Following its new presence in Zurich, euNetworks (SIN:H23, news) extended its financial bandwidth business even further south across the Alps into Milan, Italy today. That gives them low latency connectivity from the other financial markets in their footprint, including 8.81ms to London, 4.71ms to Frankfurt, and 1.98ms to Zurich. euNetworks also reported earnings this morning, as it continues to put in place all the pieces of a European version of the metro-fiber-driven business we have seen take off in the past few years here in the US. Here is a quick tabular summary of their results in context:
|€ in millions||Q4/09||Q1/10||Q2/10||Q3/10||Q4/10||Q1/11|
|Adj EBITDA margin||-13%||-18%||-18%||8%||13%||4%|
Revenues & EBITDA: Last quarter, euNetworks had more non-recurring revenues than usual, and that pendulum swung back all the way in the first quarter of 2011. But recurring revenues held up well at €10.5M, and adjusted EBITDA remained positive despite not having the aid of one-time events. They're still at the point where they haven't scaled the business beyond the noise that happens along the way. But the most striking feature of this report was the increase in average contract term length, which shot up from 26 months in Q4 all the way to 53 months in Q1, indicating that euNetworks probably sold more long term IRUs to wholesale customers than in the past.
Footprint expansion: Because the ground is frozen for much of the quarter, there is usually a downtick in euNetwork footprint expansion in terms of on-net building additions. You can see that in their capex number for Q1 this year and last, however this quarter they still managed to add 29 buildings with the number still in the pipeline rising to 62. That's a high rate for a company of this size, and gives them 394 now. And of course there are the new routes to Stockholm, Munich, and Madrid. They haven't put those up on their public network map yet, but here's an early peak at one version of the new map of euNetworks' assets:
Starting to look less regional and more pan-European... Madrid next?