Dycom Industries, Inc. (NYSE:DY) Q3 2023 Earnings Call Transcript

Steven Nielsen: Well, Brent, I mean, look, it has — our folks in the field have worked really hard. If you think about this quarter, it was up $188 million year-over-year. I think through 3 quarters, organic revenue growth was in excess of $500 million. So they’re working really hard. There are cost to growth. And certainly, those are things that we’re working with. I think the good news is, with the breadth of our footprint and the experience of our field management that — these are organizations that have been through growth before and we can always do better. We’re always learning. And as I always say, Brent, half the business is worse than average, so there’s always something to work on.

Brent Thielman: Okay. I appreciate that. And then, Steve, I mean, it looks like still good operating leverage here. Maybe if you could just speak to some of the upward pressures you’re seeing on G&A, just beyond the need to support the growth? And can we still kind of think of a high-single-digit percentage is the right long-term range?

Steven Nielsen: Sure. Look, I think, again, we’ve had a number of initiatives that we have been working at for years because with G&A, you’re never done, right? There’s always something else to work on. And we don’t see real pressures in G&A. I mean we’ve actually streamlined the organization in a lot of ways because of the pandemic and the way we think about back office functions. And — so there are certainly pressures there but all of the things that we have been — all the projects we are working on to take those costs out, we’re encouraged by their progress.

Brent Thielman: Okay. And then Steve, I guess, if you do see sort of a reversion to mid- to high-single digits this quarter, I know any number of things could play out but would you expect to see more benefits to cash flow?

Steven Nielsen: Yes, absolutely. And Drew, why don’t you talk that through.

Andrew DeFerrari: Yes, Brent, clearly, we’ve grown sequentially in the quarter and then for the full year as well so far. We’re going to use some working capital as we have grown the revenue. We’re working at it every day and working hard on collecting the working capital in the fourth quarter.

Steven Nielsen: Yes. And I think Brent, as you know, you’ve followed the company for a long time, fourth quarter tends to be a seasonally strong quarter for operating cash flow. And based on seasonality and we’re working hard to make that happen this year, too.

Operator: Our next question comes from the line of Noelle Dilts with Stifel.

Noelle Dilts: First, I just had a housekeeping question. I was wondering if you had wireless as a percentage of revenues.

Steven Nielsen: Yes, we’re just less than 6%, Noelle, it grew over 30%. So it was a nice quarter for wireless.

Noelle Dilts: Perfect. Then AT&T on its call and in its release, look like home passings declined pretty substantially in the third quarter and they talked about their CapEx being weighted towards the first half of the year. You’re not — doesn’t seem like you’re seeing any of that in your revenue with AT&T. So I was curious if you could expand upon how we should think about the type of work that you’re doing for AT&T? Is that — should we be focused on home passings? Or are there other buckets of CapEx that have become important? And to what extent a potential maybe moderation in AT&T spending is embedded in your fourth quarter guidance?