Core Insights - Dycom Industries, Inc. is experiencing significant growth driven by demand for telecommunication and digital infrastructure, including data centers [1][5] - The company has raised its full-year revenue outlook following a record third quarter performance [6] Financial Performance - Dycom reported record earnings of $3.63 for the Fiscal 2026 third quarter, exceeding the Zacks Consensus Estimate of $3.15 by $0.48 [3] - Contract revenue reached a record $1.45 billion, up 14.1% from $1.27 billion year-over-year, with organic growth of 7.2% [4] - The company generated strong operating cash flows of $220 million and has a record backlog of $8.2 billion [5] Future Outlook - The midpoint of Dycom's revenue outlook for Fiscal 2026 has been increased to a range of $5.35 billion to $5.425 billion, indicating total growth of 13.8% to 15.4% over the previous year [6] - Fourth quarter earnings guidance is set between $1.62 and $1.97, surpassing the Zacks Consensus of $1.34 [6] - Analysts have raised earnings estimates for both Fiscal 2026 and 2027, projecting earnings growth of 14.5% and 22% respectively [7][8] Market Performance - Dycom shares have reached new all-time highs this year, significantly outperforming the S&P 500 [10] - The company has a forward price-to-earnings (P/E) ratio of 32.5, with a PEG ratio of 1.78, indicating a balance of growth and value [12][14] - The price-to-sales (P/S) ratio stands at 1.9, which is considered relatively low compared to technology companies involved in the AI sector [14] Investment Consideration - Dycom Industries is positioned as a potential investment opportunity for those interested in companies involved in AI infrastructure [15]

Core Insights - Three stocks with strong growth characteristics and buy ranks are highlighted for investors: Dycom Industries, Micron Technology, and Sanmina Corporation [1][2][3] Company Summaries - **Dycom Industries, Inc. (DY)**: - Provides specialty contracting services to the telecommunications sector - Zacks Rank 1 - Current year earnings estimate increased by 4.7% over the last 60 days - PEG ratio of 1.78 compared to the industry average of 2.66 - Growth Score of B [1] - **Micron Technology, Inc. (MU)**: - Engages in memory and storage products - Zacks Rank 1 - Current year earnings estimate increased by 5.9% over the last 60 days - PEG ratio of 0.46 compared to the industry average of 1.24 - Growth Score of A [2] - **Sanmina Corporation (SANM)**: - Global provider of electronics contract manufacturing services - Zacks Rank 1 - Current year earnings estimate increased by 38.9% over the last 60 days - PEG ratio of 0.63 compared to the industry average of 1.86 - Growth Score of A [3]

Core Insights - Dycom Industries Inc. (DY) reported strong third-quarter fiscal 2026 results, with both contract revenues and earnings exceeding estimates and showing year-over-year growth [1][9] - The company’s stock rose by 9.8% during the trading session following the results, with an additional 1.8% increase in after-hours trading [1] Financial Performance - Adjusted EPS reached $3.63, surpassing the Zacks Consensus Estimate of $3.15 by 15.2% and increasing 35.4% from $2.68 year over year [5] - Contract revenues totaled $1.45 billion, exceeding the consensus mark of $1.40 billion by 3.7% and rising 14.1% year over year, with organic growth of 7.2% [5] - Adjusted EBITDA increased by 28.5% to $219.4 million, with an adjusted EBITDA margin of 15.1%, expanding 170 basis points from the previous year [6] Backlog and Future Outlook - The backlog reached a record $8.22 billion, with $4.99 billion projected to be completed in the next 12 months, supported by strong bookings [6] - Dycom raised its full-year revenue guidance, now expecting total contract revenues to range from $5.350 billion to $5.425 billion, reflecting a year-over-year increase of 13.8% to 15.4% [13] Strategic Developments - The company announced the acquisition of Power Solutions for $1.95 billion, expected to close by January 31, 2026, enhancing its data center infrastructure capabilities [4][10] - This acquisition is projected to be accretive and will add over 2,800 skilled employees, positioning Dycom to capture a projected $20 billion market in outside-plant data center network construction over the next five years [3][11] Market Position - Dycom is well-positioned to leverage its operational capabilities and national footprint to meet the growing demand for fiber infrastructure and data center services [2][3]

