Quanta Services, Inc. (PWR) Earnings Call Transcript & Summary

Great. Good morning, everyone, and thank you for joining us for the Quanta Services 2022 Investor Day. My name is Kip Rupp, and I'm Quanta's Vice President of Investor Relations. We're excited to discuss with you and take a deeper dive into our business and industry trends and the strategies and initiatives we have in place to differentiate Quanta from the competition and capitalize on opportunities to profitably grow the business over the next several years. For those joining us today, they may be newer to the Quanta story. Quanta Services is a leading specialty infrastructure solutions provider serving the utility, renewable energy, communications and energy industries with operations focused on North America and Australia. We believe Quanta is a unique company in our industry with a notable competitive advantage. This slide presents some of the key characteristics that we feel differentiate Quanta from our competition in the eyes of our customers, employees and the investment community. As you will hear today, we remain focused on providing solutions to our customers through collaboration and continuing to advance our capabilities to meet their needs. As our customers' capital programs increase in size, scope and complexity, many are seeking a long-term and enhanced relationship with Quanta to deliver projects for them safely, on time and on budget. As you can see from the agenda, our discussion today will be led by Duke Austin, Quanta's President and CEO; and Derrick Jensen, Quanta's CFO. We also have a number of senior executives joining us from Quanta in the room today. Quanta has a strong and experienced corporate and operational leadership team with decades of experience in the industry and many with several generations of family involvement in our industry. Duke will start the presentations with a reflection on the last 5 years and then we'll discuss key elements of our business strategy. Derrick will then discuss our financial success, our long-term financial goals and capital allocation strategy. We'll then have a Q&A session to address any of the topics we've discussed during the morning. [Operator Instructions] We expect to conclude the formal and webcasted portion of the event between 11 and 11:30 Eastern Time this morning. For those in attendance that would like to join the Quanta team for informally for lunch after the event that will take place just outside the room in the lobby area. This event is being webcast from our website, and all the presentation materials we'll be discussing today will be available shortly after the conclusion of the event and can be found in the Investors & Media section of our website at quantaservices.com. And finally, a brief housekeeping item. All the presentations and comments made here today are covered by the forward-looking statement language shown here. Please remember that information discussed during this Investor Day speaks only as of today, April 5, 2022. And therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This Investor Day will include forward-looking statements intended to qualify under the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These include all statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance or that do not solely relate to historical or current facts. Forward-looking statements 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. For additional information concerning some of these risks, uncertainties and assumptions, please refer to the cautionary language included in today's presentation along with the company's periodic reports and other documents filed with the Securities and Exchange Commission, which are available on Quanta's or the SEC's website. You should not place undue reliance on forward-looking statements, and Quanta does not undertake any obligation to update such statements and disclaims any written or oral statements made by any third party regarding the subject matter of this Investor Day. Please also note that we will be -- we will present certain historical and forecasted GAAP -- non-GAAP financial measures, including adjusted diluted EPS, backlog, EBITDA and free cash flow. Reconciliations of these measures to their most directly comparable GAAP financial measures are included in our presentation. Lastly, if you'd like to be notified when Quanta publishes news releases or 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. Before I turn the floor over to Quanta's President and Chief Executive Officer, Duke Austin, I'd like to kick things off with a brief video about Quanta. [Presentation]

Good morning, everyone. Welcome to Quanta's 2022 Investor Day. Good to have everyone here. I think it's really important for us to kind of be back in person. So it's -- we learned a lot about ourselves through the pandemic. How we can communicate. A lot of people on the phone, a lot of people in video conferencing. But certainly, the people in the room, it's good to see you. We've done a lot over the time through the pandemic. And so I think a lot to say about the company and where we're going. So when we think about it and we think about where we're at and the key takeaways, I thought it was important for us to come here and talk about where we're going as a company. It happens to be 5 years ago, we met in Lazy Q out in La Grange, Texas, and we talked about kind of the things that we were -- where we were, what we were doing and our core values. And I think it's extremely important to go back a little bit and talk about it before we go forward. So we're going to do that. But a few takeaways. Our core values are the same. It hasn't changed. Craft-skilled labors are very key to Quanta. What I will say is we built the portfolio. We built the platform for double-digit, 10% type EPS growth that we talk about all the time. What we're doing today is we're going to talk about a strategy that delivers 15-plus percent going forward. And I think that's important. If you take one thing away, we have a platform that delivers 10 and the strategy to deliver 15-plus with opportunities and pathways, it derisks the 10, but has the upside of the 15 plus. So as we go through, that's one key takeaway for me that that's why we're here. Because I believe the company has fundamentally changed. It's different. We're different today than we were 10 years ago. And we're proud of where we -- what we've done, but you're only as good as what you do tomorrow, like yesterday's yesterday. We wake up every day. I wake up every day, I'm getting older, reinvent myself. But in general, no one cares about yesterday. They want to know what you're going to do tomorrow. And I do think, for us, we're proud of our base, but I think what you'll see through this is what we can accomplish. We have great service lines, great people. But Scott Blattner said best -- when we were in discussions. He said we don't build projects, we build people. And I think this is a people business. So you will see our strategy is certainly centered around people. We've done a lot on our platform and our portfolio of companies through this. We've 15,000-plus people that we've added. We've built out in New York. We've done stronghold. We've done Blattner. So if you look at the things in our platform and then we've built college. We've built a college, we built training, we built curriculum. I think it's really important because that sets the base of where we're going. And what we've done in that strategy you can see behind me, it's a lot. We've done a lot over the last 5 years that allow growth going forward. So it's really about what the value we can add to it on a go-forward basis. So you can see the numbers. We're proud of them. I think our track record speaks for itself, same management team, same people in the room going forward. A few new faces that we'll introduce later. Guys, thanks. Ladies, thanks for being here. But definitely, same characteristics, same companies, leading the industries that we serve and put up these kind of numbers. So when we think about the value and what we're doing, it's a couple of things here. I think 2 things: One, we're trying to derisk our portfolio by the past going forward, while you have to grow. So you can see kind of how we're looking at this and what we've done over the last 6 years, what's driving the value, but also it derisks the kind of double-digit EPS that we'll talk about. And I think it's important in the model too that we're in early stages of really at the very core of how we operate of getting leverage out of the operating units at the local levels. So we're also very much concerned with that. And I do think it will enhance the overall margins. We've talked about that as a company. We said [indiscernible] last time that was our goal. This time, we're talking 10 of EPS growth on a CAGR basis and opportunities for 15-plus, different conversations. So if you look at us and why -- what the model is and why we think it's important. When I see it, the client -- we really collaborate at the client level. And when we look at where we're at and where we're going, it's about that collaboration, and we provide cost certainty. And so when you think about at a client level, the craft-skilled labor allows us to be certain and allows us to go deliver. And I think it's the very nucleus of where we're trying to go, and it allows the total addressable market. It's much larger than what we've talked about in the past. So I do think part of the strategy was to be able to deliver certainty to the client to really, really enhance our ability to look at the total addressable market and that certainly has gotten bigger. So when you think about people and what we're trying to accomplish, the character of the people in the room, the character of where we're going is everything in our business. We want continuity, culture. We're really creating the value through the people. So you're going to hear me talk a lot about people, about how we're educating people about where we're going with that, and we have an entrepreneurial culture. So no one wakes up and goes, "Hey, I'm satisfied." A matter of fact, it's the opposite. And I think we run these businesses in the good times like we run them in a bad, maybe harder because you can't get complacent. And we're not as a company and it's really around the culture, the character and the continuity as we build people. In fact, I think we spent more time, early days of the pandemic, we decided to build a people strategy. And why you build a people strategy. How are we going to get to the numbers where we're going? And it was extremely important that we had succinct strategy around doing that. So we did that through the pandemic. Early days, we were all together, we said let's build a strategy around people, and we did it. And I think the company will forever -- we have a road map to get where we want to go. We're adding 3,000 plus people a year. So it's important. You can see what's happening with our campuses. We've expanded our campuses, our investments in those campuses have been tremendous. Aaron is actually in the room. So please make sure you talk to him later about how he thinks about it. But the curriculum, the things that we've done there, I think, are really important as we train our people. When you think about it, when you think about where we need to go and you start adding 3,000 a year, you have to do it safely, smartly and productive. And so that's -- we're building all that back into these programs through our people and our performance. But when you think about how many people are training, you also have to think about how many people are leaving the business from the utilities. So our customer base, the attrition is 100,000-plus going this way, load growth going straight up, and we're decarbonized. So every bit more so pressure on people to train, to get in the business. So we're actually just looking all the way through in many ways, many, many areas around how do we make this transition, how do we have the workforce, how do we make sure that Quanta is at the tip of the spear of this. And I think our workforce and how we train and how we attract and bring kids into the business is really, really important, and it's really a core value of who we are. And we work out it extremely hard. And I think -- this separates us. If you're just starting to think about this, you're way too late. We did this 9 years ago. So this is a platform we started 8, 9 years ago, and we've tacked on to it in the incremental spends because we see a market and we value the craft. And I think this will separate us. So we have a video here, I believe, that we'll play. [Presentation]

