Yesterday, on the day Microsoft confirmed that Azure is growing 43% and that capex stays on the order of $190 billion a year, Quanta (NYSE: PWR) fell 4.6%.
This morning it reported the strongest quarter in its history and beat consensus by 40%.
What Was Reported
| Metric | Q2 2026 | Year ago | Change |
|---|---|---|---|
| Revenue | $9.56 billion | $6.77 billion | +41% |
| GAAP EPS | $2.96 | $1.52 | +95% |
| Adjusted EPS | $4.24 | $2.48 | +71% |
| Net income | $451.4 million | $229.3 million | +97% |
| Adjusted EBITDA | $1.1 billion | - | record |
| Cash from operations | $1.1 billion | - | - |
| Free cash flow | $0.9 billion | - | - |
| RPO | $33.6 billion | - | record |
| Total backlog | $53.4 billion | - | record |
Consensus stood at $3.03. The result: $4.24. A beat of $1.21 - about 40%.
And management: "significantly increasing our full-year 2026 financial expectations across all metrics."
The Breakdown That Explains Everything: the Electric Segment
| Segment | Revenue | Share of total | Change |
|---|---|---|---|
| Electric | $7.84 billion | 82.0% | +44% |
| Underground and infrastructure | $1.72 billion | 18.0% | +31% |
82% of revenue comes from one segment, and it grew 44%. This is not a diversified company with one segment doing well - this is a company built entirely on building the electric grid, at the moment the electric grid is the bottleneck of the entire AI buildout.
Why Quanta is the executing arm of the power-scarcity thesis
Data centers need electricity, and U.S. interconnection queues have crossed 2,600 gigawatts with waits of 5-12 years. But a queue is not a planning problem - it is an execution problem.
Transmission lines, transformers, substations and control centers are not built by the utility itself. They are built by specialist contractors - and Quanta is the largest of them.
Which makes its backlog the most direct measure available of whether the infrastructure wave is real. Backlog is signed contracts, not intentions and not forecasts. And when it crosses $53 billion, it means the customers have already committed.
The Backlog - and the Comparison to Last Quarter
| Metric | Q2 2026 | Q1 2026 |
|---|---|---|
| Total backlog | $53.4 billion | $48.5 billion |
| RPO | $33.6 billion | $26.2 billion |
RPO - the portion of backlog resting on committed contracts - rose by $7.4 billion in a single quarter. That is 28% growth in a quarter, in a measure that is supposed to move slowly.
The Point I Was Watching Into This Report - and What Happened to It
When I looked at last quarter's numbers ahead of this report, free cash flow was the figure I marked for myself to check: just $184 million on revenue of $7.87 billion. An infrastructure company growing at that rate consumes working capital, and it looked thin.
This quarter closed it: free cash flow of $0.9 billion.
Why this matters more than the profit
A contracting company grows on the back of its working capital. It pays workers and suppliers before the customer pays it, and the faster it grows, the wider that gap gets.
This is where construction companies fail: not on orders, on cash. A $53 billion backlog is worth nothing without the cash to fund execution.
$0.9 billion of free cash flow in one quarter, against $184 million in the quarter before it, says the growth is funding itself. That is the figure that turns this report from good into significant.
The Acquisitions - and Where the Company Is Aiming
The quarter included the completion of four acquisitions: Phalcon, Enerfab, Percheron and PSD. Two of them are defined in the release explicitly around data centers:
- Phalcon - strengthens electrical capabilities across the Northeast and Mid-Atlantic, "in the growing data center and mission-critical facility markets"
- Enerfab - founded in 1901, providing fabrication, electrical, mechanical and construction services, including "specialty fabrication capabilities supporting power generation, data center and advanced manufacturing customers"
CEO Duke Austin: "our customers accelerate investment in the electric grid, power generation and mission-critical infrastructure that underpin the economy."
That is a contractor's statement, not an analyst's - and it rests on what he sees in the order book.
And the Paradox: This Report Against Yesterday's Move
Yesterday Quanta fell 4.63%. EMCOR fell 4.72%, Trane 4.94%, and seven regulated utilities - all negative.
On the very day Microsoft confirmed the demand.
The explanation, and it is not about AI
Utilities and electric infrastructure trade in part as bond substitutes. Their revenue is predictable, regulated and backed by long contracts - which makes their multiple directly sensitive to interest rates.
And yesterday the Fed split 9-3, with three committee members asking to raise rates - the most dissents in that direction since 2016.
Meaning: yesterday this sector did not trade on the AI story. It traded on the Fed.
The AI trade and the rate trade are now fighting over exactly the same stocks - and yesterday the rate won. This morning the report showed what happened in the business itself.
