Zayo’s Margins Hold as ELI Integration Begins

May 10th, 2017 by · Leave a Comment

Zayo posted its fiscal Q3 numbers yesterday after the market closed.  With the acquisition of Electric Lightwave closing on March 1, it is another of those quarters where the numbers are shifting and the way the company reports them is still evolving.  Here are a few of their numbers in some context:

$ in millions Fiscal
Q3/16
Fiscal
Q4/16
Fiscal
Q1/17
Fiscal
Q2/17
Fiscal
Q3/17
Total Revenue 478.0 507.3 504.9 506.7 550.2
Adjusted EBITDA 242.8 257.8 260.6 263.4 282.0
Adj. EBITDA Margin 50.8% 50.8% 51.6% 52.0% 51.2%
Capex 185.1 187.4 208.3 213.6 208.3
Buildings on-net 23,418 24,282 25,263 25,886 29,402

Revenues of $550.2 were up sequentially, but slightly below where analysts were looking for.  Of that total, $70.9M came from the more CLEC-oriented piece of Allstream up in Canada.  The detailed breakdown beyond that is something I'll have to spend a bit of time on as it all shakes out.  As for the breakdown of infrastructure revenues, 38% of revenues came from fiber solutions, 11% from colo, 23% from transport, and 36% from enterprise networks.

Adjusted EBITDA margins held steady at above 51% off of a total of $282.0M, which helped adjusted earnings per share land at $0.13, a few pennies above expectations.  Capex checked in at $280.3M, while free cash flow was $54.1M.

Operationally, Zayo's on-net building count surged to just shy of 30K, a milestone they will likely pass this summer organically.

 

Categories: Financials · Mergers and Acquisitions

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