Key Highlights
- Dycom’s Q2 EBITDA reached $315.5 million, surpassing analyst expectations of $297 million
- Quarterly revenue climbed to $2 billion, representing 46% growth versus the prior year
- Contract backlog surged 53% to an all-time high of $12.2 billion
- Company increased annual revenue outlook to $7.48B-$7.66B from previous ~$7.5B projection
- Shares had climbed approximately 37% in the 12 months prior to the earnings announcement
Dycom Industries (DY) delivered impressive second-quarter fiscal 2027 financial results Wednesday morning, yet shares tumbled 7.65% despite the company exceeding analyst projections on multiple fronts.
The shares initially rallied 2.7% in premarket trading to approximately $361.20 following the earnings release, but momentum shifted negative as the regular session progressed.
Quarterly revenue totaled $2.006 billion, marking a 45.6% increase compared to the same period last year. Non-GAAP Adjusted EBITDA came in at $315.5 million, significantly exceeding Wall Street’s consensus forecast of approximately $297 million.
The company reported GAAP net income of $115.6 million, translating to $3.81 per diluted share. Adjusted earnings per share on a non-GAAP basis totaled $5.29.
Historic Backlog Signals Strong Pipeline
The company’s total contract backlog climbed to $12.24 billion, reflecting a 53% year-over-year increase. Management anticipates completing $6.47 billion of this backlog within the coming 12 months.
Organic contract revenue expansion hit 16.7% for the quarter and 20.5% on a year-to-date basis, primarily driven by core Communications segment programs.
The Communications division posted quarterly revenue of $1.608 billion, bolstered by fiber-to-the-home deployments, long-haul infrastructure projects, middle-mile construction, and ongoing maintenance services.
Meanwhile, the Building Systems segment delivered $397.5 million in quarterly revenue with an adjusted EBITDA margin of 24.5%, benefiting from Power Solutions contracts and favorable project scope adjustments.
CEO Dan Peyovich commented in the earnings release: “Demand across our portfolio is stronger than ever, fueled by a generational deployment of digital infrastructure that is projected to go well into the next decade.”
Strategic Acquisition and Updated Forecast
The company finalized its purchase of National Technology Integrators during the second quarter. The transaction, initially announced in May with a $275 million price tag, expands Dycom’s capabilities in inside-plant structured cabling, audio-visual installations, and security systems across multiple U.S. markets.
National Technology Integrators generated roughly $22.9 million in revenue during the quarter under Dycom’s ownership.
Looking ahead to full-year fiscal 2027, management revised its revenue guidance to a range of $7.48 billion to $7.66 billion, modestly above the previous midpoint projection of $7.5 billion.
Worth noting: the company disclosed a postponement of roughly $150 million in wireless program revenues, now expected in fiscal 2028, though management emphasized the total program scope remains unchanged.
Prior to the earnings announcement, DY stock had gained approximately 4% year to date and 37% over the trailing 12-month period.
Shares had surged 26% following the company’s Q1 earnings report, momentarily trading above $535, before retreating to slightly above $350 in the days leading up to Wednesday’s announcement.
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