Quanta Services, Inc. (NYSE:PWR) Q4 2023 Earnings Call Transcript
Quanta Services, Inc. (NYSE:PWR) Q4 2023 Earnings Call Transcript February 22, 2024
Quanta Services, Inc. beats earnings expectations. Reported EPS is $2.04, expectations were $1.97. Quanta Services, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings and welcome to Quanta Services' Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Kip Rupp, Vice President, Investor Relations. Thank you. You may begin.
Kip Rupp: Thank you and welcome everyone to the Quanta Services fourth quarter and full year 2023 earnings conference call. This morning, we issued a press release announcing our fourth quarter and full year 2023 results, which can be found in the Investor Relations' section of our website at quantaservices.com. As highlighted in our earnings release this morning, as well as in the earnings press release announcing our earnings call schedule a couple of weeks ago, we've updated our earnings call format and supplemental materials. As a result, shortly after the release of our financial results this morning, we posted our fourth quarter and full year 2023 operational and financial commentary and our 2024 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. Additionally, we no longer have a slide presentation to accompany this call, as the information that has historically been included in the presentation can now be found in our operational and financial commentary. Please remember that information reported on this call speaks only as of today, February 22nd, 2024, and therefore, you are 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 intended to qualify under the Safe Harbor from liability, established by the Private Securities Litigation Reform Act of 1995, including all statements reflecting expectations, intentions, assumptions or beliefs about future events or 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, if you would like to be notified when Quanta publishes news releases and other information, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com.
We also encourage investors and others interested in our company to follow Quanta IR and Quanta Services on the social media channels, listed on our website. With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?
Duke Austin: Thanks Kip. Good morning everyone and welcome to the Quanta Services fourth quarter and full year 2023 earnings conference call. This morning, we reported fourth quarter and full year 2023 results, which included double-digit growth in revenues and earnings and included a number of record financial metrics, which we believe reflects robust demand for our services and solid execution. Total backlog at year-end was $30.1 billion, which we believe reflects the value of our collaborative client relationships, and evidences the momentum we see for 2024. Of note, Quanta has delivered record revenue six of the last seven years. Six consecutive years of record adjusted EBITDA and seven consecutive years of record adjusted diluted earnings per share.
These results were built off an industry-leading operational and financial platform, and made possible by our more than 50,000 dedicated Quanta employees, whom we believe are the very best in our industry. As outlined in our operational and financial commentary, 2023 was a significant year for Quanta strategically, operationally, and financially. And though we are proud of our many accomplishments during the year, we continue to look forward with excitement towards the multiyear strategic initiatives, we are working on and the goals we expect to achieve in this and the coming years. We are positioning Quanta for decades of expected necessary infrastructure investment and believe our service line diversity creates platforms for growth that expand our total addressable market.
Our portfolio approach and focus on craft skill labor is strategic advantage that provides us the ability to manage risk and ship resources across service lines and geographies. Which we believe will become increasingly important, as the energy transition accelerates. We believe our portfolio approach positions us well to allocate resources to the opportunities we find the most economically attractive and to achieve operating efficiencies and consistent financial results. I will now turn the call over to Jayshree Desai, Quanta's CFO, to provide a few remarks about our results and 2024 guidance, and then we will take your questions. Jayshree?
Jayshree Desai: Thanks Duke and good morning everyone. Quanta completed the year with fourth quarter revenues of $5.8 billion, net income attributable to common stock of $210.9 million or $1.42 per diluted share, and adjusted diluted earnings per share of $2.04. Adjusted EBITDA was $550.2 million or 9.5% of revenue. Of note, our cash flow in the fourth quarter and for the full year was very strong with both setting period records. For the fourth quarter and full year of 2023, we had free cash flow of $915.5 million and $1.2 billion, respectively, which exceeded the upper end of our free cash flow guidance expectations. We ended the year with liquidity and a balance sheet that will position us to support our organic growth expectations in 2024, annually increase our dividend, and opportunistically invest capital.
To that end, in January, we acquired two companies for aggregate consideration of approximately $425 million. This morning, we also provided our full year 2024 financial expectations, which calls for another year of profitable growth with record revenues, improved margins and opportunity for double-digit growth in adjusted EBITDA, adjusted earnings per share, and free cash flow. We believe our expectations demonstrate the strength of our portfolio approach to the business, our commitment to our long-term strategy, our favorable end market trends, and our competitive position in the marketplace. Additional details and commentary about our 2024 financial guidance can be found in our operational and financial commentary and outlook expectation summary, both of which are posted on our IR website.
With that, we are happy to answer your questions. Operator?
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