Greetings. Welcome to Quanta Services' First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Kip Rupp, Vice President, Investor Relations. Kip, you may now begin. Thank you. Welcome everyone to the Quanta Services First Quarter 2023 Earnings Conference Call. This morning, we issued a press release announcing our first quarter 2023 results, which can be found in the Investor Relations section of our website at quantaservices.com, along with a summary of our 2023 outlook and commentary that we will discuss this morning. Additionally, we'll use a slide presentation this morning to accompany our prepared remarks, which is viewable through the call's webcast and is also available on the Investor Relations section of the Quanta Services website. Please remember that information reported on this call speaks only as of today, May 4, 2023, and therefore you are advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements intended to qualify under the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including all statements reflecting expectations, intentions, assumptions or beliefs about future events or performance, or that do not solely relate to historical or current facts. You should not place undue reliance on these statements as they involve certain risks, uncertainties, and assumptions that are difficult to predict or beyond Quanta's control, and actual results may differ materially from those expressed or implied. We'll also present certain historical and forecasted non-GAAP financial measures. Reconciliations of those financial measures to their most directly comparable GAAP financial measures are included in our earnings release and slide presentation. Please see slide two and the appendix of the slide presentation for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, if you would like to be notified when Quanta publishes news releases and other information, please sign up for email alerts through the Investor Relations section of quantaservices.com. We also encourage investors and others interested in our company to follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke? Thanks, Kip. Good morning, everyone, and welcome to Quanta Services first quarter 2023 earnings conference call. On the call today, I will provide operational and strategic commentary, and will then turn it over to Jayshree Desai, Quanta CFO, to provide a review of our first quarter results and full year 2023 financial expectations. Following Jayshree's comments, we welcome your questions. Before we begin reviewing our financial results, I would like to briefly highlight the recognition that Quanta recently received from Engineering News-Record, a leading engineering and construction industry publication. ENR selected Quanta for its prestigious and highest honor, the Award of Excellence. Quanta was selected for its safety leadership with our innovative Capacity Model, a unique safety and training program that is designed to not only create a work environment that prevents incidents, but also build in the capacity to fail safely, and that focuses on learning from mistakes in order to drive improved outcomes. Quanta is changing how we, our customers, and the industry think about safety excellence, and I want to congratulate Quanta employees for their dedication to safety and their shared success in being recognized with this award. Our first quarter results, which include double-digit revenue growth and Adjusted Diluted EPS of $1.24, demonstrate a good start to the year. More importantly, we continue to enhance our self-perform model and remain on track to achieve our full year 2023 and multi-year expectations. Additionally, total backlog at the quarter end was $25.3 billion, a record and considerably higher than the same period last year. Notably, we see opportunity to significantly increase backlog as we move through the year, driven by our base business and larger energy transition projects such as the SunZia Transmission and SunZia Wind projects we announced this morning. We believe we are in the early stages of capitalizing on significant opportunities across our service lines, which are driven by our collaborative solution-based approach that is designed to ultimately benefit consumers. Additionally, the growth of the programmatic spending with existing and new customers and favorable mega trends provide greater visibility into our near and long-term growth outlook. Our electric power infrastructure solution segment continued to perform well and generated record quarterly revenues. Demand for our services is strong, driven by broad-based business activity from utility grid modernization, grid security, and system hardening initiatives, as well as our reputation for consistent and safe execution. We continue to work with our customers to provide them with resources to meet their capital deployment initiatives and to help them address supply chain constraints. As we have discussed over the past several quarters, our view is that the electric power grid will require significant upgrade and modernization to handle the energy transition. We also believe that electric vehicle penetration could increase at a faster rate than expected, which could create significant grid constraints that we believe are un-underappreciated by many. We expect the issue in the near term to medium term in most regions will not be generation load supply availability, but the inability to move supply to areas with accelerating EV-driven load demand through the current distribution system. According to estimates from UBS, United States EV car penetration is expected to be more than quadruple from approximately 4% in 2025 to approximately 19% by 2030. We believe this developing grid capacity challenge will be acutely impacted as commercial fleets, medium and heavy duty trucks, and buses become increasingly electrified. For example, yesterday, Navistar, a long-standing key partner to Quanta for medium and heavy duty trucks, announced a partnership with us to provide its customers a turnkey battery electric vehicle product and charging infrastructure solution that enables fleets to