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

All right. Everyone ready. Look, I know we're still in a little bit of this transition period. But thank you guys for joining again. I appreciate. We're going to keep going on the panels. I'm going to try to be as timely as I can here. Let's talk with the Quanta team here. So look, guys, if you've got questions, comments, ping me here, e-mail, chat, whatever you guys want. I got a laptop up front here. I'm going to try to be dynamic in moderating the conversation here. But with that, let's just kick this off, keep on time with everyone. So dare I say good afternoon to you guys now.

Thank you.

It feels like it was morning a second ago. But thank you guys both so much for taking the time. It's nice to have you guys.

Look, let me start off with this. I mean you guys have great perspective across the space. I mean -- and there's been a lot of conversation on renewable development. Let's just start there, right? Renewable development has been a subject that's gotten a lot of attention mostly because people are talking about delays and just various hangups. What are you guys seeing real time in terms of ability to get projects off the ground, right? Like this has been the big question through fourth quarter, would love to get sort of your real-time assessment, if you will.

I mean I think when we look at it, we certainly see the demand, the overall demand is there for renewables and batteries, wind, solar certainly is a bigger piece. But in general, the demand is there. And from our standpoint, we certainly feel confident in the guidance we get in '24. It looks good '25 and beyond. Normally, we're dealing with the top 10 developers or from what I consider renewable customers. So I think we have a very good backlog, it's solid. We don't see any -- in fact, we see more opportunity than we do decline and not even pushouts really from my standpoint Julien. I think it's solid since the repowering come in, since we have SunZia as a backstop as well on wind. So the SunZia project is going nicely. There was a little noise on it but it's already moved through. So I feel confident on that one as well. Moving like we thought it would and the cadence we thought we're going it. Look, we're on between 50 and 60 large utility-scale type renewable projects today and I continue to think that will grow as we move forward.

How do you -- I mean, maybe I should put you a little bit on the spot on growth. I mean there's been this sort of -- there's always been a sort of hockey stick dynamic in the renewal space and then kind of as you get to nearer term, things become a little bit more pragmatic, I suppose. How do you see that growth trajectory here today? And again, I get that the medium term might be a little opaque, too. So whatever you want to offer on this.

I mean I think last year, on our balance of plant in that segment, solar, wind, batteries, we grew beyond 50%. We're not going to see that type of growth, but I do see double-digit plus type growth within those segments this year and beyond.

Within each of those segments?

Yes, and beyond. It doesn't matter. Wind is obviously something that is coming off a lower base, but today, it used to be the bigger piece of the segment. When you're looking to balance the plant out, it doesn't really matter to us, honestly, but together, for sure, you'll see double-digit type growth.

Yes. And I do think on growth, you and I have talked about this, Julien, many times that those of us who have been in the industry a long time, the growth is there, but I don't think there's as much of an appreciation there is now, it's getting there, but development risk is an issue that better developers know how to deal with. And so hockey stick growth, I've never been a fan of, I mean, and I don't believe that is the right way to look at this industry. But it's our preference, we like the steady growth for longer. That's how we look at it. And we believe that's the right way to think about the market on the renewable side.

Let me ask the question slightly differently because you guys have this remarkable track record in just being steady, right? I mean if there was to be a handful of companies that you would name out there and having just exceptional execution in terms of steady delivery, I think you guys would be on that short list, if you will. How are you guys able to manage the stops and starts to fix all the various litany of more modest issues that maybe your peers have encountered, right, or the sector has encountered, right?

Yes. I mean, if you walk it back, if you go back, early days, there's actually from 1998 that's probably the day where we were with Blattner on a wind project and building balance of plant, we weren't very good at it. We build 1,000 mgs solar probably, I don't know, 10 years ago, 15 years ago in California. It was a great project. It did not last. We were done. I couldn't stay with it. And the issue is the scale matters in this business and to get that kind of scale where we're able to talk about programmatic spends on gigs versus one-off projects, I think, it matters greatly, not only to us but to our clients, and that's where the company is trying to go, is be more program nature. And so it keeps us away from one-off projects. We don't add value there at one-off project. We add value on programs. So I think for us, we're looking towards the customer base we have, doing more and as well as others that have big programs, that's our sweet spot, and we need to stay there because that's where the value is from us. So it keeps us away from that one-off. And even if our customers move off a project, there's another one behind it. So we're just moving from one to the other versus having to go look for something.

