Executive Summary

Record Q2 2026 results: contract revenues $1.378B (+14.5% y/y), Adjusted EBITDA $205.5M (14.9% margin), GAAP diluted EPS $3.33; EPS beat Street consensus by ~14% while revenue modestly missed. Management reaffirmed FY26 revenue outlook of $5.29–$5.425B and issued Q3 guidance calling for $1.38–$1.43B revenue, $198–$213M Adjusted EBITDA, and $3.03–$3.36 EPS . EPS consensus: $2.92*, revenue consensus: $1.41B*; actuals were $3.33 and $1.378B respectively (EPS beat, revenue slight miss). Values retrieved from S&P Global.*
Backlog remains robust at $8.0B total and $4.604B next-12-months; subsequent to quarter-end, Dycom secured a “significant new award” spanning service & maintenance and fiber-to-the-home across multiple states, to be reflected in Q3 backlog .
Execution and margin discipline were focal: Adjusted EBITDA margin expanded 175 bps y/y; DSOs improved to 108 (−9 days y/y), supporting $57.4M operating cash flow in the quarter .
Stock-relevant narrative: management emphasized accelerating digital infrastructure demand (FTTH, wireless upgrades, and AI-driven data center fiber), tax legislation tailwinds (bonus depreciation and R&E expensing), and visibility into multiyear growth; they highlighted a new hyperscaler inside-the-fence service & maintenance award and early data center route build wins .

What Went Well and What Went Wrong

What Went Well

Margin expansion and cash discipline: Adjusted EBITDA margin reached 14.9% (+175 bps y/y); DSOs improved to 108 (−9 days y/y), driving $57.4M operating cash flow .
Backlog quality and new awards: Total backlog $8.0B; next-12-month backlog $4.604B; subsequent significant multi-state MSA award to be booked in Q3, underscoring pipeline strength .
Strategic positioning in AI/data center fiber and wireless: Management sees a >$20B 5-year U.S. outside plant data center network opportunity and reported new hyperscaler awards (inside-the-fence build and service & maintenance). Wireless equipment replacement activity exceeded expectations with multi-year runway .

Quotes:

“We delivered record revenue within our range of expectations and record earnings that exceeded our expectations.” — CEO Dan Peyovich .
“Adjusted EBITDA was 14.9% of contract revenues… as we performed well and continued to benefit from operating leverage.” — CFO Drew DeFerrari .
“We believe we are uniquely positioned to capitalize… [AI data centers] presents a significant opportunity… build cycle will extend deep into the next decade.” — CEO .

What Went Wrong

Top-line vs Street: Revenue of $1.378B came within company guidance but modestly below consensus ($1.41B*), reflecting timing/modulation across customer program ramps (management cited some programs lighter in Q2) [GetEstimates: Q2 2026 revenue estimate 1,408,092,540.0*]. Values retrieved from S&P Global.*
Organic growth was modest: While total revenue rose 14.5% y/y, non-GAAP organic revenue growth was 3.4% y/y, highlighting dependency on acquired contributions in the quarter .
Working capital remained elevated: Cash and equivalents declined sequentially and accounts receivable/contract assets remained sizable (consistent with scale and growth), although DSOs improved; not a new concern but a monitoring point for cash conversion .

Financial Results

Metric	Q4 2025	Q1 2026	Q2 2026
Contract Revenues ($USD Billions)	$1.085	$1.259	$1.378
Adjusted EBITDA ($USD Millions)	$116.4	$150.4	$205.5
Adjusted EBITDA Margin (%)	10.7%	11.9%	14.9%
GAAP Diluted EPS ($)	$1.11	$2.09	$3.33

Vs Estimates (Q2 2026):

Metric	Consensus	Actual	Surprise
Revenue ($USD Billions)	$1.408*	$1.378	Miss (~$0.03B)
EPS ($)	$2.92*	$3.33	Beat (+$0.41)

Notes: Consensus EPS estimate 2.921; Revenue estimate $1,408,092,540. Values retrieved from S&P Global.*

Customer Concentration (Q2 2026):

Customer	Revenue ($USD Millions)	% of Total
AT&T	$373.0	27.1%
Lumen	$155.4	11.3%
≥5% contributors (names)	Brightspeed; Charter; Comcast; Frontier; Verizon; Unnamed	N/A

KPIs and Balance Sheet

KPI	Q4 2025	Q1 2026	Q2 2026
Total Backlog ($USD Billions)	$7.760	$8.127	$7.989
Next-12-Month Backlog ($USD Billions)	$4.642	$4.685	$4.604
Operating Cash Flow ($USD Millions, quarterly)	$328.2 (Q4)	$(54.0) (Q1)	$57.4 (Q2)
DSO (days)	114 (Q4)	111 (Q1)	108 (Q2)
Cash & Equivalents ($USD Millions)	$92.7	$16.1	$28.5
Total Notional Debt ($USD Billions)	$0.950	$1.039	$1.035
Notional Net Debt ($USD Billions)	$0.857	$1.023	$1.007
Liquidity ($USD Millions)	$695.2	$529.6	$545.9

