Dycom Industries, Inc. Q4 FY2026 earnings call

• Fourth quarter and full-year consolidated results: Q4 revenue $1.46 billion (+34.4% y-o-y), organic revenue +16.6%, adjusted EBITDA $162.4 million, margin 11.1%; FY2026 revenue $5.55 billion (+17.9% y-o-y), organic revenue +6.5%, adjusted EBITDA $737.7 million, margin 13.3%. - Backlog: Record $9.5 billion, $6.3 billion expected in next 12 months. - FY2027 outlook: Strong growth across demand drivers, including fiber to the home, communications and building system services for data centers. - Strategic priorities: Talent and workforce development, expansion of building system segment, margin expansion, and cash position improvement. - Power Solutions acquisition: Performing well, integration on schedule, leveraging expertise for data center and digital infrastructure markets.

Communications revenue was $1.362 billion, driven by continued execution of fiber-to-the-home programs, wireless activity, fiber infrastructure programs for hyperscalers, and maintenance and operations services. Adjusted EBITDA for communications increased 30% to $151.3 million, or 11.1% of segment revenue. Building systems segment revenue was $95.8 million, including Power Solutions results from December 23rd. Adjusted EBITDA for building systems was abbreviated due to the operating period. Backlog at end of Q4 was $9.542 billion, with $8.333 billion in communications backlog and $1.209 billion in building systems backlog, and $6.358 billion expected in next 12 months.

• FY2027 total contract revenues range 6.85 billion - 7.15 billion. Communications segment: 5.70 billion - 5.90 billion. Building systems segment: 1.15 billion - 1.25 billion. - Q1 2027 total contract revenues range 1.64 billion - 1.71 billion, adjusted EBITDA 202 million - 218 million, adjusted diluted EPS $2.57 - $2.90. - Expect wireless equipment replacements to decline ~$100 million in FY2027. - Building systems segment expects exceptional demand in data center electrical services, annual capital expenditures 210 - 220 million.

Q: Dan, can you talk a little bit about how you plan to increase the scope of work that you're doing inside Power Solutions?

A: Power Solutions acquisition is going well, integration on schedule. Cross-sell taking flight, looking at organic expansion and M&A opportunities within building systems.

Q: On the fourth quarter organic growth, any notable project pull forward?

A: No pull forwards, shows overall demand despite winter weather.

Q: Eric Lupko on long haul, middle mile, and inside defense work.

A: $20 billion TAM is conservative, demand strong, ramping this year and beyond.

Q: Joseph Osha on BEAD program.

A: Progress made, nearly all states approved, funding pushing down, some revenue opportunities in Q2, bigger programs later.

Q: Frank Louthen on Power Solutions growth rate.

A: Trailing four-year CAGR ~15%, expecting 15% - 25% growth this year, focused on responsible growth.

Q: Michael Dudas on margin front and Power Solutions labor growth.

A: Continue to invest ahead, Power Solutions growth related to labor, focused on responsible growth.

Q: Judah Aronowitz on building systems margin guidance.

A: Building systems expected mid-teens margin, need to invest, transaction costs in Q4.

Q: Richard Cho on hyperscale opportunity.

A: Near-term hyperscale revenue from Lumen Overfall, long haul middle mile routes back half-weighted.

Q: Adam Thalheimer on M&A pipeline.

A: Predominantly in building system segment, looking for cultural fit and growth opportunities, optimistic but patient.

Q: Liam Burke on balancing leverage and acquisition pipeline, and traditional business pricing.

A: Responsible on net leverage, margin improvement from operating leverage and internal efficiencies, not from increasing pricing with customers.