Good day, and thank you for standing by. Welcome to the Dycom Industries, Inc. Third Quarter 2025 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. Steven Nielsen, Chief Executive Officer. Please go ahead, sir.

Thank you, operator. Good morning, everyone. Thank you for attending this conference call to review our third quarter fiscal 2025 results. Going to Slide 2. During this call, we will be referring to a slide presentation, which can be found on our website's Investor Center main page. Relevant slides will be identified by number throughout our presentation. Today, we have on the call Dan Peyovich, our President and Incoming Chief Executive Officer; Drew DeFerrari, our Chief Financial Officer; and Ryan Urness, our General Counsel. Now I will turn the call over to Ryan Urness.

Thank you, Steve. All forward-looking statements made during this conference call are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all comments reflecting our expectations, assumptions, or beliefs about future events. These forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from current projections, including those risks discussed in the company's filings with the US Securities and Exchange Commission. Forward-looking statements are made solely as of the original broadcast date of this conference call, and we assume no obligation to update any forward-looking statements. Steve?

Thanks, Ryan. As announced last June, I am retiring at the end of this month from Dycom after over 30 years of service, 25 as CEO. This earnings call is my last. Accordingly, I will review this past quarter, Dan will review industry opportunities and operational highlights, while Drew will cover our financial performance and outlook. Dan and Drew will handle Q&A. After the Q&A, I will have a few final remarks. Before I review our third quarter results, I would like to thank my fellow employees for their hard work and dedication. Your efforts make Dycom the special place it is, and I am so proud of what we have built together. To our Directors, thanks for your wisdom, guidance, and oversight over these last 25 years. I leave Dycom a much better leader because of you. To my fellow shareholders, your support as I have led our company has been invaluable. Thanks for the opportunity to benefit from your counsel and the market's discipline. And finally, Dan, I'm so excited for you and Dycom as you and your strong team lead our company to a bright future. I firmly believe Dycom's opportunities have never been greater, and I leave Dycom well-assured that you and your team will take full advantage of those opportunities to the great benefit of customers, employees, and shareholders. You have my full confidence in the support of the entire company. Now moving to Slide 4 and a review of our third quarter results. As we review our results, please note that in our comments today and in the accompanying slides, we reference certain non-GAAP measures. We refer you to Slides 12 through 18 for a reconciliation of these non-GAAP measures to their corresponding GAAP measures. Turning to the quarter. Revenue increased year-over-year to $1.272 billion, an increase of 12%. Organic revenue increased 7.6% as we deployed gigabit wireline networks, wireless, wireline converged networks, and wireless networks. This quarter reflected an increase in demand from three of our top five customers. Non-GAAP gross margin was 20.8% of revenue and increased 45 basis points compared to Q3 of fiscal '24. Non-GAAP general and administrative expenses were 7.8% of revenue, and all of these factors generated adjusted EBITDA of $170.7 million or 13.4% of revenue and adjusted earnings per share of $2.68. Liquidity was strong at $462.8 million. And during the quarter, we completed the acquisition of Black & Veatch's public carrier wireless telecommunications infrastructure business. Now, I will turn the call over to Dan for a business update.

