Zayo Finishes Off Fiscal Q4

Zayo posted its fiscal Q4 numbers, turning in revenues of $638.0M, which was pretty much inline with expectations, and earnings per share of $0.09 which were also after taking out four pennies or so that went toward costs of extinguishing debt.  Here are a few of Zayo’s numbers in some context:

$ in millions	Fiscal Q4/16	Fiscal Q1/17	Fiscal Q2/17	Fiscal Q3/17	Fiscal Q4/17
Total Revenue	507.3	504.9	506.7	550.2	638.0
Adjusted EBITDA	257.8	260.6	263.4	282.0	310.8
Adj. EBITDA Margin	50.8%	51.6%	52.0%	51.2%	48.7%
Capex	187.4	208.3	213.6	208.3	205.3
Buildings on-net	24,282	25,263	25,886	29,402	30,555

EBITDA margins fell somewhat as the rest of Electric Lightwave’s business was brought into the fold.  Synergies will likely be bringing that back up over the next quarter or two, and forecasts have it moving up toward 50% by the end of the year.  Zayo’s guidance for EBITDA and growth were unchanged, although they did lower projections for next quarter’s adjusted unlevered free cash flow margin from 25% to 20-25%.

Zayo added 1,153 buildings and towers to its on-net total during the quarter despite a somewhat lower capex number relative to revenue than in prior quarters.  I suspect that updated cash flow guidance may reflect some lumpiness in that capex number.  Net installs were lower than the company wants to see, checking in at $1.4M rather than the $3M or so they’d really like to see.  Bookings, however were on the rise.  Zayo is trying to keep its organic growth momentum despite its larger revenue base, and it’s doing so under a microscope given how much detail they give in their supplements.

Meanwhile, Zayo is apparently taking a look at becoming a REIT.  Hmmm…

 

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Categories: Fiber Networks · Financials