Dycom Industries ((DY)) has held its Q4 earnings call. Read on for the main highlights of the call.
Dycom Industries’ recent earnings call highlighted a generally positive sentiment, underscored by strong revenue growth and significant opportunities in the fiber and 5G sectors. Despite these promising aspects, the company acknowledged challenges such as weather-related impacts, the exclusion of BEAD revenues, and rising SG&A expenses, which could pose potential hurdles moving forward.
Strong Revenue and Growth
Dycom Industries reported impressive financial results for Q4 2025, with revenues reaching $1.085 billion, a 13.9% increase from the previous year. For the full fiscal year, revenues totaled $4.702 billion, marking a 12.6% increase. The company also achieved an adjusted EBITDA of $116.4 million for Q4 and $576.3 million for the full year, expanding their EBITDA margin by approximately 450 basis points over the past three years.
Backlog and Customer Diversification
The company’s backlog at the end of the fiscal year was a robust $7.8 billion, with $4.6 billion expected to be completed over the next twelve months. Dycom has successfully diversified its customer base, with the top five customers accounting for 55% of revenue in fiscal 2025, down from 66% in fiscal 2022.
Significant Fiber and 5G Opportunities
Dycom is strategically capitalizing on fiber-to-the-home and 5G opportunities, with customers adding more than 35 million incremental passings. The company secured new markets for Verizon and extended several existing agreements, positioning itself well in the expanding digital infrastructure landscape.
Positive Free Cash Flow and Share Repurchases
The company reported improved free cash flow performance, generating $137.8 million for the full year. Dycom also repurchased 410,000 shares of common stock and announced a new $150 million stock repurchase authorization, reflecting confidence in its financial stability and growth prospects.
Weather and Seasonal Challenges
Unforeseen weather challenges, such as fires in California and snow in New Orleans, impacted Q4 operations. The company is also considering potential impacts from difficult winter weather in its Q1 2026 expectations.
Exclusion of BEAD Revenues
Due to uncertainties in state broadband programs and the finalization of awards, Dycom has excluded BEAD revenues from its fiscal 2026 outlook. This cautious approach reflects the company’s prudent financial planning amid regulatory uncertainties.
Increased SG&A Expenses
SG&A expenses have grown faster than revenues in recent years, as Dycom invests significantly to support growth and acquisitions. This trend has impacted operating leverage, highlighting the need for careful cost management as the company continues to expand.
2026 Revenue Growth Outlook
Dycom Industries projects a promising revenue growth outlook for fiscal 2026, expecting an increase of 10% to 13% over fiscal 2025. This growth is anticipated to be driven by fiber-to-the-home expansions, hyperscaler long-haul projects, and wireless equipment replacements, excluding BEAD and storm-related revenues.
In summary, Dycom Industries’ earnings call conveyed a positive sentiment, with strong revenue growth and promising opportunities in the fiber and 5G sectors. While challenges such as weather impacts and rising SG&A expenses pose potential hurdles, the company’s strategic initiatives and prudent financial planning position it well for continued success in fiscal 2026.