Dycom(DY) - 2026 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's financial analysis Item 1. Financial Statements This section presents Dycom's unaudited consolidated financial statements and related accounting notes Condensed Consolidated Balance Sheets This section details the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (Dollars in thousands) | ASSETS | July 26, 2025 | January 25, 2025 | | :--------------------------------- | :------------ | :--------------- | | Cash and equivalents | $28,460 | $92,670 | | Accounts receivable, net | 1,587,961 | 1,373,738 | | Contract assets | 119,655 | 63,375 | | Total current assets | 1,938,922 | 1,694,630 | | Property and equipment, net | 564,678 | 541,921 | | Goodwill | 332,645 | 330,330 | | Total assets | $3,219,924 | $2,945,367 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $264,908 | $223,490 | | Total current liabilities | 612,702 | 587,153 | | Long-term debt | 1,009,058 | 933,212 | | Total liabilities | 1,850,193 | 1,706,270 | | Total stockholders' equity | 1,369,731 | 1,239,097 | | Total liabilities and stockholders' equity | $3,219,924 | $2,945,367 | Condensed Consolidated Statements of Operations (Three Months) This section details the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Operations (Three Months Ended July 26, 2025 vs. July 27, 2024) (Dollars in thousands, except share amounts) | Metric | July 26, 2025 | July 27, 2024 | | :---------------------------------- | :------------ | :------------ | | Contract revenues | $1,377,944 | $1,203,059 | | Costs of earned revenues, excluding D&A | 1,070,450 | 952,882 | | General and administrative | 106,794 | 99,583 | | Depreciation and amortization | 60,854 | 46,572 | | Total Expenses | 1,238,098 | 1,099,037 | | Income before income taxes | 131,118 | 94,819 | | Provision for income taxes | 33,635 | 26,419 | | Net income | $97,483 | $68,400 | | Basic earnings per common share | $3.37 | $2.35 | | Diluted earnings per common share | $3.33 | $2.32 | Condensed Consolidated Statements of Operations (Six Months) This section details the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Operations (Six Months Ended July 26, 2025 vs. July 27, 2024) (Dollars in thousands, except share amounts) | Metric | July 26, 2025 | July 27, 2024 | | :---------------------------------- | :------------ | :------------ | | Contract revenues | $2,636,551 | $2,345,482 | | Costs of earned revenues, excluding D&A | 2,081,562 | 1,874,518 | | General and administrative | 210,519 | 194,138 | | Depreciation and amortization | 119,243 | 91,777 | | Total Expenses | 2,411,324 | 2,160,433 | | Income before income taxes | 209,717 | 172,263 | | Provision for income taxes | 51,187 | 41,309 | | Net income | $158,530 | $130,954 | | Basic earnings per common share | $5.48 | $4.50 | | Diluted earnings per common share | $5.42 | $4.44 | Condensed Consolidated Statements of Comprehensive Income This section presents the company's net income and other comprehensive income items Condensed Consolidated Statements of Comprehensive Income (Dollars in thousands) | Metric | Three Months Ended July 26, 2025 | Three Months Ended July 27, 2024 | Six Months Ended July 26, 2025 | Six Months Ended July 27, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $97,483 | $68,400 | $158,530 | $130,954 | | Disposal of foreign entity | — | — | — | 1,547 | | Comprehensive income | $97,483 | $68,400 | $158,530 | $132,501 | Condensed Consolidated Statements of Stockholders' Equity This section details changes in the company's common stock, retained earnings, and total equity Condensed Consolidated Statements of Stockholders' Equity (Six Months Ended July 26, 2025) (Dollars in thousands) | Metric | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | | :------------------------------------ | :------------------ | :------------------ | :------------------------- | :---------------- | :----------- | | Balances as of January 25, 2025 | 28,978,949 | $9,659 | $8,991 | $1,220,447 | $1,239,097 | | Stock options exercised | 13,144 | 4 | (1,916) | — | (1,912) | | Stock-based compensation | 390 | — | 17,199 | — | 17,199 | | Issuance of restricted stock, net of tax withholdings | 155,882 | 52 | (102) | (12,948) | (12,998) | | Repurchase of common stock, including excise tax | (200,000) | (66) | (8,991) | (21,128) | (30,185) | | Net income | — | — | — | 158,530 | 158,530 | | Balances as of July 26, 2025 | 28,948,365 | $9,649 | $15,181 | $1,344,901 | $1,369,731 | Condensed Consolidated Statements of Cash Flows This section summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended July 26, 2025 vs. July 27, 2024) (Dollars in thousands) | Cash Flow Activity | July 26, 2025 | July 27, 2024 | | :------------------------------------ | :------------ | :------------ | | Net cash provided by (used in) operating activities | $3,478 | $(44,912) | | Net cash used in investing activities | $(107,693) | $(118,952) | | Net cash provided by financing activities | $39,905 | $82,342 | | Net decrease in cash, cash equivalents and restricted cash | $(64,310) | $(81,522) | | Cash, cash equivalents and restricted cash at end of period | $30,164 | $21,368 | NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS This section provides detailed explanations and disclosures for the financial statements 1. Basis of Presentation This note describes the company's business, fiscal year, and the basis for preparing interim financial statements - Dycom Industries, Inc. is a leading provider of specialty contracting services throughout the United States, primarily for telecommunications providers, including program management, planning, engineering, construction, maintenance, and fulfillment services. They also provide underground facility locating services for various utilities[27] - The company's fiscal year ends on the last Saturday in January, with fiscal 2026 consisting of 53 weeks and fiscal 2025 consisting of 52 weeks[28] - Dycom operates in one reportable segment, aggregating all operating segments due to similar economic characteristics, nature of services, production processes, customer types, and service distribution methods[30] 2. Significant Accounting Policies and Estimates This note outlines the company's key accounting policies and estimates, noting any material changes - No material changes to significant accounting policies and critical accounting estimates from the fiscal 2025 Annual Report on Form 10-K[31] - Financial statements require management to make estimates and assumptions, which are based on historical experience and current facts, and actual results could differ materially[32] - Basic EPS is computed based on weighted average common shares outstanding (excluding unvested restricted share units), while diluted EPS includes dilutive potential common shares from stock-based awards using the treasury stock method[33] 3. Accounting Standards This note details the impact and adoption plans for recently issued accounting pronouncements - No changes in expected adoption dates or estimated effects of recently issued accounting pronouncements from those disclosed in the fiscal 2025 10-K[34] - The company will adopt ASU 2023-09 (Income Taxes: Improvements to Income Tax Disclosures) in the fourth quarter of fiscal 2026, effective for fiscal years beginning after December 15, 2024, and is evaluating its disclosure requirements[36] - The company is evaluating ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted[37] 4. Computation of Earnings per Common Share This note provides the calculation of basic and diluted earnings per common share Earnings per Common Share (Dollars in thousands, except per share amounts) | Metric | Three Months Ended July 26, 2025 | Three Months Ended July 27, 2024 | Six Months Ended July 26, 2025 | Six Months Ended July 27, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income available to common stockholders | $97,483 | $68,400 | $158,530 | $130,954 | | Basic earnings per common share | $3.37 | $2.35 | $5.48 | $4.50 | | Diluted earnings per common share | $3.33 | $2.32 | $5.42 | $4.44 | | Anti-dilutive weighted shares excluded | 131,554 | 145,860 | 154,493 | 145,868 | 5. Acquisitions This note details recent business acquisitions, including purchase price allocation and acquired assets - During fiscal 2025, Dycom acquired three telecommunications construction contractors for an aggregate cash purchase price of $191.2 million, expanding geographic presence and customer base[41][42][43] Aggregate Consideration Paid and Net Assets Acquired for Fiscal 2025 Acquisitions (Dollars in millions) | Quarter of Fiscal 2025 | Net Assets Acquired | | :--------------------- | :------------------ | | First quarter | $16.0 | | Second quarter | $24.5 | | Third quarter | $150.7 | | Total | $191.2 | Intangible Assets Acquired in Fiscal 2025 Acquisitions (Dollars in millions) | Intangible Asset | Estimated Useful Life (in years) | Amount | | :------------------------------- | :------------------------------- | :----- | | Customer relationships | 12.0 | $114.3 | | Backlog intangibles (1st & 2nd Q) | 0.8 | $0.5 | | Backlog intangibles (3rd Q) | 2.0 | $26.3 | | Trade names | 10.0 | $1.1 | | Total intangible assets acquired | | $142.2 | 6. Accounts Receivable, Contract Assets, and Contract Liabilities This note provides details on accounts receivable, contract assets, liabilities, and customer credit concentration Accounts Receivable, Net (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :------------------------ | :------------ | :--------------- | | Trade accounts receivable | $585,264 | $538,475 | | Unbilled accounts receivable | 976,584 | 801,423 | | Retainage | 28,708 | 34,934 | | Less: allowance for credit losses | (2,595) | (1,094) | | Accounts receivable, net | $1,587,961 | $1,373,738 | Net Contract Assets (Liabilities) (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :-------------------------- | :------------ | :--------------- | | Contract assets | $119,655 | $63,375 | | Contract liabilities | 69,897 | 73,548 | | Contract assets (liabilities), net | $49,758 | $(10,173) | Customer Credit Concentration (Combined Accounts Receivable and Contract Assets, Net) (Dollars in millions) | Customer | July 26, 2025 Amount | July 26, 2025 % of Total | January 25, 2025 Amount | January 25, 2025 % of Total | | :-------------------- | :------------------- | :----------------------- | :---------------------- | :----------------------- | | AT&T Inc. | $201.0 | 12.3% | $127.7 | 9.4% | | Charter Communications | $234.0 | 14.3% | $158.9 | 11.7% | | Lumen Technologies | $255.4 | 15.6% | $287.1 | 21.1% | 7. Other Current Assets and Other Assets This note details the composition and changes in other current and non-current assets Other Current Assets (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :-------------------------- | :------------ | :--------------- | | Prepaid expenses | $33,607 | $20,688 | | Deposits and other current assets | 8,023 | 11,332 | | Receivables on equipment sales | 1,446 | 1,237 | | Restricted cash | 1,372 | 1,372 | | Total Other current assets | $44,448 | $34,629 | Other Assets (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :------------------------------------------ | :------------ | :--------------- | | Insurance recoveries/receivables for accrued insurance claims | $9,585 | $3,343 | | Deferred financing costs | 4,297 | 4,945 | | Restricted cash | 332 | 432 | | Cloud computing software | 53,478 | 29,844 | | Other non-current assets | 8,020 | 8,025 | | Total Other assets | $75,712 | $46,589 | 8. Cash and Equivalents and Restricted Cash This note provides a breakdown of cash, cash equivalents, and restricted cash balances Cash and Equivalents and Restricted Cash (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :------------------------------------ | :------------ | :--------------- | | Cash and equivalents | $28,460 | $92,670 | | Restricted cash included in: | | | | Other current assets | 1,372 | 1,372 | | Other assets (long-term) | 332 | 432 | | Cash equivalents and restricted cash | $30,164 | $94,474 | 9. Property and Equipment This note details the company's property and equipment, including depreciation policies and expenses Property and Equipment, Net (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :-------------------------- | :------------ | :--------------- | | Total Gross Property and Equipment | $1,609,892 | $1,585,007 | | Less: accumulated depreciation | (1,045,214) | (1,043,086) | | Property and equipment, net | $564,678 | $541,921 | Depreciation Expense (Dollars in thousands) | Period | July 26, 2025 | July 27, 2024 | | :----------------------- | :------------ | :------------ | | Three months ended | $48,900 | $40,700 | | Six months ended | $95,300 | $80,000 | 10. Goodwill and Intangible Assets This note provides information on goodwill and other intangible assets, including amortization Goodwill Carrying Amount (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :-------------------------------- | :------------ | :--------------- | | Goodwill | $332,645 | $330,330 | | Goodwill adjustment from fiscal 2025 acquisitions | 2,315 | — | | Balance as of July 26, 2025 | $332,645 | $330,330 | Intangible Assets, Net (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :-------------------- | :------------ | :--------------- | | Customer relationships | $167,295 | $182,207 | | Trade names, finite | 4,493 | 4,787 | | Trade name, indefinite | 4,700 | 4,700 | | Contract backlog | 19,317 | 28,010 | | Non-compete agreements | 34 | 42 | | Total Intangible Assets, Net | $195,839 | $219,746 | Amortization Expense