Core Viewpoint - Dycom Industries, Inc. has shown strong stock performance, significantly outperforming its industry and the broader market over the past three months, with a stock price increase of 38.9% compared to the industry's 11.5% growth [1][5]. Financial Performance - In the first quarter of fiscal 2026, Dycom reported adjusted earnings and contract revenues that exceeded the Zacks Consensus Estimate, with a year-over-year revenue increase of 10.2% driven by strong contributions from AT&T and other customers [2]. - The company's backlog at the end of the fiscal first quarter reached $8.127 billion, up from $7.760 billion at the end of fiscal 2025 and $6.364 billion in the first quarter of fiscal 2025, with $4.685 billion projected to be completed in the next 12 months [11]. Growth Drivers - Dycom is experiencing growth in fiber-to-the-home projects and maintenance contracts, benefiting from customers increasing or reconfirming fiber deployment targets [10]. - The company is expanding its work with hyperscalers by connecting fiber networks and data centers, which opens new markets and enhances its digital infrastructure services [12]. - The service and maintenance segment is a steady source of recurring revenues, with significant new contracts secured during the quarter [14]. Market Position and Valuation - Dycom's stock is currently trading at a premium relative to its industry and historical metrics, with a forward 12-month price-to-earnings (P/E) ratio above the five-year average [17]. - The company's P/E ratio is higher than some industry peers, such as MasTec, EMCOR, and Fluor, which trade at 23.28X, 19X, and 15.67X, respectively [19]. Challenges - Ongoing tariffs and trade tensions pose risks for equipment costs and project margins, with expected increases in costs for offshore-sourced equipment components [20]. - Despite these challenges, Dycom's focus on fiber-to-the-home and hyperscaler initiatives supports long-term growth visibility [21].

Core Insights - Dycom Industries reported revenue of $1.26 billion for the quarter ended April 2025, marking a year-over-year increase of 10.2% [1] - The company's EPS for the same period was $2.09, slightly down from $2.12 a year ago, but exceeded the consensus estimate of $1.60 by 30.62% [1] - The revenue surpassed the Zacks Consensus Estimate of $1.2 billion, resulting in a surprise of 5% [1] Financial Performance - The backlog for Dycom Industries stands at $8.13 billion, exceeding the average estimate of $7.47 billion based on two analysts [4] - Revenue from Lumen Technologies (CenturyLink) was reported at $125.20 million, which is a decline of 20.2% year over year and below the average estimate of $151.63 million [4] - Revenue from AT&T Inc was reported at $325.10 million, reflecting a significant increase of 50.9% year over year and surpassing the average estimate of $259.41 million [4] Stock Performance - Dycom Industries shares have returned +39.4% over the past month, outperforming the Zacks S&P 500 composite's +13.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Dycom Industries Inc. reported better-than-expected results for Q1 fiscal 2026, with contract revenues and adjusted earnings surpassing estimates, leading to a 15.8% increase in stock price following the announcement [1][3]. Financial Performance - Adjusted EPS for Q1 was $2.09, exceeding the Zacks Consensus Estimate of $1.60 by 30.6%, though down from $2.12 in the same quarter last year [3]. - Contract revenues reached $1.259 billion, surpassing the consensus mark of $1.199 billion by 5% and reflecting a year-over-year growth of 10.2% [4]. - Adjusted EBITDA increased by 14.9% to $150.4 million, with an adjusted EBITDA margin of 11.9%, up 40 basis points from the previous year [5]. Customer Contributions - AT&T, Dycom's largest customer, contributed 25.8% to total revenues, showing a year-over-year growth of 50.9% [4]. - Lumen, the second-largest customer, contributed 9.9% to total revenues, which declined by 20.2% from the previous year [4]. - Other customers combined contributed 64.2% to total revenues [4]. Backlog and Liquidity - The backlog as of Q1 totaled $8.127 billion, up from $7.760 billion at the end of fiscal 2025 and $6.364 billion in Q1 of fiscal 2025, with $4.685 billion projected to be completed in the next 12 months [5]. - As of April 26, 2025, Dycom had liquidity of $529.6 million, including cash and cash equivalents of $16.1 million, compared to $92.7 million at the end of fiscal 2025 [6]. Future Guidance - For Q2 fiscal 2026, Dycom expects contract revenues between $1.38 billion and $1.43 billion, compared to $1.203 billion in the same quarter last year [7]. - Adjusted EBITDA for Q2 is projected to be between $185 million and $200 million, indicating growth from $158.3 million reported last year [7]. - EPS is anticipated to be in the range of $2.74-$3.05, up from $2.46 in the year-ago quarter [8]. Revenue Outlook - Dycom raised its fiscal 2026 revenue outlook to between $5.29 billion and $5.425 billion, reflecting a year-over-year growth of 12.5-15.4%, up from the previous expectation of 10.0-13.0% [9].

