DY - Earnings call 3 2024 | Dycom Industries, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Dycom Industries, Inc.

Third Quarter Fiscal 2024 Results Conference Call. [Operator Instructions] Today's conference is being recorded.

to conference like speaker to now Mr. today, would hand over the your I Chief Executive and Nielsen,President Steven Officer. ahead, go Please sir.

Steven Nielsen

third results. Thank you, conference our this you for fiscal operator. Good morning, call everyone. to Thank attending quarter XXXX review

Going X. to Slide

Financial have to DeFerrari, by During which and slide presentation. number Officer; website's Center throughout can be slides our Relevant we our presentation, main on our a page. our this on found will Urness, will Drew General call, Investors we Chief the referring call be be Ryan Today, identified Counsel.

Urness. turn Now, call I will the over to Ryan

Ryan Urness

Thank during Litigation provided provisions are you, Act forward-looking Steve. safe the of All statements Reform this conference harbor the to made of call Securities Private XXXX. pursuant

beliefs risks events. subject discussed filings differ those statements U.S. statements are in uncertainties forward-looking and materially about including company's future actual Forward-looking comments from assumptions all include results to These risks the may reflecting Securities Commission. which cause our projections, to and Exchange the current or with expectations,

statements to date call, no of assume the and statements. we made this obligation original broadcast solely Forward-looking any Steve? conference forward-looking as update of are

Steven Nielsen

Thanks, Ryan.

and moving quarter Now of our X review results. third to a Slide

measures. results, of in these review you non-GAAP measures reference reconciliation please in we their today Quarterly that Reports GAAP and the to our As non-GAAP measures. comments website our the a for our we slides, refer accompanying note certain We section corresponding of to

adjusted of the contributed change of quarter. revenues million impacts impacts these and After of contract this all by margin both several gross $XX.X other addition, In during increased costs, items certain and to closeout million EBITDA. the order the of $XX.X projects the

EBITDA basis, or share gross by and reported items result, income was after-tax contributed both diluted. contract $XX.X an a revenues. $X.XX margin X.X% as these reported per by to net was increased reported of percentage increased approximately million a On X.X%, As adjusted common

Organic X%. to $X.XXX revenue increased of billion, Now an increase quarter. year-over-year Revenue grew for the X.X%.

demand gigabit of quarter deployed top and of XXX quarter of customers. Gross converged and compared revenue, third quarter, networks, X factors we of revenue ago Construction. year Liquidity from increased XX.X% of Bigham were the Cable and to X produced networks, these wireline ample and And the all wireless/wireline million XX% in we networks wireless $X.XX X.X% was fiscal expenses of acquisition the General in or administrative EBITDA our XXXX. revenue, was per to $XXX.X million. of points basis this As increase an reflected of margin completed adjusted during at earnings the $X.XX of finally, $XXX.X compared share quarter.

to going are sections individual generally their designed belief Today, that upgrading either consumers Industry wirelessly businesses or Slide These broad technologies. of to network participants the to enabling single increasing cost can network industry. industry's fiber for view the fiber networks that effort we and the deliver set businesses, single most meaningfully deployments, a appetite our This deploy to investment. for both have Now X. country. across speeds a fiber revenue and multiple significant wireline industry streams consumers networks the broaden of participants is or and using believe to high-capacity opportunities wireline directly gigabit services continues networks high-capacity from XG to are major effectively provision constructing stated

proposals the December their support increases an level unprecedented by addressed. and especially construction represents BEAD submit requirements for are XX the States the that the be Increasing Jobs rural for areas and rural The billion rural communications the of BEAD across initial This continues unserved and in the will be Act expect to access under market high-capacity through we telecommunications $XX program. society, underserved includes meaningfully country to ultimately of crucial over progressing to networks America. deadline. investment infrastructure to