for Finite-Lived Intangible Assets (Dollars in thousands) | Period | July 26, 2025 | July 27, 2024 | | :----------------------- | :------------ | :------------ | | Three months ended | $11,900 | $5,900 | | Six months ended | $23,900 | $11,800 | 11. Accrued Insurance Claims This note details the company's self-insured retention levels and accrued insurance liabilities - For fiscal 2026 and 2025, Dycom retained the risk of loss up to $1.0 million per occurrence for workers' compensation[62] - For fiscal 2026, the company retained the risk of loss up to $2.0 million per occurrence for the first $5.0 million of automobile liability and general liability coverage[63] Accrued Insurance Claims and Recoveries/Receivables (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :------------------------------------ | :------------ | :--------------- | | Accrued insurance claims - current | $46,345 | $46,686 | | Accrued insurance claims - non-current | 54,602 | 49,836 | | Total Accrued insurance claims | $100,947 | $96,522 | | Insurance recoveries/receivables (non-current) | $9,585 | $3,343 | 12. Leases This note describes the company's lease arrangements, lease costs, and lease liabilities Total Lease Cost (Dollars in thousands) | Lease Cost Category | Three Months Ended July 26, 2025 | Three Months Ended July 27, 2024 | Six Months Ended July 26, 2025 | Six Months Ended July 27, 2024 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Lease cost under long-term operating leases | $12,537 | $10,903 | $25,518 | $21,364 | | Lease cost under short-term operating leases | 4,000 | 4,386 | 7,724 | 8,380 | | Variable lease cost | 1,118 | 913 | 2,308 | 2,005 | | Total lease cost | $17,655 | $16,202 | $35,550 | $31,749 | Supplemental Balance Sheet Information for Long-Term Operating Lease Liabilities | Metric | July 26, 2025 | January 25, 2025 | | :-------------------------- | :------------ | :--------------- | | Weighted average remaining lease term | 4.8 years | 4.6 years | | Weighted average discount rate | 5.8% | 5.8% | | Operating lease liabilities | $117.8 million | $112.8 million | Maturities of Long-Term Operating Lease Liabilities as of July 26, 2025 (Dollars in thousands) | Fiscal Year | Amount | | :---------------- | :----- | | Remainder of 2026 | $21,043 | | 2027 | 38,901 | | 2028 | 25,451 | | 2029 | 15,435 | | 2030 | 8,860 | | 2031 | 4,339 | | Thereafter | 22,646 | | Total lease payments | $136,675 | | Less: imputed interest | (18,883) | | Total | $117,792 | 13. Other Accrued Liabilities This note provides a breakdown of other accrued current liabilities Other Accrued Liabilities (Dollars in thousands) | Category | July 26, 2025 | January 25, 2025 | | :------------------------------------ | :------------ | :--------------- | | Accrued payroll and related taxes | $45,621 | $35,543 | | Accrued construction costs | 40,930 | 36,078 | | Accrued employee benefit and incentive plan costs | 49,224 | 61,213 | | Other current liabilities | 36,560 | 34,136 | | Total Other accrued liabilities | $172,335 | $166,970 | 14. Debt This note details the company's outstanding indebtedness, credit facilities, and financial covenants Outstanding Indebtedness (Net Carrying Value) (Dollars in thousands) | Debt Instrument | July 26, 2025 | January 25, 2025 | | :------------------------------------------ | :------------ | :--------------- | | Credit Agreement - Revolving facility | $85,000 | $— | | Credit Agreement - Term loan facility | $447,501 | $447,115 | | 4.50% senior notes, net (mature April 2029) | 496,557 | 496,097 | | Total | $1,029,058 | $943,212 | | Less: current portion | (20,000) | (10,000) | | Long-term debt | $1,009,058 | $933,212 | - The Credit Agreement, amended on May 15, 2024, includes a revolving facility with a maximum commitment of $650.0 million and a term loan facility of $450.0 million, maturing on January 15, 2029[72] Weighted Average Interest Rates and Fees for Credit Agreement Balances | Category | July 26, 2025 | January 25, 2025 | | :-------------------------- | :------------ | :--------------- | | Borrowings - Term loan facility | 5.95% | 6.02% | | Borrowings - Revolving facility | 5.94% | —% | | Standby Letters of Credit | 1.50% | 1.63% | | Unused Revolver Commitment | 0.25% | 0.30% | 15. Income Taxes This note explains the effective income tax rate and the impact of recent tax legislation Effective Income Tax Rate | Period | July 26, 2025 | July 27, 2024 | | :----------------------- | :------------ | :------------ | | Three months ended | 25.7% | 27.9% | | Six months