Dycom’s first quarter results saw strong momentum, with leadership crediting the performance to continued expansion of fiber-to-the-home projects, rapid integration of its recent wireless acquisition, and growth in recurring service and maintenance contracts. CEO Dan Peyovich emphasized that a more diversified customer base, notable project awards with companies like Verizon and Windstream, and robust demand for both fiber and wireless infrastructure supported top-line growth. He added, “Our service and maintenance business provides a stable base of recurring revenue,” highlighting its increased share of the company’s work.
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Dycom (DY) Q1 CY2025 Highlights:
- Revenue: $1.26 billion vs analyst estimates of $1.19 billion (10.2% year-on-year growth, 5.7% beat)
- EPS (GAAP): $2.09 vs analyst estimates of $1.64 (26.9% beat)
- Adjusted EBITDA: $150.4 million vs analyst estimates of $137.4 million (11.9% margin, 9.4% beat)
- Revenue Guidance for Q2 CY2025 is $1.41 billion at the midpoint, above analyst estimates of $1.38 billion
- EPS (GAAP) guidance for Q2 CY2025 is $2.90 at the midpoint, beating analyst estimates by 3.3%
- EBITDA guidance for Q2 CY2025 is $192.5 million at the midpoint, above analyst estimates of $183.6 million
- Operating Margin: 6.8%, in line with the same quarter last year
- Market Capitalization: $7.11 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Dycom’s Q1 Earnings Call
- Alex Waters (BofA): asked about the relative size and stability of the service and maintenance business. CEO Dan Peyovich explained it historically makes up more than 50% of Dycom's business and provides recurring revenue through long-term contracts.
- Richard Choe (JPMorgan): inquired about the drivers behind Q2 strength, focusing on project ramp-ups and wireless integration. Peyovich confirmed both fiber-to-the-home acceleration and wireless growth are contributing, and the company feels well-positioned for the year.
- Steven Fisher (UBS): questioned whether margin improvement was sustainable and if operating leverage was the main driver. Peyovich said operating leverage was key, with additional efficiencies from quality and safety initiatives.
- Frank Louthan (Raymond James): asked about the pace of backlog burn and organic growth. CFO Drew DeFerrari noted slightly positive organic growth, with expectations for further improvement as customer programs accelerate.
- Sangita Jain (KeyBanc): probed whether expanded operations and maintenance contracts could improve free cash flow over time. DeFerrari responded that free cash flow is a focus area, with ongoing efforts to improve days sales outstanding and manage capital expenditures.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will track (1) the pace of fiber and data center project awards, especially “inside the fence” opportunities with hyperscalers, (2) the contribution and integration progress of the wireless segment, and (3) the level and renewal of multi-year service contracts supporting recurring revenue. Updates on the BEAD broadband program and macro policy shifts will also be important to monitor for longer-term upside.
Dycom currently trades at $246.29, up from $193.30 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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