XX of and required X. and XX funding. X before completing all states XX the commencing of spending, Once having X X As of have or XX% more can steps of allocated steps process, its X commenced territories completed week, with state completed, a request of X planning last are

programs all In prior initiation networks will provide Infrastructure the substantially funding even states that addition, have funding telecommunications Act. commenced of the for under to

consisting management, wired We across to multi-use are networks. for elements providing the services and geographic and network areas and in include converged wireless underground deployments. program being fulfillment multiple planning, These design, engineering deployments and country provided These gigabit numerous services entirely aerial, networks of wireless/wireline construction customers. are

respond deployment opportunities network societal to in Fiber increasing initiatives. are as participants emerging industry new America rural

provide and Macroeconomic participants. execution integrated impacting maintenance services the capital to influence the of some may those procurement to continue plans. and planning, of construction conditions, including industry and industry design, engineering We several cost

the conditions tight these remains around In how to labor for seen regions specialty chassis country. It be and Prices to the challenged, equipment remains required Automotive long chains addition, in may for supply the truck continue for for capital market many equipment increase. particularly persist. large remain equipment.

demand may increases amongst cost fluctuate slow. of in expect We the customers less as capital

next For the those increasing of calendar half deployments weighted year, of first into several customers the more whose towards for customers, heavily capital including is pace expenditures year were XXXX.

some these may are we that customers, already be For increasing. pleased activity

These our fund confident financings. We this strength context, position to that financial are us and our service to recent capital industry scale encouraged have by Within of future longer-term customers. well deliver to expanded financings available pool growth. valuable remain we industry the

X. Slide to Moving

quarter, increased the revenue X%. During

million. our at from XX.X% of top increased XX.X% excluding customers. This of Lumen. was largest XX.X% of our decreasing X increased revenue, combined Demand customers top Brightspeed period. organic growth with grew to Our All customer Lumen ago X.X% year customers Lumen our other seventh from operations sold organically. the or X quarter consecutive organically XX.X%, X of produced $XXX.X organically. revenue was

X.X%. and $XXX.X a revenue. largest This grew XX.X% finally, was was customer or largest customer requested or name was And organically from Verizon at million has fifth Revenue largest be Comcast was organically. customer their X.X% our grew million of total Verizon of second X.X% largest Comcast third $XXX.X $XX.X customer fourth organically. of at was $XXX.X XX.X% grew our AT&T not disclosed revenue XX.X% revenue. X.X% customer or at Dycom's of million. our who million customer or revenue.

customer This have customers customers the first was quarter. our XX in electric all in aggregate, note, than is revenue increasing XXth have of X where quarter the the $XX.X X and where represented total other top organically. our excluding utilities is opportunity. Of million consecutive construction encouraging customers, in of top of from less quarter an revenue, XX% sign fiber grown breadth It years the

and services. expanded our management network planning We have extended our geographic reach and program

last deployment over and we of converged believe must outside we years, that plant be wireless/wireline operations gigabit believe direct and meaningfully have trend those extended the and the dramatically parallel network our maintained. amount long-term of fact, several a the value networks, as will wireline of we In business, increase which increased our maintenance deployments

backlog, reflects work. Backlog the $X.XXX going end booked renewed $X.XXX XX an expected the Slide work this of Of at Backlog Now we months. of at July the performance to the completed quarter XXXX million. to billion X. quarter third quarter, existing versus solid end the billion next in the be was and of new billion as increase third activity during $XXX is approximately $X.XXX

customers. continue of We opportunities across future anticipate a to substantial broad our array

locating and Kentucky, for Alabama, Tennessee, AT&T agreements From New line and York; Arizona, agreements in agreements in Ohio fiber we Georgia; utility Carolina Georgia. North Illinois, quarter, agreements Carolina Frontier, from South construction and South Wisconsin, Tennessee, various and and fiber construction Headcount and Charter, for various in received XX,XXX. Carolina maintenance construction rural in Kansas, Georgia. was South construction the Arkansas, Tennessee, California, Ohio; Carolina, During a agreement

outlook. turn review to over will for call I his the financial Now, Drew and

H. DeFerrari

everyone. Thanks, Steven. Good morning,

million these revenues from of Going was revenue $XX.X revenues our in the projects revenues Adjusted both increased contributed of and billion, increased 'XX. to acquired EBITDA in and $X.XXX and 'XX. $XX.X period. $XXX.X were or margin revenues X. to QX recently was compared Revenue certain order Contract costs, $XX.X or XX.X% other a impacts by items EBITDA. organic current contract of impacts closeout million several million contract Slide of XX% the to the million business contract $XXX.X After in X.X%. adjusted million of QX The gross change

reported result, EBITDA increased percentage was was by X.X% a by reported both margin adjusted X.X%, and a as increased gross of As contract revenues.