ended | 24.4% | 24.0% | - The effective tax rate differs from the statutory rate due to state income tax rates, non-deductible/non-taxable items, tax credits, tax effects of share-based awards, and changes in unrecognized tax benefits[80] - New U.S. tax legislation enacted on July 4, 2025, reinstates 100% bonus depreciation and immediate deductibility of domestic research & experimental expenditures, expected to reduce current fiscal year cash tax requirements[81] 16. Other Income, Net This note details the components of other income and expenses, net Other Income, Net (Dollars in thousands) | Component | Three Months Ended July 26, 2025 | Three Months Ended July 27, 2024 | Six Months Ended July 26, 2025 | Six Months Ended July 27, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gain on sale of fixed assets | $10,103 | $8,160 | $19,875 | $20,564 | | Miscellaneous expense, net | (3,273) | (1,741) | (5,782) | (4,895) | | Other income, net | $6,830 | $6,419 | $14,093 | $15,669 | - Other income, net, includes discount fee expense from a customer-sponsored vendor payment program, which effectively reduces the time to collect receivables[82] 17. Capital Stock This note provides information on share repurchase programs and stock-related transactions - On February 26, 2025, the Board authorized a new $150 million share repurchase program through August 25, 2026[83] - During the three months ended April 26, 2025, the company repurchased 200,000 shares for $30.2 million, leaving $119.8 million available under the authorization as of July 26, 2025[83] - For the six months ended July 26, 2025, 84,296 shares totaling $13.0 million were withheld to meet payroll tax withholding obligations from restricted share unit vesting[84] 18. Stock-Based Awards This note describes the company's stock-based compensation plans and related expenses - Stock-based awards, including common stock, stock options, time-based restricted share units (RSUs), and performance-based restricted share units (Performance RSUs), are granted to attract, retain, and reward employees, officers, and directors[86] Stock-Based Compensation Expense (Dollars in thousands) | Period | July 26, 2025 | July 27, 2024 | | :----------------------- | :------------ | :------------ | | Three months ended | $8,100 | $9,482 | | Six months ended | $17,199 | $17,305 | - As of July 26, 2025, unrecognized compensation expense for stock options, RSUs, and target Performance RSUs totaled $0.9 million, $41.0 million, and $18.4 million, respectively, to be recognized over weighted-average periods of 2.2, 2.5, and 1.4 years[92] 19. Customer Concentration and Revenue Information This note details revenue concentration by major customers and service types Significant Customer Contract Revenues (Dollars in millions) | Customer | Three Months Ended July 26, 2025 Amount | Three Months Ended July 26, 2025 % of Total | Six Months Ended July 26, 2025 Amount | Six Months Ended July 26, 2025 % of Total | | :---------------- | :------------------------------------ | :------------------------------------ | :--------------------------------- | :--------------------------------- | | AT&T Inc. | $373.0 | 27.1% | $698.1 | 26.5% | | Lumen Technologies | $155.4 | 11.3% | $280.6 | 10.6% | | Total other customers combined | $849.5 | 61.6% | $1,657.9 | 62.9% | | Total contract revenues | $1,377.9 | 100.0% | $2,636.6 | 100.0% | Contract Revenues by Customer Type (Dollars in millions) | Customer Type | Three Months Ended July 26, 2025 Amount | Three Months Ended July 26, 2025 % of Total | Six Months Ended July 26, 2025 Amount | Six Months Ended July 26, 2025 % of Total | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Telecommunications | $1,269.1 | 92.1% | $2,418.0 | 91.7% | | Underground facility locating | 84.1 | 6.1% | 166.4 | 6.3% | | Electrical and gas utilities and other | 24.7 | 1.8% | 52.2 | 2.0% | | Total contract revenues | $1,377.9 | 100.0% | $2,636.6 | 100.0% | - Most individual work orders are completed within one year, making remaining performance obligations not meaningful for overall revenue disclosure[99] 20. Segment Reporting This note explains the company's single reportable segment structure and CODM review - The Company operates in one reportable segment, providing specialty contracting services throughout the United States, including program management, planning, engineering, construction, maintenance, and fulfillment services for telecommunications and utilities[100] - All operating segments are aggregated into one reportable