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Date

Wednesday, March 4, 2026 at 9 a.m. ET

Call participants

  • President & Chief Executive Officer — Dan Peyovich
  • Chief Financial Officer — Drew DeFerrari
  • Vice President, Investor Relations — Callie Tommaso

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Takeaways

  • Total revenue -- $1.46 billion in fiscal Q4 (period ended Jan. 31, 2026), up 34.4% year over year, representing an all-time Q4 record for both total and organic revenue.
  • Organic revenue -- Increased 16.6% in fiscal Q4, with strength attributed to the company's backlog and demand momentum.
  • Adjusted EBITDA -- $162.4 million in fiscal Q4, a 39.6% rise, with margin at 11.1%, expanding 41 basis points versus prior fiscal Q4.
  • Non-GAAP adjusted diluted EPS -- $2.03 in fiscal Q4, reflecting a 42% increase over the prior year quarter.
  • Operating cash flow -- Increased 27.7% to $419 million in fiscal Q4.
  • Days sales outstanding (DSOs) -- Improved by 13 days to 101 days compared to fiscal Q4 a year ago.
  • Full-year revenue -- $5.55 billion, up 17.9%, establishing an annual record.
  • Full-year non-GAAP adjusted EBITDA -- $737.7 million, with a margin of 13.3%, up 105 basis points year over year.
  • Full-year non-GAAP adjusted diluted EPS -- $11.97, growing 29.7% annually.
  • Full-year free cash flow -- $435.3 million, more than doubling from the previous year.
  • Backlog -- Record $9.5 billion at year-end, with $6.3 billion expected to convert in the next 12 months; total book-to-bill of 1.3x and organic book-to-bill of 1.2x.
  • Power Solutions acquisition -- Completed December 23, resulting in a new Building Systems segment with $95.8 million fiscal Q4 revenue.
  • Communications segment fiscal Q4 revenue -- $1.362 billion, with AT&T and Lumen each over 10% of total revenue and Verizon/Frontier combined at $205.6 million.
  • Building Systems segment fiscal Q4 revenue -- $95.8 million, with adjusted EBITDA margin of 11.6%, its integration reported as "proceeding on schedule."
  • Fiscal 2027 revenue outlook -- Expected range of $6.85 billion to $7.15 billion, implying total growth of 23.6%-29% and organic growth of 6.6%-10.3%.
  • Segment revenue guidance for fiscal 2027 -- Communications: $5.7 billion-$5.9 billion; Building Systems: $1.15 billion-$1.25 billion.
  • Adjusted EBITDA margin outlook -- Expecting continued expansion, with Building Systems guided to a mid-teens margin.
  • Pro forma net leverage -- 2.3x adjusted EBITDA at quarter-end, with explicit plans to reduce further to approximately 2.0x in 12 months.
  • Cash & liquidity -- $709.2 million in cash and equivalents, $1.46 billion in total liquidity, and $1.54 billion outstanding under Term Loan A; undrawn $800 million revolver at quarter-end.
  • Verbal BEAD awards -- Over $500 million, expected to convert to contracted backlog in fiscal Q1 or Q2 2027.
  • Capital expenditures guidance -- Fiscal 2027 annual capital expenditures expected between $210 million and $220 million, reflecting lower capital intensity.
  • Fiscal Q1 2027 guidance -- Total contract revenue expected to be $1.64 billion-$1.71 billion, adjusted EBITDA of $200 million-$220 million, and adjusted diluted EPS of $2.57-$2.90 (excluding intangible amortization).
  • Wireless equipment replacement program -- Management expects a $100 million revenue decline in fiscal 2027 as the program transitions phases, with a further step-down anticipated for fiscal 2028.

Summary

Dycom Industries (DY 2.64%) capped a record fiscal year by completing the Power Solutions acquisition, establishing a Building Systems segment that expands its presence in the data center infrastructure market. The company closed the year with a historic $9.5 billion backlog, with $6.3 billion set to convert in the next year, and a book-to-bill ratio indicating sustained pipeline growth. Management detailed significant anticipated revenue gains for fiscal 2027, targeting $6.85 billion to $7.15 billion in total contract revenue, driven by strong fiber-to-the-home, long-haul, and inside-the-fence demand. Management emphasized readiness to capture BEAD program opportunities, with over $500 million in verbal awards expected to move to backlog imminently. Capital structure was enhanced by new debt funding for the Power Solutions acquisition and is on a stated deleveraging trajectory toward 2.0x net leverage within 12 months.

  • President Peyovich stated, "the cross-sell is quite frankly taking flight even earlier than we anticipated," highlighting quick synergy realization between Communications and Building Systems for hyperscaler clients.
  • AT&T, Lumen, and combined Verizon/Frontier revenues each exceeded 10% of fiscal Q4 total revenue, evidencing customer concentration at the top of the portfolio.
  • CFO DeFerrari noted, "Operating cash flow totaled $642.5 million for the full fiscal year, and free cash flow increased 216% to $435.3 million after capital expenditures, net of disposal proceeds."
  • Management reported a trailing four-year CAGR of approximately 15% for Power Solutions prior to acquisition and guided for 15%-25% growth in the segment for fiscal 2027.
  • Labor investment was a recurring strategic theme, as Dycom Industries prepares for projected skilled workforce shortages; a new multi-week employee training facility will open near Atlanta.
  • President Peyovich clarified current margin gains are "not coming from us increasing pricing with our customers," but from operating leverage and efficiency improvements.

Industry glossary

  • BEAD program: Broadband Equity, Access, and Deployment program—a U.S. federal initiative to expand high-speed internet access via grants distributed to states and subgrantees.
  • Book-to-bill: The ratio of new contract bookings to revenue recognized in a given period, indicating growth in order pipeline relative to sales activity.
  • DSO (Days sales outstanding): The average number of days required to collect payment on receivables after a sale is made.
  • Inside-the-fence: Fiber and related network infrastructure construction work completed within the physical perimeter of a data center campus.
  • Over-pull program: Telecom network upgrade involving installation of new fiber over existing routes and infrastructure, as referenced for customer Lumen.

