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Acquisitions | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisitions | 5. ACQUISITIONS: On July 25, 2025, Quanta completed the acquisition of Dynamic Systems (DSI), LLC (Dynamic Systems), which provides turnkey mechanical, plumbing and process infrastructure solutions to a diversified customer base that includes technology, semiconductor, healthcare and other load center markets. Dynamic Systems is located in the United States, and its results will be included primarily in the Underground and Infrastructure segment. The consideration for the acquisition included approximately $1.26 billion in cash (subject to certain adjustments and including payment for cash held by Dynamic Systems as of the acquisition date) and 518,772 shares of Quanta common stock, which had a fair value of $218.8 million as of the acquisition date. Additionally, the former owner of Dynamic Systems is eligible for a potential contingent consideration payment of up to $216.0 million to the extent the acquired business achieves certain financial performance targets during a two-year post-acquisition period beginning in January 2026. To the extent payable, Quanta can pay 15% of any such contingent consideration amount in Quanta common stock. As of July 25, 2025, the fair value of the contingent consideration liability was $190.6 million. The final amount of consideration for the acquisition remains subject to certain post-closing adjustments, including with respect to net working capital (inclusive of cash) and certain assumed liabilities. During the nine months ended September 30, 2025, Quanta also acquired four additional businesses, including two businesses located in the United States that specialize in civil solutions, including site clearing, earthwork, soil stabilization and infrastructure development (which will be included in Underground and Infrastructure segment), a business located in Australia that specializes in electrical engineering and the design and manufacturing of industrial technology solutions (which will be included in both the Electric and Underground and Infrastructure segments), and a business located in the United States that specializes in utility construction and related support services (which will primarily be included in the Electric segment). The consideration for these transactions consisted of approximately $605.6 million in cash and 515,822 shares of Quanta common stock, which had a fair value of $161.6 million as of the respective acquisition dates. The final amount of consideration for these acquisitions remains subject to certain post-closing adjustments, including with respect to net working capital, tax estimates and other contractually agreed-upon adjustments to consideration. Additionally, pursuant to the terms of the agreements, the former owners of certain of these businesses are eligible to receive payments of contingent consideration of up to approximately $127.9 million to the extent the acquired businesses achieve certain financial and operating performance targets over a three-year period. To the extent payable, Quanta, at its sole discretion, can pay up to approximately one-third of certain contingent consideration amounts in Quanta common stock. As of the dates of the respective acquisitions, the fair value of the contingent consideration liabilities related to certain of these acquisitions was $98.9 million. On July 17, 2024, Quanta completed the acquisition of Cupertino Electric, Inc. (CEI), which provides electrical infrastructure solutions, including engineering, procurement, project management, construction and modularization services, to the technology, renewable energy and infrastructure and commercial industries. CEI is located in the United States, and its results have been included in the Electric segment since the acquisition date. The aggregate consideration for the acquisition was approximately $2.04 billion, which included approximately $1.65 billion in cash, including payment for cash held by CEI as of the acquisition date, and 882,926 shares of Quanta common stock, which had a fair value of $216.3 million as of the acquisition date. The cash consideration paid by Quanta, net of cash received from CEI, was $1.24 billion. Additionally, the former equity holders and award holders of CEI are eligible for a contingent consideration payment of up to $200.0 million based on achievement of certain financial performance targets during the three-year post-acquisition period beginning in January 2025. To the extent payable, Quanta, at its sole discretion, can pay up to 10% of any such contingent consideration amount in Quanta common stock. As of the acquisition date, the fair value of the contingent consideration liability was $164.0 million. During the year ended December 31, 2024, Quanta also acquired seven additional businesses located in the United States, including: a business that provides specialty environmental solutions to utility, industrial and petrochemical companies (primarily included in the Underground and Infrastructure segment); a business that specializes in testing, manufacturing and distributing safety equipment and supplies (primarily included in the Electric segment); a business that