A look at the results from a few companies.
EarthLink announced 2Q2013 Results: Revenues for 2Q2013 is $313.4 million, "which is net of $1.9 million of revenues reclassified to Discontinued Operations." CFO speak. Besides good revenue numbers, EarthLink made the Talking Cloud 100 list, as one of the fastest growing MSPs!
"EarthLink's Retail growth business, which includes MPLS, Hosted VoIP and IT Services, reached an approximate $157 million annualized revenue run rate in the second quarter of 2013." They now look at Wholesale of MPLS, VoIP and IT as Growth Products. "New recurring sales bookings increased 8% in the second quarter of 2013 over the second quarter of 2012, generated by 42% fewer sales reps than in the year-ago quarter." The cut a lot of sales people -- and pressed the Channel for more sales.
Surprise here: "EarthLink's consumer segment continues to perform well, with broadband services representing 69% of consumer access revenue in the second quarter of 2013. Subscriber churn in the consumer segment reached a new historical low of 2.1% in the second quarter of 2013."
Investors aren't happy with Windstream's numbers. And they worry that they can't keep paying the dividend. When CenturyLink cut its dividend, it's stop dropped 25+% in a day.
Windstream has a revenue problem much like Level3 -- declining revenue due to churn and reduced pricing. As pricing continues to drop on bandwidth, revenue can't increase.
Windstream uses hard cash to pay dividends. WIND has $8.942 Billion in debt with financing of 6.5% to 9.875%. That's debt service of almost $700M per year. Plus paying a $1 per year dividend. Lots of cash spent.
This is 1Q2013 WIND: Business service revenues were $914 million, a 2% increase year-over-year, yet Total enterprise customers grew 7% year-over-year. Total revenues and sales were $1.5 billion, a decline of 2 percent year-over-year. This is the issue. Plus Total business and consumer broadband revenues now represent 71 percent of total revenues -- depending how they define business broadband this is a crazy weighted problem for a company that dumped a lot of money in data centers.
Next up Cbeyond with 2Q2013 numbers.
CBEY 2nd quarter revenue was down to $118.2 million - compared with $123.8M in 2Q 2012 and $119.9M in 1Q2013. The company does note that "Cbeyond 2.0 revenue was $16.1 million, or 13.6% of total revenue in the second quarter of 2013, an increase of 100% from the second quarter of 2012 and an increase of 17% from the first quarter of 2013." So in a year they have doubled their Cbeyond 2.0 revenue - services and cloud. The ARPU is actually up a little bit to $662.
Cbeyond is looking at less than $500M in annual revenue in 2013 -- but the big question is can they make a profit?
So that's a look at the numbers.