Okay, good morning. Welcome back. I'm Steven Fisher, UBS Machinery Engineering Construction and U.S. Building Materials Analyst. We are really thrilled to have Dycom with us here today. We have Dan Peyovich, CEO, on stage with us. We also have Drew DeFerrari, CFO, and Callie Tomasso from IR. Welcome. I know, Dan, you have a disclosure you wanted to make sure we could get through.
Yeah, good morning, Steve. Happy to be here. Just real quick, wanted to point to our safe harbor statement that is either on the screen or on the webcast and direct folks to our IR website for SEC disclosures for any forward-looking statements we might make today.
Fantastic. Okay, so Dan, you've just taken over as CEO, first time for a new CEO at Dycom in 25 years. Can you just tell us a little bit about your leadership style? What's going to be most important to you as you guide the company from here?
Appreciate it, Steve. First, really excited about where we are in the industry and certainly in the company. A nice period of growth behind us, and as we look forward, there's just significant opportunities that we'll spend some time talking about today, so really an exciting time to be part of the business. Really proud of our people across the board. Our footprint has grown over the past two years. We're in all 50 states now, and we really feel like that sets us up between that and certainly our expertise in delivering on some of these significant programs for our customers that we're really in a good place to be able to capitalize on some of the opportunities that are coming down the pike.
Awesome. Obviously, you've been with the company for a little while. You've been integral into a lot of the decision-making. And now as you take over, I'm just curious about with this opportunity that you have ahead, what are some of the most important decisions that you're making now that you think are going to set up for the most success in a couple of years from now?
Yeah, and I think you said it at the beginning there. So I've been here almost four years now, and certainly since the very beginning, my fingerprints along with Drew's and the rest of the leadership team have been part of the strategy, have been part of where we're going. So those decisions and how we think about setting up for the future really go back, obviously before my time, but when you talk about the team going forward, go back the last four years and how we've been looking at the business. And again, I want to go back to our footprint and just how we've set ourselves up with our customers. And we talked about this idea of quality as a brand, right?
So we want to make sure that not only are we delivering and executing quality in the field, but as we're going out and talking to our customers, the commitments that we make are the commitments we're going to meet, right? They've got a lot riding on these programs. They certainly have large aspirations that seem to only be getting larger this past year. We want to make sure that we can deliver on that on every step of the plan and every step of the way. So this concept of quality of a brand and then our footprint sets us up that we're certainly not in every zip code across the country, but we're in a lot of places. We understand the municipalities. We understand some of the challenges that you have.
We understand what kind of ramp speeds you can, and it doesn't matter what type of the program is, whether it's related to the upcoming BEAD work or whether it's related to the programs that our customers have today. We really have a good idea of what those take to get going and what they take to ramp. And that complexity certainly has favored us. When we look back the last few years, the programs have gotten more significant with our customers. They've gotten faster. They've been making commitments to the street about what that rate of speed is going to be and what some of the dynamics are. That's all favored us from a complexity standpoint. And we've really worked to set our business up, not just in the work that we do in the field, but how we're interfacing with the customer across multiple levels.
We have groups that are connecting with the customers on forward planning, thinking about how their programs are going to go, again, helping them maybe prioritize where we think it makes the most sense, where we can get the most labor and efficiencies, where we can get the most throughput from a passing standpoint. We're trying to and augment their enterprises, augment their businesses so that we can provide more value. We've seen that complexity favor us. As we look at the programs that are coming forward, whether it's the increases that they have now in the fiber to home passings, whether it's, again, some of the opportunities related to not just BEAD, there's a lot of other government programs there.
And then certainly on the AI data center side, which we'll spend some time talking about today, all have a lot of complexity to them, and we just think that we're set up well to be able to capture that. So when you think about strategy, when you think about the moves that we've been making and the moves that we continue to make, it's how do we stay in front of our customers in that way? How do we continue to deliver and execute in that quality as a brand kind of mentality? And hopefully, we can kind of differentiate ourselves for the level of service that we can provide.
Great. And we are going to get into a lot of the details of the end market dynamics and growth drivers.
I get really excited about it, so I'm trying to get ahead of myself so I can follow the question.
