Q4 2025 Dycom Industries Inc Earnings Call

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Speaker Change: I would now like to hand, the conference over to MS. Kelly Tommaso <unk>, Vice President of Investor Relations. Please go ahead.

Speaker Change: Thank you operator, and good morning, everyone welcome to <unk> fourth quarter fiscal 2025 results conference call.

Speaker Change: Joining me today are Dan <unk>, our President and Chief Executive Officer, Andrew <unk>, Our Chief Financial Officer.

Speaker Change: Earlier. This morning, we released our fiscal 2025 fourth quarter and annual results along with certain outlook information.

Speaker Change: We also announced our board's authorization of a new $150 million stock repurchase program as our most recent share repurchase authorization has expired.

Speaker Change: The press releases and accompanying materials are available in the Investor Relations section of our website.

Speaker Change: Today's discussion will include forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.

Speaker Change: These statements reflect our expectations assumptions and beliefs regarding future events and are subject to risks and uncertainties that could cause actual results to differ materially.

Speaker Change: A detailed discussion of these risks and uncertainties is included in our filings with the SEC.

Speaker Change: Forward looking statements are made as of today's date and we undertake no obligation to update them.

Speaker Change: Additionally, we will reference certain non-GAAP financial measures during today's call.

Speaker Change: Explanations of these measures and reconciliations to the most directly comparable GAAP measures can be found in our press release and accompanying materials.

Dan: With that I will turn the call over to Dan <unk> Dan.

Dan: Thanks, Kelly and good morning, everyone.

Speaker Change: I am pleased with our performance in fiscal 2025.

Dan: We delivered another solid year of growth and continued to focus on creating long term shareholder value.

Dan: I'll give a brief overview of our Q4 and fiscal 2020 results Andrew will provide more color on our performance.

Dan: We closed the year with a strong fourth quarter generating revenues of 1.5 billion adjusted EBITDA of $116 4 million or 10, 7% of revenue.

Andrew: We accomplished this against the backdrop of unforeseen weather challenges across the country, demonstrating the breadth and durability of our business.

Andrew: Our fourth quarter results punctuated another year of profitable growth for the company with fiscal 2025 revenues of $4 702 billion and an adjusted EBITDA margin of 12, 3%.

Andrew: Over the past three years, we have increased our revenues by 50% and expanded our EBITDA margin by approximately 450 basis points.

Andrew: In that same time period, we further diversified our customer base shifting our top five customers to 55% of revenue in fiscal 2025.

Andrew: From 66% in fiscal 2022.

Andrew: Backlog at the end of the fiscal year was $7 8 billion with $4 6 billion is expected to be completed over the next 12 months.

Andrew: Finally, we remain committed to a balanced approach to capital allocation prioritizing organic growth augmented by M&A and share repurchases.

Andrew: In fiscal 2025, we completed three acquisitions and repurchased 410000 shares of our common stock, including 200000 shares during the fourth quarter.

Andrew: Okay.

Andrew: Looking ahead, we believe <unk> remains uniquely positioned to capitalize on the significant tailwind, we see driving the industry.

Andrew: As I've said before our strategy remains consistent we've always sought to differentiate ourselves through our comprehensive footprint and by offering the highest level of service to our customers and communities.

Andrew: We're in every state and across markets, whether rural suburban or metropolitan we have relationships and understand the municipalities and the challenges at every stage of a project.

Andrew: And we are interfacing with customers on forward planning advising on how they can get the highest throughput and how we can best augment their businesses. So we can optimize value.

Andrew: They have high aspirations and with projects, becoming increasingly more complex, our proven capabilities and unmatched footprint position us with the scale and expertise to partner with them to support their digital infrastructure needs.

Andrew: Let me take a minute now to walk you through some of the opportunities that we believe we are well positioned to realize and that will drive our performance going forward.

Andrew: First our customers.

Andrew: We continue to execute against their fiber to the home programs and in calendar 2024, collectively added more than $35 million incremental passing through their plans. In addition to their already robust fiber to the home builds.

Andrew: And several of our customers. Most recent earnings calls they reiterated their commitment to their fiber to the home plans and some mentioned opportunities for increased velocity of builds while others again increased total expected passing.

Andrew: We believe fiber to the home will continue to be a significant growth driver for our business in fiscal 2026.

Andrew: During Q4 2025, we were awarded new markets for Horizon, and also extended several existing agreements.

Andrew: These awards combined both maintenance and fiber to the home and we appreciate and our partnership with Verizon and their confidence in our ability to deliver as they increase their programs in calendar 2025.

Andrew: Second the intensity around new inter and intra city high capacity private secure redundant fiber infrastructure for Hyperscale. There is continues or.

Andrew: Our previously announced aluminum award related to the long haul overhaul work commenced in the fourth quarter and has begun ramp ramping in Q1.

Andrew: In addition, customer dialogue around AI digital infrastructure needs remains robust.

Two isp's recently announced their intent to build a total of more than 5100 long haul fiber route miles across the U S to meet the growing demands of AI workloads.

Andrew: Key data center locations and provide a diverse path to other long haul routes.

During Q4 2025, we were awarded various long haul routes segments by our customers. These deployments will begin in calendar 2025.

Andrew: We maintain our belief that the most significant revenue opportunities for the long haul market will occur in calendar 2026 and beyond.

Andrew: While the market remains competitive the addressable opportunity is large and we will continue to be disciplined and deliberate in how we evaluate projects ensuring that our work is priced properly to deliver sustainable profitable growth.

Andrew: This market continues to expand as all the Hyperscale <unk> recently reaffirmed our commitment to capital expenditures for AI related data centers and digital infrastructure with several announcing increased levels of capex in calendar 2025.

Andrew: Third state and federal programs are making progress against our goal to provide broadband to rural areas of our country. It.

Andrew: It remains a bipartisan goal to bridge the country's digital divide despite the present uncertainty related to the bead program.

Separate from bead there continues to be substantial activity at the state level with over $1 billion awarded across nine states for broadband infrastructure during the fourth quarter.

Andrew: Many states continue to award grants for both rural fiber to the home and middle mile programs. We believe these state and federal programs presents a significant opportunity for dot com.

Andrew: Lastly, we continue to add backlog to our service and maintenance work and highlight the importance of these programs as part of our core offerings to our customers.

Andrew: In addition, our AT&T wireless activity is ramping for the equipment replacement program and the pace continues to meet our expectations.

Andrew: I'd like now to turn to our outlook for fiscal 2026.

Andrew: We have demonstrated our ability to grow both organically and through acquisition and are confident in our strategy continue that growth this year.

Andrew: To give you additional perspective, we are providing our full year revenue outlook for fiscal 2026 to provide insight into the opportunities we see for <unk> across our space and how we are positioned to capitalize on them.

Andrew: We expect fiscal 2026 total revenue to increase 10% to 13% over fiscal 2025.

Andrew: This expectation assumes.

Andrew: Our customers fiber to the home expansion programs and hyper scaler long haul network projects proceed as planned.

Andrew: Ramping of wireless equipment replacements.

Andrew: Growth from recent maintenance awards and other maintenance activity in line with expected run rates.

Normal seasonal factors.

Andrew: Opportunities from beat are not included in our fiscal 2026 outlook and we remain well positioned to realize revenue from this program once it begins.

Andrew: Of course, we will adjust our expectations as we see these underlying drivers develop but want to provide you with some additional insight into how we're thinking about growth in the coming year.

Andrew: I would like to finish by highlighting our top goals for fiscal 2026.

Andrew: First and foremost given the significant opportunity set I described earlier, we remain focused on providing long term value for our shareholders and long term opportunities for our people.

Andrew: We are purposeful in our pursuit of opportunities unwilling to grow backlog by taking low margin high risk contracts.

Andrew: That patience and discipline has been evident over these past few years as we've driven top line growth, while also expanding margins and broadening both our customer base and the types of programs and builds in our book of work.

Speaker Change: In addition, and as drew will discuss we saw improved free cash flow performance in fiscal 2025, and improving free cash flow continues to be a priority.

Speaker Change: Our teams made substantial progress this year in the invoicing cycle in converting earnings into cash flow and we have good momentum going into the new year.

Speaker Change: Finally, we've worked hard to differentiate our offering to our customers and communities in what are referred to as quality as a brand.

Speaker Change: That means delivering our work safely and at the highest level of quality in the field, but it goes much further than that.

Speaker Change: We strive everyday to be a partner that delivers quality throughout our engagement from the first interaction with the customer or in a community sustained 10 steps ahead from day, one to day done so our customers in all of our stakeholders can have peace of mind, knowing we deliver on our commitments.

Speaker Change: We believe our customers recognize the difference in working with dotcom and we continue to work hard to earn their business every day as we pursue our vision to be the people connecting America.

Now I'll pass the call to drew to review our financials drew.

Drew: Thanks, Dan and good morning, everyone.

Drew: We finished fiscal 2025 strong delivering solid top and bottom line growth and margin expansion, while also investing in our business and returning capital to our shareholders through share repurchases.

Drew: Fourth quarter total contract revenues of 1.085 billion grew 13, 9% over Q4 of last year.

Drew: Revenues in the quarter reflected seasonality and were driven by continued execution of fiber to the home programs maintenance and operation services for customers initial revenue contribution from fiber infrastructure programs for hyper scaler.

Drew: And $67 $9 million of storm restoration revenues for.

Drew: For the full year contract revenues increased 12, 6% to $4 $7 2 billion.

Drew: Adjusted EBITDA of $116 4 million or 10, 7% of contract revenues increased 89 basis points over Q4, 'twenty four and exceeded our expectations for the quarter despite difficult winter weather conditions.

Drew: For the full year adjusted EBITDA was $576 3 million and 12, 3% of contract revenues, increasing approximately $95 million compared to $481 2 million in fiscal 2024.

Drew: Fourth quarter adjusted net income was $34 5 million and adjusted diluted EPS increased 48, 1% to $1 17 per share for.