Core Insights - Dycom Industries reported revenue of $1.45 billion for the quarter ended October 2025, reflecting a year-over-year increase of 14.1% [1] - The company's EPS was $3.63, up from $2.68 in the same quarter last year, exceeding the consensus estimate of $3.15 by 15.24% [1] Financial Performance - Revenue exceeded the Zacks Consensus Estimate of $1.4 billion, resulting in a surprise of +3.7% [1] - The stock has returned +16.4% over the past month, outperforming the Zacks S&P 500 composite, which saw a change of -0.3% [3] Customer Revenue Breakdown - Revenue from Lumen Technologies was $170.3 million, surpassing the average estimate of $156.53 million, representing a year-over-year increase of +16.3% [4] - Revenue from AT&T Inc was $361.9 million, exceeding the average estimate of $357.27 million, with a year-over-year increase of +36.3% [4] Backlog Information - The company's backlog stood at $8.2 billion, slightly below the average estimate of $8.52 billion based on two analysts [4]

Financial Performance - Net income available to common stockholders for the three months ended October 25, 2025, was $106.4 million, compared to $69.8 million for the same period in 2024, representing a 52.5% increase [41]. - Basic earnings per common share increased to $3.67 for the three months ended October 25, 2025, from $2.39 in the same period of 2024, reflecting a 53.7% growth [41]. - For the three months ended October 25, 2025, total contract revenues were $1,451.8 million, a 14.1% increase from $1,272.0 million for the same period in 2024 [98]. - For the nine months ended October 25, 2025, total contract revenues were $4,088.3 million, an increase from $3,617.5 million for the same period in 2024 [99]. - The telecommunications sector represented 91.6% of total contract revenues for the three months ended October 25, 2025, compared to 90.6% for the same period in 2024 [99]. Acquisitions and Investments - 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 [42][43][44]. - The preliminary purchase price for the acquisition of Power Solutions, LLC is $1,950,000,000, with 15% of this amount ($292,500,000) to be paid in common stock [111]. - The acquisition will involve a mix of 1,011,069 shares of common stock and cash, with the cash portion being $1,657,500,000 minus purchase price adjustments [111]. - The company has secured a $1,000 million senior secured term loan A facility and a $700 million 364-day senior secured bridge loan facility to finance the acquisition [113]. - The acquisition is subject to customary conditions and is not obligated to close before December 22, 2025, with an outside termination date of May 18, 2026 [112]. - The company aims to integrate Power Solutions' operations to realize anticipated benefits and synergies from the acquisition [116]. - Forward-looking statements regarding the acquisition are subject to various risks and uncertainties, including regulatory approvals and integration challenges [116]. Assets and Liabilities - Total accounts receivable, net, as of October 25, 2025, was $1.59 billion, up from $1.37 billion as of January 25, 2025, indicating a 15.6% increase [51]. - As of October 25, 2025, net contract assets amounted to $92.8 million, a significant increase from a net liability of $10.2 million as of January 25, 2025 [52]. - The company recorded intangible assets totaling $142.2 million from acquisitions, with customer relationships valued at $114.3 million [48]. - Goodwill and intangible assets from acquisitions totaled $163.1 million, which are deductible for tax purposes [47]. - Goodwill increased to $332.6 million as of October 25, 2025, from $330.3 million as of January 25, 2025, reflecting adjustments from fiscal 2025 acquisitions [57]. - Intangible assets, net, were reported at $183.999 million as of October 25, 2025, with amortization expense for finite-lived intangible assets at $11.8 million for the three months ended October 25, 2025 [59][60]. - The net carrying amount of long-term debt as of October 25, 2025, was $919,480,000, a slight decrease from $933,212,000 as of January 25, 2025 [72]. Cash Flow and Liquidity - Total cash and equivalents increased to $110.1 million as of October 25, 2025, compared to $92.7 million as of January 25, 2025 [55]. - The Company had borrowing availability under its revolving facility of $596.4 million as of October 25, 2025 [77]. - Cash paid for lease liabilities during the three months ended October 25, 2025, was $10,286,000, compared to $12,063,000 in 2024, reflecting a decrease of 14.8% [70]. Tax and Compliance - The effective income tax rate for the three months ended October 25, 2025, was 24.2%, compared to 23.6% for the same period in 2024 [82]. - The company plans to adopt ASU 2023-09 regarding income tax disclosures in the fourth quarter of fiscal 2026, which will enhance transparency without impacting financial position [37]. Stock and Compensation - Stock-based compensation expense for the three months ended October 25, 2025, was $7.986 million, down from $14.024 million in the same period of 2024 [93]. - As of October 25, 2025, the company had unrecognized compensation expense related to RSUs of $36.4 million, which will be recognized over a weighted-average period of 2.3 years [94]. - The company incurred approximately $11.4 million of incremental stock-based compensation modification expense in fiscal 2025 related to previously issued equity awards [92]. Risk Management - There were no material changes to the company's market risk disclosures during the three months ended October 25, 2025, primarily related to interest rate changes [192].

