Dycom Industries beats Q2 forecasts as digital infrastructure demand accelerates

Dycom Industries Inc. (NYSE:DY) reported second-quarter results above Wall Street expectations on Wednesday, supported by strong demand for digital infrastructure deployment and continued expansion across its core markets.

Shares of the specialist contractor gained 1.76% in premarket trading following the announcement.

Adjusted earnings reached $5.29 per share, comfortably exceeding the consensus estimate of $4.70. Revenue came in at $2.01 billion, ahead of analysts’ forecast of $1.98 billion.

Revenue jumps 45.6% as fibre investment drives growth

Dycom’s quarterly revenue increased 45.6% from the same period last year, including organic growth of 16.7%.

The company attributed the performance to continued investment in fibre-to-the-home programmes, long-haul and middle-mile fibre networks and growing demand for maintenance services.

Dycom also completed its acquisition of National Technology Integrators during the quarter, with the acquired business contributing $22.9 million in revenue.

“Dycom delivered record organic first half revenue, increased profitability, and continued above-market growth,” said Dan Peyovich, President and Chief Executive Officer. “Demand across our portfolio is stronger than ever, fueled by a generational deployment of digital infrastructure that is projected to go well into the next decade.”

Communications revenue rises but margins face investment pressure

The Communications segment generated revenue of $1.61 billion, representing organic growth of 16.7%.

Adjusted EBITDA margin for the division declined to 13.6% from 14.9% a year earlier. Dycom said the reduction reflected investments required to expand its operating capacity, as well as the impact of wireless projects that have been deferred into fiscal 2028.

Building Systems generated $397.5 million in quarterly revenue and delivered an adjusted EBITDA margin of 24.5%.

Dycom raises full-year revenue forecast

For the third quarter, Dycom expects revenue of between $1.90 billion and $1.98 billion, with the midpoint of $1.94 billion coming in below the current analyst consensus.

Adjusted earnings are forecast at between $4.33 and $4.79 per share for the quarter.

Despite the softer midpoint of its near-term revenue guidance, Dycom raised its full-year fiscal 2027 revenue forecast to between $7.48 billion and $7.66 billion.

Backlog reaches record $12.24 billion

The strength of Dycom’s longer-term demand pipeline was reflected in its backlog, which climbed 53.2% year-over-year to a record $12.24 billion.

The combination of above-forecast quarterly results, double-digit organic growth and a substantially larger backlog points to continued demand from telecommunications and infrastructure customers investing in next-generation digital networks.

While near-term Communications margins are being affected by expansion investments and project timing, Dycom’s increased full-year revenue outlook suggests management remains confident in the broader infrastructure spending cycle.

Dycom Industries stock price