Good day, and thank you for standing by. Welcome to the DICOM Industries, Inc. 4th Quarter 2026 Results Conference Goal. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 in your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ms. Callie Tomasso, DICOM's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to DICOM's Fiscal 2026 Fourth Quarter and Annual Results Conference Call. Joining me today are Dan our President and Chief Executive Officer, and Drew DeFerrari, our Chief Financial Officer. Earlier this morning, we released our fiscal 26 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 Expectations Summary document, which provides additional Outlook metrics beyond what will be discussed on today's fall. 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 DICOM'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 communication 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 system 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 Dan Penovich.

Thank you, Callie. Good morning, everyone, and thank you for joining us. BACOM'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, and 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 DICOM'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 DICOM and our robust, skilled workforce remains the indispensable backbone of the next generation of digital economy. Let's 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, Drew 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 percent 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 as 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. CSOs were 101 days, an improvement of 13 days, year-over-year, and operating cash flow increased 27.7% to $419 million for the quarter. As I mentioned, the fourth quarter caps a year of exceptional performance for DICOM, in which we capitalized on growth opportunities across our demand drivers, while also enhancing our underlying business to deliver stronger margins and improves 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% through 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 2020. 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 DICOM 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 FY2026 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 territories 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 the bill for the year was 1.3 times in total and 1.2 times on an organic basis, reflecting the increasing demand for our services. As we turn the calendar to the new fiscal year, DICOM is strategically positioned for strong growth across multiple demand drivers, led by significant increases in fiber-to-home deployments, as well as increasing demand for communications and building system services to support data center and hyperscaler build-ups. 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% to 29% or approximately 6.6% to 10.3% on an organic basis. We also anticipate continued adjusted diva margin expansion. In communications, we expect modest adjusted diva segment margin gains driven by operating leverage offsetting continued investment to support. We expect building systems to deliver a mid-teams adjusted given a segment margin if we scale the business to capitalize on favorable sector 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 operational foundation allows us to be disciplined in our growth. We are hydrating our pipeline and diversifying across robust demand drivers. Collectively, these demand drivers have never been stronger, and neither has DICOM's positioning within them. Our service and maintenance work remains the bedrock of our communications business, delivering over 50 percent of our communications revenue in FY 2026. This recurring base provides the scale 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. While the growth rate for maintenance naturally trails our high-velocity build programs at the scales of 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 DICOM's role as a long-term partner in our customers' ecosystems. Driver to the home deployment remains the most mature and dominant driver of growth in our communication 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. DICOM is a leader in this deployment and our large skilled workforce enables us to meet the growing demand for this critical infrastructure. The passing is only the first phase of the revenue lifecycle. We are also accelerating our work on customer drops, the lateral connections required that 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 tale of simply put, Skycom is well positioned to lead the fiber of the home market for the next decade. We believe that our strategy, deep customer relationships, and proven performance will enable DICOM to be a leader in the execution of the fee program as it enters the funding stage. 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 subgrantee levels, which has translated to additional verbal awards with subgrantees, increasing the $500 million in verbal awards we noted last quarter. We believe these verbal awards will begin moving the contracted backlog in Q1 or Q2. Our customers are choosing DICOM 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 FY2026 bill, the wireless equipment replacement program is transitioning into its next phase in accordance with the original bill plan. While Drew will provide further details on this program, we remain ready to capture any future surge in network densification or new infrastructure initiatives, sifting the 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-isle, and inside the fence fiber infrastructure continues to grow as it progresses through the ecosystem. We are seeing more activity today than ever before, giving further confidence in the revenue opportunities now and in the future. As we said before, these large programs have a longer planning phase than Fiber to the Home or other programs, and we see their pace ramping considerably for builds that would start in earnest in calendar 2028. DICOM is uniquely positioned for the long-haul, middle-mile, and inside defense opportunity First, we believe we were first on the field executing Lumen's OverPol program. Their program continues, with Lumen announcing that they received another $2.5 billion of awards this quarter to bolster their current bill. We expect our revenue to continue to ramp this year as we look to deliver on Lumen's OverPol program. Second, both OverPol and new construction bills require massive foresight, geographic scale, and technical sophistication. Complexity favors DICOM. While the incubation period from inception to construction is longer than fiber to the home, these programs generate elongated build cycles that provide revenue visibility well into the next decade. Lastly, the surge in long-haul capacity must be matched by the fiber density inside the data center campuses. We continue to secure new awards inside the fence, validating that hyperscalers require a strategic, scale partner to sustain their build pace. Our strategy is to position DICOM as the indispensable partner for hyperscalers and carriers alike. We have deployed dedicated teams to work directly with customers and the supply chain, ensuring we proactively plan and precisely execute every program. Acquisition of power solutions and entry into the data center space is one way we are leading into those partnerships. DICOM now offers an extended suite of solutions across the digital infrastructure space, and we are already seeing opportunities to bring our communications and building system services together to meet the intensifying requirements of hybrid scalers. Specifically, they are looking for DICOM's breadth, scale, and proven execution, whether it's inside the four walls or interconnecting the fiber between data centers. We view this as a substantial growth driver and are executing a clear, disciplined strategy to capitalize on this demand. Since closing the Power Solutions acquisition just over two months ago, the business is performing well and the integration has proceeded on schedule. We're leveraging their specialized expertise to sharpen our approach to the data setter and digital infrastructure markets. The strong cultural and operational alignment between our teams has allowed us to hit the ground running, and we are very pleased with its initial contributions to our broader portfolio. We are focused on four core strategic priorities. First, talent and workforce development. We are investing heavily in our workforce, now over 19,500 strong, to meet intensifying customer demands. In the coming weeks, we will break ground on a new, state-of-the-art training facility outside of Atlanta. While we operate numerous facilities nationwide, this center represents a major step in staying ahead of evolving technical demands. Designed to house employees for immersive multi-week programs, the facility will provide hands-on training in real-world environments to ensure our teams consistently deliver the safety, quality, and expertise that defines the DICOM brand. This investment is part of our overall strategy, which includes significant enhancement of our benefits package as we continue our efforts to remain the employer of choice in our space. As demand drivers intersect and overlap, we anticipate an industry-wide shortage of skilled labor that will favor DICOM's scaled workforce and proven execution.

