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DYCOM INDUSTRIES INC (DY)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered solid top-line growth with contract revenues up 10.2% to $1.259B and non-GAAP adjusted EBITDA up 14.9% to $150.4M; diluted EPS was $2.09. Management also reported a record backlog of $8.127B and raised the FY26 revenue outlook to $5.29–$5.425B (+12.5%–15.4% y/y) .
  • Results exceeded the company’s prior Q1 guidance across revenue ($1.16–$1.20B), adjusted EBITDA ($130.6–$140.6M), and diluted EPS ($1.50–$1.73) provided in February .
  • Management cited accelerating fiber-to-the-home programs, stronger maintenance/O&M activity, initial hyperscaler-related fiber infrastructure revenue, and above-expectation ramp from the acquired wireless business as drivers; they see negligible margin impact from recent tariff actions .
  • Stock-reaction catalysts: raised FY26 revenue outlook, strong next-12-month backlog ($4.685B), and Q2 FY26 guide calling for $1.38–$1.43B revenue, $185–$200M adjusted EBITDA, and diluted EPS $2.74–$3.05 .

What Went Well and What Went Wrong

  • What Went Well

    • “We exceeded the high end of our guidance for the quarter on all metrics, including revenue, adjusted EBITDA and EPS,” highlighting operational execution and demand strength .
    • Record backlog ($8.127B) and diversification (AT&T $325.1M; multiple customers >5% revenue) support visibility; next-12-month backlog was $4.685B .
    • Raised FY26 revenue outlook to $5.29–$5.425B (was +10%–13%), reflecting strengthening demand across fiber-to-the-home, wireless modernization, and hyperscaler-related builds .

  • What Went Wrong

    • GAAP diluted EPS of $2.09 declined modestly y/y versus $2.12 in Q1 FY25, partly reflecting lower tax benefits from share-based awards ($2.2M vs $5.9M y/y) .
    • Operating cash flow was seasonally negative (-$54M) and net CapEx stepped up; management reiterated focus on improving free cash flow and DSOs (111 days, down 3 days q/q) .
    • Organic revenue growth was only +0.7% y/y as acquisitions contributed $111.9M to revenue; underlying growth will need further acceleration despite strong headline results .

Financial Results

  • Quarter-over-quarter and year-over-year performance
MetricQ3 2025Q4 2025Q1 2026
Contract Revenues ($USD Billions)$1.272 $1.085 $1.259
Adjusted EBITDA ($USD Millions)$170.7 $116.4 $150.4
Adjusted EBITDA %13.4% 10.7% 11.9%
Diluted EPS ($)$2.37 $1.11 $2.09
  • Year-over-year comparison
MetricQ1 2025Q1 2026
Contract Revenues ($USD Billions)$1.142 $1.259
Adjusted EBITDA ($USD Millions)$130.9 $150.4
Adjusted EBITDA %11.5% 11.9%
Diluted EPS ($)$2.12 $2.09
  • Actual vs Wall Street consensus (S&P Global)
MetricConsensus EstimateActualSurprise
Revenue ($USD Millions)1,194.55*1,258.61 +64.06 (+5.4%)*
Adjusted EBITDA ($USD Millions)137.40*150.36 +12.96 (+9.4%)*
Primary EPS (S&P) ($)1.6249*1.8268*+0.202*

Values retrieved from S&P Global.*

  • Segment/Customer breakdown and KPIs
KPI / CustomerQ1 2026
Backlog ($USD Billions)$8.127
Next-12-Month Backlog ($USD Billions)$4.685
AT&T Revenue ($USD Millions)$325.1
Other Customers >5%Brightspeed, Charter, Comcast, Frontier, Lumen, Verizon, unnamed
Operating Cash Flow ($USD Millions)-$54.0
DSO (Days)111
Net CapEx ($USD Millions)-$68.6
Liquidity ($USD Millions)$529.6
Notional Net Debt ($USD Millions)$1,022.9
Share Repurchases200,000 shares for $30.2M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Contract RevenuesFY 2026+10% to +13% y/y $5.290B to $5.425B (+12.5% to +15.4% y/y) Raised
Contract RevenuesQ2 2026N/A$1.38B to $1.43B New
Adjusted EBITDAQ2 2026N/A$185M to $200M New
Diluted EPSQ2 2026N/A$2.74 to $3.05 New
Amortization ExpenseQ2 2026N/A$11.9M New
Stock-based Compensation ExpenseQ2 2026N/A$8.0M New
Interest Expense, NetQ2 2026N/A$15.7M New
Non-GAAP Effective Tax RateQ2 2026N/A26.0% New
Diluted SharesQ2 2026N/A29.3M New
Q1 2026 (Guide vs Actual)Q1 2026Rev $1.16–$1.20B; Adj EBITDA $130.6–$140.6M; EPS $1.50–$1.73 Rev $1.259B; Adj EBITDA $150.4M; EPS $2.09 Beat across metrics

