Dycom Industries Inc (NYSE:DY) stock rose 4.54% (As on November 21, 11:32:18 AM UTC-4, Source: Google Finance) after the company reported better-than-expected third quarter results, as the specialty contracting services provider saw strong revenue growth and improved profitability. Contract revenues increased 12.0% to $1.272 billion for the quarter ended October 26, 2024, compared to $1.136 billion in the year ago quarter. Organic revenue increased 7.6%, after excluding revenue from acquired businesses each period, storm work from the current quarter and revenue from a change order and project closeout in the prior year quarter. Adjusted EBITDA was $170.7 million, or 13.4% of contract revenues, an increase of 52 basis points compared to $143.2 million, or 12.9%, in Q3 2024. Gross margin improved 45 bps to 20.8% of revenue compared to 20.4%. For comparative purposes, the prior year Adjusted EBITDA and gross margin exclude the impacts of a change order and closeout of several projects reported in Q3 2024. Backlog at the end of the third quarter was $7.856 billion versus $6.834 billion at July 2024, an increase of over $1.0 billion. Of this backlog, approximately $4.467 billion is expected to be completed in the next 12 months. Headcount was 15,980. Cash and equivalents were $15.3 million and liquidity was $462.8 million. At the end of Q3, we had $450 million of Term Loan and $155 million of drawn Revolving Credit Facility borrowings which was used for acquisition funding during the quarter.

Moreover, AT&T was the largest customer at $265.6 million, or 20.9% of revenue, and grew organically 58.4%. Lumen was the second largest customer at $146.4 million, or 11.5% of revenue. The third largest customer was at $104.9 million, or 8.2% of revenue, and grew 50.2% organically. Comcast was at $102.7 million, or 8.1% of revenue. And finally, Brightspeed was the fifth largest customer at $88.6 million, or 7.0% of revenue, and grew 43.3% organically. All other customers decreased slightly on an organic basis.

DY in the third quarter of FY 25 has reported the adjusted earnings per share of $2.68, beating the analysts’ estimates for the adjusted earnings per share of $2.31. The company had reported the adjusted revenue growth of 12 percent to $1.27 billion in the third quarter of FY 25, beating the analysts’ estimates for revenue of $1.22 billion.

For the fourth quarter, Dycom expects total contract revenues to increase mid- to high-single digits YoY. The company also anticipates adjusted EBITDA margin to expand by approximately 25 basis points compared to Q4 last year.