Dycom Industries (DY) Soars on Earnings Beat, Higher 2026 Outlook and $1.95 Billion Data‑Center Acquisition

Dycom Industries, Inc. (NYSE: DY) is firmly in the market spotlight today after reporting record fiscal 2026 third‑quarter results, raising its full‑year guidance and unveiling a $1.95 billion deal to acquire Power Solutions, a major data‑center electrical contractor. ^[1]

Record Q3 FY26 results: Revenue rose 14.1% year over year to $1.452 billion, while diluted EPS climbed to $3.63, roughly 53% above last year’s level. ^[2]
Backlog and profitability at new highs: Dycom reported record backlog of $8.2 billion, record net income of $106.4 million, and adjusted EBITDA of $219.4 million (15.1% margin). ^[3]
Guidance raised again: For fiscal 2026, Dycom now expects $5.35–$5.425 billion in contract revenues, implying 13.8–15.4% growth versus last year, and guided Q4 adjusted EPS to $1.62–$1.97. ^[4]
Transformational acquisition: The company will acquire Power Solutions, LLC for $1.95 billion in cash and stock, adding roughly $1.0 billion in annual revenue and deep exposure to high‑growth data‑center markets. ^[5]
DY stock hits record territory: Shares have surged intraday, with separate reports citing double‑digit percentage gains and fresh all‑time highs above $320 following the news. ^[6]

Record Q3 2026 Results: Revenue, Earnings and Backlog All Hit New Highs

For the quarter ended October 25, 2025, Dycom delivered one of the strongest prints in its history:

Contract revenues: $1.452 billion, up 14.1% from $1.272 billion a year ago. On an organic basis (excluding recently acquired businesses), revenue still grew 7.2%, showing solid underlying demand. ^[7]
GAAP diluted EPS: $3.63 versus $2.37 in the prior‑year quarter, an increase of just over 50%. ^[8]
Net income: $106.4 million, compared with $69.8 million in last year’s Q3. ^[9]
Adjusted EBITDA: $219.4 million, up 28.5% year over year and representing 15.1% of contract revenues, versus 13.4% a year earlier. ^[10]
Operating cash flow: $220 million for the quarter. ^[11]

The company’s backlog — a key indicator of future revenue — reached a record $8.2 billion as of quarter‑end, highlighting strong multi‑year visibility across its telecom and digital‑infrastructure customers. ^[12]

In a statement, CEO Dan Peyovich said the quarter reflected “record revenue, profitability and backlog” and cited accelerating demand for fiber deployments, data‑center capacity and infrastructure programs like the U.S. Broadband Equity, Access and Deployment (BEAD) initiative as key drivers. ^[13]

Third‑party coverage broadly echoed that view. Zacks Equity Research noted Dycom’s adjusted EPS of $3.63 topped its consensus estimate of around $3.15, while revenue of roughly $1.45 billion also came in ahead of forecasts. ^[14]

Fiscal 2026 Outlook Raised: Double‑Digit Growth in Sight

On the back of its strong performance, Dycom once again lifted its full‑year expectations.

Full‑Year FY26 Outlook

The company now expects:

Total fiscal 2026 contract revenues:$5.35–$5.425 billion, implying 13.8–15.4% growth over the prior year. ^[15]
53‑week year: FY26 includes an extra week of operations in the fourth quarter due to the fiscal calendar, typically a seasonally slower period because of winter weather, which management has factored into the guidance. ^[16]

GuruFocus highlighted that the updated revenue range signals continued robust demand and noted Dycom’s trailing‑twelve‑month revenue of roughly $5.0 billion alongside expanding margins and strong returns on equity. ^[17]

Q4 FY26 Guidance

For the quarter ending January 31, 2026, Dycom provided the following guidance: ^[18]

Contract revenues: $1.26–$1.34 billion
Non‑GAAP adjusted EBITDA: $140–$155 million
GAAP diluted EPS: $1.30–$1.65
Adjusted diluted EPS: $1.62–$1.97

Analysts polled ahead of the release were looking for EPS of around $1.62 on revenue of approximately $1.30 billion, meaning Dycom’s guidance brackets consensus on both the top and bottom lines and leaves room for upside if execution remains strong. ^[19]

$1.95 Billion Power Solutions Deal: A Big Bet on AI‑Driven Data Centers

The other major announcement today is Dycom’s agreement to acquire Power Solutions, LLC, a premier Mid‑Atlantic electrical contractor focused on mission‑critical data‑center projects. ^[20]

Deal Terms and Financing

According to Dycom’s press release:

Purchase price:$1.95 billion
Consideration mix: About $293 million in Dycom common stock, with the balance in cash. ^[21]
Financing:
- Cash on hand
- A committed $1.0 billion senior secured term loan A
- A committed $700 million senior secured 364‑day bridge loan

Management expects pro‑forma net leverage below 3.0x at closing and aims to reduce it toward 2.0x over the next 12–18 months as the combined business generates strong free cash flow. ^[22]

The transaction is subject to customary closing conditions and is expected to close before Dycom’s fiscal year‑end. ^[23]

What Power Solutions Brings

Power Solutions:

Focuses on electrical infrastructure for data centers and critical facilities in the Washington, D.C.–Maryland–Virginia region — currently the world’s largest data‑center hub. ^[24]
Employs more than 2,800 people and has a 25‑year track record with large general contractors and hyperscale technology customers. ^[25]
Is expected to generate roughly $1.0 billion of revenue in calendar 2025, with a ~15% compound annual growth rate over the past four years. ^[26]
Has historically produced mid‑to‑high‑teens adjusted EBITDA margins and currently carries a backlog exceeding $1.0 billion. ^[27]

Dycom will keep the Power Solutions brand and management team, with the business operating as part of the broader Dycom platform from its headquarters in Bowie, Maryland. ^[28]

Strategic Rationale: Riding the AI Data‑Center Wave

Dycom framed the acquisition as a “milestone” transaction that broadens its reach beyond fiber and telecom construction into the electrification side of digital infrastructure: ^[29]

More than 90% of Power Solutions’ revenue comes from data‑center projects. ^[30]
The company cites third‑party estimates suggesting U.S. data‑center capacity could grow at a 20–25% compound annual rate through 2030, with generative AI as a major accelerator. ^[31]

By combining Dycom’s strength in fiber and network construction with Power Solutions’ expertise in high‑voltage electrical work inside data centers, management believes it can offer more turnkey solutions to hyperscalers and cloud providers — and capture a larger share of the AI‑driven capex cycle. ^[32]

Market Reaction: DY Stock Breaks Out to New Highs

Investors have reacted enthusiastically to the one‑two punch of strong earnings and M&A.

Zacks and other outlets showed the stock up around 16–17% in morning trading following the release. ^[33]
An Investing.com report later in the day highlighted that Dycom shares hit a new all‑time high near $323.76, with the stock up more than 13% on the session and about 70% year‑to‑date. ^[34]
Prior to today’s move, Dycom’s own investor site showed a 52‑week range of $131.37–$301.88, underscoring how far the stock has run as infrastructure spending has ramped. ^[35]

Analyst sentiment remains broadly positive. Recent data from MarketBeat, StockAnalysis and other aggregators show: ^[36]

A consensus “Buy” to “Strong Buy” rating, with most covering analysts positive on the long‑term story.
Average 12‑month price targets in the low‑$300s, close to or slightly below where the stock is now trading after today’s rally.

In a separate piece, Zacks highlighted Dycom on its “recent price strength” screen, noting the stock’s strong three‑month and one‑year performance and its position near the top of its 52‑week trading range even before today’s breakout. ^[37]

Balance Sheet and Leverage: Bigger, But Still Disciplined

The Power Solutions deal will meaningfully increase Dycom’s scale — and its debt load — but management is emphasizing balance‑sheet discipline: ^[38]

Pro‑forma leverage is expected to be under 3.0x at close.
The combined company’s free cash flow is expected to support de‑leveraging to about 2.0x within 12–18 months, assuming no major macro shocks.
Dycom ended Q3 with $1.48 billion of shareholders’ equity and total assets of about $3.32 billion, before the transaction. ^[39]

Third‑party analyses from GuruFocus and InvestingPro point to strong liquidity (current ratio above 3x) and a solid financial‑health score, though they also note a relatively high valuation multiple and above‑market stock volatility. ^[40]

Key Opportunities — and Risks — for Investors

From a strategic standpoint, today’s news reinforces several themes around Dycom:

Growth Drivers

AI and cloud data centers: Power Solutions gives Dycom direct exposure to one of the fastest‑growing pockets of infrastructure spending, with analysts cited in company materials calling for 20–25% annual growth in U.S. data‑center capacity through 2030. ^[41]
Fiber and broadband build‑outs: Even before the acquisition, Dycom was a key contractor for U.S. telecom operators rolling out fiber‑to‑the‑home and 5G, with federal programs like BEAD providing multi‑year funding tailwinds. ^[42]
Record backlog: An $8.2 billion backlog provides revenue visibility and some cushion against near‑term order volatility. ^[43]

Risks to Watch

Integration and execution: Dycom will need to integrate a 2,800‑person organization with its own culture, systems and customer base — always a complex task in large M&A deals. ^[44]
Leverage and interest rates: While management has mapped out a path back below 2x net leverage, higher‑for‑longer rates or any downturn in demand could complicate that trajectory. ^[45]
Cyclicality and policy risk: Infrastructure spending is sensitive to carrier capex cycles, regulatory changes and government‑funding timelines, which the company itself flags in its risk disclosures. ^[46]

What’s Next

Investors will be watching several milestones in the coming months:

Closing of the Power Solutions deal and any regulatory approvals needed. ^[47]
Integration updates and early commentary on cross‑selling opportunities to hyperscale and telecom customers. ^[48]
Q4 FY26 results and 2027 commentary, which will show how demand holds up after a strong 2025 and how much of the AI‑related capex surge persists. ^[49]

For now, the market’s verdict is clear: between record results, a higher outlook and a sizable data‑center acquisition, Dycom Industries has just delivered one of its most consequential days in years.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Always do your own research or consult a licensed financial adviser before making investment decisions.

Dycom Industries (DY|$8.5B) - 2026 Q4 Earnings Analysis