So you can see the things that we're doing. I think in general, the video says a lot. But when we thought about it and we thought about where we need to go and how far we need to go to be diverse, to be inclusive, to get to the inner cities. How do you do that? It can't be done the same way it was done 50 years ago, I saw my dad. It was a lot different back then, a lot. And so things are different. We have to think different. Kids are different. My kids are different. Your kids are different. And the way the brain thinks, we were training the same way for 50 years. And when you add academia, you add curriculum, what happens when you get a preapprentice that pays, those kids who are yelling, we didn't make them yell. We didn't say, "Hey, go yell and cheer." They got up that morning and did that. They paid double digits to go to school to learn. They're doing that on their own. It's powerful. And people say, "Well, where are you going to get the workforce? Well, you see it. There it is. I always say if you don't realize who we are, what craft skill is, go to Idaho, you'll see it at that training facility. There's kids that want to be in this business, and we're working at it really hard from academia hitting it in a ton of different ways. It's necessary. And what does it do for us? What does it do as Quanta. Why does that make a difference because they get to the field and they know what they're doing, they are productive day 1, not day 500, day 1. So it matters. So really, when we think about our customer base and what we did there and how we thought about it, we are providing solutions here. And I do think when we think about it, the collaborative nature of Quanta and how we think about if our customer is successful then we're successful, 9 times out of 10. And I think that's really important. When you look at the customer bases that we have and many of them transitioning in the energy transition, we want to make them successful. And the verticals that we work across the board, I mean, that's -- theoretically, we work at that. We work at the customer level. And you'll hear me say multiple times about collaboration. It's key to where we're going and it is to make the industry successful through how we deliver and it matters. It matters where we sit. We're very sticky when you think about our customer base and how many people that we have and many of these are our customers for decades. And we stay in the facilities, 17,000-plus that stay with our customers on a daily basis. In many ways, building the very infrastructure for the transition. But it's sticky. It's not -- we talk about all time base business, base business, but you can see this is a great slide around what we're doing and how long we've been on these customers' facilities and what we do for them on a daily basis. You can see where the industry is going. This is kind of our customer base. We're still wildly backed by utility capital. And you can see the spends of our customers going up. And I think it's important when we think about it, how deep these relationships are, how we collaborate with our clients. As they move up their capital, we're moving along with them. And no matter what we say or how we're talking about it, you'll hear me continue to drive, well, we're not doing 30% or we're not doing something. But it's client feedback from our customer base that -- as they move that capital up, we have to go with them. So you can see kind of -- we've resegmented the business a bit. We've talked about through the acquisition of Blattner, what we're doing to deliver on the transition here. But we have segmented roughly 50% electric, 25%, 25% between UI and your renewables. So we have done that. Why did we do that? I just think it -- for me and for our investor base, who is a better way that we can speak to it better. I will say that -- no matter how we segment, it's extremely important in the field that we operate across. So we'll operate across all these segments. We have New York-based talent in the room. They'll be doing electric. And you've got to think of it as it doesn't -- while we comment to our investment community around this as we look at numbers, it's in the field, we're operating across service lines, many of our units. And we're in the early stages of that. And I would tell you that when we talk about operating leverage and getting operating leverage, it's about operating across these segments. It matters. And you get utilizations out of it, we can do -- certainly do a lot of things. I do think we have talked a bit about supply chain. I have got questions about every 10 minutes. So when I think about supply chain, look, the glass is half full for us. We'll be the very ones that collaborate to fix the issues, to help. And we have a big, broad base of business that I believe allows us to mitigate those risks. We talk about the portfolio. Many of you have a portfolio that you're managing, same thing. We're managing the portfolio. So when you think about the segments of that portfolio, that derisk through supply chains, we can't deny the fact that we have a war, we have tariffs on panels, you have 4 or 5 different things going on at once. I want to be clear, reiterating where we stand for the year. It's April. We're doing great. And I think from my standpoint, yes, we'll talk about, I'll talk to you all day long about it, but we've mitigated those risks. I think we'll come out ahead and also create value because of it. So any time you have a problem or an issue, if we do it right, if we do it properly, this company will come out ahead, not behind because we've already thought about it, thought about it 6 weeks ago, 6 months ago when we went through it. We talked about like our fleet. When you think about our fleet, we never missed a beat. This is -- when we talk about collaboration, the business was very transactional early. And I think why are we different across all segments? What has changed? Why is this a different look today than it was 6 years ago even? In my mind, we self-perform 85% of our business through craft on all lines. A little bit less in telecom, but primarily, even if a blended segment, it's 85%. When we think about it, that self-performance gives us certainty and allows us to provide the solution to the client. And it was led mostly around engineering before at the client level. Now it's led with constructability. And I think when you think through it, engineering is about 5%, 7% of any project, we're in front of it, we're 80%, 60% to 80%, if you take the material. So you're thinking through that. Why are we not lean -- why did we always get behind? And why are we never in front? We've been working on it 8, 9 years to get in front to look at the total addressable market and also drive the value to the client. And I think that was our biggest thing is overcoming that. We're in early stages at 30%, we talk about all the time with the addressable market on the front side of the business. And we'll continue to bolster that and it's -- not a day goes by that is just as robust as our construction on the other side of it. So -- and when you blend it and when you have that conversation at a client level that you can actually, it's much like a consultant that actually build something. And so when I think about it, that's who I think we've become through this solution-based platform. I do think -- what was happening in the past, we weren't communicating well enough with the client. And it was really pressing on us and pushing this down. So now that we can have a deep discussion with them and have much, much more addressable market, actually, and we start early. So when you think about why we win? What's going on? Why is Quanta successful? We're really early in these projects when you start talking the whole market and you start thinking about the total cost of a project versus just a piece of it. And it doesn't matter like if you think about how Blattner thinks, how we all think. This is why we're successful and what enables us to differentiate ourselves against our competition. There's a -- this is a -- we wanted to give you an example of a client. We've had a very transactional client for 25, 30, 40 years probably. And you can see from -- when we thought about it, we were doing 5 poles in x, y, z city. That was the job 10 years ago and become 100 poles then becomes the whole city, then becomes the whole program and the whole state. So the involvement of our ability to self-perform give them cost certainty, give safety and also scale to the capital plans of the client because if you think through the utility-based customers, they really need the capital deployed when they say they are, but one thing they're trying to modernize systems to get in front of a lot of the macro trends we're going to talk about in a minute, but it really resonated with our clients. But this is just one example of a bunch. And many of our clients are going this way. The majority are moving towards more programmatic ways to look at things versus commoditization of one-off projects and it's big programs. I do think when we think about the transition, and we talk about it a lot about how we look at the energy transition, what are we doing. From my standpoint, you can see the numbers are staggering. This is a worldwide number, probably it's China, and I'm confident. So it will be a big piece of it. But still, if you say $1 billion, $1.5 trillion, I can't say it. It's a big number in this transition. It's huge. And these are things that are driving. I do think we're at the tip of the spear of this, we are. And how we sit, where we sit in this transition, we talk about it a lot, but we're providing solutions to get us there as a country or even in all the markets that we serve, Australia, Canada, we're at the tip of the spear. There's nothing that we're not talking about. It's not up here on this slide or any other slide to a client. We are providing the solutions. And I think when you go back and you look at all the things that we do today and where we're going, it's different, it looks different. We have the things that are core that enable us now. But where we're going, if you think through it, if we're going to decarbonize, if we're going to carbon-free, it looks different. And we'll discuss it. We'll talk about it through the segments. But there's no way around the emerging transition that's ongoing and where we sit in this transition. If you look at every segment. When you look at the megatrends, we're calling the megatrends, I call them pathways. All the trends that you see, these segments have them in there, every one of the whether it's -- we'll talk about 5G. We'll talk about technology, how we're using technology, all those kind of things, but it's in these segments. And it positions us to really have a full discussion and be one stop. Showing electric power side, you can see the numbers. This is a characteristic of a few things, a few trends, a few opportunities that we see and how we see it playing out. I do think this is scope -- some of our customers, we talk a lot about where is it? Where is it at? What are you talking about? We put together some slides around just a few things that are ongoing. And I do think these transitions -- this transition is around these trends. So when we talk about the pathways, we talk about the growth of the company. As we said before, when we say 15-plus percent, as we go through these segments, these are the things that drive on top of your base. It's still delivering double-digit type EPS growth. So this is stacking on. And we talk about it a lot, but it's additive. So I think it's important. We talked about the past, told you where we were, where we're going, but this is all additive here. And I do think it's an important thing when we think about what does the transition mean for Quanta and why? So we have -- we're already doing many things here. We talk about grid hardening. We talk about the undergrounding. If you think about undergrounding, just take that, for example, and you say, okay, well, less fire-hardening. Ten years ago, we would have said, hey, you can't go underground, it's too expensive right? And now you say, well, loss of life on the West Coast, the amount of insurance that is spent for fire, storms, all those things, you can't afford not to underground in many areas because it's uninsurable -- and I think we're down that path, very, very early stages of undergrounding. I think you'll see it across the coastlines. We're seeing it here in New York as we bring wind on, you'll see more and more undergrounding across the system. It's a big trend. I do think you'll see our segments move across here. If we were at doing gas, it's not a lot different. We do it here in New York. It's not a lot different underground, whether it's -- no matter what service line you're putting in, gas, telecom, electric, it's the same principles, the same people until you get to the very, very craft at the end, and then we can supplement the craft. So in my mind, that's it, that's how we're doing, how we go across and transition into the underground. You also have your interconnections on renewables. You also have -- there's about 10 different things in my mind that we're doing on the electric side. And when I think through it, EV is a huge example of -- well, what does that mean? Well, EV, when you put electric vehicles on systems, it not only is it the charging stations, but it's the incremental spend on the distribution systems that will go on for a long, long period of time. You have a 50-, 60-, 70-year old distribution system that is not modern that needs to be modernized to handle the load of EV. Well, it's at night. We're charging at night. It's different. It's totally different. I don't think we even understand as an industry yet the magnitude and the amount of electric vehicles that are coming on to the system. The manufacturers are there. OEMs are there, they are going, it's gone. We're going to EV. And so the load on those systems, we're in early stages of that build, and that's in our mind what we're considering a megatrend. When we think about why the growth, where the business is going. So early stages, you have workforce attrition going on within the utility business as well as I discussed and load growth. So all 3 things at once with attrition. So if you look at the capital budgets of the clients, somebody -- I get questions all the time around, well, what does it mean around Build Back Better or the transition. Well, they had $75 million in the transition in Biden's plans -- $1 billion in the Biden plan. You can look at, just a fraction of the customers up here that we work for. You can see the capital spends. Many of this -- much of this doesn't even include your EV build or different things that we're talking about today. This is like a 3-year, 5-year type time frame for our clients. And it doesn't include a lot of your interconnections or anything like that. This is just a small fraction. And this is what gives you and us the confidence in getting up here and talking about a 5-year, 10-year plus strategy around this. And I think it's multi decades actually. So these strategies and what we need to do as a country to get where we're going on a transition. You can see our clients are behind it, and it's something that you can look at from a capital spend standpoint. So technology, when we think about 5G, it's kind of our telecom piece of the segment, we've invested in technology through [indiscernible]. I think that will prove to be a great investment to the underserved fixed wireless capabilities. It allows us to build out our wireless capabilities in the segment. So it really, really -- in my mind, give us growth patterns. But we use technology throughout the organization. And I think when you go through communications, we have many of our clients with secure networks or wanting secure networks. So when I think about it, when I think about where we're going as a company, our electric business, our lineman, our guys in the field are also very much involved in the telecom build-out. Whether it be 5G or wireless either way, we're involved in this build-out because our utility electric customers are also building secure networks. And with RDOF and all the things that are happening here, your customer bases are changing. It's not necessarily just your traditional customer base you've seen in the past. We've got big players in here and through federal funding, it's allowing a different customer base, your utilities are building out, your cooperatives are building out, your municipalities are building out. So in my mind, a huge opportunity here. I will say we're proud of where we sit. We're not happy with the execution. We own that. We'll fix it, and we have fixed it. And part of who we are is known when you make -- you have mistakes and you're not as good as you thought you were, it makes you go back and think about how do you execute better across this spectrum. And I can tell you that you can ask anyone in the room, personally, it bothers me when we don't execute where we think we can and what we're capable of. We're just getting started here. We're going to execute here. We are executing here now. And I do think the opportunity here is significant going forward through technology through the customer bases that we have. We got off to a little bit of a slow start. But where we're going now and the platform that's put in here is certainly significant, and the drivers and megatrends here are significant. Renewables. We want to talk about. Obviously, a big piece of what we've done here lately would be our Blattner acquisition and where they sit and how we think about the infrastructure solutions around this and also the interconnections. In my mind, the country is moving this direction. We're going. It was about -- I looked at this morning. 35% of the world is renewable with hydro -- if you add hydro. Take hydro out, now in North America it's like 20%. So when you think about it and you think -- if you're moving in that direction, there's no way to go where you want to go as a nation without solar, wind, balance of plant builds, it's significant. And when we leaned into the Blattner acquisition, it was really around this market. And we saw it from a macro level. And then when we met the family and how we thought about it, it was just like one. And every bit of where Blattner sat in this market was certainly where we were on the other side of it. So it allowed us lots of synergies that we haven't talked about but just philosophically on how we thought culturally, was large for Quanta here. In my mind, we're also thinking around hydro in Canada, all the interconnections there and what we can do through the transition. And so -- when we think through Canada, well, Canada has bounced a bit, but the hydro and what we're doing from load from Canada really backstops that market. And solar, wind obviously where we sit here. I think at the very top of the sphere and where we can go and what we can do for every client and the synergies that we can give not only from a top line growth standpoint, but also internally. We have a very robust supply chain here. I think it separates us on the renewable side. So I'm really proud of that as well, will also help Quanta on the other side. So really can drive some value. You can see here the load, what's planned. They're large. You can see where it's going. You can see the logo, you see the miles of transmission that we believe are necessary to renewable generation that we're going to put on the systems, it's massive. And to think you can put load on here without doubling your transmission corridors is probably not possible at this stage, but that will take some kind of technology that we don't know what it is. So we're not seeing the technology to give us any kind of load -- I mean, wire -- you can do some things with wire, but ultimately, you have to expand your transmission system to handle intermittency of renewables. It's come. And you also have the renewables coming on market. So both those 2 things are driving our renewable business in that segment. And it's massive. So I do think when I think through it, you might have short-term blips here or there, speed bump, but what I would tell you is any time you see speed bump, we're gaining market share on the other side of it. Definitely. And so that gives me a lot of confidence. It gives me a lot of confidence with our client base here and how we think if you're a utility or a developer or whatever it may be, we're thinking through next year. We're thinking through the previous year, how we go about it, how we build. So as someone is considering their carbon-free plan or energy transition plan, we're at the very top of that. And we talk to them all the time. I mean if you go back and you think about how much renewables has been built, we've built around 25% of the renewables in North America. Well, [ lower 48 ]. So 25% is significant. And I do think we have the ability to repeat that or beat that number going forward if we do it right, and we are. We have the platforms to do so, and the opportunities are certainly there in this transition. I do think when we think about it in both companies, we talk all the time about how we are like Blattner was 115 years old. And when we thought about it, it was really about the client and how we interacted at the -- clients would say, can you do it like Blattner and Blattner said, "Can you do it like Quanta." And we didn't even know like until we got together. And I think that really gives me a lot of -- when I think about confidence in how we can deliver on the same way we deliver transmission or telecom or gas on the other side, we'll deliver the same way in a solution-based environment, with the client driving value on renewables. And the conversations get way broader than just a wind farm and a solar farm, a transmission line interconnect. It's much broader than that. We're looking at programs. We're looking at large, long-term spends here. So lots of trends here. The relationships are key for us. I do think when we think through and you hear in this segment, you may hear some others say, well, we don't -- we're having trouble. We have scale here. And the scale allows us a lot of flexibility within this segment. So we can move people from wind, solar. We've talked about it a lot, about all the things that we're capable of. But I will say, make no mistake that our clients are moving in this direction. And they want a solution. And we are able to provide that now with what we consider the very best renewable solution provider in the world. And together, the transition becomes very much in play for us on this segment. With that, I think we have a video here on some wind work. [Presentation]

