ديكوم (DY) الربع الأول 2027 نص مكالمة الأرباح

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Date

May 27, 2026, 9 a.m. ET

Call participants

- President and Chief Executive Officer — Daniel Peyovich

- Chief Financial Officer — H. Drew DeFerrari

- Vice President of Investor Relations and Corporate Communications — Callie Tomasso

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Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Dycom Industries, Inc. First Quarter 2027 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ms. Callie Tomasso, Dycom's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Callie Tomasso: Thank you, operator, and good morning, everyone. Welcome to Dycom's fiscal 2027 First Quarter Results Conference Call. Joining me today are Dan Peyovich, our President and Chief Executive Officer; and Drew DeFerrari, our Chief Financial Officer. Earlier this morning, we released our fiscal 2027 first quarter results along with certain outlook information. We also announced a definitive agreement to acquire National Technology Integrators, a low-voltage engineering and construction firm based in Maryland. The press release and accompanying materials are available in the Investor Relations section of our website, including the outlook expectation summary document, which provides additional outlook metrics beyond what will be discussed on today's call.

These materials, which we will discuss during today's call include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our discussion and these statements reflect our expectations, assumptions and beliefs regarding future events and are subject to risks and uncertainties that could cause actual results to differ materially. A detailed discussion of these risks and uncertainties is included in our filings with the SEC. Forward-looking statements are made as of today's date, and we undertake no obligation to update them. Additionally, we will reference certain non-GAAP financial measures during today's call.

Explanations of these measures and reconciliations to the most directly comparable GAAP measures can be found in our press release and accompanying materials. With that, I will turn the call over to Dan Peyovich.

Daniel Peyovich: Thank you, Callie, and good morning, everyone. Thank you for joining us today. We delivered an outstanding start to the year, continuing to execute our strategy and capitalize on the generational set of opportunities across our business. Total revenues of $1.965 billion exceeded the high end of our expectations, increasing 56% compared to Q1 FY 2026, including organic growth of 25%. With robust and intensifying demand drivers, we remain disciplined in our awards, high-grading the pipeline and intensely focusing on execution. The results of this discipline are reflected in our earnings for the quarter, which also exceeded the high end of our expectations.

Adjusted EBITDA of $262.5 million and adjusted EBITDA margin of 13.4% increased 75% and 141 basis points, respectively. And non-GAAP adjusted diluted EPS was $4.42, an 85% increase compared to Q1 fiscal 2026. We ended the quarter with record total backlog of $11.9 billion, growing 25% sequentially and representing a book-to-bill of 2.2x for the quarter. Notably, awards this quarter continued to diversify our backlog across customers, demand drivers and geographies. In some cases, we are also seeing customers extend durations to ensure they have the skilled workforce to meet their goals. These awards provide certainty and visibility that allow Dycom to plan and invest for work far in the future and positions us for multiyear growth.

With strong results in Q1 and intensifying demand across our business, we are increasing our full-year fiscal 2027 outlook to a range of $7.38 billion to $7.65 billion. At the midpoint and excluding the extra week from last year, our new outlook represents total revenue growth of 38%, including 14% organic compared to last year. I'll shift now to our segments, which delivered excellent performance to start the year. Our Communications segment generated significant revenue growth of 25% compared to Q1 FY 2026 with adjusted EBITDA margins that increased 31 basis points year-over-year. Growth during the period was driven by expansion into additional geographies and fiber-to-the-home builds that ramped ahead of expectations, all aided by a favorable seasonal backdrop.

Demand for fiber infrastructure remains as strong as ever as evidenced by our customers' bullish commentary about their multiyear fiber-to-the-home and long-haul build programs as well as recent announcements from Corning to scale manufacturing capabilities in response to the demand for fiber in the coming years. Our Building Systems segment is off to a fantastic start, performing exceptionally well this quarter. Dycom's integration engine is firing on all cylinders, and I am immensely proud of the team for outpacing our internal projections in a very short period of time. Power Solutions eclipsed expectations right out of the gate, delivering $395.4 million of revenue and adjusted EBITDA margin of 17.7%.

