Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Quanta Services Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded.

to Vice conference President like host, to now Rupp, Kip of would turn over the your I Investor Relations. ahead. go Please

Kip Rupp

that Thank outlook announcing our quantaservices.com, summary found our in the morning. website to quarter XXXX Earnings at morning, welcome, Investor and this can Second our we second issued of and be which we release XXXX will This Conference a Relations Quanta press along a the commentary with results, Quarter discuss XXXX Call. you, Services everyone, section of

of we'll any X, this advised Quanta Additionally, of remember therefore, you're the viewable information morning And time-sensitive any today, accompany call. our the and August use call's be that is on replay only on of the section Services is information which website. to reported accurate that XXXX. no Investor a this may slide Relations longer call this as available also of Please presentation prepared through webcast as speaks remarks,

include will to assumptions events the safe facts. from Reform forward-looking intended call beliefs including intentions, but statements future performance, This not do or to that relate historical the reflecting Act or by about Securities Litigation all expectations, liability Private XXXX or qualify harbor solely and established under of statements current

materially difficult differ You should may or these are reliance to control, uncertainties that actual undue statements on results predict as not expressed risks, beyond place those assumptions they involve or and certain and from Quanta's implied.

release included forecasted directly earnings and GAAP these measures most financial historical our comparable presentation. certain of and are to measures present non-GAAP financial slide also Reconciliations measures. We'll financial their in

the our statements X financial and forward-looking information for Slide additional presentation in slide Please the non-GAAP measures. appendix of see regarding

sign notified for quantaservices.com. you when if Relations Quanta please alerts releases news Services to and section e-mail through other of information, Investor be publishes the up like Lastly, would

listed on others Services and the our our channels investors company Quanta website. and interested on follow social Quanta encourage IR media in also We to

With the Austin, and call now turn Quanta's to will President over Duke? that, I Duke CEO.

Earl Austin

and Earnings to Quanta everyone, Kip. XXXX welcome the Call. Second morning, Quarter Services Thanks, Good Conference

today, review strategic then On and XXXX I second a to turn CFO, provide of call the financial provide and expectations. operational results Jayshree our commentary, Desai, it to full-year quarter we'll will Quanta's over and

Following questions. Jayshree's welcome we your comments,

Our second well quarterly double-digit of to our start second revenues our growth quarter results solid $XX.X in increasing quarter the for the due to employees time as added momentum with continue X,XXX total billion record the solutions. $X in a resulted infrastructure the backlog approximately history building year billion. during first as record demand exceeding our strong that for revenue We and

in programs chain are supply our and service and lines employees advancing We for training and other investing our various solutions. expanding safety

operational to our We resources portfolio service Quanta transition and necessary a of provides for advantage manage important are lines positioning the continue which us accelerates. infrastructure geographies, believe that the energy believe increasingly investment as will and ability across shift we become and to is strategic decades risk

and attractive opportunities well We believe consistent find achieve financial to to approach resources most results. allocate to efficiencies economically our the the portfolio us operating positions we and

as security performing broad-based Electric our driven execution. well consistent Our margin Power strong. from for utility reputation segment grid Infrastructure and Canada. is well Electric our system Power are lower and Demand activity hardening utilizations Operations safe as some overall, by in for experienced modernization, grid from Solutions pressure though business initiatives

of multiple anticipated projects. resources we are utility of Accordingly, multiyear investing programs in and the ahead start-up

execute a well from to margin our both operations revenue communications and perspective. continue Additionally,

and number demands, out of plans them and be resiliency modernization of on growing system a of by grid and load electric forward, pace transition. are of America's need penetration, enabling favorable to reliability demand continues levels technologies, grid's and meeting utility with the customers' North Going hardening, multiyear we looking power facilitating capitalizing vehicle years. policies capital to to plans programs through increase CapEx number energy having the discussions remain power higher our challenged federal new strong in increase the and state about accelerate including a designed the and

Quanta believe and execute to ability safely We consistently offering is Solutions industry-leading.

electric uniquely substation with the as positioned Solutions remained We construction significantly are projects active. work within renewable multiyear and our to revenues clients the multiyear Renewable their ramped on up operations. quarter of increased segment generation Infrastructure transmission collaborate high-voltage and grid programs in

and HPDC $X and total necessary programs believe and acceleration in reached quarter the continue, substation of renewable our resources renewable driven the levels expect making at of handle renewable Segment the decade, segment that capacity SunZia generation RA station will We by investments to this generation, end, America's yield over contracts multiyear scale new to various transition. the coming record energy transmission backlog record and momentum will by and converter and billion a projects. of transmission we driven addition the we are North

Additionally, of and we billions pursuing transmission growth current overall reliability. renewable capacity designed system support are are to dollars projects and high-voltage that generation of future

increase on already the earnings power the demand grid. of designed state are and and the reported accelerate As and policies load pressuring discussed and federal have to everything, calls prior energy electrification the media, we in are expected to more transition recently significantly

a to levels The significant necessary are obtaining all to the minimizing to built infrastructure while getting at and impacts cost greatest primarily for permits transmission ratepayer to the need remains in environmental ensure great At due manner, collaboration reliability regulatory time, timely the challenge. challenges same industry's regional there approvals.

