Zayo Marches On, Posts Steady Fiscal Q2

February 6th, 2014 by · 16 Comments

Steady revenue growth, some organic some inorganic, steady margin expansion, and plenty of new on-net buildings marked Zayo's fiscal second quarter.   Here are their numbers in some context:

$ in millions Fiscal
Q3/13
Fiscal
Q4/13
Fiscal
Q1/14
Fiscal
Q2/14
 - Wavelength 60.7 62.1 63.3 64.4
 - Sonet 32.5 31.9 31.6 30.2
 - Ethernet 33.8 35.3 36.1 37.6
 - IP 23.0 23.1 23.8 24.7
 - Mobile Infrastructure 17.5 19.0 18.9 19.8
 - zColo 15.9 16.7 18.9 20.9
 - Dark Fiber 74.9 77.1 78.9 83.6
Total Revenue 251.4 258.2 264.3 273.6
Adjusted EBITDA 146.1 141.7 155.4 161.5
Adj. EBITDA Margin 58.1% 54.9% 58.7% 59.0%
Capex 95.7 101.9 86.7 88.3
Buildings on-net 11,740 12,222 13,242 14,196

The company closed both the Access Communications and Fiberlink deals near the start of the quarter, with adjusted EBITDA multiples of 12.3 and 11.7, respectively, according to the earnings supplement.  The two acquistions combined added perhaps a third of the company's incremental revenue growth, with the rest coming from organic growth.  Margins expanded up to 59%, putting the 60% barrier within reach before long if they keep up the pace.

The extensive segment breakdown has enough data to see the product trends.  The only downward trend is clearly Sonet, with zColo, Ethernet, and Mobile having very good quarters.  Dark fiber is where most of the acquire revenue went I think, but I will listen for that on the call.

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Categories: Fiber Networks · Financials · Metro fiber

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