Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Waters - Bank of America - Analyst : Steve, maybe just to start, could -- obviously retiring in November here. You've had a long career at Dycom. Maybe could you just give us the 10,000 foot view of how you've seen the industry change where we are in kind of a cycle versus previous cycles.

Question: Alex Waters - Bank of America - Analyst : That's great to hear. And I think just maybe going off the Verizon Frontier and news this morning, I mean, any change that you're expecting from them being kind of under the same umbrella right now or in the next 18 months or so in terms of deployments or impacts that could have happened for Dycom.

Question: Alex Waters - Bank of America - Analyst : When you think about that as well, I mean, is that kind of the same characteristics you're seeing with the Unity and the Windstream merger again, two of --?

Question: Alex Waters - Bank of America - Analyst : And then maybe one question that we get a lot is, I mean with T-Mobile kind of jumping in here with Metronet and Lumos is, do you talk to them or their customer right now or? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : And then maybe just talking about -- I mean, you've reported earnings late August. I think one of the biggest questions as well that we've gotten is 3Q guide maybe came in a little softer than the Street was expecting. Could you maybe just talk about some of the puts and takes that are associated with the 3Q guide, the year over year lapping of some one-timers as well to?

Question: Alex Waters - Bank of America - Analyst : And then maybe just thinking about the third quarter we had AT&T this morning and Pascal was on stage with Dave, and they called out that there are some workers that are on strike right now for fiber installations. Will that have any read through to the third quarter for you guys have told people in the field they self-perform. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : It's good to hear. And then maybe just -- when you're thinking about kind of the I know you we've talked about kind of the 10-year period here, but when you're thinking about the second half of the year and the ramp in that calendar '25 fiscal '26, I mean, one of your competitors has come out and said that wireline for them, which is a little smaller or much smaller than you guys have --

Question: Alex Waters - Bank of America - Analyst : Yes, is very robust right now that demand environment is very robust heading into next year. I mean, any comments that you guys have on that just as we get into 2016, what that backlog could start to look like?

Question: Alex Waters - Bank of America - Analyst : I'll give a shot.

Question: Alex Waters - Bank of America - Analyst : The Barton School of questioning. When you brought this up before hand, but just kind of that 140 million homes.

Question: Alex Waters - Bank of America - Analyst : Sure. So we are around 70 million right now, let's just say, 60 million in the next 10 years or so. And what is the -- once we hit that 140 million, 150 million, what's the opportunity set there? What does that? Is it mainly maintenance work? Is it in? Can you just walk us through kind of your thoughts on once we hit it?

Question: Alex Waters - Bank of America - Analyst : Okay. And maybe just on the opportunity set, I mean, we had Lumin here an hour or so ago, I mean maybe before I get there, the data center opportunity for Dycom, I think your words were a couple of quarters, it's been modest of -- kind of those what 50, 100 mile connections into some of the data centers. I mean, can you just talk about how that has evolved over the last couple of years or so? And what you're expecting with it's kind of a new wave or I mean of data center builds, but really just kind of AI that's coming in. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : Maybe just a little bit more of I mean, Chris was on states and it's going to be a two to four, three to four year build for Lumen from the opportunities kind of -- Unidentified Company Representative I heard the question was three to four, and you said two to three.

Question: Alex Waters - Bank of America - Analyst : When you look at kind of the $5 billion that they've discussed saying that is on existing conduit and then $7 billion opportunity, which a good portion of that is new routes. I mean, can you just talk about the differences in that sort of work that Dycom could potentially do for them? I know Lumen's your second largest customers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : So maybe just switching topics and thinking about I mean, you brought up beforehand, but maybe before we jump into speed, can you just I mean, can you talk about how much of the dollars are still being deployed? How much sort of dollars that you're seeing from customers being deployed in some of these rural areas?

Question: Alex Waters - Bank of America - Analyst : And then just would be I think with this is another question we get is I know it's a bipartisan bill. But I mean, do you see any risk if there is a change in the White House and in kind of November here of some portions of the program changing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : So I guess where we are today, 39, I think states that last time we check have received Phase 2 approval from the FDA. That's around 60% of the BEAD money. I mean, you noted on the conference call in August that 3Q of next year start to see some sort of impact. So I guess what have your initial conversations been like with customers in terms of their deployments? And what are you kind of expecting on, I guess, costs for some of these rural builds as well, too?

Question: Alex Waters - Bank of America - Analyst : And I guess just I mean, you noted beforehand of $15 billion or $6 billion of the art of money has been spent. I mean -- Unidentified Company Representative No allocated.

Question: Alex Waters - Bank of America - Analyst : But when you think about the runway for BEAD there, I mean $42 billion, it's up and how -- Unidentified Company Representative It will require 25% match. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : And maybe before we switch topics here just in terms of rural builds, I mean, is there a general rule of thumb that you kind of point to for cost per passing and --

Question: Alex Waters - Bank of America - Analyst : And then we're thinking about kind of third quarter here. You guys made a big splash with the black and beach acquisition, wireless construction operator out West. I mean, could you maybe just talk about the acquisition --

Question: Alex Waters - Bank of America - Analyst : So can you just talk a little bit about that acquisition and kind of what you're expecting from this business now being under the Dycom umbrella?

Question: Alex Waters - Bank of America - Analyst : And kind of the single best way to ask this of in terms of --

Question: Alex Waters - Bank of America - Analyst : In terms of the why you noted the wireless piece of the pie is the smaller portion for you and we had all the tower companies here yesterday and today, and it sounds like there is starting to be those initial conversations of more deployments generally (multiple speakers) -- ?

Question: Alex Waters - Bank of America - Analyst : So that I guess that densification conversation, those new deployments, that's, I guess, just ongoing and --

Question: Alex Waters - Bank of America - Analyst : And if we for the last 10 minutes or so, I mean maybe switching to margins, you've worked through the last couple of years of improving margins. I think you've noted on the call a couple of quarters ago that you worked through a program that was a drag on margins. And I mean, any other programs that you're seeing drive a drag on margins right now? And maybe where could we see the margin profile go for Dycom?

Question: Alex Waters - Bank of America - Analyst : And on the cost side, I mean, are you leveraging kind of -- any sort of a I wish people would be about in the field and George, maybe talk about some others. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : You brought up the locating business, I think maybe one of the underappreciated aspects of the Dycom businesses locating on top of kind of these maintenance programs that you provide your customers. I mean, could you just talk about the recurring nature of these a little bit more in what you could provide?

Question: Alex Waters - Bank of America - Analyst : And then when we talk to the data center operators, there's there are long lead times right now for the supply chain. I mean, are you seeing any impacts to your business on supply chain or even from your customers getting equipment as well for some of their some of their fiber builds? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:20PM, DY.N - Dycom Industries Inc at Bank of America Media, Communications and Entertainment Conference

Question: Alex Waters - Bank of America - Analyst : And with that 200 million, I mean, is that is that ratable? Should we think about that kind of the next couple of years of being in that neighbourhood or till there's programs that could be it could increase?

Question: Alex Waters - Bank of America - Analyst : Perfect. I think that's a great place to leave it. Steve, thank you so much. Really appreciate it.