revenue which solid and operations in quarter across profitability, Infrastructure our with remain demonstrating segment, delivered Underground this second pleased segment. We the execution our performance record of double-digit growth and Utility Solutions

gas regulated and systems, utility executed environmental had strong demand ensured integrity driven well, and modernize our emissions, improved Our for Services we and methane Industrial reduced compliance reliability. to Operations safety by and pipeline operations, spend

designed our driven solution-based early are We believe our the and on stages that of consumers. opportunities by we collaborative is across are in geographies, capitalizing benefit ultimately lines service approach which significant to

increased with and spending, megatrends customers, programmatic near- greater activity favorable new and outlook. of renewable into growth growth and visibility long-term provide generation our existing the Additionally,

to performance, year-to-date have adjusted full-year revenues, economy The reduced dynamics executing financial is a result solutions initiatives clients carbon our financial continues our on our pace. and a EPS. and our Quanta and and towards for we As gaining for cost we EBITDA energy expectations successfully consistent adjusted drive transition strategic growth. of solid operational profitable increased progress, total believe sustainable these to is resilient excellence, and XXXX

operating the for safe We distinguish long term to and build continue are through the on leadership. focused and best-in-class ourselves to expect business execution

Quanta's innovative opportunities our business base to pursue customers. will the position leadership to and and in provide enhance We solutions industry

and diversity, model the foundation unique that long-term Quanta's entrepreneurial continue mindset our operating generate to for form allow will believe value stakeholders. us We to

for our Desai, results I will call the second and turn Jayshree? expectations. quarter her to the of over review now XXXX Jayshree CFO,

Jayshree Desai

stock Duke, per of Thanks, to share share revenues $X income and common second morning, quarter Net good everyone. we $XXX or announced billion. diluted diluted $X.XX attributable Today, was per million $X.XX. was record earnings adjusted and

revenues quarter second $X.X expectations for XX.X% billion electric margins Our first power margin were growth against income and consistent our sequential and expansion operating results. were quarter revenue with our

growing activities investments in demand way business to utility for and create segment solutions. of Our initiatives hardening for modernization the base our comprehensive the lead continue

lower-than-expected negatively margin by double-digit segment electric While a impacted was it executed a profile, at of Canada. resources utilization the in

quarter margins quarter were forward X%. regulatory customers' of in momentum behind the the infrastructure for move energy second $X.X and our this to Renewable income Energy with strength operating Infrastructure ability construction environment. 'XX activities billion, in The revenue growing reflects renewable revenues with favorable segment

quarter, segment and cost increased we sequentially and absorption margins Infrastructure contributed the contributed as as improved absorption. benefiting for were X.X%, projects. and from better and through executed revenues billion operating with noteworthy revenues to Margins income Both second projects the quarter improved were ongoing fixed revenues margins large business $X.X base elevated risks a on Underground operations to performance. Utility successfully cost

'XX, XQ comparing this additional XQ slides to the accompanying For call. commentary please refer 'XX to

with inclusion record of end. announced the we another at the our the Renewable previously with contracts SunZia backlog, segment continued activity achieved two level of and Regarding in robust award quarter three

to At XX. billion, XXXX, billion June backlog $XX.X compared March of an increase was XX, $X.X

is backlog a Our than $X higher at level approximately record billion, of March XX. XX-month also $XX.X billion

we second the the favorable cash quarter by and certain arrangements our days during the average historical with XX second aided $XX measured billing XXXX, million. associated than had of lower awards for free quarter. of quarter, For flow

operating Regarding the the construction throughout decided the based and Canadian our early while Renewable on to and spring Transmission the conditions encountered ability overcoming into achieve project, accelerate quarters, to stakeholder targets Project, summer. we've the in discussed schedule challenges prior COVID-XX-related course the we of

As a result, so contract pressure to project. grew DSO, we and the and quarter continues during finish asset do balance will until the the

of days significant remain our execution to balance DSO successful our XX, the and June with representing approximately of portions in the regarding discussions confident the the seven six Given ongoing customer as in position. we of field

XX, X.X as June had we of XXXX, approximately $X.X calculated credit our total of agreement. ratio under billion As a liquidity debt-to-EBITDA of and

We cash quarters second deployment. growth to half create the support continuing expect our earnings coming ability opportunistic while capital to over value generation stockholder delever through and to

guidance. our to Turning

a to performance and billion quarter. back segment particularly continue see for in fourth and we expect We are year first the significant From the $XX year. perspective, billion the our with the year, half between Segment pleased through the revenues Electric strength half of the $XX.X of

Canadian programs. segment the However, this be costs the for preparation the for impacted we and multiyear by from XX.X% to in between our us expectations full-year That, incurred our operations, lower range is with to leading full-year utility will pressure margins along in expect year growth anticipated margin XX%.

