Dycom Industries Q4 Earnings Call Highlights

Dycom Industries (NYSE:DY) reported fiscal 2026 fourth-quarter and full-year results that management described as an “excellent finish to a record year,” highlighted by revenue growth, margin expansion, and improved cash generation. The company also outlined fiscal 2027 guidance that includes contributions from its recently acquired Power Solutions business, which prompted a new two-segment reporting structure: Communications and Building Systems.

Record quarterly and annual results

For the fiscal fourth quarter, Dycom posted all-time record quarterly revenue of $1.46 billion, up 34.4% year-over-year. Organic revenue increased 16.6%, which management said reflected backlog strength and momentum entering the new fiscal year. Adjusted EBITDA was $162.4 million with an adjusted EBITDA margin of 11.1%, up about 41 basis points from the prior-year quarter. Non-GAAP adjusted diluted EPS was $2.03, up 42% from the year-ago period.

Management noted that significant workforce additions to support expected growth, along with “severe winter storms,” pressured margins in the quarter. Cash conversion improved as well: DSOs were 101 days, a 13-day improvement year-over-year.

For the full fiscal year, Dycom reported record revenue of $5.55 billion, up 17.9% from fiscal 2025, with organic revenue growth of 6.5%. Non-GAAP adjusted EBITDA was $737.7 million and the adjusted EBITDA margin was 13.3%, representing 105 basis points of margin expansion year-over-year. Non-GAAP adjusted diluted EPS rose 29.7% to $11.97.

Operating cash flow for fiscal 2026 totaled $642.5 million, and free cash flow increased 216% to $435.3 million after capital expenditures, net of disposal proceeds.

Segment reporting update and customer concentration

Dycom said that following its acquisition of Power Solutions, it now reports results in two segments:

• Communications: Specialty contracting services for telecommunications providers, underground facility locating for various utilities (including telecom), and other construction/maintenance services for electric and gas utilities.
• Building Systems: Building infrastructure solutions including electrical, energy management, security, and fire safety systems for data centers and other critical facilities, including Power Solutions since the December 23, 2025 closing.

In the fourth quarter, Communications revenue was $1.362 billion, driven by fiber-to-the-home execution, wireless activity, hyperscaler fiber infrastructure programs, and maintenance and operations services. Communications adjusted EBITDA was $151.3 million, or 11.1% of segment revenue.

Building Systems revenue was $95.8 million for the partial period from acquisition close through the end of January, with adjusted EBITDA of $11.1 million or 11.6% of segment revenue. Management said results were impacted by seasonal holidays during the abbreviated operating period and that integration was proceeding on schedule.

Dycom also detailed customer concentration in the quarter. AT&T and Lumen each exceeded 10% of total revenue, contributing $350.5 million and $147.7 million, respectively. Following Verizon’s acquisition of Frontier during the quarter, their combined revenue was $205.6 million, also exceeding 10%. Customers exceeding 5% of total consolidated revenue included Brightspeed, Charter, Comcast, and Uniti.

Backlog reaches $9.5 billion

Dycom ended fiscal 2026 with record total backlog of $9.542 billion, including $8.333 billion in Communications and $1.209 billion in Building Systems. Backlog expected to be completed in the next 12 months was $6.358 billion, including $5.25 billion from Communications and $1.108 billion from Building Systems.

Management said book-to-bill for the year was 1.3x in total and 1.2x on an organic basis, reflecting what it described as increasing demand for Dycom’s services. The company also emphasized its “disciplined” approach to the pipeline, prioritizing high-value work that balances risk and return.

FY 2027 outlook: growth led by fiber and data centers

For fiscal 2027, Dycom guided total revenue to $6.85 billion to $7.15 billion, representing total year-over-year growth of approximately 23.6% to 29%, or about 6.6% to 10.3% on an organic basis. Segment guidance includes Communications revenue of $5.70 billion to $5.90 billion and Building Systems revenue of $1.15 billion to $1.25 billion.

The company said it expects continued adjusted EBITDA margin expansion, with modest Communications segment margin improvement as operating leverage offsets workforce investment. For Building Systems, Dycom expects a mid-teens adjusted EBITDA segment margin as it scales to meet data center demand.

For the fiscal first quarter, Dycom guided revenue of $1.64 billion to $1.71 billion, adjusted EBITDA of $202 million to $218 million, and adjusted diluted EPS of $2.57 to $2.90, excluding intangible amortization expense.

Strategic themes: BEAD timing, long-haul fiber, Power Solutions integration, and leverage

Management highlighted several demand drivers and timing considerations. Fiber-to-the-home was described as the most mature and dominant growth driver, with customers affirming or raising passing goals and industry commitments representing “nearly 60 million additional” fiber-to-the-home passings. The company also pointed to multi-year follow-on work from customer drops, which it said typically takes an average of four years after initial builds to reach terminal penetration.

On the BEAD program, Dycom said it expects verbal awards to begin converting into contracted backlog in Q1 or Q2, with first revenue opportunities expected in Q2 and a ramp in the second half of the year as programs move into construction. Executives repeatedly emphasized that meaningful momentum is expected in calendar 2027 as projects come online.

In long-haul, middle-mile, and “inside the fence” fiber, management said it is seeing rising activity and reiterated that these programs often have longer planning cycles, with builds “starting in earnest” around calendar 2028. Executives discussed Dycom’s work on Lumen’s over-pole program and noted Lumen’s announcement of receiving an additional $2.5 billion of awards.

During Q&A, management said the cross-sell between Dycom’s “inside the fence” Communications work and Power Solutions’ “inside the four walls” capabilities is occurring earlier than expected, with a positive hyperscaler response. Dycom also said it is looking primarily for additional M&A in Building Systems, potentially beyond electrical into other disciplines “inside the four walls,” while remaining committed to a long-term net leverage target.

On the balance sheet, Dycom described the Power Solutions acquisition as a $1.95 billion transaction on a cash-free, debt-free basis (subject to adjustments). It funded the net cash payment at closing of $1.63 billion through a mix that included a $1.1 billion Term Loan A, a $600 million bridge loan, and cash on hand, then later issued $800 million of Term Loan B to repay the bridge facility. Dycom ended the quarter with $709.2 million of cash and equivalents and total liquidity of $1.46 billion. Pro forma net leverage at quarter-end was about 2.3x adjusted EBITDA, and management said it expects to delever toward ~2x over the next 12 months.

Separately, Dycom reiterated that recent margin improvement was driven by operating leverage and internal efficiencies rather than pricing increases. It also outlined ongoing investments in workforce development, including plans to break ground on a new training facility outside Atlanta designed for immersive multi-week programs.

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.