Dycom Industries Q4 2025: Contradictions on Storm Revenue, BEAD Funding, and Margin Expectations

These are the key contradictions discussed in Dycom Industries' latest 2025 Q4 earnings call, specifically including: Revenue Impact of Storm Work, BEAD Funding Timeline, Revenue Growth Expectations, Backlog Expansion, Verizon New Business, Margin Expectations, and AI Data Center Opportunity:



Revenue Growth and Outlook:
- Dycom Industries delivered revenues of $1.085 billion in Q4 2025, with an adjusted EBITDA margin of 10.7%, surpassing expectations despite difficult winter weather conditions. For fiscal 2025, revenues were $4.702 billion, representing a 12.6% increase from the previous year.
- The growth was driven by continued execution of fiber-to-the-home programs, maintenance and operations services, initial revenue contribution from fiber infrastructure programs for hyperscalers, and storm restoration services. The outlook for fiscal 2026 anticipates a 10% to 13% increase in revenues, supported by customer fiber-to-the-home expansion programs and hyperscaler long-haul network projects.

Customer Diversification and Backlog:
- Dycom achieved a significant shift in its top 5 customers, reducing their revenue share from 66% in fiscal 2022 to 55% in fiscal 2025. Backlog at the end of fiscal 2025 was $7.8 billion, with $4.6 billion expected to be completed over the next 12 months.
- This diversification was attributed to a strategic focus on expanding its customer base and diversifying its service offerings, supported by a robust backlog and strong customer relationships.

Share Repurchase and Capital Allocation:
- Dycom authorized a new $150 million stock repurchase program, following the expiration of its previous authorization. The company repurchased 410,000 shares in fiscal 2025, including 200,000 shares in the fourth quarter.
- This reflects the company's commitment to returning capital to shareholders while maintaining a balanced approach to capital allocation, including investments in organic growth, M&A, and share repurchases.

Free Cash Flow and Operating Efficiency:
- Dycom demonstrated improved free cash flow performance in fiscal 2025, with an increase of 82% to $137.8 million for the full year. The combined days sales outstanding (DSOs) improved by 6 days compared to the previous year, reducing to 114 days.
- The improvement in free cash flow was due to enhanced invoicing cycles and a focus on converting earnings into cash, supported by strong operating cash flows and disciplined capital expenditure management.