Dycom Reports Record Backlog and Growth

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]