Importantly, looking ahead, we expect their fiscal 2027 margin to be in a similar range to the Q1 performance. With Power Solutions, we have added an incredible team that has earned tremendous respect across all stakeholders for nearly 3 decades. As a result, we are positioned for significant long-term growth as we continue to scale our digital infrastructure platform. Shifting to discuss our initiatives. Last quarter, I spoke of 4 core strategic priorities for the year, and we delivered on every one of them in our first quarter. First, talent and workforce development. Our investments in our training and our people are yielding great results.

We added 730 employees in the quarter as we continue to invest to support our significant growth. Second, we are executing on the expansion of our Building Systems segment, both organically as Power Solutions scales its operations and through strategic M&A. Today, we announced a definitive agreement to acquire National Technology Integrators, a tenured and fast-growing low-voltage engineering and construction firm based in Maryland, enhancing our position and further expanding our capabilities in the high-growth data center industry. National Technology Integrators specializes in inside-plant structured cabling, including within data centers as well as audio-visual and security systems. This is a critical step that connects the work of both our segments.

We will be able to offer our customers complete fiber infrastructure, starting at the racks and connecting data centers across America, ultimately bringing fiber connectivity to businesses, communities and homes. Their work marries incredibly well with our inside-plant electrical work as these trades are highly coordinated and in high demand. Importantly, this private founder-led business is another outstanding cultural fit with a team that is highly respected and excited to continue the growth story. Based in Maryland and with much of their revenue in the DMV, they also have operations spanning Texas and the Midwest, brought there by their general contractor and hyperscaler customers because of their proven performance.

This creates enormous opportunity for Dycom to continue to grow our Building Systems segment and cross-sell our services. This cross-selling is already occurring. Power Solutions and National Technology Integrators have been strategic partners for years and are currently working on projects together. In addition, we are already working together on inside-defense fiber work in our Communications segment. In short, the synergies are incredibly strong, and this is a perfect fit to further increase our opportunity set. They consistently deliver superb results and the transaction is expected to be immediately accretive across key enterprise financial metrics. We are excited to welcome National Technology Integrators to the Dycom Family when the transaction closes expected in Q2.

Looking ahead, we will continue to pursue additional high-quality M&A while also maintaining our commitment to long-term net leverage discipline and investing in organic growth opportunities. Moving to our third strategic priority, margin expansion. We delivered year-over-year improvement of 141 basis points in adjusted EBITDA margin for the quarter. Looking toward the full fiscal year, we continue to expect our Communications segment to modestly increase adjusted EBITDA margin over the prior-year and we now expect our Building Systems segment to maintain adjusted EBITDA margin in the high teens. Fourth, cash flow enhancement continues to be a priority, and our combined DSOs were 96 days for the quarter, a significant improvement of 15 days year-over-year.

Over the past 5 quarters, we've laid out a clear picture of the intensifying demand across our industry, and we've proven Dycom's ability to step up and capitalize on it. We're doing that through clear strategy, consistent execution, organic investments and disciplined M&A. Looking ahead, the momentum behind fiber deployments and data center builds is stronger today than we have ever seen. We are moving quickly to capture this opportunity, expanding our presence and footprint across our business while continuing to anchor ourselves with steady service and maintenance work. On top of that, BEAD is progressing through state level and subgrantee pipelines, which points to upside for both our backlog and our future outlook.

In closing, Dycom's scale and positioning, combined with our local expertise is unmatched in digital infrastructure. We are focused on delivering value to our frontline employees and our customers and believe that this goes hand-in-hand with delivering value to our shareholders. I would like to thank my 20,000 teammates for raising the bar every day for our customers and in our communities. I am incredibly proud of what we've accomplished together, and I'm confident we will continue to deliver value for our shareholders and long-term opportunities for our teams as we pursue our vision to be the people connecting America.

