Uniti Group (NASDAQ:UNIT) delivered a strong Q4 2024 performance, with growth in recurring revenue, fiber infrastructure demand, and a strategic merger on the horizon.
Key Takeaways from Uniti’s Q4 2024 Earnings Call
Uniti’s 2024 Performance: A Transformational Year
CEO Kenny Gunderman described 2024 as a “consequential year” for Uniti, highlighting the company’s efforts to “future-proof” its business. Key metrics include:
- Recurring revenue growth of ~5%
- Adjusted EBITDA growth of 8%
- 27% increase in consolidated bookings
- Positive free cash flow expected in 2025
Uniti’s merger with Windstream, expected to close in H2 2025, is poised to simplify the company’s Master Lease Agreement (MLA) and position Uniti to capitalize on the rising demand for Generative AI and fiber-to-the-home expansion.
Financial Highlights: Revenue, EBITDA, and AFFO
CFO Paul Bullington provided financial results:
- Q4 consolidated revenue: $293 million (vs. $294.59M estimated)
- Adjusted EBITDA: $239 million
- AFFO per share: $0.35
- Net success-based CapEx: $0.7 million, reflecting disciplined cost management
For 2025, Uniti projects AFFO per share between $1.40 and $1.47 (6% YoY growth), with revenue and adjusted EBITDA forecasts of:
- Uniti Leasing: $902M revenue / $872M EBITDA
- Uniti Fiber: $304M revenue / $125M EBITDA
The company is set to build fiber to 2 million homes by the end of 2025, two years ahead of schedule.
AI, Hyperscalers, and Infrastructure Demand
AI infrastructure remains a key focus, with Uniti leveraging its fiber network in Tier II and III markets to secure a first-mover advantage. CEO Gunderman noted that AI inference spending will comprise 80% of total AI-related expenditures by 2030, reinforcing the company’s long-term growth strategy.
Hyperscaler demand has also evolved, with significantly increased strand counts and conduit capacity requirements. Uniti is now deploying fiber cables with over 864 strands, compared to 6-12 strands in previous years, signaling growing hyperscaler reliance on Uniti’s network.
Q&A Insights: Analyst Interest in AI, ABS Funding, and Fiber Expansion
- Greg Williams (TD Cowen): Asked about Uniti’s AI positioning. Gunderman emphasized first-mover advantage in underserved markets.
- Frank Louthan (Raymond James): Inquired about ABS funding strategy. Bullington confirmed a flexible approach, while Gunderman announced plans to build 325,000 homes in 2025 with marketing efforts aimed at increasing penetration beyond 25%-30% in recent cohorts.
- Bora Lee (RBC Capital Markets): Asked about hyperscaler needs. Gunderman highlighted increased fiber leasing opportunities as hyperscalers seek more capacity.
Market Sentiment and Strategic Direction
Analysts expressed curiosity and optimism, particularly regarding AI-driven opportunities, ABS funding flexibility, and Uniti’s fiber expansion plans. Compared to previous quarters, both management and analysts displayed a higher level of confidence in Uniti’s execution and merger timeline.
Key Risks and Challenges
- Competitive yields in hyperscaler deals remain a challenge.
- ABS funding reliance and its long-term sustainability were discussed.
- Integration complexity with Windstream post-merger.
Uniti remains focused on balancing capital allocation between fiber expansion and marketing efforts to maintain growth momentum in 2025.
