National tier-1 metro fiber operator abvt released its Q4 earnings this morning, turning in it usual solid performance. Revenues were in line with expectations, while EBITDA and earnings per share had positive surprises. The company also both raised and narrowed its full year revenue guidance and raised its EBITDA margin expectations. Here are the company's results in the context of the prior four quarters:
|$ in millions||Q3/10||Q4/10||Q1/11||Q2/11||Q3/11||FY2011(Guidance)|
Revenues: Revenues were flat sequentially, but this was because the prior two quarters had seen higher one time equipment sales and termination revenue boost the numbers a bit. If those are removed from the equation, revenues rose sequentally from $113.1M to $116.7M, reflecting the company's usual growth in recurring revenue. As usual, most of the growth came from their domestic WAN services. The company's updated guidance suggests that Q4's revenues will be in the $117-121 range - perhaps a bit lighter than analysts are projecting but AboveNet does tend to be conservative with such projections.
EBITDA: Adjusted EBITDA of $56.4 was a pretty big number, representing a 47.7% adjusted EBITDA margin. The improvement came mostly from lower cost of revenue, but SG&A was also down sequentially. Last quarter Zayo's adjusted EBITDA margin slightly surpassed AboveNet's, taking them to the top of my charts. We'll see if this was enough for AboveNet to reclaim the title when Zayo reports.
Capex & Expansion: AboveNet spent $40.2M on capex, which was a tick up but entirely expected. They continue to develop their new markets, and have been planning to open Toronto by the end of this year. I expect we'll hear more about that soon.
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