Quanta Services Sees Growth Ahead of Plan as Power and Data Center Demand Accelerates

Key Points

• Quanta Services is growing faster than expected, driven by demand for power infrastructure, data centers and renewable energy. CEO Duke Austin sees potential for growth in the 20% range next year, while leaving the company’s longer-term targets unchanged.
• Data centers and related projects account for roughly 10% to 15% of the business, and Quanta’s revenue per megawatt on data center work has increased to about $4 million to $6 million as customers award it more work at each site.
• Quanta is investing in equipment manufacturing and supply to ease project bottlenecks, but that spending could weigh on free cash flow over the next couple of years. The company is also pursuing generation projects, with some work expected to begin in 2027.

Quanta Services NYSE: PWR is growing faster than management anticipated at its March analyst day, driven by demand for power infrastructure and technology-related construction, CEO Duke Austin said at the Baird 2026 Global Industrial Conference.

Austin said the company was ahead of the five-year plan it outlined at the event, which included a target for 15% to 20% compound annual growth in adjusted earnings per share. He said demand for power and computing capacity had developed more quickly than expected, while renewable energy work had remained stronger than anticipated.

“It’s broad-based growth, faster than we thought,” Austin said, pointing in particular to expansion in mechanical, electrical and plumbing, or MEP, work.

Austin said Quanta expects to grow next year and sees an opportunity for growth in the 20% range, with potential to grow faster. He did not revise the company’s longer-term targets at the conference.

Power and Data Center Demand

Quanta serves utilities and large power users, including technology customers. Austin said the company self-performs about 85% of its work, has 95,000 employees and generates $41 billion in revenue.

He said data centers and related work, including chip and Tesla projects, represent roughly 10% to 15% of the business. Electricians can move among data centers, pharmaceutical facilities and other projects, giving Quanta flexibility if demand shifts, he said.

Austin said Quanta’s revenue capture on data center work had risen to approximately $4 million to $6 million per megawatt from $3 million to $5 million, as customers ask the company to take on more work at each site. He expects that share to continue expanding.

On transmission projects, Austin said Quanta had not yet started field work on 765-kilovolt lines and probably would not begin until sometime next year. He said the company’s existing business was growing without that contribution.

Supply Chain and Generation Investments

Quanta has expanded into manufacturing and supply of equipment to keep projects moving when materials are scarce, Austin said. Its investments include transformers, circuit breakers and poles. The company formed a breaker joint venture with Hyosung HICO and acquired a pole manufacturer during the quarter, he said.

Austin also discussed Quanta’s fossil-fuel generation business, including a combined-cycle power plant program with NiSource. He said Quanta structured the work to manage risk and target a margin profile consistent with the segment, which he described as approximately 10% to 12%.

Some generation work will start in 2027, Austin said, adding that other customers have expressed interest. He expects the business to become a meaningful platform, though not Quanta’s largest segment.

Cash Flow and Capital Deployment

CFO Jayshree Desai said growth in renewables, MEP and engineering, procurement and construction work can support a more favorable free-cash-flow profile because those activities generally have more favorable working-capital characteristics than Quanta’s typical utility master service agreement work.

Desai cautioned that spending to expand transformer, breaker and offsite manufacturing facilities could pressure free cash flow over the next couple of years. The mix and growth rate of the company’s businesses will influence the outcome, she said.

Austin said Quanta could deploy capital through acquisitions or by buying back stock if the share price becomes disconnected from the business. He also expressed confidence in demand beyond the near term, saying he felt good about the outlook through 2029.

About Quanta Services (NYSE:PWR)

Quanta Services, Inc. provides specialized contracting and infrastructure services to the electric power, energy and communications industries. Its work spans the planning, design, construction, repair and maintenance of essential infrastructure. The company's services include electric transmission and distribution lines, substations, renewable energy facilities, natural gas and pipeline systems, and communications networks. Quanta supports projects across the infrastructure lifecycle, from initial development and construction to ongoing upgrades and maintenance.

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