deploy battery EVs quickly and efficiently. The partnership intends to leverage Navistar's approach to delivering fully integrated e-mobility solutions to its customers with Quanta's expertise in assessing and designing EV charging infrastructure and building the interconnecting EV battery charging infrastructure into the power grid. Quanta understands infrastructure and its partnership agreement with Navistar is an example of the unique vantage point we have into the growing challenges with the power grid as the energy transition and electrification of everything accelerates. As we have discussed on prior calls, to meaningfully reduce carbon emissions and increase electrification of the economy will require substantial incremental investment in transmission, substation, and renewable generation facilities to produce and transport clean power and to ensure grid reliability due to the growth of intermittent power added to the system. One of the strategic reasons we acquired Blattner was because we believe the addition of utility-scale renewable generation solutions to Quanta's holistic grid solutions would transform our ability to collaborate early with our customers on their energy transition strategies over the coming decades and create a value proposition unique in the industry. To that end, this morning we announced that Quanta was selected by Pattern Energy to provide comprehensive infrastructure solutions for the SunZia Transmission and SunZia Wind projects, which together compromise the largest clean energy infrastructure project in the United States history. Quanta will leverage the capabilities of multiple operating companies to execute these projects for Pattern Energy. We believe these project awards validate the power of our combined high voltage transmission and renewable generation solutions and demonstrate the value of our collaborative approach to providing energy transition infrastructure solutions, which can serve as a model for the renewable and utility industries going forward. As expected, normal seasonality in the solar panel supply chain and regulatory hurdles from last year resulted in a slow start for our renewable generation project activities in the first quarter. These dynamics are improving and renewable generation project activity is accelerating, which we expect to continue throughout the year. For example, at the end of April, we were in various levels of construction on 28 utility-scale renewable generation projects. We are in active discussions with clients about projects in 2024 and beyond and are focused on scaling our resources and capacity to handle what we expect to be record levels of new renewable generation capacity additions over the coming decade, at least. We are pursuing billions of dollars high voltage transmission projects that are designed to support current and future renewable generation capacity growth and overall system reliability. We are pleased with the performance of our underground utility and infrastructure solutions segment in the first quarter, which delivered double-digit revenue growth and record levels of first quarter profitability, demonstrating solid execution across our operations in the segment. Our industrial services operations executed well and experienced strong demand following two years of deferred activity during the pandemic. We also experienced solid demand for our gas utility and pipeline integrity operations, which are executing well and are driven by regulated spend to modernize systems, reduce methane emissions, ensure environmental compliance, and improve safety and reliability. We continue to believe our operational portfolio is a strategic advantage that provides us the ability to shift resources across service lines and geographies, which we believe will become increasingly important as the energy transition accelerates. We believe our portfolio approach positions us well to allocate resources to the opportunities we find the most economical and attractive to achieve operating efficiencies that enhance our operational and financial consistency. The energy transition towards a reduced economy continues to progress and we believe is gaining pace. Quanta is successfully executing on our strategic initiatives to drive sustainable and resilient operational excellence, total cost solutions for our clients, consistent, profitable growth and value for our stakeholders, all of which gives us confidence in our ability to deliver on our 2023 and multi-year financial expectations. We are focused on operating the business for the long term and expect to continue to distinguish ourselves through safe execution and best-in-class field leadership. We will pursue opportunities to enhance Quanta's based business and leadership position in the industry and provide innovative solutions to our customers. We believe Quanta's diversity, unique operating model, and entrepreneurial mindset form the foundation that will allow us to continue to generate long-term value for all our stakeholders. I will now turn the call over to Jayshree Desai, our CFO, for her review of our first quarter results and 2023 expectations. Jayshree? Thanks, Duke. Good morning, everyone. Today, we announced record first quarter revenues of $4.4 billion. Net income attributable to common stock was $95 million or $0.64 per diluted share, and adjusted diluted earnings per share was $1.24. Our first quarter electric power revenues were $2.3 billion, and operating income margins were 9.2%, consistent with the directional views provided on last quarter's call and reflecting successful execution across the segment. Our base business continues to lead the way for the segment as utility investments in hardening and modernization initiatives create growing demand for our comprehensive solutions. Renewable energy infrastructure segment revenues for first quarter 2023 were $1 billion, with operating income margins of 3.5%. Revenues in the quarter were better than expected due to the acceleration of construction activities as our renewable customers move forward with projects. As we mentioned on our last call, we anticipated