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Revenue Recognition and Related Balance Sheet Accounts | 9 Months Ended
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Sep. 30, 2025
Revenue from Contract with Customer [Abstract] |
Revenue Recognition and Related Balance Sheet Accounts | 3. REVENUE RECOGNITION AND RELATED BALANCE SHEET ACCOUNTS: Contracts Quanta’s services are generally provided pursuant to master service agreements (MSAs), repair and maintenance contracts and fixed price and non-fixed price construction contracts. Contracts are combined if they are entered into at or near the same time as one another and negotiated as a group, in contemplation of one another, for a related commercial purpose. When applicable, the transaction price is allocated to performance obligations on the basis of relative standalone selling prices that is generally determined using an expected profit margin on anticipated costs related to the performance obligation. Quanta’s contracts are classified into three categories: unit-price contracts, cost-plus contracts and fixed price contracts. The following tables present Quanta’s revenue disaggregated by contract type and by geographic location, as determined by the job location (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
By contract type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed price contracts |  | $ | 4,813,711 |  |  | 63.1 | % |  | $ | 3,725,174 |  |  | 57.4 | % |  | $ | 12,517,491 |  |  | 60.7 | % |  | $ | 9,489,949 |  |  | 55.4 | %
Unit-price contracts |  | 1,692,949 |  |  | 22.2 |  |  | 1,769,369 |  |  | 27.2 |  |  | 4,882,579 |  |  | 23.7 |  |  | 4,830,577 |  |  | 28.2 |
Cost-plus contracts |  | 1,124,748 |  |  | 14.7 |  |  | 998,624 |  |  | 15.4 |  |  | 3,237,679 |  |  | 15.6 |  |  | 2,798,847 |  |  | 16.4 |
Total revenues |  | $ | 7,631,408 |  |  | 100.0 | % |  | $ | 6,493,167 |  |  | 100.0 | % |  | $ | 20,637,749 |  |  | 100.0 | % |  | $ | 17,119,373 |  |  | 100.0 | %
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
By primary geographic location:
United States |  | $ | 7,112,960 |  |  | 93.3 | % |  | $ | 5,871,453 |  |  | 90.4 | % |  | $ | 19,180,023 |  |  | 92.9 | % |  | $ | 15,573,776 |  |  | 91.1 | %
Canada |  | 275,644 |  |  | 3.6 |  |  | 329,066 |  |  | 5.1 |  |  | 724,296 |  |  | 3.5 |  |  | 778,578 |  |  | 4.5 |
Australia |  | 202,031 |  |  | 2.6 |  |  | 195,815 |  |  | 3.0 |  |  | 571,222 |  |  | 2.8 |  |  | 503,095 |  |  | 2.9 |
Others |  | 40,773 |  |  | 0.5 |  |  | 96,833 |  |  | 1.5 |  |  | 162,208 |  |  | 0.8 |  |  | 263,924 |  |  | 1.5 |
Total revenues |  | $ | 7,631,408 |  |  | 100.0 | % |  | $ | 6,493,167 |  |  | 100.0 | % |  | $ | 20,637,749 |  |  | 100.0 | % |  | $ | 17,119,373 |  |  | 100.0 | %
Under fixed-price contracts, as well as unit-price contracts with more than an insignificant amount of partially completed units, revenue is recognized as performance obligations are satisfied over time, with the percentage of completion generally measured as the percentage of costs incurred to total estimated costs for such performance obligation. Approximately 64.6% and 61.4% of Quanta’s revenues recognized during the three months ended September 30, 2025 and 2024 were associated with this revenue recognition method, and 63.6% and 59.3% of Quanta’s revenues recognized during the nine months ended September 30, 2025 and 2024 were associated with this revenue recognition method. Performance Obligations As of September 30, 2025 and December 31, 2024, the aggregate transaction price allocated to unsatisfied or partially satisfied performance obligations was approximately $20.97 billion and $16.76 billion, with 64.1% and 67.1% expected to be recognized in the subsequent twelve months. These amounts represent management’s estimates of the consolidated revenues that are expected to be realized from the remaining portion of firm orders under fixed price contracts not yet completed or for which work had not yet begun as of such dates and, to a lesser extent, from certain unit-price contracts with more than an insignificant amount of partially completed units. For purposes of calculating remaining performance obligations, Quanta includes all estimated revenues attributable to consolidated joint ventures and variable interest entities, revenues from funded and unfunded portions of government contracts to the extent they are reasonably expected to be realized, and revenues from change orders and claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Excluded from remaining performance obligations are potential orders under MSAs and expected revenues under certain non-fixed price contracts. Contract Estimates and Changes in Estimates Actual revenues and project costs can vary, sometimes substantially, from previous estimates due to changes in a variety of factors, including unforeseen or changed circumstances not included in Quanta’s cost estimates or covered by its contracts. Some of the factors that can result in positive changes in estimates on projects include successful execution through project risks, reduction of estimated project costs or increases of estimated revenues. Some of the factors that can result in negative changes in estimates include concealed or unknown site conditions; changes to or disputes with customers regarding the scope of services; changes in estimates related to the length of time to complete a performance obligation; changes or delays with respect to permitting and regulatory requirements and materials; changes in the cost of equipment, commodities, materials or skilled labor; unanticipated costs or claims due to delays or failure to perform