Q1 2026 Dycom Industries Inc Earnings Call
Unknown Executive: Good day and thank you for standing by.
Good day, and thank you for standing by.
Unknown Executive: Welcome to Dycom Industries Inc. first quarter 2026 results conference call. At this time, all participants are in a listen-only mode.
Welcome to Dicom industry think first quarter 2026 results conference call.
At this time all participants are in a listen only mode.
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After the speaker's presentation, there will be a question and answer session.
To ask a question during the session you will need to press star one on your telephone.
We'll then hear an automated message advising your hand is raised.
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Callie Tomasso: I would now like to hand the conference over to Ms. Callie Tomasso, Dycom's Vice President of Investor Relations. Please go ahead. Thank you, operator, and good morning, everyone.
Kelly Tommaso: I would now like to hand, the conference over to MS. Kelly Tommaso Dotcoms, Vice President of Investor Relations. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone welcome to die from its first quarter fiscal 2026 results Conference call. Joining me today are Dan pay bench, our president and Chief Executive Officer, Andrew Jafari, Our Chief Financial Officer.
Callie Tomasso: Welcome to Dycom's first quarter Fiscal 2026 Results Conference Call. Joining me today are Dan Peyovich, our President and Chief Executive Officer, and Drew DiFerrari, our Chief Financial Officer. Earlier this morning, we released our Fiscal 2026 First Quarter Results, along with certain Outlook information. The press release and accompanying materials are available in the Investor Relations section of our website.
Kelly Tommaso: Earlier. This morning, we released our fiscal 2021st quarter results.
Kelly Tommaso: Long with certain outlook information.
Kelly Tommaso: Our press release and accompanying materials are available in the Investor Relations section of our website.
Callie Tomasso: Today's discussion will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 filing with the FDA. Forward-looking statements are made as of today's date, and we undertake no obligation to update them.
Kelly Tommaso: Today's discussion will include forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
Kelly Tommaso: 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.
Kelly Tommaso: A detailed discussion of these risks and uncertainties is included in our filings with the SEC.
Kelly Tommaso: We're looking statements are made as of today's date and we undertake no obligation to update that.
Callie Tomasso: Additionally, we will reference certain non-GAAP financial measures during today's call. Explanations of these measures and reconciliations to the most directly comparable GAAP measures can be found in our press release and accompanying materials.
Kelly Tommaso: Ali we will reference certain non-GAAP financial measures during today's call.
Kelly Tommaso: Operations at these measures and reconciliations to the most directly comparable GAAP measures can be found in our press release and accompanying materials.
Dan Peyovich: With that, I will turn the call over to Dan Peyovich. Thank you, Callie, and good morning, everyone, and thank you for joining. We delivered a strong start to fiscal 2026 and continue to make progress against the goals I outlined at the start of the year. I am pleased to report that we exceeded the high end of our guidance for the quarter on all metrics, including revenue, adjusted EBITDA, and EGS. Our first quarter revenue was $1.259 billion, a 10.2% increase over Q1 2025. Our adjusted EBITDA was $150.4 million, representing 11.9% of revenues and an increase of 14.9% over Q1 2025.
Speaker Change: With that I will turn the call over to Dan Pavage Dan.
Speaker Change: Kelly and good morning, everyone and thank you for joining us.
Dan Pavage: We delivered a strong start to fiscal 2026 and continued to make progress against the goals I outlined at the start of the year.
Dan Pavage: I'm pleased to report that we exceeded the high end of our guidance for the quarter on all metrics, including revenue adjusted EBITDA and <unk>.
Dan Pavage: Yes.
Dan Pavage: Our first quarter revenue was one to $5 9 billion, a 10, 2% increase over Q1 2025.
Dan Pavage: Our adjusted EBITDA was $150 4 million, representing 11, 9% of revenues and an increase of 14, 9% over Q1 2025.
Dan Peyovich: In addition, we repurchased 200,000 shares, or $30.2 million, during the quarter. As a result of our strong performance and our view of the market today, we are increasing our revenue expectations for the year to a range of $5.29 billion to $5.425 billion. Despite the current macroeconomic uncertainty, we remain confident in the drivers of our industry and our ability to capitalize on the opportunities. This is evident in our record backlog of $8.1 billion, including a record $4.7 billion of next 12 months backlog. We've worked hard to diversify our customer base and the services we offer within the telecommunications and digital infrastructure space.
Dan Pavage: In addition, we repurchased 200000 shares or $32 million during the quarter.
Dan Pavage: As a result of our strong performance in our view of the market today, we are increasing our revenue expectations for the year to a range of $5 9 billion to 542 5 billion.
Dan Pavage: Despite the current macroeconomic uncertainty we remain confident in the drivers of our industry and our ability to capitalize on the opportunities.
Dan Pavage: This is evident in our record backlog of $8 1 billion, including a record $4 7 billion of next 12 months.
Dan Pavage: We've worked hard to diversify our customer base and the services, we offer within the telecommunications and digital infrastructure space.
Dan Peyovich: This diversification suffers us from the impact of any single customer or program. Underpinning each of these drivers and build programs is our service and maintenance business, which has grown significantly along with our revenue in recent years. These services provide consistency and stability as other customers' programs add and flow. The nature of the work within this business, that is, day-to-day maintenance, restoration, as well as accommodating road moves and other infrastructure work, and extending networks in the greenfield development. When taken at scale, it creates consistency in the volume of work and associated revenue and margins. Our growth in this business comes from maintaining newly installed plants from the fiber to the home build, as well as securing additional markets from our customers.
Dan Pavage: Diversification buffers us from the impact of any single customer or program.
Dan Pavage: Underpinning each of these drivers and build program as our service and maintenance business, which has grown significantly along with our revenue in recent years.
Dan Pavage: These services provide consistency and stability as other customers programs ebb and flow.
Dan Pavage: The nature of the work within the business that is day to day maintenance restoration as well as accommodating road moves and other infrastructure works and expanding network and the Greenfield developments.
Dan Pavage: When taken at scale creates consistency in the volume of work and associated revenue in March.
Dan Pavage: Our growth in this business comes from maintaining newly installed plant from the fiber to the home builds as well as carrying additional markets from our customers.
Dan Peyovich: The work is sustainable, as the agreements are typically 2 to 4 years in duration, and as a reminder, we only include contracts up to their current expiration dates in our backlog. In short, our service and maintenance business provides a stable base of recurring revenue. Our strategy is to build on our service and maintenance business while also capitalizing on other drivers, whether that's fiber-to-the-home deployment in urban, suburban, and rural America. Long-Haul and Middle-Mile Networks, Hyperscaler Work Inside the Fence, Wireless Equipment Replacement, or Other Drivers. We continue to layer these programs into our business in alignment with our growth strategy.
Dan Pavage: The work is sustainable the agreements are typically two to four years in duration and as a reminder, we only include contract up to their current expiration dates in our backlog.
Dan Pavage: In short our service and maintenance business provides a stable base of recurring revenue.
Dan Pavage: Our strategy is to build on our service and maintenance business. While also capitalizing on other drivers whether thats fiber to the home deployments in urban suburban and Rural America.
Dan Pavage: Long haul and middle mile networks.
Dan Pavage: Scalar work inside defense wireless equipment replacement or other drivers.