revenue the project million, billion. segment given second segment, between $X.X activity, into the ranging increased Renewables visibility by of performance our full-year $X.X for and raising billion quarter expectations the $XXX we are Regarding now our and

and around risks the year through just work We to margins of continue expect have we before the is execute much the will margins for opportunity project getting need as X.X% improve. started, to to

to and Underground between After at we $X.X a between range billion midpoint and continue the our range a X.X%. $XXX for increase margins segment million and revenues from billion, segment good to now expect second the full-year X% to we quarter, $X.X expect

between which said, date to $XX to the of $XX.X billion increased $X.XX range stock revenue visibility, between and midpoint range. range and EBITDA we improved are between and to for attributable As now given increase and earnings billion to expect billion a and performance adjusted Duke at diluted full-year our for $XXX to full-year billion, our range for our raising million now share expectations, We've we our adjusted the common expectation our $X.XX increased year. expectation $X.XX per $X.XX full-year

year in levels case. the with highest other favorable full-year $XXX fourth flow, expected capital free our With a regard our expectations, revenues, renewable modestly we to the typically have to profile working primarily due which raising segments. in are and million flow the as to cash expect cash billion, compared typically increase range to between the quarter we the free now for Therefore, is $X

guidance, our We our modified which outlook are website which can at Information Financial summary, of IR other be slightly included aspects the of in details the quantaservices.com. our Section in of found

we are multiyear by growing Looking highly behind visible and our the Renewable momentum and segments. excited Electric ahead, and outlook

which the transition and a at we execute and deliver Additionally, create to confident by significant solutions our strategic shareholder encouraged are high level. value growth portfolio, our core and strength comprehensive underground organic to through continues operating investment. capital are support ability we to grow utility in this to energy infrastructure of and segment, With the

it back Q&A. for turn now to operator I'll the Operator?

Operator

D.A. question comes from Instructions] Brent of Please the Thielman [Operator proceed. you. with Our first line Thank Davidson.

Brent Thielman

solar you just you. provide should a margin rest sort this be not renewables was maybe previously for I in new seen, chain how may of renewable here Great, still an hey supply may be factor morning. A that that of could or impacting the on if Good for the wondering nice quarter. year? update And thank the you still rebound business? pressures

Earl Austin

you we the we stopped. thought what We're to six chain had playing in Thank move increasing and as morning. general. we are would we segment thought that. a out forward, balanced get of 'XX, months issues, and go of happen side but year operating to opportunities through And margin second solar some other there think We're certainly general, industry to are thought. where Good And and greater. you'll what of the That half you would we like through beyond solar 'XX, operate pickups the I due are type margin guidance and through as certainly 'XX I with really you. be slashing the is cadence year 'XX we profile, cadence the quarter-over-quarter the that on in seeing those more thought -- we see think supply we the into the

Brent Thielman

come this SunZia Thanks, in in bookings in as Is quarter? about more you're Duke. negotiations? the you Got And my it. it there follow-up. financials? still then just likely Can Is to represented what talk is reflected from here all still

Earl Austin

third the contract still business. negotiating the of wind side We're there on a No.

-- So quarter, the second there. that have we that the third in year, here quarter, fourth be half will finished we'll believe up in of somewhere

Operator

Our proceed. next question Dudas Michael with Vertical the Research from Partners. of comes line Please

Michael Dudas

morning, Kip, Jayshree. Duke, Good

Earl Austin

morning, Good Mike.

Michael Dudas

you from is or next pace development ahead type either customer of Duke, the prepared utilities impacting customers, Are I coming talked about it and to remarks, your the -- XX looking I or want Or more -- sooner? out facing. regulators to And that going like what there's anticipate any regulators -- Have XX been is and that what you as opportunities? given with you to do backlog are much are overcome? in of the wind base clients mix to your on utility that months? your the or at follow-up of they've challenges your date, discussions assume be solar there

Earl Austin

Yes, what's significant at at a look when rebate the consumer at Mike, level, itself look the needs grid the level distribution modernization. and a the on rebuild, regulation EVs, you we're you at going rebating then we certainly question. and When good the -- way

they not to their car his consumer and or that getting when is have started inter-minute and bringing it's the to power needs get power. So to it vehicle no now, way the home,

we've think in as we anticipate. an always of industry, in front that. have what to I front of In So levels, those been we get

as states with that service with a the necessary utility worried that what's level, the other capital level at to sure well, got where are consumer you at and level, have We've bill at are direction. we -- better state the and on coming a and federal federal you we to the which have pushing just us. get So the is customer make and can along mechanism collaboration

the although of than with forward. necessary triple capital anything go and moving monumental of and listen double, it's talking try no go are it's transmission, decarbonization grid, anticipate we're started as when to net are you the It's rebuilds if have to you car may think the look total cost If the for necessary energy, you thought listen that capital triple now. you impacts we've renewables, value, the when to that it's gas here also and and forward I you we double, -- to when question into present decreasing for anticipate manufacturers, and just been or about, forward. plans you're to anyone interconnections I the the when think answer. coal it's in would generation that right you we move may get with the greater they're you There's

three that's inflation, people When up. where make just everything we just years the of talking trying from years the need the I'm and in the matter of at front it's about years look also the even with to transmission of industry that certainly to tomorrow. systems. modernization pace of a clients for collaborating. we sure of the now, distribution not moving So put from is now now. industry even with is a going be It's is It's itself our five need capital on, matter and from in It's five