Full Conference Call Transcript

Callie Tommaso: Thank you, Operator, and good morning, everyone. Welcome to Dycom Industries, Inc.’s fiscal 2026 fourth quarter and annual results conference call. Joining me today are Dan Peyovich, our President and Chief Executive Officer, and Drew DeFerrari, our Chief Financial Officer. Earlier this morning, we released our fiscal 2026 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 would 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 Dycom Industries, Inc.’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 Systems 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 Peyovich.

Dan Peyovich: Thank you, Callie. Good morning, everyone, and thank you for joining us. Dycom Industries, Inc.’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 Dycom Industries, Inc.’s reach through strategic M&A.

The acquisition of Power Solutions, which closed on December 23, 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 Dycom Industries, Inc.’s 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 will move to our fiscal 2027 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 fiscal 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 and adjusted EBITDA margin was 11.1%.

EBITDA margin increased by 41 basis points compared to Q4 fiscal 2025. Significant additions to our workforce position us well for next year's growth, but did have some impact on margins this quarter as they are working through the severe winter storms. Non-GAAP adjusted diluted EPS was $2.03, a 42% increase compared to Q4 fiscal 2025. DSOs 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 Dycom Industries, Inc. 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 fiscal 2025. Organic revenue increased 6.5% for 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 fiscal 2025. 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 Dycom Industries, Inc., 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. As evidenced by our fiscal 2026 margin performance, Communications demand drivers remain robust, and we moved aggressively to expand our footprint. With the strategic addition of Power Solutions, we successfully entered a new high-demand sector with a distinct customer base, significantly broadening our total addressable market. In addition to diversification, we are capturing new territory, highly focused on digital infrastructure from a position of strength. Our year-end numbers confirm the velocity of our growth.

We concluded the year with a record $9.5 billion of total backlog, of which $6.3 billion is expected to be completed over the next 12 months. Book-to-bill for the year was 1.3x in total and 1.2x on an organic basis, reflecting the increasing demand for our services.

As we turn the calendar to the new fiscal year, Dycom Industries, Inc. is strategically positioned for strong growth across multiple demand drivers, led by significant increases in fiber-to-the-home deployments, as well as increasing demand for communications and building systems services to support data center and hyperscaler build. For fiscal 2027, we expect total revenue between $6.85 billion and $7.15 billion, representing year-over-year total revenue growth of approximately 23.6% to 29%, or approximately 6.6% to 10.3% on an organic basis. We also anticipate continued adjusted EBITDA margin expansion. In Communications, we expect modest adjusted EBITDA segment margin gains driven by operating leverage offsetting continued investment to support our growth.

We expect Building Systems to deliver a mid-teens adjusted EBITDA segment margin as we scale the business to capitalize on favorable sector tailwinds.

Our strategy remains focused on driving long-term value for our shareholders and providing industry-leading opportunities for our people. Our execution consistently sets the standard for our industry, and we are focused on continuously enhancing the solutions we provide to our customers as their businesses evolve. This operational foundation allows us to be disciplined in our growth. We are high-grading our pipeline and diversifying across robust demand drivers. Collectively, these demand drivers have never been stronger, and neither has Dycom Industries, Inc.’s positioning within. Our service and maintenance work remains the bedrock of our Communications business, delivering over 50% of our Communications revenue in fiscal 2026.

This recurring base provides a scaled national footprint of facilities, equipment, and skilled workers, enabling us to aggressively pursue larger capital programs. Our unmatched local knowledge provides significant value for our customers as they plan their network builds across the country. While the growth rate for maintenance naturally trails our high-velocity build program, as it scales with new plant installations and geographic expansion, we will continue to grow this segment with purpose to lock in long-term recurring revenues as our customers' networks expand and densify. We see significant ongoing opportunities to further deepen these relationships and amplify Dycom Industries, Inc.’s role as a long-term partner in our customers' ecosystems.

Fiber-to-the-home deployment remains the most mature and dominant driver of growth in our Communications segment heading into fiscal 2027. This quarter, our customers again either affirmed or raised their passing goals. With recently completed customer consolidation, we are seeing the same commitment to fiber infrastructure investment, further reinforcing our strategy. Current industry commitments represent nearly 6 million additional fiber-to-the-home passings. Dycom Industries, Inc. is a leader in this deployment, and our large, skilled workforce enables us to meet the growing demand for this critical infrastructure. Virtually, the passing is only the first phase of the revenue life cycle. We are also accelerating our work on customer drops, the lateral connections required if subscribers sign on to the network.

Following the initial build, these connections typically take an average of four years to reach terminal penetration, the point at which most potential subscribers in an area that they connected. This creates a powerful multiyear tail of quality work. Simply put, Dycom Industries, Inc. is well positioned to lead the fiber-to-the-home market for the next decade.

We believe that our strategy, deep customer relationships, and proven performance will enable Dycom Industries, Inc. to be a leader in the BEAD program as it enters the funding phase. The NTIA has already cleared the large majority of states, representing more than $30 billion in total spend, and NIST has moved over $17 billion, or more than half of that amount, into the funding stage. Our teams are in active discussions with the state and the subgrantee levels, which has translated to additional verbal awards with subgrantees, increasing the $500 million of verbal awards we noted last quarter. We believe these verbal awards will begin moving to contracted backlog in Q1 or Q2.

Our customers are choosing Dycom Industries, Inc. because they recognize that delivering on these massive individual programs requires a specialized, high-capacity workforce that only we can provide at scale. We continue to expect the first revenue opportunities in Q2, and we anticipate revenue to ramp as programs move from the planning phase into active construction. In the 2026 bill, the wireless equipment replacement program is transitioning into its next phase in accordance with the original build plan. While Drew will provide further details on this program, we remain ready to capture any future surge in network densification or new infrastructure initiatives.

