LITTLE ROCK, Ark. – Uniti Group Inc. (NASDAQ:UNIT), a real estate investment trust specializing in communications infrastructure, has secured a 20-year contract to support the expansion of AI-optimized data centers in Alabama. The deal involves constructing a new long-haul fiber route extending over 200 miles, connecting Montgomery and Mobile, AL.
The new infrastructure will include a multi-duct fiber system featuring several high-count fiber cables. This development aims to enhance connectivity and provide a diverse path between the two markets, allowing for better interconnection with other regional and long-haul routes.
Greg Ortyl, Uniti's President of Wholesale & Strategic Accounts, expressed gratitude for the trust shown by the hyperscale customer, emphasizing the importance of this route for connecting key markets in Alabama. The contract reflects Uniti's growing presence in the hyperscale segment, driven by the demand for new AI-optimized data center construction.
Uniti's ongoing investments in Alabama's fiber network infrastructure underscore its commitment to improving connectivity solutions for various sectors, including enterprise, wholesale, and government segments. This includes the recent completion of a new multi-duct system across Mobile Bay and the receipt of the "Alabama Middle Mile" grant funding to further network expansion efforts.
The agreement, executed in the second quarter, is part of Uniti's larger investment in Alabama, where it has constructed almost 4,000 fiber route miles, representing over $300 million in capital investment. The company plans to deliver the new fiber routes to the customer in 2025.
Uniti's forward-looking statements in the press release indicate the company's anticipation of future growth, although they caution that these projections are subject to various risks and uncertainties.
This news is based on a press release statement from Uniti Group Inc., which outlines the company's latest strategic move to expand its infrastructure and services within the communications industry.
In other recent news, Uniti Group reported a strong Q2 2024 performance, driven by high demand for its fiber infrastructure. The company reaffirmed its full-year 2024 revenue and adjusted EBITDA outlook, anticipating a 4-6% monthly recurring revenue growth for the year. Uniti's merger with Windstream, which is expected to close in the latter half of 2025, is on track. This merger aims to establish a national fiber network focusing on Tier 2 and 3 markets.
Uniti's core recurring strategic fiber business saw a 3% growth in Q2, and their net capital intensity decreased to 31% from 44% year-over-year. The company is in a strong financial position, with approximately $619 million in cash and equivalents. Uniti is actively exploring refinancing opportunities and engaging in M&A discussions.
Looking ahead, Uniti expects sustained demand from hyperscalers and a pickup in wireless bookings in the latter half of the year. The company is also optimistic about achieving free cash flow positivity by 2026. These developments are part of Uniti's strategic plan to capitalize on the expanding fiber market and ensure its robust outlook post the Windstream merger.
InvestingPro Insights
Uniti Group Inc. (NASDAQ:UNIT), with its latest strategic initiative to expand Alabama's communications infrastructure, seems poised to enhance its market presence. According to InvestingPro data, Uniti has a market capitalization of $1.06 billion, indicating its significant size in the communications infrastructure sector. Moreover, the company's revenue for the last twelve months as of Q2 2024 stands at $1.157 billion, with a gross profit margin of 85.75%, reflecting its ability to generate substantial income from its operations.
InvestingPro Tips suggest that Uniti is trading at a low EBITDA valuation multiple, which could indicate that the stock is undervalued relative to its earnings before interest, taxes, depreciation, and amortization. Additionally, the company pays a significant dividend to shareholders, with a yield of 13.76%, which is attractive for income-seeking investors. It's noteworthy that Uniti is not just about current returns; analysts predict that the company will be profitable this year, providing a positive outlook for potential growth.
For investors looking for more detailed analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/UNIT. These tips could provide further insights into Uniti's financial health and future prospects, helping investors make more informed decisions.
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