Dycom Industries (DY) Q3 2025 earnings summary

Executive summary

• Q3 2025 contract revenues rose 12% year-over-year to $1.272 billion, with organic revenue up 7.6% driven by increased demand from top customers and strategic network deployments.

• Adjusted EBITDA reached $170.7 million (13.4% of revenue), and adjusted EPS was $2.68, reflecting improved margins and operational execution.

• GAAP net income for Q3 was $69.8 million ($2.37 per diluted share), down from $83.7 million last year due to prior year one-time benefits.

• The CEO transition is underway, with Dan Peyovich taking over as CEO and Kevin Wetherington joining as COO; $7.1 million in stock-based compensation modification expense was recognized.

• The company completed the $150 million acquisition of Black & Veatch's public carrier wireless telecommunications infrastructure business.

Financial highlights

• Non-GAAP gross margin improved by 45 basis points to 20.8% year-over-year; Q3 operating margin was 8.0%, down from 10.5% last year.

• Top five customers accounted for 55.7% of revenue, with AT&T as the largest, growing 58.4% organically.

• Backlog increased to $7.86 billion, with $4.467 billion expected to be completed in the next 12 months.

• Cash and equivalents were $15.3 million; liquidity stood at $462.8 million at quarter-end.

• Capital expenditures for the nine months were $182.0 million; cash paid for acquisitions totaled $183.9 million.

Outlook and guidance

• Q4 2025 contract revenues expected to increase mid- to high-single-digit percent over $952.5 million in Q4 2024.

• Organic revenues for Q4 2025 projected to rise low- to mid-single-digit percent year-over-year.

• Q4 adjusted EBITDA margin expected to increase by 25 basis points versus Q4 2024, with seasonal factors and startup costs impacting earnings.

• Revenue opportunities from BEAD and recent acquisitions expected to ramp in the second half of 2025 into 2026.

• Supplemental Q4 2025 guidance includes $9.9 million amortization, $9.3 million stock-based compensation, $16.5 million net interest expense, and 26% effective tax rate.