Everything we do and wind, solar is big, real big, big cranes. So uniquely positioned here in my mind. When we think -- when we thought about Blattner as we go into the [ UUI ] group, really the self-perform capabilities. You say, well, what separates, what separates? And their ability to train people and get people more productive. Same, very much in line. That's why the margins are there. That's why they lead the way. Same with Quanta on the other side, 85%, I do think it separates. We're not a general contractor or an engineering firm. We built it. We build the people that built it. So I do think that's really a characteristic if you think about how we differentiate in this segment or any other segment that we have, it's around our people, craft. So [ UUI ], you saw the megatrends up there, all the kind of things that we think through, whether it's carbon sequestration, hydrogen, methane leaks, you are getting the programmatic spend on your local distribution systems. The values are going up in the systems as you can see with the utility when they sell a system, it's -- they're getting good value for those systems. And why are they getting good value? Because they're there, they're going to be there a long period of time as we make third transitions. And I do think natural gas is a play here for a long period of time as we transition to a carbon-free environment. It's very clean in many ways, and you can blend hydrogen in it. We're at the very top of that level talking to those clients on a daily basis and here at this. But when I think through it, we also have got the core competencies to underground electric, to underground telecom. We can move across our service lines here. We underground a lot in wind and solar. So it doesn't -- we can move. And all the things that you hear around the transition on the gas side, electric side, telecom technology, it doesn't matter if you're -- if you think about gas in this segment, one day, it's gas; next day, it's something else. So the portfolio is big. I do think you'll see LNG buildout obviously, with what you see from a security standpoint. I do believe the country will build LNG out. You'll start to see more of those projects get built. Our Australian business is robust. Mining, significant mining on batteries as well as you got high oil, good LNG. So that business goes way up through this as well as Canada. And people say all the time, well, why not just divest? Well, in my mind, it's a portfolio of companies, a few geographies that we can operate in that allows us to be what I think at the very top of the transition. And we're thinking through it in Australia just as much as we're thinking through it here, we learn. Many times they'll have ahead of us and many times we're ahead of them. So we learn back and forth. But in this segment, it's certainly something that there is a lot of things going on even in our industrial business on biodiesel, [ biocatalyst ] is known there, where we sit in our industrial business. We have a really nice start to that this year. So I think, again, as we move forward, we're in the right spots to take advantage of the transition. And not only to take advantage of it, but to help the clients in our industrial side, on our [ UUI ] side to get to where they want to go from a carbon-free standpoint. When they start talking about, well, how do I get there? We're there. We're already there. We're talking to them, whether it be, I want to build solar plant, I got 5 million acres in XYZ or whatever. And so we're able to do those things. And I think that really positions us well from top line growth. And when we talk about synergies across the portfolio, it certainly derisks us to the 10 and also gives you the upside plus of the 15 when we think through it. So we talked about the portfolio. We talked about where we stand and where we sit. I do think the derisking of it, it was important. When I thought about it, it's not just the growth, but it's the derisk thereof. And our addressable markets are getting bigger. As we provide the solutions across the front side of the business. It's early stages of that for us, developing those programs, helping the clients, whether it be battery charging stations across the country or at the OEMs or whatever it may be, we deal with a multitude of clients that we have the ability to get to the transition through these segments. And it's all around craft, which we know very well. So many, many verticals we could go around craft as well. And we think through that every day. Where can we go? What can we do off this platform which creates value? And that's what we're here to do is create value. So when I think about sustainability, ESG, our portfolio, it's pretty easy to talk about. I think in many ways, we were already doing much of this. And when I thought about it -- when I thought about -- what are you doing well, okay? So when we think about Puerto Rico, what we're doing on the island and what we're doing for people on the island and how we think through that. Not only are we building a modern infrastructure, we're also providing jobs, built college campuses, inner cities, how we develop inner city, I think, is really, really important. When you think, okay, how do I get -- make sure that we're diverse, inclusive in our workforce. We really have it down where it's -- we know what to look for in the inner city. We know how to recruit, we know how to get kids in and provide great jobs. We not only do that for ourselves, we do it for our clients. So lots of opportunity here. Obviously, we're a renewable build. We use batteries all over the place where we used to use 2-cycle oil. We recycle a lot of the hardware we put in the air. As an industry, as a company, I think we're right in the middle of this, whether -- when you think about family and how much we give back, there's no company that's more committed to their people than we are in my mind. We really, really drive that. And it gives us lots of things to talk about from an environmental and governance and everything that we're doing here and a social aspect. So we're proud of this. We're proud of where we sit. I do think as we move forward, we're going to have good metrics, and we're going to put them up. Obviously, our fleet is -- we use it every day to build a very infrastructure that allows us to go to an energy transition. We can't take away the fleet. What we can do is, as batteries progress in fleet, we go with them. I mean we talked about a partnership with GM. We just did with GM, and it's a large number, thousands of Silverados in the West. Right in the front of it, not behind it, in front with GM, developing those vehicles in the workforce around our ability to make the transition. We could be on a solar plant, it can be undergrounding, but we will move the fleet towards batteries as they progress. Obviously, they haven't picked up in the heavier duty trucks yet. But as they do, we'll progress with them as well. So we're working with OEMs here as Quanta to really pull down our footprint. And we have technology on our fleet. Almost 100% of our fleet has technology around GPS, so we can idle times, things like that. We'll be able to account for those things. I do think we'll spend a lot of time on reports here, and you'll see us stand behind this and put significant reporting out on how we sit here because I think it's a great story, not only what we're doing as a company, but where we sit as people and what we're doing internally. So we're proud of this. We're proud of where we sit here. You'll see us put more reporting out here. So I think for me, key takeaways I've talked to 10 and 15, I've beat that to death. So I'm not going to keep beating on you about it. Jamie is going to calculate it here in a minute. But that being said, I do think it is a takeaway. We've built a great platform, and we've derisked the platform. We have a great portfolio like [ many of you ]. And that gives us a lot of what I would consider strength that we didn't have 6 years ago. 6 years ago, we were trying to build our base. We were trying to find identity. Now we have growth platforms that we can grow. And we're excited about it. We're excited about our track record, we're excited about how we collaborate with the client. Where are we sitting this transition? Derrick has all the fun part and tell you all the numbers. But in general, I would just say the management team is committed. We're going to have Q&A after Derrick gets up, he's next. And with that -- Derrick and I have worked together a long time. And it's fun. We have fun together. And I will tell you like what we've done with our balance sheet and the things that we've done, I will say, it gives us -- me the ability to stand here and talk about how we're going to grow EPS. Because we did a lot of things when we weren't sexy. I'm not sure we're sexy today, but in general, we did good things and across the company, and it was a strategy. And that same strategy will be deployed on a go-forward basis on how we allocate capital and what we do. So with that, I want to turn it over to the main man, Derrick.