Dan Pavage: We continue to layer these programs into our business in alignment with our growth strategy.
Dan Peyovich: It's visible in the results from last year. It's visible in the results of this quarter, and it's visible in the revised outlook we're providing for fiscal 2026. We've built Dycom to be resilient and nimble, and we believe we've differentiated ourselves in the industry. Increasing TAM in our industry, combined with the speed and commitment with which our customers are planning and executing their strategic plans, means complexity has increased. and Complexity Favors Dycom. Our customers demand certainty of delivery, they demand certainty of quality, and they want a partner they can trust every step of the way. Many customers have and continue to consolidate their vendors, shifting more and more work to proven partners with the national region.
Dan Pavage: Is visible in the results from last year.
Dan Pavage: It's visible in our results this quarter and.
Dan Pavage: And it's visible in the revised outlook, we're providing for fiscal 2026.
We've built viacom to be resilient nimble and we believe we differentiated ourselves in the industry.
Dan Pavage: The increasing Tam and our industry combined with the speed and commitment with which our customers are planning and executing their strategic plans means complexity has increased.
Dan Pavage: And complexity favorite steakhouse.
Dan Pavage: Our customers demand certainty of delivery.
Dan Pavage: They demand certainty of quality.
Dan Pavage: They want a partner they can trust every step of the way.
Dan Pavage: Many customers have and continue to consolidate their vendors shifting more and more work to proven partners with national reach.
Dan Peyovich: This shift, just like the increasing complexity of the work they need done, favors Dycom.
Dan Pavage: A shift just like the increasing complexity of the work they need done papers dot com.
Dan Peyovich: Transitioning to the broader economy. While recent tariff and international trade actions have created volatility and market uncertainty, we believe that the impact to Dycom and to our customers' current bill plans will be negligible. We continue to track this closely and have discussed it with many customers, telecommunications equipment manufacturers, and our equipment suppliers. While there will be cost increases in some equipment components that come from offshore, the bulk of the components in these builds are produced in the United States. Since labor represents the majority of build costs, tariff implications are diluted as a percentage of the overall build, and as such, we are not anticipating an impact to our current build.
Dan Pavage: Transitioning to the broader economy.
Dan Pavage: While recent tariff in international trade actions have created volatility and market uncertainty, we believe that the impact of data and to our customers current bill plans will be negligible.
Dan Pavage: We continue to track that closely and I have discussed it with many customers.
Dan Pavage: Telecommunications equipment manufacturers and our equipment suppliers.
Dan Pavage: While there will be cost increases and some equipment components that come from offshore the bulk of the component. The new builds are produced in the United States.
Dan Pavage: Since labour represent the majority of build costs tariff implications are diluted as a percentage of the overall build and as such we are not anticipating an impact or a chrome builds.
Dan Peyovich: Specific to our equipment suppliers, while there are some tariff implications, we believe that the percentage increases are manageable without impacting our margins or our customers' Of course, the policies and actions around tariffs and international trade are fluid, and there could be impacts different from what we anticipate today. Importantly, against this backdrop, demand drivers in our business remain robust. First, many of our customers recently reconfirmed or increased their fiber-to-the-home target. As I shared during our last call, the increase in fiber-to-the-home passing is a key driver for our revenue growth, and we delivered on that during the first quarter.
Dan Pavage: Specific to our equipment suppliers.
Dan Pavage: There are some tariff implications, we believe that the percentage increases are manageable without impacting our margins or our customers' programs.
Dan Pavage: Of course, the followup, even actions around tariffs and international trade are fluid and there could be impact different from what we anticipate today.
Dan Pavage: Importantly against this backdrop demand drivers in our business remained robust.
Dan Pavage: Many of our customers recently reconfirmed or increase their fiber to the home targets as.
Dan Pavage: As I shared during our last call the increase in fiber to the home passing the key driver for our revenue growth and we delivered on that during the first quarter.
Dan Peyovich: We continue to see fiber-to-the-home ramping as many of these programs accelerate. While we added a number of new projects to our backlog this quarter, I would point to several notable awards. with Verizon for both Fiber to the Home and Maintenance Works, with Windstream for both Fiber to the Home and Maintenance Works, as well as Fiber to the Home Awards with Lumo. Second, fiber demand related to data centers continues to grow. Opportunities to build long-haul and middle-mile routes to meet the needs of AI infrastructure are increasing and we are underway and executing well on the Lumen Overvolt project.
Dan Pavage: We continue to see fiber to the home ramping at many of these programs to accelerate.
Dan Pavage: While we added a number of new projects to our backlog this quarter I would point to several notable awards.
Dan Pavage: With Verizon for both fiber to the home and maintenance works.
Dan Pavage: With Windstream for both fiber to the home and maintenance work as well as fiber to the home awards with Limos.
Dan Pavage: Second fiber demand related to data centers continues to grow.
Dan Pavage: Opportunities to build long haul and middle mile routes to meet the needs of AI infrastructure are increasing and we are underway and executing well on the lumen overhaul projects.
Dan Peyovich: All the hyperscalers reiterated, or increased, their CapEx pledges and commitment to AI infrastructure on their most recent call. And we continue to see these long-haul and middle-mile networks as a significant addressable market over the long term. While this driver is still in its early days, we are pleased to have received a substantial multi-year award from an ISP for Middle Mile Network. We expect this recently awarded work to commence later this fiscal year with revenue ramping in fiscal 2020. Beyond the opportunities for long-haul and middle-mile routes, we are seeing, and have been in discussion, to move inside the fence to work directly with high-performance vehicles.
Dan Pavage: All of the Hyperscale or reiterated or increase their capex budget and commitment to AI infrastructure on their most recent calls and we continue to see these long haul and middle mile networks as a significant addressable market over the long term.
Dan Pavage: While this driver is still in its early days. We are pleased to have received a substantial multi year award from an ISP for middle mile networks.
Dan Pavage: We expect this recently awarded work to commence later this fiscal year with revenue ramping in fiscal 2027.
Dan Pavage: Beyond the opportunities for long haul our middle mile routes, we have seen have been in discussions move inside defense to work directly with Hyperscale.
Dan Peyovich: Generally, this work brings fiber from the meet-me vaults in the right-of-way directly into the data centers and includes connecting data centers via underground networks within clusters. These meet me vaults are typically where the backhaul work we perform for our ISP customers. We were notified of an award from a hyperscaler related to this work that will commence this year, but is not yet in back. Entry into this scope further expands our TAM and provides another opportunity for us to leverage our skill set, add value directly for the hyperscalers, and further diversify our capabilities as a provider of digital infrastructure services.
Dan Pavage: Generally this work brings fiber from the <unk> and the right of way directly into the data centers and includes connecting data centers via underground networks within clusters.
Dan Pavage: It may be vaults are typically where the backhaul work, we perform for our ISP customers terminate.
We were notified of an award from a hyperscale it related to this work that will commence this year, but it's not yet in backlog.
Dan Pavage: Entry into this scope further expands our Tam and provides another opportunity for us to leverage our skill set.
Dan Pavage: That value directly to the Hyperscale orders and further diversify our capabilities as a provider of digital infrastructure services.