Michael Dudas

years? you that And I guess your load the seeing again, the have slow the to -- a ability are your rates. customers to to very accelerating next plans that? growing year on has to So five capacity at outlook be from in execute there to five industry base going been electricity three given are that And the

Earl Austin

growth transmission, in just centers, at you're the from your XXX-degree think board, to AI is the heat. switching industry about got if data load fuel you've everything, now when I where the across seeing look going it's certainly, then load necessary you and

had mild where you're You to it's what consider many way the to August, in I low, a mild areas. plus a pretty necessary those first industry. just It spent and for would But is winter, -- the quarter into spend. was impacts capital XXX July

deviations You moving a standpoint, from exponential it's planning of up this on of grid start load. temperatures

Operator

Fisher question Your proceed. the from of comes next Please with line Steven UBS.

Steven Fisher

for weighing Obviously, it's you've growth. little support investments new concept morning. are how long the you now, a margins on some need bit making to investments make not the a electric but Good about really the prudently to you're growth for of talked Thanks.

a bit this of you 'XX impact in 'XX? the half in for maybe growth, investments made making you've kind can that some investments investments might the And first about these kind So of what year the those just like look to versus little about you're the year-over-year and what talk investments relative quantify think of should we half support out the frame you how to can is? of that where that already second if

Earl Austin

think X,XXX a Steve, added look you when employees. X,XXX. around quarter, We Yes, we I about from at add normally the

that, So through we it and thinking It's we the can inflation, could need company is or call does pressure, of are five the out call all pressuring when capable start the there's made. things make we out all pressure you where investments can that doing kinds four excuses training, just whether it. already that to about you of do, that's things

in Really, levels G&A behind to those is all indirect Canada much we there. been in little through We've can we of, the operating. been training, better The of Canada than margins. at in I Canada. operate and transition Canada, kind We've say, can normalized we bit a things would to made where different balance have pandemic operate from

we which execution, much you'll people can put portfolio that move reason to segment no allow see it. should get into the in you'll years, foreseeable we just future. renewable I in the anything. the past. even and produce we of more margins about double-digits. As see better by train, still why Canadian segments, together outward growth believe type into for can. in I'll the that stand results absorb place do that can The we we 'XX, in And out I normalized we of produced to think in 'XX the operate And put us I

Steven Fisher

staying this I the maybe that to there. range get And Renewables of are Jayshree in follow-up execution risk other factors. you some just margins with, mentioned Okay. and guess, the until can comfortable

the see should the we we could realized some allowing margin think about how to Renewables? that through of in be So for margins when and come better upside that timing

Earl Austin

segment. large the few We're starting We're scale starting utility projects in win. Yes, thousands renewable-type a solar quite Steve. transmission of also

where at, would cadence end thought the So back we at when and that we're look itself, loaded. we it be

to jobs So contingencies, the operate those the start margin think see a as more profile into I we through you'll 'XX. normalized

you to or to have that in operate in We you the numbers -- second what half won't double-digits the get see. you

I through hit tried there's here. for opportunities it normalized more approach We opportunities think prudent to I cadence. middle. it. there's a 'XX on get down think to a the all the what way into took we we've to That's do done do And us,

Operator

Kaplowitz The line next question from comes the Citigroup. of Please with proceed. Andy

Andrew Kaplowitz

Good morning, everyone.

Jayshree Desai

Good morning.

Andrew Kaplowitz

in backlogs concerned. to quarter, underground pick you revenue and actually know utility modestly I has up. last were continue to rise business your Would continued

the raise for there forecast did You this the year. for year.

the it up you 'XX what you even are than about thinking you forward? seeing end Could So being more how moving business expected? there? resilient And on are ground the into

Earl Austin

we've the look offices we portfolio. said that thought we the could get scale UI through through segment, some we When regional at

first that some great. did do the the had operated were have to -- segment. you year. -- we in performance that awarded. up some We into we in half we starting half, see awards industrial we've the see We've back of pipe the When you're get think I show good

those don't We good to on. make things going We numbers. have some need the things

opportunity you weather have see do we the also So but impacts.

electrical underground. more doing We're

our so the will over shift segment Electric in UI And some of that segment.

the nicely reporting way on segment returns the company. and scalability, the in as the works, our should And but It what rise service it is crews we're the overall. on lines. will far the returns Just also segment doing doing from as our the rise company

Andrew Kaplowitz

could I if maybe Duke, on follow-up that.

segment. few basically did over the in but which deliver interesting the that been quarters that's that in last Quanta high we've You as it's is as segment, X.X consistency seen UI maybe

on there, that consistent could segment higher based businesses scale, comments, you So of more balancing the to see your margin in and moving continue forward?

