Dycom Posts 43% Profit Jump in Fiscal Q2
Key Points
Non-GAAP earnings per share reached $3.33 in Q2 FY2026, topping estimates by 14.1%.
GAAP revenue rose 14.5% to $1.378 billion in Q2 FY2026, slightly underperforming analyst expectations but within management’s stated guidance.
Organic growth was modest at 3.4% for the quarter ended July 26, 2025, with Acquisitions provided the bulk of topline gains amid strong margin improvement in both Q1 and Q2 FY2026.
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Dycom Industries (NYSE:DY), a leading provider of specialty contracting services to the telecommunications and infrastructure sectors, released its fiscal second quarter results on August 20, 2025. The most notable news: the company posted record GAAP earnings in Q2 FY2026 well ahead of analyst estimates, as Improved margins drove substantial growth in GAAP profits. GAAP revenue missed consensus by a modest margin but tracked within previously guided ranges. Non-GAAP diluted earnings per share reached $3.33 versus the $2.92 estimate, while GAAP revenue landed at $1.378 billion against a $1.41 billion forecast. Overall, it was a quarter marked by robust profit expansion, disciplined execution, and continued progress on strategic goals—though Underlying organic revenue growth lagged the headline figures.
| Metric | Q2 FY26(ended July 26, 2025) | Q2 FY26 Estimate† | Q2 FY25(ended July 27, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $3.33 | $2.92 | $2.46 | 35.4% |
| Revenue (GAAP) | $1.378 billion | $1.41 billion | $1.20 billion | 14.8% |
| Non-GAAP Adjusted EBITDA | $205.5 million | $158.3 million | 29.8% | |
| Net Income (GAAP) | $97.5 million | $68.4 million | 42.6% | |
| Non-GAAP Adjusted EBITDA Margin | 14.9% | 13.2% | 1.7 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report.
Dycom's Business Model and Priorities
Dycom Industries provides engineering, construction, and maintenance services to telecommunications and utility companies in North America. Its core work involves designing, installing, and servicing the infrastructure necessary for high-speed fiber and wireless networks.
The company’s recent strategy revolves around capitalizing on major sector trends: surging data usage, the roll-out of next-generation fiber optic networks, and the expansion of data centers. Dycom’s national scale, focus on recurring service and maintenance, and selective acquisitions all serve as key factors for staying competitive and growing market share. Success relies on disciplined cost management, tight project execution, and the ability to win long-term contracts with the country’s largest network operators.
Quarter In Review: Growth Drivers and Financial Performance
The second quarter saw strong progress on Dycom’s key strategic pillars. Year over year, total GAAP revenue climbed 14.5% in Q2 FY2026, but organic revenue rose just 3.4%. The vast majority of the revenue bump stemmed from recent acquisitions—with $139.8 million in acquired business revenue compared to $5.7 million in the prior year period.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, a measure of operating efficiency, was 14.9% for the quarter ended July 26, 2025, compared to 13.2% in the prior year quarter. This margin expansion translated into tangible profit growth: net income rose 42.5%, and GAAP diluted earnings per share climbed 43.5%. According to management, “operational efficiency and operating leverage” were behind these improvements.
Cost of revenue excluding depreciation and amortization (GAAP) rose 12.4% for the quarter ended July 26, 2025, compared to the prior year quarter, trailing revenue growth. General and administrative expenses increased 7.2% for the quarter ended July 26, 2025, compared to the prior year quarter. The company also continued its share buyback program, repurchasing 200,000 shares for $30.2 million during the six months ended July 26, 2025, at an average price of $150.93 per share.
Service and maintenance contracts remain a stability anchor for Dycom, historically representing over half of the company’s business. Dycom’s ability to diversify its customer base and expand bookings with major telecommunications providers supports a sizable backlog, which stood at $8.0 billion—slightly lower than the previous quarter. Much of the ongoing demand is tied to projects for fiber-to-the-home, wireless upgrades, and work for AI/data center infrastructure.
Product and Service Update: Segment Developments and One-Time Events
The integration of recent acquisitions, including last year’s addition of Black & Veatch’s wireless services unit, continued to boost revenue but also shifted the weight of reported growth toward acquired (rather than organic) sources. This sharp incline in acquired revenue contribution (from $5.7 million to $139.8 million) reflects deliberate portfolio expansion, with management targeting businesses that complement Dycom’s core offerings.
Dycom reported that operating cash flow turned positive at $57.4 million.
The quarter ended July 26, 2025, did not include material one-time charges or large, non-recurring items. Storm restoration revenue—a major factor in FY2025, at $114.2 million—was excluded from the company’s FY2026 outlook.
Looking Ahead: Management Guidance and Investor Watchpoints
Management reaffirmed its full-year outlook for fiscal 2026. Contract revenue is projected to be between $5.29 and $5.43 billion for FY2026, representing 12.5% to 15.4% growth. This estimate includes the effects of acquisitions and an extra (53rd) week in the fiscal year, but deliberately excludes any foreseeable storm restoration revenue. Third quarter guidance points to revenue of $1.38 to $1.43 billion, non-GAAP adjusted EBITDA between $198 and $213 million, and diluted earnings per share between $3.03 and $3.36.
Looking forward, investors may want to track several factors. No additional dividend or capital return decisions were disclosed by management for the period.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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