Drew: For the year adjusted net income was $248 7 million and adjusted diluted EPS increased 24, 5% to $8 44 per share compared to $6 78 in fiscal 2024 after excluding the impacts of a change order and close out of <unk>.

Drew: Several projects in fiscal 2024.

Drew: For the fourth quarter, our top five customers were 56, 7% of total revenue and grew 14, 2% and all other customers grew 13, 5%.

Drew: These metrics demonstrate the depth and breadth of our business and we are pleased with the diversification and strong relationships across our customer base.

Drew: <unk> was our largest customer at $251 4 million and grew 54, 5% in total and 22, 7% on an organic basis.

Drew: Details on other customers are included in the presentation materials posted on our IR website.

Drew: Backlog at the end of Q4 was $7 76 billion, including 464 $2 billion that is expected to be completed in the next 12 months.

Drew: Operating cash flows were strong at $328 2 million in the quarter. The combined dsos of accounts receivable and contract assets were 114 days a reduction of six days compared to 120 days in Q4 24.

Drew: For the full year operating cash flows totaled $349 1 million.

Drew: After annual capital expenditures net of disposal proceeds free cash flow increased 82% to $137 8 million for the full year.

Drew: Strong cash flows remain a key focus area for the company in fiscal 2026.

Drew: During the quarter, we repaid $155 million of revolver borrowings and repurchased 200000 shares of our common stock for $35 9 million, bringing our total repurchases for the year to 410000 shares for $65 6 million.

Drew: This week, our board of directors approved a new $150 million authorization for share repurchases through August 2026.

Drew: This authorization replaces the remaining amount from our prior authorization.

Speaker Change: As Dan highlighted we're excited about the opportunities ahead of us and believe that an annual revenue outlook provides visibility into how we are positioning for the year ahead.

Speaker Change: For the full year of fiscal 2026, we expect total contract revenues to increase 10% to 13% compared to FY 'twenty five revenues.

Cash flows were strong at $328 2 million in the quarter.

Speaker Change: Fiscal 2026 will include 53 weeks of operations due to our fiscal calendar with the extra week occurring in the fourth quarter when operations are normally seasonally impacted by winter weather.

The combined Dsos of accounts receivable and contract assets for 114 days a reduction of six days compared to 120 days in Q4 24.

Speaker Change: Fiscal 2025 included $114 2 million of revenue from storm restoration services completed in Q3 and Q4. We are pleased that we could help customers and communities that were impacted by the storms. We have not included any storm restoration revenues in the fiscal 2026.

For the full year operating cash flows totaled $349 1 million.

After annual capital expenditures net of disposal proceeds free cash flow increased 82% to $137 8 million for the full year.

Strong cash flows remain a key focus area for the company in fiscal 2026.

Speaker Change: Look.

Speaker Change: Finally, we expect capital expenditures net of disposal proceeds to range from 220 to 230 billion for fiscal 2026.

During the quarter, we repaid $155 million of revolver borrowings.

And repurchased 200000 shares of our common stock for $35 9 million, bringing our total repurchases for the year to 410000 shares for $65 6 million.

Speaker Change: For our Q1 of fiscal 2026 outlook, we expect contract revenues of 1.1 dollars 6 billion to $1 2 billion adjusted.

Speaker Change: Adjusted EBITDA of $130 6 million to $140 6 million and diluted EPS of $1 50 to $1 73 per share.

This week, our board of directors approved a new $150 million authorization for share repurchases through August 2026.

Speaker Change: We believe we are well positioned for another successful year in fiscal 2026. Operator. This concludes our prepared remarks, you may now open the call for questions.

This authorization replaces the remaining amount from our prior authorization.

As Dan highlighted we're excited about the opportunities ahead of us and believe that an annual revenue outlook provides visibility into how we are positioning for the year ahead.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

For the full year of fiscal 2026, we expect total contract revenues to increase 10% to 13% compared to FY 'twenty five revenues.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Please standby, we compile the Q&A roster.

Fiscal 2026 will include 53 weeks of operations due to our fiscal calendar with the extra week occurring in the fourth quarter when operations are normally seasonally impacted by winter weather.

Speaker Change: And our first question will come from Frank Louthan from Raymond James and Associates. Your line is open.

Speaker Change: Great. Thank you.

Speaker Change: Quick clarification. So on the 26th guide I want to be clear on the jumping off point is that on the reported revenue, including the $114 million from the storm growing 10% to 13% off of that I just wanted to be clear on that and then the 5100 miles of long haul build that you that you discussed are those private builds their announced or is that.

Fiscal 2025 included $114 2 million of revenue from storm restoration services completed in Q3 and Q4. We are pleased that we could help customers and communities that were impacted by the storms. We have not included any storm restoration revenues in the fiscal 2026 <unk>.

Speaker Change: I assume that's not part of the lumen.

Speaker Change: Activity Thats going on thanks.

Look.

Finally, we expect capital expenditures net of disposal proceeds to range from $220 million to $230 million for fiscal 2026.

Brian: Thanks, Brian Good morning.

On the first question.

Brian: Related to the guide, yes, I think in addition to $114 million of storm work that we had in fiscal 2025, but we are not including storm in the fiscal 2026 revenue outlook.

For our Q1 of fiscal 2026 outlook, we expect contract revenues of 1.1 dollars 6 billion to $1 2 billion adjusted.

Brian: And so moving to your second question on the 5100 miles that's public statements from other customers than lumen and again, we're just trying to show the breadth of the Hyperscale opportunity.

Adjusted EBITDA of $130 6 million to $140 6 million and diluted EPS of $1 50 to $1 73 per share.

Brian: Honestly lumens been quite vocal about it we're very excited to be working on the on the overhaul work, which we've already started we actually have crews out there today, Paul and fiber on that project, but there are a number of other opportunities we're talking to about with our customers. We're talking to the hyperscale are themselves really we're in early innings. Overall. So we just wanted to kind of signal that hey, there is a lot of work out there a lot of opportunity.

We believe we are well positioned for another successful year in fiscal 2026.

Speaker Change: Operator. This concludes our prepared remarks, you may now open the call for questions.

Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Brian: Glad that were in there at the beginning but we see this playing out over a multiyear period.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Okay, Great and just one other quick clarification on the Verizon the new Verizon business is that an expansion of the <unk> network or can you give us a little bit more color on the nature of those.

Speaker Change: Please standby, we compile the Q&A roster.

Speaker Change: And our first question will come from Frank Louthan from Raymond James and Associates. Your line is open.

Brian: New awards thanks.

Brian: Sure. So some of those are extending current awards. Those those awards themselves includes both service and maintenance work as well as fiber to the home.

Frank Louthan: Great. Thank you just a quick clarification. So on the 26th guide I want to be clear on the jumping off point is that on the reported revenue, including the $114 million from the storm growing 10% to 13% off of that I just wanted to be clear on that and then the 5100 miles of long haul build that you that you discussed are those price.

Brian: None of this is related to the previous fiber one program. This adult with their more typical fiber to the homework. We also added additional markets and again those are a combination of both the maintenance work and fiber to the home.

Frank Louthan: It builds their announced or I assume that's not part of the lumen.

Brian: Great. Thank you very much.

Brian: Thank you.

Frank Louthan: Activity, that's going on thanks.

Speaker Change: And our next question will come from Alex waters from Bofa. Your line is open.

Frank Louthan: Thanks, Sarah and good morning.

Frank Louthan: On the first question.

Alex Waters: Hey, guys. Thanks, so much for taking my question, maybe first thanks for providing the 2026 revenue bogey, but could you maybe just talk about your expectations for margins throughout the year and then secondly, I mean, obviously very strong performance from black and Veatch and <unk> does this change the way you guys.

Speaker Change: Weighted to the guide yes, I think in addition to $114 million of storm work that we had in fiscal 2025, but we're not including storm in the fiscal 2026 revenue outlook.

Speaker Change: Answering moving to your second question on the 5100 miles that's public statements from other customers than lumen and again, we're just trying to show the breadth of the Hyperscale opportunity.

Speaker Change: Kind of think about that previous revenue guidance you gave.

Alex Waters: Back into Q3, Q this past year. Thanks, so much.

Speaker Change: Honestly lumens been quite vocal about it we're very excited to be working on the on the overhaul work, which we've already started we actually have crews out there today, Paul and fiber on that project, but there are a number of other opportunities. We are talking to about with our customers, we're talking to hyperscale or themselves really we're in early innings. Overall. So we just wanted to kind of signal that hey, there's a lot of work out there a lot of opportunity.

Alex Waters: Good morning, Alex So for 2026, we're just providing revenue obviously drew just as we have in the past has provided the Q1 outlook that would include EBITDA.

Alex Waters: When we look at margins overall were very pleased again I talked about in my comments I'm very pleased with what we've done over the last three years I would think about margins going forward.

Speaker Change: Glad that were in there at the beginning but we see this playing out over a multiyear period.

Alex Waters: As we look at margins going forward I would think about it we continue to work in the business looking for efficiencies investing in innovation and doing everything we can to try and certainly increased margins from that perspective, I would also look to operating leverage as we continue to grow now sometimes we're going to use that and reinvest it back into the business, sometimes we're going to invest in innovation, sometimes we've invested in growth.

Speaker Change: Okay, Great and just one other quick clarification on the Verizon the new Verizon business is that an expansion of the <unk> network or can you give us a little bit more color on.

Speaker Change: The nature of those New awards. Thanks.

Speaker Change: Sure. So some of those are extending current awards. Those go the words themselves include both service and maintenance work as well as fiber to the home.

Alex Waters: Other times it will fall through the bottom line, we're not seeing any downward pressure in margins, but again, that's something we're going to give a specific full year outlook.

Speaker Change: None of this is related to the previous 501 program. This is all the more typical fiber to the homework. We also added additional markets and again those are a combination of both the maintenance work and fiber to home.

Speaker Change: And then sorry on your Black and Veatch question.