Good morning. I don't have any of the sexy sizzle videos that Duke does. So I'll try to do it with some numbers. How about that? We're very proud of the last 5 years. As we sit here and set ourselves up, we think, for the strategic aspect of how we're going to be able to go into the next 5 years. When we think about the organic growth perspectives of what we've done, how that's delivered a degree of cash flow, how we've deployed that capital, which we'll go through very much, to Duke's point of having really the last 5 years. I think that theme will continue through and mostly the level of excitement that we have about thinking about those next 5 years and where we can go, we think we're very well positioned for it. Here's the last 5. Double-digit revenue growth complemented by end markets that have led ourselves to have $20 billion of backlog as we stand here today. With the EBITDA that's grown equal to the level of revenue with expanding margins, giving us a 17% growth in EBITDA over that period. Deploying capital, that's translated to almost a 30% CAGR in adjusted EPS through this 5-year period. EPS growing faster than margins, growing faster than revenue. 5 years ago, almost to the day, we were in front in an Investor Day presentation, and we talked about a $10 billion opportunity and $1 billion of adjusted EBITDA. That was the organic. What we did not do at that time was share our inorganic expectations. The middle column here represented our internal model at the time. You can see that we had the model -- at the inorganic contributions, we expect it to be a $12 billion, $1.26 billion of adjusted EBITDA and 10% return on invested capital. The column on the right is what we did. We exceeded our revenue expectations, we're eerily close on our EBITDA performance with a little bit of margin dynamic that is largely associated with the COVID. If you were to adjust for the industrial impact in 2021 on our COVID, that 10.3% is almost spot on. When you go through and then look at adjusted EPS and then more importantly, in our mind, return on invested capital, 8.9% is what we ended at the GAAP perspective of that. When you exclude the large deployment of capital at the end of the year for Blattner and 4 other acquisitions, our ROICs were exceeded 10%. Very proud of that 5-year performance. And more specifically, how close it came to modeling against or performing against what our internal models were. That's that last 5 years. That's what gives us the confidence as we look forward for the next 5 years. That underlying nature of our business is still intact. That base business growth, the visibility into our end markets are all still intact. As we stand here, we think that we have the ability to exceed $20 billion in revenue. We think we have the ability to exceed $2 billion to $2.4 billion of adjusted EBITDA, providing for an aggregate cash flow of $4.5 billion to $5.5 billion. That gives us still yet in our mind, the ability to achieve an $11 to $12 EPS target, which is greater than the 15% growth, CAGR growth. That is with the deployment of capital, but that's built upon the organic perspective of an EPS that has the ability to grow up to $9.50, which is a 10% CAGR. And all on the backdrop of exceeding a double-digit return on invested capital throughout these periods. So before I break those numbers down a little bit, let's come back and revisit who we are a little bit. So these are '22 expectations, inclusive of the acquisitions we did in the fourth quarter. So as we look forward, we believe about 90% of our revenues will be U.S.-based revenues. We still have a Canadian and Australian presence. Those represent around 10% to 11% of our revenues. We still believe there are ample opportunities for growth and contributions out of Canada and Australia. We like those individual markets, but we are largely still U.S.-based at this point. When you look at the top right, you can see that still, as Duke made reference to, largest portion of our revenue is utility backed, between 65% and 70% of that revenue is a utility-backed revenue. When you go and you look at then renewable energy developers and communications, that aggregate represents about 85% of revenues that we think are highly visible, highly recurring and growing capital spends driven by those end markets of all of those individual customers. Down on the bottom, you see our contract type. Fixed-price work runs about 45% of our expected revenues going into 2022. That's something we always come back and talk about because it's something that we think we exceed at is our performance on fixed-price work. It's important to recognize materials represent a small component of that equation. Materials are at times a part of our fixed price work, but the largest portion of what we do is customer buy the materials. So that means for our fixed price work, the vast majority of what we do is we are estimating the risk associated with labor. Duke has spent a lot of time talking about how we lean into labor, how that represents 80% to 85%, right, we self-perform. So that gives us high visibility into the way that labor is going to execute. It gives us high visibility in our ability to manage that labor. One of the things that we'll put is, when you look at -- on the right side of the bottom right, last 5 years, 1% of our contract value, 1% has had any noticeable component of losses. That 6 projects in 5 years, one of them was a processing facility. That leaves 5 other projects. Those 5 projects aggregated around $100 million losses. Over a period of time in the 5 years, we recognized $7.2 billion of gross profit. Project execution issues rarely, given the circumstance, we do not meet our aggregate financial expectations. What drives that is the one distinct difference I would put forward, and that is our operating model. Remember, the vast majority of our current operations are still run by their former owners. In the back of that room right there, and you all are going to spend time with them, are the vast majority of our operating leadership who are all former owners. Scott [ Fluerty ], Paul Gregory, Duke Austin, Reggie [ Bropes ], Scott Blattner. Those guys back there did more. Aaron Howell, our training leadership, former owners. That's what leads to the type of performance you see here, driven largely by our base business, that still remains intact. That component of the business that is a small, repetitive, recurring, every single day type dynamic. Duke made reference to the 17,000 employees. That's the dynamic of the jobs they're working on. Large projects are a component of our business, but it's not what defines us. Electric power, 90% of that business, 95% of that business, we think that base business has still yet the same drivers, the ability to grow at a mid-single to double-digit growth rate. We've been speaking about that for a decade. As we look forward, we still see the same dynamics, grid modernization efforts remaining intact associated with the Electric Power Group, large projects remaining -- representing a small component of that business. When we look to the Renewables segment, we think that, that is very recurring and very visible. We have components of base business in Electric Power that we categorized to be within that renewables group, and then we add on the generation component. But what we would consider on the generation side of the equation, it is very recurring, very visible. High volumes with work, high demand, project dynamics that although there may be a component that may move at any given point for any given project, the demand in total and opportunities that are there are such that the workers are irreplaceable. In our mind, it gives us that visibility to lean into the growth dynamics the same way that we think about the normal aspect of our base business for electric and underground. We've slightly shaded it different, putting it a little bit -- because we recognize it's not as repeatable, sustainable, but we definitely think is highly visible and highly recurring and has the same type of multiyear trends associated with it. When we look at the Underground space, around 90% of that is the base business with a mid-single to an upper single-digit type growth profiles. This is a very consistent perspective that we've had. We think it's important to recognize that nothing has changed about our aspects of how we think about those next few years of growth, whether it be within this 5-year horizon or still yet beyond. Fundamentals of that business are still intact. But this is how you can also get a perspective of it. If you were to aggregate that base business and look at the last 5 years, the organic base business had a 9% growth rate. Nice acquisition contribution being able to get us up into that $13 billion range. But the base business itself organically, aggregate has grown 9% from 2016 and 2021. Our future expectations in the aggregate are still very firmly in that mid-single to double-digit opportunity of that base business. So the way we think about the modeling is large projects will still be able to be a component of our equation. Large projects and emergency storm restoration. And this modeling shows that to be about $1.4 billion of contribution in '22. We've modeled it to be the equal level of contribution in 2026. It will have some variability. It will move -- large projects move up and down, storm work moves up and down, but we believe that the consistency of it is such that we think it will be a regular contributing component of the equation and be nicely contributing on top of that base business overall growth. Segment type dynamics. A lot of numbers on here. The first thing I'll mention to you is that most of these will seem very familiar to you. When you think about Electric Power, you see the top line of that 5% to 9%, large projects pressing down just a little bit of the gross rate against that base business, of that mid-single to double digit. Operating margin is 10.5% to 11.5%. That is inclusive of the -- our integral operations and joint ventures. So that's into that number right there. We're looking at that as having a steady contribution throughout. And this reflects a little bit of an aspect of expanding on our telecom margins to be at parity with our Electric Power group today. When we think about the Renewables, top line growth of 8% to 10%. We very much feel confident in renewable generation at a double-digit CAGR throughout, pressed down a little bit by the large projects, being that -- at being a consistent performance. And then equal to what we've commented to, renewable generation, we thought could be out in that 9% to 10% or double-digit EBITDA contribution throughout. The Underground group was a 3% to 5% horizon. That 5% to 7% growth pressed down a touch by large projects. We do continue to believe that the midpoint guidance for this year was at 7% margins for that Underground group. We continue to believe we can see some expansion of that, seeing that start to press into what we consider to be that upper single-digit margin performance range. This is a great spot to talk about that the Underground group's performance, our revenue expectations are slightly muted primarily because as Duke said, the portfolio of the way that we're going to deliver. Where do we see more growth aspects of it? As we're undergrounding electric power. Those resources and the growth opportunity there is actually supplementing the electric power component of the equation more so than it is here because we see the opportunity to share those resources across. Two points I want to make additional is the opportunities that aren't reflected to here as an example. We have the ability in our mind to continue to see margin improvements through execution. If you look at our performance over the last few years, you'll see that we exceeded our Electric Power margins. If you look at the preacquisition result of Blattner, see they exceeded these margins. We do believe we continue to execute, and that gives us an upside characteristic. Other things than not in here. Puerto Rico, to the extent we were to see new awards in the T&D component of the space. We have not modeled that into here. So we believe that these numbers as presented still yet have a degree of upside to it with outperformance and other opportunities, growth rates that are more comparable to what you've seen in the last 5 years. One other point I'll make is, Duke referenced our ability to be more in the front-end component of the space. To the extent that we're more on the front end, that might be -- lead to an engineering side, that might lead to procurement, that might lead to right-of-way, that might lead to permits. That type of revenue stream might allow for higher revenues, less capital deployment. Could, in fact, put some degree of pressure on margins. Not all of that work necessitates the level of capital and might have a lower margin profile. It is possible, therefore, that some of these margins might be a little lower. But if that is the case, we will call that out. We will pursue that work because it will expand our return on invested capital, which is our ultimate goal. So we will pursue that work. And to the extent that puts any pressure on any of this margin, we'll make sure to color that as we go. This is the portfolio discussion that Duke was talking about. We -- these -- the black dots represent legacy operations for these companies. The green dots represent where they go. These are example companies we have today. Some of them are in this room today, whereby our Underground group is spending time focusing on growing in the Electric Power space. Some of our Electric Power operations are delivering across into communications. And the aggregate of the groups, we think have the ability to find nice complementary and synergistic work when working with Blattner in the Renewables group. With organic growth, with the degree of our margin expansion, with cash conversion remaining consistent and growing both with renewables component, I think having an expansion and the opportunity for cash conversion, the front-end services having a different cash flow profile, offering ability to expand the rate of conversion. When we look forward, we think we have the ability to have $4.5 billion to $5.5 billion of free cash flow generation. Very robust cash flow generation that, if we were to sit here today and do nothing, it would produce a negative net debt by 2026. We historically have not been a company to sit on cash. We have historically found ourselves in a position to deploy capital. And most specifically, I would tell you that we do believe managing a conservative balance sheet is important to us. You can see our target leverage on the right there is at 1.5 to 2x. I think that very much will still be part of our equation. I think you'll see variability at that at times. But on the most part, we still yet believe that running a conservative balance sheet is very important to us. But I think we have proven our ability to historically deploy capital. Our capital priorities remain the same. First, we're going to lean into the organic growth of the business. Working capital is a very important component of the business. Capital expenditures will continue to do that as we lean into the aspects of the growth itself. But inorganic deployments into M&A and investments are important and then still yet, look -- think about share buybacks. In the middle portion of this is what we've done over the last 10 years. And I think what we're trying to highlight here is no doubt, we think we've had regular deployments of capital. I think you'll see that there's a balance between where we've acquired companies and where we bought our stock. I think you can see it's lumpy because it represents an opportunistic way of deploying it. We believe that creates the most value. But I think what you can also find is consistent. On the far right, you see the aspects of our M&A and share buybacks through that 10-year period. When you see the $5.7 billion of cash or total consideration paid relative to acquisitions, you see an acquisition multiple between 5 and 7x. That's the average multiple of all deals combined for the last 10 years. Below that, you see stock repurchase, $2.5 billion at 95 million shares at an average price of $26.67. We think we have been very deliberate and very purposeful in creating shareholder value with those deployments. And I think you'll see that continue. The main thing I'd also emphasize about this is when you think about deployments, that M&A does continue to be a large component of that. We do believe that M&A is very value added, but we will not pursue M&A without measuring it first against buying back our stock. We look at every single transaction against what value we could create by buying back our stock. I believe that, that is a do-no-harm model. We know no one like we know ourselves. So we will look at buying ourselves before we buy someone else. To the extent that we do that, though, we do think there's definite value-added capabilities. Historically, when we have looked at M&A, we've looked at the core characteristics of a strengthened management team, that management team that you'll spend time for lunch with today. That becomes the first thing that we look at. It becomes the most fundamental thing that we look at. We think that those type of transactions still exist. We think we can still go through, acquire transactions that are additive, value-creating and differentiating between us and our competitors and to our customers for the value and the services that they provide. I think that these are a good example of some select acquisitions on the bottom. What I'll tell you, we're not afraid of doing large transactions, evidenced by Blattner, the largest transaction we've ever done. But right after Blattner, we closed 4 other transactions in the fourth quarter. Run rate revenue is around $200 million, $250 million. Total consideration about $230 million. We like those transactions. We're very regularly looking at transactions like that. Those bolt-on acquisitions provide ample growth opportunities for us. And we think that those are a nice way to play. And I think that you'll find that to be a very common way to think about the M&A transactions. The numbers then translate to an EPS perspective of growth of nearly a 10% type of opportunity at the organic level, up to $9.50; at 1.5x of leverage, $9.50 to $11; at 2x levered, which is still a reasonably conservative balance sheet, $11 to $12 opportunity. That is greater than the 15% CAGR opportunity for relative to earnings per share, with opportunities still yet to execute above. Combine that with our -- in our mind, although dividends are a smaller component, we do believe that it's valuable to think about dividends and the ability to continue to see that grow commensurate with the net income and the free cash flow generation of the company. Overall, we intend to manage ourselves and our balance sheet for the long term. We think a strong balance sheet is very important. I think that our investment-grade status is very important. We will continue to manage ourselves that way, but we do believe that we can create value and create long-term shareholder returns that are quite beneficial with our deployments. A big component that I did not discuss was how the megatrend component of that comes into the equation. We believe that the mega trends that Duke spent the most of his time talking about are complementary to everything we've talked about. We believe that our future 5 years in and of itself, and the underlying drivers that have still been intact to remain intact throughout, that give us the same type of opportunities to develop and grow, to continue to offer the same type of return dynamics. But the megatrends either enable that growth. If there's any other type of headwind in there to the extent that there are adoptions of any of these megatrends a little bit sooner, they enable growth or they expand our ability to grow faster or they extend the long-term nature of the growth. We think that they play into it very much in the way of being able to build on top of that. When you think about the electric vehicle charging and the amount of grid hardening that would need to -- grid support to be able to adopt that level of electric vehicle, load growth, hydrogen, carbon sequestration, all of those megatrend components of that play into us in 1 of 3 ways: enable, expand or extend. The tailwinds of the base business are intact, opportunity to grow. We're very excited about where we stand today. As I stand here today, I'm starting my 25th year with the company, and this is the most exciting time I've ever been with the company. I think that each of these items that are out here today, we will continue to lean into to create value and to create a long-term perspective. And we'll let -- turn that back over to Duke for his final comments and take some Q&A.

