DYCOM INDUSTRIES INC - 10-Q Summary (Q1 2027)
Business Context and Reporting Period
This report covers the quarterly period ended May 2, 2026 (Fiscal Q1 2027). Dycom Industries, Inc. is a leading provider of specialty contracting services for digital infrastructure, telecommunications, and utilities. The company operates in two reportable segments: Communications and Building Systems. The Building Systems segment was added following the acquisition of Power Solutions, LLC in the fourth quarter of fiscal 2026.
Key Financial Metrics
| Metric | Q1 2027 (Ended May 2, 2026) | Q1 2026 (Ended April 26, 2025) |
|---|---|---|
| Contract Revenues | $1,964.8 million | $1,258.6 million |
| Net Income | $91.3 million | $61.0 million |
| Diluted EPS | $3.00 | $2.09 |
| Adjusted EBITDA (Non-GAAP) | $262.5 million (13.4% margin) | $150.4 million (11.9% margin) |
| Cash and Equivalents | $538.8 million | $709.2 million (Jan 31, 2026) |
| Total Debt (Long-term + Current) | $2.816 billion | $2.814 billion (Jan 31, 2026) |
| Operating Cash Flow | ($24.6 million) used | ($54.0 million) used |
| Backlog | $11.906 billion | $9.542 billion (Jan 31, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Contract revenues increased 56.1% year-over-year. This includes $395.4 million from the newly acquired Building Systems segment. Organic growth in the Communications segment was driven by fiber-to-the-home deployments.
- Profitability: Net income increased 49.5% to $91.3 million. The effective tax rate decreased to 14.5% from 22.3% in the prior year.
- Expense Increases: Interest expense, net, rose to $35.5 million from $14.0 million due to higher outstanding borrowings related to the Power Solutions acquisition. Depreciation and amortization increased to $111.6 million, largely due to new intangible assets from the acquisition.
- Working Capital: Accounts receivable increased by $283.9 million, and contract assets increased by $80.5 million, contributing to a net cash outflow from operating activities of $24.6 million.
Outlook, Risks, and Unusual Items
- Acquisition Activity: On May 22, 2026, the company announced a definitive agreement to acquire National Technology Integrators, LLC for $275.0 million, expected to close in Q2 2027.
- Capital Allocation: The company repurchased 100,000 shares of common stock for $36.0 million. $83.9 million remains available under the current repurchase program.
- Debt Structure: The company amended its credit agreement in late 2025/early 2026 to support the Power Solutions acquisition, establishing a $1.54 billion Term Loan A and an $800 million Term Loan B. Borrowing availability under the revolving facility is $746.4 million.
- Risks: Key risks include high customer concentration (AT&T and Verizon accounted for ~33% of revenue), seasonality affecting outdoor work, and potential goodwill impairment if economic conditions deteriorate.
- ERP Implementation: The company is implementing a new Enterprise Resource Planning (ERP) system, which involves changes to internal controls over financial reporting.
Investor Verification Checklist
- Verify the integration progress and revenue contribution of the Power Solutions acquisition in the Building Systems segment.
- Monitor Days Sales Outstanding (DSO), which stood at 96 days, to assess collection efficiency given the high concentration of receivables.
- Review the impact of interest rate fluctuations on the $2.8 billion debt load, particularly the variable rate Term Loan A and B facilities.
- Confirm the closing timeline and financial impact of the pending National Technology Integrators acquisition.
- Assess the sustainability of the 14.5% effective tax rate compared to the statutory rate and prior periods.