And I will keep you high level for now and maybe thinking about the concept of success. And what do you think success, if we look forward, say, five years from now, what do you think success for Dycom and for your tenure as CEO will have looked like? What's the vision you want to set for Dycom for five years from now?
Yeah, I'd like to first talk about our people. We've got exceptional talent throughout the organization. So when we think about that, first measure of success is from a safety standpoint. Extremely proud of what our team has done. We have a Headway program that we set up a few years ago. Safety is always something that you're pursuing, right? It's always a journey. But again, I really feel like our team has embraced it culturally and we moved in the right direction. So when I think about it in five years, we want to continue to deliver our work safely. We want to make sure that our folks have the opportunities on the field, opportunities to be challenged and to grow, but we want to make sure that at night they go home safe. So that would be the first metric.
And then the other one related to our people is opportunity, right? When we talk about some of the programs that we're going to get to today, it's not just opportunity for Dycom. It's not just opportunity for the industry. It's opportunity for our people and for people that aren't yet with our enterprise to come in, to learn something, and to grow. I mean, we have so many folks in our business that started with a shovel in their hands. That's how I started, by the way, with a shovel in my hands. But many of our folks started with their shovel in their hands and have worked their way up through an organization. And I just think that's a wonderful pathway and something to offer that may be a little bit different from a lot of different companies, a lot of different industries that are out there.
So that success of our people creating those opportunities for them. And then, like I said, we'll get to a lot of the programs in some more detailed discussion, but we're in a unique spot, right? I talked about our footprint, talked about our people, talked about the success of some of the programs. So the question is, how do we capitalize on the opportunities that are coming out, right? How do we make sure that we continue to see these growth opportunities in the right way, make sure that we grow at the right speed so we can still deliver that quality as a brand? Because there is rates of speed that can go too fast, right? A continued growth rate can be hard on your company, can be hard on your people. So you've got to be really strategic about it.
You've got to be really thoughtful about how you're going to do it, how you're going to set up for that growth. So again, it's a lot to be excited about. We have obviously a lot of internal measurements that we keep on a routine basis that we want to make sure that we're hitting our marks, but feel really good about the opportunities.
Terrific. We often get asked about Dycom's competitive advantages. And just a moment ago, you talked about how complexity favors you. And maybe you could just talk a little bit more about how broadly you differentiate amongst the whole industry that provides these services. And do you think you have a competitive moat? And if so, how is that moat changing now?
I'd go back to the concept of quality as a brand, right? I think where we try and differentiate, probably where I would start, when people think about the end product that we deliver, it doesn't seem like a complex thing, right? Whether it's burying fiber, whether it's HFC networks, whether it's aerial. When you think about the kind of end product, I think people don't think that that's a complex activity.
But when you start to roll that out en masse and when you start to understand how municipalities actually work and the fact that a lot of municipalities don't want to have 18 crews in their neighborhoods tearing up streets at a given point in time, or that you can only go so fast because of the number of inspectors that they might have or the ability to get locates, all these other dynamics, and then you have one municipality and how does that coordinate with another municipality? I think all of the complexity there, I think, gets missed when people think about the end product. And I think that oftentimes folks oversimplify maybe the ease of coming into this space or the ease of ramping into some of the programs.
I do think that we've really proven the expertise over the history of the company, but these last few years in a very kind of furious pace. We've proven the expertise and the ability to hit those numbers time and time and time again because our customers are making these commitments publicly, right? These are thoughtful programs, but they're big programs. In order to stay ahead of that and to make sure that we're going to deliver, there's a huge amount of planning that has to happen very early on that we've got to be out in front, sometimes out in front of our customers thinking about how we can make sure that we're going to hit those numbers.
Because in programs, there are programs that we have that you're doing 30,000 passings in a given month in a given market. I mean, that's a huge number that I think for a lot of people, it's hard to kind of get the gravity of it, but that's a huge deal. And so when we think about kind of the competitive landscape for folks trying to come into that or maybe folks who are a little bit smaller trying to ramp into something like that, I think it has proven to be much more difficult. And that's what we talk about, our ability as an enterprise and from this enterprise set that our customers over the last few years have started to favor.
