Dycom Industries, Inc.

Good day, and thank you for standing by. Welcome to the DICOM Industries, Inc. Fourth Quarter 2026 Results Conference Call. At this time, all participants are in a listen-only mode. 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ms. Callie Tommaso, DICOM's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to DICOM's Fiscal 2026 Fourth Quarter and Annual Results Conference Call. Joining me today are Dan Paevich, our President and Chief Executive Officer, and Drew DeFerrari, our Chief Financial Officer. Earlier this morning, we released our fiscal 26 fourth quarter and annual results, along with certain outlook information. The press release and accompanying materials are available in the investor relations section of our website, including a new outlook expectation summary document, which provides additional outlook metrics beyond what will be discussed on today's call. These materials, which we will discuss during today's call, include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our discussion and these statements reflect our expectations, assumptions, and beliefs regarding future events and are subject to risks and uncertainties that could cause actual results to differ materially. A detailed discussion of these risks and uncertainties is included in our filings with the SEC. Forward-looking statements are made as of today's date and we undertake no obligation to update them. 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. Before I turn the call over, I'd like to note an update to our segment reporting implemented during the fourth quarter. As a result of the recent acquisition of Power Solutions, we are now reporting our business in two reportable segments, communications and building systems. This new segment reporting reflects how DICOM's business is managed and the positioning of the company's strategies and expanding platform to provide comprehensive solutions as we address the growing demands for digital infrastructure. The communications segment provides specialty contracting services for telecommunications providers underground facility locating services for various utilities, including telecommunications providers, as well as other construction and maintenance services for electric and gas utilities. The building system segment provides comprehensive building infrastructure solutions, including electrical, energy management, security, and fire safety systems for data centers and other critical facilities. This segment includes the results of power solutions following the closing of the acquisition on December 23, 2025. With that, I will turn the call over to Dan Pankovich.

Thank you, Callie. Good morning, everyone, and thank you for joining us. DICOM's fourth quarter results are an excellent finish to a record year as we set new benchmarks across nearly every financial metric we track. We exceeded the high end of our annual revenue outlook, and our performance highlights our unique ability to capitalize on a diverse and intensifying demand environment. We delivered on the two pillars we set as priorities. meaningful margin expansion, and improved operating cash flow. Our strategy and focus on scaled efficiencies strengthened our balance sheet and built a platform for sustained high-performance growth. Beyond our solid organic growth, we fundamentally broadened DICOM's reach through strategic M&A. The acquisition of Power Solutions, which closed on December 23rd, positions us squarely at the intersection of digital infrastructure and the burgeoning data center market. Capitalizing on industry tailwinds, we are aggressively architecting our own trajectory, ensuring DICOM and our robust, skilled workforce remains the indispensable backbone of the next generation of digital connectivity. I will start by covering our fourth quarter and full-year consolidated results, and then I'll move to our FY2027 financial outlook and our objectives for the year ahead. After that, Drew will provide further financial details and insights. For the quarter, we delivered all-time record fourth quarter revenue of $1.46 billion, an increase of 34.4% compared to Q4 FY 2025. Of note, this was a Q4 record both in total and on an organic basis. Organic revenue increased 16.6% for the quarter, a testament to the strength of our backlog and the momentum going into the next year. Adjusted EBITDA was $162.4 million. An adjusted EBITDA margin was 11.1%. EBITDA margin increased by 41 basis points compared to Q4 FY2025. Significant additions to our workforce positioned us well for next year's growth, but did have some impact on margins this quarter, as did working through the severe winter storms. Non-GAAP adjusted diluted EPS was $2.03, a 42% increase compared to Q4 FY2025. PSOs were 101 days, an improvement of 13 days year-over-year. And operating cash flow increased 27.7% to $419 million for the quarter. As I mentioned, the fourth quarter capped a year of exceptional performance for DICOM, in which we capitalized on growth opportunities across our demand drivers, while also enhancing our underlying business to deliver stronger margins and improved cash flow. For the full year, we delivered all-time record revenue of $5.55 billion, an increase of 17.9% compared to FY2025. Organic revenue increased 6.5% through the year. Non-GAAP adjusted EBITDA was $737.7 million, and non-GAAP adjusted EBITDA margin was 13.3%. EBITDA margin increased by 105 basis points compared to FY2025. Non-GAAP adjusted diluted EPS was $11.97, an increase of 29.7% year-over-year. We ended the year more than doubling free cash flow to $435.3 million. Fiscal year 2026 set new records for DICOM and, importantly, positioned us for continued growth, margin expansion, and further cash flow improvement in fiscal 2027. Shifting to our backlog, our approach to the pipeline remains disciplined. We are optimizing for high-value engagement that balances risk with superior returns.