PWR Quanta Services 10-Q 2026-09-30 section summaries

Quanta Services (PWR) — Q3 and nine months ended September 30, 2026

Consolidated results

Revenue grew 57.4% in Q3 and 42.7% in 9M. Higher amortization—$188.6M versus $133.2M in Q3 and $498.0M versus $355.9M in 9M—along with increased stock compensation contributed to higher corporate and non-allocated costs.

Segment performance — Q3

Electric segment margin rose to 12.6% from 11.4%; Underground and Infrastructure margin increased to 9.4% from 8.4%. Both segments also improved their 9M margins year over year: Electric to 11.2% from 10.0%, and Underground and Infrastructure to 8.8% from 7.1%.

Revenue mix and operating outlook

Fixed-price work increased to 68.1% of Q3 revenue from 63.1%, heightening the importance of estimating and executing projects within budget. Remaining performance obligations were approximately $41.75B at September 30, 2026, versus $23.76B at December 31, 2025; about 67% is expected to convert to revenue within 12 months. Conversion remains subject to project timing, permitting, weather, customer acceptance of change orders and other execution risks. Revenue recognized over time using cost-to-cost percentage of completion was 71.5% of Q3 revenue (64.6% prior year) and 68.5% for 9M (63.6%).

Unapproved change orders and claims, primarily in contract assets, declined to $488.4M from $983.6M at year-end, largely after customer approval of amounts for a completed Canadian renewable transmission project. Contract assets were $1.713B versus $1.522B at year-end, while contract liabilities rose to $5.536B from $3.259B, primarily reflecting large-project activity and favorable billing terms. Quanta recognized approximately $2.76B of 9M revenue from contract liabilities outstanding at year-end, compared with $1.94B in the prior-year period.

Cash flow and capital allocation

Working-capital movements included uses of $2.647B from receivables and retainage and $510.9M from contract assets, partly offset by $1.929B from payables and accrued liabilities and $1.984B from contract liabilities. Cash, cash equivalents and restricted cash ended 9M at $2.321B, versus $613.7M a year earlier. The quarterly dividend increased to $0.11 per share from $0.10. A $1.00B repurchase authorization took effect in May; no shares were repurchased in 9M 2026, versus $134.6M of repurchases in 9M 2025.

Balance sheet, debt and equity

Tangible common equity, calculated as stockholders’ equity less goodwill and other intangible assets, was approximately negative $715.9M. Other intangible assets include $3.1669B of net amortizable intangibles and a $3.000M engineering license. Net amortizable intangibles include customer relationships, backlog, trade names, non-compete agreements, patented rights/developed technology/process certifications/other, and curriculum.

Quanta issued $2.00B principal of senior notes in August at coupons of 4.85% (due 2029), 5.30% (2033) and 5.55% (2036), receiving $1.98B net of discounts and financing costs; it repaid its $618.8M term loan in September. The revolving facility increased to $2.98B and was extended to July 2031; $2.90B was available at quarter-end. Senior-note fair value was $6.23B versus carrying value of $6.69B. Quanta reported covenant compliance. Cash interest paid in 9M was $225.519M, versus $169.712M.

Acquisitions, compensation and principal risks

Nine-month acquisitions involved estimated total consideration of $1.800B: $1.291B cash, $299.6M fair value of stock issued and $209.6M contingent consideration. Acquired net assets included $772.2M of identifiable intangible assets and $695.2M of goodwill; approximately $527.6M of acquisition-related goodwill is expected to be tax deductible. Additional contingent payments of up to approximately $242.4M may be earned. Fair-value contingent consideration liabilities were $837.4M at quarter-end, against aggregate maximum potential payments of $921.5M. Acquisitions completed in the periods contributed Q3 revenue of $898.6M versus $335.7M and 9M revenue of $985.7M versus $548.2M.

Non-cash stock-based compensation rose to $193.9M in 9M from $129.1M. At September 30, unvested awards included 1.631M RSUs and 395,000 PSUs; unrecognized compensation was $369.7M for RSUs and $46.0M for PSUs. Common shares outstanding increased during the period as shown above.

Outstanding performance bonds were approximately $23.1B. Gross accrued insurance and employee-related claims were $688.9M, with $5.7M of related insurance recoveries/receivables. Quanta also notes potential exposure from joint ventures’ joint-and-several obligations and subsidiary guarantees. In the Silverado Fire matter, management assessed a material loss as not probable and expected insurance to cover liabilities above the applicable deductible.