Speaker Change: So yes, it ramped up a little bit faster. This Q4 than we had anticipated what that's really doing is just pulling some work forward. So we still feel good about that initial projections that we gave for this year of $250 million to $275 million.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Alex waters from Bofa. Your line is open.

Alex Waters: Hey, guys. Thanks, so much for taking my question, maybe first thanks for providing the 2026 revenue bogey, but could you maybe just talk about your expectations for margins throughout the year and then secondly, I mean, obviously very strong performance from black and Veatch and <unk> does this change the way you guys.

Speaker Change: Perfect. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Steven Fisher from UBS. Your line is open.

Thanks. Good morning wondering if you could just give us some sense of how the organic revenues in the quarter were relative to your expectations. Excluding the storm work I am not sure. If this storm work was done.

Alex Waters: Kind of think about that previous revenue guidance you gave.

Alex Waters: Back into Q3, Q this past year. Thanks, so much.

Speaker Change: November early before you gave the guidance you've already kind of knew what it was just trying to gauge.

Speaker Change: Hi, Good morning, Alex So for 2026, we're just providing revenue obviously drew just as we have in the past has provided the Q1 outlook that would include EBITDA.

Speaker Change: If there was.

Speaker Change: More kind of core customer activity than you thought because the seven roughly a 5% organic growth was higher than you.

Speaker Change: When we look at margins overall were very pleased again I've talked about it in my comments very pleased with what we've done over the last three years I would think about margins going forward.

Speaker Change: Forecasted.

Speaker Change: So just just trying to separate whether that was the storm work or if actually the core underlying business was a bit better and similarly for Q1 can you give us any help on the sort of organic assumption there because it seems like it might be incline in decline.

Speaker Change: As we look at margins going forward I would think about it we continue to work in the business looking for efficiencies.

Speaker Change: <unk> and innovation and doing everything we can to try and certainly increased margins from that perspective, I would also look to operating leverage as we continue to grow now sometimes we're going to use that and reinvest it back into the business, sometimes we're going to invest in innovation, sometimes where you invested in growth other times. It will fall through to the bottom line, we're not seeing any downward pressure in margins, but again not something.

Steve: Thanks, Steve Let me start and Andrew can add additional color so far.

Speaker Change: First part on the storm.

Speaker Change: At work happened throughout the quarter. So we didn't have insight into that in its entirety. When we gave the initial outlook.

Speaker Change: You're going to give a specific full year outlook.

Speaker Change: And then the other thing I would add it was a.

Speaker Change: Obviously, there was a lot going on we had the fires in California, We had a number of we had 10 inches of snow in New Orleans for example, obviously, we didn't anticipate that.

Speaker Change: And then sorry on your Black and Veatch question.

Speaker Change: So yeah, it ramped up a little bit faster. This Q4 than we had anticipated what that's really doing is just pulling some work forward. So we still feel good about that initial projection that we gave for this year of $250 million to $275 million.

Speaker Change: So you had both you had the storm work coming back from the Hurricanes that we experienced last season that was on a positive but you had a bunch of debits on the other side and that's really the aggregate of both which is how you see it play out.

Speaker Change: Perfect. Thank you.

Speaker Change: And then Steven as far as Q1 goes as we highlighted last few quarters. We did have a couple of customers that started the year strong last year and then slowed.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Steven Fisher from UBS. Your line is open.

Speaker Change: Thanks. Good morning wondering if you could just give us some sense of how the organic revenues in the quarter were relative to your expectations. Excluding the storm work I am not sure. If this storm work was done.

Speaker Change: We're still lapping those kind of higher periods in the front half of this year.

Speaker Change: But I think thats one of the considerations when we look at the full year and how we are positioning for the full year that we would expect the work to pick up further after Q1 Q.

Speaker Change: November early before you gave the guidance you already kind of knew what it was just trying to gauge.

Speaker Change: Q1 is also one of those quarters, a little bit difficult to call, sometimes because it's typically backend loaded.

Speaker Change: If there was.

Speaker Change: More kind of core customer activity than you thought because the seven roughly 5% organic growth was higher than you.

Speaker Change: As the work ramps into the spring, we've got some new awards as well and.

Speaker Change: And the acquired businesses are still ramping this year.

Speaker Change: Had forecasted.

Speaker Change: That and there has been a little bit of difficult weather at the beginning of February here. The news reports a lot of things about the polar vortex and other things impacting so we just wanted to be mindful of that.

Speaker Change: So just just trying to separate whether that was the storm work or if actually the core underlying business was a bit better and similarly for Q1 can you give us any help on the sort of organic assumption there because it seems like it might be incline in decline.

Speaker Change: Okay. That's helpful and then maybe just.

Speaker Change: We can get caught up in a lot of these quarter to quarter numbers, which are still important but I'm just kind of wondering if on the <unk>.

Speaker Change: Thanks, Steve.

Andrew: Let me start and Andrew can add additional color so far.

Andrew: The first part on the storm that that work happened throughout the quarter. So we didn't have insight into that in its entirety. When we gave the initial outlook.

Speaker Change: Big picture perspective here.

Speaker Change: Dan as you talked about in the beginning of the comments a lot of your customers or are stepping up and getting more positive about their investment plans. So.

Andrew: And then the other thing I would add is it was obviously there was a lot going on we had the fires in California. We had a number of you know we had.

I guess I'm just curious.

Speaker Change: If you see this as as a result of those increasing plans by our customers do you think this will be a longer than expected investment cycle or perhaps.

Andrew: And the smell in New Orleans for example, obviously, we didnt anticipate that.

Andrew: So you had both you had the storm work coming back from the Hurricanes that we experienced last season that was on a positive but you had a bunch of debits on the other side and that's really the aggregate of both which is how you see it play out.

Speaker Change: Faster growth in kind of a similar period than you might have thought.

Andrew: And then Steven as far as Q1 goes as we highlighted last few quarters we.

Speaker Change: Previously before these kind of announcements.

Speaker Change: And Stephen just unfair you're talking about longer than a year that we gave the outlook for.

Andrew: We did have a couple of customers that started the year strong last year and then slowed.

Speaker Change: Is that the question.

Andrew: We're still lapping those kind of higher periods in the front half of this year.

Speaker Change: Thinking about the big picture over the next few years of how this is going to play out I mean is this going to be now a do you have more more visibility over and over a greater number of years or do you think is just going to basically represent just faster growth opportunities and a better organic growth rate for you I'm just trying to think again about.

Andrew: But I think that's one of the considerations when we look at the full year and how we're positioning for the full year.

Andrew: We would expect the work to pick up further after Q1.

Andrew: Q1 is also one of those quarters, a little bit difficult to call, sometimes because it's typically backend loaded.

Speaker Change: We're talking about.

Andrew: As the work ramps into the spring, we've got some new awards as well and.

Speaker Change: Kind of.

Speaker Change: Mid mid ish single digit upward maybe mid to upper single digit growth organic.

Andrew: And the acquired businesses are still ramping this year.

Speaker Change: Near term, but should this be an accelerating growth market over the next several years and you now have more visibility to that as a result of some of these announcements.

That and there has been a little bit of difficult weather at the beginning of February here. The news reports a lot of things about the polar vortex and other things impacting so we just wanted to be mindful of that.

Speaker Change: Yeah, and I think.

That's part of why we gave the full year outlook on revenue as you mentioned, sometimes quarterly results might not indicate what really the trajectory of the business and the trajectory trajectory of the capital coming into the business can be and so if we look at the fiber to the home and we've talked about it before over $35 million passing added incremental by our customers last year, that's a significant number we've talked.

Andrew: Okay. That's helpful and then maybe just.

Andrew: We can get caught up in a lot of these quarter to quarter numbers, which are still important but I'm just kind of wondering if on the big picture perspective here.

Speaker Change: Dan as you talked about in the beginning of the comments a lot of your customers or are stepping up and getting more positive about their investment plans. So I.

Speaker Change: What kind of impact that can have youre certainly seeing that in the projections. We are giving for this year as those customers ramp up for the most part they talked about those being multi year going out all the way to 2030 and a lot of cases, so we see that playing out over a longer term, but that's a little bit about the hyper scalar side like I said very happy to be in the early innings there doing.

Andrew: I guess I'm just curious.

Andrew: If you see this as a result of those increasing plans by our customers do you think this will be a longer than expected investment cycle or perhaps.

Andrew: Faster growth in kind of a similar period than you might have thought.

Speaker Change: Work as we speak.

Speaker Change: We still think that's very very early innings, I mean, we're not even having a second batter up to the plate so to speak.

Andrew: Previously before these kind of announcements.

Speaker Change: And Stephen just unfair you're talking about longer than the year that we gave the outlook for is that the question.

Speaker Change: We think thats going to be at least five years of opportunity and we will have to see how the Tam plays out exactly I think a lot of people who have seen there's been industry reports out there talking about $100 billion of addressable market over a five or so year period.

Speaker Change: Thinking about the big picture over the next few years of how this is going to play out I mean is this going to be now a do you have more more visibility over and over a greater number of years or do you think its just thats going to basically rather than just faster growth opportunities and a better organic growth rate for you I'm just trying to think again about.

Speaker Change: Again, we will see exactly what those numbers are but regardless, we think that's just going to be significant investment even after deep sea to hyperscale or came back quite quickly and said still committed to their capital allocation still going to be over $300 billion in Capex. This year again, we got to see exactly how that moves into our space, but when we look at that over this year.

Speaker Change: We're talking about.

Speaker Change: Kind of.

Speaker Change: Mid mid ish single digit upper and maybe mid to upper single digit growth organic.

As I said early innings, just ramping into some programs, but as you get into 2026 calendar 'twenty six and after we do we do expect that to continue to ramp.

Speaker Change: Near term, but should this be an accelerating growth market over the next several years and you now have more visibility to that as a result of some of these announcements.

Speaker Change: And then the last of the state and federal programs in.

