Zayo Group Holdings, Inc. (NYSE:ZAYO) Q2 2019 Earnings Conference Call Transcript

Feb 07, 2019 • 05:00 pm ET

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Zayo Group Holdings, Inc. (NYSE:ZAYO) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Thank you for standing by and welcome to the Zayo Group Holdings Fiscal Year 2019 Second Quarter Earnings Call. My name is William, and I will be your operator for today. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded today, Thursday, February 7, 2019.

And I would now like to turn the conference over to Brad Korch. Please go ahead.

Executive
Bradley W. Korch

Good afternoon and thank you for joining. Today's call will be led by Zayo's Chairman and Chief Executive Officer, Dan Caruso; and Chief Financial Officer, Matt Steinfort. This call is being webcast with a slide presentation that reviews the key financial and operating results for the three months ended December 31, 2018. For a link to the webcast, please visit the Investor Relations section of the Zayo website, www.zayo.com. The slide presentation and earnings release are directly available on the site.

Please turn to page 2 of our earnings call presentation, while I review our Safe Harbor statement. Statements made on this call and contained in the earnings material available on our website that are not historical in nature may constitute forward-looking statements. Such statements are based on the current expectations and beliefs of management.

Actual results may differ materially from these forward-looking statements due to risks and uncertainties that are described in more detail in our filings with the SEC. We undertake no obligation to publicly update or revise these forward-looking statements except as required by law.

I will now turn the presentation over to Dan Caruso.

Executive
Daniel P. Caruso

Thanks, Brad. December 2018 was a solid quarter and both bookings and net installs showed momentum. The $8.3 million net bookings was the second strongest in our history and the $7.8 million gross installs was also the second highest in our history. Churn was down from the prior quarter and net installs implied a 4% growth rate.

Our revenue increased 5% and EBITDA increased 7%. Our EBITDA margins are very strong at 56% and a very key metric for us is adjusted unlevered free cash flow and that's also very strong at 22%. This has been very consistent numbers for us quarter in quarter out. We have positive leverage free cash flow at $22 million.

This quarter was the second highest bookings quarter in our history at $8.3 million and if you look at our last four quarters rolling average that also was $8.3 million and reflects an 11% year-over-year increase over what we did in 2017.

The bookings had a solid capital profile, very strong payback profile of 17 months and 17 -- or 71% of our net sales or close to $6 million has less than a 12-month payback. All those were very strong numbers, reflecting not just a high-bookings quarter but a very high quality as well.

The prior quarter we announced investments in some new long haul routes that were done in coordination with some of our large customers. At