Earl Austin

I I in thought expectation. operate single-digits, and we see upper would always

to got segment prudent I single-digit we things and range. are and in about operate in can second climbs We But of do how half weather the upper northern overall the that nature. think that due that

of pushing those We telecom of you're the the that see absorptions to you're offices, bit, going and you And out a seeing to some scale that. fact getting margins and and to rise are -- electric you're due out what gas are are that's and doing throughout up. going same show renewables

Operator

Please question Justin next of proceed. Hauke with the The Baird. line comes from

Justin Hauke

a it's light little quarter Good guidance I morning, the contribution down multiple equity like it know wanted I this Electric million there. little is contribution, the kind At your ask guess to it's everybody. last mostly a in quarter, which I things, LUMA. bit as -- looks of for the took bit was income $X.X segment, you It from but well.

kind was from last changed business kind is that rate there the almost the maybe that's think running year, this anything run double these that levels, is at that? that about of more of should that kind we it appropriate of contribution Given in of

Earl Austin

we in off that are have there as performing businesses LUMA half. are investments on there is other that some expected, first the

up those you pick But to can comment. into the 'XX. and expect in Jayshree, We 'XX

Jayshree Desai

well. in Yes, year. -- year, part we entities a you This were last Justin, in in last events had catch-up what the we of -- had And of a couple that's segment the year. outsized that We is performing some of our general, those of helped from part segment. that had some very LUMA, that the seeing also storm

the a continue lot at bit to of levels. expect, believe and systemic, and nothing operations we pullback, that operate through of perform going we as to little continue can these a but would see We we

Justin Hauke

Obviously, anything up half XQ, your they in more the in following Okay. were than maybe on you you margin little unexpectedly would was then second like do than have margins there a those quantifiable it quite the but But Usually, in And made Andy's high? underground. would in unusual anything something on question or in like the bit strong. XQ. imply closeout just margins that is was that, project that guidance softer quarter

Jayshree Desai

No.

Earl Austin

our performed in well as I said business quarter No. Industrial really mean well. we the

do So to out, when Industrial do the was in visibility the start that you certainly look think have you fourth I And the not strength business. in quarter. great in quarter

said, that would show to up. prudent So the a what that's guidance down seeing in quarter. the be it you're And of pull kind fourth bit

Justin Hauke

Okay, fair enough. Thank you.

Operator

Our next question comes from the line Please of Neil Mehta proceed. with Goldman Sachs.

Neil Mehta

of maybe been for Yes, like saw A perspective as the thinking competency smaller market versus extent is thank opening guys, you. markets M&A you And couple you are has to it big looks your do larger core Blattner, up think It what the strategic? M&A? questions. for the bolt-ons on picture Duke, here. a we with clearly you particularly

Earl Austin

we strategy. M&A, a Yes. have

solutions, and five-year strategy. no things do We There's the bolt-on, our across about have picky provide strategy board a talked services. out we we to to our provide customers. some follow it, opportunities really how about We're the go about shortage we'll to that see solutions add-on, of front-end there. opportunities We

the that to in those that we're We're seen We're be And into strategy prudent what those have, we're solutions have keep significantly. our out laid the that plans go moving pace following investors past. about the at we've the and watching anything provide of and for how the we And we're plan, And in I ahead five-year we we great can good company to next forward. necessary feel to visibility known making execution. are our the we And decade. like forward doing is position the sure company is we'll a we absorb cash generation.

in executing manner at have to on strategy the looking capital and keep the proper We in to stakeholders. deploy add our field, while the for

Neil Mehta

it talked If $X.XX. Duke. believe path the go last Thanks, of to to follow-up. glide And you was was to April, $X about to $X.XX, the back $X I that I

get So as scenarios like or $XX. could $XX talked then XX% CAGR. upside where EPS to you X% you high about But as a

us base Just And again, how could the update would to us beyond that to of are just those levers tracking you $X on to you're give the upside you scenarios? a $X.XX status plan? that you think that relative remind get what some of case

Earl Austin

I we're better. is relatively guidance growth basis look think on upon, level, guide or at ahead measured now our EPS at the what this XX% year, the of when you XX% which we're a

to, I think as think big across and set all forward. it, We'll about executing the things. of see of to today. to we hear sit already a we the balance at we I here of the the we numbers when opportunities we And and local we're We're executing drive We're doing EPS. level. going those that doing strategy levers that lot things So the kind continue need do do sheet,

not We're it's the top the And just it's line, quality quality of earnings. of earnings. constantly talking about

returns, forward. right on they we capital all and in the direction are go invested returns our return moving at look you of our on If as

Operator

of comes Malloy line question the proceed. with next The Johnson Martin from Rice. Please

Martin Malloy

to Denbury outlook infrastructure. Congratulations Exxon's larger the following what curious the get outlook on COX part terms of wanting quarter. on just about seeing for the you're to first carbon in out And question, the to for of My in ask there I in COX pipeline those pipelines? Exxon of of kind related potential terms kind just acquisition of sequestration. building capture morning. and to And Good on wanted related pipelines

Earl Austin

they Yes. longer, on a way we're carbon usually looking with the type there builds. on that as we're across at but well users constant But that hydrogen that carbon and market We The the sequestration. hydrogen blinds are smaller it. they're and discussions smaller also run operators of as being also nice We market. opportunities in see the as do of see board the end

economic And I both think some the the do forward us. on see benefit will The you'll think in lines sides opportunities RA for as do that. certainly some I help 'XX, provides those of be that of move So bill, market well.