Dan Peyovich: Third, while the final construct of the BEAT program remains unknown, additional states have published subgrantee awards with a heavy lean toward fiber infrastructure. We continue to believe that there will be considerable opportunities for us in fiscal 2027, with the possibility of awards in the second half of this year. As we noted during our last call, we have not included revenue from BEEP in our updated financial outlook for fiscal 2026. Importantly, while the BEAT opportunity is significant, we believe the other drivers in our space provide robust, ongoing opportunities to support our continued growth in the years to come.
Third while the final construct of the beef program remains unknown additional states published a brand New awards, but the heavy lean towards fiber infrastructure.
Dan Pavage: We continue to believe that there will be considerable opportunities for us in fiscal 2027 with a possibility of awards in the second half of this year.
Dan Pavage: As we noted during our last call. We have not included revenue from beat and our updated financial outlook for fiscal 2026.
Dan Pavage: Importantly, while the beat opportunity is significant we believe the other drivers in our space provide robust ongoing opportunities to support our continued growth in the years to come.
Dan Peyovich: Fourth, we maintain our focus on our service and maintenance business and added meaningful awards this quarter. The day-to-day connection with our customers and our national footprint to serve these contracts enable further differentiation in the depth of our relationships and the scope and scale of our operations. Lastly, our Wireless Equipment Replacement Works, both organic and from our acquisition last year, continues to deliver above expectations. While we are not updating specific wireless guidance for the fiscal 2026 outlook, we believe this work will well outperform the original expectations we gave at the close of the transaction, and we have included this in our Q2 guidance and full year outlook.
Dan Pavage: Sure.
Dan Pavage: We maintain our focus on our service and maintenance business and added meaningful awards this quarter.
Dan Pavage: The day to day connection with our customers and our national footprint to serve these contracts enable further differentiation and the depth of our relationships and the scope and scale of our operations.
Dan Pavage: Lastly, our wireless equipment replacement works, both organic and from our acquisition last year continued to deliver above expectations.
Dan Pavage: While we are not updating specific wireless guidance for fiscal 2026 outlook. We believe this work will well outperformed the original expectations. We gave at the close of the transaction and we have included this in our Q2 guidance and full year outlook.
Dan Peyovich: I'd like to shift to discussing our progress on the goals I outlined at the start of the fiscal year. We remain focused on providing long-term value for our shareholders and long-term opportunities for our people. Our approach to pursuits is consistent and disciplined, with backlog that properly balances risk and return profiles to create value for our shareholders. We've proven our ability to capitalize on the opportunity set and that our customers value what Dycom brings with record backlog this quarter and the new market awards across drivers I mentioned earlier. Our teams continue their focus on improving free cash flow, and while our progress may not be linear, we expect to continue to improve our cash flow throughout the year.
Speaker Change: I'd like to shift to discussing our progress on the goals I outlined at the start of the fiscal year.
Speaker Change: Main focus on providing long term value for our shareholders and long term opportunities for our people.
Speaker Change: Our approach to pursuits is consistent and disciplined with backlog that properly balances risk and return profile to create value for our shareholders. We have proven our ability to capitalize on the opportunity set and that our customers value with icon brands with record backlog this quarter and the new market awards across drivers I mentioned earlier.
Speaker Change: Our teams continue their focus on improving free cash flow and while our progress may not be linear we expect to continue to improve our cash flow throughout the year.
Dan Peyovich: In summary, we have a well-defined strategy, clear objectives, and explicit metrics to track our progress along the way. We are investing with intention and getting the outcomes and returns we expect. We've demonstrated our ability to execute and capitalize on our strategy and on the increasing TAM in our industry. Despite some tariffs and macroeconomic uncertainty, our customers are steadfast in their fiber-to-the-home and hyperscaler build programs, and we continue to see multi-year opportunities for growth. We've expanded our services inside the fence with hyperscale. opening us up to entirely new opportunities and further demonstrating the broad diversification of telecommunication and digital infrastructure particles we serve.
Speaker Change: In summary, we have a well defined strategy clear objectives and explicit metrics to track our progress along the way.
Speaker Change: We are investing with intention and getting the outcomes and returns we expect.
Speaker Change: We've demonstrated our ability to execute and capitalize on our strategy and on the increasing Tam and our industry.
Speaker Change: Despite some tariffs and macroeconomic uncertainty our customers are steadfast in their fiber to the home and hyperscale or build programs and we continue to see multi year opportunities for growth.
Speaker Change: We've expanded our services inside defense with Hyperscale.
Speaker Change: Opening us up entirely new opportunities and further demonstrating the broad diversification of telecommunications and digital infrastructure verticals, we serve.
Dan Peyovich: And we continue to deliver at a level that allows us to increase our revenue expectations for the year, and we believe, raises the bar in the industry.
Speaker Change: And we continue to deliver at a level that allows us to increase our revenue expectations for the year and we believe raises the bar in the industry.
Dan Peyovich: I'd like to thank our nearly 16,000 teammates for their commitment to working safely every day and for delivering another strong quarter. We believe our customers recognize the difference in working with Dycom 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: I'd like to thank our nearly 16000 teammates for their commitment to working safely every day and for delivering another strong quarter.
Speaker Change: We believe our customers recognize the difference in working with Thaicom and we continue to work hard to earn their business every day as we pursue our vision to be the people connected America.
Unknown Executive: With that, I'll pass the call to Thanks, Dan.
Speaker Change: With that I'll pass the call to true.
Drew DiFerrari: And good morning, everyone. We are pleased that we outperformed the high end of our expectations for Q1, delivering solid top line and adjusted EBITDA growth and margin expansion, while also returning capital to our shareholders through share repayment. First quarter total contract revenues of $1.259 billion grew 10.2% over Q1 of last year. Revenues in the quarter were driven by continued execution of fiber-to-the-home programs, wireless activity, higher maintenance and operations services, and initial revenue contribution from fiber infrastructure programs for hypersensitivity. Adjusted EBITDA of $150.4 million or 11.9% of contract revenues, increased 49 basis points as a percentage of contract revenues over Q125, and exceeded the high end of our expectations for the quarter.
Speaker Change: Thanks, Dan and good morning, everyone. We are pleased that we outperformed the high end of our expectations for Q1, delivering solid top line and adjusted EBITDA growth and margin expansion, while also returning capital to our shareholders through share repurchases.
Speaker Change: First quarter total contract revenues of one to five 9 billion grew 10, 2% over Q1 of last year.
Speaker Change: Revenues in the quarter were driven by continued execution of fiber to the home programs wireless activity higher maintenance and operation services and initial revenue contribution from fiber infrastructure programs for Hyperscale.
Speaker Change: Adjusted EBITDA of $154 million or 11, 9% of contract revenues increased 49 basis points as a percentage of contract revenues over Q1, 'twenty fives and exceeded the high end of our expectations for the quarter.
Drew DiFerrari: Net income was $61 million and diluted EPS was $2.09 per share, also exceeding the high end of our expectations. Results for the quarter included income tax benefits resulting from the vesting and exercise of share-based awards of $2.2 million, or $0.08 per share, compared to $5.9 million, or $0.20 per share in Q1 last year. We are pleased with the strength of our relationships and diversification across our customer base. We had one customer, AT&T, that exceeded 10% of total revenue. AT&T was at $325.1 million for the quarter. Customers exceeding 5% of total revenues for the quarter were Brightspeed, Charter, Comcast, Frontier, Lumen, Verizon, and an unnamed customer.
