Thank you, operator. Good morning, everyone. Welcome to Dycom's fiscal 2026 fourth quarter and annual results conference call. Joining me today are Dan Peyovich, our President and Chief Executive Officer, and Andrew 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'd 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'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 23rd, 2025. With that, I will turn the call over to Daniel Peyovich.
Thank you, Callie. Good morning, everyone. Thank you for joining us. Dycom'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. 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's reach through strategic M&A. The acquisition of Power Solutions, which closed on December 23rd, 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 and our 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'll move to our FY 2027 financial outlook and our objectives for the year ahead. After that, Andrew 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 FY 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 FY 2025. Significant additions to our workforce position us well for next year's growth, but did have some impact on margins this quarter, as did working through the severe winter storms. Non-GAAP adjusted diluted EPS was $2.03, a 42% increase compared to Q4 FY 2025. DSOs were 101 days, an improvement of 13 days year-over-year. 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, in which we capitalized on growth opportunities across our demand drivers while also enhancing our underlying business to deliver stronger margins and improve cash flow. For the full year, we delivered all-time record revenue of $5.55 billion, an increase of 17.9% compared to FY 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 FY 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 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 FY 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're 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 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 funds.
For FY 2027, we expect total revenue between $6.85 billion and $7.15 billion, representing year-over-year total revenue growth of approximately 23.6%-29%, or approximately 6.6%-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's positioning within them. Our service and maintenance work remains the bedrock of our Communications business, delivering over 50% of our Communications revenue in FY 2026. This recurring base provides a scaled national footprint of facilities, equipment, and skilled workers that enable 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 programs 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'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 FY 2027. This quarter, our customers again either affirmed or raised their passing goals. With recently completed customer consolidations, we are seeing the same commitment to fiber infrastructure investment, further reinforcing our strategy. Current industry commitments represent nearly 60 million additional fiber-to-the-home passings. Dycom is a leader in this deployment, and our large skilled workforce enables us to meet the growing demand for this critical infrastructure. Crucially, 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 have been connected. This creates a powerful multi-year tail of quality work. Simply put, Dycom 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 to be a leader in the execution of 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 at the state and the sub-grantee levels, which has translated to additional verbal awards with sub-grantees, 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 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 second half of this year. We have the capacity to deliver on this demand, and we are ready to execute as these funds flow into the sector.
Following a highly productive FY 2026 build, the wireless equipment replacement program is transitioning into its next phase in accordance with the original build plan. While Andrew will provide further details on this program, we remain ready to capture any future surge in network densification or new infrastructure initiatives. Shifting to long-haul and middle-mile fiber opportunities. 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 it. 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.
Thanks, Dan. 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. We are excited to welcome Power Solutions to Dycom. 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 $2.03 per share. These results are adjusted to exclude non-recurring 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 23rd through the end of 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 to be completed 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, 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, which is further bolstered by the lower DSO profile of the newly acquired business in our Building Systems segment. I'm pleased to report that our ERP implementation is on track, 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. 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. We have $500 million of 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 2x 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-$7.15 billion.
For the Communications segment, we expect contract revenues to range from $5.70 billion-$5.90 billion, increasing approximately 6.6%-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-$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.
To 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 towards completion. Our strategy positions us well for future wireless opportunities, whether other equipment upgrades or overall densification. For the Building Systems segment, we expect exceptional demand for electrical services in the growing data center market. We expect annual capital expenditures net of disposal proceeds to range from $210 million-$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-$1.71 billion, adjusted EBITDA of $202 million-$218 million, and adjusted diluted EPS of $2.57-$2.90 per share, excluding the impact of intangible amortization expense. We encourage you to review the Outlook Expectations summary document newly available on the company's Investor Center website for additional metrics. With a record fiscal 2026 behind us, Dycom 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. You may now open the call for questions.