As a trusted partner, we maintain constant dialogue with our customers to build our talent ahead of the curve.

Second, expansion of our building system segment. The Power Solutions is our foundation. We are actively pursuing opportunities to drive their organic growth beyond their current footprint, as well as pursuing additional complementary acquisitions, while remaining committed to our strict criteria and long-term net leverage targets. Third, margin expansion. We will continue to drive margin improvement through productivity gains and operating leverage. Our commitment to field efficiency is unwavering, rooted in our disciplined approach to safety, quality, and financial performance. This past year, we delivered significant margin expansion and are applying that same discipline to fiscal year 2027. Operating cash flow and fleet optimization. We have made significant strides in our cash position by improving internal processes and controls and sharpening our cash conversion cycle. We have driven significant improvement in our net DSOs, which are nearing a range we expect to remain relatively steady. We will continue to identify and execute on opportunities to further enhance operating cash flow. This includes capturing additional efficiencies within capital expenditures, and reflected in our reduced spend last year and our outlook for FY 2027. This reduction is a result of long-term strategic planning, not short-term cost savings. As a leading customer for many of our equipment suppliers and the strategic decision to favor for ownership over leasing. We hold a unique position in their R&D cycles. R&D partnerships have led to advanced telematics that provide real-time insight into usage, maintenance, and diagnostics. By leveraging these insights, we've optimized our fleet, allowing us to maintain high performance levels with a lower capital footprint. In summary, GICOM's strength is rooted in the expertise of our large workforce and our proven ability to raise the bar for our customers. In striving to deliver at the highest possible level, we believe we are setting the industry standard for what focused, scaled, and high-quality execution looks like. Our record performance and historic backlog are a direct reflection of the trust we've earned as an indispensable partner to the world's leading carriers and hyperscalers. As we move into FY 2027, we will continue to leverage our scale and technical sophistication to solve the industry's most complex challenges and meet commercial opportunities. From the massive fiber-to-home build-out to the critical infrastructure requirements of the data center and AI economy, we remain committed to the disciplined growth and superior execution that define DICOM and drive long-term value for our shareholders and long-term opportunities for our people. I would like to thank the entire DICOM team across all 50 states for your relentless commitment to safety and quality and to delivering at the highest level for our customers and communities as we pursue our vision to be the people connecting America. With that I'll turn the call over to Drew for a deeper look at the financials.

