Zayo Group reported that a mix of new net installations and the addition of new customers and network facilities from acquisitions drove up fiscal first quarter revenue 10 percent to $264.3 million.
Likewise, gross profit increased $30.7 million over the first quarter of fiscal year 2013 as a result of organic revenue growth.
The company's adjusted EBITDA jumped 39 percent to $155.4 million sequentially as it recorded a $10.2 million charge for lease termination costs in the previous quarter. Taking out this charge, Zayo said that adjusted EBITDA for the quarter ended June 30, 2013 would have been $151.9 million.
It was an active spending time for Zayo. During the quarter, it spent $86.7 million making network upgrades and acquiring two dark fiber providers, Access Communications and FiberLink.
From an organic growth perspective, it added 154 route miles and 1,790 buildings to its fiber network.
By acquiring Access for $40.1 million, Zayo gained a 1,054 fiber network covering the greater Minneapolis-St. Paul metropolitan area, connecting more than 500 on-net buildings in the education segment.
Through its $43 million acquisition of FiberLink, a Midwest-based dark fiber provider, Zayo will have over 1,200 route miles of network running from downtown Chicago through Des Moines and Omaha to downtown Denver. It can also bundle about 26,000 miles of dark fiber with its colocation and technical support services, including its recently announced zTech fiber installation service suite.
Despite reporting new organic service growth, Zayo reported that net losses during the quarter rose $3.5 million to $27.9 million due to what it said was due to "unfavorable movements in interest rates that decreased the fair value of the Company's interest rate swaps, which resulted in a $10.0 million increase to interest expense."
- see the earnings release
Earnings summary: Wireline telecom earnings in the third quarter of 2013
The Contenders: Dark fiber providers add a new layer of flavor on the network cake
Zayo acquires FiberLink, expands dark fiber network to 26,000 miles
Zayo wraps up Access Communications acquisition, adds 1,200 metro fiber miles
Zayo gets into the professional services game with zTech fiber design-install suite
Zayo's FY Q4 2013 revenues rise to $258.2M on organic growth, Core NAP acquisition