Dycom Industries Q1 Earnings Call Highlights

Key Points

• Dycom delivered a strong fiscal Q1, with revenue up 56% year over year to $1.965 billion and adjusted diluted EPS rising 85% to $4.42. Adjusted EBITDA jumped 75% to $262.5 million as fiber and data center-related demand accelerated.
• Backlog hit a record $11.9 billion, up 25% sequentially with a 2.2x book-to-bill ratio, giving the company visibility for multi-year growth. Management said the backlog is being supported by larger, longer-duration customer agreements.
• Dycom raised its fiscal 2027 outlook to $7.38 billion-$7.65 billion in contract revenue, excluding any contribution from the pending National Technology Integrators acquisition. The company also said BEAD-related revenue could provide upside later, but it is not included in guidance.

Dycom Industries NYSE: DY reported a sharply higher fiscal first quarter and raised its full-year revenue outlook, citing accelerating demand for fiber deployments, data center-related infrastructure and a growing backlog that management said supports multi-year growth.

On the company’s fiscal 2027 first-quarter earnings call, President and Chief Executive Officer Daniel Peyovich said Dycom delivered “an outstanding start to the year” as total revenue rose 56% from the prior-year quarter to $1.965 billion. Organic growth was 25%, and results exceeded the high end of the company’s expectations, he said.

Adjusted EBITDA increased 75% year over year to $262.5 million, while adjusted EBITDA margin expanded 141 basis points to 13.4%. Non-GAAP adjusted diluted earnings per share were $4.42, up 85% from the same quarter a year earlier.

“With robust and intensifying demand drivers, we remain disciplined in our awards, high-grading the pipeline and intensely focusing on execution,” Peyovich said.

Backlog Reaches Record Level

Dycom ended the quarter with total backlog of $11.9 billion, which Peyovich described as a record. Backlog increased 25% sequentially and represented a book-to-bill ratio of 2.2 times for the quarter. Chief Financial Officer H. Andrew DeFerrari said the backlog included $10.8 billion in the Communications segment and $1.1 billion in Building Systems.

Backlog expected to be completed over the next 12 months totaled $6.4 billion, with $5.4 billion from Communications and $1 billion from Building Systems.

Peyovich said recent awards have continued to diversify Dycom’s backlog across customers, demand drivers and geographies. He also said some customers are extending contract durations to ensure access to a skilled workforce for multi-year build plans.

“These awards provide certainty and visibility that allow Dycom to plan and invest for work far in the future and positions us for multi-year growth,” Peyovich said.

Communications Growth Driven by Fiber Builds

Dycom’s Communications segment generated revenue of $1.57 billion, up 24.7% organically from the prior-year quarter. DeFerrari said growth was driven by ramping Fiber-to-the-Home programs, increased long-haul and middle-mile fiber infrastructure builds, and growing maintenance and operations services.

Adjusted EBITDA for the segment increased 28% to $192.4 million, equal to 12.3% of segment revenue. Peyovich said Communications benefited from expansion into additional geographies and Fiber-to-the-Home builds that ramped ahead of expectations, aided by favorable seasonal conditions.

During the question-and-answer portion of the call, Peyovich said Fiber-to-the-Home work grew 33% sequentially, though the company does not publish that figure as a standard metric. He said the increase reflected both accelerating customer programs and Dycom’s ability to gain additional work.

Asked about long-haul and middle-mile opportunities, Peyovich said that market has grown significantly from a previously discussed $20 billion opportunity set, though the company has not published updated figures. He said Dycom continues to win more work in that area, but larger projects typically take time to begin and ramp.

“Really start thinking about next year, calendar 2027, and especially calendar 2028,” Peyovich said, describing when long-haul and middle-mile activity could become more meaningful.

Building Systems Outperforms Expectations

Dycom’s Building Systems segment, which includes Power Solutions, generated revenue of $395.4 million in the quarter and adjusted EBITDA of $70 million, or 17.7% of segment revenue. DeFerrari said Building Systems represented about 20% of total revenue.