Quanta Services (PWR) — Part I, Item 2

Consolidated results

Revenue growth reflected strong demand across both segments, including grid modernization and reliability work, rising electricity needs from data centers, manufacturing and electrification, and continued demand for transmission, substations, renewables, storage and interconnections. Underground work benefited from gas-system maintenance, pipeline integrity and safety-related projects. Acquisitions also contributed materially to growth. Management expects strong demand to continue.

Q3 segment results

Electric revenue growth included approximately $1.22B from acquired businesses; improved execution in electric and power-generation services also supported segment profit and margin. Underground and Infrastructure growth included approximately $335M of acquired-business revenue, with mechanical-services acquisitions improving fixed-cost absorption. Higher corporate costs included $55.4M more acquisition-related intangible amortization and $36.6M more compensation, including non-cash stock and variable compensation.

Backlog and demand visibility

September backlog included $51.8851B in Electric and $11.8466B in Underground and Infrastructure. Growth reflected new awards and higher volumes with existing customers, as well as acquisitions. Backlog includes estimated MSA and certain non-fixed-price work; it is not a GAAP measure or a guarantee of future revenue. MSAs were 31% of estimated 12-month backlog and 37% of total backlog, down from 37% and 44%, respectively, at year-end. MSA volumes generally are not committed, and contracts are often terminable on short notice.

Cash flow and liquidity

Operating cash flow improved with earnings, non-cash adjustments and working-capital movements. Days sales outstanding fell to 50 days from 66 days a year earlier, below the five-year historical average of 69 days; prior-year DSO was affected by change orders and claims on a large Canadian renewable-transmission project. Prior-year operating cash flow also included an approximately $109.1M federal tax payment deferred from 2024 under disaster relief.

Investing outflows included $1.10B for acquisitions and $719.0M of capital expenditures; the prior period included $1.78B for acquisitions and $149.2M mainly for an integral equity-method investment. Quanta expects continued investment in equipment, leasing/rentals and strategic manufacturing facilities, as well as potential acquisitions.

In August 2026, Quanta issued $2.00B aggregate principal of senior notes, receiving $1.98B net proceeds. Financing activity also included $969.4M of net repayments under the senior credit facility and commercial-paper program, $174.7M of stock-compensation tax-withholding payments and $50.9M of dividends. At September 30, cash was $2.3153B and available revolving/credit-support commitments were $2.8961B, totaling $5.2114B of liquidity. The revolving commitment increased to $2.98B and maturity was extended to July 2031; the commercial-paper limit also increased to $2.98B. Management expects cash, operating cash flow, borrowing capacity and capital-market access to meet near- and longer-term needs.

Earnings quality and risks

Q3 EBITDA was $1.3250B versus $772.85M, and adjusted EBITDA was $1.4489B versus $858.33M. For 9M, EBITDA was $2.8767B versus $1.8099B and adjusted EBITDA was $3.2019B versus $2.0310B. Adjusted EBITDA excludes selected items, including non-cash stock compensation, acquisition/integration costs and contingent-consideration fair-value expense.

Quanta’s work is exposed to project delays, cancellations, permitting and weather, and to changes in customer spending, financing conditions, regulation and policy. Many customer agreements do not guarantee service volumes; backlog estimates are subject to these uncertainties and change-order acceptance. Fixed-price contracts carry estimation, execution and productivity risks, while subcontracted and materials-intensive work can dilute margins and expose the company to cost and availability risks. Seasonal working-capital needs, delayed billing or collections, unpaid change orders and claims can also pressure cash flow.

For the nine months ended September 30, 2026, PWR reported no material changes to its market-risk disclosures. Its principal market-risk exposures remain unfavorable changes in interest rates and foreign currency exchange rates. The company refers readers to Item 7A of its 2025 Annual Report for further discussion.

Controls and Procedures

Quanta concluded that its disclosure controls and procedures were effective, providing reasonable assurance, as of September 30, 2026. During the nine months ended that date, it acquired five businesses and is integrating them into its internal-control-over-financial-reporting process. SEC rules permit acquired businesses to be excluded from the assessment for up to one year after acquisition.

No change during the quarter ended September 30, 2026 materially affected, or was reasonably likely to materially affect, internal control over financial reporting. Management cautions that controls provide reasonable—not absolute—assurance and may not prevent or detect every error or instance of fraud, including those arising from human error, collusion, management override, or changing conditions.

Risk Factors

As of the filing date, PWR reported no material changes to the risk factors described in Part I, Item 1A of its 2025 Annual Report. The company cautioned that known, unknown, or otherwise unlisted risks could adversely affect its operations, financial condition, results, cash flows, and the value of an investment in its securities.

For the three months ended September 30, 2026, no Quanta director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. The section reports no financial metrics, business developments, or other material changes.