How do we go with an enterprise partner that we know is looking out well ahead at waves that can't even be seen yet and they just have the expertise and experience? So certainly we think that favors us. I'm always going to talk about our people, right? I think we just have phenomenal talent at every level. And we have a huge passion for delivering for our customers, right? I mean, what we talk about internally is how do we deliver value to the front lines? How do we deliver value to the folks that are out there working with their tools every day? Because if we deliver value to the front lines, we're going to deliver value to our customers. And ultimately, if we deliver value to the customers, it's going to be value to our shareholders.
This intense passion to make sure that we're supporting the front lines and supporting our customers. I'm certainly not going to say that's unique to us. Everybody talks about that, but we really do feel like we're positioned well from that perspective.
Terrific. You mentioned numbers a few times here. So let's talk a little bit about that, you recently reported your Q3 results and gave Q4 guidance. Stock was off a little bit that day. Maybe you can just give us some overall perspectives on the results and how you see the near term fitting into the broader picture.
Q4 always has unique dynamics for us. It's not a new story generally. There's some moving parts within it for sure. The first thing I would say is we don't think about Q4 in and of itself, right? We think about the entirety of the year. We think about the progress we're making. We would look to the opportunities that are in front of us. We look to the growth that we've shown that we can do over these past few years. We'd say the opportunities that are in front of us is greater today than it has been even for the growth that we've had. Q4 is going to be Q4. Specifically this year, you have Christmas on a Wednesday. You have New Year's on a Wednesday.
We have folks that have been working continuously, maybe on some of the storm work, continuously on some of these large customer build programs. We just think two weeks in a quarter is a pretty big impact. More people are going to take some time off, right? So we got to think about that as we're approaching how we guide towards the fourth quarter. And then there's other components related to weather that we're always going to see and how that plays out. So we just say, I wouldn't read anything in the fourth quarter. We should really be thinking about the opportunity set and what comes after it. And I'm still trying not to get ahead of myself talking about some of the opportunities, but I'm excited to get there.
Okay. So some unusual dynamics there. Don't read into it too much.
Oh, and I did miss. We talked about we have a couple of programs that are ramping. We talked about two awards, one with Lumen, one with AT&T this past quarter. Very excited for those projects. Again, this is kind of one of those things that it wouldn't be unique other than the fact we have two programs that are starting in the back half of the quarter, in a quarter that's typically slower because of the seasonality. So that's the only reason we called those out. There's nothing else kind of special to see, but it just all adds to it.
Perfect. Maybe shifting gears a little bit in terms of your customer base and how you see that evolving. You really have kind of two angles in mind. On one hand, some of your larger customers have been consolidating. And so I'm curious kind of what opportunity that presents for you. But on the second time, when we think about that pie chart of your customer base, it's always had a very huge percentage of it that's very concentrated into the top five, but it's becoming a little less concentrated more recently. So curious, as that changes a little bit, becomes a little bit more diversified, what are the implications for growth rate and margins?
It's a good point, Steve. So right now, our top five customers comprise about 56% of our revenue. But what I'd really point to is the top 10. It goes beyond our top 10. I think a lot of five or it's not 10 or it's not 15 or 20. We have hundreds of customers and hundreds of customers that we're excited that treat us as partners. And we certainly enjoy long-term contracts and long-term work with. So yeah, so we've been working hard across the top 10. You've seen a lot of those revenue ranges have gotten closer, which helps with some of the moves that happen between customers.
We're really trying to ask people not to look specifically like how did the top five do or how did the top 10 do because we have customers that are moving in and out of those numbers that can sometimes skew the way you might look at a particular result. Instead, look at the breadth of the business, right? We've been able to grow that. We've been able to continue growth with some of our top customers. And this is an industry that's been consolidating for decades, right? I mean, we've had that customer list certainly long before my time here, but that would have been much, much longer to do the same revenue in those same markets. And so they can continue to consolidate.
What we've seen this year, obviously, there's been a number of acquisitions and combinations, whether that's T-Mobile with Lumos and Metronet, whether it's the latest announcement from Verizon and Frontier. And we always say when there's more capital coming into the space, whether that's from somebody refinancing or from somebody doing an acquisition, the general intention of that is going to be to take an asset and grow it, right? It's no different than how we look at M&A internally, right? Usually when we're looking at an opportunity, it's because we see an opportunity to grow that and invest in it in a different way. And certainly, we've seen our customers come out and talk about that right after they've done the acquisitions or after they've gotten through some of these things. They said, "Hey, let's add another million homes here.
