Good morning, and welcome to Quanta Services First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow management’s prepared remarks, and we ask that you please hold all questions until that time. I will then provide instructions for the question-and-answer session. As a reminder, this conference is being recorded. If you have any objections, please disconnect at this time. I will now turn the call over to Kip Rupp, Vice President, Investor Relations for introductory remarks.

Thank you and welcome, everyone, to the Quanta Services first quarter 2025 earnings conference call. This morning, we issued a press release announcing our first quarter 2025 results, which can be found in the Investor Relations' section of our website at quantaservices.com. This morning, we also posted our first quarter 2025 operational and financial commentary and our 2025 outlook expectation summary on Quanta's Investor Relations' website. While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community. Please remember that information reported on this call speaks only as of today, May 1st, 2025, and therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements and information intended to qualify under the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements reflecting expectations, intentions, assumptions or beliefs about future events or financial performance that do not solely relate to historical or current facts. You should not place undue reliance on these statements as they involve certain risks, uncertainties, and assumptions that are difficult to predict or beyond Quanta's control, and actual results may differ materially from those expressed or implied. We will also present certain historical and forecasted non-GAAP financial measures. Reconciliations of these financial measures to their most directly comparable GAAP financial measures are included in our earnings release and operational and financial commentary. Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com to receive notifications of news releases and other information, follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I would now like to turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks Kip. Good morning everyone and welcome to the Quanta Services first quarter 2025 earnings conference call. This morning, we reported our first quarter 2025 results, which included robust double-digit growth in revenue, adjusted EBITDA, and adjusted earnings per share, along with record backlog of $35.3 billion and a number of other record financial metrics. As a result, we have increased our full-year 2025 expectations for revenue, adjusted EBITDA, and adjusted earnings per share. Quanta's core strategy is built on the foundation of craft-skilled labor, execution certainty, investment discipline, and clear strategic rationale. At the heart of Quanta's success is our unmatched craft workforce that delivers essential infrastructure solutions with a dedication to safety, quality, and performance. Our execution certainty combined with strategic investments in talent, technology, and complementary businesses strengthens Quanta's leadership position across our expanding and addressable markets. Our investment decisions are guided by a disciplined strategic rationale aimed at reinforcing Quanta's differentiated platform, growing customer partnerships, and driving long-term sustainable value creation. Quanta differentiates itself through a unique solution-based approach that integrates craft labor with engineering, technology, and program management expertise to deliver comprehensive self-perform infrastructure solutions. Rather than providing isolated services, Quanta partners with customers to solve complex challenges across the full project life cycle, which creates deeper strategic relationships. Our collaborative model drives higher value for our customers and positions Quanta as a trusted partner and solutions provider, not just a contractor. As demand for resilient electric grids, power generation, technology expansion, and energy infrastructure accelerates, Quanta's large addressable markets continue to grow. Quanta has a proven track record of consistent profitable growth across both favorable and challenging conditions, demonstrating the resilience and sustainability of our business model, which is a testament to the strength of our portfolio approach, a diversified solution-based strategy that enables us to adapt to evolving industry dynamics while delivering mission-critical infrastructure. The successful execution of our strategic plan, combined with significant financial liquidity, positions us well to not only navigate periods of uncertainty but emerge stronger. The energy and infrastructure landscape is undergoing a fundamental transformation, and Quanta is positioned at its center. Utilities across the United States are experiencing and forecasting meaningful increases in power demand, which is being driven by the adoption of new technologies and related infrastructure, including data centers and artificial intelligence, policies intended to reinforce domestic manufacturing and supply chain resources, and the need for all forms of energy generation. We believe these drivers are leading to what could become the largest investment in an expansion of high-voltage transmission infrastructure in a generation. Quanta's unmatched execution platform and solution-based mindset enable us to capitalize on these expanded opportunities, positioning Quanta for sustained leadership and long-term growth. I will now turn the call over to Jayshree Desai, Quanta's CFO, to provide a few remarks about our results and 2025 guidance, and then we will take your questions.