Right. Do you want to talk -- actually, let me come back to this point, you brought up storage a second ago. How do you guys think about that as an opportunity, right? Because there's an interesting sort of grey area between the E&C and the integrator, it seems to be something of an evolving question about how involved some of these companies want to be, but also at the same time, what is the growth trajectory, right? If not 50, then what, right? Again, I get this is a lot of probably a variation.

I mean I think batteries are certainly [indiscernible] for us. It's a big piece of -- I mean, it's going to be a big piece of the business. I'd say big. It's growing nicely. We still -- in that space, the integrators, the way we see it, you can get very modularized and do things in a modular way. The technical piece is substation, your integration piece, Tesla is not changing the type of battery they give you. You get a Tesla battery. And that's what the way it is, it's hard to integrate it back into the systems. Our substation business against that is nice. We do quite a bit of EPC substations against those battery projects. So I love the business is growing. We have a big business in Australia as well, that's done a lot of battery work over in Australia. So we like it. We understand it. There is get into it early. I think it's easy. And the integration piece and how you look at those batteries is difficult. So I think we have it down, and it will continue to grow nicely for us.

That's awesome. Wonderful. And then another big subject, I guess what I'm going to ask about it. If there's one big subject at this conference. It happens to be load and data centers and all this fun stuff. And look, I get that you guys have -- you want to talk about your ability to tap that opportunity? Again, it's probably multipart.

No, I think when we look at data centers, what we see there, and we've seen in a long time, the demand on the system. So your ancillary issues or your transmission, your redundancy and transmission, I'm watching it now in real time. You're seeing it move from Virginia to Tennessee to Ohio back into Atlanta, into Oklahoma into Texas over into New Mexico and all those are gigs and gigs multi-gigs. So you can just see the demand on a system and you're in a rate base, it's about 2% growth globally from the power side. So you got that going and your backstop by tech, that's probably 30% to 40% of the renewables that we're building as well from a capacity standpoint when you look at load. So it's driving load at that level, and you're already fuel switching. So it's backstopping, no one's waiting for interest rates to go down in the tech sector. No one is waiting for people to go get equity. And so what they're saying is we need redundancy, we need renewables, and we need it now. And I think that's driving the whole utility business in a different manner. No one expected 6 gigs to show up and you're planning -- if you're a planner and 6 gigs show up, you go, what? What happened? And it's got the industry and a whole dilemma of how to finance it, how to pay, who pays. I think as an industry, we'll figure that out, we always do. The question is how quickly and is it quick enough. And so that's my concern, but the demand is amazing from my standpoint from the back looking in, even though the centers that are in, they're going to go away and put bigger chips in and the use of power goes up substantially, cities, data cities, you saw the thing happen where they took the whole nuke site. So I -- look, it's there. It's here. It's right in front of us. Opportunities are great for us. We'll stay around the ancillaries at this point. We get asked to do some -- about 60% of a data center is electric. When you look at it, we'll stay on the high voltage, build the subs, obviously, the ancillary interconnects, things like that at this point.

Do you guys see another opportunity to do more of that behind the [indiscernible] type work that you saw with Talend's announcement this week?

Yes. I mean we could do it. It's certainly something we look at quite a lot. There's no reason why we can't do it. So yes, it's certainly a vertical that you would have to be blind not for us to look at it. So of course totally.

Absolutely. A lot of angles here. Look, maybe another angle to go down. You brought it up is that, you alluded to it because I think this is a point again, it's a drive home. It's talking about stability. People talk a lot about IRA, what happens next, et cetera, you could talk about whether you need like sort of, call it, a full wave versus just an executive branch change, but also you just alluded to yourself, look, the tech demand is there irrespective. They're willing to pay high PPA prices. You move IRA off elevated PPA price, the percent increase isn't as much as it once was and that's actually a really big change. Do you want to talk about like how you see demand going under the various scenarios because I think you underscore a really important point about the visibility?