Let's add another million homes there." So sure, from a kind of optic standpoint, it appears more concentrated for us. And some of these combinations will do that, right? I mean, Verizon and Frontier certainly is going to consolidate a customer and make it a larger number in the overall pie for us. But again, we would just go back to what it ultimately means for us and for the industry is that they're bullish on the opportunity to continue to grow that asset and move forward. And obviously, that's good for us. Obviously, it's good for the industry.
Fantastic. So let's maybe focus really on sort of the heart of what these opportunities are that people are really excited about. So in terms of maybe one leg of the stool in terms of the growth would be sort of this urban and suburban opportunity unpack. We've talked about 40-45 million homes perhaps where there's opportunity for fiber. Can you just talk about kind of what's the opportunity set for you there? Is it all these 40-45 million homes, or do you apply some selectivity filters to that opportunity?
Yeah, I would love to say that we could do all the passings and everything that's coming down the pike, but obviously, that's not realistic. So we've talked for a long time about how we believe that private capital is going to end up covering about 80% of the 140 million in growing homes across America. And I think what we've seen and from some of the customer announcements, some of the increases that we've seen this year that I'll talk about in a moment is it certainly seems to be trending towards that number, right? And then that last 20% is going to be filled with some kind of subsidized government funding and other. And of course, we'll talk about that too. So one, we're excited to see that that is how things appear to be playing out.
And we still think that for sure, telecommunications getting high-speed internet access to all the homes in America today is no different than power was 90 years ago, right? I mean, it's become a necessity of life. And when we go into a lot of these communities that have never had high-speed internet and they've had to make do other ways, driving a long distance so their kids can connect for school and other things, our crews get welcomed, right? They get brought home baked pies because people are so excited about it. So we just have to think about that construct that this is a necessity in today's world. You have to have high-speed internet. So some way, somehow, over a period of time, we're going to get these homes connected.
We think it's being a little bit overlooked that our customers in the past year have added now incrementally about 35 million new passings, 35 million new passings. I mean, that's a huge number, and if we didn't have BEAD to talk about and we didn't have the hyperscalers to talk about, in and of itself, that is a massive story. 35 million new homes over the horizon timeframe that they're talking about, that's something greater than five years. That's a very large undertaking, and again, great opportunity set for us. This is customers that we've worked for a long time. In a lot of cases, we have master agreements with them, and so we will certainly do our best to earn that work, and we work to earn it every day.
But we see that as a huge opportunity that we just don't think is really getting there at time that it should.
So it's certainly a very dynamic opportunity at the moment. There's just, it seems like over the last handful of months, lots of new data points every day coming out or every week about opportunities here, including this week. Maybe you can just talk about and frame what you heard at one of the key customers and at their investor day and kind of what that might mean for you.
Yeah, absolutely. I mean, so AT&T has talked about 10-15 million incremental homes, and they came and reinforced that with the addition of Gigapower a couple of days ago this week. And again, we just think it really reinforces this 80% that 80% homes are going to get connected, right? So they continue to push further into their footprint. All of that obviously is good news for the industry, right? They've kind of met and exceeded what those initial expectations were. So we think that's obviously all positive. And again, it's going to take some time to work its way through the system. And I know they talked about dates, but significant amount of work and opportunities, again, that we're going to work hard to address.
But maybe just putting a bow on, I think about there's a few broad legs to the stool of your growth opportunity. So kind of wrapping up this 40-45 million urban/suburban-type opportunities, just that bucket alone, do you think? Would you tell investors that just that opportunity itself is enough to drive meaningful growth for you over the next several years?
Yeah, absolutely. Again, the 35 million number that I pointed to before, that's incremental to what their plans were before. This is not in total, right? And so again, the numbers you're talking about. And that takes a lot of work too. I mean, not every home is an easy connection, and not every home's on 40-foot lot lines where you can get a lot in a mile, right? It's very different as you move around the United States. So it's going to take some time to work through. I mean, our customers are very thoughtful about how they're planning and working through it, and we're just excited to be a partner to them.
Fantastic. Okay, shifting over to another leg of this growth stool here would be sort of this long-haul opportunity and hyperscalers. So maybe you can talk about how the emergence of hyperscalers have created opportunities for you and what actually is the opportunity here.
