XO Reports Q3 649107

Reports revenue of $359.4M, $29M of adjusted EBITDA, and a net loss of $4.5M

November 12, 2007

2 Min Read

RESTON, Va. -- XO Holdings, Inc. (OTC Bulletin Board: XOHO.OB - News) today reported its third quarter 2007 financial and operational results. For the third quarter of 2007, XO Holdings, Inc. (XOH) reported revenue of $359.4 million, $29.0 million of adjusted EBITDA and a net loss of $4.5 million. XOH operates two business segments, XO Communications, LLC (XOC), its nationwide wireline telecommunications business, and Nextlink Wireless, Inc. (Nextlink), its wireless business.

"Revenue in the third quarter was our highest quarterly revenue in two years, demonstrating continued strong demand for our data and IP services for enterprises and high-capacity network services for carriers and service providers," said Carl Grivner, XO Holdings' chief executive officer.

"With our expanded IP services portfolio and increased focus on the enterprise market we are expanding the number of customer opportunities with higher-margin data and IP services. Enterprise customers accounted for one third of all new sales orders within XO Business Services, up from 24 % in the first quarter of this year. Demand for wholesale high-capacity network services continues to be strong, and our ongoing network investments give us the ability to quickly meet customer demand."

"Overall, our strategic investments in new IP services, network enhancements and enterprise and carrier customer initiatives will increase our growth opportunities in 2008."

Commentary

Consolidated revenue for the three months ended September 30, 2007 was $359.4 million, a 2% increase over both the prior quarter and the same period in 2006. The increase in revenue was driven primarily by growth revenue from the Company's in Data and IP Services, which increased 12% from the prior quarter and 27% from the same period in 2006. The Company continued strong growth in its collocation, commercial VoIP, dedicated Internet access, Ethernet, IP-VPN and high-capacity private line network services. This growth was partially offset by declines in both Traditional Voice Services and Integrated Voice and Data Services. Revenue from these services continued to be adversely impacted by the Company's shift away from traditional circuit- switched voice services, instead focusing on next-generation IP-based services. Carrier VoIP revenue decreased due to recent challenges experienced by some customers in this category. The Company's consolidated revenue for the three months ended September 30, 2007 also benefited from certain carrier private line settlements in the third quarter of 2007.

The improvement in net loss benefited from, among other things, $21.5 million received related to the beneficial settlement of a legal matter regarding the Company's holding of Global Crossing debt securities.

XO Communications Inc.

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