Yes. I think the industry has been 2 decades of nonload growth. And so when you roll it back, it should be the most prolific time it is as far as the demand goes, it's been a prolific time of anyone's career in this business. And it's hit quick. It's here. When you start looking at load demand long term, go double, triple, I think Elon has been outstanding triple for a long time in telling the industry, hurry up, hurry up. He's not wrong about it. Now whether it's 2x, 3x, it's a bunch. And we're seeing it in the West as stuff penetrates, you need this load. And so there's no denying that fact. Under any administration, whether you look at blue-state, red states, I believe we've moved off that we're going to do it. It's just you could see some timing where you could delay pieces of it of the transition, but we're moving that direction as a country. So I don't see the administration is -- I don't see then with PTCs, maybe in pieces of RA you can see them, but PTCs are tax credits which are meaningful. Those bigger renewable developers than everyone else, they remain intact under any scenario in my mind. Then tech drives so much of that, and the auto manufacturing moving off towards batteries, the things that you see that we've asked -- our country has asked everyone as an industry to move towards. I can't see a reversal in it. And I think the red state -- like I said, the red states and the blue states they are aligned on this. And even if you're a big oil or gas or whatever you're at, you have absolutely moved your business towards somewhat -- for the most part, somewhat of a renewable state or you have a long, long runway over in your own business, but I just can't see a path where you're going to hear it's going to be noisy. But in the end, I think you come to the fact that under any administration, Red, Blue, you go back to the PTCs are probably intact.

Maybe just quickly on supply side, also gas, gas gen build. Like a, time lines, seem protracted. We would love to get your thoughts on this. And then b, how much backlog, how can you think about that expanding here? Sounds like this is a good bit of like activity to bid on from what I can tell, a lot actually coming in.

There's a bunch of gas combined cycles coming in, I'm going to say a bunch, I kind of think around 10 that I hear, but that close, we can build on -- I don't like the risk on them. They're not something we do every day at this point. So I don't see that being a big business for us. The line is going in, some things around that. There's others that build them better than we do or at least from my standpoint, so I think our generation business will stick to renewables. But I do believe hardly natural gas would be a part of the solution. I don't see how you can go away from it. Part of the reason you need analysis you need way more renewables and if batteries aren't catching it quick enough, no matter how you think about it. So to keep -- I'm going to say it's really quick. People want affordable, cheap, sustainable, secure power. Like that you can say it real fast, and it sounds easy. But when you start to back that up, you need natural gas to balance it to keep everything kind of imbalanced for a period of time and the bridge to be a bridge fuel in many ways, keep the grid secure. And I continue to believe that will be a big piece of it, 20% or so.

To that end, when you say the risks, the risks are with gas pipe permitting and just procurement.

I mean, for us to build it, I just don't -- like we don't like to build them. I mean, you're dealing with labor that we don't. We self-perform about 85% of anything we do. And so you're just doing a little different with different labor, with different unions, different things that you have to hire them and like on the spot, it just becomes a total different business for us. And so we typically stay away from that. We understand it. We know how to do it. It's just not something we do every day.

Yes. No, I hear you.

Not a growth vertical, I would say.

Actually, since you -- I'm going to ping-pong over to -- you talk about labor and how you guys contract. I mean, what are you seeing on distribution work right now on that side of the equation, right? I mean, you guys have talked about this. Where are we in that cycle? Because CapEx is up across the board holistically, rate base across the board covering utilities. What are you guys seeing?

I mean I think utilities have to make decisions at this point where they spend their capital.

Yes.

And you have transmission interconnections and data breathing down your neck and fire hardening and things of that nature that's breathing down your neck, so trying to plan for EV and how fast that penetrates I think is one of the things that the industry has to solve is how do we plan for that penetration and how quickly does it happen? And right now, it's not penetrating quick enough to really you don't have to spend the capital today, but it's got to be spent, It's going to happen and so you just compress what you're doing and it just gets longer in many ways. So we're able as an industry to probably move capital from that business over into transmission for a bit. But I don't think that they can last very long. I mean California was down, let's call it a couple of years, and you're starting to see California moved back because of EV penetration, and it's starting to hit your circuitry below from us at a distribution level. I do think technology is going to help there. We've got to know as an industry more than the charter. The charter is telling us like I'm going to shut off because they don't have enough capacity. So I think as an industry, we'll start to see the grid get much smarter at a distribution level and the planning gets much better at a distribution level. And I just -- it will all come together longer cycles, I think we're in decades of distribution cycle here. It's not going to happen overnight. We've got to talk a lot about Europe when you go towards a total cost of energy. You start looking at it. It is NPV-positive to the ratepayer. And that voice has to get out there and be said, like because I think that's -- the regular state level is going well, my pricing is going up at the customer level and that affordability issue at the distribution level is something that we're seeing. It's not everywhere, but it's impacting certain areas. Typically, we'll move in the resources from one to another or moving towards transmission in those areas. So we kind of know where the CapEx is going and make -- and move accordingly. But I do think that it's just building from a distribution level and what we're seeing the impacts of EV as it penetrates as -- I'd say trillions of dollars of spend at the distribution model.