Thanks Duke and good morning everyone. This morning, we reported strong first quarter results, including revenues of $6.2 billion, net income attributable to common stock of $144 million or $0.96 per diluted share, and adjusted diluted earnings per share of $1.78. Adjusted EBITDA was $504 million or 8.1% of revenues. Additionally, we generated healthy cash flows in the first quarter, with cash flow from operations of $243 million and free cash flow of $118 million, both of which include the impact of a $109 million tax payment deferred from 2024. Our first-quarter performance reflects a continuation of the significant revenue, EBITDA, and EPS growth and the free cash flow generation that we have achieved since 2020. Over that period, we have demonstrated our ability to grow organically and maintain a disciplined approach to acquisitions and share repurchases while improving our cash flow profile and return on invested capital. This track record has facilitated our ability to raise debt capital as an investment-grade borrower and efficiently de-leverage following opportunistic capital deployment. Accordingly, during the quarter, S&P Global Ratings upgraded our long-term issuer rating to BBB flat from BBB and our short-term issuer rating to A2 from A3. We believe these credit upgrades lower our borrowing costs, expand our liquidity and financing options, and strengthen our financial position while supporting our long-term growth strategy. As Duke mentioned, our performance in the first quarter, coupled with the momentum we're seeing across our core markets, have led us to increase our 2025 expectations for revenues by $100 million, adjusted EBITDA by $10 million, and adjusted earnings per share by $0.15. In light of the recent trade policy actions and based on what we understand today, we believe the terms and conditions in our contracts limit our exposure to direct cost increases associated with the currently implemented tariffs. As a result, we believe we have addressed those potential impacts within our range of expectations in our full-year 2025 guidance. We are also proactively collaborating with our customers to provide supply chain, process, and value-driven solutions focused on cost optimization and growth. Further, we are adjusting our own supply chain by making strategic advanced purchases as well as working with existing suppliers and evaluating digital suppliers in an effort to manage material and equipment costs and product availability. In addition, we believe our full-year range of 2025 guidance takes into consideration delays that could result from possible changes to the Inflation Reduction Act or IRA. To date, we have seen immaterial shifts in capital plans from our sophisticated and high-quality renewable energy customers, who we believe have the supply chain expertise and robust development pipeline to weather near-term impacts from policy disruptions. Demand for power is increasing rapidly. As such, the need for renewable energy generation and storage is strong, and we remain confident in our multi-year CAGR expectations. We are actively engaged with our customers to provide solutions designed to help them navigate the evolving policy and regulatory environment, combining our craft labor capabilities with our engineering, procurement, and domestic manufacturing solutions. We believe our increased 2025 financial expectations demonstrate the strength of our portfolio approach to the business, our commitment to our long-term strategy, favorable end markets, and our partnership approach with our customers. From January 1st to the date of this earnings release, we have repurchased approximately $135 million of our common stock, leaving us with approximately $365 million remaining under our existing repurchase authorization. Given our cash flow expectations and the strength of our balance sheet, we expect to remain opportunistic with stock repurchases while continuing to support strategic investments to generate incremental returns for our stockholders. Additional details and commentary about our 2025 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both of which are posted on our IR website. Also, our first-quarter 2025 operational financial commentary includes a new supplemental information table that provides estimated revenue growth opportunities across each of our key markets in 2025, along with the factors influencing those opportunities. Note, this information is a directional estimate that is not intended to replace or exactly align with our guidance for the year. Quanta's strategies are focused on delivering solutions to customers across all of our end markets, and we continue to emphasize the power of our aggregate portfolio of solutions and the cash flow earnings and returns they generate. With that, we are happy to answer your questions.

Thank you. We will now begin our question-and-answer session. Your first question comes from Ameet Thakkar from BMO Capital Markets. Please unmute your line and ask your question, Ameet.

Good morning. Can you hear me?

Loud and clear. Please go ahead.

Thank you very much. Thanks for the time. Just I guess a question maybe that's a little bit off the beaten path, but it looked like the Long Island Power Authority, I guess, floated down your application to kind of be the grid operator there. I just was wondering, was any of that kind of baked into your guidance for this year? And then my second question is that sort of kind of grid operator role, is that something you envision doing more of in other jurisdictions? Thanks.

Yes, thank you. First, regarding the opportunity we explored, it's somewhat different from the situation in Puerto Rico. We are open to considering these types of arrangements when they arise. The recent management decision to support Quanta was well executed and the process was commendable. Although the Board did not accept the recommendation, they did not provide any alternatives. We will communicate with the Board to understand their concerns, which differ significantly from our experience in Puerto Rico where we essentially built a utility. We are prepared to provide the necessary feedback and I recognize their perspective given that we haven't had direct communication with them. As we encounter various opportunities, we will continue to distinguish ourselves in the market. While you may not hear about all these unique opportunities regularly, it's important to note that we are not a utility, but we do support them, and we will occasionally participate in such arrangements.