Financial Data and Key Metrics Changes - The meeting confirmed that a majority of votes were cast for the director nominees and for the proposals regarding executive compensation and auditor ratification, indicating shareholder confidence in the company's governance and financial management [13][14]. Business Line Data and Key Metrics Changes - No specific data regarding individual business lines was discussed during the meeting [18]. Market Data and Key Metrics Changes - No specific market data or key metrics were provided during the meeting [18]. Company Strategy and Development Direction and Industry Competition - The meeting did not delve into specific strategic initiatives or competitive positioning within the industry [18]. Management's Comments on Operating Environment and Future Outlook - Management did not provide detailed comments on the operating environment or future outlook during the meeting [18]. Other Important Information - The meeting acknowledged the retirement of board member Steven Robinson, highlighting his invaluable service [16]. Q&A Session All Questions and Answers - There were no questions submitted during the Q&A session, indicating a lack of immediate shareholder inquiries [18].

Financial Performance - Net income available to common stockholders for the three months ended April 26, 2025, was $61.048 million, compared to $62.554 million for the same period in 2024, reflecting a decrease of approximately 2.4%[34] - Basic earnings per common share for the three months ended April 26, 2025, was $2.11, down from $2.15 in the prior year, indicating a decline of about 1.9%[34] - Total contract revenues for the three months ended April 26, 2025, were $1,258.6 million, a 10.2% increase from $1,142.4 million for the same period in 2024[88] Acquisitions and Goodwill - The company acquired telecommunications construction contractors for a total cash purchase price of $191.2 million across three acquisitions in fiscal 2025, enhancing its geographic presence and customer base[35][36][37] - The company recorded goodwill and intangible assets totaling $161.0 million from the acquisitions, which are deductible for tax purposes[40] - Goodwill balance slightly increased to $330.5 million as of April 26, 2025, from $330.3 million on January 25, 2025, indicating a marginal growth[50] Accounts and Receivables - Total accounts receivable, net, as of April 26, 2025, was $1.528 billion, an increase from $1.375 billion as of January 25, 2025, representing a growth of approximately 11.1%[44] - Contract assets increased to $101.992 million as of April 26, 2025, from $63.375 million as of January 25, 2025, indicating a rise of about 60.7%[45] - Significant customers included Lumen Technologies, which accounted for 16.3% of total combined accounts receivable and contract assets as of April 26, 2025[46] Assets and Liabilities - Other current assets increased to $45.8 million as of April 26, 2025, from $34.6 million on January 25, 2025, representing a growth of approximately 32.3%[47] - Cash and equivalents decreased significantly to $16.1 million as of April 26, 2025, down from $92.7 million on January 25, 2025, a decline of about 82.7%[48] - Total property and equipment net value increased to $567.4 million as of April 26, 2025, compared to $541.9 million on January 25, 2025, reflecting a growth of approximately 4.7%[49] Debt and Interest - As of April 26, 2025, the company's long-term debt amounted to $1,017,635,000, an increase from $933,212,000 on January 25, 2025, representing an 8.99% increase[65] - The weighted average interest rate for the term loan facility was 6.04% as of April 26, 2025, compared to 6.02% on January 25, 2025[70] - The company has a total borrowing availability under its revolving facility of $513,500,000 as of April 26, 2025, down from $602,500,000 on January 25, 2025[70] Tax and Compensation - The effective income tax rate for the three months ended April 26, 2025, was 22.3%, up from 19.2% for the same period in the previous year[74] - The company realized $2,239,000 in income tax effects related to stock-based compensation for the three months ended April 26, 2025[82] - The company had unrecognized compensation expense related to stock options, RSUs, and target Performance RSUs of $1,100,000, $44,700,000, and $21,600,000, respectively, as of April 26, 2025[83] Operational Metrics - Total accrued insurance claims rose to $102.3 million as of April 26, 2025, compared to $96.5 million on January 25, 2025, an increase of approximately 6.0%[60] - Total lease cost recognized for the three months ended April 26, 2025, was $17.9 million, up from $15.5 million for the same period in 2024, representing a year-over-year increase of about 15.1%[62] - Total lease liabilities under long-term operating leases were $113.1 million as of April 26, 2025, slightly up from $112.8 million on January 25, 2025[62] Stock and Shareholder Activity - The company repurchased 200,000 shares of common stock at an average price of $150.93, totaling $30,200,000 during the three months ended April 26, 2025[76] - Performance RSUs granted during the three months ended April 26, 2025, included 95,514 shares with a weighted average grant date fair value of $161.57[85] - The total number of Performance RSUs outstanding as of April 26, 2025, was 275,236 shares, with a weighted average grant date fair value of $139.63[85] Market and Risk Disclosures - The company operates in one reportable segment, providing specialty contracting services throughout the United States[92] - The company has no material changes to its market risk disclosures, primarily related to interest rate fluctuations[169] - The company has issued $47.5 million in standby letters of credit under its credit agreement as of April 26, 2025[99]