Thank you, Steve, and good morning, everyone. I'd like to start by expressing my gratitude for the support and partnership Steve has provided throughout this transition. His guidance has firmly established our company as an industry leader. On behalf of the Board of Directors and all our employees across the country, I want to extend our deepest thanks to Steve for his dedication over the past 25 years. I'd like to welcome Kevin Wetherington, who joined as our new Chief Operating Officer in October. Kevin brings over 25 years of experience in leading national operations with large distributed workforces across the country. Kevin has already been out in the field with a number of our subsidiaries and met with customers as he steps in to lead operations across Dycom. We're delighted to have him join our executive team. Moving to our results. We delivered another strong quarter with year-over-year growth in both revenue and EBITDA. We're encouraged to see continued and additional strategic transactions including refinancings and commitments to increase capital expenditures by many of our customers, with some customers also increasing homes past expectations. We work hard to deliver quality every day, and we believe we are well positioned to capitalize on these opportunities. Fiber-to-the-home work and our maintenance and operations services are a core part of our business, and we secured both extensions and new awards in a number of markets for these services from AT&T during the quarter. We're excited about the increasing opportunities we see related to AI, including expansive new national deployments of high capacity, low latency inter and intracity networks. We believe we are in the early stages of a broad set of significant opportunities with a number of customers as hyperscalers look to connect their data centers with long-haul private redundant fiber networks. During the quarter, we received an award from Lumen for the expansion of their inter and intracity fiber network to provide additional capacity for hyperscalers. The integration of our recent wireless acquisition is going well, and we are seeing an anticipated ramp in wireless network modernization and deployment services. We remain comfortable with our initial revenue expectations for this acquisition, and we continue to integrate and execute on anticipated synergies. Lastly, we continue to see unprecedented levels of federal and state support for rural broadband deployment programs. We believe the magnitude and importance of these programs should not be underappreciated as they address some of the more difficult locations to deploy in America and represent a generational deployment opportunity. We continue to believe that we will see revenue opportunities from BEAD in the second half of calendar 2025 ramping into 2026. In summary, we executed well during the quarter and continue to capitalize on opportunities across our industry. We believe that the long-term value of our maintenance and operations business will continue to increase relative to our deployment of wireline and converged networks, as those deployments dramatically increase the amount of outside plants that must be extended and maintained. As customer projects increase in scope and complexity, our industry focus, scale, and financial strength position us well to deliver valuable services and anticipate and meet the demand for our customers. We believe that we are building momentum in the markets we serve as we pursue our vision to connect America. I would like to acknowledge our 16,000 employees for their dedication to delivering for our customers safely every day. We've grown significantly over the past several years and have unprecedented opportunities ahead of us. Our results and continued success are because of you. Thank you. I'll pass the call to Drew for his financial review and outlook.

Thanks, Dan, and good morning everyone. Going to Slide 6. Contract revenues were $1.272 billion, an increase of 12% compared to Q3 '24. Organic revenue increased 7.6% after excluding revenue from acquired businesses each period, storm work for the current quarter and revenue from a change order and project closeout in the prior year quarter. A presentation of these amounts can be found in our press release and materials for today's call. 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 '24. Gross margin improved 45 basis points 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 '24. G&A this quarter included incremental stock-based compensation of $7.1 million related to the CEO transition and acquisition integration costs of $4.2 million related to the Q3 '25 acquisition. Excluding these amounts, non-GAAP G&A expenses were 7.8% of revenue compared to 7.7% in Q3 '24. Non-GAAP net income increased to $2.68 per share compared to $2.23 per share in Q3 last year after excluding $0.59 for the change order and project closeout benefit last year in Q3. Going to Slide 7. During the quarter, our top five customers combined produced 55.7% of revenue and grew organically 16.7%. AT&T was our largest customer at $265.6 million or 20.9% of revenue and grew organically 58.4%. Lumen was our second largest customer at $146.4 million or 11.5% of revenue. Our third largest customer was $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 our fifth largest customer at $88.6 million or 7% of revenue and grew 43.3% organically. All other customers decreased slightly on an organic basis. Going to Slide 8. Backlog at the end of the third quarter was $7.856 billion versus $6.834 billion at July 2024, an increase of over $1 billion. Of this backlog, approximately $4.467 billion is expected to be completed in the next 12 months. Headcount was 15,980. Going to Slide 9. Our financial position and balance sheet remained strong. 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 were used for acquisition funding during the quarter. Additionally, we had $500 million of senior notes outstanding. Our capital allocation continues to prioritize organic growth followed by M&A and opportunistic share repurchases within the context of a historical range of net leverage. Going to Slide 10. Cash flows from operating activities were $65.8 million in Q3. The combined DSOs of accounts receivable and net contract assets were 119 days. Capital expenditures were $66.4 million, net of disposal proceeds and gross CapEx was $74.6 million. During Q3, we acquired a wireless telecommunications infrastructure business for $150 million in cash. Going to Slide 11. As we look ahead to the fourth quarter, we expect total contract revenues to increase mid- to high-single digits as a percentage of contract revenues compared to $952.5 million in Q4 '24. Included in the expectation for Q4 '25 is approximately $35 million of revenues from acquired businesses not owned for the entirety of both the current and prior year quarters. For comparison purposes, there were no acquired revenues from these businesses in Q4 '24. As a result, organic revenues are expected to increase low- to mid-single-digit as a percentage of contract revenues. Our outlook for Q4 reflects normal seasonal factors such as fewer available workdays due to the holidays, reduced daylight work hours, and inclement winter weather conditions. These seasonal factors as well as additional operating costs to initiate work on a number of new awards are also expected to impact earnings. For Q4 '25, we expect non-GAAP adjusted EBITDA percentage of contract revenues to increase approximately 25 basis points compared to 9.8% in Q4 '24. Other expectations about the Q4 outlook include $9.9 million of amortization expense, $9.3 million of stock-based compensation which includes $2.1 million of incremental expense related to the CEO succession transition, $16.5 million of net interest expense, a 26% non-GAAP effective income tax rate, and $29.5 million diluted shares. As I wrap up, I would like to personally say thank you to Steve for your leadership and dedicated service to the company over the past three decades. I wish you well in your retirement. I'm excited to work alongside Dan and our dedicated team as we continue to grow the business and focus on delivering long-term value for our shareholders.

