Zayo’s Fiscal Q1 Looks Pretty Solid

November 7th, 2014 by · 5 Comments

In its first quarterly report since going public two weeks ago, Zayo continued to push forward the way it did while private with a complex mix of both organic and inorganic growth.  I had wondered if the vast amounts of data Zayo has always offered might get compressed by the various requirements on a public company, but although they reduced the reportable segments to three their earnings supplement is as detailed as ever.  Here is a small subset of that data in context.

$ in millions Fiscal
Q1/14
Fiscal
Q2/14
Fiscal
Q3/14
Fiscal
Q4/14
Fiscal
Q1/14
 - Physical Infrastructure 113.6 120.9 125.0 135.9 149.6
 - Lit Services 149.4 151.3 151.7 153.8 156.1
 - Other Services 6.8 6.5 6.4 8.4 14.9
Total Revenue 264.3 273.6 278.0 296.7 320.6
Adjusted EBITDA 155.4 161.5 165.0 171.7 183.3
Adj. EBITDA Margin 58.7% 59.0%  59.4% 55.9% 57.1%
Capex 86.7 88.3 90.9 94.9 115.3
Buildings on-net 13,242 14,196 14,490 15,027 16,151

Analyst expectations are not clear, as the company has only just gone public and that data if available is not yet being collected by the usual suspects like Yahoo! Finance.  Revenues of $320.6M were up Adjusted EBITDA margin started rising again despite the purchased EBITDA margins from both AtlantaNAP (49%) and Neo (19%) being lower.

Zayo built out its fiber network to 530 buildings during the quarter, while adding about the same amount through the acquisition of Neo over in France.  Capex burst through the $100M mark for the quarter, suggesting the company has plenty of projects going on.  Earlier this week they unveiled a new dark fiber build to Mahwah NJ.

In particular though, Zayo saw a particularly large surge in estimated capital and upfront expenditures during the quarter.  This was attributed to two large projects that will see some 1,800 route miles of network constructed in the US, with a longer than usual payback period.  No other specifics were given, but this sounds like a large dark fiber expansion somewhere, perhaps of the long-term, intercity variety.

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Categories: Fiber Networks · Financials · Metro fiber

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