Core Insights - Dycom Industries, Inc. reported a 10.2% year-over-year revenue increase for Q1 FY2026, reaching $1.26 billion, with adjusted EBITDA of $150.4 million and net income of $61 million, surpassing guidance [1] - The company raised its full-year revenue guidance, supported by a record backlog of $8.1 billion, indicating strong demand across telecom and digital infrastructure segments [2][3] Revenue and Backlog - The backlog of $8.1 billion includes $4.7 billion expected to convert to revenue in the next twelve months, showcasing Dycom's ability to secure long-duration projects from large telecom and utility customers [3][4] - The diverse mix of projects, with over 50% from recurring service and maintenance contracts, provides stability amid the shift to multi-year fiber buildouts [3] Market Expansion - Recent strategic wins include a multiyear middle mile fiber award to support AI infrastructure, marking Dycom's entry into hyperscaler markets, thus expanding its total addressable market [5][7] - Demand for fiber build associated with data center and AI investments is accelerating, with significant project work expected to ramp up by FY2027 [6] Margin Improvement - Adjusted EBITDA margin improved by 49 basis points to 11.9% compared to the prior year, with future margin gains anticipated from operating leverage rather than one-time events [8][9] - Management projects full-year net capex at $220–$230 million and focuses on optimizing free cash flow [8] Future Outlook - Contract revenue guidance for FY2026 has been raised to $5.290 billion to $5.425 billion, reflecting a year-over-year increase of 12.5% to 15.4% [11] - Q2 FY2026 forecasts include contract revenues of $1.38 billion to $1.43 billion, adjusted EBITDA of $185 million to $200 million, and diluted EPS of $2.74 to $3.05 [11]

Company Overview - Dycom Industries, Inc. is a leading provider of specialty contracting services to the telecommunications infrastructure and utility industries across the United States [2] - The services offered by Dycom include program management, planning, engineering and design, aerial, underground, and wireless construction, maintenance, and fulfillment services for telecommunications providers [2] - Additionally, Dycom provides underground facility locating services for various utilities, including telecommunications providers, as well as construction and maintenance services for electric and gas utilities [2] Recent Developments - Dycom Industries announced its participation in the KeyBanc Industrial & Basic Materials Conference in Boston, MA on May 28, 2025, where senior management will engage in one-on-one and group meetings with investors [1]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $1,259,000,000, a 10.2% increase over Q1 2025 [5][19] - Adjusted EBITDA was $150,400,000, representing 11.9% of revenues and an increase of 14.9% over Q1 2025 [5][19] - Net income was $61,000,000, with diluted EPS of $2.90 per share, exceeding expectations [20] - The company increased its revenue expectations for the year to a range of $5,290,000,000 to $5,425,000,000, representing a growth of 12.5% to 15.4% over the prior year [6][23] Business Line Data and Key Metrics Changes - The service and maintenance business has grown significantly, providing a stable base of recurring revenue [8][9] - The company has diversified its customer base and services within telecommunications and digital infrastructure, which buffers against the impact of any single customer [7][9] - The backlog at the end of Q1 was $8,127,000,000, including $4,685,000,000 expected to be completed in the next twelve months [21] Market Data and Key Metrics Changes - The company noted robust demand drivers, particularly in fiber to the home programs and hyperscaler infrastructure [12][13] - Recent awards include significant contracts with Verizon and Windstream for fiber to the home and maintenance work [13] - The company is seeing increased opportunities related to AI infrastructure and middle mile networks [13][14] Company Strategy and Development Direction - The company aims to build on its service and maintenance business while capitalizing on fiber to the home deployments and other growth drivers [9][16] - The strategy includes expanding services inside the fence with hyperscalers, which opens new opportunities [17] - The company is focused on improving free cash flow and maintaining a balanced risk-return profile in its backlog [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on market opportunities despite macroeconomic uncertainties [6][11] - The impact of tariffs and international trade actions is expected to be negligible, with most components produced in the U.S. [11][23] - Management remains optimistic about the growth prospects, with ongoing opportunities in fiber infrastructure and service maintenance [12][16] Other Important Information - The company repurchased 200,000 shares for $30,200,000 during the quarter [6][22] - Operating cash flows used in the quarter were $54,000,000, reflecting seasonal uses of cash [22] - The company is closely monitoring the impact of tariffs and trade actions on its operations [23] Q&A Session Summary Question: Performance of Black and Veatch - Management noted that the performance is a mix of pull forward and ramping quicker than expected, with strong integration into operations [26][27] Question: Second Quarter Guidance - The guidance reflects continued strength from fiber to the home builds and wireless business, with expectations for ongoing growth [32][33] Question: CapEx and Tariff Impact - Management feels confident about managing equipment costs and has been proactive in planning to mitigate tariff impacts [34][36] Question: Margin Improvement - Operating leverage is a key factor in margin improvement, with expectations for continued growth in margins [39][41] Question: BEAD Program