Dycom Industries, Inc.

Dycom reported Q2 total contract revenues of $2.01 billion, up 45.6% year over year, with 16.7% organic growth in Communications. Adjusted EBITDA was $315.5 million, up 53.5% year over year, representing 15.7% of revenue; adjusted diluted EPS was $5.29, up 45.3%; and consolidated adjusted net income was $160.7 million. Communications revenue was $1.608 billion and adjusted EBITDA margin was 13.6%, down about 134 basis points year over year, while Building Systems revenue was $397.5 million and adjusted EBITDA was $97.2 million, or 24.5% of segment revenue. Backlog ended at a record $12.2 billion, including $10.98 billion in Communications and $1.26 billion in Building Systems; $6.47 billion is expected to be completed in the next 12 months. Operating cash flow was $103.7 million, cash and equivalents were $340.1 million, total liquidity was over $1.086 billion, and pro forma net leverage was approximately 2.3x adjusted EBITDA. For full-year fiscal 2027, Dycom now expects total contract revenues of $7.48 billion to $7.66 billion, Communications revenue of $5.90 billion to $6.01 billion, and Building Systems revenue of $1.58 billion to $1.65 billion. For Q3, it expects total contract revenues of $1.90 billion to $1.98 billion, adjusted EBITDA of $281 million to $302 million, and adjusted diluted EPS of $4.33 to $4.79. Management also said overall fiscal 2027 adjusted EBITDA margin should increase versus last year, with Communications margin expected to decline slightly and Building Systems margin expected in the high teens to low 20s.

Dan Peyovich framed the quarter as evidence that Dycom’s strategy is working, emphasizing the company’s scale, local execution, and ability to win quality work in complex infrastructure projects. He highlighted strong demand in fiber-to-the-home, long-haul fiber, data center interconnects, data center electrical work, and wireless, and said the company has visibility to projects years out. His tone was confident and expansive, while also stressing continued investment in workforce, training, and diversification through M&A.

Drew DeFerrari focused on strong financial performance, margin expansion, and balance sheet flexibility. He cited $315.5 million of adjusted EBITDA, $160.7 million of adjusted net income, $5.29 of adjusted EPS, $103.7 million of operating cash flow, 101 days of DSOs, and pro forma net leverage of about 2.3x, and noted a new $150 million share repurchase authorization through February 2028. On margins, he pointed to about 35 basis points of Communications cost pressure from higher fuel prices, plus investment in workforce and lower operating leverage from deferred wireless work. He also said the Board’s buyback authorization replaces the remaining prior authorization and that capital allocation priorities remain organic growth, then M&A, then opportunistic repurchases.

Analysts pressed on the $150 million wireless revenue deferral, asking what caused the timing shift, how confident management is in recapturing it next year, and whether the underlying wireless program is unchanged. Peyovich said the deferral reflects normal timing movement in a multi-year equipment replacement program, that the company has line of sight to the work, and that overall spend has not gone down. Questions also focused on whether the strong first-half fiber-to-the-home growth was partly timing-related, how long-haul/middle-mile demand is shaping backlog, and whether data-center backlash or tighter competition could slow Building Systems or long-haul projects; management said demand remains strong, long-haul work is highly diversified, and it is still too early to quantify next-year growth or backlog timing. Analysts also asked about margin normalization in Building Systems and Communications; Peyovich said both businesses require ongoing investment and that current margins reflect Dycom’s strategy of investing for future growth.