The privately held competitive fiber operators are posting the early financial numbers this year, with Zayo Group (news, filings) turning in a big EBITDA number reflecting integration progress in its fiscal second quarter. It's always a challenge to parse Zayo's financials in light of their voracious M&A appetite, but here's their numbers in some context:
|$ in millions||Fiscal
|- Zayo Bandwidth||64.5||74.8||76.4||152.1||158.7|
|- Zayo Fiber Solutions||15.3||19.6||22.7||65.9||71.5|
|Adj. EBITDA Margin||50.6%||51.3%||52.4%||53.4%||56.4%|
Revenues of $243.5M suggest that the annual run-rate is now over $1B given the full effect of the acquisitions during the quarter, with both organic and inorganic growth being meaningful during the quarter. They had a strong bookings quarter, offset by a slightly higher than expected churn number.
Meanwhile EBITDA surged mightily to $137.5M on the back of integration progress, much of which surely came from the AboveNet synergies. That boosted the company's adjusted EBITDA margin from its already stratospheric levels all the way up to 56.4%. Just where the ceiling will be on that number isn't clear, but they have $40M in planned annualized synergies yet to achieve which mathematics says would take them above 60%.
Zayo added 436 buildings to the network organically, as well as 410 by acquisition of course (First Telecom, Litecast, US Carrier). That's also a big number, reflecting growth in both on-net enterprises and towers.
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