Neutral Tandem Reports Q4 With Tinet Boosting Revenue

tndm gave us our first real look at its numbers following the acquisition of Tinet at the beginning of the third quarter.  Owning and operating a major internet and Ethernet backbone gives Tinet a much different look, but of course its main tandem switching business remains the primary driver for the company.  Revenues of $63.8M seem to have been basically inline with guidance though a hair below composite estimates, while diluted earnings per share of $0.31 came a bit stronger.  Here’s a quick table of the company’s results in context:

($ in millions)	Q4/09	Q1/10	Q2/10	Q3/10	Q4/10	2011  (Guidance)
-Tinet	0	0	0	0	$16.1
-Voice	$44.7	$44.8	$44.8	$46.5	$47.7
Revenue	$44.7	$44.8	$44.8	$46.5	$63.8	$256-268
Adj. EBITDA	$22.4	$20.6	$19.8	$19.9	$22.8	$91-95
EPS (diluted)	$0.31	$0.25	$0.25	$0.29	$0.31
Capex						$20-24
Billable Minutes	23.8M	24.7M	25.9M	27.9M	29.9M	130-137M
Markets	137	146	155	167	179

In late 2009 and early 2010, Neutral Tandem saw its tandem voice revenue growth pull back, however they seem to have found their way back to growth in the past few quarters.  Billable minutes of course have been growing steadily all the while, as have the company’s markets.  Prior to its acquisition, Tinet had been growing at a pretty good clip, so their addition should help that out as well.   Guidance for 2011 was inline with analyst expectations, and suggests 0-5% growth above the annualized Q4 run rate, though seasonality may make that a bad way to look at it – we’ll have to see.

Neutral Tandem also forecast their revenue breakdown across product lines as 74% voice, 22% IP, and 4% Ethernet.  Obviously the Ethernet side of their business is still at an early stage.  That’s where much of the news in 2011 will be centered though, I’ll bet.

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Categories: Ethernet · Financials · Internet Backbones · VoIP