Quanta Services, Inc. Q4 FY2024 earnings call

Duke Austin stated Quanta reported double-digit growth in revenues and earnings, with record financial metrics. Total backlog at year-end was $34.5 billion, with the renewable energy infrastructure solutions segment achieving all-time highs in backlog. Quanta has had record revenues seven of the last eight years, seven consecutive years of record adjusted EBITDA, and eight consecutive years of record adjusted diluted earnings per share. Jayshree Desai noted Quanta completed the year with strong financials, and subsequent to 2024, acquired two companies for aggregate upfront consideration of approximately $562 million of cash and stock. The new segment reporting reflects how the business is managed and resources are allocated.

Fourth quarter revenues were $6.6 billion. Net income attributable to common stock was $305.1 million, or $2.03 per diluted share. Adjusted diluted earnings per share was $2.94. Adjusted EBITDA was $737.8 million, or 11.3% of revenues. Free cash flow in the fourth quarter was $575.4 million and $1.6 billion for the full year 2024, with full-year free cash flow a record. Starting from March 31, 2025, results will be reported under two reportable segments: electric infrastructure solutions and underground utility and infrastructure solutions. The new segment reporting reflects how the business is managed and resources are allocated.

Quanta provided full-year 2025 financial expectations, calling for profitable growth with record revenues, improved margins, and opportunity for double-digit growth in adjusted EBITDA and adjusted earnings per share. Backlog is expected to be at record levels, with growth across various markets. The company is pacing well against multiyear financial targets, including double-digit EPS growth and double-digit returns.

Discussions around potential impacts from changes in government policies, such as layoffs, deregulation, and import bans, which could affect approval processes and project timelines. Also, risks associated with fire events and the need to harden the grid, as well as managing risk in gas-fired generation projects.

Q: What does the shift from investing in training data centers to inference mean for Quanta and the broader grid?

A: Duke Austin mentioned seeing firm demand on energy, not concerned with the specific shift but noting the firm demand on infrastructure.

Q: What sort of revenue contribution should we be baking in for 2025 from recent M&A?

A: Jayshree Desai said they don't discuss individual acquisitions but mentioned the acquisitions are captured in segments and guidance includes inorganic contribution.

Q: Impact of California wildfires on Quanta and long-term undergrounding?

A: Duke Austin discussed involvement in hardening the grid and addressing fire risks, with ongoing efforts to make the grid more resilient.

Q: Outlook for underground business in 2025?

A: Duke Austin mentioned margin improvement potential due to industrial business improvement, acquisitions, and leveraging capabilities across segments.