Dycom Q4 Earnings & Revenues Top, Adjusted EBITDA Up Y/Y, Stock Down

Core Insights - Dycom Industries Inc. (DY) reported strong fourth-quarter results for fiscal 2026, with adjusted earnings and contract revenues exceeding expectations and showing year-over-year growth [1][4]. Financial Performance - Adjusted EPS for the fourth quarter was $2.03, surpassing the Zacks Consensus Estimate of $1.91 by 6.3%, and up from $1.43 in the same quarter last year [4]. - Contract revenues reached $1.46 billion, exceeding the consensus mark of $1.34 billion by 5.1% and growing 34.4% year over year, with organic revenue growth of 16.6% [4][10]. - Adjusted EBITDA increased by 39.6% to $162.4 million, with an adjusted EBITDA margin of 11.1%, expanding by 40 basis points from the previous year [6][9]. Customer Base - Major customers such as AT&T, Verizon, and Lumen each accounted for over 10% of total revenues in the fiscal fourth quarter, while other customers like Brightspeed, Charter, Comcast, and Uniti exceeded 5% [5]. Backlog and Future Outlook - The total backlog as of the fiscal fourth quarter was $9.54 billion, a 23% increase from $7.76 billion year over year, with $6.36 billion expected to be completed in the next 12 months [6][10]. - For fiscal 2027, Dycom anticipates contract revenues between $6.85 billion and $7.15 billion, reflecting a year-over-year growth of 23.6-29% [16]. Segment Performance - The Communications segment saw contract revenues rise by 25.6% year over year to $1.36 billion, driven by strong demand from fiber-to-the-home (FTTH) programs and infrastructure deployments [8]. - The Building Systems segment reported contract revenues of $95.8 million, with an adjusted EBITDA margin of 11.6% [11]. Capital Allocation and Strategy - Dycom is focused on a disciplined capital allocation strategy, balancing acquisitions, share repurchases, and organic growth, with strong long-term demand visibility supported by federal broadband programs [2][3].