Recent hyperscaler announcements by Verizon, AT&T, Meta, and Corning confirm our thesis. Existing networks lack the capacity and latency required to support growing data consumption and AI inference. This quarter, hyperscalers collectively raised their CapEx guidance to nearly $718 billion, representing an approximate 70% increase year over year, affirming both the need and the capital behind. The $20 billion addressable market that we identified across long-haul, middle-mile, and inside-the-fence fiber infrastructure continues to grow as it progresses through the ecosystem. We are seeing more activity today than ever before, giving further confidence in the revenue opportunities now and in the future. As we have said before, these large programs have a longer planning phase than fiber-to-the-home or other programs.

We see their pace ramping considerably for builds that would start in earnest in calendar 2028.

Dycom Industries, Inc. is uniquely positioned for the long-haul, middle-mile, and inside-the-fence opportunity set. First, we believe we were first on the field, executing Lumen's over-pull program. Their program continues, with Lumen announcing that they received another $2.5 billion of awards this quarter to bolster their current build. We expect our revenue to continue to ramp this year as we look to deliver on Lumen's over-pull program. Second, both over-pull and new construction builds require massive foresight, geographic scale, and technical sophistication. Complexity favors Dycom Industries, Inc. While the incubation period from inception to construction is longer than fiber-to-the-home, these programs generate elongated build cycles that provide revenue visibility well into the next decade.

Lastly, the surge in long-haul capacity must be matched by the fiber density inside the data center campus. We continue to secure new awards inside the fence, validating that hyperscalers require a strategic, scale partner to sustain their build pace.

Our strategy is to position Dycom Industries, Inc. as the indispensable partner for hyperscalers and carriers alike. We have deployed dedicated teams to work directly with customers and the supply chain, ensuring we proactively plan and precisely execute every program. Our recent acquisition of Power Solutions and entry into the data center space is one way we are leaning into those partnerships. Dycom Industries, Inc. now offers an extended suite of solutions across the digital infrastructure space, and we are already seeing opportunities to bring our Communications and Building Systems services together to meet the intensifying requirements of hyperscalers.

Specifically, they are looking for Dycom Industries, Inc.’s breadth, scale, and proven execution, whether it is inside the four walls or interconnecting the fiber between data centers. We view this as a substantial growth driver and are executing a clear, disciplined strategy to capitalize on this demand. Since closing the Power Solutions acquisition just over two months ago, the business is performing well, and the integration has proceeded on schedule. We are leveraging their specialized expertise to sharpen our approach to the data center and digital infrastructure markets. The strong cultural and operational alignment between our teams has allowed us to hit the ground running, and we are very pleased with its initial contributions to our broader portfolio.

As we look to the year ahead, we are focused on four core strategic priorities. First, talent and workforce development. We are investing heavily in our workforce, now over 19,500 strong, to meet intensifying customer demand. In the coming weeks, we will break ground on a new state-of-the-art training facility outside of Atlanta. While we operate numerous facilities nationwide, this center represents a major step in staying ahead of evolving technical demand. Designed to house employees for immersive, multi-week programs, the facility will provide hands-on training in real-world environments to ensure our teams consistently deliver the safety, quality, and expertise that define the Dycom Industries, Inc. brand.

This investment is part of our overall strategy, which includes significant enhancement of our benefits package as we continue our efforts to remain the employer of choice in our space. As diverse demand drivers intersect and overlap, we anticipate an industry-wide shortage of skilled labor that will favor Dycom Industries, Inc.’s scaled workforce and proven execution. As a trusted partner, we maintain constant dialogue with our customers to build our talent ahead of the curve.

Second, expansion of our Building Systems segment. With Power Solutions as our foundation, we are actively pursuing opportunities to drive their organic growth beyond their current footprint, as well as pursuing additional complementary acquisitions, while remaining committed to our strict criteria and long-term debt leverage target.

Third, margin expansion. We will continue to drive margin improvement through productivity gains and operating leverage. Our commitment to field efficiency is unwavering, rooted in our disciplined approach to safety, quality, and financial performance. This past year, we delivered significant margin expansion and are applying that same discipline to fiscal 2027.

Fourth, operating cash flow and fleet optimization. We have made significant strides in our cash position by improving internal processes and controls and sharpening our cash conversion cycle. We have driven significant improvement in our net DSOs, which are nearing a range we expect to remain relatively steady. We will continue to identify and execute on opportunities to further enhance operating cash flow. This includes capturing additional efficiencies within capital expenditures and is reflected in our reduced spend last year and our outlook for fiscal 2027. This reduction is a result of long-term strategic planning, not short-term cost savings.

As a leading customer for many of our equipment suppliers, and the strategic decision to favor ownership over leasing, we hold a unique position in our R&D cycles. R&D partnerships have led to advanced telematics that provide real-time insight into usage, maintenance, and diagnostics. By leveraging these insights, we have optimized our fleet, allowing us to maintain high performance levels with a lower capital footprint.

In summary, Dycom Industries, Inc.’s strength is rooted in the expertise of our large workforce and our proven ability to raise the bar for our customers. In striving to deliver at the highest possible level, we believe we are setting the industry standard for what focused, scale, and high-quality execution looks like. Our record performance and historic backlog are a direct reflection of the trust we have earned as an indispensable partner to the world's leading carriers and hyperscalers.

As we move into fiscal 2027, we will continue to leverage our scale and technical sophistication to solve the industry's most complex challenges and meet commercial opportunities, from the massive fiber-to-the-home build-out to the critical infrastructure requirements of the data center and AI economy. We remain committed to the disciplined growth and superior execution that define Dycom Industries, Inc., drive long-term value for our shareholders, and long-term opportunities for our people. I would like to thank the entire Dycom Industries, Inc. team across all 50 states for your relentless commitment to safety and quality, to delivering at the highest level for our customers and communities as we pursue our vision to be the people connecting America.

With that, I will turn the call over to Drew for a deeper look at the financials.

Drew DeFerrari: Thanks, Dan, and good morning, everyone. We delivered record annual results in fiscal 2026 with strong revenue growth, significant margin expansion, and robust free cash flow. We executed well in Q4, and we are excited to welcome Power Solutions to Dycom Industries, Inc. Together, we are positioned at the center of the powerful secular trends driving growth in digital infrastructure services.

