After looking at EBITDA Margin, Capex, and EBITDA-Capex across the sector, I’ll finish up this series with a look at Revenue. Everyone wants to grow of course, but in this recession there has been a divergence in the sector’s growth profile. Seen alongside the EBITDA and Capex trends, we get a fuller picture of what is going on in the sector. Here is the relative revenue growth chart over the past 7 quarters:
So who is growing the fastest in this tough economic environment? cbey and abvt followed by RCN Metro and Cogent Communications (NASDAQ:CCOI, news, filings). Three of those are managing such growth by by leveraging and investing further in their metro fiber footprints, demand for which has been largely untouched by the recession. TW Telecom (NASDAQ:TWTC, news, filings) on the other hand, has grown steadily but not particularly spectacularly relative to these others.
CBeyond on the other hand is quite a different type of provider, but has continued to drive impressive revenue growth. As we saw from the EBITDA-Capex, they have taken a different strategy in dealing with the economy, spending their cash on expansion in spite of it. It has been working in terms of revenue, but unlike the metro fiber players its margins have slipped as EBITDA has not risen in synch. When the economy recovers and its new markets start kickin in, will we see CBeyond’s EBITDA rise to match its revenue performance?
Down below of course we have Level 3 Communications (NYSE:LVLT, news, filings) and Sprint Nextel (NYSE:S, news, filings) which have suffered from heavy revenue pressure all year. We saw them at the top of the EBITDA-Capex chart and the bottom of the Capex chart, as both companies are clearly maximizing their operating cash flow at the expense of revenue growth. Above that PAETEC (news, filings) and itcd which have also lost some ground yet maintained their EBITDA and margins, steering a rather conservative route through the storm.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: CLEC · Financials · Metro fiber