Peyovich said Power Solutions exceeded expectations “right out of the gate” and that the company now expects Building Systems adjusted EBITDA margin for fiscal 2027 to remain in a similar high-teens range. He said the team integrated the operations more quickly than expected while continuing to invest for growth.

Management also announced a definitive agreement to acquire National Technology Integrators, a Maryland-based low-voltage engineering and construction firm. The business specializes in inside plant structured cabling, including within data centers, as well as audiovisual and security systems.

DeFerrari said the purchase price is $275 million on a cash-free, debt-free basis, with about $234 million payable in cash and roughly $41 million in Dycom common stock valued as of the transaction signing date. Dycom expects the deal to close before the end of its July fiscal quarter, subject to customary closing and post-closing adjustments.

The acquired business will be included in the Building Systems segment. DeFerrari said Dycom anticipates an initial annual revenue run rate of approximately $175 million, and that the business has historically achieved adjusted EBITDA margins in the mid- to high-teens.

Peyovich said National Technology Integrators has been a strategic partner of Power Solutions for years and is already working with Dycom on inside-the-fence fiber work. He said the acquisition expands Dycom’s ability to offer customers fiber infrastructure services from data center racks to broader connectivity networks.

Guidance Raised for Fiscal 2027

Following the first-quarter performance, Dycom raised its fiscal 2027 total contract revenue outlook to a range of $7.38 billion to $7.65 billion. Peyovich said that at the midpoint, excluding the extra week from last year, the new outlook represents total revenue growth of 38%, including 14% organic growth.

DeFerrari said Dycom now expects Communications revenue of $6.03 billion to $6.2 billion, representing organic growth of about 12.6% to 15.8% from last year. Building Systems revenue is expected to range from $1.35 billion to $1.45 billion. The outlook excludes any contribution from the pending acquisition of National Technology Integrators.

For the fiscal second quarter, Dycom expects total contract revenue of $1.94 billion to $2.01 billion, adjusted EBITDA of $284 million to $303 million, and adjusted diluted EPS of $4.40 to $4.82, excluding intangible amortization expense.

Management said cash flow remains a priority. DeFerrari said combined days sales outstanding for accounts receivable and contract assets were 96 days, down five days sequentially and 15 days from the prior-year quarter. Dycom repurchased 100,000 shares of common stock during the quarter for about $36 million, or $360 per share.

The company ended the quarter with $538.8 million in cash and equivalents and total liquidity of more than $1.28 billion. DeFerrari said pro forma net leverage was approximately 2.3 times adjusted EBITDA at quarter-end, providing financial flexibility for continued strategic growth and investment.

BEAD Seen as Potential Upside

Peyovich said the Broadband Equity, Access and Deployment program, or BEAD, continues to progress through state-level and subgrantee pipelines. He said Dycom still expects to see some BEAD-related revenue in the fiscal second quarter, but emphasized that BEAD is not included in the company’s current outlook.

“We really want people to think about BEAD for this year as potential uplift and then really starting to take shape in calendar 2027,” Peyovich said.

Across the call, management pointed to sustained demand for fiber and data center infrastructure. Peyovich said the company is continuing to invest in talent and workforce development, including adding 730 employees during the quarter, while remaining selective about the work it pursues.

“There are still people out there that are looking for low bid numbers, and that’s just not where we play,” Peyovich said. “We want to play in those longer-term agreements where we can really have input into how they think about their builds.”

About Dycom Industries NYSE: DY

Dycom Industries, Inc NYSE: DY is a leading provider of specialty contracting services to the telecommunications industry in North America. The company delivers engineering, construction, installation and maintenance solutions for communications infrastructure, supporting a broad range of network technologies and system architectures. Dycom's services span outside plant construction, cable placement, fiber optic deployment, wireless and wireline network engineering, as well as testing and turn-up services for voice, data and video applications.

Dycom's customer base includes major telecommunications carriers, cable operators, utility companies and competitive local exchange carriers.

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