Thank you. And our first question will come from Adam Thalhimer from Thompson Davis. Your line is open.

Hey. Good morning, guys. Nice quarter. And Steve, congrats on your last conference call.

Very heartfelt, Adam, I'm sure.

Hey, Drew. Can you actually just pick up where you left off? You talked about startup incremental costs in Q4 related to the startup of large programs. Can you just flesh that out a little bit for us?

Thanks for the question, Adam. As we've done before, we've announced several new awards along with extensions. We're happy to report on the Lumen award as well. We are anticipating some costs due to these new areas we're entering, so there will be some expenses in the upcoming quarter as we prepare for next year. Additionally, we're continuing to ramp up following our recent acquisition, which will incur some costs too.

Can you discuss what you received from Lumen this quarter compared to the overall Lumen AI opportunity, considering that the backlog increased mainly due to the Black & Veatch acquisition?

Yeah. Hey. Good morning, Adam. This is Dan. So, first, we're not going to size the revenue of our backlog opportunities, including the Lumen AI deal. We're very excited to continue our partnership there. Certainly believe that we got our fair share. And really, I want to point out that we view this as kind of the start of what's to come for the data centers as the hyperscalers look to connect and extend their data centers across the country in this new surge of long-haul activity. We really see this as being a significant potential opportunity and excited to have the partnership with Lumen to get this started, but having a lot of conversations with other customers, having a lot of conversations with hyperscalers, and believe this could be significant in the years to come.

I'll turn it over. Thanks, guys.

Thank you. Our next question will come from Alex Waters from BofA. Your line is open.

Hey, good morning. Thanks so much for taking my questions. Maybe just first off here, Dan, I think in your script you noted the BEAD opportunity kind of 2H '25 and 2026. It seems like it's changed a little bit from last quarter when I think it was noted 2Q. Maybe if you could just describe that a little bit more.

Yeah. Good morning. Thanks, Alex. Last quarter, what we talked about was being in the second half, the third quarter of 2025. We still believe that we can see revenue in that timeframe. We're just talking about probably the significant ramp being in 2026. I'm sure everybody saw Louisiana made some announcements yesterday. Certainly excited to see that 95% of that ended up being fiber. We'll see how it all plays out, but certainly a good start. And collectively with what the amounts that would be contributed from the sub-grantees there, that's over $1 billion in fiber construction for Louisiana alone. So excited to see how it plays out. And we'll see on timing, but we still believe, yeah, back half of 2025, ramp into 2026.

Okay. Perfect. Thanks. And then maybe just on kind of the all other customers bucket, it seems like that was down 9% year-on-year. Maybe just could you talk about what you're seeing from these customers and kind of what the expectations are going forward?