first quarter renewable revenues to be the segment's lowest of the year, and the lower volumes would create fixed cost absorption pressure on segment margins. In light of that expected pressure, from a margin perspective, we are pleased with the results from the bulk of our project activities. The overall segment margin was affected, however, by the large renewable transmission project in Canada, which we've discussed on prior calls. With over 90% of the project complete as of March thirty-first, construction activities were quite successful during the quarter, and we believe we are positioned to achieve substantial completion after the next winter build season. Yet despite the significant progress, access delays, logistics, and other issues outside of our control increased our costs on the project, negatively impacting quarter margins by approximately 120 basis points. We are working collaboratively with the customer to recover the financial impacts associated with these and other issues and are confident in an equitable outcome. Underground utility and infrastructure segment revenues were $1.1 billion for the quarter and operating income margins were 5.7%. Continued strength from our base business operations drove the performance with margins exceeding expectations, benefiting from improved fixed cost absorption on higher than anticipated revenue levels. For additional commentary comparing first quarter 2023 to first quarter 2022, please refer to the slides accompanying this call. With regard to backlog, we continue to achieve record levels. At March 31st, 2023, backlog was $25.3 billion, an increase of $1.2 billion compared to December 31st, and did not include amounts related to SunZia, which we announced this morning and was awarded subsequent to the quarter end. Our 12-month backlog is also at a record level of $14.6 billion, which we believe is another indicator of the steady growing demand for our base business solutions. Our end markets remain robust with opportunities that can lead to new record levels of backlog in subsequent quarters. For the first quarter of 2023, as expected, we had negative free cash flow of $31 million, driven by working capital demands from the aforementioned Canadian renewables project, as well as a ramp-up of work activities following the holidays, which is typical for the first quarter. DSO measured 77 days for the first quarter of 2023, lower than our historical average, aided by favorable billing arrangements associated with certain awards during the quarter. Regarding the Canadian Renewable Transmission Project, the contract asset balance grew during first quarter 23 and continues to pressure DSO. Positive discussions with the customer regarding portions of the balance are ongoing, which represents approximately five to six days of DSO as of March 31st, and we are increasingly confident in our position. As of March 31st, 2023, we had total liquidity of approximately $1.8 billion and a debt-to-EBITDA ratio of 2.5, as calculated under our credit agreement. The decrease in liquidity and increased leverage profile is due to roughly $450 million of capital deployed on acquisitions in the first quarter. We expect continued earnings growth and cash generation to support our ability to efficiently de-lever over the coming quarters while continuing to create stockholder value through incremental capital deployment. Turning to our guidance. We had a nice start to the year with record first quarter revenues and strong performance in the field. Given that strength, we are raising our revenue expectations for the year by $200 million, while our expectations for full year adjusted diluted earnings per share attributable to common stock are unchanged, ranging between $6.75 and $7.25. From a segment perspective, we continue to see electric segment revenues between $10 billion-$10.1 billion for the year, with full year margins between 10.7%-11.3%. We expect segment margins to be somewhat pressured in the second quarter due to challenging weather conditions throughout the northern and western parts of North America. Regarding our renewable segment, given the strength of the first quarter and increased project awards, we are raising our full-year revenue expectations for the segment by $200 million, ranging between four and a half billion dollars and $4.7 billion. We continue to expect margins around 8.5% for the year, with second quarter margins in the upper single digits. The increase in renewables is being offset by a reduction in our underground segment due to a shift in the expected portfolio mix. Our segment revenue expectations are unchanged, we now expect full year margins to range between 7% and 7.5%. We've slightly modified other aspects of our guidance, the details of which are included in our outlook summary, which can be found in the financial information section of our IR website at quantaservices.com. Looking ahead, our end markets continue to strengthen, led by utilities modernizing their infrastructure to support increased load driven by electrification trends, and most importantly, to support North America's transition to a reduced carbon future. We believe we are uniquely positioned to deliver comprehensive solution to the markets we serve and to create significant shareholder value through organic growth and strategic capital investment. I'll now turn it back to the operator for Q&A. Operator? Thank you. We'll now be conducting a question- and- answer session. If you'd like to ask a question at this time, please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. That we may address questions for as many participants as possible, we ask you please limit yourself to one question. If you have additional questions, you may re-queue and time permitting those questions will be addressed. One moment please while we poll for questions. Thank you. Our first question is from the line of Andy Kaplowitz with Citigroup. Please proceed with your question. Hey, good morning, everyone. Morning. Morning. Duke, your backlog has been accelerating over the last few quarters. It seems like, you know, you are announcing