Core Insights - Dycom's shares increased over 10% intra-day following the announcement of strong quarterly results, an increased revenue outlook, and a $1.95 billion acquisition of Power Solutions [1] Financial Performance - GAAP net income rose to $106.4 million, or $3.63 per diluted share, exceeding the average analyst estimate of $3.20 [2] - Contract revenue grew by 14.1% to $1.452 billion, with organic revenue increasing by 7.2% when excluding recent acquisitions [2] - Contributions from acquired businesses reached $110.9 million, significantly up from $21 million in the same period last year [2] - Adjusted EBITDA improved to $219.4 million, representing 15.1% of contract revenue, compared to $170.7 million, or 13.4%, a year earlier [2] Future Projections - For the fourth quarter ending January 31, 2026, Dycom projected adjusted EPS between $1.62 and $1.97, compared to the consensus estimate of $1.66 [3] - The company forecasts Q4 contract revenue to be between $1.26 billion and $1.34 billion, with adjusted EBITDA expected to be between $140 million and $155 million [3] - Dycom raised the midpoint of its fiscal 2026 outlook, now anticipating contract revenue between $5.350 billion and $5.425 billion, indicating a year-over-year growth of 13.8% to 15.4% [3]

Core Insights - U.S. stocks exhibited mixed performance, with the Nasdaq Composite increasing by over 100 points on Wednesday [1] - Dycom Industries, Inc. reported record third-quarter results, raised its outlook, and announced a significant acquisition [1] Company Performance - Dycom Industries' contract revenues rose by 14.1% year-over-year to $1.45 billion, surpassing analyst expectations of $1.41 billion [1] - The adjusted EPS for Dycom Industries was $3.63, exceeding analyst estimates of $3.20 [1] - Dycom Industries shares increased by 8.1% to $320.17 on Wednesday following the positive results [2] Other Notable Stock Movements - PACS Group, Inc. shares increased by 11.1% to $16.03 [4] - TransMedics Group, Inc. saw a rise of 10.4% to $129.27 [4] - MP Materials Corp. shares jumped by 9.3% to $63.95 after Goldman Sachs initiated coverage with a Buy rating and a $77 price target [4] - BellRing Brands, Inc. surged by 9.1% to $28.64 despite mixed fourth-quarter financial results and FY26 sales guidance below estimates [4] - Hinge Health, Inc. gained 8.2% to $43.93, announcing a $250 million share repurchase program [4] - Kyivstar Group Ltd. rose by 7.6% to $12.06 [4] - Lumentum Holdings Inc. increased by 7.2% to $265.33 after Mizuho Securities initiated coverage with an Outperform rating and a price target of $290 [4]

Core Insights - Dycom Industries stock experienced a nearly 18% surge following strong third-quarter results that exceeded analyst expectations [1] - The company provided a significant upward revision to its fiscal 2026 guidance as a result of the strong performance [1] Financial Performance - The third-quarter results were described as "crushing" analyst expectations, indicating a robust financial performance [1] - The specific financial metrics that contributed to this performance were not detailed in the provided content [1] Future Outlook - The upward revision to fiscal 2026 guidance suggests a positive outlook for the company, reflecting confidence in continued growth [1] - The implications of this guidance revision for investors and market positioning were not elaborated in the content [1]

