Following up on yesterday's look at revenue trends over the past 8 quarters amongst competitive telecoms of all stripes, let's take a look at EBITDA margins. EBITDA margins give us an idea of each business's ability to turn revenue into cash, but of course it doesn't account for cash spent on capital expenditures. Thus, business models with a heavy fiber bias tend toward the top, while fiber-light business models tend toward the bottom. With no further ado:
Business models don't change overnight, which means that lines on this graph don't cross too often. But we can see that CBeyond's Q4 performance was actually pretty dramatic, hopefully they will manage to keep it up as they say they expect to. Overall though, EBITDA margins in the sector didn't really do very much., at least not relative to 2008 when everyone was on the upswing. A few went up slightly, a few went down slightly. Perhaps after the recession the sector has squeezed all the operating efficiencies it can for now, or perhaps they are in some cases starting to spend in anticipation of a rebound.
Next up will be capex as a percent of revenue, which is the other half of this graph that is needed to understand this sector.
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