Fresh off its announced plans to acquire the pan-European network and cloud operator Interoute earlier this week, GTT posted its fourth quarter and full year 2017 numbers. This was a rare quarter in which the company didn’t actually close any deals halfway through, which means we get a relatively clean look at where they are.
Q4 revenues checked in at $249.2M, up 23% sequentially and 81% over the same quarter last year following the string of deals they did over the past year. That number was a few million above expectations, and brought their 2017 total revenue to $827.9M, and they entered 2018 at a run rate above $1B as promised.
Adjusted EBITDA of $60.8M during Q4 was up 80% over the same period last year and 8% sequentially, yielding a margin of $24.4%, consistent with the same period last year and down sequentially as they took on lower margin revenue from Global Capacity. Earnings per share after one time tax and M&A items came to $0.04, rather better than the loss of $0.13 expected by analysts. But this number is still pretty volatile given all the activity going on.
Combined with Interoute’s annual revenue of about $880M, GTT is already within striking range of its most recently stated goal of achieving $2B in revenue. There will be plenty of integration work over in Europe to do along with what’s probably still ongoing from last year’s deals, with synergies likely to get margins back into the mid to high 20s over the rest of the year.
So if GTT has an appetite for fiber in Europe, why not in the USA next? I’m wondering if they might finally be the one to take a swing at Cogent, which would give them more reach on both continents as well as more scale in IP transit and more metro depth in US markets.
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