Dycom’s CEO says Charter/Cox and Verizon/Frontier deals are a positive

A new wave of consolidation among service providers has recently picked up. The proposed deals from Charter/Cox, Verizon/Frontier, and, more recently, AT&T’s bid for Lumen’s consumer fiber broadband business are evidence of this trend.

Dycom, one of the largest network construction companies, sees an opportunity to help these companies scale further because it also has resources on hand in multiple markets.

Speaking to investors during its first quarter fiscal year 2026 earnings call, Daniel Peyovich, CEO of Dycom, said, “Customer consolidation has been a positive for us.”

“One, larger customers typically want a national player like us to handle the work across many of their locations,” he said. “And two, any time there's capital infusion and consolidation like that, generally speaking, there's going to be more opportunities, more investment overall.”

FTTH, data center ramping

While the outcome of the new deals won’t be clear until these deals close next year, Dycom remains bullish about fiber-to-the-home (FTTH) and data center network builds.

During the recent quarter, several service providers, including AT&T, Verizon, and Lumen, all experienced an increase in FTTH subscribers and locations.

Both AT&T and Verizon will scale their fiber reach further when they complete their acquisitions of Lumen’s fiber business and Frontier. AT&T expects to scale its fiber business to 60 million total fiber locations by the end of 2030, while Verizon will pass over 25 million locations with fiber.

During the quarter, Dycom won several new contracts with three of its key customers: Verizon for FTTH and network maintenance, Windstream for both fiber-to-the-home and maintenance work, as well as fiber-to-the-home awards with Lumos.

Peyovich said that several of its customers either confirmed or raised their FTTH build targets.

“The increase in fiber-to-the-home passings is a key driver for our revenue growth, and we delivered on that during the first quarter,” he said. “We continue to see fiber-to-the-home ramping as many of these programs accelerate.”

Additionally, Dycom is witnessing continued growth in fiber demand for data centers from service providers such as Lumen. Lumen is building a new U.S. intercity network, which includes diverse routes to more than 50 major cities nationwide, to interconnect AI-enabled data centers.

“Opportunities to build long-haul and middle-mile routes to meet the needs of AI infrastructure are increasing, and we are underway and executing well on the Lumen overall project,” Peyovich said. “All the hyperscalers reiterated or increased their CapEx budgets and commitment to AI infrastructure on their most recent calls, and we continue to see these long-haul and middle-mile networks as a significant addressable market over the long term.”

Besides Lumen, Dycom won a multi-year middle-mile network contract with an unnamed internet service provider (ISP).

Peyovich said he “expects this recently awarded work to commence later this fiscal year with revenue ramping in fiscal 2027.”

Dycom is also pursuing opportunities to work directly with hyperscalers. In these network builds, Dycom will help bring fiber from the Meet Me vaults in the right-of-way into the data centers, including connecting data centers via underground networks within clusters.

“We were notified of an award from a hyperscaler related to this work that will commence this year, but is not yet in backlog,” Peyovich said. Entry into this scope further expands our total addressable market (TAM). It provides another opportunity for us to leverage our skill set and add value directly for hyperscalers, further diversifying our capabilities as a provider of digital infrastructure services.

Eying BEAD

BEAD, despite the delays that have emerged since the new administration took office in January, still presents opportunities for fiber construction for Dycom.

Peyovich said that Dycom sees opportunities for it to pursue in its fiscal 2027 reporting period, with possible awards expected to come in the second half of this year.

“There's still a lot of bullishness that a lot of fiber is going to get installed in rural America for the BEAD program,” Peyovich said. “However, as I noted, that will be calendar '26 or fiscal '27. We'll continue to update, but I think the important takeaway is that it's not necessary for the current growth curve.”

He added that “we still think there will be plenty of rural opportunities with or without BEAD.”

Dycom’s first quarter fiscal year 2026 revenues were $1.26 billion, up 10.2% year-over-year.

Looking forward, Dycom is raising the full-year fiscal 2026 expected range of contract revenues.

“As a result of our strong performance and our view of the market today, we are increasing our revenue expectations for the year to a range of $5.29 billion to $5.425 billion,” Peyovich said.

For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.