How did Quanta perform financially in Q3 2024?

Revenue rose 15.5% to $6.49 billion, net income attributable to common stock was $293.2 million, and diluted GAAP EPS was $1.95. Adjusted diluted EPS, a non-GAAP measure that excludes items such as amortization and stock-based compensation, was $2.72, up from $2.24.

What drove the growth and where was it weakest?

Electric Power Infrastructure Solutions revenue grew about 20% to $2.98 billion and Renewable Energy Infrastructure Solutions grew about 29% to $2.25 billion. Underground Utility and Infrastructure Solutions fell about 9% to $1.26 billion, and its operating margin declined to 7.5% from 8.9%.

Is Quanta generating more cash, and what is the backlog outlook?

Yes. Nine-month operating cash flow was $1.37 billion, compared with $572 million a year earlier, and free cash flow was $979.3 million. Total backlog reached a record $34.0 billion, and remaining performance obligations were $15.6 billion, which provides good visibility into future revenue.

Why did GAAP EPS grow more slowly than adjusted EPS?

Amortization of intangible assets rose to $110.4 million in the quarter from $71.4 million, largely because of recent acquisitions including Cupertino Electric. This amortization is excluded from adjusted EPS but reduces GAAP earnings. Acquisition and integration costs also weighed on GAAP results.

What did the filing say about 2024 guidance and the Cupertino Electric acquisition?

Management raised the midpoint of its full-year 2024 adjusted EPS expectations, and the detailed range is posted on the company's investor relations website, not in this 8-K. Management said Cupertino Electric's integration is progressing well and that early customer response to its technology and data center electrical offering is positive.

PWR 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.

Quanta Services (PWR) reported third quarter 2024 results on October 31, 2024, showing continued double-digit growth.

Q3 consolidated revenues rose 15.5% year over year to $6.49 billion, GAAP diluted EPS increased to $1.95^a from $1.83, and adjusted diluted EPS rose to $2.72 from $2.24 (a 21% increase). Adjusted EBITDA reached a record $682.8 million, up from $592.5 million, and net income attributable to common stock was $293.2 million. Growth was led by the Electric Power and Renewable Energy segments, while the Underground Utility segment declined, with revenues down about 9% in the quarter.

Cash generation improved markedly. Year-to-date operating cash flow was $1.37 billion^b versus $572 million a year earlier, and year-to-date free cash flow was $979.3 million versus $295 million. Total backlog reached a record $34.0 billion, and remaining performance obligations stood at $15.6 billion.

Quanta completed the Cupertino Electric acquisition in July 2024, which management says is progressing well and is driving positive customer response in the technology and data center electrical market. Management also raised the midpoint of its full-year 2024 adjusted EPS guidance and said it expects another year of double-digit EPS growth in 2025. Key watch items include rising amortization of acquired intangibles, which weighed on GAAP EPS, a thinner margin at the consolidated operating level (6.6%^c versus 7.1%), and a higher debt load following acquisitions.

The filing itself is a Regulation FD and earnings disclosure. The Q3 Operational and Financial Commentary, which was furnished as an exhibit, is not part of the 8-K text and is not audited.

02—Key points

Key Highlights

Record Q3 consolidated revenues of $6.49 billion, up 15.5% from $5.62 billion a year earlier.
Adjusted diluted EPS of $2.72, up 21% year over year from $2.24; GAAP diluted EPS of $1.95 versus $1.83.
Record Q3 adjusted EBITDA of $682.8 million, up about 15% from $592.5 million.
Year-to-date free cash flow of $979.3 million, more than triple the $295.0 million in the prior-year period, on operating cash flow of $1.37 billion.
Total backlog hit a record $34.0 billion, with remaining performance obligations of $15.6 billion.
Electric Power and Renewable Energy segments drove growth, while Underground Utility revenues fell about 9% in the quarter.
Management raised the midpoint of 2024 adjusted EPS guidance and expects double-digit EPS growth again in 2025.

03—Questions

Frequently Asked Questions

How did Quanta perform financially in Q3 2024?
Revenue rose 15.5% to $6.49 billion, net income attributable to common stock was $293.2 million, and diluted GAAP EPS was $1.95. Adjusted diluted EPS, a non-GAAP measure that excludes items such as amortization and stock-based compensation, was $2.72, up from $2.24.
What drove the growth and where was it weakest?
Electric Power Infrastructure Solutions revenue grew about 20% to $2.98 billion and Renewable Energy Infrastructure Solutions grew about 29% to $2.25 billion. Underground Utility and Infrastructure Solutions fell about 9% to $1.26 billion, and its operating margin declined to 7.5% from 8.9%.
Is Quanta generating more cash, and what is the backlog outlook?
Yes. Nine-month operating cash flow was $1.37 billion, compared with $572 million a year earlier, and free cash flow was $979.3 million. Total backlog reached a record $34.0 billion, and remaining performance obligations were $15.6 billion, which provides good visibility into future revenue.
Why did GAAP EPS grow more slowly than adjusted EPS?
Amortization of intangible assets rose to $110.4 million in the quarter from $71.4 million, largely because of recent acquisitions including Cupertino Electric. This amortization is excluded from adjusted EPS but reduces GAAP earnings. Acquisition and integration costs also weighed on GAAP results.
What did the filing say about 2024 guidance and the Cupertino Electric acquisition?
Management raised the midpoint of its full-year 2024 adjusted EPS expectations, and the detailed range is posted on the company's investor relations website, not in this 8-K. Management said Cupertino Electric's integration is progressing well and that early customer response to its technology and data center electrical offering is positive.

04—Continue

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