Executive Summary
Dycom reported QQ2 2025 contract revenues of $1.203 billion, up 15.5% year over year and 9.2% organically, as the company benefited from fiber/wireless deployments, data-center edge activity, and ongoing multi-year capital programs. Gross margin rose 52 basis points to 20.8%, with adjusted EBITDA of $158.3 million (13.2% of revenue) and non-GAAP EPS of $2.46, underscoring a mix shift toward higher-margin projects and improved productivity. Backlog expanded to $6.834 billion at quarter-end, up from $6.364 billion a year ago, with roughly $3.83 billion expected to be completed in the next 12 months, reinforcing a robust revenue runway even as demand accelerates in wireless/wireline deployments. The quarter featured the August closing of the Black & Veatch public carrier wireless infrastructure acquisition for $150 million (cash), expanding Dycom’s geographic footprint and strengthening wireless capabilities; management indicated the acquired business is expected to contribute $250–$275 million of revenue in fiscal 2026 with margins in line with the consolidated average. Management also highlighted BEAD as a “generational deployment opportunity” with over $40 billion of BEAD-related funding and a pipeline of state approvals, with BEAD opportunities anticipated in calendar year 2025 and beyond. Despite positive momentum, near-term cash generation was restrained by working capital dynamics, including a 117-day DSOs/contract assets and elevated accounts receivable, contributing to negative operating cash flow in QQ2. The company maintained a disciplined balance sheet with total debt of about $1.021 billion and liquidity of $622 million, while signaling disciplined capital allocation focused on organic growth, select M&A, and share repurchases within leverage targets.
Key Performance Indicators
QoQ: 85.86% | YoY:116.75%
Key Insights
Revenue: $1.203 billion, +15.5% YoY; Organic revenue: +9.2% YoY.
Gross margin: 20.8% (+52 bps YoY).
EBITDA: $158.3 million, margin 13.2% of revenue, vs. $130.8 million and ~12.6% in Q2 FY2024.
Operating income: $150.6 million (margin 12.5%).
Net income: $68.4 million (net margin 5.69%); EPS (GAAP) $2.35; diluted $2.32.
Non-GAAP EPS: $2.46, up from $2.03 in the prior-year quarter.
Backlog: $6.834 billion, up from $6.364 billion a year earlier; $3.83 billion expected to be completed in the n...
Financial Highlights
Revenue: $1.203 billion, +15.5% YoY; Organic revenue: +9.2% YoY.
Gross margin: 20.8% (+52 bps YoY).
EBITDA: $158.3 million, margin 13.2% of revenue, vs. $130.8 million and ~12.6% in Q2 FY2024.
Operating income: $150.6 million (margin 12.5%).
Net income: $68.4 million (net margin 5.69%); EPS (GAAP) $2.35; diluted $2.32.
Non-GAAP EPS: $2.46, up from $2.03 in the prior-year quarter.
Backlog: $6.834 billion, up from $6.364 billion a year earlier; $3.83 billion expected to be completed in the next 12 months.
Cash flow: Operating cash flow negative at $(7.5) million; free cash flow negative at $(72.9) million; cash balance $19.6 million; liquidity $622 million.
Liquidity & leverage: Term loan outstanding $450 million; undrawn revolver $650 million; senior notes $500 million; total debt $1.021 billion; net debt ~$1.002 billion.
Headcount: 15,901 employees.
Acquisitions: Black & Veatch wireless public carrier infrastr. (Aug, $150 million cash); acquired revenue run-rate of ~$75 million in near-term quarters.
Backlog quality: BEAD not in backlog; BEAD pipeline cited as substantial with ~53% program approvals at NTIA and about $22 billion of BEAD funding approved to date.
Outlook: Q3 ’25 revenues expected to grow mid-to-high single digits; acquired revenues ~ $75 million; non-GAAP EBITDA margin improving 25–50 bps vs Q3 ’24; capex guide unchanged at $220–$230 million; BEAD timing anticipated in late calendar 2025 and into 2026.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.20B |
15.51% |
5.31% |
| Gross Profit |
203.61M |
-3.56% |
15.96% |
| Operating Income |
150.59M |
116.75% |
85.86% |
| Net Income |
68.40M |
13.53% |
9.35% |
| EPS |
2.35 |
14.63% |
9.30% |
Key Financial Ratios
operatingProfitMargin
12.5%
operatingCashFlowPerShare
$-0.26
freeCashFlowPerShare
$-2.51
Management Commentary
- Strategy & acquisitions: "the acquisition [Black & Veatch] expands our geographic presence and strengthens our wireless services footprint"; management expects fiscal 2026 revenue contribution of $250–$275 million from the Black & Veatch acquisition with post-integration EBITDA margins in line with the consolidated average.
- BEAD opportunity: "the BEAD program includes over $40 billion for rural deployments" and is described as a generational deployment opportunity; BEAD opportunities are expected to be visible in the third quarter of calendar year 2025; NTIA-state approvals have progressed, with 35 states/territories complete and 21 with nine of ten steps.
- Data center / AI opportunity: management highlighted long-distance intercity fiber deployments and edge compute as potential growth catalysts; comments referenced Lumen/Microsoft and Corning implications, with routes measured in thousands of miles and large-scale programs.
- Backlog and demand drivers: backlog increased to $6.834B; top five customers generated 54.9% of revenue; AT&T, Lumen, Comcast, a large unnamed customer, and Verizon collectively drive a meaningful portion of activity; organic growth supported by BEAD and private capital deployment in fiber.
- Financial health and liquidity: liquidity remains strong at $622 million; balance sheet remains disciplined; debt levels and DSOs indicate near-term working capital pressure, but long-term demand drivers (fiber deployment, Open RAN, and AI edge) support multi-year growth.
"the appetite for massive fiber deployments is irreversible"
— Steven Nielsen
"the BEAD program... represents a generational deployment opportunity"
— Steven Nielsen
Forward Guidance
- Revenue trajectory: Expect total contract revenues to increase mid-to-high single-digit in Q3 2025 vs Q3 2024; acquired revenues contribute ~ $75 million in the quarter, with Q3 2024 having about $45.2 million of acquired revenues plus change-order effects.
- EBITDA margin: Non-GAAP adjusted EBITDA margin to improve by 25–50 basis points versus Q3 2024 (excluding incremental one-time gains from change orders in that year).
- Acquisition impact: The Black & Veatch wireless business is a multi-year growth trigger; management indicated 2026 revenue contribution of $250–$275 million with margins in line with the consolidated average; integration costs are modest and pre-tax integration costs for the Q3 ’25 acquisition are expected to be about $5.5 million (with after-tax impact disclosed).
- BEAD timing and risk: BEAD represents a meaningful, potentially accelerating revenue stream; approvals have accelerated in 2024–2025, but political risk around the 2024/2025 election cycle and the timing of state awards could affect near-term execution. Investors should monitor NTIA state approvals, material procurement, labor availability, and permitting timelines.
- Strategic considerations: The firm’s mix shift toward higher-margin, service-intensive wireline/wireless programs and the integration of the wireless backlogs from Black & Veatch provide a pathway to improved margins and greater revenue visibility, albeit with near-term working capital challenges due to project timing and recoveries in DSOs. Overall, the roadmap supports a constructive view provided BEAD timing aligns with forecasts and integration efficiency remains on plan.