From Motley Fool Transcribing, February 19, 2026:
TAKEAWAYS
- Full-Year Revenue -- $28.5 billion, up 20% year over year, representing a new company record.
- Adjusted EBITDA -- $2.9 billion for the full year, another record, with 8 consecutive years of adjusted EBITDA records.
- Adjusted Diluted EPS -- $10.75 for the full year, increasing 20% from 2024 and marking 9 consecutive years of record performance.
- Cash Flow From Operations -- $2.0 billion for the year, setting a new all-time high.
- Free Cash Flow -- $1.7 billion for the full year, a company-best result.
- Year-End Backlog -- $44.0 billion, a record, driven by grid investment, power generation growth, and ongoing infrastructure needs.
- Fourth Quarter Revenue -- $7.8 billion, establishing a quarterly record.
- Fourth Quarter Adjusted EBITDA -- $845 million, the highest Q4 in company history.
- Fourth Quarter Adjusted Diluted EPS -- $3.16, highest Q4 EPS to date.
- Fourth Quarter Cash Flow From Operations -- $1.1 billion, setting a fourth quarter record.
- Fourth Quarter Free Cash Flow -- $946 million, highest Q4 figure achieved.
- 2025 Acquisitions -- Eight acquisitions completed, including Dynamic Systems, Tri City Group, Wilson Construction Company, and Billings Flying Service, adding around 11,100 employees and expanding capabilities in key markets.
- Aggregate Acquisition Consideration (Q4) -- $1.7 billion for Tri City Group, Wilson Construction Company, and Billings Flying Service, funded with cash and Quanta common stock.
- Post-Acquisition Leverage Ratio -- Maintained below 2.0x after material acquisition activity, reflecting ongoing balance sheet discipline.
- 2026 Financial Guidance -- Management expects continued double-digit growth in revenue, net income, and adjusted EBITDA, with potential for over 20% adjusted EPS growth and midpoint free cash flow of $1.8 billion.
- Expected 2026 Capital Expenditures -- $250 million to $350 million allocated for vertical supply chain initiatives in power transformer manufacturing.
- Data Center End Market -- Now represents approximately 10% of Quanta’s business and is the fastest growing backlog component.
- Electric Infrastructure Margins -- Midpoint guidance for 2026 margin set at 10.3%, consistent with recent years, with over 50% of business under regulated utility contracts.
- Major Project Commentary -- No significant 765 kV projects included in 2026 backlog; anticipated growth is broad-based and programmatic rather than driven by large discrete projects.
- Vertical Supply Chain Strategy -- Planned $500 million to $700 million investment over several years in high-voltage transformer manufacturing to derisk supply chain and enhance certainty for utility clients.
- Craft Labor Expansion -- Workforce increased to approximately 69,500 at year-end, with organic growth of 6,000 employees in addition to acquisition additions.
- Customer Engagement -- Shift toward negotiated, risk-adjusted, multi-year programmatic contracts with utilities and technology clients, increasing revenue visibility.
- Risk-Averse Contracting -- Stated unwillingness to engage in firm fixed price generation contracts, with all new power generation contracts to include risk adjustments.
- Renewables Pipeline -- Double-digit growth cited for renewable energy segment, with visibility through at least 2030 and ongoing "business as usual" despite market noise.
- Custom Fabrication Capacity -- Over 3 million square feet of fabrication and prefabrication facilities, including recently acquired Tri City Group capabilities.
- M&A Pipeline and Selectivity -- Management intends to remain selective in acquisitions, focusing on strategic fit and organic investment for vertical capabilities.
SUMMARY
Management conveyed that record backlog and a strengthening economic outlook underpin expectations for continued double-digit earnings growth and expanding supply chain initiatives. Energy infrastructure investment, particularly for data centers and electric grid modernization, is a primary driver of Quanta's expanding addressable market with a shift toward longer-term, programmatic contracts providing increasing revenue visibility. Acquisitions and organic investments have significantly scaled self-perform capabilities and workforce, while substantial capital allocation to vertical supply chain strategies aims to mitigate external procurement risks and secure execution certainty for customers.
- Earl C. Austin stated that Quanta’s backlog is "certainly growing" and described data center infrastructure as its "fastest growing piece of backlog."
- Chief Financial Officer Desai emphasized that "the strength of which is broad-based," citing grid reliability, generation growth, and rising electricity consumption as multiyear demand drivers.
- Chief Executive Officer Austin noted, There is no shortage of inbound calls wanting to build generation. with a pipeline of gas-fired and alternative projects not yet included in backlog but expected to be booked in future periods.
- Chief Executive Officer Austin said, regarding supply chain risk, "I mean, you know, the $300,000,000 to $500,000,000, probably up in the $700,000,000 over the next three years, is derisking us. If the transformers, breakers, the things that we are building do not show up, we have issues, significant issues. So I think, you know, part of that was a collaboration with the industry and our client AEP on building transformers to their spec. And that is something that we take very seriously, and we know that our clients want certainty. This company is built on certainty, and building transformers, all the things that you may not think, why are they doing that? We are doing that to derisk this company long term and allow us to be certain as we look at it while addressing affordability to our clients."
- Management indicated that the company is focusing capital deployment on both bolt-on and platform M&A as well as organic expansion in vertical supply chain capacity, positioning Quanta to serve multidecade infrastructure demand.
- Chief Executive Officer Austin stated, "We are already seeing ways to, you know, I think when we look at M&A, we are not looking at engineering anymore. Because I think AI is going to be significant there. And it is going to really affect the way we, we have 2,000 plus engineers. And we will definitely incorporate AI into it. And so I just think there is a lot of things that will change, and we are in front of that. It is something I am highly focused on both from cost and the way that we get more productive in the field." using AI, highlighting cost and efficiency potential but emphasizing a commitment to workforce development over displacement.
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Full Conference Call Transcript
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[safe harbor and housekeeping notes]
Earl C. Austin: Good morning, everyone, and welcome to the Quanta Services, Inc. fourth quarter and full year 2025 earnings conference call. I would like to begin by thanking our exceptional employees for their continued absolute performance mindset, dedication to safety, operational excellence, and delivering mission-critical infrastructure solutions to our customers. Your commitment has once again driven outstanding results and positioned Quanta for sustained success. 2025 was another year of significant achievement and advancement for Quanta. We again delivered record results as we generated double-digit growth in revenues, adjusted EBITDA, and adjusted earnings per share along with record free cash flow and backlog....
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