Dycom Industries Inc Q3 2026 Earnings Call Transcript

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

Question: Frank Louthan - Raymond James - Analyst : Great. Quickly, the 14-day improvement on the DSOs. Is that -- are we at a new normal there? Or was there something in the quarter that helped? And then looking forward, what do you think about expansion of Power Solution to Texas, other areas with some significant data center activity. What are your thoughts on kind of future growth plans for them with your scale?

Question: Alexander Waters - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, good morning guys, thanks so much for taking my question. Maybe just first off, Dan, you kind of hit on it in your prepared remarks, but with the $20 billion data center TAM that you guys gave, gosh, a couple of quarters ago. Can you just talk about perhaps how additive this acquisition REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 2:00PM, DY.N - Q3 2026 Dycom Industries Inc Earnings Call is to that? And then secondly, just thinking about kind of the skilled labor force and the synergies there between the existing Dycom labor base. Can you just talk about that, too?

Question: Alexander Waters - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Perfect, thanks, Dan.

Question: Richard Choe - JPMorgan Chase & Co - Analyst : I just have two questions. One, regarding the fourth quarter guidance, the revenue range is a little bit wider than previous quarters. I just wanted to get a sense of what -- the puts and takes there might be as you look into the fourth quarter? And then on Power Solutions, can you give a sense of what the contracts are like and in terms of the $1 billion in backlog.

Question: Richard Choe - JPMorgan Chase & Co - Analyst : And following up on the kind of new markets for Power Solutions. I think with (inaudible), there's been a long history and steady demand, and it continues to see that. But as you look to new markets, I think there is some worry with some of these builds that some new markets are going to be long-term markets and others are going to maybe not have the same gravity and long-term strength that an (inaudible) will. So Dallas and Atlanta and maybe certain markets seem that way, but there's others that are less certain or on that outcome. Can you give us a little sense on how you would think about expansion to new markets?

Question: Richard Choe - JPMorgan Chase & Co - Analyst : Yes. Sorry to follow up on it, but it was just something that weren't relatively clear.

Question: Steven Fisher - UBS AG - Analyst : Congrats on the deal here. Just, Dan, relative to the 90% of Power Systems revenues coming from data centers. I'm curious what that mix was, say, five years ago when the revenues if you work backwards, we're probably around $500 million, was it still 90% data centers then when we were sort of in a different stage of data center development? And if not, what happened -- what was the rest of the business then? What happened to it? Because I guess, obviously, today, it's great to have 90% be focused on data centers, and I know you view this data center opportunity, as many of us do for many years, but just thinking about -- because you mentioned long-term shareholder value, what is this business set up to do beyond the data center market?

Question: Steven Fisher - UBS AG - Analyst : Great. And just maybe to talk about the $500 million of service and maintenance agreements that you talked about after the quarter. Can you just put maybe that into context a little bit? You're doing around $1.5 billion of new awards per quarter. Is the point here that, I'd say, 30% of awards on service is an indication of the importance and growing mix of service and maintenance? Or is it that you're an indication that you're setting up for another strong quarter of bookings already in Q4? Or is it both?

Question: Steven Fisher - UBS AG - Analyst : Perfect. Thanks very much.

Question: Adam Thalhimer - Thompson Davis & Co Inc - Analyst : Hey, good morning, guys. Congrats on the record results and the acquisition.

Question: Adam Thalhimer - Thompson Davis & Co Inc - Analyst : First of all, on the organic business, is it too early to talk about fiscal '27 and maybe broad strokes for revenue growth and margin improvement?

Question: Adam Thalhimer - Thompson Davis & Co Inc - Analyst : Sounds good. And then, Dan, can you give a little bit more background on the acquisition? How do the discussion start with Power Solutions?

Question: Eric Luebchow - Wells Fargo Securities LLC - Analyst : Great, thanks for, taking the question. So Dan, as you think about kind of the landscape and the data center contracting space, I mean, could you maybe just talk a little bit about how concentrated it is? Is it still pretty fragmented? And do you see more opportunity there to do future M&A maybe compare and contrasted to your traditional telecom business where you see more opportunity over time to gain scale?

Question: Eric Luebchow - Wells Fargo Securities LLC - Analyst : Great. And maybe just one follow-up for me. You touched on the BEAD program a little bit earlier. We've seen, I think a vast majority of the awards have gone to fiber and a lot of the capital will be fiber-related. Have you seen any of BEAD rewards go into your backlog at this point? I know you've talked about Q2 as kind of a starting point for revenue contributions. But just wondering if you've been having conversations and you're starting to see demand flow in already so that you can get started in Q2?

Question: Brent Thielman - DA Davidson & Co - Analyst : Great, thanks. Yes, I had a question just on the margin progression, mid- to high teens is notable, Dan, but I want to understand how those margins have progressed over the last few years what you think is sustainable? And I guess, as a follow-up to that, can you sort of quantify the cash conversion cycle related to the acquisition, especially as we think about the business sort of driving deleveraging efforts.

Question: Brent Thielman - DA Davidson & Co - Analyst : Okay. And maybe one more, if I could. Your inside-the-fence strategy, maybe you could argue, at least for the core Dycom business is kind of early days. I know starting from a relatively low point. Does this accelerate it as you leverage these customer relationships, the Power Solutions has such that we could see some revenue synergies with that strategy as you sort of combine the two companies?

Question: Brent Thielman - DA Davidson & Co - Analyst : Got it. Okay, thank you.

Question: Laura Mayer - B . Riley Securities - Analyst : Hi, good morning. Thanks for taking the question. My first question, Verizon recently announced potential large layoffs. Is this related to any kind of project that Dycom's involved with?

Question: Laura Mayer - B . Riley Securities - Analyst : Okay. Great. And then in regard to the latest fiber build-out, how much more sophisticated is this build-out and the support of the growth of AI versus the previous fiber build-out that was driven by the Internet?

Question: Laura Mayer - B . Riley Securities - Analyst : No. Just the fiber work in general, not necessarily Power Solutions.