more large projects. Are you just generally seeing an acceleration in, you know, these types of projects, and would you expect their frequency to continue? I know you talked about backlog continuing to increase. Does the higher backlog in your view raise the probability that Quanta could deliver that higher end? I think you had told us the analyst day like 15% plus longer term EPS growth that you discussed. Yeah. Thanks, Andy. I think when we look at the market and especially the larger projects within the market, there's a significant amount that, you know, you gotta get through permitting, you gotta get through a lot of different things. More importantly, if you're gonna transition, the need for transmission and, you know, North America for that matter is significant, way more than what people estimate. I think you hear it quite a bit if we're moving towards the transition we are. That said, we do see, you know, large projects across the board, but you have multi-year projects as well with existing customers that are also addressing this, you know, need to provide load to the load centers from the areas where you have renewables. Those things, along with what you're doing with EV penetration and things like that, are certainly increasing. Our dialogue with customers is robust. The amount of capital necessary to go where we wanna go continues to grow. I don't see a path to get to anywhere near where we wanna go in 2030, 2040, 2050 without significant infrastructure build across this grid. It's not meant to handle the modernization, the penetration of electric vehicles and what we're trying to do from a carbon environment without modernizing this infrastructure in a significant way. Are we at least trending towards your higher end, you know, target that you talked about last year? Longer term. Andy, you see our backlog growing. We don't even have SunZia in, it'll go up significantly. I think it'll go up significantly every single quarter throughout the year. It may not be perfect CAGR, it will grow through this year. I don't see that stopping. I mean, we've given you good guidance on a multi-year, you know, 10% type growth at the EPS line with the ability to grow 15%. I stand by it today, even more so. Appreciate it. Our next question is from the line of Adam Thalhimer with Thompson Davis. Please proceed with your question. Hey, good morning, guys. Congrats on a strong start to the year. Morning. Hey, Duke, at a high level, where do things stand with the renewables supply chain? I think it's getting better. I mean, you still, you still hear Congress and even today or yesterday, I can't remember, you start to see things around, you know, your reliance on China for panels, and I do think that'll continue to play through this. All in all, for what we see, for what we have, we certainly have risk adjusted kinda how we're guiding this year. I do think we've watched it. We know what panels are in, we know what panels aren't in. I do believe that has alleviated a bit and will continue. The supply chain's gotten better in many ways. Certainly if there's any kind of regulation or things like that, it could change. I do see more of, for that matter, everything being more onshored than offshored. I do think that's a good trend for us in the way that we think about providing those solutions. Jayshree can comment. No, I have nothing more to add. That's right. I think it is opening up. We're seeing the supply chain, the panel manufacturers do a better job of ensuring that they're meeting the requirements under the tariff provisions. Yes, if there is any sort of regulation, any sort of anti-China sentiment that continues to push through, that can obviously affect the supply chain again. Okay. Thanks, guys. The next question's from the line of Alex Rygiel with B. Riley. Please proceed with your question. Thank you, gentlemen. Real quick question here. Where do you stand on the% of revenue generated from self-performed versus external subs? How could this change over the coming years? Yeah, thanks, Alex. I think in general, we're about 85% still. I think that remains the work mix for us. If we get more material concentric, we'll make some comment on it. Today, it's the same for about 85% of the business is still self-performed. We like that. We like that mix. I think it'll continue. We certainly to have certainty in our projects and to the client on delivery times and on for our ability to, you know, provide earnings power, we need to be able to self-perform about that mix and the constraints that we have, no one understands those. We have to make sure that we can operate through any kind of issue. That's about the mix you'll see. Secondly, can you talk a little bit about the competitive environment, particularly as it relates to some of the. Congratulations on that. How many bidders were on that, and how does that compare to a few years ago? Yeah, honestly, I don't have any idea. I know we had great collaboration with the client. It was a collaborative effort, I believe it shows what the Blattner acquisition did for us. When you put both of us together, what we can do together, what we can do for the client, the synergies that we can create for a client on a project like this, I would say it's proof of concept. It's proof of what can be done with the client to the ultimate consumer. I don't, I don't think there is anyone that can do what we can do with these type of projects based upon history, based upon what we're able to really think through for early in construction. We can certainly create impacts and solutions to both sides of this transition unlike any other. Thank you. Our next question is from the line of Justin Hauke with Robert W. Baird. Please receive with your question. Great, thanks. I guess I had a couple questions on SunZia just because it's been out there obviously forever. It's had all kinds of moving pieces on the financing side and the regulatory side. I'm just curious, is there anything that it still has outstanding that it needs to receive to start construction in 4Q, or is that pretty much all cleared up? I guess related to that, is