Speaker Change: Net income was 61 million and diluted EPS was $2 90 per share also exceeding the high end of our expectations results.
Speaker Change: Results for the quarter included income tax benefits, resulting from the vesting and exercise of share based awards of $2 2 million or <unk> <unk> per share compared to $5 9 million or <unk> 20 per share in Q1 last year.
Speaker Change: We are pleased with the strength of our relationships and diversification across our customer base. We had one customer AT&T that exceeded 10% of total revenues AT&T was at $325 1 million for the quarter.
Speaker Change: Customers exceeding 5% of total revenues for the quarter were bright speed charter Comcast frontier lumen horizon ended unnamed customer.
Drew DiFerrari: This presentation of our customer base, combined with our annual revenue outlook, provides insight into our performance, balanced with attention to customer preferences and competitive considerations. We had solid bookings across a broad range of customers in the quarter, backlog at the end of Q1 was $8.127 billion, including $4.685 billion that is expected to be completed in the next 12 months. Operating cash flows used in the quarter were $54 million, supporting the growth in revenue and reflected seasonal uses of cash. The combined BSOs of accounts receivable and contract assets net were 111 days, a reduction of three days sequentially from Q4-25.
Speaker Change: This presentation of our customer base combined with our annual revenue outlook provides insight into our performance balanced with attention to customer preferences and competitive considerations.
Speaker Change: We had solid bookings across a broad range of customers in the quarter backlog at the end of Q1 was 812 7 billion, including $4 six to eight 5 billion that is expected to be completed next 12 months.
Speaker Change: Operating cash flows used in the quarter were $54 million supporting the growth in revenue and reflected seasonal uses of cash.
Speaker Change: The combined Dsos of accounts receivable and contract assets net were 111 days a reduction of three days sequentially from Q4 'twenty five.
Drew DiFerrari: Strong cash flows remain a key focus area for the company, and we continue to see opportunities for improvement. During the quarter, we repurchased 200,000 shares of our common stock for $30.2 million. Generating solid shareholder returns is a priority, and we will remain opportunistic in our approach towards capital outgrowth. We are closely monitoring the recent actions on tariffs and international trade. All of Dycom's business operations are based in the United States, and while these actions have created volatility and market uncertainty, We believe the impact of Dycom and to the customers current build plans will be next.
Speaker Change: Strong cash flows remain a key focus area for the company and we continue to see opportunities for improvement.
Speaker Change: During the quarter, we repurchased 200000 shares of our common stock for $30 2 million.
Speaker Change: Generating solid shareholder returns is a priority and we will remain opportunistic in our approach towards capital allocation.
Speaker Change: We are closely monitoring the recent actions on tariffs and international trade.
Speaker Change: All of <unk> business operations are based in the United States and while these actions have created volatility and market uncertainty, we believe the impact of di Com and to the customer's current build plans will be negligible.
Drew DiFerrari: We're observing increasing momentum across industry drivers, creating significant opportunities for our company.
Speaker Change: We are observing increasing momentum across industry drivers, creating significant opportunities for our company.
Drew DiFerrari: Building on our strong first quarter results and a favorable demand outlook, we are increasing our full year fiscal 2026 expected range of contract revenue. We now expect total contract revenues to range from $5.29 billion to $5.425 billion, representing a range of 12.5% to 15.4% total growth over the prior year. For our Q2 of Fiscal 2026 Outlook, we expect contract revenues of $1.38 billion to $1.43 billion. Adjusted EBITDA of $185 million to $200 million and diluted EPS of $2.74 to $3.05 per share.
Speaker Change: Building on our strong first quarter results and a favorable demand outlook, we are increasing our full year fiscal 2026 expected range of contract revenues.
Speaker Change: And now expect total contract revenues to range from $5 billion to $9 billion.
Speaker Change: Five $4 billion to $5 billion.
Representing a range of 12, 5% to 15, 4% total growth over the prior year.
Speaker Change: For our Q2 of fiscal 2026 outlook, we expect contract revenues of 138 billion to $1 43 billion.
Speaker Change: Adjusted EBITDA of $185 million to 200 million and diluted EPS.
Speaker Change: <unk> of $2 74 to $3 five per share.
Drew DiFerrari: Additional financial outlook metrics can be found in the presentation materials posted to our IR website.
Additional financial outlook metrics can be found in the presentation materials posted to our IR website.
Unknown Executive: Operator, this concludes our prepared remarks. You may now open the call for questions. Thank you.
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 one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby we compile the Q&A roster.
Unknown Executive: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We compile the Q&A roster.
Alex Waters: And our first question will come from Alex Waters from B of A. Your line is open. Hey, good morning. Thanks so much for taking my question. Maybe first off, Dan, you noted the kind of strong performance of Black & Veatch.
Speaker Change: And our first question will come from Alex <unk> from Bofa. Your line is open.
Alex: Hey, good morning, Thanks, so much for taking my question maybe.
Speaker Change: Maybe first off Dan you noted the strong performance of Black and Veatch.
Alex Waters: Is this more of a pull forward of activity or have you seen kind of a larger opportunity set here? And then secondly, just on the maintenance side, you've noted it a couple of times in your opening remarks, but could you help size that business for us for Dycom?
Speaker Change: Is this more of a pull forward of activity or have you seen kind of a larger opportunity set here and then secondly, just on the maintenance side. You've noted a couple of times in your opening remarks, but could you could you help size that business for us for dotcom.
Dan Peyovich: Good morning, Alex. On Black & Veatch, that wireless acquisition, that's a little bit of both. A little bit of a pull forward, but mostly ramping much quicker than expected. Works going extremely well, the business is well integrated into our overall operations and excited about how they've done this quarter and the projection ahead.
Alex: Good morning, Alex.
Speaker Change: <unk> Beach.
Speaker Change: Airless acquisition, that's a little bit of both.
Speaker Change: Little bit of a pull forward, but mostly it ramping much quicker than expected work is going extremely well the business is well integrated into our overall operations are excited about.
Speaker Change: Based on this quarter in our projections.
Dan Peyovich: On the maintenance side, absolutely. As I talked about, you know, service and maintenance underpins the drivers in our business, certainly a core part of our strategy that goes back a long way. It really enables the other drivers, as you've seen. And if you look at our backlog, that growth is not only service and maintenance, but across many drivers. So very different today than maybe recurring revenue. I think that's a very important point, longer term contracts. And even though in our backlog, we only project them until the end of the current agreement, it's quite common that we get to renew those.
Speaker Change: On the maintenance side, absolutely as I talked about service and maintenance underpins the drivers in our business certainly a core part of our strategy that goes back a long way.
Speaker Change: It really enables the other drivers as you've seen and if you look at our backlog that growth is not only in service maintenance, but across many drivers so very different today than maybe a few years ago.
Speaker Change: Recurring revenue I think thats been a very important point longer term contracts and even though in our backlog, we only project them until the end of the current agreement it's quite common that we get to review those so that consistency when you when you take it at scale and the scale that we have across the entirety of the United States across many many customers really gives us the embedded operations.
Dan Peyovich: So that consistency when you when you take it at scale and the scale that we have across the entirety of the United States and across many, many customers, really gives us the embedded operations. And we can leverage that we can leverage that into customer bills, we can certainly leverage that in opportunities. We leverage it in how we look at our labor and our labor force. our ability to respond ultimately to our customers.
