tapebrief
PWR · Q3 2025

PWR · Q4 2025 Earnings

Bullish

Quanta Services

Reported February 19, 2026

30-second summary

Quanta closed FY2025 with Q4 revenue of $7.84B (+19.7% YoY), adjusted EPS of $3.16, and record total backlog of $43.98B (+$4.8B QoQ, +$8.2B YoY) — and dropped an aggressive FY2026 guide of $33.25–$33.75B revenue and $12.65–$13.35 adjusted EPS, explicitly framed as "over 20% adjusted EPS growth." The print answered last quarter's hidden-EBITDA-cut worry decisively: FY adjusted EBITDA came in at $2.88B, at the high end of the prior $2.77–$2.88B range, and the 2026 adjusted EBITDA guide of $3.34–$3.50B implies ~18.8% growth at midpoint vs. $2.88B. The trade management is asking investors to accept: electric segment operating margin guided at 10.3% midpoint for 2026 — essentially flat vs. the FY25 print — in exchange for ~17% top-line growth, $500–700M of vertical supply-chain investment, and a 5–10 year programmatic contract pivot.

Headline numbers

EPS

Q4 FY2025

$3.16

Revenue

Q4 FY2025

$7.84B

+19.7% YoY

Gross margin

Q4 FY2025

15.5%

Free cash flow

Q4 FY2025

$0.95B

Operating margin

Q4 FY2025

6.2%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$7.84B+19.7%$7.63B+2.7%
EPS$3.16—$3.33-5.1%
Gross margin15.5%—15.9%-40bps
Operating margin6.2%—6.8%-60bps
Free cash flow$0.95B—$0.44B+116.1%

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueFY2025$27.8 billion to $28.2 billion$28.48 billion+$0.28 billion above high endBeat
Diluted EPS (GAAP)FY2025$6.53 to $7.02$10.75+$3.73 above high endBeat
Adjusted Diluted EPSFY2025$10.33 to $10.83$10.75$0.00 at midpoint (slightly below high end at -$0.08)Beat
Adjusted EBITDAFY2025$2.77 billion to $2.88 billion$2.979 billion+$0.099 billion above high endBeat
Free Cash FlowFY2025$1.30 billion to $1.70 billion$1.673 billionin-line (at high end of range)Met

New guidance

MetricPeriodGuideYoY
RevenueFY2026$33.25 billion to $33.75 billion—
Diluted EPS (GAAP)FY2026$8.36 to $9.06—
Adjusted Diluted EPSFY2026$12.65 to $13.35—
Net IncomeFY2026$1.27 billion to $1.38 billion—
EBITDAFY2026$3.09 billion to $3.25 billion—
Adjusted EBITDAFY2026$3.34 billion to $3.50 billion—
Operating Cash FlowFY2026$2.30 billion to $2.85 billion—

Segment KPIs

Q4 FY2025
SegmentQ4 FY2025YoY
Electric Infrastructure Solutions$6.427B+19.5%
Underground Utility and Infrastructure Solutions$1.415B+20.6%

Other KPIs

Q4 FY2025
SegmentQ4 FY2025
Remaining Performance Obligations (RPO)$23.76B
Total Backlog$43.98B
Electric Segment RPO$21.64B
Electric Segment Total Backlog$36.17B
Adjusted EBITDA$845.3M
Operating Cash Flow$1.127B
Electric Segment Operating Margin10.8%
Underground and Infrastructure Segment Operating Margin7.7%

Management tone

Q4 24 → Q1 25 → Q2 25 → Q3 25 → Q4 25 narrative arc: Cycle setup → "Fundamental transformation" → "Potential historic investment" → Generational cycle + Total Solutions launch → "Compounder of profitable growth, just getting started."

Three quarters ago Quanta described itself as a solutions partner with a strong infrastructure services franchise; last quarter it launched the Total Solutions power generation platform and stood up the Zachry JV; this quarter management explicitly relabels the company as a "compounder of profitable growth" and asserts "in many ways, we believe we are just getting started." The shift signals management wants investors to underwrite a perpetual-compounder multiple, not a project-cycle multiple — and the FY26 guide ($33.5B revenue, 20%+ adjusted EPS growth) is the print that backs that framing.

The vertical supply chain commitment escalated from rhetorical positioning to a quantified, multi-year capex program. Q3 management was qualitatively describing transformer investments; this quarter the CFO and CEO put hard brackets on it: "strategically investing approximately $500 to $700 million over the next several years in our power transformer manufacturing facilities and vertical supply chain strategy" — with the Q&A range expanding to $300–500M baseline up to $700M. This is the single biggest non-M&A capital commitment in Quanta's history and it explains why the FY26 FCF guide midpoint only grows 7.6% even as adjusted EPS grows 21%.