there any contribution that you're assuming in your guidance for this year from it? Yes. We have some revenue in our guidance this year from it. It was in our uncommitted prior to the award. That said, it's minimal. We don't see, you know, a pullback or a path where it doesn't go. You know, there's a lot of commitments being made here. We feel like the project's a go project. It's a great project on Pattern Energy of longtime customer of Blattner and ours for that matter. We're confident. We've worked hard with the client to make sure that this project is a, you know, a showcase for them and us and the industry of what can be done through hard work. Yeah, it's a long, long project. It took a long time. It shouldn't take this long in America to build infrastructure. Certainly, we're glad to get it across the finish line for everyone. Okay, great. That's helpful. I guess my second question is just on the Canadian renewable job. You said it's 90% complete, and you're expecting it to complete with the next winter build. Does that mean that for the next couple of quarters, there's really no contribution on that, we shouldn't think of that as kind of a, you know, source of potential pressure, and it won't start up again until we get back to next winter when it completes? Is that the right way to think of it? Yeah, a little bit. A little bit on the project. That's the way to think about it, but a little bit on that project, just so we can discuss it a bit. It's a project that we did through the pandemic, and it's a project no one's done in northern climes like this, where we're taking people off fuel and putting them on, you know, renewable power. I think it's significant in the way you think about the northern climes and what can be done. Our people worked through a pandemic and built this. That said, no one's ever done that. The way that we're thinking through it, we've taken a prudent approach the way we've looked at it. All I can say is we can build things in northern climes better than anyone in the world. I'm confident in our position. I think it's much better than what we have, but we took a prudent approach to it. We'll continue to do so. I don't think you'll see any more fluctuations unless it goes the other way. I feel confident in where we're at, and it was our decision really to make sure we de-risk the rest of the year and the rest of the job with the approach that we've taken. We're extremely happy with our people. This build was significant for us in a, in a COVID free environment of what's possible. Our productivity rates and everything else were off the chart, so real pleased with how we finished up, and I do believe it'll pay dividends in the long term. Okay, great. Thanks. Perfect. Thank you. Our next question is from the line of Steven Fisher with UBS. Please receive with your question. Thanks. Good morning. Congrats on SunZia. Just wanted to follow up on that last point there. I mean, this seems to be a reminder that things can happen on these renewable projects. How can we get comfortable that these risks can be reasonably controlled? You know, what comfort can you give investors that SunZia is not gonna be an execution overhang? I know Blattner's done other work in New Mexico before. You know, you're taking great efforts to de-risk the business but, you know, it's obviously it's a big, huge project. You know, we do have a margin impact this quarter from renewables projects. What comfort can you give investors that there's not gonna be an execution overhang now? Thank you. Thanks, Steve. SunZia is right down the middle for us, both. We just got off a wind project with Pattern, did really nicely. We built line across that part of the world many, many times. Not concerned. What I can't control is a pandemic. If our project has a 24-month pandemic in it, I don't know how to address that yet. I'll let you know when we get done with all of the settlements on the claim. The one in Canada, we worked through a 24-month pandemic in a camp in the most northern territory in North America. By the way, like every other project up there is off the rails. Look at Coastal GasLink, look at Trans Mountain, what they did compared to what we've done. I like our chances. I know we know what we're doing on large projects, and this one's right down the middle. I expect many more of them to come. Okay. Thank you. The next question is from the line of Chad Dillard with Bernstein. Please proceed with your question. Hi, good morning, guys. First of all, can you talk about what is the mix of small versus large projects today, particularly on electric transmission? Like with the recent slate of large wins that you've had over the couple of quarters, like where do you think that mix goes over the next couple of years? What I'm ultimately trying to understand is like how should we think about the margin impact of a potential mix shift? I think when you look at it's about the same between 80%-85%, you know, base business, the way we've laid it out. Large projects will grow significantly. Our base business will grow significantly. We're signing much larger MSA-type programmatic spends than the projects that you're seeing. It just they're over multi years. This SunZia is over, I think we get done in 2026. End of 2026. The line goes a little faster, 2025. That said, we have multi-year type MSAs, type agreements with our current customers that are longer in nature, that are much bigger. We continue to see both the base as well as these larger projects as we've talked about the stacking effect due to the transition and all the things that we're able to accomplish there. The company's in front of it, and I do believe the outlook looks good. You know, certainly our strategies are, you know, five years out, and I like where we're at, and I think we're right on track, maybe a little better. That's helpful. Secondly, can you give a little more color on the Navistar partnership? Is this something where it's exclusive for Quanta? Just say, like, at what stage of the sales cycle is Quanta brought in? Is this like the type of like programmatic work that you've been talking