Quanta Runs Ahead of Plan as Data Center Work Pays More Per Megawatt

Quanta Services is running ahead of the five-year plan it set at its March analyst day, with CEO Duke Austin now pointing to growth in the 20% range for next year and, in his words, potential to grow faster.

Austin delivered the update at the Baird 2026 Global Industrial Conference. The March plan called for 15% to 20% compound annual growth in adjusted earnings per share. Demand for power infrastructure and computing capacity, Austin said, has developed more quickly than management expected, and renewable energy work has stayed stronger than anticipated.

"It's broad-based growth, faster than we thought," Austin said, singling out expansion in mechanical, electrical and plumbing work, known as MEP. He did not revise the longer-term targets at the conference. A CEO who says growth exceeds plan but leaves the plan untouched invites an obvious question; the answer, for now, is that he sees no need to raise it.

What drives the numbers?

Quanta serves utilities and large power users, including technology customers. The company self-performs about 85% of its work, employs 95,000 people and generates $41 billion in revenue.

Data centers and related work — including chip projects and Tesla projects — represent roughly 10% to 15% of the business. Austin said electricians can move among data centers, pharmaceutical facilities and other projects, which gives Quanta flexibility if demand shifts between end markets.

The most concrete figure in the update concerns revenue capture. Quanta now books approximately $4 million to $6 million per megawatt on data center work, up from $3 million to $5 million, because customers ask the company to take on more scope at each site. Austin expects that share to keep expanding.

On transmission, the picture is less immediate. Quanta has not yet started field work on 765-kilovolt lines and probably will not begin until sometime next year. Austin noted the existing business is growing without that contribution — which cuts both ways. The growth on display today carries no help from a pipeline that has yet to break ground.

Where is Quanta putting capital?

The company has expanded into manufacturing and supplying equipment to keep projects moving when materials run short. Its investments include transformers, circuit breakers and poles. During the most recent quarter, Quanta formed a circuit-breaker joint venture with Hyosung HICO and acquired a pole manufacturer.

Austin also addressed the 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, at approximately 10% to 12%. Some generation work will start in 2027. Other customers have expressed interest, and Austin expects the business to become a meaningful platform — though, in his words, not Quanta's largest segment.

What happens to free cash flow?

CFO Jayshree Desai offered the most cautious note of the session. Growth in renewables, MEP and engineering, procurement and construction work can support a more favorable free-cash-flow profile, she said, because those activities generally carry better working-capital characteristics than Quanta's typical utility master service agreement work.

But she 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 determine the outcome, she said. In plain terms: the same expansion that lifts revenue may drain cash before it returns any.

On capital deployment, Austin said Quanta could deploy capital through acquisitions or through share buybacks if the share price becomes disconnected from the business. He also expressed confidence in demand beyond the near term, saying he feels good about the outlook through 2029.

Every promise in this update — the 20% growth, the rising per-megawatt capture, the 2027 generation start, the cash-flow improvement — carries a condition Austin and Desai did not spell out in full: that power and data center demand holds at a pace no one fully predicted six months ago. Growth ahead of plan is a fact today; its durability is a forecast.