And the correction arrived immediately: the stock rose about 10% in pre-market on the report, as of 07:15 ET. Meaning yesterday's decline was not about the business - and the market reversed it the moment it saw the numbers.
The Bull Thesis
Whoever reads it positively will point to a combination that is hard to find: revenue +41%, adjusted profit +71%, a 40% beat against consensus, a record $53.4 billion backlog, free cash flow jumping to $0.9 billion, and every full-year expectation raised significantly.
Beyond that: the positioning. 82% of revenue from the electric segment, at the moment the grid is the bottleneck. There is no need to guess which data center gets built, or whose - all of them need a grid connection.
The Bear Thesis
Whoever reads it critically will note first the valuation. The stock is up 32% year-to-date and trades at a very high multiple relative to the historical contracting sector. The report is excellent, but the question is how much of it is already priced.
Second, part of the growth was bought. Four acquisitions in one quarter add revenue, but they also add integration risk and make comparing organic growth to total growth harder.
Third, concentration. 82% from one segment is a double-edged sword: it is the positioning, and it is also the exposure. If grid investment slows, there is no second segment to balance it.
And fourth, contracting cyclicality. A $53 billion backlog is impressive, but backlog is not revenue until it is executed - and execution depends on skilled labor, the scarcest resource in this industry.
The debate in one line
The bulls see a 40% beat, revenue +41%, a record $53.4 billion backlog, free cash flow up fivefold, and raised guidance across every metric - at a company positioned precisely on the bottleneck of the AI buildout. The bears see a stock up 32% year-to-date, growth partly bought through four acquisitions, 82% concentration in one segment, and dependence on skilled labor that is not abundant. Both sides are reading the same report.
My Angle
A personal opinion of Ilan Abramov - not advice, not a recommendation
What catches me in this report is that the figure I was watching into it is exactly the one that changed.
When I looked at last quarter's numbers, free cash flow was what I marked for myself: just $184 million on revenue of $7.87 billion. The logic was simple - a contractor growing at that pace burns cash on working capital, and a backlog is worth nothing without cash to fund execution.
And this quarter delivered $0.9 billion of free cash flow. Meaning the figure that was my biggest doubt going into the report is the one that reversed - and the growth here is funding itself.
And what makes the report significant beyond the numbers is the backlog. $53.4 billion, with RPO up $7.4 billion in a single quarter. Backlog is signed contracts - the hardest form of demand there is. When Microsoft guides to $190 billion of capex, that is its decision. When Quanta's backlog grows $7.4 billion in a quarter, it is already signed.
And the point I hold most strongly is yesterday's paradox. On the day demand was confirmed in the strongest possible way, everyone who supplies the electricity fell - Quanta, EMCOR, Trane and seven utilities. Because this sector also trades on rates, and the Fed split 9-3 that same evening.
Which says something worth internalizing: a stock can be on the right side of the big story and the wrong side of the macro story - on the same day. Whoever sold yesterday did not sell because the backlog is shrinking. They sold because bond yields rose.
And what I will watch: the ratio of backlog to execution. A $53 billion backlog against an annual revenue run rate of roughly $38 billion is nearly a year and a half of committed work. The risk here is no longer orders - it is the ability to execute them. And in an industry where the constraint is licensed electricians rather than orders, the right measure is how much of the backlog converts to revenue each quarter.
Summary
Quanta reported the strongest quarter in its history: revenue of $9.56 billion (+41%), adjusted EPS of $4.24 against a $3.03 consensus - a beat of about 40% - and GAAP EPS of $2.96, nearly double the prior year. The electric segment, 82% of revenue, grew 44%.
And the forward-looking figures: a record backlog of $53.4 billion and RPO of $33.6 billion - up $7.4 billion in a single quarter. Free cash flow jumped to $0.9 billion, against $184 million in the first quarter. And management raised every full-year expectation significantly.
And the context that cannot be ignored: all of this came one day after the stock fell 4.6%, on the day the Fed split 9-3. The question for the investor is not whether demand exists - a $53 billion backlog answers that - but how much of it is priced into the multiple, and whether the company can execute it.
Sources: Quanta Services' official results release for the second quarter of 2026 (July 30, 2026), as filed with the U.S. Securities and Exchange Commission on Form 8-K, including revenue and the segment breakdown, GAAP and adjusted earnings, adjusted EBITDA, cash flows, RPO and backlog, acquisition details and CEO Duke Austin's remarks; first-quarter 2026 figures from that quarter's results release (April 30, 2026); analyst consensus ahead of the report. Share price moves are from the July 29, 2026 close. Data accurate as of the time of writing. The chart is shown in real time via TradingView. Nothing herein constitutes a forecast, recommendation or advice - see the full disclaimer at the bottom of the page.