Summary of Unity's Conference Call Company Overview - Unity is one of the largest independent fiber providers in the United States, with nearly 200,000 route miles of fiber [4][5][6] Industry Insights - The demand for fiber, particularly from hyperscalers, has significantly increased, with the Total Addressable Market (TAM) in the fiber space growing from a de minimis level to approximately $15 billion to $20 billion in just 12 to 24 months [5][7] - The company is experiencing a shift in its customer base, with hyperscalers now representing a substantial portion of its business [5][9] Financial Performance and Expectations - Unity reported strong demand and bookings, but cautioned that bookings can be lumpy due to the nature of hyperscaler deals [6][7] - The company anticipates that the TAM for hyperscalers will grow to $40 billion to $50 billion in the coming years [7] - Analyst estimates for the second quarter are considered low due to the back-end loaded nature of the year, primarily driven by large hyperscaler deals that do not reflect in traditional bookings [7][10] Customer Segmentation - Unity serves a diverse range of customer segments, including hyperscalers, wireless carriers, and large enterprises, with no single segment representing more than 10% of revenue or EBITDA [13][14] - The company is merging with Windstream, which has a significant wholesale fiber business, creating synergies and expanding opportunities in the hyperscaler market [16] Deal Structure and Yields - Unity's approach to hyperscaler deals involves building new fiber with anchor customers, targeting initial yields of 5% to 10% [18][19] - The blended initial yield on greenfield builds is around 7%, with overall yields approaching 30% [19][20] - The company is successfully executing its lease-up strategy, with yields from hyperscaler deals approaching 20% [20] Market Dynamics - Unity focuses on tier two and tier three markets, benefiting from less stressed power grids compared to larger cities, which enhances its ability to service hyperscaler data centers [22][23] - The company is optimistic about the transition from training to inference in AI, which is expected to drive increased demand for fiber [27][30] Fiber to the Home Strategy - Unity's Kinetic division aims to build fiber to 3.5 million homes by 2029, with a current build cost of approximately $6.50 per home, significantly lower than industry averages [40][41] - The company attributes its lower build costs to its focus on smaller markets and prior investments in backhaul and metro fiber [42][44] Financing and Capital Structure - Unity has identified $1 billion of ABS capacity for funding its builds, with potential capacity of $3 billion to $4 billion [54][56] - The company plans to maintain a healthy mix of high yield and ABS in its capital structure, taking advantage of lower refinancing opportunities [58][59] Market Perception and Stock Performance - Unity's stock price has been affected by technical overhangs related to its merger with Windstream and the transition from a REIT to a C Corp [61][62] - There is optimism about the intrinsic value of the business, despite current market perceptions [64]