Thanks Dan and 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, and we are excited to welcome Power Solutions to DICOM. Together, we are positioned at the center of the powerful secular trends driving growth in digital infrastructure services. Fourth quarter, we delivered strong growth in revenue, adjusted EBITDA, and adjusted EPS. Consolidated total contract revenues for $1.458 billion, a 34.4% increase over Q425. 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 Q425. Adjusted EBITDA margin of 11.1% was within our range of expectations and increased over 40 basis points compared to Q425, 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-home programs, wireless activity, fiber infrastructure programs for hyperscalers, and maintenance. 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 for spec. Following Verizon's acquisition of Frontier during our fourth quarter, their combined revenue was $205.6 million, also exceeding 10% of total. Customers exceeding 5% of total consolidated revenue for the quarter were Brightspeed, Charter, Comcast, and Unity. Adjusted EBITDA for communications increased 30% to $151.3 million, or 11.1% of segment revenue. The building systems segment includes power solution 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 expected in the next 12 months was $6.358 billion, including $5.25 and $1.1 billion. Strong cash flows remain a primary focus, and we delivered excellent results. Operating cash flow totaled $642.5 million for the full fiscal year, and 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 Q425. 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. I'm pleased to report that our ERP implementation is on track and we are actively deploying additional phases during fiscal 2027, further enabling future operational efforts. As previously disclosed, the $1.95 billion acquisitions completed in the quarter on a cash-free, debt-free basis, subject to working capital and other post-closing adjusts, the purchase price consisted of approximately 1 million shares of DICOM common stock, with a remainder of consistent at closing of $1.63 billion was funded with a mix of proceeds from a $1.1 billion senior secured term loan aid facility, a $600 million, 364-day bridge loan facility. During January, we raised $800 million of senior secured term loan aid, repaid the bridge loan facility, and added the remaining net proceeds from the debt issuance. We ended the quarter with cash and equivalents of $709.2 million and total equity of $1.46 billion. The maturity of our senior credit facility has been extended to December 2030 and we had a total of $1.54 billion term loan A outstanding and an undrawn $800 million. The term loan B balance was $800 billion outstanding with a maturity in January 2033. Additionally, we have $500 million of senior notes outstanding and mature in April 2029. Proforma net leverage at the end of the quarter was approximately 2.3 times adjusted EBITDA, and we see a clear path to deliver further to approximately 2 times 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 to $7.15 billion. For the communications segment, we expect contract revenues to range from $5.70 billion to $5.90 billion, increasing approximately 6.6% to 10.3% organically when compared to $5.35 of fiscal 2026 communications revenue after excluding the extra week in our 53-week fiscal year. For the building system segment, we expect contract revenues ranging from $1.15 billion to $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 defense opportunities, and modest growth in our service and maintenance business 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 complete strategy positions as well for future wireless opportunities, whether other equipment upgrades or overall densification. And for the building system segment, we expect exceptional demand for electrical services net of disposed 210 to 220 million dollars for fiscal 2027 as we efficiently utilize our fleet of assets to continue to reduce our capital. For Q1, we expect total contract revenues of $1.64 billion to $1.71 billion, adjusted EBITDA of $202 million to $218 million, and adjusted diluted EPS of $2.57 to $2.90 per share 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, DICOM 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 up.

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We compile the Q&A roster. And our first question will come from Sangeeta Jain from KeyBank Capital Markets. Your line is open.