And yes, this was not anticipated in our guidance.

No.

Thank you. Our next question is from Andy Kaplowitz from Citi Research. If you'd like to unmute yourself and ask your question please Andy.

Hey, good morning everyone.

Hello.

Good morning.

Duke, you mentioned the largest expansion of high-voltage transmission, I think you said in generation. Maybe you could elaborate on that and how you think this cycle plays out. Do you see a bigger slug of transmission projects starting to actually move forward now, as I'm sure you saw recent developments in Texas with the big line being improved? And would you expect to continue to see sequential backlog growth moving forward despite all the macro uncertainty out there?

Yes, transmission is essential for moving generation. We have consistently emphasized this. People often discuss the grid operating at only 60% capacity, but consider the freeway in Texas that runs from San Antonio to Houston—it has 24 lanes and is approximately 50% full during peak hours. If we removed eight lanes, traffic would back up to San Antonio, making it impossible to get to the east. This analogy applies to the grid, which requires stable transmission to supply loads and data centers. We continue to observe strong demand across the board, which reinforces the need for transmission. I believe that on-grid solutions will be the main focus for our utility customers, and I liken this situation to the significant transmission system expansions of the 1970s. Currently, North America has not recouped costs for newly built lines very quickly. However, it is clear that for the ultimate customer, investing in transmission is the right approach, and we will see substantial growth in this area.

Thanks Duke.

Thank you for your question, Andy. Our next question is from Phil Shen from ROTH Capital. Phil, please unmute yourself to ask your question. It seems we are experiencing an issue with Philip. Let's move on to Joe Osha from Guggenheim Partners. Joseph, please unmute yourself and ask your question.

There we go, can you hear me?

Loud and clear. Please go ahead.

Okay. Thank you and good morning. We have seen a lot in terms of incremental tariffs being imposed on imports for solar modules. And yes, this is something that came up when First Solar reported earlier this week. Is this materializing as a problem for any of your customers at all to the extent you're hearing about it? Thank you.

Thank you for the question. We haven't noticed any issues within our customer base regarding this. We're monitoring the situation closely, but we aren't observing any significant pull-ins or push-outs. I believe that 2025 expectations are already factored into 2026. We will keep an eye on it, but it isn't impacting us at this time. Furthermore, our company is structured to handle push-outs effectively. Our portfolio is designed to adapt to changes along with service lines and our customer base, so it's not an issue if there are some adjustments. I would prefer it if we could operate at full capacity, but achieving about 80% efficiency is quite satisfactory given that there will always be fluctuations. If tariffs were to impact us, I believe our portfolio is resilient enough to withstand much of it. We anticipate multi-year projects coming our way, and I maintain that solar energy is one of the most cost-effective forms of energy, which will likely lead to significant developments in solar, gas, and various other projects.

Thank you.

Operator.

Thank you. Our next question is from Philip Shen. If you are unmuted, if you could go ahead and ask your question please.

Hi, can you hear me okay?

Yes, go ahead.

Okay, great. Hey. Sorry about that, having trouble with the Zoom. So, first question is on interconnection work. We recently hosted a webinar with grid strategies, and they highlighted that 50 gigawatts of coal plants may not be decommissioned. And this could result in tens of billions of interconnection work proximate to coal plants stranded as the renewable projects planning to access, eco interconnection points could be at risk. What are your thoughts on this potential? And how could this impact your backlog? And then the second one, very quick one on the renewables subsegment, if you will. If you were to think about your total megawatts of construction starts in 2025 now, that you expect compared with what you expected for those 2025 construction starts at year-end 2024. Has that changed at all? Or has it remained steady? Thanks guys.

Yes. I'll go backwards. I think the growth is steady, although not at the pace we saw last year, but it is increasing. I'm pleased with where we stand in that area. We're performing well in battery, solar, and even onshore wind. The inquiries are strong. If you need power quickly, you'll have to consider renewables for the next three years due to delivery timelines, but I believe renewables will always be part of the grid. We've consistently stated that natural gas will also be a significant component, and we've been saying that for a decade. We will make progress here, and it will still be included. Regarding coal, there hasn't been much investment in it over the past decade, and operating coal plants is quite costly right now. Many believed they would be phased out, so that has created challenges in keeping them operational. That said, I expect to see some colocations where gas plants will be built on existing sites, requiring upgraded transmission, or we'll continue to see transmission developments coming from coal facilities. Overall, I don't think there is a lack of projects ahead; we have plenty of work lined up for the next twenty years. Regardless, I believe we are well-positioned either way.