For the fourth quarter, we delivered strong growth in revenue, adjusted EBITDA, and adjusted EPS. Consolidated total contract revenues were $1.458 billion, a 34.4% increase over Q4 2025. Organic revenue exceeded the high end of our expectations, growing 16.6% after excluding the acquired revenues from Power Solutions of $95.8 million and the extra week in our 53-week fiscal year. Consolidated adjusted EBITDA of $162.4 million increased 39.6% over Q4 2025. Adjusted EBITDA margin of 11.1% was within our range of expectations and increased over 40 basis points compared to Q4 2025, even as we increased our workforce to meet the growing demand for our services and experienced severe winter weather at the end of the quarter.

Consolidated adjusted net income was $60.5 million, and adjusted diluted EPS was $2.30 per share. These results are adjusted to exclude nonrecurring acquisition-related items and the amortization of intangible assets.

For the segment results, Communications revenue was $1.362 billion, driven by continued execution of fiber-to-the-home programs, wireless activity, fiber infrastructure programs for hyperscalers, and maintenance and operations services. We are pleased with the strength of our relationships and diversification across our customer base. AT&T and Lumen each exceeded 10% of total revenue for the quarter, contributing $350.5 million and $147.7 million, respectively. Following Verizon's acquisition of Frontier during our fourth quarter, their combined revenue was $205.6 million, also exceeding 10% of total revenue. Customers exceeding 5% of total consolidated revenue for the quarter were Brightspeed, Charter, Comcast, and Uniti. Adjusted EBITDA for Communications increased 30% to $151.3 million, or 11.1% of segment revenue.

The Building Systems segment includes Power Solutions results from the date of acquisition on December 23 through January. Revenue was $95.8 million, and adjusted EBITDA was $11.1 million, or 11.6% of segment revenue, with results impacted by several seasonal holidays during the abbreviated operating period. This acquisition fundamentally broadens our reach into the data center market. The integration is proceeding on schedule, and the business is performing in line with our expectations.

Backlog at the end of Q4 was $9.542 billion, including $8.333 billion of Communications backlog and $1.209 billion of Building Systems backlog. Backlog expected in the next 12 months was $6.358 billion, including $5.25 billion from Communications and $1.108 billion from Building Systems.

Strong cash flows remain a primary focus, and we delivered excellent results. Operating cash flow totaled $642.5 million for the full fiscal year, and free cash flow increased 216% to $435.3 million after capital expenditures, net of disposal proceeds. The combined DSOs of accounts receivable and contract assets, net, improved to 101 days, a 13-day improvement over Q4 2025. We made solid progress improving our cash conversion cycle in the Communications segment and of the newly acquired business, which is further bolstered by the lower DSO profile in our Building Systems segment. I am pleased to report that our ERP implementation is on track, and we are actively deploying additional phases during fiscal 2027, further enabling future operational efficiencies.

As we previously disclosed, the $1.95 billion acquisition of Power Solutions was completed in the quarter on a cash-free, debt-free basis, subject to working capital and other post-closing adjustments. The purchase price consisted of approximately 1 million shares of Dycom common stock, with the remainder of consideration paid in cash. The net cash payment at closing of $1.63 billion was funded with a mix of proceeds from a $1.1 billion senior secured Term Loan A facility, a $600 million 364-day bridge loan facility, and cash on hand. During January, we raised $800 million of senior secured Term Loan B, repaid the bridge loan facility, and added the remaining net proceeds from the debt issuance to cash on the balance sheet.

We ended the quarter with cash and equivalents of $709.2 million and total liquidity of $1.46 billion. The maturity of our senior credit facility has been extended to December 2030, and we had a total of $1.54 billion Term Loan A outstanding and an undrawn $800 million revolving credit facility. The Term Loan B balance was $800 million outstanding, with a maturity in January 2033. Additionally, we have $500 million senior notes outstanding that mature in April 2029.

Pro forma net leverage at the end of the quarter was approximately 2.3x adjusted EBITDA, and we see a clear path to delever further to approximately 2.0x net leverage over the next 12 months, in line with our expectations at the time of the transaction and maintaining our financial flexibility for continued strategic growth and investment.

Going forward, we remain committed to our capital allocation priorities of investing in organic growth, pursuing strategic M&A, and opportunistically repurchasing shares. We continue to observe strong demand across a diverse set of drivers, creating significant opportunities for continued strong growth and performance. For fiscal 2027, we expect total contract revenues to range from $6.85 billion to $7.15 billion. For the Communications segment, we expect contract revenues to range from $5.7 billion to $5.9 billion, increasing approximately 6.6% to 10.3% organically when compared to $5.35 billion of fiscal 2026 Communications revenue after excluding the extra week in our 53-week fiscal year. For the Building Systems segment, we expect contract revenues ranging from $1.15 billion to $1.25 billion.

We also anticipate continued adjusted EBITDA margin expansion. For Communications, we expect modest adjusted EBITDA segment margin improvement as operating leverage offsets continued investment in our workforce to meet growing demand. For Building Systems, we expect a mid-teens adjusted EBITDA segment margin as we scale operations to capture increasing market opportunities.

I will highlight some of the expectations driving our outlook range for fiscal 2027. Within Communications, we expect continued strong demand from fiber-to-the-home programs, increasing demand from long-haul and middle-mile fiber infrastructure builds, growing inside-the-fence opportunities, and modest growth in our service and maintenance business. We expect revenue from wireless equipment replacements to decline by approximately $100 million in fiscal 2027 as the program transitions into its next phase, in accordance with the original build plan. We expect a further step down in fiscal 2028 as this program moves toward completion. Our strategy positions us well for future wireless opportunities, whether other equipment upgrades or overall densification.

And for the Building Systems segment, we expect exceptional demand for electrical services in a growing data center market. We expect annual capital expenditures, net of disposal proceeds, to range from $210 million to $220 million for fiscal 2027, as we efficiently utilize our fleet of assets and strive to continue to reduce our capital intensity. For Q1, we expect total contract revenues of $1.64 billion to $1.71 billion, adjusted EBITDA of $200 million to $220 million, and adjusted diluted EPS of $2.57 to $2.90 per share, excluding the impact of intangible amortization expense.

