Dycom Q2 Earnings Beat Estimates, Revenues Miss, Stock Down

Dycom Industries Inc. DY reported mixed results in second-quarter fiscal 2026 (ended July 26, 2025) with quarterly earnings surpassing the Zacks Consensus Estimate and also increasing on a year-over-year basis. Meanwhile, contract revenues missed the consensus estimate but increased year over year.

In the fiscal second quarter, the company delivered strong results, supported by record revenues, EBITDA and EPS. Fiber-to-the-home initiatives, wireless activities, maintenance services and early contributions from infrastructure projects tied to hyperscalers were the key drivers of growth. Cash flow improved as DSOs decreased by nine days, and the backlog increased significantly over the next 12 months, increasing by more than 20% year over year.

DY stock tumbled 4.6% during yesterday’s trading session.

Dycom Industries, Inc. Price, Consensus and EPS Surprise

Dycom Industries, Inc. price-consensus-eps-surprise-chart | Dycom Industries, Inc. Quote

DY’s Q2 Earnings & Revenue Discussion

Dycom reported adjusted earnings per share (EPS) of $3.33, beating the Zacks Consensus Estimate of $2.86 by 16.4% and increasing 35.4% from $2.46 year over year. The upside was attributable to improved operating leverage.

Contract revenues of $1.378 billion missed the consensus mark of $1.396 billion by 1.3% but rose 14.5% year over year. Contract revenues increased 3.4% on an organic basis. Acquisitions contributed $139.8 million to contract revenues.

Operations & Backlog Details

Adjusted EBITDA increased 29.8% to $205.5 million from a year ago. Our projection for the metric was $187.2 million for the fiscal second quarter.

Adjusted EBITDA margin of 14.9% expanded 175 basis points from the year-ago level. Our estimate for the metric was 13.4%.

Dycom’s backlog at the end of the fiscal second quarter totaled $7.989 billion (our projection was $8.6 billion), representing a year-over-year increase of 16.9% from a year ago. Of the backlog, $4.604 billion is projected to be completed in the next 12 months.

Financials

As of July 26, 2025, DY had liquidity of $545.9 million, including cash and cash equivalents worth $28.5 million compared with $92.6 million as of Jan. 25, 2025. Long-term debt was $1.01 billion at the fiscal second-quarter end, up from $933.2 million at the fiscal 2025 end.

During the first two quarters of fiscal 2026, DY repurchased 200,000 shares of its common stock for $30.2 million at an average price of $150.93 per share.

Dycom’s Q3 View

For the fiscal third quarter (ending on Oct. 25, 2025), DY expects $1.38 to $1.43 billion of contract revenues for the quarter.

The adjusted EBITDA is expected to be between $198 million and $213 million. For the said period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.3 million. Interest expenses, net, are likely to be $14.7 million and amortization expenses to be $11.8 million.

FY26 Guidance by Dycom

Dycom expects total contract revenues for fiscal 2026 to range from $5.290 billion to $5.425 billion, representing a 12.5% to 15.4% year-over-year increase, driven by robust digital infrastructure growth and long-term demand drivers.

Service and maintenance provide a steady stream of income, and management is certain that margins will continue to grow and operational efficiency will improve.

DY’s Zacks Rank & Key Picks

Dycom currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Construction sector are Everus Construction Group Inc. ECG, Tutor Perini Corporation TPC and Great Lakes Dredge & Dock Corporation GLDD.

Everus Construction Group presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 42.7%. ECG stock has jumped 13.7% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ECG’s 2025 sales and EPS indicates growth of 18% and 3.9%, respectively, from the year-ago period’s levels.

Tutor Perini sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 387.2%, on average. Tutor Perini's stock has skyrocketed 131.4% year to date.

The Zacks Consensus Estimate for Tutor Perini’s 2025 sales and EPS indicates growth of 20.6% and 187%, respectively, from the prior-year levels.

Great Lakes Dredge & Dock flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 45.3%, on average. Great Lakes Dredge & Dock stock has gained 1.4% year to date.

The Zacks Consensus Estimate for Great Lakes Dredge & Dock’s 2025 sales and EPS indicates growth of 9% and 21.4%, respectively, from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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