So we had awards. area in nice are and of it. in We've seeing pipe front staying that some opportunities

of type said and be the business. and happy things We can, we're certainly So we able we are. those would handle with to we

for like of we So the it's it. not but business, I opportunities It's think stay main certainly the us.

Martin Malloy

talk I Okay. it seems there lines. that more your perspective, the Can for question, type programs follow-up meaningfully? from little about multiyear And then it's up it lines. about thing out it programs? transmission customer bit those is undergrounding a my to -- appearing like maybe ask of investment in Is electric is what of about underground these a wanted distribution to And utility picking and company commentary in you press

Earl Austin

many a insurance the said prone It which in and fire West there I mean you never seen no I underground. have nature fire of is will things the to from West. the a insurability but early will today, It's West, nature decade you in the but stages decades it underground, of would the continue We're type rates, on and that. that that's utility undergrounding. going an the that see in out ago. what have areas you've only way. go the point, They're the that start on. at And this hardening of not fire that And choice fires think to it you to in punitive reconstruction, economical of lines -- it's are make out of

are. believe do see I in underground the the transmission we that corridors prevalent So you'll

wire some the of chain move those. you come tight. will large things transmission, you do transmission of the looking that undergrounding have Europe I You We're start around about. believe constraints larger bigger that nature, those is and that on forward certainly projects supply in when the are edges when at wire

areas, in mean, overhead, I see work But be will underground. air. still in mainstay Where long prone the some the haul the you'll fire is

Operator

Bernstein. question line Please proceed. with of Chad the next The from Dillard comes

Chad Dillard

guys. morning good Hi,

question my is it that what particularly in did like What exit half? you that small Can talk and half? mix the second mix, So 'XX for do Renewables. versus in half Electric about ultimately about Power rate the what is and margins? first second for And mean the project large look

Earl Austin

at standpoint. don't I utilizations. it. look Yes. on are segments. really look like our at great it utilizations don't It's We all The from that

bigger You'll work. see

this a talk more point. to want Renewables project, your you will If about be in at it

Electric. just cross segments. in of It's multi-year the programs programs, capital, and your deployment crews, Your more be same bigger same will people,

be a to stack that. itself, we're matter utilizations line. just segment the significant, I start you're will the starting The will on both being starting is starts cadence say in, project levels. -- What are what of company on and the high will versus the sides So at cognizant no

right the we're lot kind a programs. And projects large in of of and now, early stages of

be you So that as where we'll that, earnings. of long operate contingencies like we get last the flow good move see into to move contingencies execute 'XX, through and of we things XX we out of in top into as years. see cadence as into 'XX, stack in you'll a out, you'll nature have those We'll start as future them stages shape, and those early you'll on normalized will it 'XX

Chad Dillard

Lineman's question next then That's on helpful. And the College. is my Northwest

can Just what the over trying to to channels? also go the what understand talk the other your we're you it people you years? where looking then is next on meet versus from X,XXX today over that came brought was ability how and to -- just if And that three about scale to that like the and much demand time labor Northwest capacity can five Maybe period?

Earl Austin

recruit quarter. every operate guide. There's points And scale. X,XXX -- add while thought. thing we're lot X,XXX down another or to at whatever there's our with the a certainly we -- to it basis of opportunities add it's on one a the We some that's not it's to Northwest totally Board, lot same or is of quarter pleased every necessary to be the XX able work across internally It's level work, curriculum is Electric just the thing to also margins,

curve Yes. those labor colleges. We hope supply we're or meet the us. and We've But invested and very sound. That put contributing in up demands ability think only it use with to get scale. Could the our in And of we're not more? front-end we've I the having are able and will things and nature, those to we certainly and field at. type we're we make foreseeable to demands as we easy invested people They not curriculums, with the said, in on looking that's it's execute quickly that any only issues absorption chain engineering. of as catches do that -- as cross-skilled

Operator

proceed. comes The from of Suisse. Jamie Credit line next question with Please Cook the

Jamie Cook

Difficulty]. [Technical

Earl Austin

up. breaking I can't Jamie, you're hear you.

it to got You do again.

Jamie Cook

Right. Hold on. now? Can you hear me

Earl Austin

you. Got

Jamie Cook

Okay.

Sorry.

guide the if earnings so, without XXXX earnings just which for and that that's a or half if I about a annualize it's So your we think base back and my trajectory, quarter first $X.XX say, SunZia. question, let's implies of, $X.XX of million

and like XXXX the an we for that about upside SunZia trying setup I'm think imply that? of think XXXX half the is to to that $X without and implies what can So base for earnings back of would in just

with is ability degree But in the my on opportunities. ramp you of I perspective? of growth understand risk strategically. projects limit get then with that from your the projects you. just SunZia number size in more question just to a comfortable you're this capitalize what the environment terms you to do of to second you, on and more fairly you want take concerned to And Thank big management like to labor want

Earl Austin

get Thanks, 'XX Jamie. I'd guidance. I figured

Can look when you course. won't think in reason We about next So starting run double-digit seasonality I do the We're growth it, we no outward, not into numbers. agree some for at year. the it kind I well those we don't of line. and EPS market. the why stacking that. continue we of numbers think ready 'XX, bodes at guide talked a going I rate. to markets. yes. see type have it certainly great us see We're We're on you. get I to with great

and will. look and We're the That the other level, it a customer the still at company. the with that think baseload we work, don't before at the focused highly in When larger things hasn't on we're work percent. CREZ XX-plus projects, the changed. been have I baseload of projects through customer

get will move We large projects as we forward.

