7/25/01

XO Announces Strong Revenue Growth and EBIDTA Improvement

XO COMMUNICATIONS ANNOUNCES STRONG REVENUE GROWTH AND EBIDTA IMPROVEMENT IN THE SECOND QUARTER

RESTON, VA - XO Communications, Inc. (Nasdaq:XOXO), one of the world's fastest growing providers of broadband communications services, today announced financial results for the quarter and six month period ended June 30, 2001.

Total revenue grew to $306.8 million in the second quarter of 2001, an 11 percent increase over revenue reported in the first quarter of 2001, and a 118 percent increase over revenue reported in the second quarter of 2000. Year-to-date revenue for the six months ended June 30, 2001 totaled $584.1 million, a 137 percent increase over the comparable period in 2000.

Of the total revenue reported in the second quarter of 2001, $147.8 million was derived from voice services revenue, including revenue from local, long distance voice and other enhanced voice services, and $149.0 million was attributable to data services, which includes Internet access, network access, and web hosting. Integrated voice and data services totaled $8.5 million and other revenue totaled $1.5 million in the second quarter of 2001.

"We are very pleased with our results and believe they are evidence of the operational momentum that XO is gaining across our local fiber and wireless networks throughout the United States," said XO Chairman and Chief Executive Officer Dan Akerson. "We are seeing significant operational improvement in many of the key metrics that are leading indicators of our on-going revenue growth. During the past quarter we have seen increases in revenue per customer, sales productivity and the shortening of our average time required to provision service for our customers. Because of these improvements, we continue to believe that we are positioned for accelerated revenue growth into the second half of this year."

The EBITDA loss totaled $70.7 million in the second quarter of 2001, compared to an EBITDA loss of $77.1 million in the first quarter of 2001, and a $68.6 million EBITDA loss in the second quarter of 2000. Year-to-date EBITDA loss totaled $147.8 million as of June 30, 2001 compared to an EBITDA loss of $131.8 million in the first six months of 2000.

XO also reported that its voice grade equivalents (VGE) grew to 17.3 million in the second quarter of 2001, a 17 percent increase from the first quarter of 2001 and a 211 percent increase from the second quarter of 2000. XO introduced VGE's (64 Kpbs of capacity) last year as a more relevant way of tracking the company's incremental growth in total network traffic compared to the historical tracking of access lines which measures only voice services traffic.

During the quarter, XO continued to see growth in its bundled products and services. The company posted its third consecutive quarter of strong revenue growth generated by its popular XOptions bundled service packages. Quarterly revenue associated with these services increased by 138 percent in the second quarter over the first quarter of 2001. Across its entire customer base, approximately 44 percent of XO customers are now bundling a combination of XO local, long distance, data or Internet services.

Additionally, XO is continuing to demonstrate progress in its ability to sell services to enterprise customers. Since the beginning of 2001, XO has added more than 50 new major account "logos" to its enterprise customer base including Genuity, Exodus, Akamai, Maximus, Nextel, Nortel, Planet Hollywood and Car Toys during the past quarter. These developments have helped contribute to XO's continued revenue per customer growth, a measurement that has increased by 57 percent across the entire customer base since the fourth quarter of 1999.

XO also made important enhancements to its data networking product portfolio in the second quarter. In that time period the company introduced an enhanced virtual private networking (VPN) product, announced a strategic content delivery partnership with industry-leader Akamai (Nasdaq:AKAM) , and introduced nationwide metro wavelength services at OC-12 (622 Mbps), OC-48 (2.5 Gbps) and OC-192 (10 Gbps) levels.

During the quarter XO also announced the closing of the previously disclosed $250 million investment by Forstmann Little & Co. in XO. In conjunction with the investment, XO issued 50 million shares of its class A common stock and amended the terms of the preferred stock held by Forstmann Little to reduce the conversion price from $31.625 to $17.00 per share.

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 throughout the United States. XO currently offers facilities-based broadband communications services in 62 markets throughout the United States. The Company is also one of North America's largest holders of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities.

XO Senior Management will host a conference call to discuss second quarter results on July 25 at 8:00 a.m. EDT that is open to the public and can be accessed at 800-992-7413 (U.S.) or 801-303-7424 (International). A replay of the call will be available for 72 hours at 800-839-0860 (U.S.) pin # 1129 or 402-220-1490 (International) pin # 1129. Additionally, the call will be webcast and can be accessed via www.xo.com/news.

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