Dycom Reports Record Backlog and Growth

Dycom Industries, Inc. (NYSE:DY) reported first quarter fiscal 2026 earnings on May 21, 2025, surpassing the high end of its guidance across revenue, adjusted EBITDA (non-GAAP), and EPS. Revenue reached $1.26 billion, while adjusted EBITDA was $150.4 million (11.9% margin), and net income stood at $61 million.

Management raised full-year revenue guidance and reported a record next-twelve-months backlog of $4.7 billion, signaling broad-based demand across its telecom and digital infrastructure segments, supported by major customer diversification and continued expansion in service and maintenance contracts.

Record Backlog Strengthens Revenue Visibility

Backlog reached $8.1 billion, of which $4.7 billion is expected to convert to revenue in the next twelve months, demonstrating Dycom’s ability to secure long-duration projects from multiple large telecom and utility customers. The company’s mix of projects has grown increasingly diverse, with recurring service and maintenance contracts historically accounting for over 50% of total business, providing stability amid the shift of telecom operators to multi-year fiber buildouts.

"This is evident in our record backlog of $8.1 billion, including a record $4.7 billion of next twelve months backlog. We worked hard to diversify our customer base and"
-- Daniel Peyovich, President and Chief Executive Officer

High-quality, multi-year backlog across an increasingly diverse customer base and service offering significantly de-risks Dycom’s topline for the coming year and supports sustainable, visible growth.

Expansion in Hyperscaler and Data Center Infrastructure Markets

Management highlighted recent strategic wins including a multiyear middle mile fiber award to support AI infrastructure spend, as well as Dycom’s first entry “inside the fence” with hyperscaler customers, expanding the company’s total addressable market beyond traditional right-of-way work.

Fiber build demand associated with data center and AI investments continues to accelerate, with next-phase project work, including direct connections and intra-campus networking, beginning in FY2026 and ramping materially by fiscal 2027.

"We were notified of an award from a hyperscaler related to this work that will commence this year but is not yet in backlog. Entry into this scope further expands our TAM and provides another opportunity for us to leverage our skill set, add value directly for the hyperscalers, and further diversify our capabilities as a provider of digital infrastructure services."
-- Daniel Peyovich, President and Chief Executive Officer

Penetration of the hyperscaler segment increases Dycom’s exposure to long-term secular growth driven by data center buildouts and AI-driven networking needs, diversifying revenue sources and deepening customer relationships in a highly resilient end-market.

Margin Improvement Driven by Operating Leverage

Adjusted EBITDA margin improved by 49 basis points to 11.9% compared to the prior-year quarter, while management confirmed that future margin gains are expected to be driven primarily by operating leverage rather than one-time events, with full-year net capex projected at $220–$230 million, and management continues to focus on free cash flow optimization with sequential DSO improvement.

"So operating leverage is a big part of that increase. As we look ahead to the year, we do see opportunities for continued margin growth. Working very hard to achieve that. And again, most of that would come from operating leverage."
-- Drew DeFerrari, Chief Financial Officer

These efforts are enhancing long-term shareholder value potential.

Looking Ahead

Management raised contract revenue guidance for FY2026 to $5.290 billion to $5.425 billion (+12.5% to 15.4% year-over-year), and forecast contract revenues of $1.38 billion to $1.43 billion for Q2 FY2026, adjusted EBITDA of $185 million to $200 million for Q2 FY2026, and diluted EPS of $2.74 to $3.05 for Q2 FY2026. management reiterated its goal of continued improvement in free cash flow

No contribution from the BEAD (Broadband Equity, Access, and Deployment) program is factored into the outlook, while newly awarded hyperscaler projects set to commence in FY2026 are not yet included in backlog but are expected to contribute incremental growth. Management also reiterated its goal of continued improvement in free cash flow

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