order to XXX On performance. million an basis, $XX.X Compared from change reported and or after-tax close the impact projects income and the of the $X.XX points, operating point out basis basis to contributed increased per share. net from margins XXX approximately items these improved 'XX, of gross several resulting QX

EBITDA adjusted depreciation $X.XX increase sales, taxes. higher last per stock-based of expense X.X% G&A Net partially share and in share QX income in amortization, to interest by QX per compared was higher 'XX. The was on gains and year. expense reflects compared compensation, offset to earnings higher $X.XX X.X% in asset revenue and

Slide X. to Going

Our sheet million. loan QX financial were of borrowings. $XXX.X million $XX.X and strong. senior and million of ended term $XXX and was position notes, liquidity balance at with million Cash $XXX and equivalents million We remains revolver ample $XXX.X of

allocation leverage. M&A and growth, context Our share organic opportunistic of prioritizes capital followed of repurchases by range net historical our within the

proceeds, were XX in Capital of XX. and Going QX operating net contract days, organic million. and $XX CapEx The assets of $XX.X DSOs were of $XX.X growth. net to flows increase million XXX support gross Slide used disposal activities receivable Cash to million, were sequentially. accounts in combined expenditures an was days

During amounts. QX, $XXX.X acquired we cash net and of Bigham debt for Construction million Cable

quarterly seasonality daylight on the may weather, and XX. actual reduced workdays the calendar year, payroll Going These factors Each to taxes. of Slide other our available for a hours quarter. by as impact results fewer January impacted including pronounced have the are well inclement due as holidays, our to restart work results January

last expect fourth ahead XX, line with to As look XXXX, we quarter to be QX revenues the year. organic January of ending in we

approximately we addition, our expect acquired revenues contract of recently from business. In $XX million

basis of EBITDA adjusted compared points XX to XXX QX non-GAAP expect also contract increase 'XX. to to revenues percentage We

interest income million million tax XX% $X.X Additionally, of expense, total effective shares. XX.X expect net rate and expense, amortization a we $XX.X million of diluted

the Steve. call I Now, will turn to back

Steven Nielsen

Drew. Thanks,

Slide to XX. Moving

experienced we on strengths. quarter, solid and significant capitalized our This activity

First presence markets. we and our maintained significant foremost, customer throughout

are the in business. breadth our encouraged by We

for doing this supply share Federal chains, growth support are state deployments deployments creating and are projects in operators fiber scale and increasing Customers and consolidating operations expansion underway. maintenance of Cable consumers continues our consumer Telephone are Our deploying to evolving bands increasing newly is Capacity market industry of construction spectrum enable of extensive for high-speed of forefront value Rural year. growing, the are are rural for activity particularly communications same. Dramatically and America. networks and being rural available increasing be opportunities market is electric duration. utilities increased dramatically long-term presence has allowed fiber-to-the-home business. speeds to data Wireless companies in at us upstream. provisioned opportunities. are usage the connections. the support gigabit of

nation to our uncertainty, customers As economic our committed a spending initiatives. that of remain multiyear capital and we number industry encouraged navigate substantial are

in our We of strategies, employees and are our the our prospects our confident capabilities company, for management team. dedicated the experience of the

operator, questions. for will open call we Now, the

Operator

from question from first our And Thompson Instructions] will [Operator come Adam Davis. Thalhimer

Adam Thalhimer

Great easing? I say the a Drew. level, you like and hear of concerns did around feels at quarter. are Steve it cost Steve, high capital

Steven Nielsen

Yes.

would roll is year rates. I say, an I increase it as back what ago, think I anticipated people a in don't we if interest significant think Adam,

today. that be and better. about feel is it I future, into lower, outlooks a think that things because that's clearer And view where in basically hopefully where have may the they perhaps people's just and uncertainty less baked

