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DATE
Thursday, Oct. 29, 2026
CALL PARTICIPANTS
- Vice President, Investor Relations – Kip Rupp
- President and Chief Executive Officer – Earl Austin
- Chief Financial Officer – Jayshree Desai
TAKEAWAYS
- Consolidated Revenue — $12.01 billion, representing a 57% increase year over year driven by broad-based strength across all segments and end markets.
- Adjusted Diluted EPS — $6.06, an 82% increase from $3.33 in the prior year quarter, reflecting operational leverage and efficient project execution.
- GAAP Diluted EPS — $4.55, more than double the $2.24 reported in the third quarter of 2025.
- Adjusted EBITDA — $1.45 billion, a 69% increase year over year, resulting in an expanded adjusted EBITDA margin of 12.1%.
- Total Backlog — $63.7 billion, a record high that includes a $10 billion sequential increase since June 30, 2026.
- Remaining Performance Obligations (RPO) — $41.8 billion, representing the portion of firm orders under fixed-price contracts not yet completed.
- 12-Month Backlog — $38.4 billion, indicating the amount of total backlog work expected to be realized within the next year.
- Electric Power Segment Revenue — $9.80 billion, accounting for 81.6% of total revenue and growing from $6.17 billion in the third quarter of 2025.
- Underground Utility Segment Revenue — $2.22 billion, driven by an expanding mix of mechanical and civil business services.
- Electric Power Operating Income — $1.24 billion, with segment margins improving to 12.6% from 11.4% year over year.
- Underground Utility Operating Income — $208 million, resulting in an operating margin of 9.4% for the segment.
- Free Cash Flow — $1.20 billion, marking a record quarterly result for the company.
- Full-Year 2026 Revenue Guidance — $41.3 billion to $41.6 billion, representing an increase of $1.9 billion at the midpoint from previous expectations.
- Full-Year 2026 Adjusted EPS Guidance — $17.90 to $18.30, raised from prior outlooks due to outperformance and expected incremental strength in the fourth quarter.
- Full-Year 2026 Adjusted EBITDA Guidance — $4.40 billion to $4.49 billion, implying a 10.7% margin profile at the midpoint.
- Full-Year 2026 Free Cash Flow Guidance — $2.5 billion to $3.0 billion, reflecting an adjusted EBITDA conversion rate of more than 60% at the midpoint.
- Liquidity — $5.2 billion, comprising $2.3 billion in cash and $2.98 billion in available revolving credit facility commitments.
- Leverage Ratio — 1.3x bank-defined leverage, providing ample capacity for continued strategic initiatives and acquisitions.
- Acquisition Activity — $245 million, net of cash acquired, for two companies that strengthen fabrication, engineering, and supply chain capabilities.
- Headcount Expansion — 26,000 employees added during the year, including approximately 12,000 from organic growth driven by internal training investments.
- Manufacturing Investment — $500 million to $700 million in manufacturing-related capital expenditures planned over the next several years to mitigate supply chain constraints.
- Days Sales Outstanding (DSO) — Improved during the quarter, contributing to record quarterly operating cash flow of $1.5 billion.
- Term Loan Prepayment — $618.8 million, representing the full outstanding balance prepaid in Sept. 2026 to bolster financial flexibility.
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RISKS
- Austin stated, “I’m worried about copper, I’m worried about other things,” regarding potential constraints in the supply chain for critical materials.
- Austin warned that while the company prioritizes certainty, its growth remains dependent on original equipment manufacturers (OEMs) delivering materials such as poles and transformers on schedule.
SUMMARY
Quanta Services, Inc. (PWR +4.66%) reported record third quarter results for the period ending Sept. 30, 2026, driven by broad strength across its utility, power generation, and technology end markets. Management stated that the company is currently pacing ahead of the multiyear growth targets established at its 2026 Investor Day. The company indicated that its self-perform operating model and investment in internal training programs provided a competitive advantage in deploying resources to areas of highest demand. CFO Jayshree Desai noted that the company utilized its financial flexibility to prepay outstanding debt and upsize its revolving credit facility. CEO Duke Austin indicated that visibility into electric grid modernization and large load demand from technology customers extends well beyond 2030.
- Austin indicated that utilities are expected to significantly expand, stating, “Utilities are being asked to double in size over time, and we believe the need to significantly expand and enhance the power grid for reliability, resiliency and load growth is visible and necessary.”
- The company is seeing increased adoption of its collaborative model by technology customers, with Austin noting, “The proven success of our operating model on the utility side of the business is also why technology and large load customers are embracing it.”
- Management is expanding its integrated fabrication solutions to increase speed and schedule certainty for customers, with Austin indicating, “We are also investing in the expansion of our integrated fabrication solutions, which we believe is a workforce multiplier.”
- The company sees significant future opportunities in high-voltage transmission, with Austin noting, “We’ll be on 765 in ’27 for sure.”
- Management indicated that the five largest technology companies have capital budgets significantly larger than the utility sector, as Austin noted, “the 5 largest technology companies will spend 3x the capital budget of the utility side.”
- Austin stated that the company focuses on developing internal craft labor through curriculum and training because craft labor cannot be purchased.
INDUSTRY GLOSSARY
- 765 kV: High-voltage electrical power transmission lines used for long-distance power delivery.
- DSO: Days Sales Outstanding, a measure of the average number of days it takes a company to collect payment after a sale.
- EPC: Engineering, Procurement, and Construction, a common form of contracting arrangement in the construction industry.
- MEP: Mechanical, Electrical, and Plumbing, referring to these specific aspects of building design and construction.
- MSA: Master Service Agreement, a contract that establishes most terms governing future transactions or future agreements.
- OSM: Off-site manufacturing, the process of planning, designing, and fabricating building elements in a factory before transporting them to the site.
- RPO: Remaining Performance Obligations, representing the amount of revenue expected to be recognized from existing contracts.
- T&D: Transmission and Distribution,
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
