Ahead of its deal to be acquired early next year by two investment firms, Zayo Group Holdings missed the mark for some of its fiscal first quarter results.
In its Wednesday earnings report, Boulder, Colo.—based Zayo reported net income of $17.9 million, or 8 cents per share, compared to $22.1 million, or 9 cents per share in the same quarter a year ago. Those results missed consensus analyst estimates by 10 cents per share.
Zayo's revenues for the quarter that ended in September were $638.6 million, which was down from $64.1 million year over year. The top line consensus estimate was $647 million. The Zayo Networks segment accounted $483.2 million of the total revenues, while $63.7 million came from the zColo segment and $86.6 million from the Allstream division.
Primarily due to lower operating expenses, Zayo's operating income improved to $129 million from $123 million a year ago. Zayo's adjusted EBITDA was $314.8 million compared to $319.4 million a year ago. Adjusted EBITDA from Zayo Networks was $277.5 million, $26.6 million from zColo and $9.3 million from Allstream.
Zayo's capital expenditures were $217.1 million, which was an increase over last year's $182.5 million. Consolidated net installs, on a monthly recurring revenue and monthly amortized revenue, were $0.9 million, (excluding the Allstream segment), which included $1.1 million of net installs from the Zayo Networks segment and ($0.2) million of net installs from the zColo segment.
Zayo said in its earnings report that its pending merger with affiliates of Digital Colony Partners and EQT Infrastructure IV fund was still on track to close the first half of next year pending customary regulatory approvals.
Zayo provides fiber connections for the communications industry across the U.S., Canada and Europe. Zayo’s 130,000-mile network in North America and Europe includes metro connectivity to thousands of buildings and data centers.
Zayo’s communications infrastructure offerings include dark fiber, private data networks, wavelengths, Ethernet, dedicated internet access and data center colocation services. Zayo also owns and operates a Tier 1 IP backbone and 51 carrier-neutral data centers.
Last week, Zayo announced it had signed a deal for the largest amount of capacity sold on any route in the company's history. The deal with the unnamed customer will provide approximately 5 terabits of capacity that can be used to connect key data centers.