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SEC filingDycom Industries, Inc. reported strong financial results for fiscal year 2026, ending January 31, 2026. Contract revenues increased to $5.55 billion, up 17.9% from $4.70 billion in fiscal 2025. Net income grew to $281.2 million, a 20.5% increase from $233.4 million in the prior year. The company's performance was driven by significant growth in its Communications segment, which saw contract revenues rise 15.9% to $5.45 billion, primarily due to increased fiber-to-the-home deployments and revenues from businesses acquired in fiscal 2025. The company completed the acquisition of Power Solutions, LLC in fiscal 2026, establishing a new Building Systems segment. Dycom generated robust operating cash flow of $642.5 million and ended the period with $709.2 million in cash and equivalents. The company's backlog increased to $9.54 billion, providing visibility into future revenue streams.
Dycom Industries delivered strong financial performance in fiscal 2026 with contract revenues of $5.55 billion, representing 17.9% growth from $4.70 billion in fiscal 2025. Net income increased to $281.2 million from $233.4 million in the prior year, a 20.5% improvement. Basic earnings per share rose to $9.68 from $8.02. The company's income before income taxes was $367.9 million, up 19.5% from $307.8 million in fiscal 2025. Fiscal 2026 included 53 weeks of operations compared to 52 weeks in fiscal 2025, which impacts comparability. The Communications segment generated income before income taxes of $470.0 million, a 27.1% increase from $369.8 million in the prior year, while the newly established Building Systems segment reported a loss before income taxes of $9.6 million, primarily due to amortization expense from acquisition accounting.
Revenue growth was concentrated in the Communications segment, which accounted for 98.3% of total contract revenues at $5.45 billion, up 15.9% from $4.70 billion in fiscal 2025. The increase was primarily driven by net increases in fiber-to-the-home deployments, including rural fiber deployment programs, and revenues from businesses acquired in fiscal 2025. The Building Systems segment, established through the Power Solutions acquisition in fiscal 2026, contributed $95.8 million in contract revenues. Customer concentration remains significant, with AT&T Inc. representing 25.4% of total contract revenues, Verizon Communications Inc. at 14.0%, Lumen Technologies at 10.8%, and Comcast Corporation at 7.4%. The company's backlog increased to $9.54 billion as of January 31, 2026, from $7.76 billion in the prior year, with $6.36 billion expected in the next 12 months.
Gross profit increased to $1.14 billion in fiscal 2026 from $0.98 billion in fiscal 2025, with gross margin improving to 20.6% from 19.8%. The improvement in operating leverage resulted from higher contract revenues. Operating income (income before income taxes plus interest expense and loss on debt extinguishment) was $425.1 million, representing a 7.7% operating margin. Costs of earned revenues, excluding depreciation and amortization, were $4.41 billion, general and administrative expenses were $445.5 million, and depreciation and amortization was $269.6 million. The Building Systems segment's loss before income taxes of $9.6 million was primarily attributable to $20.4 million of amortization expense associated with finite-lived intangible assets related to the Power Solutions acquisition.
Net cash provided by operating activities was strong at $642.5 million, up from $349.1 million in fiscal 2025. Free cash flow (operating cash flow minus capital expenditures) was $401.7 million. Cash used in investing activities was $1.84 billion, primarily for the Power Solutions acquisition ($1.63 billion net of cash acquired) and capital expenditures of $240.8 million. Cash provided by financing activities was $1.81 billion, driven by borrowings on the senior credit agreement. The company ended the period with $709.2 million in cash and equivalents, up from $92.7 million at the end of fiscal 2025. Total assets increased to $5.98 billion from $2.95 billion, largely due to the acquisition. Long-term debt was $2.81 billion, and total stockholders' equity was $1.86 billion. The company had borrowing availability under its revolving facility of $746.4 million.
Management expects capital expenditures, net of disposals, to range from $210.0 million to $220.0 million during fiscal 2027 to support growth opportunities and the replacement of certain fleet assets. The company believes its capital resources, including existing cash balances and amounts available under its credit agreement, are sufficient to meet financial obligations for at least the next 12 months. Dycom intends to retain earnings for use in the business and other capital allocation strategies which may include investment in acquisitions and share repurchases. The company does not anticipate paying cash dividends on its common stock in the foreseeable future. Key risk factors include customer concentration, the cyclical nature of the industries served, and integration risks associated with acquisitions. The non-cash amortization charges from the Power Solutions acquisition are expected to continue impacting segment operating results in future periods as the economic value of the acquired intangibles is realized.