Zayo reported that its fiscal third-quarter revenues were $341 million, up $16.8 million sequentially, representing 21 percent annualized sequential growth.
The service provider's adjusted EBITDA for the third fiscal quarter was $199 million, which it said was $9.3 million higher than the prior quarter, representing 20 percent annualized sequential growth.
Likewise, Zayo's quarterly revenue and adjusted EBITDA increased by $59.3 million and $33.8 million, respectively, compared with the third quarter of fiscal year 2014.
But not everything was rosy.
Company operating income declined $40.4 million sequentially, while net income decreased by $57.5 million from the previous quarter. Zayo said in the earnings release that it attributes the decrease in operating income to a $46.7 million increase to stock-based compensation expense. Revenue and adjusted EBITDA growth was also negatively impacted by the strengthening of the U.S. dollar over the British pound and euro.
During the quarter, Zayo completed the acquisitions of IdeaTek and Latisys, two acquisitions that increased the service provider's fiber and data center footprints.
By purchasing IdeaTek in January, Zayo gained 1,800 route miles of fiber in Kansas, a network that includes a dense metro footprint in Wichita, Kan. The network spans across Kansas and connects to approximately 600 cellular towers and more than 100 additional buildings.
When it purchased Latisys in February, Zayo bolstered its colocation and IaaS service capabilities through eight data centers across five markets in northern Virginia, Chicago, Denver, Orange County and London. After completing the Latisys acquisition, the company promoted Stephanie Copeland, formerly Zayo's president of Lit Services, to serve as zColo's new president.
Shares of Zayo were listed at $28.32, up 30 cents or 1.07 percent, in Wednesday morning trading on the Nasdaq stock exchange.
- see the earnings release
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