Good morning. Thank you for taking my question. So, Dan, can you talk a little bit about how you plan to increase the scope of work that you're doing inside Power Solutions? I know DICOM has SETICOM expertise, so maybe you can expand into cabling or something else that you're currently not doing there. Any color there would be helpful.

Good morning, Sangita. First, I just want to say Power Solutions acquisition is going incredibly well. The integration is going just as we expected it to be. This is an incredibly strong, very deep leadership team that's been in that market for a very long period of time. So we're excited about how they're performing. We're excited about the opportunity set in front of them. And, you know, you've probably heard me say the demand, especially in the DMV right now, is just off the charts. So plenty of opportunity there. As you can see, we're outlining significant growth for them this year. You know, with the range we gave is 15% to 25%. Really, that's about trying to ramp into that over the year. and set us up for the future and what that looks like. So we're investing in that business. We're certainly adding resources to that business. And then to your question, the cross-sell is, quite frankly, taking flight even earlier than we anticipated. The reaction from the hyperscalers has been fantastic. Where we can bring our inside defense communications work and couple that with what Power Solutions is doing inside the four walls, that we think is a recipe. And, again, with both of our proven expertise, if you think about inside the four walls, one, I would point to how we named the segment so communications obviously for the first and we're really architecting diacom around of data and the transmission of data around the country getting it all the way from the data consumer over to the end business and that's really our play we want to be straight down the fairway look into that and we're also looking at m&a opportunities and we've been vocal about thinking about civil infrastructure we're not thinking about getting outside of digital infrastructure but there are other opportunities inside everybody knows it's a We're very active, planning around what we're looking for, strategy around what we're looking for. Got to have a really strong culture. Could be other disciplines.

Thank you for that, Dan. And then on the fourth quarter organic growth, which was especially strong, given, you know, winter weather and the holidays, et cetera, can you talk a little bit about where you were most surprised versus your internal expectations? If there was any notable project pulled forward that came in? Thank you.

No pull forwards. And, yes, we're obviously very pleased with the overall performance exceeding the high end of our range that we gave at the beginning of the year, you know, giving that revenue outlook at the beginning of the year that we raised after Q1. But notably for the fourth quarter, as you point out, one, we had to work through significant winter weather. You know, what it shows really, one, the ability of our team to execute even in those conditions, we did get a little bit of margin pressure from that, but the ability to keep that going. But importantly, the demand from our customers. The demand coming out of Q4 and the demand going into this year, you can see it in the guide that we gave for FY 2027. You can see it in the organic growth that we're talking about on the communications side and the outlets for 2027. So, it really just shows all of these different demand drivers as they're coming through the business and the opportunity set there. So, nothing specific really, I would say, points to the overall demand. One thing I would point out, you know, we did have wireless that increased in Q4, and And you do have to think about that, as Drew talked about. You know, we expect aligned with the original expectations of that program. But since we got that working, we definitely do have to include that going together.

Thank you.

Thank you. Our next question comes from Eric Lupko from Wells Fargo. Your line is open.

Thanks for taking the question. Dan, I wanted to just ask about the long-haul, middle-mile, and inside defense work. I know you quantified the $20 billion TAM a few quarters ago. So it sounds like you're optimistic that that's going to prove conservative, and we've seen some interesting announcements from the likes of Meta and Corning recently. So maybe any kind of quantification on how that program's progressing and, you know, where you think that addressable market ultimately goes? It sounds like $20 billion is just the start.

It really is, Eric. If we think about the $20 billion, and remember, that is back half-weighted because these programs are complex. They take a while to get off the ground. But what you've seen since the last quarter, and I think we put that number out a couple quarters ago, In this last quarter, you saw a number of our customers now talking about it and talking about the significant opportunities and appetite from the hyperscalers. As recent as yesterday at some of the conferences, even more demand that they're seeing on their It does take time for that to get through the ecosystem, and that's what we tried to talk about early on when we identified the $20 billion. We really think that we were first on the field with what we've been doing for Lumen. We saw another nice increase to their PCF that they're going to continue to build on over time. And then you have the new construction work which again just takes further time to come in I would really think about you know ramping this year continuing the ramp this year Continuing the ramp in 2027 and a lot of that really taking flight in calendar 2028. So is it more than 20 billion? We strongly believe that if they're going to be more that comes there What I would tell you is today We are getting more phone calls and seeing more opportunities than we then we saw even a quarter ago or frankly even a week ago the demand is that strong and it comes back that you know a little bit of what I talked about and how they need to transmit this data right they need more capacity they need latency ultra low latency we're excited that we can be a trusted partner there and we really think that over time that's going to continue to grow and we'll continue to update great thank you Dan and maybe we could just touch on the bead program you talked about it a little bit sounds like