I'm just going to do a quick frame-up here if I can, and I know we're going to talk about BEAD because everybody talks a lot of conversations about BEAD these days, but BEAD goes back a few years ago, and when BEAD came up, it was a big topic. Since then, again, I just talked about 35 million incremental passings on fiber to the home and fiber to some of the workplaces that are in some of those numbers. That's been post-BEAD, right? That 35 million incremental, and then we have this whole concept around hyperscalers and the increasing need for data and speeds and reduced latency, right, and so this concept now of long-haul, high-capacity, low-latency, redundant, and in some cases, not just diversity, but riversity.
So what I mean by that is what the hyperscalers want is not just maybe one landing, one fiber route coming to their data centers. They want two, in some cases three, right? They want that idea of. And we're talking about long-haul fiber that hasn't been done really en masse in 25 years, right? So now we're talking about connecting a lot of times we say the NFL cities, but major metropolitan cities around. They're looking for much greater capacity than the networks offer today. They're looking for routes that are different than are offered today. And I mean, some of the equipment folks have talked about the capacity of some of these fibers. These are very much greater, significantly greater than what exists today. So you take the low latency component and again, this drive towards AI, right?
The drive towards bringing these data centers together. And it's difficult for anybody to predict exactly how much data we're going to need, right? In one year, two years, and much less five years. But we know with where the world is going, it's significantly more than we need today. And we think this is the future planning that goes along with it. But when you add all that together, it's a massive opportunity. We're very excited to have received an award for Lumen. That's overpull work. So that's an existing conduit route that they have, which means that it's work that jumped into quicker. It doesn't have the same kind of permitting timeframe, the complexity around environmental studies and whatnot that you'll have to do. So we're certainly excited for that award. They've talked about additional trenches behind that.
But this is a huge opportunity set that multiple customers are talking about. I mean, the appetite, again, for the hyperscalers, when you think about this, which leads back to their data centers, the opportunity set there is significant. We just feel like, again, this is something that wasn't really talked about really more than about 18 months ago in any significant way and looks to be a large part of business opportunity for us going forward.
Fantastic. And as we think about who we should be paying attention to, how broad is the customer base for this? You mentioned Lumen. Is it really sort of just a handful of large tech companies, or is there a broader customer base to think about?
Yeah, I think, again, the hyperscalers are certainly the headline, right? They have the largest appetite to feed their clouds, to feed their data centers. And by the way, the thing I didn't mention before, so you have the intercity network, the long-haul networks that go large city to large city. And by the way, when you take a network of these scales and you try and go through a major downtown area, pick a major metropolitan city in the country, highly, highly complex, it's going to take a while for permitting. It's going to take a while to get that work done. And it's obviously not going to be inexpensive to do some of those routes.
Once you get that network built, which is going to take some time, as the data centers come, and we all know that they're constrained by power and how they're going to feed power and where exactly these data centers are going to go, that's going to take some time to play out. Well, behind that, we or somebody in our industry has to get those connected, right? So you have this kind of initial opportunity to get the current data centers and the data centers that are coming up. You got to get all that connected. Again, high capacity, redundant, right? Redundant networks. And then after that, you got to come back and you got to continue to feed these intra-city routes as we connect. So this isn't just we have some great opportunities upfront because, again, there's some plan that's already in place.
You have kind of that mid-level opportunities for new construction, then you have the more distant opportunities to make sure you're coming in and backfilling behind as the data centers get built.
Great. Maybe just digging in just a little bit more on this to understand the nature of this work. You mentioned some overpull with Lumen. So what are you actually doing on these routes?
Yeah, I think it's good. Yeah, because the term can be a little bit confusing. So this is where you have existing conduit that's in place, buried in the ground, and you're going to come back and pull fiber through an empty conduit. So why that's obviously it's easier because you're not digging the trench. But if you think about the permitting side, again, if you think about some of the environmental side, this is work that you can get to really quick. This is work that we do every day, right? It's work that we do every day. The fiber counts are denser, right? They're higher in these scenarios, which sometimes means you got to both push and pull the fiber. There's some complexity in maybe how you do the work out in the field.
But work that we do every day, work that can be done quite quickly compared to starting new construction routes.