I'll turn the call over to Drew now for a deeper dive into our Q1 performance and further details on our acquisition.

H. DeFerrari: Thanks, Dan, and good morning, everyone. In Q1, we outperformed the high-end of our expectations, delivering strong top-line and adjusted EBITDA growth and margin expansion while also investing in our future growth and returning capital to our shareholders through share repurchases. Q1 total contract revenues of $1.965 billion grew 56.1% over Q1 of last year. This reflects the strength of relationships and continued diversification across our customer base. Organic revenue of the Communications segment grew 24.7%, and Building Systems grew significantly compared to the prior year quarter. Building Systems represented approximately 20% of total revenue for the quarter. Consolidated adjusted EBITDA of $262.5 million increased 75% over Q1 '26, reflecting strong performance in both of our business segments.

Consolidated adjusted net income was $134.3 million, and adjusted diluted EPS was $4.42 per share, an increase of 85% over Q1 '26. These results are adjusted to exclude the amortization of intangible assets. Results for the quarter included income tax benefits resulting from the vesting and exercise of share-based awards of $12.5 million or $0.41 per share compared to $2.2 million or $0.08 per share in Q1 last year. Moving to the results of our business segments, each of which performed well in the quarter and exceeded our expectations. Communications revenue was $1.57 billion and grew 24.7% organically, driven by ramping fiber-to-the-home programs, increased long-haul and middle-mile fiber infrastructure builds and growing maintenance and operations services.

Adjusted EBITDA for Communications increased 28% to $192.4 million or 12.3% of segment revenue, reflecting operating leverage and continued investment to scale our footprint and increase headcount, further strengthening our position to execute on multiyear build programs. Building Systems revenue was $395.4 million, and adjusted EBITDA was $70 million or 17.7% of segment revenue as Power Solutions ramp growth ahead of our initial expectations and we integrated the operations. Total backlog at the end of Q1 was $11.9 billion, including $10.8 billion of Communications backlog and $1.1 billion of Building Systems backlog. Backlog expected to be completed in the next 12 months was $6.4 billion, including $5.4 billion of Communications and $1 billion from Building Systems.

Strong cash flow remains a primary focus. We delivered solid results supporting the growth in revenue and normal seasonal uses of cash during the quarter. The combined DSOs of accounts receivable and contract assets net were 96 days, a reduction of 5 days sequentially from Q4 '26 and 15 days year-over-year. During Q1, we repurchased 100,000 shares of our common stock for approximately $36 million or $360 per share. We ended the quarter with cash and equivalents of $538.8 million and total liquidity of over $1.28 billion. Pro forma net leverage at the end of the quarter was approximately 2.3x adjusted EBITDA, providing us with financial flexibility for continued strategic growth and investment.

Building on our strong first quarter results and a favorable demand outlook, we are increasing our full year fiscal 2027 expected range of contract revenues. We now expect total contract revenues to range from $7.38 billion to $7.65 billion. For the Communications segment, we expect contract revenues ranging from $6.03 billion to $6.2 billion, increasing approximately 12.6% to 15.8% organically from last year. For the Building Systems segment, we expect contract revenues ranging from $1.35 billion to $1.45 billion. We also anticipate adjusted EBITDA margin expansion. For Communications, we continue to expect modest adjusted EBITDA margin improvement over last year.

For Building Systems, we now expect an adjusted EBITDA margin in the high teens, similar to our Q1 performance as we capitalize on the strong opportunity set and proven performance in the DMV. On a consolidated basis for Q2, we expect total contract revenues of $1.94 billion to $2.01 billion, adjusted EBITDA of $284 million to $303 million and adjusted diluted EPS of $4.40 to $4.82 per share, excluding the impact of intangible amortization expense. This outlook for fiscal 2027 and Q2 of fiscal 2027 excludes any results from the pending acquisition of National Technology Integrators. While we expect to close the acquisition in our fiscal Q2, impacts are dependent on the