the verbal award balances is above that 500 million but it also seems like it's taking a little longer for the funds to actually get disbursed. I think Louisiana is the only one that I've seen. So maybe you could just talk about the construction timelines there when you think that's really going to ramp and kind of hit a more full run rate.

We still believe Q2 that we have some revenue opportunities to be putting work in place overall and really unchanged what we've been saying for a bit Really think about that in calendar 2027 is getting some momentum. So it's great to see progress. you know nearly all the states and territories are approved to your point you know the funding this has pushed the funding down and that continues to grow over time you know we think that that addressable market is approaching 20 billion but it's going to take some time for those to get off the ground you've got numerous states at different paces whether they're pushing it down to the subgrantees and then those subgrantees also at different paces within that you know I'll just frame a context for you if you think about a local cooperative where they own their own poles they've probably already done the engineering to date, as soon as they get the funding pushed down, they can hit the go button, and that's why we talked about it. Again, great to see progress. Do we all wish it would go a little bit faster? Absolutely. And that's coming through the supply chain.

Thanks, Sam. Thank you. Our next question will come from Joseph Osha from Guggenheim Partners. Your line is open.

This is Mike Sprizoni on for Joe. Just to kind of follow up on that B program, is it Is it fair to say that the guidance has not had a potential impact for this year? And then also, how do margins from this program differ from your traditional work? Are they more creative?

Mike, I think you're breaking up just a little bit. I think you're referring to the BEAT program again and just how it's built over time.

Yes, exactly.

First, on a margin profile, similar to all of our work, right? We think about everything on the communication side very similar. If it's taking the same type of skilled workforce resources, if it's taking similar types of equipment, then the margin profile on that return all ends up in a similar range. So that doesn't mean every project is exactly the same, but it's in the same similar bandwidth. And we believe deed will play out that way over time. But, and I think this is an important point, you've got fiber of the home demand that, you know, is really just reaching another level. And, again, I do want to point out it hasn't peaked yet, right? You still have a ton of growth that's happening in that program. You've got everything going on with the hyperscalers and the long-haul minimile That's significant. You still have a lot of activity on the wireless work today. We continue to add to our service and maintenance platform. When you put all those together and you start adding them up and showing the increases over time, without question, there's going to be pressure on labor. So if you think about the skilled workforce, as you get later this year and really starting in calendar 2027, that's where we think DICOM is exceptionally well-positioned. And we've been investing heavily in our workforce to make sure that if you think about big program and the needs that our customers are going to have there, when you already have these other programs going fast, we need to have been investing years ago, right? We need to be thinking about and having a strategy that was very long-term. You've probably heard me in my prepared remarks talk about, and I'm really excited about this, talk about the new training facility that works. This is something you're going to hear more about in the coming days. And we have numerous training facilities around the country, but this one is really taking into the front yards and back in a simulated environment. And then we think about it lightly coming in this year. It's just going to take a while for these programs to start. Again, we're excited about, you know, the backlog that we have verbally awarded. And I want to point out that it's still verbal to date, Q1 or Q2, with some activity starting in Q2. But think about calendar 2027 is really when those are.

Thank you. Our next question comes from Frank Louton from Raymond James & Associates. Your line is open.

Great. Thank you very much.

Can you comment on what the current growth rate is at Power Solutions today versus what it was when you acquired the business? And then secondly, can you characterize your exposure to Echostar, any project that they have currently, and if you've removed any of that from your guidance?