Where you're not doing this pull through existing conduit, there you're actually digging trenches and.
For new construction, right? That's right. And I think at least as far as we know, there's not a ton of routes around the country besides what Lumen's talking about that have the ability for high-capacity fiber in existing conduit. So generally speaking, a lot of that's going to be new construction. Or by the way, in many cases, like I said, if they want diverse routes, they're going to be completely different routes going from a different place in a different city to get to the same ultimate destination. So that's new work. Obviously, as anybody can easily guess, right? It's going to be significantly more expensive to do new construction as compared to doing overpull work. And it's going to take longer. So again, I talked about that kind of midterm opportunity really in the new construction work.
Yeah, I was just going to ask you next exactly about that point about timing. So how should we think about this timing in general?
Yeah. I mean, again, we're already ramping into the first Lumen award that we got. So that work's starting now for us. It's going to be significant in our next fiscal year, but it is work that we're getting into today. So the short answer is it's now to a very long distance in the future, right? Again, there's so many other things that have to play out that are out of current control or ability to project and forecast. But even the stuff that we do know or are talking about that's new construction, that's a multi, multi-year to get through, again, just with the complexity and how you have to do the work. That's multi-year in and of itself. So we certainly look at this as well beyond a five-year opportunity.
Got it. And just lastly on this part of the topic, how are the competitive dynamics for this type of long-haul intercity work?
Yeah, and I'd go back to one of our earlier comments about complexity certainly favors us. Obviously, we're not the only ones that can handle complex projects. We're not the only large folks in our space. But certainly when the magnitude of these projects, and I go back to when our customers are talking about anything publicly, right? They want to be absolutely certain they can get it done. And so that certainly gives us opportunity because we've proven across the space, we've proven across our customers that we have the ability to do that repeatedly over and over and over again. I don't want anybody to walk away that means that we get to go win everything and we get to pick all the projects that we want because that's just not how the world works, right?
We got to look for the right opportunities, and we got to earn every single one of the opportunities. But it's certainly from a landscape perspective, it takes enterprises that have proven performance and the ability to scale and the ability to ramp up and the ability to deliver month over month, day over day, repeatedly for a long period of time.
Great. So you made reference before to the BEAD opportunity, rural in general. Maybe we can talk a little bit about that. So what are you? I mean, this concept of rural is not new. What are you doing in rural today, and how would BEAD work be different?
The short answer is not much different, right? We're doing a lot of work with co-ops. We're doing a lot of work in very rural environments. Like I said, we have hundreds of customers, and we're working all over the country. The actual doing that work and putting it in place is something that we know and know well. The programs like BEAD, as it stands today, are more complex, right? The way the reporting requirements work, the way prevailing wage may or may not work, all of those pieces do kind of up the complexity when you think about a program like that. Then that's a program that's much more time-bound than some of the other work. As we think about BEAD, we think about the way that that's going to work its way through the system.
Again, we believe we're set up well, but it's going to be a more complex program than a lot of the other work that's going on today. I would point to, though, that BEAD is part of what's coming through from government funding, right? It's certainly a large part of it, but there's other programs, right? Whether it's RDOF that's been going for a long time. There's so many state grants that are happening, and somebody could certainly put together the data, but it seems that every other week another state's awarding $100 million here or $200 million there. So all of this is continuing to happen because it comes back to what we said at the beginning, right? It's just like power was. We got to get high-speed internet to these homes.
There's certainly other ways to do it that I know we'll talk about in a moment, but that's all going to continue to happen. BEAD is a part of that, but it's not all of it.
Okay. So as this opportunity comes through and develops over the next few years, just curious how well set up from an infrastructure perspective you are? Do you still need to make investments in certain parts of the country, putting in, I know you have warehouses and equipment and various things? Is there a need to invest in CapEx or other investments to support that rural work? And then how do you think about timing of that investment?
So we're always investing in our business, right? We're always investing in our people from a training aspect. We've retooled all of our training programs across every level of the organization as we've come through and into this last cycle. We're building new training facilities around the country so we can train and bring our folks in. And I like to use the story of if you take somebody who hasn't been in the physical trades, right, hasn't been out there, we can't just throw them into a crew for two weeks and have them carrying a bunch of tools and climbing up and down ladders and out in the elements and do all this stuff and expect that they're going to be here in four weeks, much less in six months or six years.
