Dycom(US:DY)2023-08-23 16:41Financial Data and Key Metrics Changes - Revenue for Q2 2024 was $1.042 billion, reflecting an organic increase of 7.1% compared to the previous year [11] - Gross margin improved to 20.3% of revenue, an increase of 234 basis points year-over-year [11][14] - Adjusted EBITDA was $130.8 million, representing 12.6% of revenue, up from 10.8% in Q2 2023 [11][92] - Earnings per share increased to $2.03 from $1.46 in the same quarter last year [11][14] Business Line Data and Key Metrics Changes - Fiber construction revenue from electric utilities was $82.7 million, growing organically by 3.6% [13] - Revenue from the top five customers accounted for 59.2% of total revenue, decreasing 2.3% organically, while all other customers increased by 24.6% organically [22] - Lumen, the second-largest customer, grew organically by 56.5%, while Verizon saw a 29.8% organic growth [22] Market Data and Key Metrics Changes - Backlog at the end of Q2 was $6.207 billion, down from $6.316 billion at the end of Q1 2024, with approximately $3.523 billion expected to be completed in the next 12 months [71] - The company noted that federal and state support for rural communications networks is increasing significantly, with over $40 billion allocated for rural broadband initiatives [21][72] Company Strategy and Development Direction - The company is focused on organic growth, followed by M&A and opportunistic share repurchases, with a recent acquisition of Bigham Cable Construction for $127 million [7][79] - Management emphasized the importance of maintaining a strong balance sheet and liquidity, with $685.9 million available [7][79] - The company is optimistic about future growth opportunities driven by increased fiber deployments and capital investments in the industry [5][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges, including tight labor markets and rising capital equipment costs, but remains confident in the long-term growth potential of the industry [12] - The company expects organic contract revenues to align with Q3 of the previous year, with an additional $30 million from the Bigham acquisition [15] - Management highlighted that many customers are committed to multiyear capital spending initiatives, indicating a positive outlook for future revenue [81] Other Important Information - The company has authorized a new $150 million share repurchase program through February 2025, replacing the previous authorization [7][79] - The company is experiencing a broad growth pattern across its customer base, with significant opportunities in rural broadband deployments [30][81] Q&A Session Summary Question: What is the outlook for customers that are moderating spending? - Management expects that activity may pick up in fiscal Q4, as customers typically manage budgets closely towards the end of the year [16][84] Question: Can you provide insights on the Bigham acquisition and its expected revenue? - The acquisition is expected to enhance growth opportunities, particularly in rural areas, and Bigham generated approximately $140 million in revenue over the last year [26][79] Question: How does the company view the current demand environment? - Management noted that while some customers are moderating their spending, overall growth has been broad-based, and they remain optimistic about future demand [30][52]