about? Yeah. When we look at the Navistar contract, I think it's just how we relate with our, you know, not only us, but our suppliers. We collaborate, and that collaborations leads to other things that we can do together, such as try to create the safest truck in the industry, which I think is where this started, was trying to create the safest truck. You know, what can we do with automated driving? What can we do with other things? It led to, well, what can we do together to build the infrastructure necessary to go to electric vehicles? That said, if you think about Navistar's. Their amount of market share in school buses in every school district across North America, it's significant. Many of the school districts load once you put buses in and you go to an EV-type bus, it will pull more load at the bus depot than the town. When you start thinking through that and you start thinking all the school districts that are out there, I think it's a significant build. It's meaningful for the company. If we work together, we work with our utility clients and municipalities on the front end of this, we can certainly do it cost-effective and create an environment that allows everyone to move towards carbon free. Great. Thank you. Our next question is from the line of Jamie Cook with Credit Suisse. Please proceed with your question. Hi. Good morning. Congrats on SunZia. I guess, you know, first question, is there any way you could size the number of projects or in dollars what you're bidding on, where you're bidding both the transmission and the renewable side, sort of like SunZia so we can see how many more opportunities that are out there? To what degree are you worried or... I know you've been investing in labor for some period of time, and you always have, but that, you need to ramp your investment in labor even more. Could that be a risk to margins in the short term? My second modeling question is just on within renewables, understanding the first quarter margins were below your expectations, and you explained that fine, but I think you've maintained your renewable margin guidance for the year despite the first quarter, you know, being lower. I'm wondering if that implies potentially the rest of the business is performing at a level slightly better than you expected. Thanks. Good morning, Jamie. I do think when you think about that we're on call it 25 renewable projects today, all those have interconnections. The discussions with the customer are usually when we didn't have Blattner, you weren't combining that. We were doing a lot of the interconnections for the utilities or for the developers. Some are going towards a combined approach. I think the more we show the economics around it, the more we think through it. The bigger the project, certainly the more economical it is for us to, you know, think through both wind, solar and interconnection with the client. We do that quite a bit. There's significant amount of projects out there that are ongoing or from utilities driving wind towards the west, on the east coast, coming down from Canada, where you're absolutely bringing load wind. Whether we're on the wind side or not, usually we're on both sides of it. If they combine it's better. I think it's our job to show the client the economics around that and how we see it. And is that the ultimate, you know, is that the ultimate project for the consumer at the end? Can we do it cheaper and more efficient? I do think I like our chances. SunZia is certainly a highlight of what can be done, and I think it's that when you collaborate early, you get those kind of results, and everyone wins. As far as the margins on renewables, I think a lot of that was the Canadian project pulling it down a bit. I do believe when you start to scale the way we're scaling. What happened in the renewable business across the board, you had a stop of six months, nine months, where no one did much because of all the regulations in 2022, and also the IRA coming in. As the IRA comes in, you're going to get on more of a run rate, base rate that you can see, and you'll stack on top of that as you grow. I don't think you'll have this, you know, cadence that you have where you're growing from the first quarter significantly into the second, into the third and the fourth, and you get more... Obviously, for us, we have to perform on the backside, much better than we did on the front. I believe, you know, everything in our historical, nothing on the backside is outside of any historical margins. In fact, it's right down the middle for us on the backside of this. I, you know, I think that should, you know, You'll have some seasonality in the first quarter, but your fourth quarter is gonna obviously grow. That you have some impacts in the second due to the, you know, the way that we're mobilizing on projects and things of that nature. It should smooth on out into 2024 and beyond. We are seeing better performance in the rest of our business, Jamie. When you see the impact of the Canadian project at 120 basis points, the rest of the business we were pleased. As I said, the performance there, 'cause margins are doing better than we expected. As Duke said, as we move out of the first quarter into the second, third, you're gonna have more volumes, you're gonna have better fixed cost absorption, and you're gonna just have better productivity as a result of getting into better climates. Well, not to push you, I'm just wondering if the back half margin implied double digit, if that's a new run rate going forward, given just what you're seeing in the market? We don't have enough history, Jamie, to give you that. If I can get 12 months worth of run clean on renewables, I'll be in a much better place to give you some dialogue. It certainly will If you do the math, you've got to be in double digits on the back half. Okay. Thank you. Our next question is from the line of Marc Bianchi with TD Cowen. Please proceed with your question. Hi. Thank you. How much should SunZia contribute to backlog here in the, I guess second and third quarter? How does that constrain, if at all, your bandwidth to take on