And so we got to be really thoughtful and intentional about how we look at bringing talent into the workforce and working them through. So we spend a ton of time internally thinking about how can we do that the best way. There's always a trial and error component to it, right? And like I said, we've retooled our training programs. Really excited about how those we're getting really good feedback and building these facilities so we can take folks through the paces before they're out there completely and entirely on their own. So making investments there. We make investments in equipment. We've got fantastic partnerships with our equipment vendors. So we're always trying to stay ahead of the curve there. And again, I would point to we grew 22% a couple of years ago, almost 22%.
We're able to stay ahead of that both from a labor perspective, which is especially then, right? Labor was even more difficult than it is today, and also from an equipment perspective. So things that we're intensely strategic about and plan towards, but we don't go drop a ton of capital well in advance, right? We want to know what the programs are. We want to know where they are. We've got a really good setup on how we go and move into a new area. But as I said before, we are very happy with the fact that we're across all 50 states. We pretty much know how the entirety of the U.S. works and where we need to be and how we can feed any opportunities that come through there. And I think that's pretty unique to us.
Excellent. So one of the things that we've been getting asked about a lot, a lot over the last several months is really sort of the alternative to fiber for rural connectivity. And so I'm curious how investors should think about Low Earth Orbit satellites as a competitor to fiber. And maybe is there anywhere where it's just sort of clearly obvious that fiber is really the answer that makes more sense?
Yeah, usually this is the first question. So we've made it like two-thirds of the way in before we got to it. So I know. Yeah, it's a real conversation that's going today. And obviously, we all have to see how things play out over the coming months. Satellites have always been a part of BEAD, right? Satellites have always been a part of the solution to how we connect America, ultimately to high-speed internet because there's just some places that can't possibly make sense, right? In any world to try and do it terrestrially and get there, $100,000 passing is just not going to make sense. So it's always going to be a part. Is it a little bit more now? We'll see exactly how it plays out. I would point to Louisiana. I think it's a really good example and certainly the first.
I think there's nine other states. Last I checked, there's nine other states that are going through the subgrantee process, which is talking to our customers and seeing what their appetite is and working through the economics and the dynamics there. I think Louisiana is a really good point, right? So 95% of that award is going to be fiber. 95%. So that's all told, that's over $1 billion of fiber work to connect rural Louisiana. I think every state's going to be a little bit different, right? Geography matters. How they got funded matters. Louisiana had the luxury that they'd gotten ahead of some of these things, so they had some money that was left over. But what it points to, and I think the key point here is not that 95% is fiber, not that a few percentage points is going to satellites.
The point is that if the economics work for our customer, for the ISPs, if the economics work and they can match their 25%. So remember, BEAD's $42 billion, but they got to match at least 25%. So that's over a $50 billion program. If those economics work and what Louisiana is telling us is that our customers say, "Yes, it works," right? For 95% of it, those economics work. That's the story to us, right?
I find that hard to see a world where if that happens state over state, and again, it's not always going to be 95%, but if it happens state over state and private capital saying that these economics work. I'm not saying that it couldn't happen because, of course, you never know, but it would be pretty unique that that would get rolled back when the marketplace is telling you that this is a good solution, it's a viable solution, and it's an economic solution because they're not going to want to do a $100,000 passing because they could just never make the economics work. So again, we really think that's going to be a part of it. Certainly, fixed wireless will play a part. That's been a big push from some of our customers. I would remind everyone that for us, right, you got to get fiber.
You got to get fiber to those towers, and also we do wireless work. So another good opportunity.
Great. I was going to ask you.
Sorry. Can I just have one more thing?
Yeah, please.
Whatever part is going to ultimately be satellite, again, we're talking about a $50 billion program. So the TAM that's going to ultimately come into our space, we still believe it's going to be massive, right? It's going to be a huge opportunity for us and for the industry.
And you mentioned Louisiana. I was going to ask you sort of what's next after Louisiana. You've mentioned maybe it's these nine other states. What should we be looking for next?