Dan Peyovich: We encourage you to review the outlook summary document newly available on the company's Investor Center website for additional metrics.

Drew DeFerrari: With a record fiscal 2026 behind us, Dycom Industries, Inc. enters fiscal 2027 with solid strategic positioning and a strong financial foundation. We remain focused on the disciplined execution necessary to convert robust industry demand into long-term value for our shareholders. Operator, this concludes our prepared remarks. We will now open for questions.

Operator: Thank you. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question will come from Sangita Jain from KeyBanc Capital Markets. Your line is open.

Sangita Jain: Good morning. Thank you for taking my question. Dan, can you talk a little bit about how you plan to increase the scope of work that you are doing inside Power Solutions? I know Dycom Industries, Inc. has telecom expertise, so maybe you can expand into cabling or something else that you are currently not doing there? Any color there would be helpful.

Dan Peyovich: Good morning, Sangita. First, I just want to say Power Solutions acquisition is going incredibly well. The integration going just as we expected it to be. This is an incredibly strong, very deep leadership team that has been in that market for a very long period of time. So we are excited about how they are performing. We are excited about the opportunity set in front of them. And if you probably heard me say, the demand, especially in the DMV right now, is just off the charts. So plenty of opportunity there. As you can see, we are outlining significant growth for them this year. You know, with the range we gave is 15% to 25%.

Really, that is about trying to ramp into that over the year and set us up for the future and what that looks like. So we are investing in that business. You know, we are certainly adding resources to that business. And then to your question, the cross-sell is quite frankly taking flight even earlier than we anticipated. The reaction from the hyperscalers has been fantastic. You know, where we can bring our inside-the-fence communications work and couple that with what Power Solutions is doing inside the four walls, that we think is a recipe that wins over time. And again, with both of our proven expertise, the response has been fantastic.

If you think about inside the four walls, one, I would point to how we named the segment. So Communications, obviously, for the Dycom Industries, Inc. business that is on the legacy side, but Building Systems, we wanted to be specific. So first, you know, we are really architecting Dycom Industries, Inc. around digital infrastructure. It is about both the compute of data and the transmission of data around the country, getting it all the way from the data centers themselves to the end consumer or to the end business. That is really our playbook. We want to be straight down the fairway as we are thinking about it.

With Power Solutions, obviously, there are opportunities for organic expansion, and we are going to look into that. It is to continue to work on that over time. And we are also looking at M&A opportunities, and we have been vocal about that. That is not just limited, to your point, not just limited to electrical. We call it Building Systems for a reason. We are not thinking about civil infrastructure. We are not thinking about getting outside of digital infrastructure. But there are other opportunities inside the four walls at a data center that could make sense. And as everybody knows, it is a very active space right now. And, you know, we are optimistic.

Again, we have discipline around what we are looking for, strategy around what we are looking for. Got to have really strong culture. It has got to fit, you know, with the growth opportunities that we see. But, yes, there could be other disciplines that we bring into the fold.

Sangita Jain: Thank you for that, Dan. And then on the fourth quarter organic growth, which was especially strong given winter weather and the holidays, etc., can you talk a little bit about where you were most surprised versus your internal expectations? If there was any notable project pull-forward that came in? Thank you.

Dan Peyovich: No pull-forwards. And, yes, we are obviously very pleased with the overall performance, exceeding the high end of our range that we gave at the beginning of the year, giving that revenue outlook at the beginning of the year that we raised after Q1. But notably, for the fourth quarter, as you point out, one, we had to work through significant winter weather. What it shows really, one, the ability of our team to execute even in those conditions. We did get a little bit of margin pressure from that, but the ability to keep that going. But, importantly, the demand from our customers.

The demand coming out of Q4 and the demand going into this year, you can see it in the guide that we gave for fiscal 2027. You can see it in the organic growth that we are talking about in the Communications side and the outlook for 2027. So it really just shows all of these different demand drivers as they are coming through the business and the opportunity set there. So nothing specific. Really, I would say, points to the overall demand. One thing I would point out, you know, we did have wireless that increased in Q4. And you do have to think about that.

As Drew talked about, you know, we expect about $100 million of deceleration in line with the original expectations of that program. But since we got that work and have been executing, we have talked about back half in the four years that it is going to start to taper off. So you do have to include that going the other direction.

Operator: Thank you. Our next question will come from Eric Luebchow from Wells Fargo. Your line is open.

Eric Luebchow: Great. Thanks for taking the question. Dan, I wanted to just ask about the long-haul, middle-mile, and inside-the-fence work. I know you quantified the $20 billion TAM a few quarters ago. It sounds like you are optimistic that is going to prove conservative, and we have seen some interesting announcements from the likes of Meta and Corning recently. So maybe any kind of quantification on how that program is progressing? And where you think that addressable market ultimately goes? It sounds like $20 billion is just the start.

Dan Peyovich: It really is, Eric. If we think about the $20 billion, and remember that is back-half weighted because these programs are complex. They take a while to get off the ground. But what you have seen since the last quarter, and I think we put that number out a couple quarters ago, in this last quarter, you saw a number of our customers now talking about it and talking about significant opportunities and appetite for hyperscalers. As recent as yesterday at some of the conferences, even more demand that they are seeing on their side.

It does take time for that to get through the ecosystem, and that is what we tried to talk about early on when we identified the $20 billion. You know, we really think that we were first on the field with what we have been doing for Lumen. Saw another nice increase to their PCF that they are going to continue to build on over time. And then you have the new construction work, which again just takes further time to come in. I would really think about ramping this year, continuing to ramp this year, continuing to ramp in 2027, and a lot of that really taking flight in calendar 2028. Is it more than $20 billion?

We strongly believe that. Is there going to be more that comes there? What I would tell you is today, we are getting more phone calls and seeing more opportunities than we saw even a quarter ago or, frankly, even a week ago, the demand is that strong. And it comes back to a little bit of what I talked about at the beginning. This is about a change in how they need to transmit this data. Right? They need more capacity. They need latency, ultra-low latency for these applications and for the future of AI.

