SEC Filings

Quanta's Customers Now Fund Its Growth: Advance Billings Hit $5.54 Billion

Customer prepayments and supplier credit drove nine-month operating cash flow to $2.94 billion, while receivables ballooned.

Quanta Services, which builds and maintains power lines, substations, pipelines and data-center infrastructure, now holds $5.54 billion in contract liabilities, which are customer billings ahead of work performed, up from $3.26 billion at the end of 2025. The third-quarter 10-Q, filed Thursday, shows those prepayments and bigger bills owed to suppliers financing a surge in cash flow.

Prepayments and payables do the heavy lifting

Contract liabilities stood at $4.24 billion in the second-quarter filing. The 10-Q attributes the rise since December mainly to more favorable billing terms on certain large projects, and to a lesser extent to acquisitions.

Operating cash flow for the first nine months reached $2.94 billion, versus $1.10 billion a year earlier. Within that, contract liabilities added $1.98 billion and accounts payable and accrued expenses added $1.93 billion. Receivables absorbed $2.65 billion.

Days sales outstanding, the company's measure of how long revenue takes to turn into cash, fell to 50 from 66 a year earlier. The metric subtracts contract liabilities from receivables, so customer prepayments directly lower it. The company's five-year average is 69 days.

Backlog, acquisitions and the bond market

Backlog reached $63.73 billion at September 30, up 44.9% from December 31, and remaining performance obligations were $41.75 billion. Quanta also raised its full-year outlook in its earnings release, now expecting revenue of $41.3 billion to $41.6 billion. Shares rose about 6% to $643.00 in Thursday trading, for a market value of $91.2 billion.

The company completed five acquisitions in the first nine months and two more since quarter-end. It paid for the earlier deals with cash, borrowings and a $2.00 billion August bond sale, and prepaid its $618.8 million term loan on September 1.

The fair value of its senior notes was $6.23 billion at September 30, against a carrying value of $6.69 billion.

What happens if prepayments unwind

Customer advances are a working-capital benefit that depends on large projects staying on favorable billing terms. As projects are delivered, those liabilities convert to revenue rather than cash, and the cash benefit would reverse.

The 10-Q ties the rise in contract liabilities to billing terms on certain large projects, so the cash cushion depends on how those projects are delivered.