Right. It's certainly the big distribution topic for the day, you say, over time. In terms of the CapEx cycle, like sort of -- if I can use the expression trickling down to you guys, how do you think about where we are? I mean we've seen another wave of uptick here in sort of nominated spend, right? CapEx budgets are up, especially on the transmission side, which is, I think, the point that you guys are trying to get across. Generation, again, depends on the specific geography. How are you thinking about that for translating back to your business and awards and just your affected bookings, if you want to call it that?

Yes. I think you'll see us continue. I mean, backlog is kind of flat based on timing, really. I mean our MSA business is good. They're usually 5 years in nature, it takes us a little longer at times to it's timing of bookings. But your larger programs as well. When we're starting to look at multiyear programs on transmission, your bigger interconnections are out there. Certainly, your bigger -- the bigger work like the SunZias of the world, probably smaller than that, [indiscernible] component. But in general, the bigger work, what I would consider bigger work that stacks up on our growth, we're seeing those come faster. Some of the things we're doing at FERC will help, some of the permitting, citing those kind of things or corridors. Those things can help. We're not going to meet the demand and the mostly build transmission. And it's the cheapest form of renewables really in my mind that you can do is build it will solve some battery issues if we build transmission. So I think that's going to be the case like we're going to have to put some numbers against it and say, this is what we need to do and how we're going to get it done. And I -- the business is growing nicely. I think it will continue to grow.

Then maybe more -- Jayshree, given the transmission backdrop, I'm just thinking, how do you think about the large projects out there, the SunZia,right? We see a number that moving, right, like our mutual Fred. There's a number of these moving at this point. Transmission is clearly the topical subject. How do you see that translating and also, I suppose at the same time, again, there are 2, there's permitting issues and stops and starts that could create more lumpiness in your business profile. How do you guys mitigate that?

Yes. So just to step back for a second. 85% of our business is base business, right? It is not the SunZia type projects, that's Duke's point. That's additive. That's what stacks on when those projects are in front of us. But the predominant part of our business is the MSA work, it's renewable generation, it's the interconnection, it's the substation work, it's the day in day out work that the utilities expect us to do as part of their systems. And we're talking about these programs on transmission, those are happening -- the SunZias are these point-to-point interstate transmission projects, which need to happen, but that isn't what a lot of the transmission investment is we're talking about, right? A lot of that transmission investment is happening anyway at the utility level, and we're on those systems doing that work. I -- you're asking me the question because I did this for almost 10 years trying to get interstate transmission built -- point-to-point interstate transmission built. And it's great to see how much progress is being made, but that progress takes decades. So those projects are out there. They're green belt, one of our mild projects, TransWest, those are moving forward, but they're still not ready -- they haven't achieved FID unlike SunZia has. So I -- we're not dependent on those projects. We like those projects. We want to do them when they're ready. But those are, again, what would stack on to our 85% based business. And you've asked earlier, why are we having steady results. Well, that was a big push when Duke took over as CEO where we wanted to make sure we weren't so dependent on these lumpy projects. We made a conscious effort to shift -- spend -- prioritize that base business work and you're seeing that in our results with the ability to stack on when these projects come up.

Yes, I think it's key. The 85%, we can see it -- we can talk upper-single digits. We've been growing past upper-single digits. I think I'm not comfortable saying out 5 years, but I'm comfortable saying we've grown past that. It wouldn't surprise me if we continue on 85% of the business to go past in the double-digit type ranges forward, but it's very difficult for us to predict when a SunZia goes, so it's better for us and our investor base to let it -- let us get our head around it, and we can give you better clarity. And the top side of it can grow much greater than double digits because we're stacking. And if you believe all the verticals that we have and our ability to win the awards, then we will stack, we will go past that, but to try to give guidance on that is very difficult.

