Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dycom Industries Inc (DY, Financial) exceeded the high end of their guidance for the quarter on all metrics, including revenue, adjusted EBITDA, and EPS.
- The company reported a 10.2% increase in first-quarter revenue over Q1 2025, reaching $1.259 billion.
- Dycom Industries Inc (DY) has a record backlog of $8.1 billion, including $4.7 billion expected to be completed in the next 12 months.
- The company has diversified its customer base and services within the telecommunications and digital infrastructure space, reducing dependency on any single customer.
- Dycom Industries Inc (DY) increased its revenue expectations for the year to a range of $5.29 billion to $5.425 billion, indicating confidence in future growth.
Negative Points
- Despite strong performance, Dycom Industries Inc (DY) faces macroeconomic uncertainties, including tariffs and international trade actions, which could impact future operations.
- Operating cash flows used in the quarter were $54 million, reflecting seasonal uses of cash and supporting revenue growth.
- The company is closely monitoring tariff implications, which could lead to cost increases in some equipment components sourced offshore.
- Dycom Industries Inc (DY) has not included revenue from the BEAD program in their fiscal 2026 outlook, indicating uncertainty in this area.
- The company's combined DSOs of accounts receivable and contract assets net were 111 days, suggesting room for improvement in cash flow management.
Q & A Highlights
Q: Dan, you noted the strong performance of Black & Veatch. Is this more of a pull forward of activity or have you seen a larger opportunity set here? Also, could you help size the maintenance business for Dycom?
A: The performance of Black & Veatch is a mix of both pull forward and ramping quicker than expected. The maintenance business is a core part of our strategy, providing recurring revenue and stability. Historically, it has been over 50% of our business.
Q: Regarding the second quarter guidance, is the strength from the wireless side or are new projects contributing to it?
A: The guidance reflects both the ramping of fiber-to-the-home builds and the strong performance of the wireless business. Both have contributed to our Q1 results and are included in our Q2 outlook.
Q: Was there anything unusual with costs this quarter that contributed to the year-over-year margin improvement?
A: The margin improvement is primarily due to operating leverage. We are strategic about investing in the business to stay ahead of growth, and we see opportunities for continued margin growth through operating leverage.
Q: How does the BEAD program impact your growth outlook, and what are your expectations for it in the coming years?
A: The BEAD program is not included in our current outlook, but we believe it will be a significant opportunity in fiscal 2027. We continue to engage with broadband offices and potential subgrantees, expecting fiber installations in rural America.
Q: Can you discuss the impact of customer consolidation on your business?
A: Customer consolidation has historically been positive for us, as larger customers prefer a national player like Dycom. Consolidation often leads to more opportunities and investment, benefiting our business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
