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The Growth of Frontier Communications’ Fiber Sparks Enthusiasm Amid Revenue Decline

Positive Financial Indicators Amid Dip in Revenue

Frontier Communications Parent, Inc FYBR unveiled a fourth-quarter fiscal 2023 revenue dip of 0.8% year-on-year to $1.43 billion, surpassing the consensus of $1.42 billion.

The American telecommunications company’s EPS of $0.07 exceeded the consensus loss of $(0.12).

The decline in copper-based products was offset by the upsurge in fiber-based products. Consumer revenue reached $774 million, marking a 1.3% growth year-over-year, while Consumer fiber revenue escalated by 11.0% year-on-year to $484 million.

Consumer fiber broadband revenue surged by 25.1% year-on-year to $354 million, powered by an increase in fiber broadband customers and ARPU.

Business and wholesale revenue totaled $635 million, experiencing a 3.6% decline year-on-year, with Business and wholesale fiber revenue showing a 2.5% drop year-on-year to $278 million.

Strides in Fiber Expansion and Financial Performance

Frontier extended fiber to 333,000 locations, elevating total fiber passings to 6.5 million. Consumer fiber broadband net additions stood at 81,000, contributing to a fiber broadband customer growth of 19.2%.

The adjusted EBITDA margin widened by 180 bps to 38.5%. Frontier retained $2.2 billion in cash and equivalents and utilized $(37) million in free cash flow.

CEO Nick Jeffery remarked, “Frontier has achieved the fastest EBITDA growth among major players in the fixed broadband industry for two consecutive quarters. This year signifies a pivotal turning point in our business, and we anticipate further acceleration in EBITDA growth in 2024.”

Future Outlook and Market Response

FY24 Outlook: Frontier foresees adjusted EBITDA in the range of $2.20 billion to $2.25 billion and aims to expand fiber builds to 1.3 million new locations.

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Price Action: FYBR shares rose by 5.18% to $22.75 in premarket trading on Friday.