Yes. Well, all right. So let me flip that around actually. Let's focus on the core. I mean, base -- you're like 85% of the business is base, our mantra is to create a naval stability where others may be stuck with lumpiness. What about doubling down on that in terms of saying, look, we're going to focus on utility services that are more stable that have that profile? And how do you get bigger in that or you talk about that double digit? I mean, is this organic? Is this inorganic? How do you think about really leaning into that, right, expanding regionally. As far as I could think about it.

Yes. No, I think we have -- when you roll it back, we talked about front-end services 5 years ago, started building our engineering capabilities or permitting. I mean, we can certainly get the front side of it. About 30% of any kind of bigger project or any projects that are transmission-driven will have components of what I would consider heavy engineering, project management, the front side, no capital, things that we can be very helpful with. We're doing it anyway. So we're working with clients from a construction-led platform engineering behind us. And I think that model is working well. And so we're able to really take more of the -- what's available to us. And so we've seen -- you've seen us do that with vertical in supply chain. We'd probably manufacture transformers. So we've gone more vertical within material. I think it's a bigger opportunity than it is before. So I'm not saying we're going to go be a transformer manufacturer per se, but to have that solution and to be able to understand or probably the, call it, fifth, sixth largest buyer of HVA equipment today. And we should know how to do that very, very well and be able to help our clients as we move forward on how they buy materials as well. And so that material component will be a piece of the business that should afford us some opportunities across all of our verticals. So as you see the company, we're moving in those directions while still looking at kind of we just bought recently in our industrial business, bought an environmental solution business to the industrial base. So we do believe in a portfolio. I do think is really, really important for us to continue to look at us as a portfolio business. It's very much in 85% because of the lumpiness of big projects is not going away. It's not. It's still going to be around whether they all need to happen, need to happen yesterday, but they're still going to be lumpy, and we know this. So we just got to really watch it and make sure that the base is moving up, and we're talking about how we stack so we can give good clarity to it on our investors.

Maybe actually since we're talking about supply chain. We talked about that a little bit more, right? In as much as 1 of the factors that's been cited with accelerating with greater frequency in the last few months even, right? So we went through the supply chain issue with COVID. Now it seems like we're back in this world, especially in electrical equipment. How long do you see this last lasting? How much of an impact do you see that in your business, right? And it's not just -- so for as much as some folks may have safe harbor transformers, now it's breakers, right? It's sort of a little bit of whack-a-mole, it feels like. How do you guys see this? How protracted is this?

We're not seeing it in a big way in the projects that we have. I mean the development in our customer base is -- they've got supply chain down. And so we're not really seeing it. But we do see it in smaller things we do and some -- I hear it a lot. And part of the reasons that we -- about, let's call it, 17% to 20% of, call it, 69 kV and above transformers are made in the U.S., everything else, so call it 80% is overseas or not domestic. And it concerns me, it concerns because I do think we've got to be careful. We've got to understand it. That's why we acquired about 3% of the -- 2% of the manufacturing capability in the U.S. because I think we're going to expand a little bit, but it's also to make sure that we internally we can be beneficial to the client. And if they want to move up, if something happens, then we can certainly have those discussions to move it forward and do some things there that will allow that opportunity. But I do believe China, the content from China that's in the grid. I think the security of this grid is paramount. And it will continue to be a vocal point going forward and industry is going to continue to get challenged on China supply chain, it will. And so we have to get it in our head on how to at least have backstops against it in many ways. And it will be a challenge for the industry to get our head around.

It's still -- yes, challenged because of international. Actually, let me pivot one more time here. I'll try to -- let's talk about the business in terms of -- so labor has been a constraint, but it almost seems like your construction services seems like a good constraint. Engineering services seems like a constraint. And so in many respects, some of the feedback we get is that actually you all as a business as a sector, able to maybe improve your margins here with some of the counterparties. I mean that's the feedback that we're hearing from the developer of renewable community, real large. How real is that? Because at the same time, you guys are realizing some inflationary pressures that effectively, you guys are passing on. So again, I hear them whether it's words of complaining or understanding that you're passing up costs. How real is that for you guys though?

