GTT Keeps Its Growth Trend Intact

In the third quarter, GTT continued and expanded on the steady growth trend they’ve been working on, beating revenue estimates and increasing margins once again.  Here are a few of their numbers in some context:

$ in millions	Q3/13	Q4/13	Q1/14	Q2/14	Q3/14
Total Revenue	45.1	46.1	47.5	48.0	49.2
Adjusted EBITDA	7.6	8.0	8.4	8.6	8.9
Adj. EBITDA Margin	16.9%	17.4%	17.7%	17.9%	18.1%
Capex	1.3	1.7	1.7	0.9	0.4
Earnings per share	-0.19	-0.16	-0.41	0.04	-0.23

Revenues came in about $0.7M high than projected and rose 9% over the same period last year, while EBITDA margins rose past 18% for the first time.  Earnings per share went negative again, but if you back out the one time restructuring and debt extinguishment items, they earned a penny.  That’s still shy of estimates perhaps, but the company is still at the stage where EPS jumps around while EBITDA and revenue progress are key to following the progress.  They seem to be doing pretty well with the former Inteliquent transit and Ethernet backbone they purchased a year and a half ago.

After the end of the quarter, GTT closed its purchase of UNSi.  That will provide an inorganic boost to their results for Q4, with more restructuring and synergy activity over the next few quarters.  Their stated goal is to reach $400M and $100M in annualized revenue and EBITDA, which basically means doubling in size.  UNSi will get them part of the way, but I expect they’ll be looking at additional assets next year once the integration is well underway.

 

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Categories: Ethernet · Financials · Internet Backbones