10/30/00
XO Communications Reports Record Breaking Third Quarter
Reston, VA - XO Communications, Inc. (Nasdaq:XOXO), one of the world’s fastest growing providers of broadband communications services and formerly known as NEXTLINK/Concentric, today announced financial results for the quarter and nine month period ended September 30, 2000.
Total revenue grew to $224.3 million in the third quarter of 2000, a 59 percent increase over revenue reported in the second quarter of 2000, and a 199 percent increase over revenue reported in the third quarter of 1999. Year-to-date revenue totaled $470.8 million as of September 30, 2000, a 155 percent increase over the comparable period in 1999. In June 2000, XO consummated a merger with Concentric Networks, which contributed to the increase in revenue over prior periods. Of the total revenue reported in the third quarter of 2000, $104 million was derived from voice services revenue, including revenue from local, long distance voice and other enhanced voice services, and $117.9 million resulted from data services, which includes Internet access, network access, and web hosting. Other revenue for the third quarter of 2000 was $2.4 million. Financial results for the last 15 days of the second quarter of 2000 and for the third quarter of 2000 include the operations of Concentric Networks following the completion of its merger with the company on June 16, 2000.
The EBITDA loss totaled $88.9 million in the third quarter of 2000, compared to an EBITDA loss of $55.6 million in the third quarter of 1999. Year-to-date EBITDA loss totaled $220.7 million as of September 30, 2000 compared to an EBITDA loss of $154.8 million in the first nine months of 1999.
“We are pleased to have once again delivered on our business plan this past quarter and believe our performance further illustrates XO Communication’s ability to consistently deliver solid financial results for our investors,” said XO Chairman and CEO Dan Akerson. “That we were able to execute our plan during a transition time in our industry, and in a quarter during which we experienced a Verizon work stoppage that impacted many of our largest markets is a tribute to our employees, all of whom are intensely focused on winning in this marketplace.”
Today, XO reported that it had launched commercial broadband wireless service in 13 markets in the third quarter and now has fixed wireless capabilities in 17 markets including New York, Boston, Chicago, Cleveland, Newark, Philadelphia, Columbus, St. Louis, Washington D.C., Dallas, Houston, Memphis, Los Angeles, Orange County, Sacramento, San Francisco and Seattle. XO expects to reach its goal of serving 25 markets via broadband wireless by year-end. Additionally, last month, XO announced that it launched broadband services in Portland, Oregon and Austin, Texas, which brings the total number of XO markets in service to 53.
During the third quarter, XO made a number of important announcements that showed continued progress toward the company’s goal of becoming a global provider of integrated, facilities-based broadband communications services.
In late September, XO announced the introduction of revolutionary flat rate service packages in the United States for small and medium-sized business locations with 10-100 employees that include local, long distance, Internet Access and Web hosting services. The company also announced that the XO Communications name would replace the NEXTLINK and Concentric brands in the marketplace and would be supported in the U.S. by an extensive fall advertising campaign that is now underway.
“As we begin to productize our unrivaled broadband network assets, XO is blurring the lines between local and long distance and voice and data services,” continued Akerson. “The result is that customers are now buying fully integrated communications services with the simplicity and quality they crave through XO service packages that are extremely difficult for our competitors to truly match.”
Additionally, XO announced that it is launching a suite of Ethernet services including Gigabit Ethernet (GigE) in selected markets in November and expects to launch those services throughout most of its 53 markets in the United States by mid-next year. At the same time, the company announced that XO would be a preferred provider of Ethernet services to Internet giant Yahoo!.
XO also made progress on its international expansion initiatives during the quarter. Last month, XO named industry-veteran Mike Read as President of XO Europe. Prior to joining XO, Read was CEO of Internet Service Provider OneMain.com, and prior to OneMain, he spent more than 30 years at British Telecom, finishing his career as BT’s Chief of Global Engineering where he was responsible for the company’s network and system strategy throughout its worldwide alliances.
Currently XO has more than 400 employees in Europe providing commercial Internet Access, hosting and security solutions and operating broadband networks and four European data centers in the United Kingdom, Paris and Amsterdam. Earlier this year, XO announced plans to extend its broadband network presence into Europe with an agreement in principle to acquire five metro European networks, a Pan-European inter-city network and transatlantic capacity that will reach 10 Gbps in the next two years.
About XO Communications XO Communications is one of the world’s leading providers of broadband communications services offering local and long distance voice communication services, Digital Subscriber Line (DSL) access, Web hosting and e-commerce service, Virtual Private Networks (VPNs), dedicated access, global transit and application infrastructure services for delivering applications over the Internet or a VPN.
XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships that, when complete, will serve much of the United States, Canada and Europe. In the United States, XO has more than 570,000 metro and intercity fiber miles in operation. The Company is also North America’s largest holder of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities and a partnership with licenses covering all of the top cities in Canada. XO has also agreed in principle to acquire more than 80,000 metro fiber miles in Europe to serve the London, Frankfurt, Brussels, Amsterdam and Paris markets and an 88,000 fiber-mile pan-European fiber network connecting 21 major European cities and transatlantic capacity that will eventually expand to 10 Gbps.
For more information contact:
Todd Wolfenbarger / XO™ Communications
Media and Industry Analysts
703-547-2011 or 703-675-3496
Lisa Miles / XO™ Communications
Financial Analysts
703-547-2440
