Dycom (NYSE:DY) Beats Q3 CY2025 Sales Expectations, Stock Soars

Telecommunications company Dycom (NYSE:DY) announced better-than-expected revenue in Q3 CY2025, with sales up 14.1% year on year to $1.45 billion. The company expects next quarter’s revenue to be around $1.3 billion, close to analysts’ estimates. Its non-GAAP profit of $3.63 per share was 13% above analysts’ consensus estimates.

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“We delivered an exceptional third quarter with record revenue, profitability and backlog, reinforcing our industry leadership and operational discipline. As a result of our strong performance, we are increasing the midpoint of our full-year revenue outlook,” said Dan Peyovich, Dycom’s President and Chief Executive Officer.

Company Overview

Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Dycom grew its sales at a solid 10.2% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Dycom’s annualized revenue growth of 11.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Dycom reported year-on-year revenue growth of 14.1%, and its $1.45 billion of revenue exceeded Wall Street’s estimates by 3%. Company management is currently guiding for a 19.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10.9% over the next 12 months, similar to its two-year rate. This projection is noteworthy and implies the market is baking in success for its products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Dycom was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.7% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

On the plus side, Dycom’s operating margin rose by 7.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, Dycom generated an operating margin profit margin of 14.7%, up 6.7 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Dycom’s EPS grew at an astounding 33.3% compounded annual growth rate over the last five years, higher than its 10.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Dycom’s earnings to better understand the drivers of its performance. As we mentioned earlier, Dycom’s operating margin expanded by 7.1 percentage points over the last five years. On top of that, its share count shrank by 9.5%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Dycom, its two-year annual EPS growth of 15.9% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, Dycom reported adjusted EPS of $3.63, up from $2.68 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Dycom’s full-year EPS of $9.96 to grow 12.1%.

Key Takeaways from Dycom’s Q3 Results

We enjoyed seeing Dycom beat analysts’ revenue and EBITDA expectations this quarter. We were also glad its EBITDA and EPS guidance for next quarter outperformed Wall Street’s estimates. Zooming out, we think this quarter featured many important positives. The stock traded up 7.5% to $318.50 immediately following the results.

Indeed, Dycom had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.