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Contract Revenues	FY 2026	+10% to +13% y/y (vs FY25)	$5.290B to $5.425B (+12.5% to +15.4% y/y)	Raised (range specified and higher)
Total Contract Revenues	Q3 2026 (quarter ending Oct 25, 2025)	N/A	$1.38B to $1.43B	New
Adjusted EBITDA	Q3 2026	N/A	$198M to $213M	New
Diluted EPS	Q3 2026	N/A	$3.03 to $3.36	New
Effective Tax Rate	Q3 2026	N/A	26.0%	New
Diluted Shares	Q3 2026	N/A	29.3M	New
Interest Expense (net)	Q3 2026	N/A	$14.7M	New
Stock-based Compensation	Q3 2026	N/A	$8.2M	New
Amortization Expense	Q3 2026	N/A	$11.8M	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2025)	Previous Mentions (Q1 2026)	Current Period (Q2 2026)	Trend
AI/data center fiber build	Identified AI-enabled data center growth as industry driver; outlook raised for FY26 growth	Initial hyperscaler inside-the-fence award; middle-mile award; Lumen overflow projects; data center fiber expected to ramp late FY26/FY27	Management sizes a >$20B 5-year outside plant opportunity; new hyperscaler inside-the-fence service & maintenance; expect significant ramp in 2026–2027	Strengthening, accelerating
Supply chain & equipment	Not highlighted as headwind; liquidity improved	Tariff impacts manageable; strategic equipment planning; fleet readiness	No significant tariff impact; monitoring; poised to pivot as densification develops	Stable/managed
Tariffs/macro/policy	No major impact; FY26 guided growth	Tariffs manageable; BEAD excluded; record backlog; cautious macro	Tax legislation tailwinds (bonus depreciation, R&E expensing); customers reinvesting; Dycom cash tax ~−$50M in H2	Positive policy tailwinds
BEAD program	Not quantified; outlook didn’t include storm restoration	Expect BEAD clarity mid-year, revenue potential FY27; excluded from FY26	Anticipate NTIA approvals; still excluded from FY26 outlook; see significant opportunity post-approval	Pending, cautious optimism
Wireless modernization	Industry driver; no specifics	Wireless replacement ahead of expectations; acquisition ramping quickly	Business above expectations; multi-year runway; potential densification	Positive
FTTH/customer ramps	Multi-year capital commitments; backlog growth	Strong FTTH awards; diversification; AT&T 10%+ revenue	Ramps cause quarterly modulation; AT&T $373M, Lumen $155.4M; significant multi-state award post-Q2	Continued growth with variability
Recurring service & maintenance	Expansion noted; backlog growing	Historically >50% of business; extended/added awards	Cornerstone of strategy; new hyperscaler service & maintenance award	Expanding and stabilizing

Management Commentary

Strategy and execution: “We delivered record EBITDA and EPS that exceeded our expectations, a direct result of operating leverage, increased efficiencies, and a disciplined focus on operational excellence” — CEO .
Market opportunity: “We believe we are in the very early stages of a generational deployment of digital infrastructure… expect construction of outside plant data center networks to ramp up in calendar year 2026, with significant growth in 2027 and beyond” — CEO .
Cash/tax tailwinds: “New tax legislation… reinstates 100% bonus depreciation… restores immediate deductibility of domestic R&E… we expect a free cash flow benefit this year from a reduction in our cash tax payments by approximately $50 million” — CFO .
Guidance posture: “We are reaffirming our fiscal 2026 revenue outlook range of $5,290,000,000 to $5,425,000,000” — CEO .

Q&A Highlights

Quarterly modulation and ramps: Management attributed revenue variability to asynchronous ramps across programs; maintained strong momentum and reaffirmed full-year guide .
Margin durability: Margin gains driven by operating leverage and operational efficiencies; expect durability with potential for further improvement, acknowledging seasonality .
Wireless outlook: Equipment replacement work ahead of expectations; integrated acquisition; program has at least two more years; potential densification opportunities .
New awards and backlog: Significant multi-state FTTH + service & maintenance award will be added to Q3 backlog; not sized but described as meaningful .
Tax reform impact: Expect customers to reinvest cash tax savings; more likely to influence next calendar year; Dycom sees ~$50M cash tax reduction in H2 .
Capital allocation: Priority to support organic growth, pursue strategic M&A, and opportunistic buybacks; ongoing DSO/cash flow improvement focus .

Estimates Context

Q2 2026 results vs consensus: EPS $3.33 vs $2.92* — beat; revenue $1.378B vs $1.408B* — slight miss. There were 8 EPS and 9 revenue estimates informing consensus.* Values retrieved from S&P Global.*
Implication: EPS beat driven by margin expansion (operating leverage and efficiencies) despite revenue modestly below Street; expect models to adjust upward for margin trajectory and cash tax benefits, with revenue phasing updated for program ramps .

Key Takeaways for Investors

Margin-led upside: Dycom’s operational efficiency and leverage are expanding margins faster than top-line, supporting EPS beats even when revenue is within guidance but below Street .
Backlog momentum and awards: Healthy backlog and a significant new award underpin H2 and FY26 trajectory; watch Q3 backlog update for confirmation .
AI/data center fiber cycle: Early innings of a multiyear outside plant build supporting AI; expect increasing contribution starting 2026 and materially in 2027; position for hyperscaler wins (inside-the-fence and route builds) .
Wireless upside: Equipment replacement program outperforms with multi-year runway; densification could add incremental growth .
Policy tailwinds: Bonus depreciation/R&E expensing should boost customers’ capex and Dycom’s cash flow (~$50M H2 benefit), aiding free cash flow and potentially supporting buybacks/M&A .
Near-term trading: Expect positive reaction to EPS beat and margin expansion; monitor Q3 execution against guidance ($1.38–$1.43B revenue; $198–$213M Adjusted EBITDA; $3.03–$3.36 EPS) and backlog update for the new award .
Medium-term thesis: Structural demand for FTTH, wireless modernization, and AI-driven data center connectivity supports multi-year growth; Dycom’s scale, national reach, and recurring service/maintenance base provide resilience and operating leverage through cycles .

S&P Global disclaimer: Consensus values marked with an asterisk were retrieved from S&P Global.

DYCOM INDUSTRIES INC (DY)·Q2 2026 Earnings Summary