Quanta CEO On Data Center Slowdown Fears: 'Growth On Growth Right Now'
Duke Austin said he is not as concerned as the market may perceive after an analyst raised checks pointing to slipping projects.
Quanta Services CEO Duke Austin said on the company's third-quarter earnings call Thursday that he is "not as concerned as the market may perceive it" about a data center slowdown, after an analyst from Roth Capital said the firm's checks suggest some work may be sliding or even going dark. Quanta, which builds and maintains infrastructure for utilities, power generators and data centers, reported revenue of $12 billion for the quarter, according to CFO Jayshree Desai.
Austin's answer to the Roth question
The Roth analyst asked about the risk of pushouts in 2027 or 2028 and whether Quanta could backfill. Austin said Quanta works for the best developers with the most liquid balance sheets in the world. "We can't even get to 25 to 30% of what they have in front of us," he said, adding that Quanta has to look out five years to judge how much it can take.
He said contracts go into backlog only when signed, and that backlog is growing beyond 12 months. Austin said the cloud work, which he called the majority of what Quanta does in data centers, "has done nothing but go vertical." Some learning centers may slow, he said, but that is very little of Quanta's work today.
If demand did slow, Austin said, the company would capture more of the spend anyway. "It's growth on growth right now, and I don't see it stopping," he said.
He also said the same workforce could build chip plants or pharmaceutical facilities if data center work slackened.
Why Quanta says it isn't a data center bet
In an answer to a separate question on margins and acquisitions, Austin said that if Quanta's data center business were cut in half, the company would not "fall off a cliff." He said 50% of the growth in its utility business is not data center, and that Quanta is not buying a pure data center company.
In another answer, Austin offered what he called "CEO math" on a data center's electrical spend: $15 million per megawatt. He said Quanta captured three to four million a year ago and now gets five to seven, with seven to ten the goal as it takes more of each site's spending.
Quanta said it ended September with a record backlog of about $64 billion, a $10 billion increase from June 30. Austin said large transmission programs, including in Texas and Ohio, are not yet in backlog. He expects good bookings in the first half of 2027, with Texas and Ohio likely first.
Results and a higher outlook
Desai said revenue rose 57% from $7.6 billion a year earlier, and adjusted earnings per share of $6.06 were up 82% from $3.33. The company now expects 2026 revenue of $41.3 billion to $41.6 billion and adjusted earnings of $17.90 to $18.30 a share.
Quanta's market value was $91.2 billion in Thursday morning trading.
Austin said he expects bookings on the large transmission programs in the first half of 2027.
Sources
- Quanta Services (PWR) Q3 Earnings and Revenues Beat Estimates — Yahoo Finance
- Quanta Services Non-GAAP EPS of $6.06 beats by $1.03, revenue of $12.01B beats by $1.03B (PWR:NYSE) | Seeking Alpha — seekingalpha.com
- Quanta Services: Q3 Earnings Snapshot – WTOP News — wtop.com
- Zacks Investment Ideas feature highlights: Quanta Services — Yahoo Finance
- Is Quanta Services (PWR) Stock Outpacing Its Construction Peers This Year? — Yahoo Finance
