Dycom(DY)2025-05-21 14:00Financial Data and Key Metrics Changes - The company reported first quarter revenue of $1,259,000,000, a 10.2% increase over Q1 2025 [4][21] - Adjusted EBITDA was $150,400,000, representing 11.9% of revenues, and an increase of 14.9% over Q1 2025 [4][22] - Net income was $61,000,000, with diluted EPS of $2.90 per share, exceeding expectations [22] - The company increased its revenue expectations for the year to a range of $5,290,000,000 to $5,425,000,000, representing a growth of 12.5% to 15.4% over the prior year [5][25] Business Line Data and Key Metrics Changes - The service and maintenance business has grown significantly, providing a stable base of recurring revenue [6][7] - The company has diversified its customer base and services within telecommunications and digital infrastructure, which buffers against the impact of any single customer [5][6] - The backlog at the end of Q1 was $8,127,000,000, including $4,685,000,000 expected to be completed in the next twelve months [23] Market Data and Key Metrics Changes - The company noted robust demand drivers, particularly in fiber to the home deployments and hyperscaler infrastructure projects [11][12] - Recent awards include significant contracts with Verizon and Windstream for fiber to the home and maintenance work [12] - The company is seeing increased opportunities related to AI infrastructure, with hyperscalers reiterating or increasing their CapEx budgets [12][15] Company Strategy and Development Direction - The company aims to build on its service and maintenance business while capitalizing on fiber to the home deployments and other growth drivers [7][18] - The strategy includes expanding services inside the fence with hyperscalers, which opens new opportunities [15][19] - The company is focused on improving free cash flow and maintaining a balanced risk and return profile in its backlog [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and tariff impacts, expecting negligible effects on current builds [10][25] - The demand for fiber to the home remains strong, with many customers reconfirming or increasing their targets [11][12] - Management believes that the company is well-positioned for continued growth, with a well-defined strategy and clear objectives [18][19] Other Important Information - The company repurchased 200,000 shares for $30,200,000 during the quarter, reflecting a commitment to returning capital to shareholders [5][24] - Operating cash flows used in the quarter were $54,000,000, reflecting seasonal uses of cash [24] Q&A Session Summary Question: Regarding the performance of Black and Veatch - Management indicated that the performance was a mix of pull forward and quicker ramp-up than expected, with strong integration into operations [28][29] Question: On the maintenance side, can you size that business? - Management noted that service and maintenance is a core part of the strategy, historically representing over 50% of the business [31] Question: Is the second quarter guidance a continuation of strength from the wireless side? - Management confirmed that both fiber to the home builds and the wireless business are contributing to the positive outlook for Q2 [34][35] Question: Any potential for pulling forward spending before tariffs hit? - Management stated that they are strategically managing equipment purchases and feel confident about their current position despite tariff impacts [36][38] Question: Was there anything unusual with costs this quarter? - Management attributed margin improvement to operating leverage and ongoing efficiency efforts [41][43] Question: What is the importance of the BEAD program for future growth? - Management believes that while BEAD is a significant opportunity, it is not necessary for current growth, with other drivers providing robust opportunities [46][47] Question: Is the pace of working through the backlog changing? - Management highlighted the diversification of the backlog and expressed confidence in the pace of business [50][51] Question: Does customer consolidation drive more business? - Management indicated that customer consolidation has historically been positive, leading to more opportunities for larger national players [80] Question: Have government layoffs affected the approval process? - Management noted that easing permitting could be a positive for the industry, and they are monitoring potential regulatory changes closely [86][87]