by customers or third parties; customer failure to provide, or supply chain and logistical challenges related to, required materials or equipment; errors in engineering, specifications or designs; project modifications; adverse weather conditions, natural disasters, and other emergencies; and performance and quality issues causing delay (including payment of liquidated damages) or requiring rework or replacement. Any changes in estimates could result in changes to profitability or losses associated with the related performance obligations. Additionally, changes in cost estimates on certain contracts may result in the issuance of change orders, which can be approved or unapproved by the customer, or the assertion of contract claims. Quanta recognizes amounts associated with change orders and claims as revenue if it is probable that the contract price will be adjusted and the amount of any such adjustment can be reasonably estimated. As of September 30, 2025 and December 31, 2024, Quanta had recognized revenues of $872.7 million and $733.6 million related to unapproved change orders and claims included as contract price adjustments primarily in “Contract assets” in the accompanying condensed consolidated balance sheets. These change orders and claims were in the process of being negotiated in the normal course of business and represent management’s estimates of additional contract revenues that have been earned and are probable of collection. The largest component of the revenues recognized related to unapproved change orders and claims as of September 30, 2025 and December 31, 2024 is associated with a large renewable transmission project in Canada. During the course of construction, the project experienced decreased productivity and additional costs from delays, administrative requirements and labor issues due to the COVID-19 pandemic, including incremental governmental requirements and worksite restrictions, as well as work resequencing and acceleration, access delays, and logistical challenges and other issues outside of Quanta’s control. The project was completed in 2024. Changes in estimates can result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in prior periods or the reversal of previously recognized revenue if the currently estimated revenue is less than the previous estimate. The impact of a change in contract estimate is measured as the difference between the revenue or gross profit recognized in the prior period as compared to the revenue or gross profit which would have been recognized had the revised estimate been used as the basis of recognition in the prior period. Changes in estimates can also result in contract losses, which are recognized in full when they are determined to be probable and can be reasonably estimated. Revenues were positively impacted by 1.1% and 0.7% during the three months ended September 30, 2025 and 2024 as a result of changes in estimates associated with performance obligations on fixed price contracts partially satisfied prior to June 30, 2025 and 2024. Revenues were positively impacted by 0.3% during both the nine months ended September 30, 2025 and 2024 as a result of changes in estimates associated with performance obligations on fixed price contracts partially satisfied prior to December 31, 2024 and 2023. The net impacts resulted from net changes in estimates across a large number of projects, primarily as a result of favorable or unfavorable performance and changes on estimates related to mitigation of risks and contingencies as the projects progressed to completion. These changes were made in the ordinary course of business and there were no changes that resulted in material amounts that should have been recognized in a prior period. Contract Assets and Liabilities Contract assets and liabilities consisted of the following (in thousands):
|  | September 30, 2025 |  | December 31, 2024
Contract assets |  | $ | 1,563,919 |  |  | $ | 1,208,619 |
Contract liabilities |  | $ | 2,445,429 |  |  | $ | 2,149,328 |
Contract assets and liabilities fluctuate period to period based on various factors, including, among others, changes in the number and size of projects in progress at period end; variability in billing and payment terms, such as up-front or advance billings, interim or milestone billings, or deferred billings; and recognized unapproved change orders and contract claims. The increase in contract assets from December 31, 2024 to September 30, 2025 was primarily due to increased activity of large projects. The increase in contract liabilities from December 31, 2024 to September 30, 2025 was primarily due to recent acquisitions and an increase in favorable billing terms on certain large projects. During the nine months ended September 30, 2025 and 2024, Quanta recognized revenue of approximately $1.94 billion and $1.35 billion related to contract liabilities outstanding as of the end of each respective prior year. Accounts Receivable, Allowance for Credit Losses and Concentrations of Credit Risk Quanta determines its allowance for credit losses based on an estimate of expected credit losses for financial instruments, primarily accounts receivable and contract assets. The assessment of the allowance for credit losses involves certain judgments and estimates. