They may still be private, but metro and regional fiber operator Zayo Group is acting more and more like a public company. Today they released an actual fiscal Q3/2010 (Jan-Mar) earnings report for Zayo Group LLC, which consists of Zayo Bandwidth, Zayo Enterprise Networks, and zColo but does not include the Onvoy voice business which was spun off to the parent corporation in March. Today’s report wasn’t just a quick summary of results; the amount of detail Zayo offered into the operations of its various groups was rather staggering and I’m still digesting much of it.
Revenues of $58.9M were up sequentially but reflected higher churn of 1.7% relating to the off-net customers from the acquired FiberNet Telecom Group business, a business Zayo de-emphasizes. Adjusted EBITDA was $20.9% for margins of 35.5%, capital expenditures were $16.6M, while free cash flow was $4.3M. Zayo Bandwidth is by far the company’s largest division, accounting for $45.5M of that revenue at 38% EBITDA margins.
There’s far too much data here to cover in a blog post, including breakdowns of churn and pricing across each line of business. However, one of the more interesting metrics the company provided was a breakdown of Zayo Bandwidth’s capex of $16.1M, $14.1M of which was attributed to growth while just $0.4M was maintenance capex.
Zayo Bandwidth also offered a variety of operational metrics relating to its Fiber-to-the-Tower (FTTT) business. Between actual towers and sites on top of enterprise buildings, the company has 1430 on-net cell sites across 14 markets, with another 807 sites and 18 markets under construction. Their FTTT revenues were 13% of Zayo Bandwidth’s total, but during the quarter consumed 49% of capex. FTTT is obviously the company’s major project, eh? The average bandwidth per tower site was just over 30Mbps. The FTTT business across the sector is one that we hear much about but have little data to work with, and having such detailed metrics to look at over time will be invaluable to those of us curious about just where the economics turn out for the business.
In the accompanying presentation they refer to a 10-Q, but I’m more curious where that S-1 is.
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Categories: Financials · Metro fiber
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Looks like Integra is joining the public release party also today.
http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100510007115&newsLang=en
Interesting. Note it is being released to debt-holders, perhaps it was a requirement that came with their recent restructuring activities.
Zayo’s earnings release just raised the bar for other comptetivie telecoms. It includes a tremendous amount of valuable information and provides for transparency into key operating metrics.
Zayo issued public debt in March–hence the reason for the earnings call. A reply of the call as well as a powerpoint that covers our results are on http://www.zayo.com.