So we are excited that we can be a trusted partner there, and we really think that over time that is going to continue to grow, and we will continue to update as we see that move.

Eric Luebchow: Great. Thank you, Dan. And maybe we could just touch on the BEAD program. You talked about it a little bit. Sounds like the verbal award balance is above that $500 million, but it also seems like it is taking a little longer for the funds to actually get dispersed. I think Louisiana is the only one that I have seen. So maybe you could just talk about the construction timelines there, when you think that is really going to ramp and kind of hit a more full run rate.

Dan Peyovich: We still believe Q2 that we have some revenue opportunities to be putting work in place overall. But as we talked about, and really unchanged from what we have been saying for a bit now, if you really think about that in calendar 2027, it is getting some momentum. So it is great to see progress. You know, nearly all the states and territories are approved. To your point, funding—this has pushed the funding down, and that continues to grow over time. We think that addressable market is approaching $20 billion, but it is going to take some time for those to get off the ground. You have got numerous states at different paces.

The way that they are pushing it down to the subgrantees, and then those subgrantees also at different paces within that. I will just frame the context for you. If you think about a local cooperative where they own their own poles, they have probably already done the engineering today. As soon as they get the funding pushed down, they can hit the go button. And that is why we talked about something in Q2. But the bigger program, the longer-duration build, those are probably going to come on much later in the year. So, again, great to see progress. We all wish it would go a little bit faster? Absolutely.

But we have a lot of confidence in that coming through the supply chain soon.

Operator: Our next question will come from Joseph Osha from Guggenheim Partners. Your line is open.

Michael Spressody: This is Mike Spressody on for Joe. Just to kind of follow up on that BEAD program, is it fair to say that the big guidance does not imply the full potential impact for this year? And then also, how do margins from this program differ from your traditional work? Are they more accretive or anything like that? Thanks.

Dan Peyovich: Mike, I think you are breaking up just a little bit. I think you are referring to the BEAD program again and just how it is built over time.

Michael Spressody: Yeah. Exactly. Thank you.

Dan Peyovich: Yeah. First on the margin profile, similar to all of our work. Right? We think about everything on the Communications side very similar. If it is taking the same type of skilled workforce resources, if it is taking similar types of equipment, then the margin profile and that return ends up in a similar range. So that does not mean every project is exactly the same, but it is in the same similar bandwidth. And we believe BEAD will play out that way over time. But—and I think this is an important point—you have got fiber-to-home demand that, you know, is really just reaching another level. And, again, I do want to point out, it has not peaked yet. Right?

You still have a ton of growth that is happening in that program. You have got everything going on with the hyperscalers and those long-haul, middle-mile builds. That is significant. You still have a lot of activity on the wireless work today. We continue to add to our service and maintenance platform. When you put all those together and you start adding them up and showing the increases over time, without question, there is going to be pressure on labor. So if you think about skilled workforce, as you get later this year and really starting in calendar 2027, that is where we think Dycom Industries, Inc. is exceptionally well positioned.

And we have been investing heavily in our workforce to make sure that, if you think about the BEAD program and the needs that our customers can have there, when you already have these other programs going fast, we need to have been investing years ago. We need to be thinking about having a strategy that was very long term. You probably heard me in my prepared remarks talk about—and I am really excited about this—talk about a new training facility that we are opening outside of Atlanta. This is something you are going to hear more about in the coming days, and we have numerous training facilities around the country.

But this one is really taking it to the next step. So picture a Hollywood-style town where our folks can be working in the front yards and backyards of America in a simulated environment, where they are going to stay onsite for a multi-week training curriculum so that we can get them very quickly oriented to the work, highly skilled to deliver at the level that Dycom Industries, Inc. is expected to do overall. I should point out, this facility is also not just what we are doing on the Communications side, but the Building Systems side as well.

That is just another example of how we invest in front of programs to make sure that we will have the skilled workforce that our customers need and that the partnerships that we have and the depth of those partnerships allow us to plan those very far into the future. So back to your original question on BEAD, you know, just really think about it lightly coming in year. It is just going to take a while for these programs to start. Again, we are excited about, you know, backlog that we have verbally awarded, and I want to point out that it is still verbal to date.

We think those should transition to actual awards and move to backlog in either Q1 or Q2, with some activity starting in Q2. But think about calendar 2027 as really when those projects are going to come online.

Operator: Our next question comes from Frank Louthan from Raymond James & Associates. Your line is open.

Frank Louthan: Great. Thank you very much. Can you comment on what the current growth rate is at Power Solutions today versus what it was when you acquired the business? And then secondly, can you characterize your exposure to EchoStar, any project that they have currently, and if you have removed any of that from your guidance? Thanks.

Dan Peyovich: No exposure to EchoStar. So nothing to think about there for Dycom Industries, Inc. On Power Solutions' growth rate, we talked about their trailing four-year CAGR, about 15%, Frank, and that is what we gave as we were doing the acquisition, announced it for folks to look ahead. Obviously, as you saw in the guide, we are looking at that really as the bottom end of the range—so 15% to 25%. But here is the really important point. Right? This is an organization that is delivering, you know, across around 3,000 skilled workforce, so 3,000 electricians, over a billion dollars of revenue. That is a very large base.

And when you think about growth as a percentage, remember, you add the skilled workforce by the person. And doing that on a much larger base is something that you really have to lean into. So, you know, if you think about how we are looking at the year, how do we continue to invest in Power Solutions, a fantastic business that has got great leadership, a fantastic strategy that they have proven over time, but we want to really lean in with them so we can think about future growth and future growth opportunities. And I just want to come back to Dycom Industries, Inc. as a whole. Right?

When we think about growth, there is a right way to do growth and there is a wrong way to do growth. We have had a ton of discipline around our backlog. You see that in our margin profile. You see that last year, not only did we significantly increase our backlog, not only did we continue to diversify our backlog, but we also improved our margin profile. And, this year, as we look at the year out in front of us, we are telling you again that we continue to improve that margin profile as we continue to grow, but as we invest in the business to ensure future growth, too. So just a couple important points there.

Frank Louthan: Great. Thank you very much.

