Steady As She Goes for Inteliquent

Fresh off its rebranding of the former Neutral Tandem and Tinet names, Inteliquent (NASDAQ:IQNT, news, filings) posted a steady first quarter.  At the end of the quarter, the company formally launched its hosted UC product line, however the revenues for this year will come primarily from their voice and IP/Ethernet product lines.  Here’s a quick table of the company’s numbers in context:

($ in millions)	Q1/11	Q2/11	Q3/11	Q4/11	Q1/12	FY12 guidance
Revenue	66.4	65.1	67.3	69.5	70.7	290-300
Adj. EBITDA	24.2	22.8	21.0	22.1	21.3	85-90
Adj. EBITDA Margin	36.4%	35.0%	31.2%	31.7%	30.2%
Earnings per share	0.24	0.20	0.18	0.19	0.21
Billed Minutes	31.7	32.5	32.9	33.3	34.4	141-147
Capex	5.6	7.2	6.8	2.4	9.1	30-35

Powered by a solid increase in billed voice minutes, revenue was generally where it ought to be although perhaps a tad lighter than analysts had projected.  The company’s EtherCloud product line generated $2.6M during the quarter.  Meanwhile earnings per share were right in-line at $0.21.

But the interesting numbers were lower adjusted EBITDA margins and higher capex.  Both reflect the extra investment the company has been putting into ramping of their expanded product set and the support infrastructure that goes with it.  As with any new product, you have to spend money before you start making any.

I still think Inteliquent is likely to take on some more M&A later this year.  Perhaps they also could be considered a suitor of sorts for Limelight, which may make more sense now that Inteliquent is moving into hosted services – even from a wholesale perspective.

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Categories: Financials · Internet Backbones · VoIP