The contract-structure pivot moved from "we are seeing more programmatic work" to a definitional shift in how Quanta sells. Management framed the change as "moving from one-to-two-year bidding to five-to-ten-year programmatic negotiations" and "solution-based pricing vs. per-unit pricing focus." That is the language of a switching-cost business with multi-year revenue visibility — and is the underwriting basis for management's claim of "meaningful visibility heading into 2026 and beyond."

The most notable tone change is on margins, and it cuts against the rest of the narrative. After three quarters of margin expansion rhetoric, management this quarter explicitly pushed back on margin-expansion expectations: "regulated utility business limits margin expansion; 6,000 employee organic growth pressures margins; focus on risk-adjusted compounding over multi-decade periods rather than percentage point margin gains." The 2026 Electric segment margin guide of 10.3% — below the Q4 print of 10.8% and Q3's 11.4% — is the number that proves the point. Management is asking investors to trade margin expansion for scale, programmatic visibility, and supply chain control.

Recurring themes management leaned on this quarter:

Record results across eight of nine years with nine consecutive years of record-adjusted EPSConvergence of utility modernization, power generation, and large load growth as multi-decade structural tailwindTotal solutions platform spanning craft labor, supply chain, and vertical integrationDisciplined M&A strategy (eight acquisitions in 2025) expanding workforce to 69,500 employeesRecord backlog of $44 billion providing multi-year visibility and execution certaintyPower transformer manufacturing vertical supply chain investment ($500-700M) as differentiation moat

Risks management surfaced:

Risks and uncertainties difficult to predict or beyond Quanta's control that could cause actual results to differ materially from forward-looking statementsCollection of remaining Canadian renewable transmission project balance (mentioned as upcoming but managed)Capital expenditure deployment for vertical supply chain could impact near-term cash flow

Q&A highlights

Julian DeMoulin-Smith · Jefferies

How will the analyst day set the tone for earnings growth through the back half of the decade? What is embedded in 2026 guidance for data center contracts? Where is the company positioned on capturing the data center opportunity—internally or through further acquisitions?

Data center represents ~10% of business on a go-forward basis with fastest-growing backlog. Management sees at least a decade of growth ahead in data center. Company is well-positioned to capture growth. Management confident in continuing past decade of results with same team and philosophy in better markets with larger TAMs.

Data center ~10% of business currentlyData center is fastest-growing backlog segmentAt least a decade of growth projected in data centerSame management team delivering decade-plus of results

Stephen Fisher · UBS

How should we bridge puts and takes between 2025 and 2026 in the electric market? What is the role of SunZia and other large projects? How will margin initiatives (vertical integration, resource sharing, mix) come through?

No major large 765-type transmission projects in 2026; no SunZia. Growth is broad-based across spectrum. Company has $33.5B scale where SunZia doesn't move needle. Two large TAMs (technology over $1T, utility over $1T) provide growth opportunities beyond large projects. Margins improvement possible but company taking prudent approach; regulated utility business limits margin expansion; 6,000 employee organic growth pressures margins; focus on risk-adjusted compounding over multi-decade periods rather than percentage point margin gains.

No 765-type transmission work anticipated in 2026No major large projects in 2026 guidanceCompany scale $33.5 billionTechnology TAM over $1 trillion

Jamie Cook · Truist Securities

What is the path toward more CCGT projects following NYSource announcement? Are additional customers coming to Quanta? Will joint ventures continue as the path? Why are electric infrastructure margins at 10.3% guidance with no expansion despite 765 projects coming and larger projects being margin-favorable?

Company opportunistically pursuing CCGT/generation projects with focus on risk-adjusted pricing (no firm fixed-price generation). Expansion will be through both JVs and internal execution. Electric infrastructure margins at 10.3% are prudent guidance midpoint; company sees improvement opportunities but focused on compounding story and quality of earnings over single-point margin expansion; regulated utility business and organic hiring limit near-term margin expansion; unwilling to take risks seen in past.

Risk-adjusted approach to generation projects (no firm fixed-price)Both JV and internal execution paths for generationElectric infrastructure margins guidance at 10.3% midpointPrudent approach to margin guidance with upside potential

Manish Sumaya · Cantor Fitzgerald

What is the pricing discipline holding in the marketplace and potential supply chain headwinds? How is Quanta de-risking supply chain through this morning's announcements?

Supply chain de-risking is critical; $300-500M over three years, potentially up to $700M, addressing transformer and breaker availability risks. Vertical supply chain investments and strategic build partnerships (AAP spec transformers) ensure certainty. Pricing dynamic shift: moving from one-to-two-year bidding to five-to-ten-year programmatic negotiations. Tight craft labor market is a tailwind for Quanta given two-decade investment in workforce development.

$300-500 million to $700 million investment over three years for supply chain de-riskingShift from 1-2 year bidding to 5-10 year programmatic contractsVertical supply chain investments (transformers, breakers)Partnership with AAP on transformer manufacturing

Mark Strauss · J.P. Morgan

What is the pipeline for gas power generation and expected backlog trend in 2026? Will expansion occur beyond the Zachary JV structure?

