States here. So, yeah, we like the markets. It's growing. It's certainly not a parody of the U.S. yet, but we continue to see improvement.

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

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