Executive Summary
Dycom delivered a strong second quarter of fiscal 2026, advancing its growth strategy in a rapidly expanding addressable market for digital infrastructure. Revenue rose 14.5% year over year to $1.378 billion, with adjusted EBITDA of $205.5 million and an EBITDA margin of 14.9%, reflecting meaningful operating leverage and ongoing efficiency gains. Net income of $97.5 million and diluted EPS of $3.33 exceeded guidance, and management highlighted a disciplined focus on cash flow and backlog growth, finishing the quarter with total backlog of $7.989 billion and a next-twelve-month backlog of $4.604 billion, up 16.9% and 20.2% respectively versus the prior year. Platform breadth was emphasized, including FTTH programs, wireless activity, maintenance services, and hyperscaler data-center initiatives, contributing to a diversified pipeline across all 50 states.
Management reaffirmed the full-year revenue target of $5.29 billion to $5.425 billion, reinforcing confidence in continued momentum into the second half of 2026. The company highlighted substantial opportunity in data-center and outside-plant fiber networks tied to AI-driven infrastructure, with an addressable market estimate of over $20 billion over the next five years for outside-plant data-center networks. Dycom also noted favorable policy dynamics (tax reform benefits and permitting initiatives) and a growing shift by customers toward consolidating engineering, construction, and service/maintenance work with national providers like Dycom. While BEAD-related revenue is not included in the current outlook, management expects meaningful BEAD-related opportunities as plans finalize. Overall, Dycom projects durable, multi-year growth supported by a robust backlog, recurring service revenue, and expanding opportunities with hyperscalers and defense-related work, underpinning an optimistic long‑term value proposition for investors.
Key Performance Indicators
Key Insights
Revenue: $1.378B in Q2 2026, up 14.5% YoY; Gross profit: $307.5M, gross margin 22.33%; EBITDA: $205.5M, EBITDA margin 14.90%; Operating income: $139.846M, operating margin 10.15%; Net income: $97.5M, net margin 7.07%; Diluted EPS: $3.33; Backlog: $7.989B total; Next twelve months backlog: $4.604B; DSO (accounts receivable and contract assets): 108 days; Cash flow from operations: $57.4M; Free cash flow: $5.76M; Cash and equivalents: ~$30.2M; Total debt: $1.147B; Net debt: $1.119B; Shares: ~28.9-...
Financial Highlights
Revenue: $1.378B in Q2 2026, up 14.5% YoY; Gross profit: $307.5M, gross margin 22.33%; EBITDA: $205.5M, EBITDA margin 14.90%; Operating income: $139.846M, operating margin 10.15%; Net income: $97.5M, net margin 7.07%; Diluted EPS: $3.33; Backlog: $7.989B total; Next twelve months backlog: $4.604B; DSO (accounts receivable and contract assets): 108 days; Cash flow from operations: $57.4M; Free cash flow: $5.76M; Cash and equivalents: ~$30.2M; Total debt: $1.147B; Net debt: $1.119B; Shares: ~28.9-29.2M weighted average diluted; Backlog growth YoY: +16.9% (total), +20.2% (next 12 months); Revenue YoY: +14.5%; EPS YoY: +43.4% (per earnings metrics); Q3 backlog to include significant new award; 2026 guidance: Revenue $5.29B–$5.425B; Contract revenues $1.38B–$1.43B; Adjusted EBITDA $198M–$213M; Diluted EPS $3.30–$3.36.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.38B |
14.54% |
9.48% |
| Gross Profit |
307.49M |
51.02% |
24.24% |
| Operating Income |
139.85M |
-7.14% |
63.79% |
| Net Income |
97.48M |
42.52% |
59.68% |
| EPS |
3.37 |
43.40% |
59.72% |
Management Commentary
Themes from management call: (1) Strategy and growth drivers: Dan Peyovich emphasized expansion of the addressable market and the diversity of opportunities across FTTH, wireless, maintenance services, and hyperscaler work; “the demand for digital infrastructure is accelerating, and Dycom is uniquely positioned to lead.” (2) Backlog, cash flow, and margins: Drew DeFerrari highlighted total contract revenues of $1.378B (+14.5% YoY), adjusted EBITDA of $205.5M (14.9% of revenues), and a 9-day YoY improvement in DSOs to 108 days, underscoring cash flow discipline. (3) BEAD and policy tailwinds: Management discussed NTIA BEAD program plans and the potential for substantial BEAD-related opportunities, though BEAD revenue is not in the current outlook; there is optimism around permitting reform and pro-investment incentives. (4) Data center and AI-driven demand: Executives outlined a multi-year growth trajectory for outside-plant data-center networks, with an addressable market of >$20B over five years and rising hyperscaler activity; the company expects growth to ramp into 2026–2027 and beyond. (5) Recurring revenue and service model: The service and maintenance business remains a backbone of stability and recurring revenue; over 80% of revenue is MSAs, with ongoing awards and extensions expanding the footprint. Quotes: “We delivered a quarter of record revenue within our range of expectations and record EBITDA and EPS that exceeded our expectations.” (Dan Peyovich); “Adjusted EBITDA of $205.5 million increased 29.8% over Q2 ’25, and we outperformed the high end of our expectations.” (Drew DeFerrari); “The demand for digital infrastructure is accelerating, and Dycom is uniquely positioned to lead.” (Dan Peyovich).
We delivered a quarter of record revenue within our range of expectations and record EBITDA and EPS that exceeded our expectations.
— Dan Peyovich
Adjusted EBITDA of $205.5 million increased 29.8% over Q2 '25, and we outperformed the high end of our expectations.
— Drew DeFerrari
Forward Guidance
Outlook and validation: Dycom reaffirmed fiscal 2026 guidance: Revenue $5.29B–$5.425B; contract revenues $1.38B–$1.43B; adjusted EBITDA $198M–$213M; diluted EPS $3.30–$3.36. The company emphasized robust multi-year demand drivers, including FTTH ramp, wireless upgrades, and hyperscaler data-center network builds, along with a growing service & maintenance base. BEAD-related revenue is not included in the current outlook, signaling upside potential if policy finalization and BEAD funding acceleration materialize. Management cautioned that backlog can vary in the near term due to contract-signing timing and seasonality, but reiterated confidence in the trajectory given the next twelve months backlog and the broader secular demand for digital infrastructure. Key factors investors should monitor: (a) BEAD plan finalization and state-level implementation pace; (b) pace of FTTH/passings and hyperscaler data-center investments; (c) progression of service & maintenance awards and multiyear contracts; (d) regulatory and tariff developments and their impact on customer capex; (e) efficiency initiatives and the durability of margin expansion through operating leverage versus reinvestment needs.