We constantly are around programs in negotiations projects. and

some them nature. being five years have multi-year, about You in think of to

of are short Some nature. them

company those different just on focused The projects. execution it's type of itself on So is projects.

seeing our business. material EPC within sides think content we're of it, both see more I I

that things different just So the company is capitalizing on.

at basis, we're sort material return So a when as the you content able better go our to returns well. if look of

So of material. us we things moving that. as large way to on for it's And think start a our lots purchaser competitive of advantage forward going a be I

like I like I it. what we're So doing.

business I only larger as to how the as enhance will enhance solution we that the and think the the -- provide will it well base client. products business only

Operator

Our Please next question comes from the & line of proceed. Adam Davis Thalhimer with Company. Thompson

Adam Thalhimer

for can resources Nice guys. shift Duke, some back morning good, what's of outlook in U.S.? not good to Canada? those the quarter. Hey, it's large projects the you And if T&D Hey,

Earl Austin

see Canada. market in We a Good question. good

have of we already end awards anticipate year. We on some starting that by the the

some clients have We great Rico. partnering Puerto in

-- in capacity. resources, and engineering to lot Canada, able customers a So of move we are

easier. do the Some has things was was over of it some Lower we company in that the said, I the a wish skillset that from a would in us certainly nice help doing easier. done job in Canada. and wish border XX. the I things Canada standpoint. resources It moving But

that we significant. about In we COVID general, we a were step doing and back it some impact I was in look different. had It played And the nothing. were we And it and when more things than here we XX, think, well, lot. it, camps, forget oh, was were there in big at much Lower a

things. see in market, the right catch up, normalized decarbonize different And we Canada solar, as a happening in -- transition just the margins I If that bit market downsize do we in some to a the things there great We're the right behind hydro Canada well. is It's market. more more will seeing what we don't the little you'll we're We're see and see Lower think we well. as -- now wind, of but as XX. see middle seeing those

Adam Thalhimer

it. about segment, then ask 'XX. hate to in Okay. And the I Renewable But Jamie started

of exactly. kind guys yes, -- You

blew away or how you next that XXXX. if curious might just year? can I'm renewables build And top-line for kind -- guys you of You on think for you me

Earl Austin

pent-up I to we a what but Renewable the due cadence where there great think market. discussions. was can And I in outward, the future and I Blattner when future to solar think primarily when purchased We off cleaned the also a a in that segment. panel demand, of we of the grow coming the you're pullback that, was it year continue kind see business said of up,

see a as of to wind up bit You're wind quite repowering as projects. coming going well

that And for think us to the advantage I that I repower decades to well of out. that we And state. of we'll well, that yet. Blattner start things, and even when acquisition, renewable see and positioned the is you wind you're load as led a those And growth switching, go That the that. the see think is as nicely on programmatic have towards spends seeing strategy you don't playing renewable what will take company was of

we see really, everything. you're security you where and growth, are say, you really as issue to once, at onshoring. hit take I then of see double significant. of you're out of And you All these it's long have America the good and happening much are growth starting time. for the North So start things carbon electrification a okay, to while load things all well, markets to load the those the are how penetration, getting going the system, EV

field, time, budget in the radar, to have some make on is main to in feel we blips continue consumer. a time, that's see, that our the projects build which the over and to but we on cost are like of what that concern Can we'll we course, basis execute, you sure we execute economic at on what CAGR is

Operator

question of with And Instructions]. comes proceed. [Operator Please our from Gus Northland. the line next Richard

Auguste Richard

thanks question. Yes, the for taking

does regions have as storage distribution? at In to terms transmission on segment, of starting in and an any increase in the you impact if what on so Are energy and incentivized see renewables that residential, that is storage. for demand

Earl Austin

it, bit and but We'll or we're XX, to a think energy of take would projects. I storage storage a it in plus I we're seeing say, something see minus certainly quite probably quite that's can we've that standpoint the benefit all bit, size in continue seeing We're doubled honestly. we markets business. over, the to utility low was piece -- it the from it west. a It's necessary participating of skill albeit see And there. with in a we

We're it. business. front of definitely way. take doing in growing. the It We the nicely is So in don't were that storage wrong

it I It a be better not will can The help. there continue storage can transmission. will a it's But you help for get as We're move alleviate growing. -- forward. capacity the but future, yet. piece better. small will do It not think of batteries foreseeable get to some business

fits business, even like get win. it, like batteries. looking it So for solar ways to nicely efficient in We're with the our more

this transmission to So at we it any would kind that, the as but of bit, the a as downturn point can't well, in not point. where transmission you see alleviate see

