Detailed narrative
Fiber-to-the-Home Step-Up Drives Communications Strength
Communications revenue reached $1.57B, up 24.7% organically, driven by ramping fiber-to-the-home programs, increased long-haul and middle-mile builds, and growing maintenance/operations services, aided by a favorable seasonal (weather) backdrop. Management said fiber-to-the-home revenue grew 33% sequentially in the quarter and reiterated the build is still early — several years of increasing passings ahead and further years where cost-per-passing rises.
Management attributed the ramp to both market timing (many programs coming online at once) and continued market-share gains, citing Corning's announced fiber manufacturing scale-up as corroborating multiyear demand.
Building Systems / Power Solutions Integration Ahead of Plan
Building Systems generated $395.4M revenue (~20% of total) at $70M adjusted EBITDA, a 17.7% margin, with Power Solutions ramping ahead of initial expectations. Management said full-year segment growth implies roughly doubling the segment's trailing 4-5 year CAGR (from ~15% to 30%+), requiring significant investment yet already delivering high-teens margins. The full-year Building Systems adjusted EBITDA margin outlook was raised to high teens, similar to Q1.
NTI Acquisition Extends the Digital-Infrastructure Stack
Dycom signed a definitive agreement to acquire National Technology Integrators (NTI), a Maryland-based low-voltage engineering/construction firm specializing in inside-plant structured cabling (including data centers), audiovisual and security systems. Purchase price is $275M cash/debt-free (~$234M cash + ~$41M Dycom stock); initial annual revenue run rate ~$175M at mid-to-high teens adjusted EBITDA margin.
NTI is ~2/3 data-center exposed, with operations in the DMV, Texas and Midwest, and has been a Power Solutions partner for years. Management framed it as connecting work 'from the racks' across data centers to long-haul routes, with strong cross-sell synergies.
Close expected in fiscal Q2; excluded from current outlook.
Record Backlog and Multiyear Visibility
Total backlog reached a record $11.9B, up 25% sequentially, a 2.2x book-to-bill; $10.8B Communications and $1.1B Building Systems. Next-12-month backlog was $6.4B ($5.4B Communications, $1.0B Building Systems). Awards diversified across customers, demand drivers and geographies, and some customers extended contract durations (3-4 years out) to lock in skilled workforce. Management noted 'awarded-but-not-contracted' (A/B/C) and 'shadow backlog' behind published figures are multiples of reported backlog.
Long-Haul / Middle-Mile Opportunity Growing but Early
Management said the previously cited ~$20B long-haul/middle-mile opportunity set has grown (internal numbers updated, not published). One customer described hyperscaler route discussions of up to 7,500-10,000 fiber strands per route versus today's 864 or 1,728-count fiber, underscoring a decade-plus build. Meaningful revenue ramp is expected in calendar 2027 and especially 2028, with Dycom claiming first-mover positioning and rising win rates.
Margins, Cash Flow and Capital Allocation
Consolidated adjusted EBITDA margin expanded 141 bps YoY to 13.4%; Communications margin rose 31 bps to 12.3%. Combined DSOs improved to 96 days (down 15 YoY, 5 sequentially), described as a sustainable range with improvement on both segments (not just Power Solutions mix).
The company ended Q1 with $538.8M cash, over $1.28B total liquidity, and ~2.3x pro forma net leverage; it repurchased 100,000 shares for ~$36M (~$360/share). Results included a $12.5M ($0.41/share) share-based-award tax benefit.
Workforce as the Binding Constraint
Dycom added 730 employees in the quarter toward a stated ~20,000 teammates, framing skilled workforce as the factor that will 'make or break' customer build plans. Customers are contracting work 3-4 years out specifically to secure Dycom's labor through the end of the decade.
Management said it passes on low-bid work, preferring longer-term agreements, and that M&A (NTI, Power Solutions) is not primarily a labor-sourcing strategy though some NTI non-union work is 'fungible' with network work.
BEAD Progress
BEAD is progressing through state-level and sub-grant pipelines after a 4+ year strategy of partnering with states and sub-grantees. Some revenue is still expected in fiscal Q2, but it is excluded from the outlook and framed as potential uplift, with the program really taking shape in calendar 2027 as smaller programs start sooner and larger ones follow.