Importance - While the BEAD program is significant, it is not essential for current growth, with other drivers providing robust opportunities [42][44] Question: Backlog and Organic Growth - The backlog is diversified, and organic growth is slightly positive, with long-term opportunities expected [48][52] Question: Government Layoffs and Deregulation - Management is monitoring the potential easing of permitting and other regulatory changes that could positively impact the industry [80]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $1,259,000,000, a 10.2% increase over Q1 2025 [4][21] - Adjusted EBITDA was $150,400,000, representing 11.9% of revenues, and an increase of 14.9% over Q1 2025 [4][22] - Net income was $61,000,000, with diluted EPS of $2.90 per share, exceeding expectations [22] - The company increased its revenue expectations for the year to a range of $5,290,000,000 to $5,425,000,000, representing a growth of 12.5% to 15.4% over the prior year [5][25] Business Line Data and Key Metrics Changes - The service and maintenance business has grown significantly, providing a stable base of recurring revenue [6][7] - The company has diversified its customer base and services within telecommunications and digital infrastructure, which buffers against the impact of any single customer [5][6] - The backlog at the end of Q1 was $8,127,000,000, including $4,685,000,000 expected to be completed in the next twelve months [23] Market Data and Key Metrics Changes - The company noted robust demand drivers, particularly in fiber to the home deployments and hyperscaler infrastructure projects [11][12] - Recent awards include significant contracts with Verizon and Windstream for fiber to the home and maintenance work [12] - The company is seeing increased opportunities related to AI infrastructure, with hyperscalers reiterating or increasing their CapEx budgets [12][15] Company Strategy and Development Direction - The company aims to build on its service and maintenance business while capitalizing on fiber to the home deployments and other growth drivers [7][18] - The strategy includes expanding services inside the fence with hyperscalers, which opens new opportunities [15][19] - The company is focused on improving free cash flow and maintaining a balanced risk and return profile in its backlog [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and tariff impacts, expecting negligible effects on current builds [10][25] - The demand for fiber to the home remains strong, with many customers reconfirming or increasing their targets [11][12] - Management believes that the company is well-positioned for continued growth, with a well-defined strategy and clear objectives [18][19] Other Important Information - The company repurchased 200,000 shares for $30,200,000 during the quarter, reflecting a commitment to returning capital to shareholders [5][24] - Operating cash flows used in the quarter were $54,000,000, reflecting seasonal uses of cash [24] Q&A Session Summary Question: Regarding the performance of Black and Veatch - Management indicated that the performance was a mix of pull forward and quicker ramp-up than expected, with strong integration into operations [28][29] Question: On the maintenance side, can you size that business? - Management noted that service and maintenance is a core part of the strategy, historically representing over 50% of the business [31] Question: Is the second quarter guidance a continuation of strength from the wireless side? - Management confirmed that both fiber to the home builds and the wireless business are contributing to the positive outlook for Q2 [34][35] Question: Any potential for pulling forward spending before tariffs hit? - Management stated that they are strategically managing equipment purchases and feel confident about their current position despite tariff impacts [36][38] Question: Was there anything unusual with costs this quarter? - Management attributed margin improvement to operating leverage and ongoing efficiency efforts [41][43] Question: What is the importance of the BEAD program for future growth? - Management believes that while BEAD is a significant opportunity, it is not necessary for current growth, with other drivers providing robust opportunities [46][47] Question: Is the pace of working through the backlog changing? - Management highlighted the diversification of the backlog and expressed confidence in the pace of business [50][51] Question: Does customer consolidation drive more business? - Management indicated that customer consolidation has historically been positive, leading to more opportunities for larger national players [80] Question: Have government layoffs affected the approval process? - Management noted that easing permitting could be a positive for the industry, and they are monitoring potential regulatory changes closely [86][87]

Group 1 - Dycom Industries reported quarterly earnings of $2.09 per share, exceeding the Zacks Consensus Estimate of $1.60 per share, with a year-over-year comparison showing a slight decrease from $2.12 per share [1] - The company achieved revenues of $1.26 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 5%, and showing an increase from $1.14 billion in the same quarter last year [2] - Dycom Industries has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - The stock has gained approximately 11.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $2.76 on revenues of $1.35 billion, and for the current fiscal year, it is $9.25 on revenues of $5.2 billion [7] Group 3 - The Building Products - Heavy Construction industry, to which Dycom Industries belongs, is currently ranked in the top 1% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - The estimate revisions trend for Dycom Industries is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]