Uniti(UNIT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported consolidated revenues of $294 million, with adjusted EBITDA of $238 million, and AFFO attributed to common shareholders of $92 million, resulting in an AFFO per diluted common share of $0.35 [15][20] - Core recurring strategic revenue grew approximately 4%, while capital intensity of the fiber business, excluding GCI impact, declined over 50% year over year [14][15] Business Line Data and Key Metrics Changes - Uniti Leasing reported segment revenues of $222 million and adjusted EBITDA of $215 million, achieving an adjusted EBITDA margin of 97% [15] - Uniti Fiber generated revenues of $72 million and adjusted EBITDA of $29 million, resulting in an adjusted EBITDA margin of 40% [16] Market Data and Key Metrics Changes - The company noted strong demand from wireless carriers, with bookings in the quarter almost double those from the same quarter last year [12] - The percentage of bookings related to hyperscalers is around 15% to 20%, consistent over the past 18 months [42][44] Company Strategy and Development Direction - The company aims for disciplined top-line growth of mid-single digits and high-single-digit adjusted EBITDA growth, reiterating full-year guidance for revenue, adjusted EBITDA, and AFFO [4][20] - The merger with Windstream is expected to enhance the fiber network significantly, with plans to convert approximately 2 million homes to fiber by the end of 2025 [26][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the fiber infrastructure business, noting minimal impact from recent economic downturns [7] - The company remains optimistic about the merger with Windstream, expecting to close the transaction in the second half of the year [10][29] Other Important Information - The company has a leverage ratio of 6.09 times based on net debt to annualized adjusted EBITDA [21] - The ABS market is viewed as an attractive source of financing, with potential for incremental capacity exceeding $1 billion [22] Q&A Session Summary Question: Concerns about M&A environment and lease ups - Management indicated no slowdown in M&A activity, with ongoing strategic conversations and a focus on integration and accelerating growth [33][34] - Regarding lease ups, management noted that a significant portion of the lease up activity was driven by hyperscalers, with expectations for continued investment in large language models [35][36] Question: Nature of bookings and AI-related deals - Approximately 20% of bookings are related to hyperscalers, with a growing percentage over the past quarters [42][44] - AI-driven builds are treated similarly to other anchor lease up models, with yields nearing 20% on hyperscaler deals [46][47]