specializes in electrical infrastructure services for substations, data centers and governmental entities (primarily included in the Electric segment); a business that manufactures transmission and distribution equipment for the electric utility industry (primarily included in the Electric segment); a business that provides services and equipment related to aerial telecommunications infrastructure and networks (primarily included in the Electric segment); a business that provides services related to fiber optic networks (primarily included in the Electric segment); and a business that specializes in designing, manufacturing, and distributing liquid-filled power transformers primarily for electrical companies and utilities (primarily included in the Electric segment). The consideration for these businesses consisted of approximately $540.9 million in cash and 334,472 shares of Quanta common stock, which had a fair value of $74.8 million as of the acquisition dates. As of the dates of the respective acquisitions, the fair value of the contingent consideration liabilities related to certain of these acquisitions was $24.3 million. The results of operations of acquired businesses have been included in Quanta’s consolidated financial statements since their respective acquisition dates. Additionally, the former owners of certain acquired businesses are eligible to receive potential payments of contingent consideration to the extent the acquired businesses achieve certain financial performance targets over specified post-acquisition periods. Purchase Price Allocation Quanta is finalizing its purchase price allocations, including the assignment of goodwill to its reporting units, related to certain businesses acquired subsequent to September 30, 2024, and further adjustments to the purchase price allocations may occur, with possible updates primarily related to intangible asset values, property and equipment values, certain contingent liabilities, tax estimates, and the finalization of closing working capital adjustments and other contractually agreed-upon adjustments to consideration. The aggregate consideration for businesses acquired between September 30, 2024 and September 30, 2025 was allocated to acquired assets and assumed liabilities, which resulted in an allocation of $350.4 million to net tangible assets, $818.8 million to identifiable intangible assets and $1.37 billion to goodwill. The following table summarizes the estimated fair value of total consideration transferred or estimated to be transferred and the fair value of assets acquired and liabilities assumed as of their respective acquisition dates as of September 30, 2025 for acquisitions completed in the nine months ended September 30, 2025 (in thousands):
|  | September 30, 2025
|  | Dynamic Systems |  | All Others
Consideration: |  |  |  |
Cash |  | $ | 1,259,262 |  |  | $ | 605,642 |
Value of Quanta common stock issued |  | 218,756 |  |  | 161,554 |
Contingent consideration |  | 190,561 |  |  | 98,856 |
Fair value of total consideration transferred or estimated to be transferred |  | $ | 1,668,579 |  |  | $ | 866,052 |
Cash and cash equivalents |  | $ | 66,696 |  |  | $ | 32,874 |
Accounts receivable |  | 285,268 |  |  | 138,601 |
Contract assets |  | 9,219 |  |  | 8,322 |
Prepaid expenses and other current assets |  | 2,895 |  |  | 7,954 |
Property and equipment |  | 34,770 |  |  | 96,317 |
Other assets |  | 23,048 |  |  | 7,282 |
Identifiable intangible assets |  | 532,400 |  |  | 285,969 |
Accounts payable and accrued expenses |  | (101,984) |  |  | (65,507) |
Contract liabilities |  | (147,913) |  |  | (27,034) |
Other non-current liabilities |  | (15,770) |  |  | (3,942) |
Deferred income taxes |  | — |  |  | (1,162) |
Total identifiable net assets |  | 688,629 |  |  | 479,674 |
Goodwill |  | 979,950 |  |  | 386,378 |
Fair value of net assets acquired |  | $ | 1,668,579 |  |  | $ | 866,052 |
Goodwill represents the amount by which the purchase price for an acquired business exceeds the net fair value of the identifiable assets acquired and liabilities assumed. The acquisitions completed during the nine months ended September 30, 2025 contributed to the recognition of goodwill by strategically expanding Quanta’s Electric and Underground and Infrastructure segments, primarily in the U.S. Goodwill, included in the Underground and Infrastructure segment, increased by $44.0 million during the three months ended September 30, 2025 as a result of certain contingent consideration adjustments associated with Quanta’s 2025 acquisitions. As of September 30, 2025, approximately $1.35 billion of goodwill is expected to be deductible for income tax purposes related to acquisitions completed in the nine months ended September 30, 2025. Quanta’s identifiable intangible assets subject to amortization include customer relationships, backlog, trade names, non-compete agreements, and patented rights and other. The following table summarizes the estimated fair values of identifiable intangible assets for the acquisitions completed in the nine months ended September 30, 2025 as of the acquisition dates and the related weighted average amortization periods by type (in thousands, except for weighted average amortization periods, which are in years).
