10-QPeriod: Q1 FY2022

QUANTA SERVICES, INC. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 5, 2022For Securities:PWR

Summary

Quanta Services, Inc. (PWR) reported its first quarter 2022 results, showcasing significant revenue growth driven by strong performance across all three segments: Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions. While revenues surged by 46.7% year-over-year to $3.97 billion, net income attributable to common stock saw a slight decrease of 5.7% to $84.6 million, resulting in diluted EPS of $0.57, down from $0.62 in the prior year period. This divergence is largely attributable to increased selling, general, and administrative expenses, and a substantial rise in amortization of intangible assets, mainly due to recent acquisitions, particularly Blattner. The company's robust backlog and remaining performance obligations, reaching $20.5 billion and $6.84 billion respectively, indicate strong future revenue potential. Management highlighted continued investment in grid modernization, renewable energy infrastructure, and underground utility solutions as key growth drivers. Despite inflationary pressures and supply chain challenges noted by management, Quanta's strategic positioning and diverse service offerings are expected to support continued growth.

Financial Highlights

54 data points
Beta

Revenue

$3.97B

13.8% Gross Margin

Net Income

$84.64M

2.1% Net Margin

EPS (Diluted)

$0.57

Total Assets

$13.02B

Cash & Equivalents

$238.26M

Free Cash Flow

-$24.85M

Financial Statements
Beta
Revenue$3.97B
Cost of Revenue$3.42B
Gross Profit$548.17M
SG&A Expenses$324.89M
Operating Income$117.52M
Interest Expense$24.73M
Net Income$84.64M
EPS (Basic)$0.59
EPS (Diluted)$0.57
Shares Outstanding (Basic)143.54M
Shares Outstanding (Diluted)148.08M

Key Highlights

  • 1Total revenues increased by 46.7% to $3.97 billion for the three months ended March 31, 2022, compared to $2.70 billion in the prior year period.
  • 2Operating income saw a modest increase of 3.3% to $117.5 million, while net income attributable to common stock decreased by 5.7% to $84.6 million.
  • 3Diluted EPS declined to $0.57 from $0.62 in the same period last year, reflecting increased operating expenses.
  • 4The Renewable Energy Infrastructure Solutions segment experienced substantial revenue growth of 128.0%, largely due to the acquisition of Blattner.
  • 5Remaining performance obligations increased by 16.1% to $6.84 billion, indicating strong future revenue visibility.
  • 6Total backlog grew by 6.1% to $20.5 billion, underscoring a healthy pipeline of future projects.
  • 7Net cash provided by operating activities decreased to $85.1 million from $125.6 million, primarily due to increased working capital requirements.

Frequently Asked Questions

Revenue growth was driven by a substantial increase in demand across all three reportable segments: Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions. This was bolstered by increased utility spending on grid modernization, renewable energy development, and the ongoing integration of acquired businesses, notably Blattner.

The decrease in net income was primarily due to higher selling, general, and administrative expenses and a significant increase in amortization of intangible assets. These increases are largely attributable to recent acquisitions, particularly the acquisition of Blattner, which added to the company's cost structure and intangible asset amortization.

Quanta Services has a strong future revenue outlook, evidenced by a 16.1% increase in remaining performance obligations to $6.84 billion and a 6.1% increase in total backlog to $20.5 billion as of March 31, 2022. This indicates a robust pipeline of work expected to be recognized in future periods.

Key growth drivers include continued investments by utilities in grid modernization and hardening, the ongoing transition to renewable energy sources and associated infrastructure development, and increased demand for underground utility and infrastructure solutions driven by aging infrastructure replacement and regulatory requirements. The company also benefits from the integration of recent acquisitions.