Operator

Capital next of Our question line proceed. Please comes Sean Markets. KeyBanc from with the Eastman

Sean Eastman

adding pretty human away this from up? of thoughts story that of than normal team. run back wanted I quarter? I that's other obviously, trends. the for the obvious demand mean, in about Xx we the that's the flex else a capital on new that? ability the notable. should this Is basically this training to people come additional rate the showing quarter? I to mean Hi, comment to What signal an positive addition kind hit to there? Maybe infrastructure take we've Any throughput for level underlying

Earl Austin

to of the great a levels talk period about in I see to scaling think, that and Sean, I for people we're at lot long at it's a it. And of execute talk lot the the of a we're can to somebody executing. example can scale it of business. a tried what there X,XXX and want able put people about time say we've projects and just

we we the field really, I they're really from build And have. just have what that great not surprised doing scale we a Blattner the quite business these ability a in we infrastructure people. many just a acquired every why internally. and standpoint, say put execution day we we And the added their able segment. to up. numbers be curriculum, resources time, to do me have to put this, about to do what utility level bit bit job. continue seasonality in think reasons an scale put the have to it one can't as from And place enough I over a their we nice great projects upon we we to So but up Renewable in quarter, and We'll

the of nature. the exponential certainly way continuing path doing curriculum we're training that we're It's us technology that from the things I and the and I down things on. forefront. the that to We're forward look see it in in and

Operator

Bianchi Please The line next proceed. question Marc TD Cowen. comes from with of the

Marc Bianchi

year ask you. it to the to to about like Analyst as you of wanted It last XX% would thank power growth the and Hi, relates XX%. of I CAGR outlined that Day renewable kind the seem at that of is you're should well we interconnection? how XX% But in And to 'XX. how Thank above you. here, exceptional a be thinking upside about that bottleneck rate XX% to much Is year now? there that?

Earl Austin

of look outer I then a use you things you it, a talked make or have de-risk on you all basis free as do kind about cash. when years the and we other your some you'll acquisitions we think see, at megatrends as that XX% the of sheet bottom at with balance XX% balance CAGR levers the sheet,

there on So invested like chances in account, into ends those our way you the looks. you on the if upper past, when same outward those the things our are we capital we've the if take look I invest outward, things

sits way the there's you tightening when business the nature, it queues the look things yes, of But in your and just at of that organically, queues.

Your months XX on transformers HVDC. are your XX, out

months XX think it spot, ordered and out. have and a clients affects about we XX, So if today don't that haven't talking you have work you're our a you project transformers to for. your the clients, it you're I

have transformers clients You're already or bigger slots. have

need no in have have I issue real that things -- have my But I the projects, the for others need necessary capacity. hey, there. queue, It's there's that hey, transformer them. it's I the are queue. my in but just, not I lines, are I for So looking

of and getting is you're a do that regulation. it. So piece things think planning of that clarity of I nature some

as us we collaborate I'll I It's utility more think seen than in beyond. so for the I've this career. and this. And say to to here group the next as necessary a and group. federal decade here, states collaborate government, need do the But a my business, is FERC everyone to trying and for the

Operator

Riley B. from question line Alex comes Securities. with next The the Rygiel proceed. of Please

AlexRygiel

nice catalyst have the XXs. this mix to high or Thank from A past quarter. about XXs to of historical ranges into Can talk improved been of you more contract to not very today XXs on or the whether they've the you. expand maybe little DSOs contract the a terms handful a if And a versus contractor? become and terms factor? ago, have more years bit bit a favorable and little

Earl Austin

projects to things a some be more piece a We the bit think those a so bit. term and outward of and seen you've materials standpoint. from that say some helping on I a what you nature, little I'll from Yes. standpoint, of see us DSO it's acquiring that's of order able but need Alex, bigger We're to inventories.

some inventories on things. of the terms. Our I that can up comment little But Jayshree, And there a on here the think better those move that's DSOs. you said, bit or

Jayshree Desai

Yes.

expectations we're I improve think our that. our DSOs see we've will talked in to past about the capital, on working and our and starting

of that a terms is In in renewable capital. positive our work of now. allow way you're in us projects the working some or run materials coming the benefit of And terms, seeing the certain parts contract performed, because to us definitely to, allow

that flows and as our for grows we're see It's moving expected as But cash our see what our in general, And well flow we you projections. continue are the in the as we business to good headed why in segment. cash where improvement feeling our increased that's year. DSOs we'll Renewables about modestly

Operator

I'd like the call closing and back Thank to remarks. question-and-answer turn this the gentlemen, concludes you. Ladies management for to session.

Earl Austin

our And thank I We interest participating It We call. every employees you. conference working call. thank of execution. appreciate safe to concludes Quanta and day. un-noticed the our in in XX,XXX-plus for commitment go to you're This questions that Services. heat Thank you. Quanta in you. does Thank your a ongoing their Thank want your people all the not want to degree XXX-plus

Operator

concludes today's This conference.

lines this for at your you participation. Thank time. your disconnect may You

Quanta Services (PWR) 3 Aug 232023 Q2 Earnings call transcript