No exposure to Echostar, so nothing to think about there for DICOM. On Power Solutions' growth rate, you know, we talked about their trailing, their four-year CAGR being about 15%, Frank, and that's what we gave as we were doing the acquisition and announced it for folks to look ahead. Obviously, as you saw in the guide, we're looking at that really as the bottom end of the range, so 15% to 25%. But here's a really important point, right? This is an organization that's delivering, you know, across around 3,000 skilled workforce, over 3,000 electricians, over a billion dollars of revenue. that's a very large base and when you think about growth as a percentage remember you add you add the skilled workforce by the person and doing that on a much larger base is something that you really have to lean into so you know if you think about how we're looking at the year how do we continue to invest in power solutions it's fantastic business that's got great leadership fantastic strategy really lean in with them so we can think about future growth and future growth opportunities and I just want to come back to DICOM as a whole right when we think about growth and there's a wrong way to do growth. We've had a ton of discipline around our backlog. You see that in our margin profile. You see that last year, not only did we significantly increase our backlog, not only did we continue to diversify our backlog, but we also improved our margin profile. And again, this year, as we look at the year out in front of us, we're telling you again that we can continue to improve that margin profile as we continue to grow, but as we invest in the business to ensure future growth.

Thank you very much.

Thank you. Our next question comes from Michael Dudas from Vertical Research. Your line is open.

Yes, good morning, Callie, Dan, and Drew. Yeah, maybe a follow-up on your answer to Frank on the margin front. Maybe talk a little bit about, you know, your investing in the business for the future, you know, how much relative to 27 fiscal versus 26. And I think just also on the power system side, well, historically in their self-performing capabilities, What has been their growth rate on the labor front, and is that within expectations from hiring and getting folks in to execute the back arc, not just for this year but for several years out?

Yeah, thanks, Mike. So on margin profile, if you look at last year, we grew over 100 basis points year over year, very pleased with the overall results, and that's in a year of change and growth. We did a major acquisition. And I think, you know, again, I would just point to how well DICOM is executing overall. As you look towards this year, you know, again, we've got big ideas and big initiatives that continue our growth and continue that long-term strategy. What's really important, and to the point of your question, is that we have to continue to invest ahead of that. We added a lot of headcount for the communication side and the backup of last year. We see that continuing as we continue to get ahead of these programs that I talked about early on that are starting to back on top of each other. That takes an investment, right? We've got to invest in a training. We've got to bring those folks on. They're obviously not as productive day one as they are six months in. So when we think about that and we add it into the growth profile of the overall enterprise, you know, that's when we say, hey, we're going to continue to grow margins. But, you know, I wouldn't set expectations to be going as fast as to have that into our backlog when I think a lot of others, you know, during periods of growth maybe struggle with improving those margins, we feel really good about that. Solutions, they're really about labor. You know, a lot of people know that hyperscalers buy all the big electrical equipment directly, so that does not come through the P&L of power solutions. So it really is about workforce. So if you think about 15% to 25% growth that we're projecting for this year, you're growing labor in a very similar range to that. And as I mentioned to Frank, if you think about that on a raw number of skilled workforce headcount, when you get to the size, the power solutions, then they're working on dozens of data centers. Those are really big numbers in the DMP. You know, we're partnered with the local union. We're getting well in front of that. But at some point, again, you want to grow at the right rate to deliver and, quite frankly, differentiate the level. And that's what you're saying, Andy.

I appreciate it. It makes sense. And just my quick follow-up. Dan, you mentioned a little bit about acquisitions and some of your prepared remarks in response to questions. Maybe share a little bit, the timing on getting to that 2.0 level, the size, the cadence, what should we anticipate maybe over the next 12 to 18 months? I'm assuming maybe there's another power solutions out there. I'm thinking a little bit more modest in cadence and size.

