Release Date: November 20, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dycom Industries Inc (NYSE:DY) reported a 12% year-over-year increase in revenue, reaching $1.272 billion, with organic revenue up by 7.6%.
• The company completed the acquisition of Black & Veatch's public carrier wireless telecommunications infrastructure business, which is integrating well.
• Dycom Industries Inc (NYSE:DY) secured new awards and extensions from major customers like AT&T, enhancing its fiber-to-the-home and maintenance services.
• The company is well-positioned to capitalize on opportunities related to AI and data center connectivity, with significant potential for long-haul fiber network deployments.
• Dycom Industries Inc (NYSE:DY) has a strong liquidity position of $462.8 million, supporting its growth and acquisition strategies.

Negative Points

• The company anticipates seasonal factors such as fewer workdays and inclement weather to impact Q4 earnings.
• There are incremental costs associated with the CEO transition and acquisition integration, impacting G&A expenses.
• Organic growth is expected to slow down in Q4 due to some customers having stronger performance in the first half of the year.
• The integration of recent acquisitions involves additional costs, which may affect short-term profitability.
• Dycom Industries Inc (NYSE:DY) faces uncertainties related to the timing and execution of federal and state broadband deployment programs.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Sign with LZB.

Q: Can you elaborate on the startup incremental costs in Q4 related to the start of large programs? A: Drew DeFerrari, CFO: We have announced new awards and extensions, including the Lumen award. There are costs expected in the quarter as we ramp up in new areas. Additionally, we continue to ramp on the recent acquisition, which also incurs some costs.

Q: What is the status of the Lumen AI opportunity and its impact on backlog? A: Dan Pavich, President: We are excited about our partnership with Lumen and view this as the start of significant opportunities as hyperscalers look to connect data centers with long-haul fiber networks. We are having conversations with other customers and believe this could be significant in the years to come.

Q: Can you provide an update on the BEAD funding and its potential impact under a new administration? A: Dan Pavich, President: We believe there is bipartisan support for broadband deployment to rural homes, similar to the importance of power 90 years ago. We expect continued support for these initiatives, and early awards in states like Louisiana are promising.

Q: How is the integration of Black & Veatch's wireless business progressing, and what were the wireless revenues for the quarter? A: Dan Pavich, President: The integration is going well, with equipment replacement ramping up quicker than expected. Drew DeFerrari, CFO: Wireless revenues were just over 4.5% of total revenue for the quarter.

Q: Are you seeing more long-haul projects related to AI data center builds compared to short spurs off networks? A: Dan Pavich, President: We are seeing more conversations about long-haul projects as hyperscalers commit CapEx to increase capacity and redundancy. This includes connecting existing data centers and building new ones, which could be a significant opportunity for years to come.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.