Thank you for your question Philip. Our next question is from Jamie Cook from Truist Securities. If you'd like to unmute yourself and ask your question please.

Hi, can you hear me now?

That’s great. Fire away.

Sorry about that. So, a nice quarter, and congrats on the transmission upgrade win this morning. I guess just my first question, just as I think about understanding you guys have a targeted margin range for your electric infrastructure business or what we're calling it now. But just pushing you as you continue to win larger projects in the mix towards larger CapEx projects versus maintenance sort of continues. Why wouldn't that create a positive upward momentum on your margins to some degree, even though you might not want to guide there over the longer term, but I would think in the next sort of 12 to 18 or 24 months, the margin trajectory should be higher. So just what your pushback would be on that? And then my second question, I'm sorry, I'm going through multiple earnings this morning. I don't think you provided an update on Cupertino about how that business is doing versus your expectations for 2025? And then, Duke, I think last quarter, you suggested there are some very large wins on the come as you benefit from synergies with Cupertino and Quanta. I'm just wondering if you could update us on that and any potential wins on the revenue synergy side in 2025? Thank you.

Thank you, Jamie. The target margins remain as we've stated. With the addition of 4,000 employees, we are progressing even faster than planned, which includes the training costs. These training expenses will keep the margins stable for now, although they may vary slightly at the higher end of our estimations. I understand this pertains to a different segment, however, you can draw parallels to the previous performance of the electric sector before some improvements were made. I genuinely believe we are executing effectively in the field, and we are pleased with the comparisons of this year's first quarter to last year’s performance and our achievements at scale. The key focus is on scaling the business, and we are currently doing that successfully. We are also observing more significant material pull-through while maintaining the same margins, which will elevate the return on invested capital. Therefore, I believe the returns will increase in this market. Nevertheless, we aim to be a solution provider by offering additional services and creating more value throughout the supply chain. We will pursue these goals. Regarding Cupertino, we are ahead of schedule, which is evident from the backlog and other developments. From our perspective, it’s a thriving business. Having participated in many acquisitions, I can confidently say this ranks among the top five for having a strong acquisition that we can build upon and expand. We are continually achieving synergies. I anticipate substantial rewards from this, considering the technology sector's total addressable market is about $300 billion annually globally, with around $200 billion in North America. Additionally, the utility market is worth approximately $250 billion. This presents a vast addressable market for us, and we currently have less than 5% in backlog for technology. We are just beginning to tap into this potential. I see numerous opportunities ahead. Can we execute and seize them? I am optimistic about our prospects.

Thank you Jamie. Our next question is from Ati Modak from Goldman Sachs. Ati, if you'd like to unmute yourself and ask your question.

Yes, thank you. Hey Duke spoke about the transmission opportunity broadly earlier. But in the supplemental disclosure, you kind of noted that the larger projects are becoming increasingly visible. Can you talk about that visibility, what stages do you see these at? And then when should we expect these to show up in the backlog? How should we think about revenue and margin impact from that?

I think you're aware that there are 765 builds happening across the country. Regarding coal, that's a new comment for me. It's important to pay attention to what the RTOs are saying, including MISOs and PJMs, as you can observe in the auctions and the Capital Expenditure spending. There's a misconception that generation will take the place of transmission, and that's simply not true. I engage with this every day and can confirm it's incorrect. Transmission will remain strong here, and while distribution might not grow as quickly in transmission, it's still present. These are the areas where significant transmission projects are currently in the early stages of development. I believe that over the next five years, you'll see considerable progress. I'll conclude my statement there.

Thank you.

Thank you. Our next question is from Steven Fisher from UBS. Please go ahead and unmute yourself and ask your question please Steven.

Thanks. Good morning. Just wanted to ask you, Duke, in terms of your solution strategy, how would you characterize the white space from here based on kind of what you're hearing from your customers about the solutions that they need, and I guess from an M&A perspective, is 2025 more of a continued fill in the white space kind of year? Or is this sort of a digest what you have at the moment kind of year?

