Dycom Industries Inc at UBS Global Industrials & Transportation Conference Transcript

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

Question: Steve Fisher - UBS - Analyst : Fantastic. Okay. So Dan, you've just taken over as CEO, first time for a new CEO at Dycom in 25 years. Can you just tell us a little bit about your leadership style? What's going to be most important to you as you guide the company from here?

Question: Steve Fisher - UBS - Analyst : Awesome. You've -- obviously, you've been with the company for a little while, been integral into a lot of the decision making. And now as you take over, I'm just curious about what this opportunity that you have ahead. What are some of the most important decisions that you're making now that you think you're going to set up for the most success in a couple of years from now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 1:50PM, DY.N - Dycom Industries Inc at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Great. And we are going to get into a lot of the details of the end market dynamics and growth drivers.

Question: Steve Fisher - UBS - Analyst : And I will keep you high level for now and maybe thinking about the concept of success. And what do you think success if we look forward, say, five years from now? What do you think success for Dycom and for your tenure as CEO will have looked like? What's the vision you want to set for Dycom for five years from now?

Question: Steve Fisher - UBS - Analyst : Terrific. We often get asked about Dycom's competitive advantages. And just a moment ago, you talked about how complexity favors you. And maybe you could just talk a little bit more about how broadly you differentiate amongst the whole industry that provides these services? And do you think you have a competitive moat? And if so, how is that moat changing now?

Question: Steve Fisher - UBS - Analyst : Terrific. You mentioned numbers a few times here. So let's talk a little bit about that you recently reported your Q3 results and give Q4 guidance. Stock was off a little bit that day. Maybe you can just give us some overall perspectives on the results and how you see the near term fitting into the broader picture.

Question: Steve Fisher - UBS - Analyst : Okay. So some unusual dynamics there don't read into it too much.

Question: Steve Fisher - UBS - Analyst : Perfect. Maybe shifting gears a little bit in terms of your customer base and how you see that evolving, you really have kind of two angles in mind. On one hand, some of your larger customers have been consolidating. And so I'm curious kind of what opportunity that presents for you. But in the second time, when we think about that pie chart of your customer base, it's always had a very huge percentage of it that's very concentrated into the top five, but it's becoming a little less concentrated more recently. So curious as that changes a little bit, becomes a little bit more diversified, how does -- what are the implications for growth rate and margins?

Question: Steve Fisher - UBS - Analyst : Fantastic. So let's maybe focus really on sort of the heart of what these opportunities are that people are really excited about. So in terms of maybe one leg of the stool in terms of the growth would be sort of this urban and suburban opportunity unpacked. We've talked about 40 million to 45 million homes perhaps where there's opportunity for fiber. Can you just talk about kind of what's the opportunity set for you there? Is it all these 40 million to 45 million homes? Or do you apply some selectivity filters to that opportunity?

Question: Steve Fisher - UBS - Analyst : So it's certainly a very dynamic opportunity at the moment. There's just -- it seems like over the last handful of months, lots of new data points every day coming out a week about opportunities here, including this week. Maybe you can just talk about and frame what you heard at, one of the key customers at their Investor Day and kind of what that might mean for you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 1:50PM, DY.N - Dycom Industries Inc at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Maybe just putting a bow on when I think about the -- there's a few broad legs to the stool of your growth opportunities. So kind of wrapping up this 40 million to 45 million urban, suburban type opportunities. just that bucket alone, do you think -- would you tell investors that just that opportunity itself is enough to drive meaningful growth for you over the next several years?

Question: Steve Fisher - UBS - Analyst : Fantastic. Okay. Shifting over to another leg of this growth stool here would be sort of this long-haul opportunity and hyperscalers. So maybe you can talk about how the emergence of hyperscalers have created opportunities for you? And what actually is the opportunity here?

Question: Steve Fisher - UBS - Analyst : Fantastic. And as we think about who we should be paying attention to, how broad is the customer base for this? You mentioned Lumen. Is it really sort of just handful of large tech companies? Or is there a broader customer base to think about?

Question: Steve Fisher - UBS - Analyst : Great. Maybe just digging in just a little bit more on this to understand the nature of this work. You mentioned some overpull with Lumin. So what are you actually doing on the house? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 1:50PM, DY.N - Dycom Industries Inc at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : And so where you're not doing this pull-through existing conduit there, you're actually digging trenches and -- ?

Question: Steve Fisher - UBS - Analyst : Yes, I was going to ask you next exactly about that point about timing. So how should we think about this timing in general?

Question: Steve Fisher - UBS - Analyst : Got it. And just lastly on this part of the topic, how are the competitive dynamics for this type of long haul intercity work? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 1:50PM, DY.N - Dycom Industries Inc at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Great. So you made reference before to the BEAT opportunity, rural, in general. Maybe you can talk a little bit about that. So what are you -- I mean, the concept of rural is not new. What are you doing in rural today? And how would BEAD work be different?

Question: Steve Fisher - UBS - Analyst : Okay. So as this opportunity comes through and developed over the next two years, just curious how well set up from an infrastructure perspective you are. Do you still need to make investments in certain parts of the country, putting in? I know you have warehouses and equipment and various things. Is there a need for -- to invest in CapEx or other investments to support that rural work? And then how do you think about timing of that investment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 1:50PM, DY.N - Dycom Industries Inc at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Excellent. So one of the things that we've been getting asked about a lot over the last several months is really sort of the alternative to fiber for rural connectivity. And so I'm curious how investors should think about low earth orbit satellites as a competitor of fiber. And maybe is there anywhere where it's just sort of clearly obvious that fiber is really the answer that makes more sense.

Question: Steve Fisher - UBS - Analyst : Great. I was going to -- .

Question: Steve Fisher - UBS - Analyst : Yes.

Question: Steve Fisher - UBS - Analyst : And you mentioned Louisiana, I was going to ask you sort of what's next after Louisiana. You've mentioned maybe it's these nine other states. What's the -- what should we be looking for next?

Question: Steve Fisher - UBS - Analyst : Okay. There's been -- as we talked earlier, the concept of rural is not new, and you mentioned that there's -- there are state programs already. So I'm curious -- what happens to these various state funding programs in a BEAD world like tennessee, for example. We followed that program for the last couple of years. They call it the digital opportunity plan or they are providing $750 million for rural connectivity. What happens to those programs? Do those continue on and that's additive? Or does it kind of blend together?

Question: Steve Fisher - UBS - Analyst : Sounds good. A couple more questions here, then we'll open it up. In terms of margins, you've had some really nice steady improvement in margins in the last few years. What's the expectation that investors should have now about margins from here? Can you kind of sustain this teens level where you are? Can you still squeeze out a little bit more margin from here as this opportunity ripens? Is there anything restraining margins? What's the message and expectation you want to say about margins?

Question: Steve Fisher - UBS - Analyst : Okay. Fantastic. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 1:50PM, DY.N - Dycom Industries Inc at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Great. Balance sheet is in good shape, gives you a lot of good flexibility. Talk about capital allocation a little bit. Company has been buying back stock and doing some targeted acquisitions in recent years. What are the priorities and opportunities ahead?

Question: Steve Fisher - UBS - Analyst : Excellent. Well, actually, we are out of time. -- For any other questions that people have, we can come up afterwards. But Dan, thank you so much. Really appreciate you being here with us.