Operator: Thank you. Our next question comes from Michael Dudas from Vertical Research. Your line is open.

Michael Dudas: Yes. Good morning, Callie, Dan, and Drew. Maybe a follow-up on Frank's—on the margin front. Maybe talk a little bit—you know, you are investing in the business for the future—how much relative to fiscal 2027 versus 2026? And I think just also on the Power Solutions side, historically, in their self-perform capabilities, what has been their growth rate on the labor front? And is that within expectations on, you know, from hiring and getting folks in to execute the backlog, not just for this year, but for several years out?

Dan Peyovich: Yeah. Thanks, Mike. So on margin profile, you know, you look at last year, we grew over 100 basis points year over year. Very pleased with the overall results, and that has been a year of change and growth. We did a major acquisition. And I think, again, I would just point to how well Dycom Industries, Inc. is executing overall to be able to do all of those things at once. As you look towards this year, again, we have got big ideas and big initiatives that continue our growth and continue that long-term strategy. What is really important, and to the point of your question, is that we have to continue to invest ahead of that.

We added a lot of headcount for the Communications side in the back half of last year. We see that continuing as we continue to get ahead of these programs that I talked about early on that are starting to stack on top of each other. That takes an investment. Right? We have to invest in training. We have to bring those folks on. They are obviously not as productive day one as they are six months in. So when we think about that and we add it into the growth profile of the overall enterprise, that is when we say, hey, we are going to continue to grow margin.

But I would not set expectations to be going as fast as we did last year from a raw dollars or a percentage profile, but still to grow, to have that into our backlog when I think a lot of others, during periods of growth, maybe struggle with improving those margins, we feel really good about that.

Going to Power Solutions, they are really about labor. You know? A lot of people know the hyperscaler buy all the big electrical equipment directly. That does not come through the P&L of Power Solutions. So it really is about workforce. So if you think about 15% to 25% growth that we are projecting for this year, you are growing labor in a very similar range to that. And as I mentioned to Frank, you think about that on a raw number of skilled workforce headcount. When you get to the size of Power Solutions, and they are working on dozens of data centers, those are really big numbers in the DMV.

You know, we are partnered with the local union. We are getting well in front of that. But at some point, again, this goes back to responsible growth. Right? You want to grow at the right rate where you continue to deliver and, quite frankly, differentiate the level of service that we deliver to our customers over time. And that is what you see in the outlook.

Michael Dudas: I appreciate it. It makes sense. And just my quick follow-up. You mentioned a little bit about acquisitions in some of your prepared remarks and in response to questions. Maybe you could share a little bit on the timing on getting to that 2.0 level, the size, the cadence—what should we anticipate maybe over the next 12 to 18 months? I am assuming maybe there is another Power Solutions out there. I am thinking a bit more modest in cadence and size.

Dan Peyovich: I think it is important to go back to the long-term strategy that we operate and talking about long-term returns for our shareholders, long-term opportunities for our people. Obviously, we did the Power Solutions acquisition. That was a very large acquisition for Dycom Industries, Inc. historically. But what we did well ahead of that, Mike, we were very intentional to drive our net leverage down before we did the acquisition. I do not remember the exact number, but I think it was about 1.2x—maybe 1.2x and change—when we did that. And then we talked last quarter about our ability to bring that net leverage down quite quickly.

We talked about 12 to 18 months, but really what you heard Drew say earlier was to do that inside of 12 months. To finish the year with a very strong cash position and already get that down to 2.3x, pro forma. We feel really good about the opportunity set that allows us to think about from an M&A perspective. Long-term strategy includes improving our cash flow. Right? And if you look at our free cash flow, I am incredibly proud of what our team was able to accomplish there. Our free cash flow increased 216% year over year, and I would point to these are durable changes that we have built into the business.

These are not simply pulling a lever or taking a one-time thing. This is really about how we changed, one, how we collect cash, we changed our operating cash collection profile and how we are thinking about that. So, again, durable. On the free cash flow side, you heard me talk a little bit about how we are thinking about our fleet differently and using technology differently there so we can optimize that as well. And what that does is it positions us in a place where those are big changes in cash position overall, sets us up much better when you think about M&A.

So those are things that we set in motion quite some time ago to enable us to be able to continue the path that we are on today. When it comes to size, again, we have got a strategy around it. We are looking for very specific cultural fit, very specific growth opportunities. It could be something else that, you know, in a kind of factor range of the size of Power Solutions, and there could be other opportunities that are much smaller than that. It is really going to depend on—and there is obviously no guarantees about timing or how these work out. We are going to be patient, but we are seeing some attractive things in the space.

Michael Dudas: Understood, thanks, Dan.

Operator: Our next question comes from Judah Aronovitz from UBS. Your line is open.

Judah Aronovitz: Hey, good morning. Thanks for taking my question. On for Steven Fisher. Just on the Building Systems margin guidance, can you talk about how you are thinking about the margin potential in that business? And how quickly can you improve kind of the mid- to high-teens level that you have talked about? And related to that, you know, what investments need to be made, and if you can quantify the margin drag from those investments in 2027, that would be helpful.

Dan Peyovich: Yeah. This is really, again, about having a long-term strategy to do this. So when we think about that business, we did talk about mid- to high-teens margin profile that they have delivered historically. Mid-teens is really the right way to think about it today. Right? We are talking about significant growth opportunities. We want to do that right. Maintaining the level of service that they have proven over decades is so imperative in a market where the demand is surging at the level that it is today. We are going to have that discipline. We are going to have that patience. We are very pleased, obviously, with the growth profile for 25% from a revenue perspective.

But we feel like mid-teens is a very strong return in that space. And I think if you look, you know, comparatively, you would see that as well. So we feel very pleased with that over time. Obviously, we are going to, just like we are on the Communications side, work to improve that. But right for now, I think that is a really good starting point.

Judah Aronovitz: Thanks. And then I was just curious about SG&A as a percent of sales in Q4, a bit higher than it has been in quite some time. And, you know, I assume that is reflective of kind of the headcount you are adding, but I was wondering if there is anything else in there, maybe something related to Power Solutions mix, or anything else? And then, you know, what is the spec kind of going forward? Thanks.

