Windstream’s SD-WAN Grows as Company Transforms from Telecom to Cloud, Connectivity

Financial Graph

Windstream on Thursday reported a $101.5 million loss for the third quarter of 2017 compared to a $66.2 million loss for the same quarter last year.

Revenue was about $1.5 billion, up 11 percent from the year-ago quarter.

During the quarter, Windstream completed its acquisition of Broadview Networks. It now offers Broadview’s OfficeSuite along with its own proprietary SD-WAN Concierge service across its entire footprint.

Windstream's Tony Thomas

Windstream’s Tony Thomas

Windstream also announced it is adopting a new business unit structure and combining its operations into two units: cloud and connectivity, and consumer and SMB. The company is consolidating the enterprise, CLEC C/SMB and wholesale segments into the cloud and connectivity unit.

“This change will enable us to accelerate our path to revenue growth, improve the customer experience and simplify our company,” said Tony Thomas, Windstream’s president and CEO. “These changes are based on the basic tenet that organizational structure should be nimble and follow the vision and strategy. The (cloud and connectivity) business unit will enable us to leverage disruptive technologies in our product solutions, such as SD-WAN and OfficeSuite, as well as broader SDN-based products, to differentiate ourselves in the marketplace. Having three different organizations doing that was no longer optimal. These solutions, combined with a best-in-class customer experience, will accelerate our transformation from a telecom reseller to a cloud application and connectivity provider.”

Service revenue was $1.47 billion in the third quarter, up 12 percent from a year ago. Consumer and small business ILEC service revenues were $303 million, down 3 percent.

Wholesale service revenue was $172.5 million, up 11 percent year over year. Enterprise service revenue was $554 million, up 12 percent.

CLEC consumer and small business service revenue was $225 million, up 90 percent from the year-ago quarter.

“Our overall strategy continues to deliver solid results,” Thomas said. “We continue to see growing demand for our SD-WAN service, which represented 19 percent of total enterprise sales in the quarter. Strategic enterprise sales, which include SD-WAN, (UCaaS) and on-net sales, accounted for 36 percent of total enterprise sales in the quarter. We also continue to deliver faster broadband speeds to more consumers and small businesses, which led to improved broadband subscriber trends sequentially.”

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