Speaker Change: And we can leverage that we can leverage that into customer builds we can certainly leverage that and opportunities delever.
Speaker Change: And how we look at our labor and our labor forces.
Speaker Change: Our ability to respond and ultimately to our customers' increasing demands.
Alex Waters: Yeah, specifically about size, what I would say, we don't give specifics, Alex, but it's historically been over 50% of our budget. Perfect. Thank you so much. Thank you.
Alex: Yes, specifically about size, but what I would say, we don't give specifics Alex but.
Alex: Historically been over 50% of our business.
Alex: Perfect. Thank you so much.
Speaker Change: Thank you.
Richard Cho: Our next question will come from Richard Cho from J.P. Morgan. Your line is open.
Speaker Change: Our next question will come from Richard Choe from Jpmorgan. Your line is open.
Richard Cho: Hi, I wanted to follow up a little bit on and in the Square Quarter Guidance Program, Is that the continuation of the strength from the wireless side or do you see new projects kind of ramping up? Good morning, Richard. First, I talked last quarter about cyber to the home builds and how they're ramping, you know, our customers. Now, I think the total, if you look back a little over a year, the total is over 45 million incremental passings that they've added. And, you know, as you've heard on many of our calls, you know, we've been fortunate to be part of those programs that are increasing and also win new markets.
Speaker Change: Hi.
Richard Choe: Wanted to follow up a little bit on the second quarter guidance.
Richard Choe: Is that the continuation of the strength from the wireless side or do you see new projects kind of ramping up and helping contribute.
Richard Choe: To that.
Richard Choe: Good morning, Richard.
Speaker Change: First I talked last quarter about fiber to the home builds and how they're ramping our customers now I think the total if you look back a little over a year totals over $45 million incremental passing that they've got it.
Speaker Change: And as you've heard on many of our calls we've been fortunate to be part of those programs that are increasing and also win new markets. So Richard as we look out over the years certainly for Q1 those programs went a little bit quicker than we expected and as we look towards the rest of the year that certainly will be included in our outlook.
Dan Peyovich: So Richard, as we look out over the years, certainly for Q1, those programs went a little bit quicker than we expected. And as we look towards the rest of the year, that certainly will be included in our outlook. The second part is absolutely the wireless business. As I mentioned, it's going very well, integrating very well and ramping more quickly. So that very much helped in our Q1 results. It's very much part of our Q2 outlook and certainly the outlook for the full year.
Speaker Change: The second part is absolutely the wireless business as I mentioned, it's going very well integrating very well in ramping more quickly so that very much helped in our Q1 results.
Speaker Change: It's very much part of our Q2 outlook and certainly the outlook for the full year.
Dan Peyovich: And you mentioned a little bit on the CapEx from your. I know it could be a little confusing given all the changes. kind of scene. But is there any potential or https://www.youtube.com.uk So Richard, our strategy around the equipment that we purchase in order to do the work, and of course, as you know, our customers buy the bulk of what we actually install. But for our equipment manufacturers, it's always been something we've been very strategic about. You know, as you saw coming through COVID, we were able to stay ahead of that from an equipment perspective, even when there were significant shortages.
Speaker Change: And you mentioned a little bit on the Capex from your equipment suppliers.
Speaker Change: Suppliers and that being manageable.
Speaker Change: I know it could be a little confusing given all the changes we've kind of seen but is there any potential or.
Speaker Change: The idea of maybe pulling forward some of the spending.
Speaker Change: Before the tariffs.
Speaker Change: Maybe it's too late.
Speaker Change: Any kind of thoughts there.
Speaker Change: So Richard our strategy around the equipment that we purchased in order to do the work and of course as you know our customers buy the bulk of what we actually install but for all of our equipment manufacturers.
Speaker Change: Always been something we've been very strategic about you know as you saw coming through Covid, we were able to stay ahead of that from equipment perspective, even though when there were significant shortages and even then when cost increase considerably for some of those pieces of equipment.
Dan Peyovich: And even then, when costs increased considerably for some of those pieces of equipment. In this particular case, we feel really good about where we are, you know, with the growth that we've had. We've been spending a lot of time projecting and working with our equipment manufacturers to make sure we can enable that growth. I would add, we do that on the labor side as well, right? We want to make sure that neither of those are going to impede our customers' big plans and aspirations. So we feel good about where we're at. You know, the tariff impacts are real, right?
Speaker Change: In this particular case, we feel really good about where we are.
Speaker Change: With the growth that we've had we've been spending a lot of time projecting and working with our equipment manufacturers to make sure we can enable that growth.
Speaker Change: I would I would add we do that on the labor side as well right. We want to make sure that neither of those are going to impede our customers big plans and aspirations. So we feel good about where we're at.
Speaker Change: Impacts are real things that are coming in from outside the United States. We're in constant conversations with the manufacturers when you look at the entirety.
Dan Peyovich: For things that are coming in from outside the United States, we're in constant conversations with the manufacturers. When you look at it in the entirety, when you build up the whole model of what it costs to pass it home, or to put in a foot of fiber on the long hauls, it's a very small component. So we feel that it's very manageable going forward and feel good about the size of our current fleet and our ability to adapt to that.
Speaker Change: When you build up the whole model of what it cost a basketball or to put in a sort of fiber on a long haul. It's a very small component. So we feel that it's very manageable going forward and feel good about the size of our current fleet and our ability to adapt to that.
Unknown Executive: Great. Thank you.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Steven Fisher: Our next question will come from Steven Fisher from UBS. Your line is open. Thanks. Good morning. Just to follow up on some of the cost angles there.
Speaker Change: Our next question will come from Steven Fisher from UBS. Your line is open.
Speaker Change: Hi, Thanks, Good morning, just a follow up on some of the cost angles. There. It was nice to see the year over year margin improvement because it was there anything unusual with the cost this quarter or mix or execution that was contributing to that year over year growth just.
Steven Fisher: It was nice to see the year-over-year margin improvement, because was there anything unusual with the cost this quarter or mix or execution that was contributing to that year-over-year growth? And just curious if there's any reason to think we won't see continued kind of year-over-year margin improvement for the balance of the year.
Speaker Change: Just curious if theres any reason.
Speaker Change: I think we won't see continued kind of year over year margin improvement for the balance of the year.
Dan Peyovich: Good morning, Steven. First, operating leverage is what I would focus on. So I talked about last quarter, you know, we're very strategic about how we're investing in the business to make sure we can stay ahead of growth, make sure we can continue to deliver at the level that we've been delivering for our customers and the communities and certainly for our shareholders. So at times we're investing in the business and it doesn't drop through and other times we're able to pass that through down to the bottom line. So operating leverage is a big part of that increase.
Stephen: Hi, good morning, Stephen.
Speaker Change: First operating leverage is what I would tell.
Stephen: So I talked about last quarter.
Stephen: Very strategic about our investing in the business to make sure. We can stay ahead of growth make sure. We can continue to deliver at the level that we've been delivering for our customers and the communities and certainly for our shareholders.
Stephen: At times, we're investing in the business and it doesn't drop through and other times, we're able to pass that through down to the bottom line. So operating leverage is a big part of that increase as we look forward towards the year and I think drew mentioned this a little bit we do see opportunities for continued margin growth working very hard to achieve that.