Financial Data and Key Metrics Changes - The company reported record revenue of $1.45 billion for Q3 FY 2026, a 14.1% increase compared to Q3 FY 2025 [4][21] - Adjusted EBITDA reached $219 million, marking a 28.5% increase year-over-year, with an adjusted EBITDA margin of 15.1%, up 169 basis points from the previous year [5][21] - Net income was $106.4 million, resulting in diluted EPS of $3.63, exceeding expectations [22] - The backlog increased to an all-time high of $8.2 billion, with $4.99 billion expected to be completed in the next 12 months [6][22] Business Line Data and Key Metrics Changes - Organic revenue growth was reported at 7.2%, driven by fiber-to-the-home programs, wireless activity, and maintenance services [21] - The company secured over $500 million in verbal awards related to BEAD deployments, which will be reflected in the next quarter's backlog [9][23] Market Data and Key Metrics Changes - The company anticipates a $20 billion addressable market for outside plant data center network construction over the next five years, driven by increasing demand for fiber infrastructure [7][11] - The NTIA approved final BEAD deployment plans for 15 states, with $29.5 billion in total spending expected from states and territories [8][9] Company Strategy and Development Direction - The acquisition of Power Solutions for $1.95 billion is expected to enhance the company's capabilities in the digital infrastructure market and is projected to be immediately accretive to financial performance [12][13] - The company aims to leverage Power Solutions' expertise in electrical infrastructure to capitalize on the growing demand for data centers and digital infrastructure services [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for telecommunications infrastructure, particularly in fiber-to-home builds and data center growth [6][19] - The company is positioned to benefit from the ongoing AI-driven demand for infrastructure, with expectations of significant growth in the data center sector [17][19] Other Important Information - The company is implementing a comprehensive ERP system to enhance operational efficiencies, with the first phase completed during Q3 [23] - The acquisition is expected to improve free cash flow and provide a clear path to deleveraging to two times net leverage within 12 to 18 months [28][29] Q&A Session Summary Question: Improvement in DSOs and future expansion of Power Solutions - Management noted that the 14-day improvement in DSOs reflects strong cash management efforts and expressed optimism about future expansion opportunities for Power Solutions in Texas and other areas [34][36] Question: Customer relationships and opportunities with Power Solutions - Management indicated that Power Solutions primarily works with general contractors, but there is significant overlap with hyperscaler end users, providing opportunities for new builds and retrofits [40][42] Question: Fourth quarter guidance and backlog context - The wider revenue range for Q4 is attributed to seasonal factors and the ongoing growth in fiber-to-the-home programs, with confidence in achieving strong backlog performance [57][59] Question: Data center market expansion and new markets - Management emphasized a cautious approach to expanding into new markets, focusing on leveraging existing strengths in the DMV region while exploring M&A opportunities [61][64] Question: Service and maintenance agreements context - The $500 million in service and maintenance agreements reflects the company's scale and ability to meet customer needs, setting up a strong backlog for Q4 [72][75]

Financial Data and Key Metrics Changes - The company reported record revenue of $1.45 billion for Q3 FY 2026, a 14.1% increase compared to Q3 FY 2025 [4][21] - Adjusted EBITDA reached $219 million, marking a 28.5% increase year-over-year, with an adjusted EBITDA margin of 15.1%, up 169 basis points from the previous year [5][22] - The company’s backlog hit an all-time high of $8.2 billion, with $4.99 billion expected to be completed in the next 12 months [6][22] Business Line Data and Key Metrics Changes - Organic revenue growth was reported at 7.2%, driven by fiber-to-the-home programs, wireless activity, and maintenance services [21] - Major customers included AT&T with $361.9 million and Lumen with $170.3 million, each exceeding 10% of total revenues for the quarter [22] Market Data and Key Metrics Changes - The company anticipates a $20 billion addressable market for outside plant data center network construction over the next five years, driven by increasing demand for digital infrastructure [7][11] - The NTIA approved final BEAD deployment plans for 15 states, with $29.5 billion in total spending expected, creating a significant addressable market for fiber and HFC infrastructure [8][9] Company Strategy and Development Direction - The acquisition of Power Solutions is expected to enhance the company’s capabilities in the rapidly growing digital infrastructure market, particularly in the data center sector [12][29] - The company aims to leverage its scale and expertise to capitalize on the growing demand for fiber infrastructure and data center construction [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for telecommunications infrastructure, particularly fiber-to-home builds and data center growth [6][19] - The company is optimistic about the future, projecting revenue growth of 13.8% to 15.4% for the full fiscal year, excluding the impact of the pending acquisition [6][24] Other Important Information - The total purchase price for Power Solutions is $1.95 billion, expected to be immediately accretive to adjusted EBITDA margin and diluted EPS [13][29] - The company has secured over $500 million in verbal awards related to BEAD deployments, which will not be reflected in the backlog until the next quarter [9][23] Q&A Session Summary Question: Improvement in DSOs and Power Solutions Expansion - Management noted a 14-day improvement in DSOs, attributing it to strong cash management practices and expressed confidence in maintaining this improvement going forward [35] - Regarding Power Solutions, management highlighted the addition of skilled workforce and the alignment with hyperscaler demands as key growth drivers [36] Question: Customer Relationships and Opportunities - Management indicated that Power Solutions primarily works with general contractors, but there is significant overlap with hyperscaler end users, providing opportunities for diversification [40][42] Question: Fourth Quarter Guidance and Backlog - The wider revenue range for Q4 reflects seasonal factors and the ongoing growth in fiber-to-home programs, with expectations for continued strong performance [57] - Power Solutions has a backlog of over $1 billion, with contracts typically spanning 6 to 12 months, indicating a robust pipeline of work [59] Question: New Market Expansion and Long-Term Strategy - Management emphasized a cautious approach to expanding into new markets, focusing on long-term shareholder returns and leveraging existing strengths in the DMV region [64] Question: Service and Maintenance Agreements - The $500 million in service and maintenance agreements post-quarter reflects the company's ability to secure ongoing work and indicates strong momentum heading into Q4 [72][75]