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QUANTA SERVICES, INC. (PWR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered double-digit revenue and adjusted EPS growth; revenue of $6.23B and adjusted EPS of $1.78 both exceeded Wall Street consensus, while GAAP EBITDA ran below Street expectations; record backlog reached $35.25B, and RPO was $17.65B .
  • Management raised full-year 2025 guidance midpoints for revenue, GAAP diluted EPS, adjusted EPS, EBITDA, and adjusted EBITDA, while maintaining cash flow targets—a positive catalyst for the stock .
  • Strategic wins and positioning: selected for LADWP’s $1B+ transmission upgrade (start mid-2026), continued data-center/technology demand via Cupertino, and S&P credit upgrades to BBB/A-2 strengthen financing flexibility .
  • Key narratives from the call: accelerating high-voltage transmission cycle, resilient demand from data centers/AI, limited tariff impact so far, and disciplined M&A/supply-chain solutions (transformers) to support execution .
  • Capital allocation remained active: ~$135M buybacks YTD into April and a $0.10/share quarterly dividend (annual $0.40), underscoring balance sheet strength and cash generation .

What Went Well and What Went Wrong

What Went Well

  • Record backlog ($35.25B) and strong RPO ($17.65B) underpin multi-year visibility; management emphasized robust double-digit growth in adjusted EBITDA and adjusted EPS and raised full-year guidance .
  • Transmission opportunity expanding materially; CEO highlighted early-stage visibility into large-scale 765kV build-outs and expects stacking of work over the next five years .
  • Data center and technology markets remain powerful growth drivers; Cupertino is ahead of plan with strong programmatic, book-to-bill dynamics and substantial TAM expansion for Quanta .
  • “We have increased the midpoint of our revenue, adjusted EBITDA and adjusted EPS expectations for the full year of 2025” — Duke Austin, CEO .
  • “Adjusted EBITDA was $504 million or 8.1% of revenues… We generated healthy cash flows… despite a $109 million tax payment deferred from 2024” — Jayshree Desai, CFO .

What Went Wrong

  • Sequential margin compression: consolidated operating margin fell to 3.8% in Q1 from 6.9% in Q4 and 6.6% in Q3; training/onboarding costs and amortization weighed near term .
  • GAAP EBITDA trailed Street consensus (Street ~ $479M vs. actual ~$448M), even as adjusted EBITDA was robust; mix, amortization, and integration/training costs are headwinds near term* .
  • Free cash flow dropped to $117.8M versus $181.2M in the prior year quarter, partially reflecting timing (deferred tax payment) and higher capex .
  • Analysts raised concerns around tariff impacts and interconnection uncertainties; management noted minimal direct tariff impact so far and portfolio resilience but acknowledged potential timing risks .

Financial Results

Headline Financials (GAAP and Non-GAAP)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$6.49 $6.55 $6.23
GAAP Diluted EPS ($)$1.95 $2.03 $0.96
Adjusted Diluted EPS ($)$2.72 $2.94 $1.78
Adjusted EBITDA ($USD Millions)$682.8 $737.8 $503.9
Operating Margin (%)6.6% 6.9% 3.8%

YoY details (Q1 2025 vs Q1 2024): Revenue $6.23B vs $5.03B (+~24% YoY); GAAP diluted EPS $0.96 vs $0.79; Adjusted EPS $1.78 vs $1.41 .

Segment Breakdown (New Two-Segment Reporting)

SegmentQ1 2024 Revenue ($MM)Q1 2025 Revenue ($MM)Q1 2024 Operating Margin (%)Q1 2025 Operating Margin (%)
Electric$3,911.1 $4,944.4 7.7% 8.3%
Underground & Infrastructure$1,120.7 $1,288.9 4.2% 6.0%
Consolidated$5,031.8 $6,233.3 3.1% 3.8%

Footnotes: Electric includes equity in earnings of integral affiliates ($12.9M in Q1’25; $12.3M in Q1’24). Underground & Infrastructure margins benefited from acquisition-related employee consideration in Q1’25 and lapped a prior-year disposition loss .

KPIs and Balance Sheet

KPIQ1 2024Q4 2024Q1 2025
Remaining Performance Obligations (Total, $MM)$14,882.7 $16,758.6 $17,649.8
Backlog (Total, $MM)$29,897.9 $34,538.8 $35,251.5
Cash from Operations ($MM)$237.955 $712.015 $243.198
Free Cash Flow ($MM)$181.234 $575.443 $117.752

Capital deployment: repurchased ~$135M YTD through Apr 29, 2025; $365.1M authorization remaining . Cash & equivalents at Mar 31, 2025: $520.6M .

Versus Wall Street Consensus (S&P Global)

MetricQ3 2024 Estimate*Q3 2024 ActualQ4 2024 Estimate*Q4 2024 ActualQ1 2025 Estimate*Q1 2025 Actual
Revenue ($MM)6,563.2066,493.167 6,610.4676,553.422 5,865.4136,233.334
Primary EPS ($)2.69281.95 2.62392.03 1.66470.96
EBITDA ($MM)676.205634.104 684.343672.064 478.704447.685

Values with asterisk (*) retrieved from S&P Global.