Drew DeFerrari: Yeah. Judah, thank you for the question. I would just point out we did have some transaction costs that we called out in the quarter, and that was in G&A—so about $18 million in there. And then as we think about the Building Systems segment, the G&A profile does come into the business as well. So if you are looking at the total overall dollars, there will be some increases there as well.

Operator: Our next question will come from Richard Cho from JPMorgan. Your line is open.

Richard Cho: I just wanted to get a little bit on the hyperscale opportunity. As we look through this year, and then into next year and 2028, it seems like there is a lot of this build that is coming back-half weighted, and it could be a big change. But what is kind of driving the near-term hyperscale revenue, and how should we think about its growth for this year and then into next? And as a clarification on the acquisitions, are you looking in the DMV area for acquisitions, or could this be a new geographic location?

Dan Peyovich: So today, you have, obviously, the Lumen over-pull that does not have the same kind of new construction logistics or permitting around it. So that program that we have been working on for over a year now—that is going to grow this year. I would think about that first, Richard. And then you do have smaller legs. You know, the way that these long-haul, middle-mile routes are working, there are some very big programs like Lumen is talking about. There is everything in between, and then there are some that are just, you know, 100 or 200 miles. Those much smaller distances—those can be added in more quickly, obviously.

But when you are looking at routes that are thousands of miles or much longer, those are the ones that are going to push further on duration. And then, you know, as you would expect, there is also the pricing dynamics. So routes that are easier are going to cost less, so those can come online a bit quicker. The more expensive routes are going to take time and have higher revenue profile—those out years of 2027, 2028. On the acquisitions question, we are nonspecific just to DMV. You know, there are obviously a number of other markets.

But I would say what was important to us with the Power Solutions acquisition was starting in a market that has been there for a very long time. Right? This is a market that has been around for decades. It has a sustainability, has a future build profile. With that now, we can certainly be thinking about some of these frontier markets or markets that are newer and ramping up considerably. Those are all on the table as we think about it going forward.

Operator: Thank you. Our next question comes from Adam Thalhimer from Thompson Davis. Your line is open.

Adam Thalhimer: Hey, good morning, guys. Also had a question on the M&A pipeline. Dan, is that all within the Building Systems segment, and then what should our expectations be on timing? And I think you mentioned Power Solutions geographic expansion. Just curious what you are thinking there. Does that mean just starting to pick up some work in West Virginia, North Carolina, sort of building out from the DMV?

Dan Peyovich: Yes. We are predominantly looking in the Building Systems segment, and that is mostly, Adam, as you know. You know, Dycom Industries, Inc. has been a major acquirer and consolidator of the Communications space. There are still some opportunities out there, but, quite frankly, when you are in all 50 states and you are across the same kind of customer expense that we have today, we do not need to do those from an M&A perspective. Those are places where we can, and have shown, we can grow organic. So thinking a lot more about the Building Systems space, as I mentioned to Sangita’s question earlier, it does not just have to be electrical.

There are other systems that happen in that digital infrastructure space or inside the data center. From a timing, you know, these things do not pace out, you know, some particular way you want them. I mean, we closed Power Solutions two days before Christmas. Right? This is how things time out. You know, we are active in the space. There are a number of opportunities that are out there. There are a number of really strong businesses that are coming to market for all the reasons you would expect. Right? Sure, the multiples are higher, but the businesses are more valuable and the growth profile is stronger.

So we are optimistic, but, you know, there is no guarantees on timing. We are going to be patient and make sure it fits. On geographic expansion, exactly. They are not in every space. Even if you think about the DMV itself, you know, you could still continue to expand. And as everybody knows, that space itself is expanding. You mentioned West Virginia. There are other markets that are really kind of coming online more in that territory. So today, you know, we feel really good about the growth profile they have. There are opportunities for future organic expansion. That group, because they have been around for a very long time, they have got a ton of talent.

So those are all things we are thinking about as we layer that together with M&A. What I would just say is we are very optimistic in the continued growth of the Power Solutions.

Operator: Thank you. And our next question comes from Liam Burke from B. Riley Securities. Your line is open.

Liam Burke: Thank you. Good morning, Dan. Good morning, Drew. Dan, with your growing EBITDA and your growing cash flow, as you balance opportunities through acquisitions and managing the balance sheet, how are you balancing your current leverage ratios versus what you see in the potential acquisition pipeline? And when you are looking at the traditional business, when negotiating longer-term contracts, are you seeing more favorable terms of pricing now that the scale is getting bigger? Projects are more complex, and you seem to be the leader in the space here.

Dan Peyovich: Yeah. I think about it the same way as we always have. We are going to be very responsible on our net leverage. I think if you think about it, you have to think about it over time because we might do acquisitions that could come through that are to push it up a bit when we know, just like we did with Power Solutions, that we can bring that down. And I mentioned, Liam, you know, this is a strategy that goes back so that we have these improvements in the business. So we can do more M&A and stay ahead of it without, you know, really changing the way that we look at our overall net leverage profile.

On pricing and contract terms, you know, I think we are the only ones that are across all 50 states, and we certainly have, you know, a number of customer relationships. If you think about the margin improvement last year, you think about the margin improvement this year, I do want to be really clear about this. This is not coming from us increasing pricing with our customers. This is coming from, obviously, operating leverage, but also internal efficiencies that we are improving. Now over time, can those pricing dynamics change? We will see as these different programs come online and ramp up. But right now, one, we feel really good with our return profile.

You know, we have a long-term view with our customers. You know, we want to deliver and execute for them across cycles—certainly across decades. We have shown that we can do that. But, you know, I would not think about it from purely us having an opportunity to continue to raise pricing. And, also, I would point that we do not need that to continue the margin improvement that we are on.

Operator: Thank you. And I am showing no further questions from our phone lines. I would now like to turn the conference back to Mr. Dan Peyovich for closing remarks.

Dan Peyovich: Thank you all for your time today. We look forward to seeing and talking to you again in around 90 days. Thank you all. Be safe, and be well.

Operator: Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.