Speaker Change: Yeah, and I think.

Speaker Change: There is work that we're doing today and I think it's important and I put it in my comments.

Speaker Change: That's part of why we gave the full year outlook on revenue as you mentioned, sometimes quarterly results might not indicate what really the trajectory of the business and the trajectory trajectory of the capital coming into the business can be and so if we look at the fiber to the home and we've talked about it before over $35 million passing added incremental by our customers last year, that's a significant number we've talked.

Speaker Change: <unk> continued to fund there is a $1 billion of funding issued in Q4 related to state programs, reaching Rural America Theres. Other federal programs that are happening a lot of that is coming through our business a lot of it is coming through active contracts or other things and opportunities that we're pursuing but again, that's going to be a multi year to get that satisfied whatever it ultimately evolves to.

Speaker Change: What kind of impact that can have you're certainly seeing that in the projections. We are giving for this year as those customers ramp up for the most part they talked about those being multi year going out all the way to 2030 and a lot of cases, so we see that playing out over a longer term I talked a little bit about the hyperscale side like I said I'm very happy to be in the early innings there doing.

Speaker Change: I'll go back to comments, we've been making for some time, we still think 80% of.

Speaker Change: Address the addresses in the country, we're going to get fiber and high speed Internet of some sort and that's going to be done mostly by private capital everything that we're hearing reinforces that so we're optimistic and excited about our position how we're set up to capitalize into the results that we've been able to provide so far.

Speaker Change: Work as we speak.

Speaker Change: We still think that's very very early innings I mean, we're we're not even haven't even got a second batter up to the plate so to speak.

Speaker Change: Terrific. Thank you.

Speaker Change: We think that's going to be at least five years of opportunity and we'll have to see how the Tam plays out exactly I think a lot of people are saying you know there's been industry reports out there talking about $100 billion of.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Eric <unk> from Wells Fargo. Your line is open.

Speaker Change: Hi, great. Thanks for taking the question.

Speaker Change: Addressable market over a five or so year period.

Speaker Change: Dan I wanted to dive a little more into the AI data center opportunity.

Speaker Change: Again, we'll see exactly what those numbers are but regardless, we think that's just going to be a significant investment even after deep sea to hyperscale or came back quite quickly and that still committed to their capital allocation still going to be over $300 billion in capex. This year again, we got to see exactly how that moves into our space, but when we look at that over this year.

Speaker Change: You made a comment that a lot of the work Youre doing now is really overhaul work.

Speaker Change: Globally for lumen.

Speaker Change: You look at the conversations Youre, having and it sounded like maybe you booked some additional deals in the fourth quarter. I mean are you seeing a bigger opportunity coming with new routes that might be a little bit more construction and labor intensive and maybe even a bigger addressable revenue market for you and have you started to work down the path of diversifying that.

Speaker Change: I said early innings, just ramping into some programs, but as you get into 2026 calendar 'twenty six and after we do we do expect that to continue to ramp.

And then the last as you know the state and federal programs in.

Speaker Change: Away from just lumen, but.

Speaker Change: Talking directly to hyperscale or itself perform or other operators out there who have announced.

Speaker Change: There is work that we're doing today and I think it's important and I put it in my comments.

Speaker Change: Some pretty large wins so far.

Speaker Change: The states continue to fund there's $1 billion of funding issued in Q4 related to the state programs, reaching Rural America.

Speaker Change: Okay.

Speaker Change: That's exactly right Eric in a really good point.

Speaker Change: This opportunity to continue to increase the conversations have not lost theme I mentioned before even when <unk> came out of the conversation Didnt slowdown and in fact have only increased.

Speaker Change: Theres other federal programs that are happening a lot of that is coming through our business a lot of its coming through active contracts or other things and opportunities that we're pursuing but again thats going to be a multi year to get that satisfied whatever it ultimately evolves to but I'll go back to comments, we've been making for some time, we still think 80% of.

Speaker Change: What <unk> had in that first set of projects that they issued was existing conduit that's not common on larger scale.

Speaker Change: Aggressive addresses in the country are going to get fiber and high speed Internet of some sort and that's going to be done mostly by private capital.

Speaker Change: Larger scaled long haul builds.

Speaker Change: There is some infill work and theres available routes that are customers the Isps.

What we are hearing it reinforces that so we're optimistic and excited about our position how we're set up to capitalize on to the results that we've been able to provide so far.

Speaker Change: Talking about negotiating with Hyperscale is directly but the appetite is much much larger than that and so we're seeing it play out and conversations we are talking to hyperscale or themselves. We're certainly talking to a number of customers and we're seeing a number of different opportunities sometimes those come in bigger chunks, sometimes they come in smaller chunks sometimes.

Speaker Change: Terrific. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Eric <unk> from Wells Fargo. Your line is open.

Speaker Change: Sometimes they come by route or segment.

Speaker Change: Hi, great. Thanks for taking the question.

Speaker Change: Really just depends on the way it is coming through the Hyperscale is himself.

Speaker Change: Yeah, and I wanted to dive a little more into the AI data center opportunity.

Speaker Change: And through our customers. So again, what I would say is we still believe the opportunity over time as massive exactly the timing and how it comes into the industry, we're going to have to pay attention to.

Speaker Change: You made a comment that a lot of the work Youre doing now is really overhaul work.

Speaker Change: <unk> for lumen.

Speaker Change: As you look at the conversations you are having.

Speaker Change: And there is things in the news and conversations out there that maybe one hyperscale or pulled back from some data centers, maybe another one add some.

Speaker Change: It sounded like maybe you booked some additional deals in the fourth quarter. I mean are you seeing a bigger opportunity coming with new routes that might be a little bit more construction and labor intensive and maybe even a bigger addressable revenue market for you and have you started to work down the path of diversifying that away from just lumen, but.

Speaker Change: We would suggest that the opportunity is so large coming into our space. The need is there to get these high capacity low latency networks and they want to redundancy. They want these private routes as it plays out over time, that's a lot of miles, it's thousands and thousands of miles.

Speaker Change: Talking directly to hyperscale or some self perform or other operators out there who have announced.

Speaker Change: It's something that we're paying very close attention to highly active in conversations and we'll continue to talk about it as it plays out over time.

Speaker Change: Some pretty large wins so far.

Speaker Change: Hi.

Speaker Change: That's exactly right Eric in a really good point.

Speaker Change: Great. Thanks, Dan.

Speaker Change: You made a comment about our focus on on free cash flow this year and I know, its obviously lumpy from quarter to quarter, but.

Speaker Change: This opportunity to continue to increase the conversations have not lost theme I mentioned before even when deep sea came out of the conversation didn't slow down and in fact have only increased.

Speaker Change: Maybe you could talk about your ability to generate cash this year and also maybe a question for Dan just on capital allocation how are you thinking about.

Speaker Change: What <unk> had in that first set of projects that they issued was existing conduit that's not common on larger scale.

Speaker Change: Potential tuck in acquisitions, what the pipeline looks like versus <unk>.

Speaker Change: Larger scaled long haul bills certainly there are some infill work and theres available routes that are customers the Isps.

Speaker Change: Buying back your stock given given the authorization that you announced today.

Speaker Change: Sure. Thanks, Eric So I'll take the first one so as far as free cash flow. It continues to be a focus for us we made solid progress by the team is pleased to see that the dsos.

Speaker Change: Talking about negotiating with hyperscale or as directly but the appetite is much much larger than that and so.

Speaker Change: We're seeing it play out and conversations we are talking Hyperscale are themselves. We're certainly talking to a number of customers and we're seeing a number of different opportunities sometimes those come in bigger chunks, sometimes they come in smaller chunks.

Speaker Change: By six days year over year.

Speaker Change: Whats.

Speaker Change: To note here too is that net leverage is low at about one five times.

Speaker Change: And so substantial room to grow the business and maintain comfortable.

Speaker Change: They come by route or segment. So it really just depends on the way, it's coming through the hyperscale or themselves.

Speaker Change: Net leverage overall.

Speaker Change: Through our customers. So again, what I would say is we still believe the opportunity over time as massive exactly the timing and how it comes in the industry, we're going to have to pay attention to.

Speaker Change: Working on DSO every day, we've got working on more timely conversion of the work completed into an invoice and then obviously process for paid for payment.

Speaker Change: And there's things in the news and conversations out there that maybe one hyperscale or pulls back from some data centers, maybe another one ads.

Speaker Change: And then the other area.

Speaker Change: Focus on the capital expenditures, we provided the outlook. There. This year, we spent about $211 million net.

Speaker Change: We would suggest that the opportunity is so large coming into our space. The need is there to get these high capacity low latency networks. They want the redundancy. They want these private routes as it plays out over time, that's a lot of miles, it's thousands and thousands of miles.

We see that going into 220 to $2 30 next year.

Speaker Change: So happy to invest in growth and replacement of assets.

Speaker Change: It would certainly invest.

Speaker Change: Invest more there as we see more growth opportunities as we look ahead.

Speaker Change: It's something that we're paying very close attention to highly active in conversations and we'll continue to talk about it as it plays out over time.

Speaker Change: But we'll take a prudent approach on that.

Speaker Change: And go from there.

Great. Thanks, Dan.

Speaker Change: And Eric just commenting on capital allocation so.

Speaker Change: You made a comment about our focus on on free cash flow this year and I know, its obviously lumpy from quarter to quarter, but maybe.

Speaker Change: As I talked about before we did three acquisitions last year.

Speaker Change: We're obviously active in the pipeline looking they've got to fit our strategy they have to fit our culture.

Speaker Change: Maybe you could talk about you know your ability to generate cash this year and also maybe a question for Dan just on capital allocation how are you thinking about.

Speaker Change: What are those opportunities come out there is certainly something that we would be entertaining and talking about.

Speaker Change: Potential tuck in acquisitions, what the pipeline looks like versus <unk>.