You can see the numbers that matches what we're talking about from how we deliver. I think from my standpoint, while we're here, what we're thinking about, the company that we are today is different. It's different than it was 5, 6 years ago and where it's going will be much different. And when we think about an investment, if you're investing along the energy transition, utility back spend, technology, we check the box. And for me and what the value we can create for our stakeholders is significant. And the numbers are big. But the strategy that we have is the same. It's very much total addressable market, the same strategy we had before. So when we think about acquisitions, as Derrick talked about, we're not taking a shotgun approach. Very calculated. And we're doing things really to enhance what we do or give us more service line expansion, 1 of the 2. And I do think we sit in a great place. One thing we do a great job of is have great people. And they allow us to get up here and talk. I pinch myself every day because of the people that we have and the people in the field that are out there today, out on a pole or on a wind tower. They're are the guys that make it, the women that make it. And so our ability to get up here and talk about it is pretty incredible, pretty incredible what we can do as a company and where we're going. So we're extremely excited. A matter of fact, I think we're just getting started. We're just getting started. So we're proud of it. We're proud of where we're going. We think we laid out a nice strategy here today. We're here. Jayshree is going to come up. Derrick's talked about the numbers. We've talked about who we are and what we think about ourselves and where we think we can go. With that, we're going to turn it over to Q&A. And Jayshree is going to come up as well. She joined the team like 2 years ago. It seems like yesterday. So she's helping us with strategy and very, very knowledgeable of the renewable business as well. So great background, she'll answer some questions as well. So with that, Kip, what are we doing?

Yes. So like I said we may have some questions coming in from the webcast. So I'll try to kind of balance a little bit. Julie and Jackie with mics who will run around and give you a mic. So like I said, name and company, please, before you ask your question. [Operator Instructions] Maybe just real quick, start with Steve up here, Julie, in the front.

Great. Steve Fisher with UBS. I wonder if you could just talk a little bit about -- either Duke or Derrick, in terms of your growth assumptions, market versus market share gains. I would assume you would be in a very good position to have market share gains as part of this? And I'm wondering what type of things you consider would be market share gain drivers. I would tend to think of them as on one level, bigger projects, but there's probably a number of other things that you would derive market share gains as well. And then I guess the related follow-up is in terms of the IIJA, how have you factored that into the growth rates? Because I would think some of the IIJA is really tied into these megatrends, but it sounds like you're almost sort of thinking about megatrends as more upside opportunities. If you could talk about those things, that would be great.