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2025)Previous Mentions (Q4 2025)Current Period (Q1 2026)Trend
AI/data center fiber (hyperscalers)Lumen award; early innings; expanding long-haul opportunities Over-pull began; broader long-haul/new routes expected; multi-year opportunity Initial hyperscaler-related fiber revenue; new middle-mile award; inside-the-fence scope expected to commence this year Accelerating
Tariffs/macroNot highlighted as primary risk; focus on program ramp Macro/weather framed; not central tariff focus Tariff impacts expected negligible; manageable supplier cost increases; labor dominates cost mix Manageable
BEAD/federal & state programsBack-half CY25/into 2026 ramp; strong state awards BEAD not in FY26; states awarded >$1B in Q4; multi-year Still not in FY26 outlook; expect clarity mid-June/July; ramp into FY27 Timing pushed; visibility improving
Maintenance/O&MEmphasized as core; backlog adds; top-10 customer growth Sustained O&M importance “Stable base of recurring revenue,” historically >50% of business; adds meaningful awards Strengthening base
Wireless modernization (B&V acquisition)Integration progressing; wireless ~4.5% of Q3 revenue Ramp faster than expected; $250–$275M FY26 revenue reaffirmed Above expectations; ramp supports Q2 and FY outlook Outperforming plan
Customer consolidationDiscussed (e.g., Verizon/Frontier) as positive Awards/extensions with Verizon; consolidation positive Consolidation seen as positive; national scale advantage Positive for DY

Management Commentary

  • CEO: “We exceeded the high end of our guidance... we are increasing our revenue expectations for the year to a range of $5.29 billion to $5.425 billion.”
  • On tariffs: “We believe that the impact to Dycom and to our customers’ current build plans will be negligible... labor represents the majority of build costs.”
  • On hyperscalers: “Opportunities to build long-haul and middle mile routes to meet the needs of AI infrastructure are increasing... a substantial multiyear award... and an award inside the fence that will commence this year.”
  • CFO: “Adjusted EBITDA... increased 49 basis points... Net income was $61 million and diluted EPS was $2.09 per share... Backlog... $8.127 billion, including $4.685 billion expected next 12 months.”

Q&A Highlights

  • Wireless/B&V ramp: Mostly quicker-than-expected ramp (some pull-forward), integration going well; wireless work above expectations in Q1 and embedded in Q2/FY outlook .
  • Tariffs: No need to pull forward spend; supplier cost increases manageable; overall build economics dilute tariff impacts .
  • Margins: Operating leverage is the primary driver of further margin improvement; efficiencies and training initiatives continue .
  • BEAD: Still excluded from FY26; expect updates mid-June/July; likely revenue back half CY25 ramping into FY27 .
  • Capex/FCF: Net CapEx outlook ~$220–$230M; DSOs improving; continued focus on free cash flow .

Estimates Context

  • Q1 FY26 results beat consensus across revenue, EBITDA, and EPS. Revenue came in at $1,258.6M vs $1,194.6M consensus; adjusted EBITDA $150.4M vs $137.4M; S&P Primary EPS 1.8268 vs 1.6249 consensus; company-reported GAAP diluted EPS was $2.09 . Values retrieved from S&P Global.*
  • Note: S&P “Primary EPS” may differ from the company’s diluted EPS reporting; investors should align EPS definitions when benchmarking.*

Key Takeaways for Investors

  • Raised FY26 revenue outlook underscores durable demand across fiber-to-the-home, maintenance/O&M, wireless modernization, and hyperscaler-related builds; backlog strength supports visibility .
  • Q1 beat across all guided metrics, and Q2 guide appears robust, suggesting continued sequential progress in revenue and profitability .
  • Tariff/macro risks appear manageable given cost structure (labor-heavy) and domestic sourcing; minimal anticipated impact to margins or programs .
  • Organic growth remains modest (+0.7% y/y) due to large acquisition contribution; watch for organic acceleration as programs ramp and hyperscaler wins convert to revenue .
  • Cash conversion and DSOs improved sequentially; near-term cash flow seasonality persists, but management remains focused on FCF improvement through FY26 .
  • Wireless acquisition is performing above plan, a positive incremental driver for Q2 and FY26; maintain focus on integration costs and amortization headwinds discussed by CFO .
  • BEAD is upside optionality not in FY26 outlook; expect clarity mid-year with likely revenue skew to late CY25 and FY27; state grants continue to add structural tailwinds .