Steady Growth As Always for Zayo in Fiscal Q2

February 11th, 2015 by · 2 Comments

Zayo posted its second quarter results this morning, the first quarter they operated in as a public company.  Revenues were held back some by foreign exchange fluctuations but were nevertheless inline with expectations, while EBITDA margins continued their upward trajectory.  Here are a few of the company's numbers in some context:

$ in millions Fiscal
Q2/14
Fiscal
Q3/14
Fiscal
Q4/14
Fiscal
Q1/15
Fiscal
Q2/15
 – Physical Infrastructure 120.9 125.0 135.9 149.6 152.7
 – Lit Services 151.3 151.7 153.8 156.1 157.4
 – Other Services 6.5 6.4 8.4 14.9 13.8
Total Revenue 273.6 278.0 296.7 320.6 323.9
Adjusted EBITDA 161.5 165.0 171.7 183.3 189.7
Adj. EBITDA Margin 59.0%  59.4% 55.9% 57.1% 58.6%
Capex 88.3 90.9 94.9 115.3 129.5
Buildings on-net 14,196 14,490 15,027 16,151 16,712

Capex was up again, reaching a high water mark of 40% of revenue.  That reflects just how aggressive Zayo is currently being with its organic buildouts these days.

And in Zayo's earnings supplement, there is all sorts of interesting data as always:

  • The purchase price of the IdeaTek deal was $52M, for which Zayo acquired 2,268 route miles of fiber connecting 600 towers and 100 other buildings.  The Kansas footprint generated annualized revenues of $4.5M and adjusted EBITDA of $2.9M in Q4 with $1.0M in annualized synergies planned.  That's a pretty high multiple, which means we can expect Zayo to have some interesting plans to do more with these assets than the previous owners were.
  • The Latisys deal price of $675M purchased annualized revenues of $109.6M and adjusted EBITDA of $48.0M in Q4, with another $7M in annualized synergies planned.  Some 25% of their revenues are from cloud services, and I'll be very curious to hear what Zayo's plans are for these assets on the call.
  • Of the 561 buildings Zayo brought on-net, 61 were apparently standalone small cell deployments, doubling their previous total.  It's still just a beginning, but an interesting acceleration nonetheless.
  • Bandwidth per tenant on their fiber-to-the-tower segment jumped to 105Mbps, the biggest aggregate jump they've seen and taking them past the 100Mbps milestone.  That's just the lit backhaul piece of course.  Dark fiber to the tower grew to 10% of the product mix, jumping from 7% in the prior quarter.

Lots more in there of course, more than even CEO Dan Caruso will be able to cover on the call in a couple hours.

 

Categories: Fiber Networks · Financials · Mergers and Acquisitions · Metro fiber

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2 Comments So Far


  • Anonymous says:

    With Latisys do you see the Zayo appetite for rollup easing leaving it open to another group/company/private equity. There seems to be a grouping of regional fiber networks that could be rolled up, WILCON, Lighttower,PEG, Fibertech, suneys etc. that someone while much more expensive then the Zayo rollup could try it the question is who will step forward with the money and start the process. It will be an interesting 6 months to see if this type of strategy plays out and where and who begins the process. Seems the Cable industry has there form of roll up occurring with comcast/TW leaving Charter with very publically stated fromthere owner Liberty they see opportunity in consolidation.

  • Survey Says.... says:

    Southern Light, US Signal, UPN, Lumos, Conterra, Alephus, Logix just to name a few more

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