Speaker Change: But if you look at if you look at last year and if you look at this year a lot of similar things, we got a lot of growth we need to make sure that we've got capital set up for that growth. We continue to innovate and we want to stay ahead of the curve, we are investing in AI in our own business.

Speaker Change: Buying back your stock given given the authorization that you announced today. Thanks.

Speaker Change: Sure. Thanks, Eric So I'll take the first one so as far as free cash flow. It continues to be a focus for us we've made solid progress by the team is pleased to see that the dsos.

Speaker Change: Certainly investing in safety and quality and you heard me talk about this concept of quality of the brand we want to stay out in front of our customers we want to deliver absolute best in class performance from the very beginning to the very end of a project.

Speaker Change: By six days year over year I think.

Speaker Change: To note here too is that net leverage is low at about one five times.

Speaker Change: That does take capital and fixed capital to make sure that we're ahead of that curve. So that we can deliver another level of service and another level of value to our customers, which we believe that they appreciate.

Speaker Change: And so substantial room to grow the business and maintain comfortable.

Speaker Change: Net leverage overall.

Speaker Change: And that they see.

Speaker Change: Working on DSO every day.

Speaker Change: We have to balance those two and then as those come together then we look for share repurchases and again, we're active this last quarter. We were active last year, certainly something that we're going to continue to look at going forward, where it makes sense.

Speaker Change: Working on more timely conversion of the work completed into an invoice and then obviously process for paid for payment.

Speaker Change: And then the other area.

Speaker Change: Focus on the capital expenditures.

Speaker Change: So a little bit of a balance, but again, we're excited about 10% to 13% growth year over year. This year, especially when you add in $114 million of storm work. So.

Speaker Change: We provided the outlook there this year, we spent about 211 million net.

Speaker Change: See that going to $2 20 to $2 30 next year.

Speaker Change: So we're going to make sure that we can prioritize that first and then the other two will follow.

Speaker Change: So happy to to invest in growth and replacement of assets.

Eric: And then Eric if I could just add.

Speaker Change: Certainly.

Speaker Change: Yes, Thanks, Eric if I could just add one more point relative to the Capex I think if you look year over year. We obviously have increased the spending there and so that's come through as increased depreciation as well.

Speaker Change: Best more there as we see more growth opportunities as we look ahead.

Speaker Change: But we'll take a prudent approach on that.

Speaker Change: And go from there.

Speaker Change: And Eric just commenting on capital allocation so.

Eric: So that's a trend as we continue to step up on the on the Capex.

Speaker Change: Talked about before we did three acquisitions last year.

Eric: We would expect some increases there and then the other area and its in the in the outlook and it's in our filings, but the non cash amortization has increased to about $12 million a quarter now.

Speaker Change: We're obviously active in the pipeline looking they've got to fit our strategy they have to fit our culture.

Speaker Change: What are those opportunities come out they are certainly something that we would be entertaining and talking about.

Eric: Relative to the acquisitions that we've done and so I just wanted to point that out.

Speaker Change: But if you look at if you look at last year and if you look at this year a lot of similar things. We've got a lot of growth we need to make sure that we've got capital set up for that growth. We continue to innovate and we want to stay ahead of the curve, we're investing in AI in our own business.

Eric: Outlook.

Speaker Change: Great. Thank you both.

Eric: Thank you.

Eric: And as a reminder to ask a question. Please press star one line.

Speaker Change: Certainly investing in safety and quality and you heard me talk about this concept of quality of the brand.

Speaker Change: And our next question will come from Sangeeta chain from Keybanc. Your line is open.

We want to stay out in front of our customers, we want to deliver absolute best in class performance from the very beginning to the very end of a project and that does take capital that fixed capital to make sure that we're ahead of that curve. So that we can deliver another level of service and another level of value to our customers, which we believe that they appreciate.

Sangeeta: Thank you good morning, and thanks for taking my question. So two brief ones for you.

Speaker Change: One on the head count that.

Speaker Change: Do you have in your slide deck, just wondering if there's anything to read into the sequential reduction in head count this quarter.

Speaker Change: And that they see so we have to balance those two and then as those come together then we look for share repurchases and again, we're active this last quarter. We were active last year, certainly something that we're going to continue to look at going forward, where it makes sense.

Speaker Change: So again nothing to read there we use a mix of in house labor and subcontract or sometimes that mix varies the nature of the projects themselves can change that so we feel really good about how we're set up just from a disciplined standpoint on our on our labor and our employment opportunities too.

Speaker Change: So a little bit a little bit of a balance, but again, we're excited about 10% to 13% growth year over year. This year, especially when you add in $114 million of storm work. So.

Speaker Change: And we feel really good about being able to support the growth that's in front of us.

Speaker Change: Got it and then one on I know, we've talked a lot about fiber already on this call. So I was wondering if you can talk about.

Speaker Change: So we're going to make sure that we can prioritize that first and then the other two will follow.

Speaker Change: And then Eric if I could just add yes.

Speaker Change: If youre seeing any.

Speaker Change: Yes, Thanks, Eric if I could just add one more point.

Speaker Change: Replacement work beyond the growth that you are doing currently with the black and Veatch acquisition.

Speaker Change: Relative to the Capex I think if you look year over year, we obviously have increased the spending there and so that's come through as increased depreciation as well.

Speaker Change: So.

Speaker Change: Remember, we have a wireless business that existed and it's been around for.

Speaker Change: So that's a trend as we continue to step up on the on the Capex.

Speaker Change: Certainly more than 10 years prior to that business. So that business is still operating we're still doing work there, including some equipment replacements and then of course as we've talked about.

Speaker Change: We would expect some increases there and then the other area and its in the in the outlook and in our filings, but the non cash amortization has increased its about $12 million a quarter now.

Speaker Change: The wireless acquisition that we did.

Speaker Change: Heavy round of equipment places that we're ramping into right now.

Speaker Change: Relative to the acquisitions that we've done and so I just wanted to point that out.

Speaker Change: Today, that's really our focus we do a little bit of work outside of that but that is certainly a core part of what we're doing and we want to make sure that we can deliver and execute on that program as it ramps into these next few years.

Speaker Change: Outlook.

Speaker Change: Great. Thank you both.

Speaker Change: Thank you.

Speaker Change: And as a reminder to ask a question. Please press star one one.

Speaker Change: Got it thank you.

Speaker Change: And our next question will come from Sangeeta chain from Keybanc. Your line is open.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Adam Tal Hammer from Thompson Davis Your line is open.

Sangeeta chain: Thank you good morning, and thanks for taking my question. So two brief ones for you.

Speaker Change: Hey, good morning, guys nice quarter nice outlook.

Sangeeta chain: One on the head count that you have in your slide deck, just wondering if there's anything to read into the sequential reduction in head count this quarter.

Speaker Change: Thank you I wanted to ask about.

Speaker Change: Windstream, which is talking about doubling the pace of their fiber deployments this year.

Sangeeta chain: Thank you David.

Speaker Change: Is that something you could benefit from or does the merger with unity, possibly impacted the relationship.

Sangeeta chain: Nothing to read there we use a mix of in house labor and subcontract or sometimes that mix varies the nature of the projects themselves can change that so we feel really good about how we're set up just from a disciplined standpoint on our on our labor and our employment opportunities.

Speaker Change: So windstream has been a longtime customer of ours even.

Speaker Change: Even in the prior year as we continue to do work for them and have some strong relationships there.

Sangeeta chain: And we feel really good about being able to support the growth that's in front of us.

Speaker Change: We have to see how it plays out, but we believe that we're well positioned.

Speaker Change: Got it and then one on I know, we've talked a lot about fiber already on this call. So I was wondering if you can talk about.

Speaker Change: Like many others talk about ramping up and look to ramp up that are fiber to the home program in the coming years.

Speaker Change: Feel like we're well positioned.

Sangeeta chain: Seeing any really.

Sangeeta chain: Replacement work beyond the work that Youre doing currently with the Black and Veatch acquisition.

Speaker Change: And then maybe a quick one on Q1 cash flow I'm wondering if that could be a little better than normal seasonality just given all the storm work from Q4.

Sangeeta chain: So.

Sangeeta chain: Remember, we have a wireless business that existed and it's been around for.

Speaker Change: Yeah, Adam Thanks.

Sangeeta chain: Certainly more than 10 years prior to that business. So that business still operating we're still doing work there, including some equipment replacement and then of course, there's as we've talked about.

Speaker Change: Could be there, but seasonality does.

Speaker Change: All these play a big factor in Q1 the work ramps.

Speaker Change: Kind of in the back half of the quarter.

Sangeeta chain: The wireless acquisition that we did.

Speaker Change: So typically we do consume some some operating cash flow in that period of time.

Sangeeta chain: Our heavy round of equipment places that we're ramping into right now.

Sangeeta chain: Today, that's really our focus we do a little bit of work outside of that but that is certainly a core part of what we're doing and we want to make sure that we can deliver and execute on that program as it ramps into these next few years.

Speaker Change: Last one for me just curious.

Speaker Change: I think giga powers in the top 10 for the second quarter in a row curious what the outlook is there.

Speaker Change: Hi.

Speaker Change: Definitely appreciate the opportunities we've had with Giga power and appreciate their trust in us to be able to execute forum not anything that we can talk about in detail to the program other than it's been successful for us thus far and we hope that we can continue to deliver for them.

Sangeeta chain: Got it thank you.

Sangeeta chain: Thank you.

Speaker Change: And our next question will come from Adam Tullow Hammer from Thompson Davis Your line is open.

Speaker Change: Hey, good morning, guys nice quarter nice outlook.

Speaker Change: Okay.

Speaker Change: I'll turn it over thanks guys.

Speaker Change: Thank you I wanted to ask about.

Speaker Change: Thank you.

Speaker Change: Windstream, which is talking about doubling the pace of their fiber deployments this year.

Speaker Change: And our next question comes from Alan <unk> from Sylvan Lake Asset management. Your line is open.

Speaker Change: Is that something you could benefit from or does the merger with unity, possibly impacted the relationship.