I mean, we've seen labor increases around 5% really year after year for 20 years. And so I don't see any exorbitant increases there. Our margins, like I say it all the time, on the electric power, they're double 10%, call it, 10.5% with Puerto Rico in. I think it maintains [indiscernible] for many, many years. And then you start to look at your renewables, we guided to 9%. It's typically been around 10%. So I think it will come up eventually. I mean, 20 years you operate in an area that's where we operate. The industry doesn't afford more than that. It's not -- you get it outside of prudency, you get issues. Our viewpoint is we want to do more. We want to help more. We want to be more of a solution provider at the pricing levels that allow us to do those things and to put our heads around technology to help. And so that's the level that I believe we'll stay at. We're not trying to [indiscernible] decline or get higher margins. I don't think it's possible long term. There's still a lot of internal workforce as well. And so you can't get your stuff outside of what the market will afford and to me, we can do other things, get better returns versus margins by utilization by pulling through material, less capital, things of that nature, more solutions versus trying to say we're going to make 15 points.

Yes.

And I just don't think it's smart for the company, and I never thought it was and fought it for, I don't know, 7 years I've been in this role. So I just don't think it's prudent.

How do you think about back -- the nature of backlog? Because what's another interesting point of feedback is like the -- so if there's a constraint out there, it's like, well, there's only so much service and so much labor. So therefore, let's just continue back -- we're ordering backlog even further, right? So it seems like we're out there looking at 26 build projects now, at least in terms of awards and BPA 27. Are you guys seeing sort of greater duration in what you guys are looking at in terms of your backlog care? It feels like we're seeing that on the front end. I would -- I feel like we should be seeing that on your side as well increasingly.

Yes. I mean we're seeing more backlog long term, definitely, the durations are getting longer. I think when you think about it, if the utility is doing $3 billion of CapEx and their internal workforce is doing $1 billion. If they go to $5 billion, it's highly likely they're not going to do more than they did yesterday. And so that incremental backlog is really flowing through at a higher rate as capital moves up. So because they can build a little bit, they're not -- you're not going to build for peak utility, you're going to build a bit moderate. And we know our role and we know how it works. So I do believe as utilities start to move that backlog up, we can play a bigger role as you start to see those incremental spends come in, in these outer years. So I do think our MSAs get bigger, our programs get bigger and our backlog increases against it. I mean that's -- we continue to see [indiscernible] are going up and not down. And -- so we really watch all those things. And we think we'll be at record levels this year again. And when, how are CAGRs -- some of it is timing, some of it is we're negotiating or whatever it may be. But we see high demand, longer and outer years. And so I do believe we'll continue to see our backlog rise.

Yes. Great. And someone else came back to me from the earlier conversation about like where you build this business, right? And we talked about like, do you build it regionally, do you add more MSAs? And your thought -- your reaction at the time was, look, let's also look at vertical, right? How do we expand out the products we're offering. Is that something that you continue to look at in terms of like using capital dollars? And is it that maybe regional dynamics you're already well played in a lot of geographies?

Yes. I mean we have a regional structure internally and the service lines that come against it. So that would -- will continue to play a role, all those service lines are driving those regions, whether it be engineering, whether it be batteries. It doesn't -- so there's expertise that's coming across the 6 regions in Canada, Australia. So that's how it's designed. And the vertical piece of it is basically centralized. So we have centralized and vertical supply chain, working on pricing. Do we -- can we get better relationships with vendors? Or is it something that we need to lean into because we can't. What can happen is we can't have -- except for maybe 5%, our customers are asking us to get something in on time, but it affects their EPS, 100% on that if we don't get it in. And I'm not like -- that's not -- we're not doing that. So we've got to get ourselves around. We own 90 helicopters, heavy lift, 10 heavy-lift helicopters. We own those because we can go faster, we can do some things with the helicopters and we're not dependent on someone else. And so anything that we believe that we're dependent on someone else to get the numbers that we've laid out will certainly lean into the vertical piece of it.