Interpretation:

  • Q1 2025 revenue beat (+$368M vs Street), adjusted EPS beat (+$0.12 vs Street on adjusted EPS), while GAAP EBITDA missed (~$31M below Street)* .
  • Prior two quarters showed light revenue vs consensus in Q3/Q4 but stronger adjusted EPS; volatility reflects project timing/mix and non-GAAP adjustments* .

Guidance Changes

MetricPeriodPrevious Guidance (Feb 20, 2025)Current Guidance (May 1, 2025)Change
Revenue ($B)FY 2025$26.60–$27.10 $26.70–$27.20 Raised midpoint
GAAP Diluted EPS ($)FY 2025$6.85–$7.45 $6.90–$7.50 Raised midpoint
Adjusted Diluted EPS ($)FY 2025$9.90–$10.50 $10.05–$10.65 Raised midpoint
EBITDA ($B)FY 2025$2.49–$2.62 $2.48–$2.61 Narrowed/shifted
Adjusted EBITDA ($B)FY 2025$2.66–$2.80 $2.68–$2.81 Raised midpoint
Net Cash from Ops ($B)FY 2025$1.70–$2.25 $1.70–$2.25 Maintained
Free Cash Flow ($B)FY 2025$1.20–$1.70 $1.20–$1.70 Maintained
Dividend/Share ($)Ongoing$0.10 quarterly (declared Nov 2024) $0.10 quarterly (declared May 22, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
AI/data centers & technology loadCupertino integration progressing; TAM expansion; fiber build with Lumen Cupertino ahead of schedule; strong programmatic booking; broad-based data center demand across states Strengthening
High-voltage transmission cycleGrowing backlog; visibility building Early-stage 765kV projects across RTOs; backlog additions expected by Q3/Q4 Accelerating
Tariffs/macro policySupply chain management emphasized Minimal direct impact so far; risks managed in guidance range and contracts Manageable
Supply chain/transformersTransformer acquisition (U.S.-based) to support EPC Strategic internal/external supply chain capabilities; U.S. transformer manufacturing cited Building capability
M&A disciplineMultiple acquisitions in Q4 and early 2025 Opportunistic M&A; digest with balance sheet flexibility Consistent
Pipeline/natural gasUnderground subdued; potential recovery More opportunity; LNG takeaways; linear pipeline still difficult Cautious improvement
Regulatory/legal—LIPA grid operator application not in guidance; Board issues under discussion Watch item
Cash returnDividend increased in Nov 2024; buybacks ongoing ~$135M repurchased YTD; $0.10 dividend declared Ongoing

Management Commentary

  • Strategic positioning: “We believe these drivers are leading to what could become the largest investment and an expansion of high-voltage transmission infrastructure in a generation.” — Duke Austin, CEO .
  • Confidence in outlook: “We have increased our full year 2025 expectations for revenue, adjusted EBITDA and adjusted earnings per share.” — Duke Austin .
  • Financial discipline/capacity: “S&P Global Ratings upgraded our ratings… lower borrowing costs, expand liquidity and financing options.” — Jayshree Desai, CFO .
  • Tariffs and IRA context: “Terms and conditions in our contracts limit our exposure… addressed those potential impacts within our range of expectations in our full year 2025 guidance.” — Jayshree Desai .

Q&A Highlights

  • LIPA grid operator bid: not included in guidance; management will seek Board clarification; Quanta is not a utility, but sees occasional opportunities for operating arrangements .
  • Transmission timing/share: deep 765kV expertise; expects opportunities to book by Q3/Q4; large builds necessary to move generation to load centers (data centers) .
  • Tariffs: limited impact to-date on customers; portfolio can absorb pushouts if needed; solar and gas expected to remain key components of generation mix .
  • Cupertino/data centers: Cupertino ahead of schedule; significant TAM; strong programmatic book-to-bill; wide geographic demand for data centers with on-grid economics .
  • Pipeline/gas generation EPC: more opportunities emerging; Quanta will avoid technology risk in gas generation EPC, focusing on low-risk execution .

Estimates Context

  • Revenue and adjusted EPS beat in Q1 2025 likely prompt upward revisions to full-year Street models on top line and adj. EPS; EBITDA miss (GAAP) could drive mixed margin expectations near term given training, amortization, and integration costs*.
  • Large transmission visibility and early-stage awards plus technology/data center tailwinds support medium-term revenue ramp; Street may reflect higher backlog conversion assumptions and sustained double-digit growth in adj. EPS*.

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Backlog and RPO at record levels support multi-year revenue visibility; raised 2025 guidance midpoints are a positive stock catalyst .
  • Expect continued margin variability near term (training, amortization), but segment profitability improved YoY; Electric and Underground show healthy operating margin expansion .
  • Transmission is entering an acceleration phase; watch for 765kV awards to hit backlog by Q3/Q4 as a second-half catalyst .
  • Data center electrification and technology load growth via Cupertino should sustain book-to-bill strength and expand TAM .
  • Tariff/policy risks currently manageable; contracts and supply chain strategies mitigate direct impacts, but timing remains a watch item .
  • Balance sheet strength (BBB/A-2 upgrades) supports opportunistic buybacks and disciplined M&A to fill “white space” solutions for customers .
  • Trading setup: near-term upside anchored by raised guidance and potential backlog wins; monitor margin trajectory and GAAP EBITDA delivery versus Street, as mix and timing can drive volatility .