DYCOM INDUSTRIES INC Q1 FY2026 earnings call

• Delivered strong start to fiscal 2026, exceeding high end of guidance for revenue, adjusted EBITDA, and EPS.
• Repurchased 200,000 shares worth $30.2 million during the quarter.
• Increased annual revenue expectations to a range of $5.29 billion to $5.425 billion.
• Record backlog of $8.1 billion, including a record $4.7 billion of next 12-month backlog.
• Diversified customer base and services in telecommunications and digital infrastructure.
• Service and maintenance business provides consistency and stability, with growth from fiber-to-the-home maintenance and securing additional markets.
• Key drivers include fiber-to-the-home programs, data center fiber demand, potential BEAD program opportunities (not in current outlook), and wireless equipment replacement work.

First quarter revenue was $1.259 billion, a 10.2% increase over Q1 2025. Adjusted EBITDA was $150.4 million, representing 11.9% of revenues and a 14.9% increase over Q1 2025. The service and maintenance business is a key segment, historically representing over 50% of revenue and providing consistency and stability due to its day-to-day maintenance, restoration, and infrastructure work.

• Increased full-year revenue expectations to $5.29 billion to $5.425 billion.
• Q2 2026 guidance: contract revenues $1.38 billion to $1.43 billion, adjusted EBITDA $185 million to $200 million, diluted EPS $2.74 to $3.05 per share.

• Macroeconomic uncertainty, though confident in industry drivers.
• Tariffs and international trade actions, but impact on Dycom and customers' build plans is negligible, with cost increases for offshore components manageable.

Q: Alex Waters asked about Black & Veatch acquisition and maintenance business size.

A: Dan Peyovich said Black & Veatch acquisition is ramping quicker than expected, and maintenance business historically over 50% of revenue.

Q: Richard Choe asked about Q2 guidance and tariffs.

A: Dan Peyovich said Q2 guidance includes strength from wireless and fiber-to-the-home, and tariffs impact manageable.

Q: Steven Fisher asked about margin improvement and BEAD.

A: Dan Peyovich said margin improvement from operating leverage, and BEAD not in current outlook but seen as potential opportunity.

Q: Frank Louthan asked about backlog pace and organic growth.

A: Dan Peyovich said backlog is diversified, organic growth slightly positive, lapping previous quarter trends.

Q: Sangita Jain asked about Q2 guidance and O&M business.

A: Drew DeFerrari said Q2 guidance includes extra week, and O&M business contributes to free cash flow.

Q: Adam Thalhimer asked about BEAD awards.

A: Dan Peyovich said middle mile and inside fence work awards, with some not in backlog yet.

Q: Jean Veliz asked about customer consolidation.

A: Dan Peyovich said customer consolidation drives more business as larger customers prefer national players.

Q: Laura Maher asked about government layoffs and deregulation.

A: Dan Peyovich said monitoring potential positives from deregulation and bonus depreciation, but fluid situation.