Speaker Change: Hi, Thank you.

Speaker Change: Just a few clean up questions can you tell us what the and then a bigger one can you tell us what the cap at the gross Capex was for the quarter.

Speaker Change: So Wednesday has been a longtime customer of ours even.

Speaker Change: Sure sure Alan It was 60 just over $68 million.

Speaker Change: Even in the prior year as we continue to do work for them and have some strong relationships there.

Speaker Change: The $8 million, Okay, and what about the cadence for the Capex for the year for this coming year.

Speaker Change: We have to see how it plays out, but we believe that we're well positioned.

Speaker Change: Like many others talk about ramping up and look to ramp up their fiber to the home program in the coming years.

Speaker Change: Yes, I mean, we've got a lot of things on order now youll see it in the filings, but we've got a little over $80 million kind of on order right now it comes in.

Speaker Change: Like we're well positioned.

Speaker Change: Okay.

Speaker Change: And then drew maybe a quick one on Q1 cash flow I'm wondering if that could be a little better than normal seasonality just given all the storm work from Q4.

Speaker Change: We've got more to order beyond that to meet our our outlook.

Speaker Change: And I think Youll see typical typical spend as we as we have it during the year.

Drew: Yeah, Adam Thanks.

Speaker Change: Okay.

Adam: Could be there, but seasonality does always play a big factor in Q1, the work ramps up.

Speaker Change: And then what would the wireless revenues this quarter.

Speaker Change: Yes, it was a little over 7% Alan.

Adam: Kind of in the back half of the quarter and so typically we do consume some some operating cash flow in that period of time.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Great and then.

Speaker Change: I'm trying to just to be clear are you.

Adam: Last one for me just curious.

Speaker Change: You're guiding with no storm revenues this year, which I understand which is great to conservative and then did you say that you were guiding for new bead revenues as well for the year or did I mishear that.

Adam: I think giga powers in the top 10 for the second quarter in a row curious what the outlook is there.

Adam: Hi.

Speaker Change: No Thats correct. So.

Adam: Definitely appreciate the opportunities we've had with Giga power and I appreciate they're trusting us to be able to execute forum not anything that we can talk about in detail to the program other than it's been successful for us This far and we hope that we can continue to deliver for them.

Speaker Change: We again the guidance outlook.

Speaker Change: Outlook is on top of the storm revenues from last year, but we are not including storm revenue for FY 'twenty six outlook and we are also not including any need dollars or opportunities in the outlook for FY 'twenty six.

Adam: I'll turn it over thanks guys.

Speaker Change: Just a couple of comments on <unk>.

Adam: Thank you.

Speaker Change: The first is we're having a lot of conversations both with be potentially awarded sub grantees and also continued with the state broadband offices.

Speaker Change: And our next question comes from Alan <unk> from Sylvan Lake Asset management. Your line is open.

Adam: Hi, Thank you.

Speaker Change: There's a little bit of a pause for some of the separate entities that are waiting for the final for the rewards to be finalized we'll see exactly what that timeline plays out as the new administration puts her fingerprints on the program, but the rest of the states are still all systems go as far as figuring out exactly how it's going to play out in the play so.

Adam: Just a few clean up questions can you tell us what the and then a bigger one can you tell us what the cap at the gross Capex was for the quarter.

Adam: Yeah.

Speaker Change: Sure sure Alan It was 60 just over $68 million.

Speaker Change: The $8 million, Okay, and what about the cadence for the Capex for the year for this coming year.

Speaker Change: Certainly have more updates in the future, but that's.

Speaker Change: And opportunity in the plus column and we still think that a large part of that is going to be fiber. Once again once it gets finalized in each state each state is going to vary a little bit, but we still believe that's a real opportunity.

Speaker Change: Yes, I mean, we've got a lot of things on order now youll see it in the filing with but we've got a little over $80 million kind of on order right now it comes in.

Speaker Change: We've got more to order beyond that to meet our our outlook.

Speaker Change: Small potential for the back half of this year, probably more likely for FY 'twenty six I'm sorry for calendar 2026.

Speaker Change: And I think you'll see typical typical spend as we as we have it during the year.

Speaker Change: There's 26 rate and do you have any beat.

Speaker Change: Okay.

Speaker Change: Work in your backlog, though.

Speaker Change: And then what would the wireless revenues this quarter.

Speaker Change: No all the all of the customers.

Frank Louthan: Yes, it was a little over 7% Alan.

Speaker Change: All the potential customers that we're talking to they are not at a place to issue issue the awards yet.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Great and then.

Speaker Change: Got it okay perfect just wanted to.

Speaker Change: I'm trying to just to be clear are you guiding with no storm revenues this year, which I understand which is great to conservative and then did you say that you were guiding for new bead revenues as well for the year or did I mishear that.

Speaker Change: But again sorry.

Allen: Sorry, Allen conversations that we are in now and we do expect to have some opportunities for those rfps once the issue.

Allen: Okay, Great and then drew you talked about depreciation and amortization going up obviously, because you are spending money can you give us a.

Speaker Change: No that's correct so.

Speaker Change: We again the guidance outlook.

Speaker Change: Outlook is on top of the storm revenue from last year, but we are not including storm revenue for FY 'twenty outlook, and we are also not including any b dollars or opportunities in the outlook for FY 'twenty six.

Speaker Change: A little a little under $53 million. This past quarter, you expect that to ramp Ratably. This coming year, I mean last year, but basically or is there a step function.

Allen: So two things Alan.

Speaker Change: Just a couple of comments.

Allen: So and we provided this in last quarter's 10-Q as well the outlook on the amortization for the full year, but that's running about this is just on the non cash amortization, that's about $12 million a quarter rate and then depreciation the depreciation has increased.

Speaker Change: On the first is we're having a lot of conversations both with the potentially.

Speaker Change: Potentially awarded sub grantees and also continued with the state broadband offices.

Speaker Change: There's a little bit of a pause for some of the southern counties that are waiting for the final for the rewards to be finalized we'll see exactly what that timeline plays out as the new administration puts her fingerprints on the program, but the rest of the states are still all systems go as far as figuring out exactly how it's going to play out in the play so.

Allen: Last year over the year before and so as that are I'm, sorry, the capex rather has increased.

Allen: And so that's caused the step up and then we've got it going up again this year as well and so I would expect that to.

Speaker Change: We'll certainly have more updates in the future but.

Allen: Kind of increase throughout the year.

Speaker Change: That's an opportunity in the plus column and we still think that a large part of that is going to be fiber. Once again once it gets finalized in each state each day, it's going to vary a little bit, but we still believe that's a real opportunity.

Allen: Okay, Yeah, it looks like with the acquisitions you did the amortization of intangibles youre, adding about a buck and a quarter something like that in terms of noncash <unk>. If you look at the cash EPS versus noncash. Some years. Obviously you have a lot of acquisitions. This past year, you did a bunch so that should impact the noncash earnings number meaningfully cash flow will be better yeah.

Speaker Change: Small potential for the back half of this year, probably more likely for FY 'twenty sorry for calendar 2020.

Speaker Change: Calendar 'twenty six rate and do you have any beat.

Speaker Change: Work in your backlog, though.

Alan: The other thing Alan on the <unk>.

Alan: Back on the on the Capex, we did have good disposal proceeds throughout the year and so that's just another point.

Speaker Change: No all the all the customers that all the potential customers that we're talking to they're not at a place to issue issue the awards yet.

Alan: Point to emphasize there we had about $200 million gross Capex and then off of that was call it 30% to $39 million of disposal proceeds. So those were strong results.

Speaker Change: Got it okay, perfect just wanted to check.

Speaker Change: Commerce, sorry, Allen conversations that we are in now and we do expect to have some opportunities for those rfps once issue them.

Alan: Okay.

Alan: Okay, let's take a look at the Dan I wanted to ask a bigger question.

Speaker Change: Okay, Great and then drew you talked about depreciation and amortization going up obviously, because you're spending money can you give us a little a little under $53 million. This past quarter, you expect that to ramp ratably this coming year than last year, but basically or is there a step function.

Alan: In terms of and I asked at the other quarter, Steve, but your SG&A expense the company's SG&A expenses growing faster than revenues. The last couple of years, you're talking about getting operating leverage and the margins. It doesn't sound like we're going to see it much from from the gross margins. This year based on the way Youre talking it seems like theres going to be obviously, a lower gross margin first quarter given.

Speaker Change: So two things Alan.

Speaker Change: And we provided this in last quarter's 10-Q as well the outlook on the amortization for the full year, but that's running about this is just on the non cash amortization, that's about $12 million a quarter right and then depreciation the depreciation has increased.

Alan: Some of the spend and then you need a bigger ramp through the year to get gross margin expansion. So.

Alan: Help me understand I wanted to know if the SG&A expense are you going to look to grow to grow that at some point slower were in line with revenue. So you get some of that operating leverage do we see that this year when does that come in.

Speaker Change: Last year over the year before and so as that or I'm, sorry, the capex rather has increased.

Alan: Yes.

Speaker Change: Alan if you look at the growth that we've had over the last few years I talked about it in my early comments, 50% growth in three Years' time as you can imagine you have to invest considerably in the business to make sure that you are set up to be able to do that and to do it well on top of that we've been bringing in acquisitions, making sure that we integrate the acquisitions the right way as we ramp them into the business.

Speaker Change: And so that's caused the step up and then we've got a going up again this year as well and so I would expect that to.

Speaker Change: Kind of increase throughout the year.

Speaker Change: Okay, Yes.

Speaker Change: Looks like with the acquisitions you did the amortization of intangibles youre, adding about a buck in the quarter something like that in terms of noncash <unk>. If you look at the cash EPS versus noncash. Some years. Obviously you have a lot of acquisitions. This past year, you did a bunch so that should impact the noncash earnings number meaningfully cash flow will be better yeah.

Speaker Change: And then of course, we're always trying to improve our service delivery for our customers. So there's parts and pieces to that.