|  | Nine Months Ended September 30, 2025
|  | Dynamic Systems |  | All Others
|  | Estimated Fair Value |  | Weighted Average Amortization Period in Years |  | Estimated Fair Value |  | Weighted Average Amortization Period in Years
Customer relationships |  | $ | 355,000 |  |  | 8.0 |  | $ | 225,889 |  |  | 6.3
Backlog |  | 58,200 |  |  | 2.0 |  | 32,635 |  |  | 2.1
Trade names |  | 101,000 |  |  | 15.0 |  | 26,366 |  |  | 15.0
Non-compete agreements |  | 18,200 |  |  | 5.0 |  | 1,079 |  |  | 5.0
Total identifiable intangible assets |  | $ | 532,400 |  |  | 8.6 |  | $ | 285,969 |  |  | 6.6
The level of inputs used for these identifiable intangible asset fair value measurements is Level 3. The significant assumptions used by management in determining the fair values of customer relationships include future revenues, margins, discount rates and customer attrition rates. The following table includes the discount rates and customer attrition rates used to determine the fair value of customer relationships for businesses acquired during the nine months ended September 30, 2025 as of the respective acquisition dates:
|  | Nine Months Ended |  |  |  |
|  | September 30, 2025 |  |  |  |
|  | Range |  | Weighted Average |  |  |  |
Discount rates |  | 13% to 20% |  | 16% |  |  |  |
Customer attrition rates |  | 10% to 30% |  | 12% |  |  |  |
Contingent Consideration As described above, certain business acquisitions have contingent consideration liabilities associated with the transactions. The aggregate fair value of outstanding contingent consideration liabilities for acquisitions completed prior to September 30, 2025 and their classification in the accompanying condensed consolidated balance sheets is as follows (in thousands):
|  | September 30, 2025 |  | December 31, 2024
Accounts payable and accrued expenses |  | $ | 7,311 |  |  | $ | 152,030 |
Insurance and other non-current liabilities |  | 486,675 |  |  | 192,954 |
Total contingent consideration liabilities |  | $ | 493,986 |  |  | $ | 344,984 |
Quanta’s aggregate contingent consideration liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, accretion in present value, changes in estimated fair value, the performance of acquired businesses in post-acquisition periods, the incremental impact on Quanta’s performance attributable to an acquired business and, in certain cases, management discretion. The estimated fair values of these contingent consideration liabilities are generally measured on a recurring basis using a probability-weighted discounted cash flow, which considers significant inputs not observable in the market and are Level 3 inputs. These changes are reflected in “Change in fair value of contingent consideration liabilities” in the accompanying condensed consolidated statements of operations. All of Quanta’s outstanding contingent consideration liabilities are each subject to a maximum payment amount, and the aggregate maximum payment amount of these liabilities for acquisitions completed prior to September 30, 2025 totaled $612.9 million as of September 30, 2025. During the nine months ended September 30, 2025, Quanta made cash payments of $106.8 million and issued 158,040 shares of its common stock to settle contingent consideration liabilities. During the nine months ended September 30, 2024, Quanta did not settle any contingent consideration liabilities. Pro Forma Results of Operations The following unaudited supplemental pro forma results of operations for Quanta, which incorporate the acquisitions completed in the nine months ended September 30, 2025 and the year ended December 31, 2024, have been provided for illustrative purposes only and may not be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future (in thousands).
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenues |  | $ | 7,701,010 |  |  | $ | 7,074,838 |  |  | $ | 21,316,195 |  |  | $ | 19,745,162 |
Net income (loss) attributable to common stock (1) |  | $ | 318,370 |  |  | $ | (15,386) |  |  | $ | 724,158 |  |  | $ | 314,015 |
(1) The pro forma results of operations for the three and nine months ended September 30, 2024 include one-time acquisition-related expenses of $453.8 million ($335.8 million net of tax) for pre-acquisition transaction costs incurred by CEI, primarily related to the vesting and increase in value of stock appreciation rights as a result of the acquisition. The pro forma combined results of operations for the three and nine months ended September 30, 2025 and 2024 were prepared by adjusting the historical results of Quanta to include the historical results of the businesses acquired in 2025 as if such acquisitions had occurred January 1, 2024. The pro forma combined results of operations for the three and nine months ended September 30, 2024 were prepared by further adjusting the historical results of Quanta to include the historical results of the businesses acquired in 2024 as if such acquisitions had occurred January 1, 2023. These pro forma combined historical results were adjusted for the following: a reduction of interest and other financing expenses as a result of the repayment of outstanding indebtedness of the acquired businesses; an increase in interest and other financing expenses as a result of the debt incurred by Quanta for the purpose of financing the acquisitions of CEI and Dynamic Systems and cash consideration paid for the other acquired businesses; an increase in amortization expense due to the intangible assets recorded; elimination of inter-company sales; and changes in depreciation expense to adjust acquired property and equipment to the acquisition date fair value and to conform with Quanta’s accounting policies. The pro forma combined results of operations do not include any adjustments to eliminate the impact of acquisition-related costs incurred by Quanta or acquired businesses or any cost savings or other synergies that resulted or may result from the acquisitions. Impact on Consolidated Results of Operations Related to Acquisitions Included in Quanta’s condensed consolidated results of operations for the three months ended September 30, 2025 were revenues of $335.7 million and income before income taxes of $22.1 million related to the acquisitions completed in 2025. Included in Quanta’s condensed consolidated results of operations for the nine months ended September 30, 2025 were revenues of $548.2 million and income before income taxes of $24.4 million related to the acquisitions completed in 2025. Included in Quanta’s condensed consolidated results of operations for the three months ended September 30, 2024 were revenues of $613.2 million and income before income taxes of $4.1 million related to the acquisitions completed in 2024. Included in Quanta’s condensed consolidated results of operations for the nine months ended September 30, 2024 were revenues of $757.5 million and a loss before income taxes of $9.7 million related to the acquisitions completed in 2024. Included in Quanta’s condensed consolidated results of operations for the three and nine months ended September 30, 2025 were acquisition costs of $19.5 million and $33.7 million related to the acquisitions completed in 2025. Included in Quanta’s condensed consolidated results of operations for the three and nine months ended September 30, 2024 were acquisition costs of $6.6 million and $16.8 million related to the acquisitions completed in 2024.

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