Dan Peyovich: As we look forward towards the year, and I think Drew mentioned this a little bit, we do see opportunities for continued margin growth, working very hard to achieve that. And again, most of that would come from operating We're always I should know we're always working on efficiency to the business. So I don't want that to be mistaken. You know, we spent a lot of time on safety, a lot of time on quality, a lot of time on production. really up the training rigor across the business. Again, this all comes back to making sure we can stay ahead of labor and deliver the quality for our customers.
Stephen: And again most of that would come from operating leverage.
Stephen: I should note, we're always working on efficiencies of the business. So I don't want that to be mistaken.
Stephen: We've spent a lot of time on safety a lot of time on quality a lot of time on production.
Stephen: Really up the training rigor across the business again. This all comes back to making sure. We can stay ahead of labour and deliver the quality for our customers, but at the end of the day. If you think about our margin opportunities right now the focus is going to be operating leverage.
Dan Peyovich: But at the end of the day, if you think about our margin opportunities right now, the bulk is going to be from operating. Great.
Steven Fisher: And then, you know, it sounded like you reiterated your comments and message on BEAD, no change there. It seems like this quarter and the guidance tells us that you really don't need BEAD to deliver double-digit growth since you don't have anything in your revenues for it. I'm just curious, you know, what you're hearing on that program and how you see the importance of it for your business in the next couple of years, just in case, you know, as the policy landscape evolves, if it gets further diminished, just kind of curious to see how you're thinking about it for the next couple of years.
Stephen: Great and then it sounded like you reiterated your comments and message on <unk> No change there and it seems like this quarter and the guidance tells us that.
Stephen: You really don't need be to deliver double digit growth.
Stephen: Since you don't have anything in your revenues for it I'm just curious what you're hearing on that program.
Stephen: And how you see the importance of it for your business in the next couple of years just in case as the policy landscape evolves if it gets further diminished.
Stephen: Curious to see how youre thinking about it for the next couple of years.
Dan Peyovich: I think I think you hit on the key message there is it's not in our outlook today. We we think about the other drivers, we think about the growth of our service and maintenance business that we've grown along with our revenue these past few years. And we feel really good about our growth prospects. We see that in the outlook for this year. And I think we feel good about opportunities to go well beyond this year, regardless. That said, we continue to believe BEAT is going to be a real opportunity. You know, everybody is expecting to hear something probably in mid-June or July.
Stephen: I think I think you hit on the key message there is it's not in our outlook today.
Stephen: When you think about the other drivers we think about the growth of our service and maintenance business that we've grown along with our revenue. These past few years and we feel really good about our growth prospects do you see that in the outlook for this year and I think we feel good about opportunities that go well beyond this year.
That's.
Speaker Change: Said b.
Stephen: Believe me it is going to be a real opportunity.
Speaker Change: Everybody is expecting to hear something probably in mid June or July so hopefully by next quarter, we can provide a little bit more clarity.
Dan Peyovich: So hopefully by next quarter, we can provide a little bit more clarity. We're talking to the broadband offices. weekly. Certainly, we're talking to many of the subgrantees and potential subgrantees constantly. There's still a lot of bullishness that a lot of fiber is going to get installed in rural America for the BEAT program. But as I noted, really, that's going to be calendar 26, our fiscal 27. We'll continue to update Steve, but I think the important takeaway is it's really not needed for our current growth curve. We'd love to have it. We still think there's going to be plenty of rural opportunities with Terrific.
Stephen: We're talking to their broadband offices.
Stephen: Weekly certainly we're talking to many of the sub grantees and potential so Graham Td's constantly.
Stephen: There is still a lot of bullishness that a lot of fiber is going to get installed in rural America orthopedic program.
Stephen: But as I noted really that's gonna be calendar 'twenty six our fiscal 'twenty seven.
Stephen: We'll continue to update Steve, but I think the important takeaway is that it's really not need FERC current growth curve, we'd love to have it we still think there's going to be plenty of rural opportunities with or without <unk>.
Unknown Executive: Thanks very much.
Speaker Change: Perfect. Thanks very much.
Unknown Executive: Thank you.
Speaker Change: Thank you.
Frank Louthan: Our next question will come from Frank Louthan from Raymond James and Associates. Your line is open. Great, thank you. I'm looking at your backlog. Is the pace that you're you're working through the backlog change from how it's trended historically? Are things moving any faster? And can you give us an idea of the current organic growth rate and what percentage of your backlog represents organic growth? Thanks.
Speaker Change: Our next question will come from Frank Louthan from Raymond James and Associates. Your line is open.
Speaker Change: Great. Thank you looking at your backlog is the pace that youre working through the backlog change from how it's trended historically or are things moving any faster and can you give us an idea of the current organic growth rate and what percentage of your backlog is it represents organic growth. Thanks.
Dan Peyovich: Yeah, the first part, Frank, I think just touching on backlog overall that I'd like to highlight is the diversification. So across customers, across programs and across drivers, we do feel like we have a really good mix across multiple opportunities. And really, as we look forward to our potential growth in the future, more opportunities out there to continue that diversification. So that's the first point I'd make on backlog.
Yeah. The first part Frank I think just touching on our backlog overall I'd like to highlight is the diversification so across customers across programs and across drivers.
Speaker Change: We do feel like we have a really good mix.
Speaker Change: Multiple opportunities and really whether we look forward towards potential growth in the future or opportunities out there to continue that diversification.
Speaker Change: That's the first point I'd make on backlog as far as organic growth.
Dan Peyovich: As far as organic growth, I'll let Drew talk about that a little bit. But if I can just make a couple of points, you know, one, we continue to see long term opportunities for organic growth. to, you know, when you think about the businesses and the reason that we've really been highlighting our overall growth, when you think about the business, like the wireless business, we recently acquired, we're investing huge amounts of capital into that business, we're growing it significantly, we're doing a lot of work to make that more efficient and more effective.
Speaker Change: I'll, let Joe talk about that a little bit, but if I can just make a couple of points.
Speaker Change: We continue to see long term opportunities for organic growth.
Speaker Change: Two.
Speaker Change: Do you think about the businesses and the reason that we've really been highlighting our overall growth. When you think about the business the wireless business the way we recently acquired.
Speaker Change: Investing huge amounts of capital into that business, we're growing significantly we're doing a lot of work to make that more efficient and more effective. So this isn't a situation where we're just adding another layer to the cake came in operating a certain level. It comes into the business and I can tell you when drew and myself and the rest of the leadership team are having conversations we don't differentiate internally about what we're going to invest.
Dan Peyovich: So this isn't a situation where we're just adding another layer to the cake that came in operating a certain level and comes into the business. And I can tell you when Drew and myself and the rest of the leadership team are having conversations, we don't differentiate internally about where we're going to invest. We're looking for the right kind of opportunities with the right kind of returns for our shareholders. And whether it's organic or inorganic, doesn't matter. The point is that all those opportunities are going to be there.
Speaker Change: For the right kind of opportunities with the right kind of returns for our shareholders and whether it's organic or inorganic doesn't matter. The point is that all of those opportunities. We're growing so we feel good about obviously the overall growth. This year feel good about our opportunities for continued organic growth and I'll, let drew touch on any of the numbers, yes, Frank good morning, So organic.