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Expected credit losses are estimated by evaluating trends with respect to Quanta’s historical write-off experience and applying historical loss ratios to pools of financial assets with similar risk characteristics. Quanta has determined that it has two risk pools for the purpose of calculating its historical credit loss experience. Quanta’s historical loss ratio and its determination of risk pools, which are used to calculate expected credit losses, may be adjusted for changes in customer credit concentrations within its portfolio of financial assets, changes in customers’ ability to pay, and other considerations, such as economic and market changes, changes to regulatory or technological environments affecting customers and the consistency between current and forecasted economic conditions and the historical economic conditions used to derive historical loss ratios. At the end of each quarter, management reassesses these and other relevant factors, including the impact of uncertainty and challenges in the overall economy and in Quanta’s industries and markets, (e.g., inflationary pressure, supply chain and other logistical challenges and increased interest rates). Additional allowance for credit losses is established for financial asset balances with specific customers where collectability has been determined to be improbable based on customer specific facts and circumstances. Quanta considers accounts receivable delinquent after 30 days but, absent certain specific considerations, generally does not consider such amounts delinquent in its credit loss analysis unless the accounts receivable are at least 120 days outstanding. In addition, management monitors the credit quality of its receivables by, among other things, obtaining credit ratings for significant customers, assessing economic and market conditions and evaluating material changes to a customer’s business, cash flows and financial condition. Should anticipated recoveries relating to receivables fail to materialize, including anticipated recoveries relating to bankruptcies or other workout situations, Quanta could experience reduced cash flows and losses in excess of current allowances provided. Accounts receivable are written-off against the allowance for credit losses if they are deemed uncollectible. Activity in Quanta’s allowance for credit losses consisted of the following (in thousands):
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Balance at beginning of period |  | $ | 15,630 |  |  | $ | 13,955 |  |  | $ | 15,185 |  |  | $ | 13,962 |
Increase in provision for credit losses |  | 897 |  |  | 1,588 |  |  | 2,499 |  |  | 1,859 |
Write-offs charged against the allowance net of recoveries of amounts previously written off |  | (563) |  |  | (1,962) |  |  | (1,720) |  |  | (2,240) |
Balance at end of period |  | $ | 15,964 |  |  | $ | 13,581 |  |  | $ | 15,964 |  |  | $ | 13,581 |
The above activity relates to the largest risk pool Quanta utilizes for assessing credit loss. The second risk pool represents approximately 10% of Quanta’s consolidated financial instruments as of September 30, 2025 and did not have any allowance for credit loss or experience any credit loss during the periods presented. Quanta’s customers generally have high credit ratings. In addition, the customers in the second risk pool typically pre-approve invoices and often receive project financing. Provision for credit losses is included in “Selling, general and administrative expenses” in the condensed consolidated statements of operations. Quanta is subject to concentrations of credit risk related primarily to its receivable position for services Quanta has performed for customers. Quanta grants credit under normal payment terms, generally without collateral. No customer represented 10% or more of Quanta’s consolidated revenues for the three or nine months ended September 30, 2025 or 2024, and no customer represented 10% or more of Quanta’s consolidated receivable position as of September 30, 2025 or December 31, 2024. Certain contracts allow customers to withhold a small percentage of billings pursuant to retainage provisions, and such amounts are generally due upon completion of the contract and acceptance of the project by the customer. Based on Quanta’s experience in recent years, the majority of these retainage balances are expected to be collected within one year. Retainage balances with expected settlement dates within one year of September 30, 2025 and December 31, 2024 were $863.8 million and $666.5 million, which are included in “Accounts receivable.” Retainage balances with expected settlement dates beyond one year were $169.6 million and $143.6 million as of September 30, 2025 and December 31, 2024 and are included in “Other assets, net.” Quanta recognizes unbilled receivables for non-fixed price contracts within “Accounts receivable” in certain circumstances, such as when revenues have been earned and recorded but the amount cannot be billed under the terms of the contract until a later date or when amounts arise from routine lags in billing. These balances do not include revenues recognized for work performed under fixed-price contracts and unit-price contracts with more than an insignificant amount of partially completed units, as these amounts are recorded as “Contract assets.” As of September 30, 2025 and December 31, 2024, unbilled receivables included in “Accounts receivable” were $1.19 billion and $859.9 million. Quanta also recognizes unearned revenues for non-fixed price contracts when cash is received prior to recognizing revenues for the related performance obligation. Unearned revenues, which are included in “Accounts payable and accrued expenses,” were $118.3 million and $97.9 million as of September 30, 2025 and December 31, 2024.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-7 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
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