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01/10 16:37
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with a 10.2% revenue increase and exceeding expectations in adjusted EBITDA and EPS. The announcement of a $150 million stock repurchase program and ongoing share buybacks positively impacts shareholder returns. Despite macroeconomic uncertainties, the company remains confident in growth drivers, with a robust backlog and promising revenue outlooks for fiscal 2026. The Q&A section highlights positive sentiment from analysts, with management addressing potential risks effectively. These factors, combined with the company's market cap, suggest a likely stock price increase in the 2% to 8% range.
Revenue $1.259 billion, a 10.2% increase over Q1 2025, driven by continued execution of fiber-to-the-home programs, wireless activity, higher maintenance and operations services, and initial revenue contribution from fiber infrastructure programs for hyperscalers.
Adjusted EBITDA $150.4 million, representing 11.9% of revenues, an increase of 14.9% over Q1 2025, exceeding expectations for the quarter.
Net Income $61 million, with diluted EPS of $2.09 per share, exceeding expectations. Results included income tax benefits from share-based awards of $2.2 million or $0.08 per share compared to $5.9 million or $0.20 per share in Q1 last year.
Backlog $8.127 billion, including $4.685 billion expected to be completed in the next 12 months.
Operating Cash Flows Used $54 million in the quarter, reflecting seasonal uses of cash.
Share Repurchases Repurchased 200,000 shares for $30.2 million during the quarter.
New Projects: Notable awards with Verizon for both fiber-to-the-home and maintenance works, Windstream for both fiber-to-the-home and maintenance work, and fiber-to-the-home awards with Lumos.
Hyperscaler Work: Received a substantial multiyear award from an ISP for middle mile network, with work expected to commence later this fiscal year.
Wireless Equipment Replacement: Wireless equipment replacement works, both organic and from acquisition, continue to deliver above expectations.
Market Expansion: Increased fiber-to-the-home targets from many customers, indicating robust demand.
BEAD Program: Potential opportunities in fiscal 2027 with awards expected in the second half of this year.
Revenue Growth: First quarter revenue was $1.259 billion, a 10.2% increase over Q1 2025.
Backlog: Record backlog of $8.1 billion, including $4.7 billion of next 12-month backlog.
Share Repurchase: Repurchased 200,000 shares for $30.2 million during the quarter.
Strategic Focus: Focus on service and maintenance business, diversifying customer base and services offered.
Operational Efficiency: Improving free cash flow and maintaining a disciplined approach to backlog management.
Macroeconomic Uncertainty: Despite the current macroeconomic uncertainty, Dycom remains confident in the drivers of its industry and its ability to capitalize on opportunities.
Tariffs and International Trade: Recent tariffs and international trade actions have created volatility and market uncertainty, but the impact on Dycom and its customers' current build plans is expected to be negligible.
Cost Increases: There may be cost increases in some equipment components due to tariffs, but these increases are manageable and not anticipated to impact margins or customer programs.
Customer Concentration Risk: One customer, AT&T, exceeded 10% of total revenues, indicating a potential risk if reliance on a single customer increases.
Regulatory Risks: The final construct of the BEAD program remains unknown, which could pose risks to future revenue opportunities.
Cash Flow Management: Operating cash flows used in the quarter were $54 million, reflecting seasonal uses of cash, indicating a need for ongoing cash flow management.
Revenue Growth: First quarter revenue was $1.259 billion, a 10.2% increase over Q1 2025.
Adjusted EBITDA: Adjusted EBITDA was $150.4 million, representing 11.9% of revenues and an increase of 14.9% over Q1 2025.
Share Repurchase: Repurchased 200,000 shares or $30.2 million during the quarter.
Backlog: Record backlog of $8.1 billion, including a record $4.7 billion of next 12-month backlog.
Service and Maintenance Business: Significant growth in service and maintenance business, providing a stable base of recurring revenue.
Diversification: Diversified customer base and services within telecommunications and digital infrastructure.
Fiber-to-the-Home: Continued ramping of fiber-to-the-home programs, with notable awards from Verizon and Windstream.
Hyperscaler Projects: Substantial multiyear award from an ISP for middle mile network, with revenue ramping in fiscal 2027.
Revenue Expectations: Increasing revenue expectations for the year to a range of $5.29 billion to $5.425 billion.
Q2 Revenue Outlook: Expect contract revenues of $1.38 billion to $1.43 billion for Q2 of fiscal 2026.
Q2 Adjusted EBITDA Outlook: Expect adjusted EBITDA of $185 million to $200 million for Q2 of fiscal 2026.
Q2 EPS Outlook: Expect diluted EPS of $2.74 to $3.05 per share for Q2 of fiscal 2026.
Share Repurchase: During the quarter, we repurchased 200,000 shares of our common stock for $30.2 million.
The earnings call summary reveals a strong financial outlook with reaffirmed revenue projections and significant growth opportunities, particularly in AI-driven data centers and fiber infrastructure. The Q&A section highlighted strategic acquisitions and synergies, with positive analyst sentiment. Although there was some caution regarding specific future figures, the overall market strategy, shareholder return plans, and acquisition benefits suggest a positive stock price movement over the next two weeks.
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