Yes. Nice. Excellent. That makes sense. Look, maybe another angle that we haven't talked about as much is how do you think about like building the business overall, like the different building pieces, right? Like let me step back. I've been so focused on like asking about renewables. And within each part, like let's just step back. How do you think about building up this business? You talk about the grid big opportunity. What are the bigger chunks that you're going to focus on? You talked about the base, how do you build the base out in a kind of more conceptual? Your own slides talk about it, there's a [indiscernible]. There's all different buckets. I've been very much fixated on generation.

Look, at the core of Quanta is cross-skilled labor, I guess. What I know [indiscernible] my background. So it doesn't -- the craft, if it's inside electric, it is mechanical. If it's -- as long as the macro market's there, we understand craft. And so we can bolt on engineering. We have between 1,000 and 2,000 engineers and staff and -- that support that business, that front-end business and technology, I think, is part of it. So we always look at it. We're in 2 separate funds there on technology with our customers. So we're looking at technology, how does that play a role? And the whole thing AI is obviously a big piece of this thing, and you have to have your head in the sand if you're not looking at that internally. So I think anything that we're doing today drives like both the project and the base at the same time, honestly. And the verticals, as we start to -- a lot of times as the customers are coming to us saying, "Can you, will you? What about this? Can you do this for me? Logistics is a big piece of the business today. So I mean how much can we expand logistics because like people are struggling. I say, well, FOB port, we'll figure it out from there. Don't worry about it. Our -- well my ships Turkey -- coming in from Turkey and I'm stopped. And I'm like, well, it's 8 days to go around. Let's just go around. We'll get like just get me to a point, and we'll get it. I got it. We'll handle it. So just stuff where we're solving problems and you go, well, that's a business and we have a fleet, an EV fleet coming in that's -- we've talked about 1,500 to 2,000 trucks going to the West. We've got about 40, we're way behind. Deliveries are behind. So then you get out and you go, "Well, how am I to charge these, right? And we're in the business and I'm looking at our people and we're in, well, so you take it home and you put it in yours and do I pay or you pay. Well, yes, that's going to be different. So we can like model things around what we see and say, hey, that's a business. Like if we figure out we are the third fourth largest fleet in North America. If we figure this fleet out, we can figure it out for others. And so I think you'll start to see us like any time there's an issue or us providing solutions, and we are a solution provider. So if we're going to say we're a solution provider, we need to be thinking like that. And so I think that's where the company gets sticky, it's where the company can benefit both the ultimate customer and our customers, both renewables and utilities.

Awesome. Yes. It sounds like there's an element of like distribution and logistics that really gets you a lot of credit with your customers.

And you got data centers and balance the plant data centers. I mean that's a big piece of what I see is a long-term growth cycle. Yes, we talked about the inside piece and the pieces that we don't do, data centers is something we would look at. I see no reason why we wouldn't.

Yes. Last super quick question, Luma with Puerto Rico. Fascinating development with you guys getting involved there. Again, I know it's a unique situation. Is there an ability to scale up those kinds of chunky?

That's a unique, we kind of heard -- you kind of heard this week about public power.

Yes.

That island is public power. It was probably the most robust system in 1984 that was out there that degraded to a point where you couldn't get the lights on it. You got load shedding every day. So I'm not a big fan of public power. I think our IOUs and our IOU customers are getting the right returns and the right restrictions. They're fantastic. We'll figure the good out and I think we were able to approve what can be done on an island like that. And we learned a ton and spent way more time in D.C. and able to really get my head around what it's going to take. So yes, they want to be 100% renewable. And hey, we need natural gas down there to balance it. So we understand you got to balance it first, and then you can build renewables all the way around it. And then eventually, you can start shedding off natural gas. So we love what we've done down there. It's getting better and better. People are starting to benefit from it, which makes me happy. We're starting to see like the FEMA dollars that are actually for construction move in the construction finally. They are -- you'll probably hear about their bankruptcy ongoing, trying to get out of bankruptcy. It doesn't affect us at all. But we do help them try to make sure that it's stabilized and they can, and you can see it. So it'd be ongoing bankruptcy discussions, I hate to put a number when that's going to happen. It doesn't affect us at all.

Right. Guys, I know I'm past time here, but thank you guys. Really, it was such a pleasure. Thank you, guys.

Thank you.