Strong market demand for combined cycle, single cycle, and various generation types. Company pursuing both JV and internal execution paths for generation. Currently no major generation backlog yet, but confidence in booking throughout year. More significant revenue ramp expected in 2027-2029. Risk-adjusted pricing approach only (no firm fixed-price). Multiple generation projects expected in backlog before year-end, building on strong internal platform.

First generation project not yet in backlogMultiple generation projects expected in backlog by year-endRamp timing: 2027, 2028, 2029Both JV and internal execution paths pursued

Answers to last quarter's watch list

Q4 EBITDA print and the FY EBITDA midpoint cut — FY25 adjusted EBITDA came in at $2.88B, at the high end of the trimmed $2.77–$2.88B range. Q4 adjusted EBITDA was $845M, sequentially down from $858M but on higher revenue. The Q3 hidden cut concern is resolved on the FY25 outturn — a clean beat to the top of the range. Status: Resolved positively
Electric segment op margin holding 11%+ — Q4 print was 10.8%, off the Q3 peak of 11.4% but still above FY24 levels. More importantly, 2026 guidance midpoint is 10.3%, below both the Q3 and Q4 prints. Management explicitly framed the step-down as the cost of 6,000 organic hires and regulated-utility mix, not as cycle weakness. The 11%+ bar did not hold. Status: Resolved negatively
Underground op margin durability — Q4 segment margin printed 7.7% vs. Q3's 8.4% — reverted toward but stayed above FY24 levels. Not a collapse, but the Q3 peak did not sustain. Status: Continue monitoring
First quantitative 2026 frame — FY26 adjusted EPS guide of $12.65–$13.35 (midpoint $13.00) implies +21% growth off the $10.75 FY25 actual, comfortably clearing the >$11.65 implied threshold from the "double-digit EPS growth" qualitative language. Revenue guide of $33.25–$33.75B implies +17.6% YoY. Management exceeded the qualitative commitment. Status: Resolved positively
CCGT contract structure disclosure — Management again refused to disclose fixed-price vs. cost-plus on NiSource specifically, but did make the broader structural statement that Quanta will only pursue generation work on "risk-adjusted pricing — no firm fixed-price." That is closer to disclosure than last quarter's full deflection. The specific NiSource structure remains undisclosed. Status: Continue monitoring
Backlog conversion velocity — Total backlog grew $4.8B QoQ to $43.98B; RPO grew $2.76B QoQ to $23.76B. The total-vs-RPO gap widened to $20.22B from $18.2B — LNTPs are still accumulating faster than firm conversion, but in absolute terms RPO growth accelerated vs. Q3's $1.8B add. Mixed read: firm conversion is accelerating, but uncontracted committed pipeline is growing even faster. Status: Continue monitoring

What to watch into next quarter

Q1 2026 Electric segment op margin vs. the 10.3% FY guide midpoint: management explicitly took the FY26 Electric margin guide below both the Q4 (10.8%) and Q3 (11.4%) prints. Watch whether Q1 prints at or above 10.3% — anything below would suggest 6,000 organic hires plus regulated mix is pressuring margins faster than expected, and the FY26 adj. EPS guide rests on the margin floor holding.

Generation backlog bookings: management said multiple CCGT projects expected in backlog before year-end 2026. Watch for the first material generation backlog disclosure in Q1 or Q2 2026 — if no generation work books by mid-2026, the 2027–2029 revenue ramp narrative weakens.

Vertical supply chain capex pace: $500–700M over "next several years" is the bracket. Watch Q1 2026 capex disclosure for evidence of front-loading (would pressure FCF further vs. the $1.80B midpoint guide) or back-loading (would imply the FCF guide has cushion).

Organic vs. acquisition contribution split: 2026 guide explicitly attributes $0.40–$0.50 of adjusted EPS to acquisitions. Watch quarterly bridges for whether organic execution is tracking to the implied ~$1.80 of organic EPS growth, or whether M&A is doing more of the work than disclosed.

RPO-to-total-backlog ratio: the gap widened to $20.22B this quarter. Watch whether Q1 2026 sees RPO catch up (firm contract conversion winning) or the gap widen further beyond $21B (LNTP accumulation outrunning conversion).

Renewable safe-harbor cliff visibility: prior quarters flagged customers safe-harbored into 2028–2029. Watch for any 2026 commentary on renewable backlog reductions or pull-forwards as the 2027 ITC cliff approaches.

Sources

  1. Quanta Services Q4 2025 press release (Exhibit 99.1), SEC filing dated February 19, 2026 — https://www.sec.gov/Archives/edgar/data/1050915/000119312526058069/d101511dex991.htm
  2. Tapebrief Q3 2025 PWR brief (prior-quarter context, watch list, guidance baseline)
  3. Tapebrief Q2 2025 PWR brief (prior-quarter narrative arc context)

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