Yes, that's a great question. We see a number of customers frequently shifting in and out of our top five. We're pleased with the variety of customers we have. Currently, six, seven, and eight are all in the $80 million range, and their movement does impact our overall figures. However, when we focus on our top 10 customers, which account for about 75% of our revenue, we observed a 17% increase this quarter, which we believe serves as a more accurate reflection of our performance.

Perfect. Thanks so much. Steve, congratulations again.

Thank you.

Thank you. Our next question will come from Alex Rygiel from B. Riley Securities. Your line is open.

Hi, good morning. This is Min speaking on behalf of Alex. Steve, I want to thank you for your extensive service and wish you all the best in your retirement. My first question is about the BEAD funding. It seems like you’re not anticipating any significant change in funding support. Can you share your current thoughts regarding this under the new Trump administration?

Good morning, Min. The first thing I'd like to mention is that we are observing some developments regarding net neutrality and digital discrimination under the new administration. These changes would benefit our customers and our industry. However, it's still too early for us to speculate extensively on this. We want to highlight the bipartisan support we saw when BEAD was passed, with both the current and previous administrations backing broadband access for rural households, and we believe that commitment will persist. There is no doubt that following COVID, high-speed Internet access has become a priority. We view the expansion of broadband to rural areas and every home in America as being as crucial as electricity was 90 years ago. We are confident that this will happen, even though there are some questions regarding the timing and specific execution. Still, the early awards we're seeing, like those in Colorado, and the participation there indicate positive trends.

Excellent. Also, can you just provide any kind of detail around how the integration of Black & Veatch is going so far? And what were your wireless revenues in the quarter?

Sure. The integration is going well. The work that they're doing for the equipment replacements is ramping up a little bit quicker than we expected. So we'd like to see that. And overall, it's been a good acquisition for us. And the team is gelling well and getting ramped up towards next year.

Yeah. And Min, this is Drew. I'll jump in here as well. So we had about $4.2 million of integration costs in the quarter there. We expect some modest cost coming up in Q4 as well, but we're seeing a nice ramp there.

Okay. And what were your total wireless revenues?

And wireless revenues right around just over 4.5% of revenue for the quarter.

Great. Thank you.

Thank you. And our next question will come from Frank Louthan from Raymond James. Your line is open.

Thank you, Steve, for your contributions throughout your career and for your assistance during this last earnings call. I just wanted to clarify whether storm cleanup revenue is included in the guidance. Can you provide insight into how much of an impact you anticipate for the fourth quarter? Do you expect it to be more or less than the impact from Q3? Additionally, will the storms affect the regular business in any way? Thank you.

Yeah. Frank, this is Drew. Thanks for the question. Our primary focus regarding the storm work is to assist our customers in restoring service in those areas. We recorded approximately $46 million in Q3, but that figure has significantly decreased as we enter Q4. Therefore, we are not highlighting specific storm work in our guidance at this time. In Q3, four storms impacted our areas, which caused some disruption in our usual scheduled work. However, as we transition into Q4, there is no significant displacement expected during this period.

Okay. Thank you. And as far as some of these AI builds that you're seeing, is relative to maybe a few months ago, are you seeing these be more substantially related to larger long-haul projects versus short spurs off of networks that we maybe have seen previously?

Good morning, Frank. In the last quarter, we've definitely observed an increase in discussions, with more hyperscalers expressing their commitment to capital expenditures for their projects. While it's still uncertain how things will unfold, our conversations indicate a focus on long-haul capacity expansion and redundancy. This includes both route redundancy, which can be crucial for long-haul operations, and connections to current data centers. As they resolve power issues and commence building new data centers, we also anticipate extensions to these facilities. Overall, we believe this presents a significant opportunity in the near term, with potential for continued growth over the coming years.

All right. Great. Thank you very much.

Thank you. Our next question comes from Sangita Jain from KeyBanc Capital Markets. Your line is open.

Yeah. Thank you so much for taking my question. So if I can ask one on Gigapower, I think you showed up for the first time as your top 10 customers. Can you talk a little bit more about how you see that growing in the near term?

We've been collaborating with Gigapower for a few years and we really value our partnership. The project is progressing well. As I mentioned earlier, some customers tend to fluctuate. This quarter, due to the diverse nature of our business, Gigapower has now entered our top 10 customers. We are very pleased about this and will continue to support those builds.

