Uniti(UNIT)2024-08-01 16:17Financial Data and Key Metrics Changes - Uniti reported consolidated revenues of 237 million for Q2 2024, with AFFO attributed to common shareholders at 0.34 [11][12] - The core recurring strategic fiber business grew by 3% in Q2 2024, with enterprise, wholesale, and dark fiber revenues increasing by 12%, 15%, and 18% respectively [6][11] - The net capital intensity during the quarter was 31%, down from 44% in the same prior year period, indicating improved capital efficiency [8][11] Business Line Data and Key Metrics Changes - Uniti Leasing reported segment revenues of 211 million, achieving an adjusted EBITDA margin of 97% [12] - Uniti Fiber generated revenues of 31 million, with margins around 40%, both higher than expected due to one-time non-recurring revenue items [14] Market Data and Key Metrics Changes - Demand from hyperscalers, driven by generative AI, represented approximately 40% of the quarter's bookings, indicating strong market interest [7] - The amount of bookings related to fiber-to-the-home carriers increased threefold in 2023 compared to 2022, with expectations for similar growth in 2024 [8] Company Strategy and Development Direction - Uniti aims to be a pure-play fiber provider in Tier 2 and 3 metro markets, focusing on building fiber first in less competitive areas to secure long-term market advantages [6][20] - The company is preparing for a merger with Windstream, which is expected to create a national fiber powerhouse, enhancing its market reach and operational capabilities [19][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained demand from hyperscalers and the overall growth of broadband, particularly in less stressed power and distribution grid markets [31][33] - The company anticipates achieving free cash flow positivity by 2026, supported by a fully funded business plan and ongoing operational efficiencies [40][41] Other Important Information - Uniti's leverage ratio at quarter-end was 5.97 times based on net debt to annualized adjusted EBITDA [18] - The company has approximately $619 million in combined unrestricted cash and cash equivalents and undrawn revolver capacity [17] Q&A Session Summary Question: What is the expected cadence of deals going forward? - Management indicated that while million-dollar-plus quarters may not be expected sequentially, solid bookings are anticipated to continue, particularly from hyperscaler deals [30][31] Question: What are the key takeaways from the merger filing? - Management highlighted the importance of pro forma financials and strategic background information in the merger filing, emphasizing the intrinsic value of the combined assets [36][37] Question: Will there be any builds for BEAD within Uniti Fiber in 2025? - Management clarified that current discussions regarding BEAD are focused on Kinetic, with potential opportunities for expansion post-merger [43][44]