Yes. So when we think about the market share and where we sit, I do think our ability with craft and what we've done and that certainty does allow us to expand our market. And our discussion and our discussion to our client is no longer very -- like a year or 1 contract or it's a program, elongated. And it's also our ability to capture the front side of the business. So you do expand there and you expand across as well. We have the framework in place to deliver. And when I think through craft, I think craft is so critical on a go-forward basis, of kids getting in the business and our ability to get them to the field safely. The client and how we collaborate and what we say and where we're going with the client does allow expansion. So we will take market share along the way. Many of the areas that we see today. I think when we think about operating leverage, when we talk about that in the field, it will be around our service lines. So if you're doing gas in an area, you're really big, gas -- a service provider, solution provider, then why are we not doing electric engineering across not only the geographic but the customer? So one customer, we may do gas, electric, telecom. Where before, we may have only done one discipline. We have the ability to do that in engineering and the front side of the business and get you to your energy transition. So we expand our total addressable market with each client that we have a great relationship and have collaborated for many, many years on base infrastructure that we've done in the past. So I do believe that expands our capabilities. And we'll take market share along the way. When we discussed it, we think from a megatrend basis, as we've tried to lay out. When I think about it, it gives you opportunities for 15-plus percent growth, but it also derisks your portfolio at double digits. Well, it does 2 things. Any kind of risk you may have, well we've mitigated it through a portfolio. And we've also provided ourselves the opportunity to grow through on those megatrends. Did I miss anything?.

No. No. I think that's fair. I mean I think it's fairly clear. We've been trying to be prudent with our modeling, which is very common for us. But then I think that Duke has addressed that the upsides are exactly what we're talking about, the -- whether it be on the level and/or taking a bigger portion of the market share.

Jamie Cook, Crédit Suisse. I guess 2 questions. One, as we think about the -- I guess, why is the 5% to 8% organic growth sort of heroic given what you've done historically? Is it just sort of the law of large numbers? And to what degree are the megatrends you're talking about embedded in that or not? So I guess that's my first question.

Yes. So when we think about the growth numbers on the 5 to 8 in, I just -- you're adding 3,000 to 5,000 people. And I know we've grown past that. I believe that's organic type growth numbers, not acquisitions. So when we think through that, can we grow past that? Absolutely. We've done it. And -- but I do think we need to be prudent about how we're discussing where we can go and how quickly we can deploy people. We're already at 3,000. Can we make 5,000? Can we put 5,000 craft organically in the field? The numbers are big, we see them. So we took a prudent approach to it, Jamie, on organic growth. But when we look at acquisitions and look at what we can do, I will also say that typically, they grow faster than we do, and we're able to expand it quicker. And opportunities like Puerto Rico, for example, doesn't give you top line growth, it gives your bottom line growth. So those opportunities are there, and we see more of those as well. I'm not saying there's -- but things come in every day much, much different than we were in the past, and people are coming to us around this transition, which I do believe -- I mean, every day, it's something new. And it's big. And so we have to think through that about where that's at in our organic growth. But I think we were prudent, put a number out that in my mind we can deliver on. We typically like to exceed our numbers. So I'll just leave it there.

And 2 other things and underground is the smallest growing component, right, as we're focused first on making sure we get to the right margin profile -- you've heard us talk about that a little bit. Then when you think about the electric and the renewables, they're both renewables, we have a 10%. Electric is very close to that. I mean, from a range perspective or certain and underground, what bringing it down a little bit, but we're focused on the margin expansion. To your second point on megatrends, no, we have not explicitly modeled anything associated with the megatrends. And so that would be the point where megatrends have the ability to expand that growth perspective.

Am I allowed a second question or no?

Please.

Yes. Okay. Just back to Blattner, -- to what degree, I guess, is the business more transactional today versus your approach to sort of understand your customers' CapEx and sort of have longer-term contracts. So where is that today versus where it should be in 2026? And to what degree will you walk away from one-off projects, which could hurt growth in the short-term but positioned you better longer term?

I think when you look at Blattner, they're probably as collaborative or engaged as much. If you think about where they started, they started in a difficult renewable market stayed with it in the '90s. And so they're ingrained in this whole build. And when you think about it, if you think about like a funnel, so they can only handle so much and our top 10 clients have so much that our ability to expand even in markets like this where you have some solar issues with tariffs and things of that nature, -- we can expand. There's people ready to go. And so that we haven't had the ability to work for in the past. We'll expand the customer base. But there's also lots of different things we can do in a synergistic way that we haven't even calculated yet, but it's early. So can we build substations with Quanta's traditional group? -- interconnections, how do we get into the queue. Can we help? Yes. And so I think our ability to look at the total addressable market, the total cost of the projects and get them what I would consider kind of done at the client level is significant. And Blattner delivers -- last year, they delivered on every single product they had COD when they said they would. We did the same thing. So that's how I see it.

Andy Kaplowitz with Citigroup. So Duke, I think you said that your glass to have full when it comes to an inflationary environment. And so maybe you can elaborate.

Supply chain.

Supply chain. Okay. Okay. So -- but maybe you can elaborate on pricing and how you think about sort of the 5% to 8% growth. I would assume you're getting a bigger component of pricing given your scarce craft labor. So is it a much bigger number going forward than it was over the last 5 years? How do we think about that?

That's a great question. In my mind, I wish I could get inflationary numbers right. I probably wouldn't be sitting here. But in my mind, we're looking at it to normalize at some point here. I do think you have some inflections. You got low. You have a lot of still out of Poland and Ukraine and things like that. I don't believe we'll be elongated because we're going to work through supply chain. We'll work through those things. We always have as an industry. And when we talk to our customer base, yes, things are escalating a bit, but it's not instrumental. Do we need to work on it and work on the total cost of -- what I like -- where we think it benefits us is we can look at the total cost of a project without affecting us or the client drive the cost down through constructability through the ways that we bring our manufacturing capabilities or we might know a supplier different than they know and we're in a broad, broad business and across a broad geography. So we look at and see things differently think differently at the client level to collaborate. So that's the issue. And I do think we have already thought through this, whether it be concrete, steel, doesn't matter, like we're already ahead of that. We've felt this a long time ago, like when we think through it, if we say, well, that's an impediment for us to get to completion, you can bet we have a strategy to fix it. And so -- and it's a long strategy. So I like it. I like the supply chain, gives us more addressable market we can -- of course, I don't like it, but it's there, and we've addressed it. And I will mitigate risk to the portfolio and through our ability to collaborate the client. Comments? I mean inflation big interest, pushes everything. So hopefully, we have small rate increases and things of that nature. But I'm more worried about high interest than I am the supply chain issues of today.

And maybe this is somewhat related Duke, but I think you mentioned you're trying to get operating leverage at the division level and you're just sort of scratching the service there. So when I look at Derrick's numbers, like I don't see you pushing margin. Really, it's kind of the same margins that we see maybe in UI. There's a little bit of margin expansion. But how do we think about you pushing the margins and getting the leverage to a much bigger company, you should be able to get operating leverage over time.

Yes. It depends on growth. So I do think we didn't really comment to what we believe in the top line. How quickly are we going to grow? How -- what's the top side of the business. But you also have to look at the returns. I do think our returns expand. We've expanded our return on invested capital considerably. I think we'll continue to expand our return on invested capital, whether the margins go up or down, past where they're at. Obviously, we take prudent approach. I mean, we're talking about a long-term strategy. So we did take a prudent approach to it. Certainly, we're there to drive utilizations value across our portfolio. And I do think there's opportunities to do so. But we need to be prudent about it, and we need to think through it because I do -- as you get into the front side of the business and you start bringing material components and things like that through. It does press margins a bit. And so we need to watch it and just -- but returns should expand.

Yes. I would say the same thing that the reality is that there is a degree optically a better absorption, but it's pressed down by the front end. So we're saying is that we think that on average, we believe that, that margin profile was there and to the extent that it wasn't, it's not going to be because of fixed cost absorption or the underlying business changing, it's going to be because the growth dynamic of the front end might actually flatten it. So we try to model that into as the portfolio delivered it.

And I don't think you hear the company come out and comment going. I'm sorry, we missed our earnings because we're growing. So I think we have those processes in place.

Jump to the webcast. I got a couple of questions. We'll take one now. Duke, related to your comments about potential opportunities in LNG given the geopolitical environment and everything else, are you seeing anything yet, how do you kind of think about that, where the opportunities could lie if that does start to materialize?

So when we think about it, I mean, energy security will be a topic I'm highly confident be a topic geopolitically and how we think. We're right in then that would be another place that I believe we have a huge opportunity for growth. And when I think through LNG is certainly something that you've seen FID on couple plans that will require a significant amount of infrastructure. We'll be around that infrastructure for sure, it does create opportunity. And we talked a long time ago around big pie, what would elongate big pipe, well LNG would elongate big pipe, I said it before. So there's opportunities there that certainly we can expand our Canadian market. It's quicker to market. In Europe, if you're on the East Coast of Canada. So there's opportunities there with that expansion you're expanding to the West. And I believe Canada will come up through LNG as well as the Australian market where you have [indiscernible] gas is priced off oil -- oil is high, that will deliver in Asia much, much quicker in Australia, that market will come up and all around energy security. I still believe Canada is a much better place for us to collaborate with in the places that we do and it's right here. So we need to figure out our borders and think through that with LNG and other things. But we're definitely going to see that as part of the energy security.

Adam?

Adam Thalhimer, Thompson, Davis. One for Duke, one for Derrick. Duke, what inning are we in for electric utility outsourcing? And then Derrick, why are the underground margins structurally lower? And is there more upside there? You talked about recovery in Australia and Canada to mining and energy recovery.