Adam Thalhimer

Okay. is had quarter seems up? that of Bigham than significant. you the And winter in revenue wonder program acquired million expectations? performing while also if I a ramping then Cable better they $XX

Steven Nielsen

their came in better were bit little continues. we business in expected we look, pleased we in a Well, when than performance They The momentum in talked October quarter. with August. what the the

less if the Southeast, think to certainly seasonal territory mind X to Minnesota. immune little less bit service than in probably primarily somewhat is seasonal. they Not is were thing a their FX, totally but I keep so in

Adam Thalhimer

curious but revenue on I'm where impact change And customer? an you're to probably punt modeling this, order purposes, for Okay. closeout by the had going

Steven Nielsen

perform we break to to we're and see working volatility. been closing we've out, I going close we program, is down think been it to Good that think customer, And less challenge. prediction, but would that's a to say Adam. going we going hopefully, -- a large not we're by it as hopefully, we're We're what that going better customer out through

Adam Thalhimer

again. Congrats Great.

Steven Nielsen

Thank you.

Operator

And from our come Davidson. from question Thielman next Brent will D.A.

Brent Thielman

Steve, well. the up XXX as still basis Great quarter gross margin's points.

change called ordering In fact, quarter we close on out relatively this out modest...

Steven Nielsen

difficulty Brent, having you. we're little a hearing

If you a up bit? could speak little

Brent Thielman

How's that?

Steven Nielsen

Much go better. Yes, Brent, ahead.

Operator

question will to on is question. looks our And move will Frank from James. actually so from come It we like Raymond our Brent disconnected, next next Louthan

Frank Louthan

so Any questions. quick of that? from couple Lumen go from fiber sort had detail, there? of about at A into seeing but if then BEAD sure And their feeling you'll the and flatline not the confident to you color intend they I'm Anyone What this current programs? forth preorders overbuild are rate. said

ramped you they would -- with the as year of past relatively has it normalized if for a baseline good sort to were of a consider on. If be you that's flat keeping obviously be this quarter them this were What for year? gone business Would that? level

Steven Nielsen

Yes. with the BEAD of demand lots that having resources with to about respect Frank, will BEAD, we're for create. customers conversations

topic all states way conversation. a a the details. through it's into premature think but certainly their process, a I way kind couple of Only initial little navigated to the get for have of it's

it to fairly seen homes. more capital, I'm like FCC be amount dollars where to broadly more government something the $XX following X,XXX like this what looks funding you're continue something or is is sure least the I we going X,XXX add the about program into that substantial to at we've and like $XX a federal additional other billion, would of state billion, is space. enhanced A-CAM think see I thing committed

and So state of I there's federal broadly. opportunity think lots but BEAD not with the only on more side

going what on on any guess we're what to us we There'll say busy to year. our Lumen, current not keep feel But I activity in plan. next said into be levels, publicly then on I detail And about particular plenty they've with good would customer. based go

Operator

next our come of from will Alex from Waters America. Bank question And

Alexander Waters

Steve and one. first Drew. just Maybe the

of a you little million it kind Could there? and was $XX.X more puts the onetime bump, any give the bit With you provide? can specific of revenue And color takes customer? us a

of weighted. as then spend think half that XXXX, well other into been we having? X expect you've And kind some customer CapEx Frontier maybe just the conversations noted of I looking Should from

Steven Nielsen

we're And by I Yes, the exclude provide what we're to through going Alex. program. you is pleased effect not projects With would detail if a respect to working we're the focus on of that than change other any out order, closing large guess on hope less volatile. still that customer better haven't I and place And been results good get EBITDA time, margins, we said earlier, we're a it, XX.X% call trend close a feel where in about at, as we we as that continuing activity, that out. long I the program and I

things I work or little little seasonally seasonality them broadly be by into different. timing quarter comments where do in think customer's more plenty their to And different. every we is I by think industry. of of the I get We can I'm when customer entire year, year. not sure X CapEx a we for to next bit see extend a for bit different They have business, would

Operator

And Riley come our B. will next Alex Rygiel question from from Securities.

