Dycom’s CEO: There are a lot of growth opportunities left in fiber-to-the-home
Key Highlights
- Major telcos like AT&T and Verizon are expanding their fiber networks through acquisitions, creating increased demand for FTTH infrastructure.
- Dycom reported a 56.1% increase in total contract revenues in Q1 2027, driven by fiber deployments and market expansion.
- The FTTH market has surpassed 11.8 million homes, with fiber networks now reaching over 60% of U.S. households, indicating robust growth potential.
- Dycom remains optimistic about the BEAD program, expecting significant revenue contributions starting in 2027 as projects accelerate.
- The company’s growth is supported by increased fiber passings, long-haul infrastructure builds, and strategic partnerships across the broadband industry.
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Here are other stories on Dycom:
· Dycom’s CEO says FTTH is the dominant driver in its communications segment
· Dycom’s CEO says it has secured half a billion in verbal agreements for BEAD projects
· Dycom’s Power Solutions acquisition bolsters its data center reach
Dycom is confident that the fiber-to-the-home (FTTH) market has significant long-term growth potential, as large and regional providers work through their buildouts and absorb other properties through targeted M&A.
It’s not hard to see the company’s thesis. Considering AT&T and Verizon alone, whose acquisitions of Lumen’s FTTH business and Frontier will significantly expand their fiber footprints, there’s plenty of work that will be needed to not only integrate the new assets, but also for expansion into new markets.
Outside the top telcos, a host of independent telcos, competitive providers, and cable operators are also expanding their FTTH reach.
T-Mobile, through a partnership with Oak Hill Capital, is acquiring GoNetspeed and Greenlight Networks to expand fiber access across key Northeastern markets. It is also acquiring i3 Broadband via a joint venture with Wren House, further growing T‑Mobile’s Midwest fiber portfolio.
Meanwhile, cable operators like Wide Open West are also moving fast with their FTTH plans. The cable MSO, which became a private company in January, recently announced FTTH expansions in Southeastern Alabama, East Central Michigan and South Carolina.
During its first quarter of 2027, Dycom reported strong revenue growth, driven by expansion into additional geographies and FTTH builds that ramped ahead of expectations.
Daniel Peyovich, CEO of Dycom, told investors during its earnings call that the broadband industry “is only early” in the build out of FTTH.
“There's a lot of growth opportunity left in fiber-to-the-home. There are still several years where the passings are going to continue to increase,” he said. “There are several years beyond that where the cost per passing will increase. And what you really see in Q1, because communications was really aided by fiber-to-the-home, is that it is starting to take place.”
FTTH continues rise
Dycom’s thesis about the FTTH market comes as deployments, according to the Fiber Broadband Association’s recent study, have surpassed 11.8 million homes.
Fiber networks now reach 98.4 million U.S. homes, more than 60% of the nation, and over 70% of Canadian homes and businesses.
The company is seeing the fruits of that growth, as its FTTH work grew 33 sequentially quarter over quarter.
However, Peyovich cautioned that service provider FTTH rollouts are happening in phases.
“You're seeing more and more of these programs that are getting to accelerated levels of execution that are consistent,” he said. “And it is important to remember, when you hear our customers talk about it, it doesn't mean all markets that they have are ramping at the same time. It doesn't mean that we have every single market that they have.”
BEAD 2027 uplift
In tandem with service providers’ ongoing FTTH rollouts, Dycom remains upbeat about its prospects for the Broadband Equity, Access, and Deployment (BEAD) program.
Dycom has been partnering with states, and it continues to have conversations with sub guarantees.
Peyovich said that while it expects to report revenue from BEAD deployments in the second quarter this year, “we think that the calendar year 2027 is when it really starts to take hold and get moving.”
He added that some of the programs and subgrantees are all moving on their own timelines.
“You are going to see the different programs and different subgrantees start at different paces,” Peyovich said. “The smaller programs can start sooner, which is why we believe we'll still see some revenue in the second quarter.”
Communications and Building Systems dominate revenues
Dycom’s first-quarter 2027 financial results reflected growth in its communications and building segments.
Organic revenue of the Communications segment grew 24.7% to $1.57 billion, and Building Systems grew significantly compared to the prior year quarter. Building Systems represented approximately 20% of total revenue for the quarter.
Driven by ramping fiber-to-the-home programs, increased long-haul and middle-mile fiber infrastructure builds, and growing maintenance and operations services, Dycom’s communications revenue was $1.57 billion and grew 24.7% organically.
Likewise, Dycom saw revenue gains in Building Systems and Power Solutions. Building Systems’ total contract revenues were $395.4 million, while Power Solutions delivered $395.4 million of revenue.
During the first quarter, Dycom reported total contract revenues of $1.97 billion, up 56.1% from Q1 last year.
“This reflects the strength of relationships and continued diversification across our customer base,” said H. Andrew DeFerrari, CFO of Dycom.
The company has forecast growth for both its Communications and Building Systems segments.
For the Communications segment, Dycom expects contract revenues of $6.03 billion to $6.2 billion, representing organic growth of approximately 12.6% to 15.8% from last year.
For the Building Systems segment, we expect contract revenues ranging from $1.35 billion to $1.45 billion.
Looking forward to its full fiscal 2027, DeFerrari said Dycom “now expects total contract revenues to range from $7.38 billion to $7.65 billion.”
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About the Author
Sean Buckley
Sean is responsible for establishing and executing the editorial strategy of Lightwave across its website, email newsletters, events, and other information products.