additional work? Is there a level where, you know, backlog gets filled up and you're probably just gonna continue to work on that level for several quarters? I think we'll continue to grow backlog. We're not gonna comment on how big the job was. It says the largest renewable project in North America, so it's quite large. We'll put it in backlog next quarter, and you can infer what that looks like. That said, in general, we hear a lot around constraints. You know, the company has grown about 1,000 employees a quarter. We're roughly very close to 50,000 today, and I do think that growth continues. We're set up to meet the demands out there. I've not seen, the demand outpace our ability to grow and grow in a efficient way where we can, you know, certainly put the resources on the projects and anything we've seen in the market, anything out there we're bidding on, we can certainly handle and handle more of it. I challenge the supply chain to catch our ability to perform the labor, because that's where the problem is. Great. Thank you. Thank you. Our next question is from the line of Neil Mehta with Goldman Sachs. Please proceed with your question. Good morning, Duke and team. I guess my first question is just around the cash flow, free cash flow progression over the course of the year and how we should be thinking about the $700 million, $750 million to $1 billion guidance and whether you're on track and whether you're targeting to where within that band you see yourself being. Hi, Neil. We are tracking toward that $750 million-$1 billion. We still feel good about it. Our first quarter was negative, which is typical for us in the first quarter, given the working capital requirements coming back from the holidays ramping up. We did also have a little bit of pressure in the first quarter with some retainage as well as some material procurement that impacted our DPO. Again, well within our expectations. Moving forward as the work increases, we've got more renewable projects coming through. You're gonna see that cash flow and the revenue come in as a result. Our expectations are still within that $750 million-$1 billion. I think, you know, we're on the midpoint is where, Neil, if you're asking me today where we are, that midpoint is right down the middle and where we would be. We feel good about where we are today and see no reason to change that. Okay, that's really helpful. The follow-up is just on one of the core competencies and capabilities of your organization has been around making strategic acquisitions, not just large ones like Blattner, but also smaller bolt-on ones as well. What's the opportunity set in the M&A market for tuck-ins, recognizing big strategic ones are probably less likely as you are working to integrate Blattner right now? We made three in the first quarter, I think are extremely strategic. That said, it addresses mid-market solar and many other things. Our ability to think differently and to get in front of these type trends as well as families that want to perpetuate their business, I do believe we'll have the ability to do that. We'll certainly weigh that against organic growth on the way that we're thinking about the market. That. There's opportunities for sure. I'll go back to cash flow. If we grow the business, for every $100 million we grow, we pull cash out. I think it's around $12 million of free cash, somewhere in there. Don't. Like if we grow another $500 million of guidance, you're gonna pull out another $70 million of cash, $60 of cash. Just, you know, that happens. We've gotta make sure that everyone understands if we grow more than what we say, it does pull cash. Thanks, team. Our next question is from the line of Sean Eastman with KeyBanc Capital Markets. Please proceed with your question. Hi, team. It's great to see the Blattner kind of revenue synergy story coming together with this big SunZia win. Duke, you had alluded to the, you know, economics to the customer, you know, being better when you guys kinda come to market with this combined transmission, generation solution. Could you give us a little more color on that and kind of what the go-to-market pitch is, and what the benefit to the customer is here? I mean, I just. There's a lot of synergies, Sean. It's kinda like the Coke secret sauce. I'm not gonna tell you what it looks like or what it, you know, what the ingredients are. The issue is, for us, if you get us in early, our ability to put a construction-led engineering package together is what I think leads the industry forward, not only from a safety standpoint, just the way we think about supply chains, everything with along the build. It's just our ability really to think through how we're gonna build something and then make sure the engineering matches and where we build all kinds of different things from logistics to everything else. We know a ton. Look, we know who's gonna build it, so we know the craft that's gonna build it. We know the superintendents that are gonna build it. When they sit with the customer early, it always ends well. Okay, interesting. A little bit more granular, we haven't hit on the underground segment. You know, the, the first quarter margin performance was quite a bit better than we expected. You know, I think the guidance for the full year has come down. Just wanna understand what, what's happening under the hood around that mix shift you described. I just think in the underground, when we look at it, I think the way we see capital spent at our customers, you can see some pull in from gas LDC into maybe electric or electric underground more so in the outer half of the year. The total portfolio rises. You may have some impacts on a little bit overhead here or there on your gas. Your industrial business on the back half, we need to watch it. You know, we have good visibility for six months, and then you can't see the back half, so you're hesitant on putting something, you know, forward that is not there at this point. We'll watch the underground business. That said, I do think that mix shift happens, and you're gonna see some portfolio adjustments, year-over-year all the