Why Is Dycom Industries (DY) Down 7.6% Since Last Earnings Report?

Core Viewpoint - Dycom Industries reported strong third-quarter fiscal 2025 results, with contract revenues and earnings exceeding estimates and showing year-over-year growth [7][8]. Financial Performance - As of October 26, 2024, Dycom's liquidity stood at $462.8 million, including cash and cash equivalents of $15.3 million, an increase from $101.1 million as of January 27, 2024 [1]. - Contract revenues reached $1.27 billion, surpassing the consensus estimate of $1.22 billion by 4.2% and growing 12% year-over-year [8]. - Adjusted earnings per share (EPS) were reported at $2.68, beating the Zacks Consensus Estimate of $2.35 by 14% and increasing 20.2% from $2.23 year-over-year [10]. - Adjusted EBITDA increased 19.3% to $170.7 million, with an adjusted EBITDA margin of 13.4%, expanding 52 basis points from the previous year [13]. - Gross margin improved by 45 basis points to 20.8% compared to 20.4% a year ago [15]. Customer Contributions - The top five customers contributed 55.7% to total contract revenues, up from 54.4% in the prior year, with a 16.7% organic growth [11]. - AT&T, Dycom's largest customer, contributed 20.9% to total revenues, growing organically by 58.4% [12]. Backlog and Future Outlook - Dycom's backlog totaled $7.856 billion at the end of the fiscal third quarter, up from $6.917 billion at the end of fiscal 2024, with $4.467 billion projected to be completed in the next 12 months [16]. - For the fiscal fourth quarter ending January 25, 2025, Dycom expects contract revenues to grow by mid to high single digits year-over-year, including $35 million from acquired contract revenues [17]. - The adjusted EBITDA margin is expected to increase by 25 basis points from the year-ago level of 9.8% [20].