Dycom Industries (DY) reported strong fiscal second-quarter 2027 results before Wednesday’s market open, but the stock fell 7.65% even after the company topped analyst expectations on several metrics.

The stock initially traded near $361.20 in premarket activity, about 2.7% higher after the earnings release, before reversing course and declining through the regular session.

Quarterly revenue totaled $2.006 billion, up 45.6% year over year. Non-GAAP adjusted EBITDA reached $315.5 million, ahead of Wall Street’s consensus estimate of about $297 million.

The company reported GAAP net income of $115.6 million, or $3.81 per diluted share. Adjusted non-GAAP earnings per share were $5.29.

Backlog Reaches Record High

Dycom said total backlog rose to $12.24 billion, a 53% increase from a year earlier and an all-time high. About $6.47 billion of that backlog is expected to convert into revenue over the next 12 months.

For a contractor tied closely to fiber and other network buildouts, backlog is one of the clearest indicators of near-term project visibility, especially as customers continue large infrastructure programs that can extend over multiple quarters.

Organic contract revenue increased 16.7% for the quarter and 20.5% for the year-to-date period, driven mainly by work in the company’s core Communications segment.

The Communications division generated $1.608 billion in quarterly revenue, supported by fiber-to-the-home deployments, long-haul and middle-mile infrastructure projects, and ongoing maintenance service contracts.

Building Systems reported $397.5 million in quarterly revenue and an adjusted EBITDA margin of 24.5%, benefiting from Power Solutions initiatives and changes to project scopes.

Chief Executive Officer Dan Peyovich said: “Demand across our portfolio is stronger than ever, fueled by a generational deployment of digital infrastructure that is projected to go well into the next decade.”

Acquisition and Guidance Update

During the quarter, Dycom completed its acquisition of National Technology Integrators. The deal was first announced in May with a price tag of $275 million and expands Dycom’s capabilities in inside-plant structured cabling, audio-visual systems, and security installations across several U.S. markets.

National Technology Integrators contributed about $22.9 million in revenue during the partial quarter in which it was included.

For fiscal 2027, Dycom raised its revenue outlook to a range of $7.48 billion to $7.66 billion, slightly above its previous midpoint target of $7.5 billion.

Management also said about $150 million in wireless program revenue has been pushed into fiscal 2028, while noting that the overall program scope remains unchanged.

The update leaves investors with a clearer near-term picture of how backlog, acquisitions, and timing shifts are flowing through the year, even as the market’s reaction suggested expectations had already been elevated after the prior quarter’s rally. Before the earnings release, DY shares were up about 4% year to date and had gained 37% over the prior 12 months. After the company’s first-quarter report, the stock had jumped 26% and briefly moved above $535 before easing to just above $350 ahead of Wednesday’s results.