Great. And on your Lumen work and any other data center type work that you're looking at, is there a difference in how you price them or a margin profile for those versus your standard fiber-to-the-home type work?

Yeah. Thanks, Sangita. The first thing I would say is we're certainly not going to talk about pricing kind of theory on a call. What I would tell you is we look at the opportunities, we look at the risk, we look at the size of the opportunities as we're putting all those things together. Again, I do want to just reinforce that we're excited about the Lumen award, but the opportunity that's out in front of us in the data center space is significant. And in addition to that, we still have, as everybody noted this quarter, Verizon and Frontier, the transaction got approved by the shareholders. What they've talked about now is adding an incremental 7 million to 12 million passings from what we saw before. So if you look prior to the third quarter, there's already over 9 million passings added incremental this year, even another 7 million to 12 million. We'll see what AT&T says in their upcoming call on December 3. That could be another 10 million to 15 million. So significant opportunities still there. We're very much excited about the opportunity to continue these fiber-to-the-home passings and it's just great to see our customers continue to add CapEx and increase some of these homes passed. So significant opportunities. And then, of course, we got asked about BEAD before. Not just BEAD, all of the funding that goes towards rural, whether it's the state programs or whether it's BEAD and whether it's everything else. We still see that that is going to continue to shape well as we look forward to next year. And when we combine all three of those opportunities, again, we look forward to the business and just see tons of growth potential. And we're going to work hard to see if we can capitalize on that.

Great. Thank you so much for taking my questions.

Thank you. And our next question comes from Eric Luebchow from Wells Fargo. Your line is open.

Great. Thanks for taking the question. And Steve, best of luck on the next stage into retirement. So just to kind of talk about some of the large opportunities you have, the AI data center build, the BEAD program potentially picking up, Dan, maybe you could talk about whether you'll kind of have to ramp up your labor force to meet all this demand into the next year or so. And any color on what the environment is like for hiring new employees, whether they're direct icon employees or subcontractors.

Hey. Good morning, Eric. Appreciate the question. The first thing I'd say, we're strategic and disciplined in the way that we look at talent. We're making investments on training programs. We're making investments in facilities and something we're always trying to stay ahead of. We don't stock up a ton of labor ahead of opportunities. We really want to wait to see how the opportunities develop. What I would point out a couple of years ago, we grew almost 22% in one year. Really proud of the job that our teams did to stay ahead of that from a labor perspective. We'll see how everything shapes out. To your point, we have a lot of factors that are coming together and we got to see what that shape looks like, but we feel confident that our teams can stay ahead of it. Certainly takes significant effort, but we feel good about our position there. And then, sorry…

Yeah. Sorry, go ahead.

Sorry, on your second question, you asked about mix for subcontractors. That depends on project-by-project, geography-by-geography and sometimes during the time of the project, we might start with more subcontractors to begin and we might work in towards our labor forces. So always foresee a mix there.

I understand. In the last earnings call, you noted that you expect some of your smaller customers to slow down somewhat in the near term as they evaluate opportunities under the BEAD program in their core market. I wanted to check if you still believe this will be the case over the next couple of quarters as we gain more clarity on state awards from BEAD and how things have progressed so far in relation to the expectations you outlined last quarter.

Sure. Yeah. So this quarter we did see just a little bit come down from our co-ops when we look at it sequentially quarter-over-quarter. And we really do believe that that has to do with them waiting to see how BEAD is going to shake out and where their funding lies. Again, looking at the Louisiana results, good to see some of our co-op customers in that mix. As they pick up some of that work, we think that that revenue is going to continue to move forward.

Great. Thank you, Dan.

Thank you. Our next question will come from Jean Ramirez from D.A. Davidson. Your line is now open.

Thank you. I would like to clarify your cost of revenue and SG&A for the next quarter. Is it expected to be in line with the third quarter, or do you anticipate a slight increase as you mentioned earlier?

