Zayo's revenues rise 4% to $323.9M as company digests acquisitions

Zayo reported that its revenue rose 4 percent sequentially to $323.9 million in its second fiscal quarter. The news comes as the company plots for potential future growth via its recent acquisitions of IdeaTek and Latisys.

By completing its acquisition of IdeaTek at the beginning of January, Zayo added 1,800 route fiber miles to its network in Kansas, including a dense footprint in Wichita, Kan. The company's network spans across the state and connects to about 600 wireless towers and another 100 buildings where Zayo can deliver its suite of dark fiber and lit Ethernet and wavelength services.

Later in January, Zayo announced an agreement to acquire Latisys, a colocation and infrastructure as a service (IaaS) provider for $675 million. The Latisys deal is about scaling Zayo's zColo business. The acquisition will give Zayo additional colocation and IaaS services through eight data centers across five markets in Northern Virginia, Chicago, Denver, Orange County and London.

One area where the service provider saw continued growth was in the wireless backhaul market where it saw a rise in both its fiber-to-the-tower (FTTT) and small cell deployments. In total, Zayo had a total of 6,111 wireless operators under contract with 4,520 FTTT and 175 small cell sites in service. The company also has an additional 1,200 FTTT and 216 small cell sites under construction.

The service provider also increased its on-net building footprint to 16,712 buildings across multiple segments, including enterprise customers, wireless towers and cable head ends.

Zayo's adjusted EBITDA clocked in at $189.7 million, up 1 percent sequentially. Likewise, its operating and net income rose to $136.6 and $114.3 million, respectively.

However, Zayo said its revenue and adjusted EBITDA growth was dragged down by the strengthening of the U.S. dollar over the British Pound and the Euro.

Shares of Zayo were down 13 cents in morning trading on the New York Stock Exchange shortly after the release of the company's earnings.

For more:
- see the earnings release

Special Report: Wireline telecom earnings in the fourth quarter of 2014

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