Boingo Wireless (WIFI) Tops Q3 EPS by 4c, Revenues Miss

Boingo Wireless (NASDAQ: WIFI) reported Q3 EPS of ($0.07), $0.04 better than the analyst estimate of ($0.11). Revenue for the quarter came in at $58.8 million versus the consensus estimate of $59.37 million.

Third Quarter 2020 Financial Highlights

• Revenue of $58.8 million increased modestly compared to $58.7 million in the second quarter of 2020 and decreased 9.2% compared to $64.7 million in the third quarter of 2019.
  • Military/multifamily revenue of $23.8 million increased 0.4% compared to $23.7 million in the second quarter of 2020 and increased 0.7% compared to $23.6 million in the third quarter of 2019.
  • DAS revenue of $21.9 million decreased 1.5% compared to $22.2 million in the second quarter of 2020 and decreased 7.7% compared to $23.7 million in the third quarter of 2019. DAS revenue for the third quarter of 2020 was comprised of $13.7 million of build-out project revenue and $8.2 million of access fee revenue. DAS revenue for the third quarter of 2019 included $1.8 million of one-time access fees.
  • Wholesale Wi-Fi revenue of $10.1 million increased 4.2% compared to $9.7 million the second quarter of 2020 and decreased 9.7% compared to $11.2 million in the third quarter of 2019.
  • Retail revenue of $2.1 million decreased 13.0% compared to $2.4 million in the second quarter of 2020 and decreased 43.5% compared to $3.6 million in the third quarter of 2019.
  • Advertising and other revenue of $0.9 million increased 34.3% compared to $0.7 million in the second quarter of 2020 and decreased 64.0% compared to $2.5 million in the third quarter of 2019.
• Net loss attributable to common stockholders was $(2.9) million, or $(0.07) per diluted share, compared to a net loss of $(5.8) million, or $(0.13) per diluted share, in the second quarter of 2020, and a net loss of $(0.2) million, or break-even per diluted share, in the third quarter of 2019.
• Adjusted EBITDA of $22.5 million increased 5.7% compared to $21.3 million in the second quarter of 2020 and increased 2.9% compared to $21.9 million in the third quarter of 2019. Adjusted EBITDA, which is a non-GAAP financial measure, is defined below and is reconciled to net loss attributable to common stockholders, the most comparable measure under GAAP, in the schedule entitled “Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA.”
• Net cash provided by operating activities of $18.2 million decreased 34.0% compared to $27.7 million in the second quarter of 2020 and decreased 62.1% compared to $48.1 million in the third quarter of 2019.
• Free cash flow was $(15.9) million compared to $(1.4) million in the second quarter of 2020 and $20.5 million in the third quarter of 2019. Free cash flow, which is a non-GAAP financial measure, is defined below and is reconciled to net cash provided by operating activities, the most comparable measure under GAAP, in the schedule entitled "Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows."
• Cash, cash equivalents and marketable securities were $54.6 million at September 30, 2020 down from $172.0 million at June 30, 2020. During the quarter ended September 30, 2020, the Company repaid $100.0 million of amounts outstanding under its revolving credit facility. As of September 30, 2020, the Company had no amounts outstanding and $150.0 million of remaining borrowing capacity under its revolving credit facility.

Management Commentary

“In the third quarter of 2020, we generated modestly higher revenue of $58.8 million and a 5.7% increase in adjusted EBITDA to $22.5 million compared to the prior quarter,” commented Mike Finley, Chief Executive Officer, Boingo Wireless. “We continue to win new business including long-term DAS rights for the new Aztec Stadium at San Diego State University, a Wi-Fi 6 network deployment at São Paulo/Guarulhos International Airport and six new multifamily properties. In addition, with over 130 site applications for our emerging tower business, we remain laser focused on deployments to meet increasing demand. We believe our nearly 20 years of experience in both licensed and unlicensed spectrum, combined with our neutral-host approach, gives us a unique and defensible business model in this 5G era.”

Mr. Finley continued, “In regard to a potential strategic transaction, there continues to be strong interest and engagement from multiple parties. We continue to run the strategic review process to evaluate opportunities that we believe would be in the best interest of our stockholders. While the process continues, we remain focused on the day-to-day execution against the extraordinary opportunities in front of us.”

For earnings history and earnings-related data on Boingo Wireless (WIFI) click here.

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