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Dycom Industries, Inc. (NYSE: DY) has reported a solid performance for the fiscal 2025 second quarter, reflecting robust growth and financial stability. Contract revenues for the quarter ended July 27, 2024, came in at $1.203 billion, marking a 15.5% increase compared to $1.042 billion in the same quarter of the previous year. This growth is partly attributable to organic revenue growth of 9.2%, excluding the $65.9 million from acquired businesses not owned in the prior year. The company’s Non-GAAP Adjusted EBITDA also saw a significant rise, reaching $158.3 million, or 13.2% of contract revenues, up from $130.8 million, or 12.6%, in the year-ago quarter.

On a GAAP basis, Dycom’s net income increased to $68.4 million, or $2.32 per diluted share, compared to $60.2 million, or $2.03 per diluted share, in the previous year’s second quarter. The Non-GAAP Adjusted Net Income was $72.5 million, or $2.46 per diluted share, indicating a strong bottom-line performance.

Additionally, during this quarter, Dycom amended its credit agreement to expand term loan capacity and extend the maturity to January 2029.

Dycom Industries Beats EPS Expectations in Fiscal Q2, Revenue in Line

Compared to market expectations, Dycom Industries’ performance for the second quarter of fiscal 2025 exceeded analysts’ forecasts. The company reported an EPS of $2.46, surpassing the expected EPS of $2.26. This outperformance highlights Dycom’s ability to effectively manage costs and drive higher profitability through strategic initiatives and operational efficiencies.

Revenue for the quarter was also slightly above expectations, coming in at $1.203 billion compared to the anticipated $1.2 billion. Although marginal, this revenue beat demonstrates the company’s capacity to generate consistent growth even in a competitive and challenging market environment. The increase in contract revenues was driven by organic growth and contributions from acquired businesses, showcasing Dycom’s successful integration strategies.

The company’s Non-GAAP Adjusted EBITDA margin of 13.2% reflects a significant improvement over the prior year’s 12.6%, indicating better cost management and operational efficiencies.

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Dycom Expects Total Contract Revenues to Increase by Mid-to-High Single Digits

Dycom Industries has provided optimistic guidance for the quarter ending October 26, 2024. The company expects total contract revenues to increase by mid-to-high single digits as a percentage of contract revenues, compared to $1.136 billion for the quarter that ended October 28, 2023. This growth includes approximately $75 million of acquired revenues, reflecting Dycom’s ongoing efforts to expand its market presence through strategic acquisitions.

Non-GAAP Adjusted EBITDA as a percentage of contract revenues for the upcoming quarter is expected to increase by approximately 25 to 50 basis points compared to 12.9% for the same quarter last year, after excluding an incremental benefit of 1.8% in EBITDA margin from the impacts of a change order and the closeout of several projects reported in the prior year period.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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