Dycom's 2026Q2 Earnings Call: Unpacking Contradictions in Wireless Revenue, Margin Sustainability, and Data Center Growth

Wireless revenue and growth opportunities, margin improvement sustainability, data center opportunity and backlog, inside defense data center opportunity, and data center opportunities and revenue are the key contradictions discussed in Dycom's latest 2026Q2 earnings call.



Record Revenue and Margin Performance:
- Dycom Industries reported revenue of $1.38 billion for Q2 2026, a 14.5% increase over the prior year, with adjusted EBITDA reaching $205.5 million, representing a 14.9% margin.
- The growth was attributed to operating leverage, increased efficiencies, and a disciplined focus on operational excellence.

Backlog and Market Opportunities:
- The company ended the quarter with a total backlog of $8 billion and a next 12-month backlog of $4.6 billion, representing a 16.9% and 20.2% year-over-year increase, respectively.
- This increase was driven by a rapidly expanding addressable market, particularly in fiber-to-the-home builds, and strategic initiatives that improved customer relationships.

Tax Reform Impact:
- The passage of the Big Beautiful Bill Act is expected to provide a significant increase in cash flow for Dycom's customers, potentially accelerating investment in fiber broadband deployment.
- The legislation reinstates 100% bonus depreciation and restores immediate deductibility of domestic research and experimental expenditures, which Dycom anticipates will benefit its customers and Dycom through tax savings.

Hyperscaler Engagement:
- Dycom secured new inside defense work with a hyperscaler, along with a service and maintenance agreement with another, reflecting a shift in its customer base to non-traditional telecom work.
- This is part of an early-stage opportunity set that Dycom anticipates will grow significantly, driven by the increasing demand for fiber infrastructure from hyperscalers for AI-related investments.