I think it's important to go back to the long-term strategy that we have, right? It's talking about long-term returns for our shareholders, long-term opportunities for our people. Obviously, as we did the power solutions, that was a very large acquisition for DICOM historically. But what we did well ahead of that, Mike, you know, we were very intentional to drive our net leverage down before we did the acquisition. We were down to remember the exact number, but I think it was about 1.2 times, maybe 1.2 and change when we did that. And then we talked last quarter about our ability to bring that net leverage down quite quickly. We talked about 12 to 18 months, but really what you heard Cruz say earlier was to do that inside of 12 months. You know, to finish the year with a very strong cash position and already get that down to 2.3 times pro forma, we feel really good about the opportunity set that allows us to think of long-term strategy, including improving our cash flow, right? And if you look at our free cash flow, I'm incredibly proud of what our team was able to accomplish there. Our free cash flow increased 216% year over year. And I would point to these are durable changes that we've built into the business. These are not, you know, simply pulling a lever or taking a one-time thing. This is really about how we change, one, you know, how we collect cash. We change our operating margin, or excuse me, our operating cash collection profile and how we're thinking about that. So, again, durable. On the free cash flow side, you heard me talk a little bit about how we're thinking about our fleet differently and using technology differently there so we can optimize that as well. And what that does is it's solutions, and there could be other opportunities that are much smaller than that. It's really going to depend on, and, you know, there's obviously no guarantees about timing or how these work out. We are going to be patient, but, you know, we are seeing some attractiveness.

Thank you. Our next question comes from Judah Aronowitz from UBS. Your line is open.

Hey, good morning. Thanks for taking my question. On for Stephen Fisher. Just on the building systems margin guidance, can you talk about how you're thinking about the margin potential in that business and how quickly can you improve to kind of the mid-to-high teams level that you've talked about? And related to that, you know, what investments need to be made? And if you can quantify the margin from those investments in 27, that would be helpful.

Yeah, this is really, again, about having a long-term strategy to do this. So when we think about that business, we did talk about mid-to-high teams margin profile that they've delivered historically. Mid-teams is really the right way to think about it today, right? We're talking about significant growth opportunity. We want to do that right. Maintaining the level of service that they have proven over decades is so imperative in a market that the demand is surging at the level that it is today. So we're going to have that discipline. We're going to have that patience. We're very pleased, obviously, with the growth profile, 50 to 25 percent from a revenue perspective. But we feel like mid-teams is a very strong return in that space. And I think if you looked comparatively, you would see that as well. So we feel very pleased with that over time. Obviously, we're going to, just like we are on the communication side, work to improve that. But for now, I think that's a really good starting point.

Okay, thanks. And then I was just curious about SG&A as a percent of sales in Q4 a bit higher, you know, than it's been in quite some time. And, you know, I assume that's reflective of kind of the headcount you're adding, but I was wondering if there's anything else in there, maybe something related to power solutions mix or anything else. And then, you know, what to expect kind of going forward.

Yeah, Judah, thank you for the question. I would just point out we did have some transaction costs that we called out in the quarter, and that was in G&A, so over about $18 million in there. And then as we think about the building systems segment, the G&A profile does come into the business as well. So if you're looking at the just total overall dollars, there will be some increases there.

Thank you. Our next question will come from Richard Cho from J.P. Morgan. Your line is open.

I just wanted to get a little bit of clarification on the hyperscale opportunity. As we look through this year and then into next year and 2028, it seems like there's, you know, a lot of this build is coming back half-weighted and it could be a big change. But what's kind of driving the near-term hyperscale revenue and how should we think about its growth for this year and then into next? Thank you.

Today you have, obviously, the Lumen overpull that doesn't have the same kind of new construction logistics or permitting around it. So that's a program that we've been working on for over a year now that is going to grow this year. You're going to talk about that. I would think about that first, Richard. And then you do have smaller, like, small, middle-mile routes are working. There are some very big programs, like Lumis is talking about. There's everything in between. And then there's some that are just, you know, 100 or 200 miles. Those much smaller distances, those can be added in much more quickly, obviously. But when you're looking at routes that are thousands of miles or much longer, those are the ones that are going to push. And then, you know, as you would expect, there's also the pricing dynamics. So routes that are easier are going to cost less. So those can come online a little bit quicker. the more expensive routes are going to take time in those out years.

Got it. And the clarification on the acquisitions, are you looking in the DMV area for acquisitions, or could this be a new geographic location?