segment due to similar economic characteristics, nature of services, production processes, customer types, and service distribution methods[101] - The Chief Executive Officer, as the chief operating decision maker (CODM), reviews contract revenues and income before income taxes to assess performance and allocate resources[104] 21. Commitments and Contingencies This note outlines the company's legal proceedings, surety bonds, and other contingent obligations - Management believes that the ultimate resolution of current claims and legal proceedings will not have a material effect on the company's financial position, results of operations, or cash flow, after considering insurance coverage or indemnities[105] - As of July 26, 2025, Dycom had $431.6 million of outstanding performance and other surety contract bonds, with an estimated cost to complete projects secured by these bonds of approximately $227.7 million[106] - The company had $47.5 million of outstanding standby letters of credit issued under its credit agreement as of July 26, 2025, collateralizing obligations to insurance carriers[107] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Dycom's financial condition, operational results, strategy, and liquidity for the reported periods Introduction This section introduces Dycom's business, strategic focus, and market opportunities in digital infrastructure - Dycom is a leading provider of specialty contracting services for telecommunications and digital infrastructure across the United States, including program management, planning, engineering, construction, maintenance, and fulfillment services[111] - Demand for high-speed and low-latency connectivity, driven by data-intensive applications and mobile usage, fuels significant opportunities in the digital infrastructure sector, including wireline network upgrades, fiber infrastructure for data centers (AI needs), and advanced wireless network deployments[112] - The company's strategy focuses on core maintenance and operations services, capitalizing on multi-year fiber-to-the-home deployments, fiber builds for hyperscaler data centers, state and federal digital divide programs, and wireless network modernization[113] Understanding Our Results of Operations This section explains the key drivers and accounting principles behind the company's operational performance - Contract revenues are recognized over time as services are performed and customers simultaneously receive and consume benefits, primarily using output measures (units delivered) for progress assessment[127] - Costs of earned revenues include direct labor, subcontractor services, capital equipment operation (excluding depreciation), direct materials, and insurance costs[129] - Operating results exhibit seasonality, with reduced revenue and profitability or losses more likely during the fiscal quarters ending in January and April due to adverse weather, reduced daylight hours, and holidays[135] Results of Operations This section analyzes the company's financial performance, including revenue, expenses, and profitability metrics Key Financial Results and Percentage of Contract Revenues (Dollars in millions) | Metric | Three Months Ended July 26, 2025 | % of Rev | Three Months Ended July 27, 2024 | % of Rev | Six Months Ended July 26, 2025 | % of Rev | Six Months Ended July 27, 2024 | % of Rev | | :------------------------------------------ | :------------------------------- | :------- | :------------------------------- | :------- | :----------------------------- | :------- | :----------------------------- | :------- | | Contract revenues | $1,377.9 | 100.0% | $1,203.1 | 100.0% | $2,636.6 | 100.0% | $2,345.5 | 100.0% | | Costs of earned revenues, excl. D&A | 1,070.5 | 77.7% | 952.9 | 79.2% | 2,081.6 | 79.0% | 1,874.5 | 79.9% | | General and administrative | 106.8 | 7.8% | 99.6 | 8.3% | 210.5 | 8.0% | 194.1 | 8.3% | | Depreciation and amortization | 60.9 | 4.4% | 46.6 | 3.9% | 119.2 | 4.5% | 91.8 | 3.9% | | Total Expenses | 1,238.1 | 89.9% | 1,099.0 | 91.4% | 2,411.3 | 91.5% | 2,160.4 | 92.1% | | Income before income taxes | 131.1 | 9.5% | 94.8 | 7.9% | 209.7 | 8.0% | 172.3 | 7.3% | | Net income | $97.5 | 7.1% | $68.4 | 5.7% | $158.5 | 6.0% | $131.0 | 5.6% | - Contract revenues increased by $174.8 million (14.5%) for the three months ended July 26, 2025, and by $291.1 million (12.4%) for the six months, driven by acquired businesses and net revenue increases in fiber-to-the-home deployments[139][141] Non-GAAP Adjusted EBITDA (Dollars in millions) | Metric | Three