Thank you, Steve. I'll address that in reverse order. It's a good question. When it comes to mergers and acquisitions, we can't predict the timing. However, when we identify exceptional companies that align with our strategic goals, we will pursue them. I can't specify the pace, but there are numerous opportunities we observe among promising companies frequently. When we find those that meet our criteria, we will certainly make an effort to pursue them. At this moment, I’m not worried about our balance sheet; we are prepared to support it but don’t feel stressed about it right now. All options remain available. As you saw, we repurchased $134 million worth of stock this year as planned. We followed through on that commitment, and you can expect us to make acquisitions when we find great companies as well. I apologize, I can't recall the first part of your question.

We are always evaluating opportunities and will pursue them if they align with our strategy. At this moment, we are not worried about our balance sheet and are prepared to support it. Everything is being considered. This year, we repurchased $134 million in stock when the situation arose as we indicated we would. You can anticipate that we will make acquisitions when we identify strong companies. I seem to have missed the initial part of your question.

I believe that if you focus solely on one service line as a contractor, you can combine different services and offer a comprehensive solution. We're targeting areas where customers are having difficulty scaling up, and we can provide multiple services like engineering and procurement to meet their diverse needs. Our goal is to do more than just act as a contractor; we want to be a solution provider. This means listening to our clients, collaborating closely with them, integrating into their organizations, and earning their trust to deliver projects on time and within budget using their own labor. With us handling 85% of the work in-house, we provide clients with confidence that their investments are secure. We meet all the criteria, and I would ask why they wouldn't want us to manage everything.

Terrific. Thank you.

Thank you. Our next question is from Steve Fleishman from Wolfe Research. Please go ahead and unmute yourself and ask your question please Steve.

Okay. Can you hear me?

Hey Steve.

Loud and clear. Please go ahead.

Okay. Thank you. A little more specific on the transmission question, just the Texas just approved the 765 kV plan. Any sense on when that would actually be a business that could be backlog and just view of likelihood of you getting a fair share of that?

Yes, Steve, we built a lot of the 765 in the country, and the majority of it over time. And so I do believe it's a core competency of ours to build it. So I always like our chances when we're building 765. We've been in front of this a long time. I'm not surprised by the amount of it. I'm not surprised by the inbound discussions. We're doing some things there that I think are unique with the client. So I think we're in good shape. I would say I'd be surprised if it's not in the third quarter or maybe early fourth quarter, you would start to see us have the opportunities to book work.

One other quick question, a very simple one, just the upgrade in guidance midpoint for the year, is that just first quarter beating your expectations? Or is there anything you'd specifically point to for raising the midpoint?

I mean we were looking at the whole year and how we see it laying out. I thought we had a nice quarter. I felt like we're trying to be prudent about the back half with everything moving around. But the way we see it laying out and the way the work is flowing and the things that we know, I felt comfortable enough to move it a bit just to show confidence in the business and as well as where we think we're going to end up for the year. And I do still think we're prudent about how we're looking at it. I think there's a lot of opportunity for us. If you ask me to kind of look at the high side of the range and the low side of the range, I would lean to the high side for sure. Thank you, Steve.

Thank you, Steve. Our next question is from Mike Dudas from Vertical Research Partners. Please go ahead and unmute yourself and ask your question please Michael.

Good morning everybody.

Morning.

Duke, could you discuss the strategic advantages you've gained by expanding supply chain access for your clients? As you help them explore other options, what are the market dynamics at play? I'm sure many others are seeking similar solutions. How are your internal opportunities enhancing your ability to provide these solutions? Will this also be a focus for you in terms of acquisitions over the next few quarters?

Yes, Mike. We intentionally acquired the transformers, focusing on U.S.-based options due to concerns about the prevalence of Chinese transformers in utility systems. This led us to a 100-year-old company in Pittsburgh that possesses significant intellectual property and UL codes nationwide. Manufacturing high-class transformers, from 138 to 765, is quite challenging. Our aim is not to become a manufacturer in the traditional sense but to enhance our service delivery and maintain strong relationships with other transformer and breaker manufacturers. We've gained valuable insights into our internal supply chain through our EPC business, which enables us to offer effective solutions to clients. This has become a core competency for us, transitioning from a focus on labor and equipment supply chains to fostering improvements in our processes. I believe this approach will benefit both us and our clients and will facilitate our business expansion.

Thanks Duke.