Alexander Rygiel

products. fiber lot Very of seen, questions. nice and in A for of decline conduit demand A quarter, quick equipment notable a anticipated have Steve. couple vendors

inventory the on obviously Some that of of with kind you softness not, are of if equipment any out And kind saying? likely corrections. what that? reconciles of sort it's due seeing there to your what's Are take vendors channel

Steven Nielsen

We Alex, goes it's a space. hard pay on certainly to on attention one. that what

I think largely makes it's your that sense. suspicion channel-related

pull mean if the customers half loaded you year them was revenue. quarter, million, quarter of up I and ago exclude this $XXX organically. quarter and everybody were X you year of is else of who else is couple $XXX this numbers a the of million for XX% notable and front That more interesting everybody this out

import guess like the labor order seeing we're changed what's we out do. we a so for the figure the broad Clearly, us activity. chain and news is have So good supply of level I don't for stuck to logistics don't I in pretty patterns think equipment, pandemic they

Alexander Rygiel

in large And then profit as very basis, margins program been from quarter the margins Is sustainable? of to level? strong you that we is about have sort a completed on may apples-to-apples of How year-over-year. guidance basis, now. a Obviously, upcoming comparable today? kind do that your that it excluding can maybe grow relates And think profit

Steven Nielsen

look is our trailing number you at think, quarters X EBITDA, at another it's I interesting XX.X%. if Alex,

number have said on view. had to always we're be you we've talked we're -- better. to for through improving back years it, as the getting We're There's what long-term not said before, take opportunities. average working to that, margins. average. We about And a longer of demand keep and going a and I backdrop we is can aspiring that things a maybe so I do always at new think if look we There's again, think

think little of back ended right it's a $X.X this for XXXX, and view we tell you and as $XXX the time a EBITDA we ourselves, would can X XX if about and revenue at that of over margins term. take the take the interesting to faster public EBITDA, and EBITDA. when -- ago of almost company, which But the a sometimes the grew and over of million billion X less And of October longer $XXX lots that had get years million short revenue $X.X we, than view. company than quarters business most longer a bit It's of recent you go billion grow revenue, quarters,

Operator

come next Eric Fargo. our question Luebchow from from Wells And will

Eric Luebchow

talked touched you this little about a this. on Steve, in bit transcript you the and

XXXX, still it quarters? talked about tough forward see customers ramping. QX the and activity predict little you the as X up that? Do the couple X last starting them levels a those of had that picking the is mentioned see Or you next You signs with customers see bottom about telco of could saw that you kind to year? CapEx of of we've effectively timing we're your you into in some numbers bit large of to had you calendar that Maybe early and pulled telcos some talk

Steven Nielsen

you year business. Yes. growth in speak I next would the we specifically indicators X won't those already to I but customers, of that tell into see

Now that. we're so through that seeing year, are think getting been about dates halfway good we projects I only the that released but service quarter, next have we're feel

XX good year. think they're going in over a what for and an capital environment months, next they hope what of some may plans it may I I what again, like absolute is, think people and of And level it's not cost pretty be of next have but where to decline the is exactly it good about feeling the that idea

Eric Luebchow

wanted be touch above typically Bigham -- specific beyond you terms a on of that years that building they Cable transaction? seem out and acquired ramping rural to revenues they're for Bigham I next about [indiscernible] about have know that. you revenue the Okay. I you we you opportunity was think that large talk couple maybe the But up acquisition. I appreciate program from but that to customer that And with the increase they beyond CapEx? a America Charter. I customers, and of future in majority also above from of in have in over assume a the customer Is don't speak opportunities and big could had growth

Steven Nielsen

adjusted so business. certainly have and working legacy some growth just acquired they both On business was We're to with over basis, revenues, and we're big plans. XX%, Yes. well executing acquired an expectations, the the in the excluding their hard so meet Eric, Charter the

Operator

UBS. Jaroslawicz question next our Avi And come Instructions] from from [Operator will

Avinatan Jaroslawicz

Steve for On Fisher.

expecting the based the that or that you experience? plans so capital to us hearing that as just fluctuate that much if from CapEx on stops of something are you're cost less, So your you can going you're themselves remind customers said that's increasing