Months Ended July 26, 2025 | Three Months Ended July 27, 2024 | Six Months Ended July 26, 2025 | Six Months Ended July 27, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $97.5 | $68.4 | $158.5 | $131.0 | | Interest expense, net | 15.6 | 14.7 | 29.6 | 27.5 | | Provision for income taxes | 33.6 | 26.4 | 51.2 | 41.3 | | Depreciation and amortization | 60.9 | 46.6 | 119.2 | 91.8 | | EBITDA | 207.6 | 156.1 | 358.5 | 291.6 | | Gain on sale of fixed assets | (10.1) | (8.2) | (19.9) | (20.6) | | Stock-based compensation expense | 8.1 | 9.5 | 17.2 | 17.3 | | Loss on debt extinguishment | — | 1.0 | — | 1.0 | | Non-GAAP Adjusted EBITDA | $205.6 | $158.4 | $355.8 | $289.3 | | Non-GAAP Adjusted EBITDA % of contract revenues | 14.9% | 13.2% | 13.5% | 12.3% | Liquidity and Capital Resources This section discusses the company's cash position, working capital, debt, and ability to fund operations and investments - Working capital (total current assets less total current liabilities, excluding current portion of debt) increased to $1,346.2 million as of July 26, 2025, from $1,117.5 million as of January 25, 2025[159] Net Cash Flows (Six Months Ended July 26, 2025 vs. July 27, 2024) (Dollars in millions) | Cash Flow Activity | July 26, 2025 | July 27, 2024 | | :------------------------------------ | :------------ | :------------ | | Provided by (used in) operating activities | $3.5 | $(44.9) | | Used in investing activities | $(107.7) | $(119.0) | | Provided by financing activities | $39.9 | $82.3 | - Days sales outstanding (DSO) improved to 108 as of July 26, 2025, compared to 117 as of July 27, 2024[166] - Backlog, an estimate of uncompleted services under contractual agreements, totaled $7.989 billion at July 26, 2025, up from $7.760 billion at January 25, 2025. Approximately 57.6% of the July 26, 2025 backlog is expected to be completed within the next twelve months[182] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the company's exposure to market risks, primarily interest rate fluctuations - No material changes to quantitative and qualitative disclosures about market risk during the three months ended July 26, 2025[184] - The company's primary exposure to market risk relates to unfavorable changes in interest rates[184] Item 4. Controls and Procedures This section assesses the effectiveness of the company's disclosure controls and internal financial reporting controls - As of July 26, 2025, the Company's disclosure controls and procedures were effective to provide reasonable assurance that information required for SEC reports is recorded, processed, summarized, and reported timely[186] - No material changes in the Company's internal control over financial reporting occurred during the most recent fiscal quarter[187] PART II - OTHER INFORMATION This section provides additional disclosures, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings This section references disclosures on ongoing legal claims and contingencies - Legal proceedings information is referenced from Note 21, Commitments and Contingencies, in the Notes to the Condensed Consolidated Financial Statements[190] Item 1A. Risk Factors This section outlines the key risks and uncertainties impacting the company's business operations and financial performance - The risks identified in the Annual Report on Form 10-K for fiscal 2025 have not changed in any material respect[191] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on equity security sales not registered with the SEC and the use of proceeds from share repurchases - No unregistered equity securities were sold during the three months ended July 26, 2025[192] - A new $150 million share repurchase program was authorized on February 26, 2025, through August 25, 2026[193] - During the three months ended April 26, 2025, 200,000 shares were repurchased for $30.2 million, leaving $119.8 million available for repurchases as of July 26, 2025[193] Item 5. Other Information This section includes disclosures on director and officer trading arrangements - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors and officers during the three months ended July 26, 2025[194] Item 6. Exhibits This section lists all supplementary documents and certifications filed with the report - Exhibits include Fifth Amended and Restated Bylaws, CEO and CFO certifications (Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350), and Inline XBRL formatted financial statements and cover page[196] SIGNATURES This section contains the required signatures for the financial report