Yes. So I think when you talk about what inning we're in on outsourcing, I just -- you've got a tremendous amount of capital deployment throughout, and we've really prided ourselves on the workforce, the craft skill piece and those solutions around it. I don't believe you'll see the utilities really build. You might see 1 or 2. I mean, not see if some in the West build some workforce up. But it's -- in my mind, the efficiencies we can gain and how we work together on labor, how we think through the bills we're certainly getting that organic growth on there, and I don't think you'll see that. I mean, best amount of utilities are out the deal with assets primarily around their asset base and delivering to the very, very customer how they deliver, building out heavy infrastructure is certainly something I believe we fit that model and that portion of it will certainly get outsourced. I mean they may have more meters to go back and forth with and set meters and things of that nature and have the facing of the customer. But the outsourced model with the attrition. I mean, we're way ahead of that attrition. And so as they have that attrition, they'll be more outsourced. So I do believe you'll see outsourced gains within the utility model over time on top of what you already see in capital growth. Derrick, do you have the.

Yes. Relative to the margins on underground. I mean probably 2 main components. One, there's a smaller fixed price component. The rest of our work with a larger fixed price continue to have the ability to manage risk and execute through contingencies. There's a smaller component of that right now in the underground, but more of it's the seasonal effects. Reality is the second, third and fourth quarter of the underground group. Oftentimes, you can see an 8% type margin profile. The first quarter of the underground group, we oftentimes can see down in the lower single digits that presses all the way through the year to bring the overall margin profile down. Electric Power has more revenues overall. And so that has less of the seasonal dynamics, but it even still sees a lower margins in the first quarter rising, the second rising in the third. Well, underground has that just more exacerbated right now. The volumes of work in first quarter activity aren't as much. We'll continue to work to see what we can do to handle that from a geographic perspective though. It's one of our main things. And then plus, to Duke's point, back to when we think about the portfolio, when we're using underground assets right now within the Electric Power group, it is delivering at margins comparable to what you see to electric power. So when we're managing the aggregate, the aggregate still has the ability to deliver double-digit returns with underground assets sometimes being deployed within the electric power group. So that's what we're really focused on is how that portfolio delivers.

Let's go to Ian and Rich.

It's Ian McPherson from Piper Sandler. Duke, the trade case on modules themselves seems a little bit more than just garden variety inflation. I know that some of the developers are concerned about availability for a few years resulting from this depending on the outcome. So what is the feedback from your customers and how that could dent the project cadence and what kind of workaround they might be looking for to keep the train moving there?

Yes. I mean, I think we're all just grappling with the tariff. And if we're going to go to where -- from an energy transition standpoint, you can't retroactively say, put panels of 300% to [ 350% ] and think that we're going to go develop against that. So that case is to play out. I do think they need finality in it. I don't -- it's not affect -- it won't affect us from a standpoint of, hey, we have more cost in our modules. What you'll see is you'll see some switching where developers will go. Well, this is this. So I'll put more wind in the air this here or I'll do more modernization you'll go from a 1.5 meg to 3 meg, your turbines will go up, and so we'll do a bunch of retrofits on turbines. So things like that, but -- if you go to our clients, and we've talked to them, I mean, they're reiterating where they're going. But have -- you might have a speed bump here there that causes some issue. Our portfolio is big enough and the way we're thinking through it, we'll overcome those. And we talked about supply chain and how we can help with supply chain and how we think through that. So we are working with them daily on that discussion and how we work through supply chains, whether there's places that we may finish the project without panels waiting all panels. So it just makes us a little more inefficient, but the scale that we have in the business and how we think through it, how we work with the client, and they can switch from solar to wind or [ bill ] transmission. And we're right there to kind of work through those things. So in my mind, while it is something that we should all look at, it's not something that's affecting the company at this point.

Rich in the front row.

Rich [indiscernible] Newberger Berman. Thank you for holding the day. We appreciate it. I'm curious on Blattner, I recall them relying really on a handful of project developers for their project flow historically. And I'm curious over the time frame and the process by which you broaden them out to the name brand utilities of the world and start working directly with them on generation and wires together.

Yes, I'll let Jayshree take it. She has a background development. So I think it would be great.

Yes. No. So Blattner has done a great job over the last 20 years, developing really strong relationships with the top 10 developers out there. But yes, already, we're seeing within the Quanta family, that the relationships that Quanta has developed over the last 20 years with our strong utility customers, and the fact that utilities now are moving more toward rate-basing renewable generation. The expertise that Blattner brings along with where we have been sitting for the last decade -- several decades, that's actually coming together very nicely. And without mentioning specific names, we've already seen some customers saying, you know what, because of the Blattner and Quanta combination, this is who we want to go on the utility side as well.

If I could, just one more unrelated. On Communications, Duke, you spoke about the growing pains and we're in the very early innings, the opportunity is very large. But from an outsider's perspective, it's also a little bit different in that it's a different customer base. They work differently, I'll say, than utility customers would. And separately, you self-perform a lower share of the work from my understanding. So would you discuss those challenges and whether you view this business potentially as high quality as your transmission distribution business?

Yes. I think when we think through it -- so what it allows us to do is be fully utilized in a portfolio? So if our portfolio, if we have more gas LDC or there's more telecom and higher margins or things that we can just move back forward. So it really allows high utilizations, which creates the margin impact at the bottom with Telecom Group. You haven't seen us make large acquisitions in Telecom Group. Been there, done that. We've been able to expand organically and build a platform. It's a little more painful than buying a platform company and expanding on it. but it's the right answer when you think about capital allocation. And we've done it economically and now we have the ability to take a thing with a large market. So how I would characterize it is we're one video game away from more fiber in the ground. If you think about it and you say, okay, if they put one video game [indiscernible] wants and that 5G platform really takes off. Like it will. The amount of fiber, the amount of infrastructure we put in almost certain that you'll see the technology players that we're putting fiber in the ground because the -- your traditionals wouldn't put fiber in the ground, it's fixed to come again because they won't go fast enough for what the technology is there. If you talk about AI, robotics, anything you're talking about, you really need a dense 5G market. The art of money does some of that on fixed wireless broadband and how we play in those markets. But I think we'll continue to expand that with the operating use we have and take the same approach. I mean we made early on in Quanta's history, we made tons of acquisitions around telecom. So I think in my mind, we can grow that business in a different manner. Not to say we will make some strategics, but we can expand them so quickly once we do it. But like the market.

Let's jump over to Marc over there.

Marc Bianchi with Cowen. Duke, you made a comment earlier about in your comments earlier in the prepared remarks about EV charging and kind of the load impact at night. And what was interesting to me, and maybe I just misheard. It didn't sound like you were talking about charging stations, you're talking about charging at home. Is the relative opportunity just not as exciting on the charging station side? And maybe you could help quantify what both of those mean in the context of the 5% to 8% growth?

No. I mean like we like both. But what I would tell you is like when you think about what the impacts of charging is on the distribution network, it's probably 25 to 50 to 1 on the backside of infrastructure to handle the load variability. And so that's the thing. I mean you're saying, well, one transformer on a poll will not handle the load now, so I've got change transformer. But you do that 7 times and your circuit is not big enough. So you had 12 kV, you need 35 kV. It goes all the way back to substations, well substation, you got -- you need a bigger break, need a bigger, transformer. Well, oh, you need transmission. So it's a pendulum effect as you start pushing EV and I don't -- like how fast it goes. That's what everyone said, "Well, it's going to go slow, it's not going slow". It's going faster, meaning all the OEMs are built manufacturers, battery plants, it's going faster than the industry probably predicted. So what I would tell you is the exponential load that goes on those distribution systems is significant will we or will be in like your high voltage or high-density charging. That's kind of where I see our markets across North America, going into the home, we'll do it, but it's not really something that you will be the ones that do that. We just -- we don't want to go install a charger in a home. Well, we like to stay at the meter and out, not go in. It has a bed, we don't like it.

Maybe just following up to that. On the -- so with the infrastructure bill, there was quite a bit of money for charging station build-out. How do you see that phasing over the next couple of years? And what -- how much of an opportunity is there for you?

I mean, we talk about it from the OEM all the way to utility daily about how we build this out and how quickly everything has to be pretty coordinated. You just can't go and say I'm going to do it tomorrow. So you need a modern grid, a robust grid. No one, you got to think through, well, okay, in a storm situation, if I'm out of power of 3 days, I can't -- no transportation. So this grid's got to get extremely modern where you don't have public transportation and ways to transfer people. I mean, the customer base itself is going to demand it. And I just continue to see the build out. We're in the early stages of the distribution piece of the build out very early, and that's the biggest piece, right? It's a multi-decade expansion.

We'll kind of move towards the back. Maybe start with Neil.

Neil Mehta here with Goldman Sachs. Appreciate the whole content here today. The first question, Duke, is just the philosophy around share repurchases. How do you think about when to deploy it. Is it fair to say your view on this is more opportunistic as the stock has done very well, even though I think we can all agree there's a value gap there? And how do you think about leveraging your balance sheet to take advantage of dislocations that can emerge in the stock with economic volatility?

Yes. I mean, I'll point back to our past a bit, and we'll lean into it when we disconnect to the market for sure. But we do want to stay agnostic to share count whether it be through acquisition or through how we make sure we incentivize our employees around Quanta. But typically, we'll stay agnostic to share count. And I think we need to, and we very much will lean into that as well. But what I will say is the deployment we've shown through capital, if we sit on cash, it's our only way to really destroy value at this market, okay? If we sit on Apollo cash, it makes no sense. So I'll let Derrick comment on the rest of it.

No, I mean, I don't think I have anything to add. I agree with you. I mean, we're going to -- we are very willing to step into it. What I'll tell you is that just like when you think about the last 12 months, right, there are times where potentially they may have optically looked at that we had the opportunity to step into it, but we didn't. But the reason was is because at the same time, we were actively working the Blattner acquisition. So you're going to see a dance, right? We're always looking out at how things are playing out in the 6- to 9-month window, and we're going to measure against that. We'll clearly look in a path to go above our leverage profile, but we fundamentally believe that we're going to always be trying to operate with a conservative balance sheet. But opportunistic is a primary way of thinking about deployment against that. I think you'll continue to see that.