Speaker Change: Obviously, it's something that we always want to work on something we're very conscious of and spent a lot of time internally and discussions about but first and foremost we need to make sure that we can be set up for the growth. That's ahead of us.

Alan: The other thing Alan.

Speaker Change: Just back on the on the Capex, we did have good disposal proceeds throughout the year and so that's just another point.

Speaker Change: And over time, we certainly believe that will drop through from operating leverage right now we need to make sure that we can grow the business responsibly and continuing to deliver at the level that we do for our customers.

Speaker Change: Point to emphasize there we had about $200 million gross Capex and then off of that was call. It 38 $39 million of disposal proceeds. So those were strong results.

Alan: And then Alan just a point to make here.

Speaker Change: Sure Youre focused on it to just.

Speaker Change: Okay.

Speaker Change: Take a look at the stock compensation expense. So we did have some transition costs that were there during the year that we call out.

Speaker Change: Okay, let's take a look at the Dan I wanted to ask a bigger question.

Speaker Change: In terms of and I ask that the other quarter, Steve, but your SG&A expense the company's SG&A expenses growing faster than revenues. The last couple of years, you're talking about getting operating leverage on the margins. It doesn't sound like we're going to see it much from from the gross margins. This year based on the way you're talking it seems like theres going to be obviously, a lower gross margin first quarter given.

Speaker Change: All of our materials.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: I am showing no further questions from our phone lines I would now like to turn the conference back to Mr. Dan <unk> for closing remarks.

Speaker Change: Thank you operator, well, we thank everybody for joining this morning look forward to updating you on our first quarter results.

Speaker Change: Some of the spend and then you need a bigger ramp for the year to get gross margin expansion. So we're helped me understand.

Speaker Change: <unk> I wanted to know if the SG&A expense are you going to look to grow to grow that at some point slower were in line with revenue. So you get some of that operating leverage do we see that this year when does that come in.

Speaker Change: And be well.

Speaker Change: Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

Speaker Change: Yeah.

Speaker Change: Alan if you look at the growth that we've had over the last few years I talked about it in my earlier comments, 50% growth in three Years' time as you can imagine you have to invest considerably in the business to make sure that you're set up to be able to do that and to do it well.

Speaker Change: Top of that we've been bringing in acquisitions, making sure that we integrate the acquisitions the right way as we ramp them into the business.

Speaker Change: And then of course, we're always trying to improve our service delivery for our customers. So there's parts and pieces to that.

Speaker Change: Obviously, it's something that we always want to work on something we're very conscious of and spent a lot of time internally in discussions about.

Speaker Change: But first and foremost we need to make sure that we can be set up for the growth. That's ahead of us.

Speaker Change: And overtime, we certainly believe that dollars will drop through from operating leverage right now we need to make sure that we can grow the business responsibly and continue to deliver at the level that we do for our customers.

Speaker Change: And then Alan just a point to make here I mean, I'm sure you're focused on it to just.

Take a look at the stock compensation expense. So we did have some transition costs that were there during the year.

Speaker Change: That we call out.

Speaker Change: On our on our materials.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: I am showing no further questions from our phone lines I'd now like to turn the conference back to Mr. Dan <unk> for closing remarks.

Speaker Change: Thank you operator, well, we thank everybody for joining this morning look forward to updating you on our first quarter results.

Speaker Change: And be well.

Speaker Change: Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

Speaker Change: Okay.

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Speaker Change: Good day, and thank you for standing by.

Speaker Change: I'll come to the Dotcom Industries, Inc. Fourth quarter 2025 results conference call.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one on your telephone.

Speaker Change: We'll then hear an automated message advising your hand is raised to withdraw your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to MS. Kelly Tommaso <unk>, Vice President of Investor Relations. Please go ahead.

Speaker Change: Thank you operator, and good morning, everyone welcome to Die Com's fourth quarter fiscal 2025 results conference call.

Dan Pavage: Joining me today are Dan Pavage, our President and Chief Executive Officer, Andrew de Ferrari, Our Chief Financial Officer.

Dan Pavage: Earlier. This morning, we released our fiscal 2025 fourth quarter and annual results along with certain outlook information.

Dan Pavage: We also announced our board's authorization of a new $150 million stock repurchase program as our most recent share repurchase authorization has expired.

Dan Pavage: The press releases and accompanying materials are available in the Investor Relations section of our website.

Dan Pavage: Today's discussion will include forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.

Dan Pavage: These statements reflect our expectations assumptions and beliefs regarding future events and are subject to risks and uncertainties that could cause actual results to differ materially.

A detailed discussion of these risks and uncertainties is included in our filings with the SEC.

Dan Pavage: Forward looking statements are made as of today's date and we undertake no obligation to update them.

Dan Pavage: Additionally, we will reference certain non-GAAP financial measures during today's call.

Dan Pavage: Explanations of these measures and reconciliations to the most directly comparable GAAP measures can be found in our press release and accompanying materials.

Speaker Change: With that I will turn the call over to Dan Pavage Dan.

Speaker Change: Thanks, Kelly and good morning, everyone.

Speaker Change: I am pleased with our performance in fiscal 2025.

Speaker Change: We delivered another solid year of growth and continued to focus on creating long term shareholder value.

Speaker Change: I will give a brief overview of our Q4 and fiscal 2025 results and drew who will provide more color on our performance.

Speaker Change: We closed the year with a strong fourth quarter generating revenues of 1.5 billion and adjusted EBITDA of $116 4 million or 10, 7% of revenue.

Speaker Change: We accomplished this against the backdrop of unforeseen weather challenges across the country, demonstrating the breadth and durability of our business.

Speaker Change: Our fourth quarter results punctuated another year of profitable growth for the company with fiscal 2025 revenues of $4 702 billion and an adjusted EBITDA margin of 12, 3%.

Speaker Change: Over the past three years, we have increased our revenues by 50% and expanded our EBITDA margin by approximately 450 basis points.

Speaker Change: In that same time period, we further diversified our customer base shifting our top five customers to 55% of revenue in fiscal 2025.

Speaker Change: From 66% in fiscal 2022.

Speaker Change: Backlog at the end of the fiscal year was $7 8 billion with $4 6 billion is expected to be completed over the next 12 months.

Speaker Change: Finally, we remain committed to a balanced approach to capital allocation prioritizing organic growth augmented by M&A and share repurchases.

Speaker Change: In fiscal 2025, we completed three acquisitions and repurchased 410000 shares of our common stock, including 200000 shares during the fourth quarter.

Speaker Change: Looking ahead, we believe <unk> remains uniquely positioned to capitalize on the significant tailwind, we see driving the industry.

Speaker Change: As I've said before our strategy remains consistent we've always sought to differentiate ourselves through our comprehensive footprint and by offering the highest level of service to our customers and communities.

Speaker Change: We're in every state and across markets, where the rural suburban or metropolitan we have relationships and understand the municipalities and the challenges at every stage of a project.

Speaker Change: And we are interfacing with customers on forward planning advising on how they can get the highest throughput and how we can best augment their businesses. So we can optimize value.

Speaker Change: They have high aspirations and with projects, becoming increasingly more complex, our proven capabilities and unmatched footprint position us with the scale and expertise to partner with them to support their digital infrastructure needs.

Speaker Change: Let me take a minute now to walk you through some of the opportunities that we believe we are well positioned to realize and that will drive our performance going forward.

Speaker Change: First our customers.

Speaker Change: We continue to execute against their fiber to the home programs and in calendar 2024, collectively added more than $35 million incremental passing for their plans. In addition to their already robust fiber to the homebuilder.

Speaker Change: And several of our customers. Most recent earnings calls they reiterated their commitment to their fiber to the home plans and some mentioned opportunities for increased velocity of builds while others again increased total expected passing.

Speaker Change: We believe fiber to the home will continue to be a significant growth driver for our business in fiscal 2026.

Speaker Change: During Q4 2025, we were awarded new markets for Horizon, and also extended several existing agreements.

Speaker Change: These awards combined both maintenance and fiber to the home and we appreciate and our partnership with Verizon and their confidence in our ability to deliver as they increase their programs in calendar 2025.

Speaker Change: Second the intensity around new inter and intra city high capacity private secure redundant fiber infrastructure for Hyperscale. There is continues.

Speaker Change: Our previously announced aluminum award related to the long haul overhaul work commenced in the fourth quarter and has begun ramp ramping in Q1.

Speaker Change: In addition, customer dialogue around AI digital infrastructure needs remains robust.

Speaker Change: <unk> recently announced their intent to build a total of more than 5100 long haul fiber route miles across the U S to meet the growing demands of AI workloads.

Speaker Change: Connect key data center locations and provide a diverse path to other long haul routes.

Speaker Change: During Q4 2025, we were awarded various long haul route segments by our customers.

Deployments will begin in calendar 2025.

Speaker Change: We maintain our belief that the most significant revenue opportunities for the long haul market will occur in calendar 2026 and beyond.

Speaker Change: While the market remains competitive the addressable opportunity is large and we will continue to be disciplined and deliberate in how we evaluate projects and <unk>.

Speaker Change: During that our work is priced properly to deliver sustainable profitable growth.

Speaker Change: This market continues to expand as all the Hyperscale <unk> recently reaffirmed our commitment to capital expenditures for AI related data centers and digital infrastructure with several announcing increased levels of capex in calendar 2025.

Speaker Change: Third state and federal programs, we're making progress against our goal to provide broadband to rural areas of our country.

Speaker Change: It remains a bipartisan goal to bridge the country's digital divide despite the present uncertainty related to the <unk> program.

Speaker Change: Separate from bead there continues to be substantial activity at the state level with over $1 billion awarded across nine states for broadband infrastructure during the fourth quarter.

Speaker Change: Many states continue to award grants for both rural fiber to the home and middle mile programs. We believe these state and federal programs presents a significant opportunity for dot com.