Thanks Michael. Our next question is from Justin Hauke from Robert W. Baird. If you'd like to unmute your line and ask your question please Justin.

Yes, great. Thank you. Good morning everybody. I guess I have one maybe larger question and then I got just a small technical one. But I guess on the large 500 kV line that you announced this morning, starting in mid-2026. I was just hoping maybe you could give us some perspective on kind of the size or scope of that, particularly as that's coming on or starting kind of as you're ramping down on SunZia, so just trying to understand kind of maybe the relative size between those two? And then also, what's the status and risk on the permitting side, given that that's not starting construction for another year or so, just what needs to happen. And then my small technical one for Jayshree, I guess, is the two acquisitions in the quarter. I just wanted to confirm those are the ones you announced last quarter on the earnings release; they weren't incremental ones. So are there any incremental acquisitions as part of the guidance increase? Thank you.

I'll quickly answer that and let Duke answer the other question. But yes, those are the two acquisitions we announced last quarter, and there are no additional ones at this stage.

The LADWP line is public information, so you can find that it exceeds $1 billion. I mention this because it's available for public review. From my perspective, I believe the permitting process is on track, and we expect to start moving forward in 2026.

Great. Thank you very much.

Thanks for your question Justin. Our next one is from Adam Thalhimer. If you'd like to unmute your line and ask your question please.

Good morning guys. Nice quarter. I wanted to ask about the pipeline market. Are you seeing anything interesting in the long-term bidding or planning Duke that would make you think that 2026 could be a recovery year for large pipe?

I believe there are definitely more opportunities available. The President is advocating for increased pipeline and drilling activities. Our conversations with shippers and pipeline customers are ongoing, and from my perspective, we need additional pipelines, particularly given the volume of natural gas we have. This is especially true for combined cycles and similar projects, particularly on the Eastern Seaboard. I anticipate some construction will take place, but I don't expect the business to be extremely robust. While LNG takeaways are improving and we look forward to participating in that, it remains challenging to construct linear pipelines.

Thanks Duke.

Thank you for your question. Our next question is from Sangita Jain from KeyBanc. If you'd like to unmute your line and ask your question please Sangita.

Hi. I'm not sure if you can hear me yet.

We can hear you, please go ahead.

Great. Thank you. I have a couple of questions. One is for Duke. Some companies have mentioned the challenges in finding a skilled workforce to complete natural gas generation projects on schedule and within budget. Considering that you have the largest craft labor force, would you think about expanding into natural gas generation EPC to assist your customers?

Thank you for the question. I believe branching out is necessary. We take a contractor approach where we leverage what we already have. We’ve done this before and we can certainly build on our experience. If we choose to expand in that direction, we would not be taking on additional risk. The uncertainty with new turbines and similar factors is too great. We prefer to avoid that risk and can still grow the business effectively without it. That’s my perspective.

And another one, maybe it's for Jayshree. So, your revenue performance this quarter was really strong. Book-to-bill was kind of 1. And I'm wondering if that is a sign of the times that your customers are more willing to do faster turnaround projects versus taking longer to both large projects?

No, I don't think you should read anything into that, Sangita. I think it's just normal timing around our backlog. We're pleased with how the backlog is growing, as Duke talked about, the relationships with our customers just keep getting stronger and stronger. And so we see growth across project-based MSA work. It's across the board. And so I think there's nothing more to read to it than just timing around those things.

I also think some of the work that Cupertino books, when you look at it, it's very programmatic, almost base business type work, and it's book-to-bill almost in months. So nice jobs but it comes in 10 million to 50 million type spurts. And that's the way that, that business has gone. So they can book to bill quite a bit any given quarter. And that's same with most of the businesses. You'll get a lot of that when that happens. But I still believe you'll see a lot of programmatic, MSA renewals are there. They're larger. So, I continue to think that the backlog will be at record levels.

Thank you.

Thank you for your question. Our next question is from Drew Chamberlain from JPMorgan. If you'd like to unmute your line, Drew, and ask your question please.

Yes. Good morning. Thanks for taking my question. I just want to look a little deeper into what's hitting the backlog on the power generation side. I mean, can you kind of talk through what's coming in between solar, storage, and wind? And then how have conversations with customers maybe changed since the tariffs have been announced, particularly on storage? And I appreciate that 2025 probably has some pretty good visibility on what's going to be installed and put in place. But are you worried at all about tariff impact on 2026, 2027 projects where equipment is not yet in the States?