Drew DiFerrari: So we feel good about, you know, obviously the overall growth this year, feel good about our opportunities for continued organic growth, and I'll let Drew touch on any of the numbers.
Drew DiFerrari: Yes, Frank, good morning. So organic growth was slightly positive this quarter. We did disclose it, so you'll see that. And then if you recall from last quarter, I called out that last year, at the beginning of the year, we had a couple of customers that had a busier start, and then they had slowed later in the year. And so we're lapping those quarters in the first and second quarter of this year. And so we see opportunities for organic growth to continue to grow from here. Frank, I think you mentioned burn rate, too. I apologize. I didn't hit that one.
Drew: Growth was slightly positive this quarter, we did disclose it so youll see that and then if you recall from last quarter I had called out that last year at the beginning of the year. We had a couple of customers that had a busier start and then they had slowed later in the year and so we're lapping those quarters in the first and second quarter of this year.
Drew: So we see opportunities for organic growth to continue to grow from here.
Drew: Frank I think you mentioned burn rate to invalidate I didn't get that one we still feel good about the pace of our business. So we don't see any big changes there.
Unknown Executive: But we still feel good about the pace of our business, and we don't see any... Okay, great.
Unknown Executive: Thank you.
Speaker Change: Okay, great. Thank you.
Drew: Thank you.
Sangita Jain: Our next question will come from Sangita Jain from KeyBank Capital Markets. Your line is open. Thank you. Good morning. Thanks for taking my questions. So one I have on your guidance race.
Speaker Change: Our next question will come from Sangeeta chain from Keybanc capital markets. Your line is open.
Sangeeta chain: Yeah. Thank you good morning, Thanks for taking my questions. So one I have on your guidance raise as I say look at <unk> results in the <unk> Guide I'm wondering if that implies.
Sangita Jain: So if we look at 1Q results in the 2Q guide, I'm wondering if that implies some conservatism in your full year guidance range in the sense that you may not be factoring in the full impact of the extra week or if there's something else that you're missing. I know you referenced some pull forward.
Sangeeta chain: Some conservatism in your full year guidance range in the sense that you may not be factoring in the full impact of the extra week or if there's something else that I'm missing I know you referenced some pull forward.
Dan Peyovich: Good morning, Sangita. We certainly included the extra week in the year. And it's important to note, so one, yes, we've included the outperformance in Q1, we certainly looked at Q2. But as you look across the scope of our business, you know, we have hundreds, in fact, thousands of projects. And of course, when we project that we projected project by project, they don't all move in the same rate in the same direction at the same time. So we spent a lot of time about that we feel really good about the growth and the increase in the outlook that we gave for the year and the increase in the outlook for Q2.
Sangeeta chain: Hi, Good morning, Thank you for that but we certainly included the extra week in the air and it's important to note. So one yes. We've included the outperformance in Q1, we certainly looked at Q2, but as you look across the scope of our business, we have hundreds of thousands of projects.
Sangeeta chain: When we project that we projected project by project. They don't all move in the same rate in the same direction at the same time. So we spent a lot of time, but that we feel really good about the growth and the increase in the outlook that we gave for the year and the increase in the outlook for Q2.
Dan Peyovich: And believe one is achievable and there's opportunities for our Great.
Sangeeta chain: And believe one is achievable and theres opportunities for our continued growth.
Dan Peyovich: And then a follow up on your commentary around your expanded O&M business. Longer time, do you think that can reduce your capital intensity and be more like a free cash flow accretion event over time? How should we think about that? Yes, Sangita, I appreciate the question. So free cash flow continues to be a priority for the company. Pleased that we had DSO improvement in the quarter. We work hard at that and will continue to. We're not satisfied yet with where we're at there. Just from a CapEx perspective, we did have a busier start to the year, or an active start to the year, I should say, around that.
Speaker Change: Great and then a follow up on your commentary around your expanded O&M business.
Speaker Change: Long lead time do you think that can reduce your capital intensity and be more like a free cash flow accretion event over time, how should we think about that.
Speaker Change: Yes. Thank you Peter I appreciate the question. So so free cash flow continues to be a priority for the company.
Speaker Change: Pleased that we had DSO improvement in the quarter, we work hard at that and we'll continue to we're not satisfied yet with where we're at there.
Speaker Change: Just from a Capex perspective, we did have a busier start to the year.
Speaker Change: Or an active start to the year I should say around that we do still see the range of total debt our net capex for the year and that $2 20 to $2 30 range.
Drew DiFerrari: We do still see the range of net CapEx for the year in that $220 to $230 range. And we're working hard at the operating cash flow. Great, appreciate that, thank you. Thank you.
And we're working hard at the operating cash flow.
Speaker Change: Okay I appreciate that thank you.
Speaker Change: Thank you. Our next question will come from Adam <unk> from Thompson Davis Your line is open.
Adam Thalhimer: Our next question will come from Adam Thalhimer from Thompson Davis. Your line is open. Hey, good morning, guys. Congrats on the beat. Thanks, Adam. Good morning. Hey, Dan.
Adam: Hey, good morning, guys congrats on the beat.
Speaker Change: Thanks, Adam good morning.
Adam Thalhimer: I wanted to follow up on, you were talking kind of fast, it sounded like there were two incremental awards. One was for Middle Mile. Fiber for data centers and one was for inside of the fence work for a hyperscaler customer. Were those both awarded after the quarter and are they in the revenue? Thanks, Adam, and good point. So, appreciate the opportunity to highlight it. So, the first one is for a customer other than Lumen that's middle-mile or work to enable the AI infrastructure for hyperscalers. So, different customer, great opportunity, multi-year, we're very excited to partner with the customer there.
Dan Pavage: Hey, Dan.
Speaker Change: I wanted to follow up on.
Speaker Change: You are talking kind of fast it sounded like there were two incremental awards one was for middle mile.
Speaker Change: Fiber for.
Speaker Change: For data centers and one was for inside of defense work for a hyperscale customer with US both awarded after the quarter and are they in the revenue guide.
Speaker Change: Thanks, Adam and good points. So I appreciate the opportunity to highlight it. So the first one is for a customer other than the boom in that middle mile or work to enable the AI infrastructure for hyperscale or.
Speaker Change: So.
Speaker Change: Customer great opportunity multi year, we're very excited to partner.
Speaker Change: With the customer there.
Dan Peyovich: The second is separate. So, that one is included in our backlog. And the second one, the inside defense work that I talked about, the important point I was trying to make is this is a new opportunity set for us. It's work that we do all the time, but, you know, moving from the right-of-way in and inside defense, quite literally inside defense into these data centers and data center clusters is a new scope. So, work that we know, know well, this really comes out of the evolution of us spending years now with hyperscalers. And myself, personally, of course, you know, I spent a couple of decades working with the hyperscalers building these data centers.
Speaker Change: The second is separate so that one is included in our backlog and the second one the inside defense work that I talked about before.
Speaker Change: One point I was trying to make is this this is a new opportunity set for US. It's work that we do all the time, but moving from the write away and inside defense quite quite literally inside defense into these data centers and data center clusters is a new scope. So work that we know well it's really comes out of the evolution of our spending years now with the Hyperscale.