Thank you, Jean. This is Drew. So in Q4, we expect the margins, particularly gross margins, to be affected by various factors including the number of available workdays, work hours, and winter weather conditions. Typically, these factors lead to some sequential impacts. Additionally, from a general and administrative standpoint, there are seasonal costs that occur as the business goes through its seasonal cycles, with some costs decreasing. However, we manage these tightly.

Thank you. Regarding the BEAD program, could you clarify when you will actually start? From your discussions with your clients, when do you anticipate the actual fiber deployment will begin? Do you expect it to be towards the end of next fiscal year going into 2026, or are you seeing quicker turnarounds given the acceleration of the BEAD program after completing the second phase? Any insight on that would be helpful.

For sure. Thanks. Jean, this is Dan. So again, I think Louisiana is kind of first out of the gates. Those are preliminary awards, so we got to see when they get to the actual awards. This is something we're tracking both with our customers. We're talking to the different state broadband programs as well. There's a lot of engineering to be done, there's a lot of permitting to be done. So there is some time. Even from when we get to start talking to our customers about potential opportunities and awards, there's time after that to really get through that cycle. And that's why we think that we'll really start to see some revenue in the back half, latter half of calendar 2025, and then ramping into 2026 as those programs themselves ramp up.

Thank you. Regarding the backlog question, you're not distinguishing what constitutes organic backlog, but based on the 12-month figure, how do you anticipate the backlog utilization or burn rate throughout next year? Will it be more concentrated in the second half, or do you expect it to resemble this year's pattern?

I'm happy to share that we're pleased with the awards we've announced. We see benefits both in the next 12 months and in the total backlog. While we won't break down the timing, we're glad to see the increase. Additionally, as we've mentioned before, the backlog isn't always directly linked to revenue growth. However, I believe that both the overall increase and the next 12-month figures provide a solid foundation as we look forward.

Okay. Well, I appreciate your time. Thank you so much. And Steve, congratulations and best of luck on your next chapter.

Thank you.

Thank you. Our next question comes from Avi Jaroslawicz from UBS. Your line is open.

Hi. Good morning, guys. Thanks for taking the question. Just wanted to unpack what's driving the organic growth slowdown, slight deceleration into Q4 here.

Sure. This is Drew. Avi, I'll jump in on that. So one, we had a strong Q3. As we provided in our outlook, we see mid- to high-single-digit total growth and then low to mid organic growth. We've had some customers, we called this out on the last call that had a stronger front half of the year that are a bit slower in the back half of the year. And then certainly as we work into our Q4, as I mentioned, with the available days, hours, et cetera, and weather, there's just certain amounts of constraints of how much you can grow during that period of time. We're pleased with where we're heading. We're just not going to get ahead of ourselves in the outlook.

Got it. That makes sense. Enjoy retirement, Steve.

Thank you. And our next question will come from Alan Mitrani from Sylvan Lake Asset Management. Your line is open.

Hi. Thank you and congratulations, Steve. This is, I think, my longest CEO relationship given how long you've been CEO. It's like separation anxiety. You're going to have to maybe put that in your…

I think, Alan, it's my longest investor relationship too. I may not have as much separation anxiety.

We appreciate it and look forward to collaborating with Dan and the team. I've noticed that the SG&A expense is growing faster than revenues for both last year and this year, particularly given the short-term slowdown. Can you discuss this? I understand there have been transitions and multiple acquisitions, and I'm referring to the efforts to reduce excess costs you've mentioned. Do you anticipate that, over the next year or two, revenue will begin to increase at a faster rate than SG&A?

Yeah, Alan. I'll jump in on that. This is Drew. So I think you highlighted there. We did have some incremental costs in the period that we called out about $7.1 million of stock comp and then some incremental integration costs, about $4.2 million. If you strip those out, we're only up slightly year-over-year. I think what I would say is as we've been able to grow in the past, we've been able to get some operating leverage out of G&A, and that would be something that I would expect to continue. Happy with what we see in the outlook and the opportunities that are there, and we'll just continue to tightly manage it.