Yes, I have concerns about everything. However, I believe the business is positioned well beyond 2026. My worries extend to 2027, 2028, and 2029. We are seeing good visibility in supply and demand, but the supply side will not meet demand without renewables. It's essential to have renewables to match the demand. Under any circumstances, it's hard to envision a future without building large-scale solar for a long time. It just makes sense. Batteries can help manage peak demand; I've observed some load growth data in Texas showing significant changes in peak demand. It's becoming increasingly clear. From a grid flexibility perspective, if we combine natural gas with solar, wind, and batteries, it results in the lowest cost of energy for consumers. When discussing addressable spend, people might mention coal or nuclear power, but cost will be crucial in these discussions. We need to focus on the most economical ways to develop our energy resources. If we maintain a diverse range of energy sources as we have for decades, we should be in good shape. Regarding what we're booking, we are engaging in all types of projects, including some wind repowering. While wind work might be slightly down, our solar and battery projects are stronger than our solar alone. I'm optimistic about our position in the business.

Thank you.

Thank you, Drew. Our next question comes from Brian Brophy from Stifel Nicolaus. If you'd like to unmute your line and ask your question please Brian.

Thanks. Good morning. Can you hear me?

Good morning.

Thank you. Under the new kind of key market disclosure, there's a technology and load center bucket there. Can you help us understand what is all in there? Is that primarily Cupertino? And what's driving that particularly strong growth rate this year?

Yes. A significant portion of the work being done is related to Cupertino, but it also includes our legacy projects with Quanta, focusing on internal electric infrastructure, data centers, semiconductors, and chip manufacturing. All of this will be included in that category.

Yes, I believe that when we discussed the total addressable market earlier, we estimated it to be around $300 billion. This is an impressive figure, considering the technology infrastructure industry is expected to spend $300 billion this year and likely even more next year. So, that’s the general overview.

Thank you. Our next question is from Laura Maher from B. Riley. If you'd like to unmute your line and ask your question please Laura.

Hi, can you hear me okay?

We can, please go ahead.

Thanks for taking the question. My first inquiry is regarding the data center build; which stages are currently seeing the most activity? Secondly, could you provide any insights into the underground business and how it might be affected by potential tailwinds from the new administration and a shift away from renewables?

Yes. So I would say on the last part of the question, I missed the first maybe Jayshree heard. But on the underground side of the business, there's opportunities in large diameter pipe. You're in the administration get behind that. I do think natural gas is coming back in certain places where you are building the natural gas. We never really stopped. But I do think you can plan a bit better that natural gas long period of time. That will be a source of energy. And then our LDC business is nice. We'll continue to give people options. It's not going to be all electric. They'll have natural gas options. So, I do see that as continuing to be a nice piece of the business. Canada year-over-year is off on a big pipe. So it's down. I do see Canada coming back in this market. I mean given the fact that the tariffs at Canada up, we do need infrastructure in Canada. They do need to build energy sources, and I think you'll see a more robust Canada over the next few years, that business will come back. So I go to see up there as well. Yes. I mean it's certainly incrementally better than it was. Our industrial business performed probably at record levels in the first quarter, very close to it. And it's a nice quarter. So, I like the quarter from that standpoint. There's growth there. We like it. We'll continue to invest in it. In the first part, I'm sorry, I missed it.

I think the first part is on data center group, if I heard that right.

Was it where it's at, the data center growth, is that the question?

At which data centers are you seeing the most activity in with data center builds?

Yes, I mean it's broad-based. I would say anywhere you can find a line that has 300 megawatts as they want a data center. So Ohio, Indiana, Virginia all the way through Arizona. I mean even California, if you look at it. If you go off, I was out in the West, if you're off-grid, it's extremely expensive. So California has a lot of areas where you could put data centers. It's not near as expensive in California than off-grid. So, it makes sense to build in California even. So we're seeing a lot of it to the West. But there's not a place that I know of that we provide services to that doesn't have data centers planned or planned and paid for, for that matter.

Thanks.

Thank you, Laura. There are no more questions at this time. I'd now like to turn the call back over to management for any closing remarks.

Yes. Thank you. I want to thank our 61,000-plus employees who are the very best in the world. We couldn't do this without them. They make our lives easier and make our jobs easy. And I want to thank everyone participating on the conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you. This concludes our call.