Steven Nielsen

like higher for year. maybe it's certainly But than year, that budgets, increase last our I so of a primarily whatever more reason, on some was and think based the experience. rates or at expectations, then set range expected people they I did makes think when tougher

you a little in to those the think to the if of budget bit have capital climate, are yourself Avi, better in I probably work budget, that -- little because weather and on back a you have bit you line costs just ahead higher get side.

have a environment, in current on to think -- good think how I I people handle budget. the

around volatility execute into I think year there's think cost they're confidence expecting their capital, so move and more as I they as they plans. of next less

Now last now. when we there's I about by the how that think this issue we was or view I view more feeling out out, no the year, guarantees. we year that played less good have and a highlighted borne had think we're But

Avinatan Jaroslawicz

Got it.

Okay. Appreciate that.

Has terms should of up out risk -- chain that labor labor growth seeing supply to a been guess about also in How generalized I how's on then? or a statement? and you're we limited call that? And what then -- force, the availability. your to think And on continued so ramp in ability constraint actually the equipment

Steven Nielsen

Yes.

risk. generalized a it's think I

been of We our have done a over That of that good million -- And in. been see. new of in right have so that that And growth we not worth for as October, $XXX everybody can be we a wouldn't have in continue be may we'll industry. job the the little constrained. we true we I now, support end business managing so risk, equipment through we've of we comes and it that when the orders pleased order, to on say place

Operator

will Alan question come Lake next Sylvan from Asset Management. Mitrani Our from

Alan Mitrani

for net? and into the a rest Can Gross and in year will of year? of the CapEx you the give next where us next sense be --

Steven Nielsen

Yes. $XX quarter. was in a Alan, on million little gross over basis, the a it

on a proceeds, so good based a Now net for we expected us basis. we hard it on timing. for less It's to forecast was a had than bit quarter little

lot a less was for get it's we it original as on need but I the have probably as But it, what we would year we're say, our it. than Alan, quickly in taking We don't can not because order. somewhat expectation

Alan Mitrani

the be their of could upgrade how CapEx? might to need CapEx much terms next in you of for And And where you do spend growth? year think gross some

Steven Nielsen

what beyond If historical buy can more. been. our relationships faster, grow anything we'll see don't we have I Yes.

Alan Mitrani

customers, lending, that guess, and adjusting. bureaucratic that about programs, outlook -- talk lot sort you giving Besides confidence going are of the you Can the after of Is government of coming what's the finally seem very I just used in delays. you a the terms normal the cost to capital obviously, forward? confident getting in about of

Steven Nielsen

I'd start such RDOF, is earlier the and as Act. I ARPA Alan, we with impacting of I think vintage federal programs that business the CARES have today mean, impacts are what

federal We that and the as funds see continuation we from are -- in increasing not have of apart of There's themselves. are state business, being so to capital trend BEAD dollars broadband mean, lots new that deployed. as big an in programs continue separate I movement. a other and see trend, and we necessarily a and this is a of

for state have we'll source work Sometimes, source. where project a and a customers will single a RDOF funding federal

And had in ] relayed they [ million identified they about call beyond [ recent passings, eligible X.X above this which of on just that for fact, enabled found RDOF, X program. XXX,XXX for and RDOF for what that by ] had adjacent passings earnings customer our a the originally customers was were

it capital, So state, is up right private broadband. call federal, the to and for I know you that if just don't rural

Alan Mitrani

your much revenues general it's MSAs to how to or Are these tell? it Or some incremental programs? just other through you tell come able and hard to related does of current of are work so revenues

Steven Nielsen

Adam It's mix. a It's excuse Alan. me, a mix, --

can see. we Some

us, customer. the won't have it Some MSA tell that and of actual we'll flow the that see just customers we through with

Operator

phone the back over no Steven turn the remarks. showing further lines. Nielsen conference to like to now from I for any I'd questions And closing am

Steven Nielsen

to time Thank talk wish your at Thanksgiving, attendance we'll all you a this for you. the everybody happy families end you your holiday and and and of and we February. week Well, thank

Operator

concludes participation. you your call. conference This today's for Thank

You may now wonderful a day. Everyone, disconnect. have

Dycom Industries (DY) 21 Nov 232024 Q3 Earnings call transcript