So we're not specific just to DMV. You know, there's obviously another number of other markets. But I would say what was important to us with the power solutions acquisition was starting in a market that's been there for a very long time, right? This is a market that's been around for decades and has a sustainability, has a future build profile. With that now, we can certainly be thinking about some of these foreign frontier markets or markets that are newer and are ramping up considerably. Those are all on the table as we think about it.

Those markets seem like they're going to be building for a while. Thank you.

Thank you. Our next question comes from Adam Talheimer from Thompson Davis. Your line is open.

Hey, good morning, guys. Good morning, Adam. I also had a question on the M&A pipeline. Dan, is that all in within the building system segment? And then what should our expectations be on timing?

Yes, we're predominantly looking in the building system segment. And that's mostly, Adam, as you know, you know, DICOM has been a major acquirer and consolidator of the communication space. There are still some opportunities out there. But, you know, quite frankly, when you're in all 50 states across the same kind of customer expanse that we have today we don't need to do those from an M&A perspective those are places where we can and have shown we can grow organically so thinking a lot more about the building system space as I mentioned to seeing you this question earlier doesn't just have to be electrical there's other systems that happen in that digital infrastructure space or inside the data center from a timing you know there's there's no these things don't pace out you know some particular way you want them I mean we closed power solutions two days before Christmas right this is how things time out you know we are active in the space there are a number of opportunities are out there there's a number of really strong businesses that are coming to market for all the reasons you would expect right sure the multiples are higher but the businesses are more valuable and the growth profile is stronger so we're optimistic but you know there's no guarantees good color and then I think you mentioned power solutions geographic expansion just curious what you're thinking there.

Does that mean just starting to pick up some work in West Virginia, North Carolina, sort of building out from the DMV?

Exactly. They're not in every space, even if you think about the DMV itself, you know, you can still continue to expand. And, you know, as everybody knows, that that space itself is expanding. You mentioned West Virginia, you know, there's other markets that are really kind of coming online more in that territory. So today, you know, we feel really good about the growth profile they have. There's opportunities for future organic expansion with that group because, you know, they've been around for a very long time. They've got a ton of talent. So those are all things we're thinking about as we layer that together with M&A. And what I would just say is we're very optimistic in the continued growth. Thanks, Dan.

Thank you. And our next question comes from Liam Burke from B. Riley Securities. Your line is open.

Yeah, thank you. Good morning, Dan. Good morning, group. Dan, with your growing EBITDA and your growing cash flow, as you balance opportunities through acquisitions and managing the balance sheet, how are you balancing your current leverage ratios versus what you see in potential acquisition pipeline?

Yeah, I think think about it the same way as we've always had. We're going to be very responsible on our net leverage. You know, I think if you think about it, you have to think about it over time because we might do acquisitions that could come through. They're going to push it up a bit when we know, just like we did with Power Solutions, that we can bring that down. And I mentioned, Liam, you know, this is a strategy that goes back so that we have these improvements in the business so we can do more M&A and stay highly changing the way that we do.

And when you're looking at the traditional business, when negotiating longer-term contracts, are you seeing more favorable terms of pricing now that the scale is getting bigger, projects are more complex, and you seem to be the leader in this space here?

Yeah, you know, I think we're the only that are across all 50 states, and we certainly have, you know, a number of customer relationships. If you think about the margin improvement last year, if you think about the margin improvement this year, I do want to be really clear about this. This is not coming from us increasing pricing with our customers. This is coming from, obviously, operating leverage, but also of internal efficiencies that we're improving. Now, over time, can those pricing dynamics change? You know, we will see it is different. But right now, one, we feel really good with our return profile. You know, we have a long-term view with our customers. You know, we want to deliver an execute for them across that point, showing that we can do that. But, you know, I wouldn't think about it from purely us having an opportunity to continue to raise pricing. And also, I would point that we don't need that to continue the margin improvement that we're on. Thank you, Dan.

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

Thank you all for your time today. We look forward to talking to you again in around 90 days. Thank you all. Be safe and be well.

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