time because the difference between electric and electric crew doing renewables or electric crew doing electric is it's nothing. It's the same. You just. It's the work type, who you're working for primarily or what you're doing with the work. That said, I mean, we could grow, you know, the electric side of the business faster than the renewable side at times, and the renewable side faster than the electric at times. That was gonna blend in the underground business, the same thing. We can be doing telecom one day and gas the next. That's the beauty of the portfolio. I think if we get operating leverage, if what the company is doing right, we'll continue to see some work mix shifts in the underground, where you're going to higher margins in electric and telecom. It's a good thing. Okay, interesting. Thanks. I'll turn it over. Thank you. Our next question is from the line of Michael Dudas with Vertical Research. Please proceed with your question. Morning. Good morning, Kip, Duke, and Jayshree. Good morning. Hey, Mike. Yeah, following up on, you mentioned telecom, maybe you could share, it seems like your revenue expectations remain what they have been. What are some of the trends you're seeing? Anything that's been more beneficial to Quanta? Is any visibility into, say, 2024 on some of the programs and where you guys can, you know, get involved? Yeah, Michael, we're starting to see more and more programs from your non-traditional customers. I think the RDOF money is starting to hit a bit. Look, we're real close to $1 billion this year, double digits, which is what we're trying to accomplish. We're very, very close. Well, it wouldn't surprise me if we surpass it. I think we paced the growth right. I think we've grown purposefully there, and we'll continue to, you know, take advantage of the market. That said, you know, we're not investing a lot in that from acquisitions or things like that. It's primarily around organic growth at this point. It allows us to really expand, you know, our, and, you know, other things against that market. We're pacing our growth. I do big opportunities in 2024 really and beyond. 2023 is nice, but, you know, we'll continue to watch it. It does get fickle at times. Thanks, Duke. You bet. The next question is from the line of Brent Thielman with D.A. Davidson. Please proceed with your question. Hey, thanks for taking the question. Hey, Duke, curious the outlook for sort of other new wind bookings opportunities. Seems like solar's kind of been the hot market last few years. Wondering if you're seeing RFP picking up in wind, and maybe that's another significant lever, I guess, beyond SunZia for bookings in the coming quarters and years. I guess off that too, are the economics of those projects more attractive than solar? 'Cause it seems like it'd be a less saturated sort of competitive environment given the technical necessities there. Yeah. I mean, we're seeing more opportunities in the outer years in wind. I mean, you know, the curves, the way the curves work and what you need solar. Your battery projects are gonna pick up significantly to handle some of the intermittencies as well as the wind in certain areas. You have to have transmission interconnects and things of that nature, so a lot of it's the transmission queues. As you get these larger lines built, you know, you'll start to see more wind behind them. But they're not gonna build the wind if they don't have anywhere to put it. Repowering certainly is a big business that we'll continue to see. That repowering market's nice. I'll let Jayshree comment on the rest of it. I'm assuming. The only thing I'd add to Duke's comment is, it is wind is starting to get some momentum. I still think we're still seeing that it's more back half weighted as projects have to get through the permitting and interconnection queues. For all the reasons Duke mentioned about the complexities of moving that wind power to where the load is, it just, it's harder and it takes more time. You have the IRA coming in as well, which will allow for more wind and have wind be as competitive as solar. Again, the projects have to move through the development cycle to be ready to be built. In terms of economics, no, I think we are comfortable with both. We've, Blattner especially has a strong history in building wind and now solar, and they've proven themselves to be successful in both. Okay. Thank you. Mm-hmm. Thank you. Our final question this morning will be from the line of Marc Bianchi with TD Cowen. Please proceed with your question. Hi, thanks. I wanted to ask on the back half renewable margins here. You mentioned the, I think, 120 basis point burden in the first quarter. I'm curious what that Canadian project would be burdening the back half by, just so we could get a sense of what it would look like, once that's out of the backlog. Yeah. I think it's non-material. If anything on the back half, it's in the 22 a bit. You know, I think when you look at 22, it's down a bit and it won't. The C-Canadian has been an impact in that segment. There's not as much Canadian content in the back half of our year. We're confident in the historical performance of both sides of the business to be able to perform at, you know, double digits in the backside of this, of the year. Okay. Okay, super. Thanks so much. Mm-hmm. Thank you. At this time, we've reached the end of our question- and- answer session. I'll turn the floor to management for closing remarks. Yeah. I wanna mainly thank our people in the field. You know, we had a really, really nice quarter through tough winter. 50 ft of snow in places. These guys, women and men perform in northern climes better than anyone in the world, and what they do every day is remarkable. They're building the nation's grid, and I'm real proud of where they're at from a safety standpoint and where we're at. I'd like to thank them and you for participating in our conference call. We appreciate your questions and ongoing interest in Quanta Services. Thank you. This concludes our call. Thank you. You may now disconnect your lines at this time. Thank you for your participation.