Speaker Change: Lastly, we continue to add backlog to our service and maintenance work and highlight the importance of these programs as part of our core offerings to our customers.

Speaker Change: In addition, our AT&T wireless activity is ramping through the equipment replacement program at pace continues to meet our expectations.

Speaker Change: I'd like now to turn to our outlook for fiscal 2026.

Speaker Change: We have demonstrated our ability to grow both organically and through acquisition and are confident in our strategy continue that growth this year.

Speaker Change: To give you additional perspective, we are providing our full year revenue outlook for fiscal 2026 to provide insight into the opportunities we see for dicom across our space and how we are positioned to capitalize on them.

Speaker Change: We expect fiscal 2026 total revenue to increase 10% to 13% over fiscal 2025.

Speaker Change: This expectation assumes.

Speaker Change: Our customers fiber to the home expansion programs and Hyperscale or long haul network projects proceed as planned.

Speaker Change: Ramping of wireless equipment replacements.

Speaker Change: Growth from recent maintenance awards and other maintenance activity in line with expected run rates.

Speaker Change: And normal seasonal factors.

Speaker Change: Opportunities from beat are not included in our fiscal 2026 outlook and we remain well positioned to realize revenue from this program once it begins.

Speaker Change: Of course, we will adjust our expectations as we see these underlying drivers develop but wanted to provide you with some additional insight into how we're thinking about growth in the coming year.

Speaker Change: I would like to finish by highlighting our top goals for fiscal 2026.

Speaker Change: First and foremost given the significant opportunities that I described earlier, we remain focused on providing long term value for our shareholders and long term opportunities for our people.

Speaker Change: We're purposeful in our pursuit of opportunities unwilling to grow backlog by taking low margin high risk contracts.

That patience and discipline has been evident over these past few years as we've driven topline growth, while also expanding margins and broadening both our customer base and the types of programs and builds on our book of work.

Speaker Change: In addition, and as drew will discuss we saw improved free cash flow performance in fiscal 2025, and improving free cash flow continues to be a priority.

Speaker Change: Our team has made substantial progress this year in the invoicing cycle in converting earnings into cash flow, we have good momentum going into the new year.

Speaker Change: Finally, we have worked hard to differentiate our offering to our customers and communities in what are referred to as quality as a brand.

Speaker Change: It means delivering our work safely and at the highest level of quality in the field, but it goes much further than that.

Speaker Change: We strive everyday to be a partner that delivers quality throughout our engagement from the first interaction with the customer or in a community sustained 10 steps ahead from day, one to day done so our customers in all of our stakeholders can have peace of mind, knowing we deliver on our commitments.

Speaker Change: We believe our customers recognize the difference in working with icon and we continue to work hard to earn their business every day as we pursue our vision to be the people connecting America.

Speaker Change: Now I'll pass the call to drew to review our financials drew.

Drew: Thanks, Dan and good morning, everyone. We finished fiscal 2025 strong delivering solid top and bottom line growth and margin expansion, while also investing in our business and returning capital to our shareholders through share repurchases.

Drew: Fourth quarter total contract revenues of 1.085 billion grew 13, 9% over Q4 of last year.

Drew: Revenues in the quarter reflected seasonality and were driven by continued execution of fiber to the home programs maintenance and operation services for customers initial revenue contribution from fiber infrastructure programs for hyper scalar and.

Drew: And $67 $9 million of storm restoration revenues for.

Drew: For the full year contract revenues increased 12, 6% to $4 $7 2 billion.

Drew: Adjusted EBITDA of $116 4 million or 10, 7% of contract revenues increased 89 basis points over Q4, 'twenty four and exceeded our expectations for the quarter despite difficult winter weather conditions.

Drew: For the full year adjusted EBITDA was $576 3 million and 12, 3% of contract revenues, increasing approximately $95 million compared to $481 2 million in fiscal 2024.

Drew: Fourth quarter adjusted net income was $34 5 million and adjusted diluted EPS increased 48, 1% to $1 17 per share for.

Drew: For the year adjusted net income was $248 7 million and adjusted diluted EPS increased 24, 5% to $8 44 per share compared to $6 78 in fiscal 2024 after excluding the impacts of a change order and closeout of.

Drew: Several projects in fiscal 2024.

Drew: For the fourth quarter, our top five customers were 56, 7% of total revenue and grew 14, 2% and all other customers grew 13, 5%.

Drew: These metrics demonstrate the depth and breadth of our business and we are pleased with the diversification and strong relationships across our customer base.

Drew: <unk> was our largest customer at $251 4 million and grew 54, 5% in total and 22, 7% on an organic basis.

Drew: Details on other customers are included in the presentation materials posted on our IR website.

Drew: Backlog at the end of Q4 was $7 76 billion, including 464 $2 billion that is expected to be completed in the next 12 months.

Drew: Operating cash flows were strong at $328 2 million in the quarter.

Drew: The combined Dsos of accounts receivable and contract assets were 114 days a reduction of six days compared to 120 days in Q4 24.

Drew: For the full year operating cash flows totaled $349 1 million.

Drew: After annual capital expenditures net of disposal proceeds free cash flow increased 82% to $137 8 million for the full year.

Drew: Strong cash flows remain a key focus area for the company in fiscal 2026.

Drew: During the quarter, we repaid $155 million of revolver borrowings.

Drew: And repurchased 200000 shares of our common stock for $35 9 million, bringing our total repurchases for the year to 410000 shares for $65 6 million.

Drew: This week, our board of directors approved a new $150 million authorization for share repurchases through August 2026.

Drew: This authorization replaces the remaining amount from our prior authorization.

Dan Pavage: As Dan highlighted we're excited about the opportunities ahead of us and believe that an annual revenue outlook provides visibility into how we are positioning for the year ahead.

Dan Pavage: For the full year of fiscal 2026, we expect total contract revenues to increase 10% to 13% compared to FY 'twenty five revenues.

Dan Pavage: Fiscal 2026 will include 53 weeks of operations due to our fiscal calendar with the extra week occurring in the fourth quarter when operations are normally seasonally impacted by winter weather.

Dan Pavage: Fiscal 2025 included $114 2 million of revenue from storm restoration services completed in Q3 and Q4. We are pleased that we could help customers and communities that were impacted by the storms. We have not included any storm restoration revenues in the fiscal 2026 <unk>.

Dan Pavage: Look.

Dan Pavage: Finally, we expect capital expenditures net of disposal proceeds to range from 220 to 230 billion for fiscal 2026.

Dan Pavage: For our Q1 of fiscal 2026 outlook, we expect contract revenues of 1.1 dollars 6 billion to $1 2 billion adjusted.

Dan Pavage: Adjusted EBITDA of $130 6 million to $140 6 million and diluted EPS of $1 50 to $1 73 per share.

Dan Pavage: We believe we are well positioned for another successful year in fiscal 2026.

Speaker Change: Operator. This concludes our prepared remarks, you may now open the call for questions.

Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Please standby, we compile the Q&A roster.

Speaker Change: And our first question will come from Frank Louthan from Raymond James and Associates. Your line is open.

Speaker Change: Great. Thank you just a quick clarification. So on the 26th guide I want to be clear on the jumping off point is that on the reported revenue, including the $114 million from the storm growing 10% to 13% off of that I just wanted to be clear on that and then the 5100 miles of long haul build that you that you discussed are those price.

Speaker Change: It builds other announced or I assume that's not part of the lumen.

Speaker Change: Activity, that's going on thanks.

Speaker Change: Thanks, Ron and good morning.

Speaker Change: On the first question.

Speaker Change: Weighted to the guide yes, I think in addition to $114 million of storm work that we had in fiscal 2025, but we're not including storm in the fiscal 2026 revenue outlook.

Speaker Change: Answering moving to your second question on the 5100 miles that's public statements from other customers than lumen and again, we're just trying to show the breadth of the Hyperscale opportunity.

Speaker Change: Obviously lumens been quite vocal about it we're very excited to be working on the on the overhaul work, which we've already started we actually have crews out there today, Paul and fiber on that project, but there are a number of other opportunities. We are talking to about with our customers. We're talking to a hyper scaler themselves really we're in early innings. Overall. So we just wanted to kind of signal that hey, there's a lot of work out there a lot of opportunity.

Speaker Change: Glad that were in there at the beginning but we see this playing out over a multiyear period.

Speaker Change: Okay, Great and just one other quick clarification on the Verizon the new Verizon business is that an expansion of the <unk> network or can you give us a little bit more color on.

Speaker Change: The nature of those.

Speaker Change: New awards thanks.

Speaker Change: Sure. So some of those are extending current awards. Those those awards themselves include both service and maintenance work as well as fiber to the home.

Speaker Change: None of this is related to the previous 501 program. This is all for their more typical fiber to the homework. We also added additional markets and again those are a combination of both the maintenance work and fiber to home.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Alex waters from Bofa. Your line is open.

Alex Waters: Hey, guys. Thanks, so much for taking my question, maybe first thanks for providing the 2026 revenue bogey, but could you maybe just talk about your expectations for margins throughout the year and then secondly, I mean, obviously very strong performance from black and Veatch and <unk> does this change the way you guys.

Alex Waters: Kind of think about that previous revenue guidance you gave.

Alex Waters: Back into Q3, Q this past year. Thanks, so much.

Alex Waters: Good morning, Alex So for 2026, we're just providing revenue obviously drew just as we have in the past has provided the Q1 outlook that would include EBITDA.

Alex Waters: When we look at margins overall were very pleased again I talked about it in my comments very pleased with what we've done over the last three years I would think about margins going forward.

Alex Waters: As we look at margins going forward I would think about it we continue to work in the business looking for efficiencies.

Alex Waters: <unk> innovation and doing everything we can to try and certainly increased margins from that perspective, I would also look to operating leverage as we continue to grow now sometimes we're going to use that and reinvest it back into the business, sometimes we're going to invest in innovation, sometimes what you invested in growth other times. It will fall through the bottom line, we're not seeing any down.