10-QPeriod: Q3 FY2022

QUANTA SERVICES, INC. Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 4, 2022For Securities:PWR

Summary

Quanta Services, Inc. (PWR) reported strong revenue growth in the third quarter and first nine months of fiscal year 2022, driven by increased demand across its key segments: Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions. Total revenues surged by 33.0% year-over-year for the quarter and 39.8% for the nine-month period, largely fueled by contributions from recent acquisitions, particularly Blattner in the Renewable Energy segment, and increased utility spending on grid modernization. Despite the top-line growth, net income attributable to common stock saw a decline of 10.6% for the quarter, primarily due to a significant unrealized loss on an investment in a publicly traded company (Starry) and increased amortization expenses from acquisitions. However, operating income showed resilience, increasing by 15.6% for the quarter, supported by robust performance in the Underground Utility and Infrastructure Solutions segment and steady contributions from Electric Power Infrastructure Solutions. The company maintained a strong backlog, ending the period with $20.87 billion, indicating continued demand for its services.

Financial Highlights

55 data points
Beta

Revenue

$4.46B

15.4% Gross Margin

Net Income

$155.96M

3.5% Net Margin

EPS (Diluted)

$1.06

Total Assets

$13.30B

Cash & Equivalents

$215.40M

Free Cash Flow

$237.40M

Financial Statements
Beta
Revenue$4.46B
Cost of Revenue$3.77B
Gross Profit$688.83M
SG&A Expenses$347.45M
Operating Income$286.79M
Interest Expense$33.57M
Net Income$155.96M
EPS (Basic)$1.09
EPS (Diluted)$1.06
Shares Outstanding (Basic)143.35M
Shares Outstanding (Diluted)147.68M

Key Highlights

  • 1Revenues increased significantly, up 33.0% year-over-year for the quarter to $4.46 billion and 39.8% for the nine months to $12.66 billion.
  • 2Operating income grew by 15.6% year-over-year to $286.8 million for the quarter, reflecting strong demand and operational execution.
  • 3Net income attributable to common stock decreased by 10.6% to $156.0 million for the quarter, impacted by a $26.5 million unrealized loss on an investment.
  • 4The Renewable Energy Infrastructure Solutions segment experienced substantial revenue growth of 195.1% for the quarter, largely due to the acquisition of Blattner.
  • 5Backlog remained strong, increasing to $20.87 billion as of September 30, 2022, signaling robust future revenue potential.
  • 6Cash provided by operating activities significantly improved, increasing by $325.5 million to $343.4 million for the quarter compared to the prior year period.
  • 7Increased amortization expenses related to recent acquisitions, notably Blattner, impacted profitability, contributing to higher Corporate and Non-Allocated Costs.

Frequently Asked Questions

The substantial revenue growth was driven by several factors, including increased spending by utility customers on grid modernization and hardening, strong demand in the renewable energy sector (bolstered by the acquisition of Blattner), and higher activity in gas utility and industrial services. The Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions segments all contributed to the overall revenue increase.

The decrease in net income was primarily attributed to a $26.5 million unrealized loss from the mark-to-market adjustment on Quanta's investment in Starry Group Holdings, Inc., a publicly traded company. Additionally, higher amortization expenses resulting from recent acquisitions, particularly Blattner, also impacted profitability.

Quanta Services maintains a strong backlog of $20.87 billion as of September 30, 2022, indicating sustained demand for its services across its core segments. This robust backlog, combined with positive long-term industry trends in infrastructure, renewable energy, and utilities, positions the company well for continued revenue generation and growth.

The Electric Power Infrastructure Solutions segment saw revenue growth driven by utility spending on modernization. The Renewable Energy Infrastructure Solutions segment experienced dramatic revenue growth, largely due to the Blattner acquisition. The Underground Utility and Infrastructure Solutions segment benefited from increased demand from gas utility and industrial customers, showing improved operating income and margin.