Dycom Industries, Inc. (NYSE:DY) Q2 2024 Earnings Call Transcript

Eric Luebchow: Okay. I appreciate that. A couple of the equipment manufacturers recently cited some demand slowdown for wireline and wireless equipment. So maybe based on what you see, do you think this is largely just an inventory digestion issue with lead times on a lot of equipment coming down a lot versus last year? Or does it have any read that you can see in terms of demand in the next few quarters in your business?

Steven Nielsen: Well, certainly and we’re no expert in that business but we’ve been around it. But clearly, with the benefit of hindsight, there was a lot of ordering when supply chains got challenged and they’re working through that inventory. That’s why we’re pleased that we’re in the services business where we have to work through those kind of issues. As you can tell, if you look at the details when you get time to run through the information we provided. We’ve got a number of customers that are still growing strongly. And it’s just a question of some rotation. We’ve seen that before, a little bit of consolidation but we feel good about being optimistic for next year.

Eric Luebchow: Perfect. And then just one last one for me, Steve. A few of the tower companies talked about wireless activity slowing pretty materially in the second quarter. One of your competitors did as well. I know it’s a small piece of your business but your top customer, you do a decent amount of workforce. So maybe you could provide any commentary at all in terms of your — what you’re doing on the wireless side, if you did see a slowdown there, consistent with what we heard from other industry participants.

Steven Nielsen: Sure, Eric. Total wireless revenue was about 4.2%, 4.3% of total revenue. So it certainly was off somewhat. I think it’s pretty generally acknowledged that carriers have done a great job of efficiently deploying the mid-band spectrum that they have. And so that’s affected activity. Again, in the near term, we think over the long term, there are great opportunities in wireless. But again, they’ve done a great job of getting this out there quickly. And what’s good for their business is ultimately always good for our business.

Operator: [Operator Instructions] One moment for our next question. And that will come from the line of Alan Mitrani with Sylvan Lake Asset Management.

Alan Mitrani: Just a couple. Was Bigham a subcontractor for you guys at all or no?

Steven Nielsen: No, no, they’re direct to customers.

Alan Mitrani: Okay, good. Also, normally, you’re guiding to, I guess, down revenues in the next quarter, excluding Bigham, if you add a menu say flat. Normally, I just want to look ahead to your fiscal fourth quarter. I know you don’t give guidance 2 quarters out but normally, that’s the odd weather quarter, the holiday quarter and revenues are typically down around 12% to 13% depending on the year, of course. Do you think we’ll normally use this base — this third quarter base which is already against your regular seasonality given the slowdown as that quarter to then decline from there 12% to 13%? Just give us some direction, if you can, looking ahead.

Steven Nielsen: I mean, Alan, we’re not giving the second quarter out guidance. I think what we would say is just to reiterate what you did is, it’s a quarter that can be — that is always influenced by daylight hours, holidays and can be impacted by weather. We have some customers that we see some opportunities adjusting for seasonality with their activity picking up into that quarter but it’s too early for us to provide guidance at this point. And in a way, Alan, I mean, thinking about it that way, I know it’s important to the Street. But when we look ahead over the next couple of years, there’s $40 billion of public capital on top of $30 billion, $40 billion of capital that’s already working its way through the system. And so we feel pretty good at the outlook for next year.