The follow-up question is just on the utility bill. Duke, maybe you could talk about when you're having your conversations with the customers over the last 10 years, one of the key tailwinds for utilities and ability to drive rate base has been a depressed natural gas price in the United States. And this is an area where Henry Hub and power prices potentially re-rate as there's global linkage of U.S. gas to rest of world, does that limit the ability of the utility CEO to make the rate base investments at the same CAGR of the last 10 years?

I'll throw it back. If you believe that the country is moving towards a carbon-free environment and you're making this transition, if you believe EV is going into the systems with the investment you see through the OEMs, you have choice. You're -- you've got to modernize the grid to take on the transition unless you decide we're going to -- we're going to go back to coal, back to we're going to get news. I mean, this is the only -- the way you have to do is through transmission, batteries, all the kind of things that we're doing now with balance of plant solar and wind. I do not think we're going back as a country. I think we're going forward in this transition. And can we get PTCs? Yes. Are there ways to drive cost down? Yes. In a high interest rate environment and in high natural gas environment, I would make the case that it makes more sense to put solar in air on the ground in wind and air and had natural gas because it balances load. So again, natural gas is a piece of this transition, I always thought it would be -- it is whether we want to talk about it or not, but it's there. And any increases make solar and wind look better and better.

Maybe Noelle.

Noelle Dilts with Stifel. So I was just hoping for a little bit of clarification on the megatrend upside to growth versus the base $20 billion to $22 billion. Is there a way to think about which of those megatrends are contributing to the upside? In other words, if you look at renewables, arguably believe that's a mega trend in and of itself, but I would assume that's kind of in the base. So is there a way to parse that out? I'm not sure, if you got that granular when you were sort of thinking about it.

Yes. I mean, we talked about how to coin what we were -- the growth patterns or pathways, what every want to call them. It's EV. That EV impact to the grid is what I would consider a megatrend, undergrounding effect that large undergrounding to the west, large undergrounding to the south and east megatrend. It's on top of the growth that you see that 5% to 8%. It does 2 things. It protects the downside but it provides the growth. And I'll let Derrick comment with the numbers and make sure I'm.

Yes. No, everything is [indiscernible]. I mean, the mega trends are not explicitly in our model. okay? So anything he's talking about are not explicitly. Do we think that there are certain of our customers that are proactively addressing some of those pieces? Yes. But for the larger portion of this, we think that this '25 and '26 and beyond type of activity. The renewable component of the equation, I would tell you, is largely based upon our original expectations associated with Blattner, we see a double-digit profile. That is fundamental to our model. right, renewable generation itself. But to the extent that you see acceleration of any of that, there's still a degree of upside opportunities there. But I mean I'd say largely, it's the fundamentals of our historic business plus the renewable generation piece of Blattner with everything else that's still yet happening, carbon sequestration hydrogen. The real aspect of underground, I think as Duke spoke to, is there are some activities associated with that, but the acceleration of that is probably in more of your auto periods. And at levels that you're going to see would drive up elongate. So I mean, I think there are several components to the equation that would add to the core of what you saw. And one other clarification I'd probably say is that although there's been a few references to the 5% to 8% on the revenue side, we're not focused on the revenue side. We are focused on the EPS side, which is really the 7% to 10% plus.

Okay. And then just circling back to the solar tariff issue. Given Duke, your comments about developers sort of shifting from wind to solar depending on what's going on. I mean are you already seeing uncertainty around the tariffs start to impact project development or timing or awards? Or do you think that's something still that we'd see a little bit later in the year?

So I want to be clear on this, like it's early, just kind of coming out and what I think is everybody's disappointed. Well, more than disappointed, they're a little angry. I don't think it's going to affect our ability for what we -- our guidance nor do I think it's -- you might see -- what I would tell you is like we have LNTPs like limited notice to proceed on a multitude of projects. It has a cadence to it. Will that cadence be interrupted a bit? Maybe. But there's project ready work that's there. There's -- like we expand the funnel. It looks different. And I just think our opportunities. People who want to work with someone that can build something certain. And the inbounds are as big as what any movement. So we just have to position ourselves properly to take advantage of any disruption for growth as well as if clients choose wind versus solar or batteries or whatever it may be, we can move those directions with them. I think everyone today is still getting their head around how long it's going to last? Do you really want to do this? Do you see the impacts of this to the transition? And I think you'll get a fairly quick decision here and we'll move forward fairly quickly. We're too far the other way. Well, while you might hear the disruptions here or there. As an industry, these things happen, we move through them. For us, I still say glass [indiscernible] will be better because of it.

Yes. Another thing I might add is that although we guide in color by segment, I mean, our overall expectations are consolidated return. And so I think what Duke's probably talking about is that there might be headwinds or pushes and pulls in any given component of the individual segment numbers. But we guide to an aggregate, and we're looking to execute in the aggregate. And I think that's what you've seen over the last little bit is despite other places that might have had headwinds at points in time, a telecom execution last year, we delivered on our aggregate portfolio.

And any kind of pushes is pent up. They're just -- it's been greater on the other side.

Let me just hit one question online and then to you, Mike. A bit of an M&A question. Granted, the acquisition of Blattner is still relatively fresh, but are you guys thinking at all about other kind of bolt-ons or M&A from the renewable side of the business?

I mean, I think it's our job right? So we are thinking through it. We leaned into Blattner because we believe in the macro markets. And where we have displacement or we need to expand our front-end services or things like that. If the right company -- is there -- we're not out looking for acquisitions on any given time. I didn't come up here and tell you we're going to make 5 acquisitions to get to our number either. We said we have a platform, we sell what we can do and grow and how we're going to allocate capital, what we said. And so we're not in the business of searching down acquisitions. If we see the right one, we know we know the good companies in our spaces and other spaces. And if we were to see the right thing, we would lean into it, much like we did with Blattner. And we do have some bolt-on things that make sense for us to expand in areas, but it's all creating a growth quicker than we're growing or it wouldn't work or against our stock price, and I'll let Derrick come in to the rest.

No, I agree. I don't have anything to add.

Okay. Mike?

Mike Dudas, Vertical Research Partners. Duke, as utilities are looking at their capital budgets longer term or all the trends that you've put forth have you noticed a shift on wanting to do less operational budget, more capital budget, so utilities can earn a better return on that investment? And how does that impact, how you do your base business relative to your customers and how that flows through?

Good question, Mike. Obviously, I think when you think about it, the utilities' ability to earn is based on capital deployed, making a return on capital deployed typically. So they would much rather spend capital than in [ O&M ], how in comes off the bottom line. And so I would say that as you modernize the system, you would have less O&M, number one, but your capital deployment is far outpacing your O&M and as you modernize the system. And we do work with them a lot on just O&M daily stuff on any given day. I mean, we probably good percentage of the business. I can't tell you if I'm on a capital project or O&M project less than in a field. But it's just we don't see it any different. We look at the whole plan of what they're trying to accomplish and they say, well, I've got this program that's another $1 billion. You got to do what you do here, plus this other $1 billion over the next 3 years. And by the way, I got another one behind that and another one behind that. But from a craft skill electrician, a gas technician, well, it does not -- they don't see the difference like we're doing mine worker welding or whatever it may be. And we have to look at it more holistically as we think about it strategically as a company, how do we collaborate with the client to get the best outcome for the ratepayer.

Sean?

Sean Eastman with KeyBanc. Duke, you really leaned in on the human capital side of the strategy and the focus there. You gave the numbers on what you invested in recruiting, training over the past number of years. Is this going to be more expensive and more challenging over the next 5 years than it was over the past 5 years? And how many people do you need to train to hit this organic growth outlook for 2026?

We're adding around 3,000 a year, something like that, give or take. So you at least need to pace that and the current growth rates we have. But when I think about -- we've got a great platform today, and we have the ability to think through academia, how we recruit. Now we work more in a holistic manner with the client to both recruit what we need. And for a broad set of where we're going or where they're going. So if we added something, it would be because the client asked us to help them, and we would work together on a transition or a platform that makes more sense for us to do it in a collaborative manner and one off. But I think the investment in craft will always be there from a training standpoint, but the significant outlay early has been done. Our ability to expand campuses or expand on training a curriculum away or may be across craft with the add of NLC and that academia-based approach to our on-the-job training. I like where we sit there and we let expand it fairly quickly. We also do significant on mobile training. So where we don't have to take crews and uplift them. We can take the mobile side of it, which is phenomenal to our people. So we can train at the people level or anything really in a mobile fashion. More questions?

Goodbye, anyone?

Easy.

Last chance.

Last chance. Okay. With that, so what we're going to do is, eventually, we're going to get off the film here. But before we do, I want to say thanks for the people that are listening who couldn't be here we we've all learned how to communicate remotely. So that said, I mean, I do think the interest in the company, where we're going, how we see it is robust. We see great markets. We've built great platforms around great people and great companies with long-standing history of performance. And I think you see this management team. You'll see the people here in the room, they're very much committed. They wake up every day on how to get better. And we press ourselves internally, and we're working hard to make sure that we deliver the transition because our clients and everyone we work forever depend on us to do so, and we're at the very tip of that spear. How we think we're at the tip of that spear to provide solutions across a broad spectrum. If you go back to e-commerce and you think, how does the e-commerce work, it's infrastructure around that no matter how you're thinking technology that does that. If you think about how you get to the transition, you cannot get there without infrastructure. You can't go where you want to go. And so we're right there at that spear to enable that. And help and collaborate. So again, thank you. Thanks so much for the interest with us and exciting time. Glad to be up here and glad to see you in person. It's been good, being good to get back out and see everyone. So with that, thanks everyone. Be safe on the way home.

Yes, we can cut off the webcast, just some logistics for those in the room. Like I said, you're welcome to stay and join the team. We've got as... [Audio Gap]