Speaker Change: And myself personally of course, you know I spent a couple of decades working with Hyperscale is building. These data centers. So things that we feel really good about but it is a good opportunity set and one that we hope to be able to expand in future years and certainly in future quarters.
Dan Peyovich: So, things that we feel really good about, but it is a good opportunity set and one that we hope to be able to expand in future years, and certainly in future quarters. The reason I noted about the award itself is this one's just a little unique. We have an MSA for the work. They won't issue the PO technically until we're about to start. So that work's not included in backlog, but we do anticipate that work to happen.
Speaker Change: And I noted about the award itself, but this one is just a lot of unique we have an MSA for the work they won't issue P. O technically until we're about to start so that were not included in backlog, but we do anticipate that work to happen this year.
Dan Peyovich: And are you working inside of the walls of the data center or is it more connecting? When you look at a data center campus, it's more connecting the data centers within the Absolutely, so typically we're going to take the work that we do for the carriers to a vault in the right-of-way that we refer to as the meet-me vault. From that point in work, typically where our work ends, again, that's on the carrier side. So this is work that the carriers themselves would not typically do. Now we're going to take it from that vault, actually inside the fence and ultimately inside the data centers to land.
Speaker Change: Got it and are you working inside of the <unk>.
Speaker Change: Walls of the data center or is it more connecting.
Speaker Change: When you look at the data center campus, that's more connecting the data centers within the campus.
Speaker Change: Absolutely. So typically we're going to take the work that we do for the carriers to.
Speaker Change: Vault in the right away that we referred to as the meat meatballs.
Speaker Change: From that point as work typically where our work and again that's on the carrier side. So this is work that the carriers themselves would not typically do.
Speaker Change: Now, we're going to take it from that vault actually inside the fence and ultimately inside the data centers to land, we won't be taking it in the data center holes into the rack themselves, but we will we will terminate inside the data center walls. So the good scope opportunity and we also will connect data centers, where they have multiple data centers and one cluster.
Adam Thalhimer: We won't be taking it in the data center halls into the racks themselves, but we will terminate inside the data center walls. So a good scope opportunity. We also will connect data centers where they have multiple data centers in one cluster or on one set of sites. We have an opportunity to connect those as well. So again, great opportunity for us, one that we're excited about, and certainly appreciate the work that we've done and will continue to do for that. All right, great. Thanks for the color. Thank you and as a reminder to ask a question please press star 11.
Speaker Change: One set of sites open.
Speaker Change: We have an opportunity to connect those as well so again, great opportunity for US one that we're excited about and you can certainly appreciate the work that we've done and we'll continue to do for the Hyperscale.
Speaker Change: Alright, great. Thanks for the color.
Speaker Change: Okay.
Speaker Change: Thank you and as a reminder to ask a question. Please press star one one.
Jean Valise: And our next question will come from Jean Valise from D.A. Davidson. Your line is open. Good morning and congrats in the quarter. Morning. Thank you.
Speaker Change: And our next question will come from James Lee from D. A Davidson your line is open.
James Lee: Good morning, and congrats on the quarter.
Speaker Change: Good morning, Thank you.
Dan Peyovich: Regarding the Charter Cox acquisition following the Verizon and Frontier acquisition, Does further customer consolidation drive more business? So historically, and I think you're breaking up just a little there, but I think you were talking about Verizon, Frontier, and then, you know, crossing additional milestones. So typically, when we think about customer consolidation, that's been a positive for us. One, you know, larger customers typically want a national, you know, a national player like us to be able to work across many other locations, And two, you know, anytime there's capital infusion and consolidation like that, generally speaking, there's going to be more opportunities, more investment overall.
Speaker Change: Regarding the charter Cox acquisition, following the Verizon and frontier acquisition.
Speaker Change: That's fair that's part of the customer consolidation drive more business.
Speaker Change: So historically and I think it was you were breaking up just a little there, but I think you were talking about Verizon and frontier and then crossing additional milestones. So typically when we think about customer consolidation that's been a positive in Florida.
Speaker Change: One larger customers typically want a national.
Speaker Change: A national player like us to be able to work across many of their locations.
Speaker Change: And to you anytime Theres capital infusion.
Speaker Change: Based on like that generally speaking there is going to be more opportunities more investment overall.
Speaker Change: All right.
Dan Peyovich: So so generally, yes, you know, we think that's a positive for us historically has been and again, customers we've been working with for a long time, and we're excited about their combination. Great, thank you. Appreciate the time. Thank you.
Speaker Change: So generally yes, we think that's a positive for us historically has been and again customers. We've been working with for a long time and we're excited about the combination.
Speaker Change: Great. Thank you I appreciate the time.
Speaker Change: Thank you.
Laura Mayer: And our next question will come from Laura Mayer from B. Reilly Securities. Your line is open. Hi, thanks for taking the question. Good morning.
Speaker Change: And our next question will come from Laura in there from B Riley Securities. Your line is open.
Laura: Hi, Thanks for taking my question.
Speaker Change: Good morning.
Dan Peyovich: So I was wondering, as it relates to government layoffs, have you seen this affect the approval process at all? And are you seeing any early benefits of deregulation? So, again, something that these days is quite fluid and we're following very closely. You know, if you're referring to the potential for easing permitting, that would obviously be a positive for the industry. I think there are a lot of opportunities. We talk a lot about feed and some of the potential pullback. But to your point, there are a lot of things that could further enable expansion for our customers.
Speaker Change: So I was wondering as it relates to government.
Speaker Change: Mr that the approval process at all and are you seeing any early benefits.
Speaker Change: Jason.
Speaker Change: So again something that these days is quite fluid and we're following very closely.
Speaker Change: If you're referring to the potential for easing permitting that would obviously be a positive for the industry. I think there are a lot of opportunities we talk a lot about bead and some of the potential pullback, but to your point there are a lot of things that could.
Speaker Change: Further enable expansion for our customers if you look at bonus depreciation and the.
Unknown Executive: If you look at bonus depreciation in the latest bill, you know, that would obviously be a positive for our customers. And they've talked about how that could increase spending. So there are a lot of potential positives and we'll see how it plays out. Something we're watching closely every day. Okay, thanks. I'll pass it on. Thank you.
Speaker Change: The latest bill that would obviously be a positive for our customers.
Speaker Change: That could increase spending so.
Speaker Change: There are a lot of potential positives and we'll see how it plays out something we're watching closely every day.
Speaker Change: Okay. Thanks, I'll pass it on.
Speaker Change: Thank you.
Dan Peyovich: And that does conclude our question and answer session for today's call.
Dan Pavage: And that does conclude our question and answer session for today's call I'd now like to turn the conference back to Mr. Dan <unk> for any closing remarks.
Dan Peyovich: I'd now like to turn the conference back to Mr. Dan Peyovich for any closing remarks. Yeah, I'd like to thank everyone for joining us this morning and look forward to seeing you next quarter. Be safe and be well.
Dan Pavage: I'd like to thank everyone for joining us this morning, and look forward to seeing you next quarter be safe and be well.
Unknown Executive: Thank you, and this does conclude our conference. Thank you for participating, and you may now disconnect. Everyone, have a wonderful day.
Speaker Change: Thank you and this does conclude our conference. Thank you for participating and you may now disconnect everyone have a wonderful day.
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Speaker Change: Thank you.
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