It seems like in the past you've encountered situations where you've invested a bit more to prepare for the next significant revenue increase, especially with BEAD on the horizon and new acquisitions and AI opportunities. Are we looking at this as the framework for the next couple of years? I'm not referring to it as a percentage of revenue. SG&A has generally been well-managed, and you've done a good job. I'm referring to the next level of growth in your capacity to support revenues of $5 billion to $6 billion-plus, compared to your performance over the past few years.

Yeah. Hey, Alan. This is Dan. Thanks for the question. So absolutely, first off, we're always working on G&A and like Drew tightly managing that. Hopefully, you heard from me today, very excited about the opportunities, right? We see the data center opportunity which continues to grow quarter-over-quarter, conversation-over-conversation. We talked about the customers have been very active strategically. Some of the combinations, they've been increasing their homes passed. Again, we think that's something else that's going to hopefully play out next year and in the years to come. And then you add to that BEAD and other funding programs. So the growth opportunities appear to be there. We're going to work hard to see if we can capitalize on them.

Great. Lastly, there's been a lot of discussion about the new administration, Elon Musk, and Starlink, as well as concerns about the potential threats of BEAD being canceled or spending clawbacks. Can you share your thoughts on the allocation of funding coming from the state, how it matches with government funding, and the possibility of delays or postponements? What is your perspective on this?

I believe alternative technologies have always been part of the discussion, even before the upcoming administration change. We anticipated that they would play a role since they can be the most economically sensible option for some homes. The impact will vary from state to state. For instance, Louisiana has shown a very low percentage for satellite, which we see as a positive indicator. Over 95% of the focus will be on fiber, and as we mentioned, there is over $1 billion to consider when factoring in the funding from the sub-grantees. There is still much to be determined, and while we cannot predict everything the new administration will do, all 50 states are progressing well. They have all completed Phase 2 and many are currently working on their sub-grantee processes. It will be interesting to see how things unfold in the coming months.

Thank you. Best of luck.

Thank you.

Thank you. And our next question will come from Adam Thalhimer from Thompson Davis. Your line is open.

Hey, guys. Thanks for taking the follow-up. AT&T the awards in the quarter, were those wireless or wireline and were there any new states in there?

Yeah. Thanks. Adam, this is Dan. Those were wireline and yes, we were fortunate to pick up some new markets as well.

Yeah. Adam, we did not list out the wireless in that. This was just new awards and extensions.

Got it. And then Verizon was down sequentially more than I expected in Q3. I was curious if you pulled crews like from those territories for storms or what drove the sequential decline considering they want to do more FiOS builds.

The work is not connected to storm activities. As you know, sometimes these projects progress more quickly and other times they take longer. We are certainly pleased with our relationship and the ongoing projects we have for Verizon. As I mentioned earlier, we believe that their approval for the Frontier merger will have a positive impact on us.

Okay. And then just lastly, I think I had a note. There were $2.5 million of B&V integration costs in Q4, but I didn't see any in the guidance. So are those not?

No, Adam. So originally we had guided a little bit higher than we thought was going to come through. The actual integration cost in Q3 was $4.2 million. We've got some modest costs that we would expect in this quarter and we'll call them out if they're meaningful, but it wasn't notable for purposes of calling out ahead of time.

Got it. Okay. Thank you.

Thank you.

Thank you. And I am showing no further questions from our phone lines. I'd now like to turn the conference back to management for closing remarks.

Thanks, operator. To conclude this, my final call, I have a special word for all of the Dycom team. Since last June, I've traveled across the country to thank hundreds of you in person for all you have done for me. I left each visit in awe of your dedication to our customers, your strong desire to excel, your commitment to the well-being of your fellow employees, and most importantly, your integrity doing the right thing even when no one is watching. In leaving Dycom, I have always tried to live up to an ancient Chinese proverb. It says, a leader is best when the people barely know he exists. When his work is done, his aim fulfilled, they will say, we did it ourselves. And you really did. Today my work for Dycom is done, my aim for the company fulfilled. Remember, in everything, serve customers skillfully, deliver results with discipline, accountable in all you do. Thanks so much. It's been great.

Thank you and best wishes, Steve. We thank everybody for joining this morning. Look forward to updating you on our annual results the last week of February. Take care.

Thank you. This does conclude today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.