Yeah. Again, I think for us, the measuring stick is really what is the appetite and how do the economics play out from our customers that want to bring fiber to these locations? We can talk about fiber as a preference. We can talk about satellites, but to me, what it really comes down to is do the economics work? And if they work, then that should be a positive thing for our industry going forward. So we'll see. I think Colorado published just some early data, and again, they had good participation. So it's good to see that. But I know we're all waiting with bated breath as we kind of see the trend that comes out over the coming months.
Okay. There's been, as we talked earlier, the concept of rural is not new, and you mentioned that there are state programs already. So I'm curious, what happens to these various state funding programs in a BEAD world like Tennessee, for example? We've followed that program for the last couple of years. They call it the Digital Opportunity Plan, where they are providing $750 million for rural connectivity. What happens to those programs? Do those continue on and that's additive, or is it kind of blend together?
Yeah, I would start with the top line kind of statement and sentiment, right? The fact that there's all these programs just goes back to we need to get all the homes connected, right? Everybody knows. Everybody coming out of COVID knows, right? There's nobody that's arguing that everybody needs to get high-speed internet access. So whether it's a state program that's trying to get ahead and fund that, whether it's augmented by BEAD, whether it's RDOF that's already out there and well ahead of it, I think all of these programs are going to interlace. But many people would point to that are more expert than I that the BEAD program in and of itself isn't enough to solve the entirety of the solution.
So, I think you're going to see a blend of those, maybe a potential for some of the RDOF dollars are left or other programs to make sure they augment it ultimately to get everybody connected.
Sounds good. A couple more questions here, then we'll open it up. In terms of margins, you've had some really nice steady improvement in margins in the last few years. What's the expectation that investors should have now about margins from here? Can you kind of sustain this teens level where you are? Can you still squeeze out a little bit more margin from here as this opportunity ripens? Is there anything restraining margins? What's the message and expectation you want to set about margins?
Obviously, something we're always working hard on, right? We want to make sure that we're getting the right return for both the risk and investment and return to our shareholders ultimately, so something that we're always working on. There's market dynamics at play, of course. The way that we like to think about it kind of today going forward is think about the leverage that we'll get as we continue to have opportunities to grow, right, and sometimes we're going to take that leverage and we're going to reinvest it very intentionally into the business so we can continue the growth curve. I would also remind folks it's not always linear. As much as we would all like it to be, it's not always linear, right? You can have some times where it's a little bit faster or maybe we're reinvesting a little bit more into the business.
You can have other times where more is going to maybe drop through to the bottom line. Historically, folks can, of course, go look at the history. We've been able to get into the 14s from an EBITDA perspective. Something we're always working on, but I would think about it more from the leverage opportunity going forward.
Okay. Fantastic. And then.
And then I would point back to all of the opportunities that I talked about from a top line opportunity perspective. And it's, again, never been larger than it is today, even adjusting for our size. Pretty significant.
Great. Balance sheet's in good shape. Gives you a lot of good flexibility. Talk about capital allocation a little bit. Company's been buying back stock and doing some targeted acquisitions in recent years. What are the priorities and opportunities ahead?
Yeah, I think for folks that aren't familiar with the company, again, I would have folks go back and look at our buyback program. It's been significant over certainly since Drew's been here and Steve over the last 25 years. We're always going to prioritize organic growth. Always going to prioritize organic growth. Whether that's growing the businesses that we've had for a long time or some of the new businesses that we've acquired, right? Again, I talked about before when we're acquiring these businesses and trying to find these partnerships with folks that we think can fit the culture of Dycom and have opportunity to grow, we're investing in those businesses as well, so we're always going to prioritize that from a capital perspective, and we do see a lot of opportunity in front of us, right, so we got to be very thoughtful about that.
We're always going to look to M&A and the share repurchase program that we've done in the past. So from an M&A perspective, right, there's plenty of opportunities that still exist out there. We're always looking for culture fit. That's important to us. And we're looking for them to have the kind of right customer set, right contract set. And again, an opportunity for growth. We have all 50 states now, so we don't have a big hole to fill that we're looking to cover. I think Alaska was kind of the last unexplored territory for us, if you will. But again, we're optimistic and we'll continue to work on things.
Excellent. Well, actually, we are out of time. If any other questions that people have, we can come up afterwards. But Dan, thank you so much. Really appreciate your being here with us.
Yeah, appreciate it. Thank you.
Thank you.