Uniti Announces New Contract Award with Large Hyperscaler

Rhea-AI Summary

Uniti Group Inc. (Nasdaq: UNIT) has secured a new 20-year contract with a major hyperscale customer in Alabama. The project involves constructing a 200+ route mile long-haul fiber network connecting new data centers optimized for Generative AI. Uniti will build a multi-duct fiber system with high-count cables between Montgomery and Mobile, AL, creating a diverse path and allowing interconnection to other regional and long-haul routes.

This contract, executed in Q2, demonstrates Uniti's strong momentum in the hyperscale segment. The company plans to deliver these fiber routes in 2025. Over recent years, Uniti has invested over $300 million in Alabama, building nearly 4,000 fiber route miles. The company also received 'Alabama Middle Mile' grant funding to enhance route diversity throughout the state.

Positive

• Secured a new 20-year contract with a major hyperscale customer
• Expanding network with 200+ route mile long-haul fiber construction
• Creating diverse path between Montgomery and Mobile, AL
• Strengthening position in the growing hyperscale and AI data center market
• Received 'Alabama Middle Mile' grant funding for network growth
• Invested over $300 million in Alabama, building nearly 4,000 fiber route miles

Negative

• None.

Financial Analyst

This 20-year contract with a major hyperscale customer is a significant win for Uniti, demonstrating its growing presence in the high-demand AI infrastructure market. The project, spanning 200+ route miles in Alabama, will not only generate long-term revenue but also position Uniti for future growth opportunities. While specific financial terms aren't disclosed, the $300 million capital investment in Alabama over recent years suggests this contract's substantial value. The multi-duct fiber system design allows for scalability, potentially leading to additional revenue streams. Investors should note the company's strategic focus on AI-optimized data centers, a rapidly expanding market segment. This contract, combined with the recent "Alabama Middle Mile" grant, indicates Uniti's strong market position and potential for continued growth in the region.

Tech Expert

Uniti's new contract highlights the surging demand for AI infrastructure. The 200+ mile route connecting Montgomery to Mobile is important for supporting Generative AI data centers, which require vast amounts of data transfer capacity. The multi-duct, high-count fiber design is forward-thinking, allowing for future expansion without significant additional construction. This approach positions Uniti well in the competitive hyperscale market. The diverse path between markets enhances network resilience, a critical factor for AI applications that demand high uptime. Uniti's focus on interconnecting to other regional and long-haul routes suggests they're building a comprehensive network topology, essential for attracting and retaining major tech clients. The 20-year contract duration indicates the customer's long-term commitment to this infrastructure, reflecting confidence in Uniti's capabilities and the sustained growth of AI technologies.

Market Research Analyst

This contract signifies Uniti's strong position in the rapidly growing AI infrastructure market. The hyperscale segment, dominated by tech giants, is aggressively expanding to support AI initiatives, presenting significant opportunities for fiber network providers. Uniti's success in securing this contract, following previous investments in Alabama, demonstrates its competitive edge in this high-stakes market. The 20-year duration provides stable, long-term revenue, a important factor for investors considering the volatility of tech-related stocks. The company's strategic focus on route diversity and interconnectivity aligns well with the increasing demand for robust, high-capacity networks to support AI and cloud services. This contract, combined with the recent grant funding, suggests Uniti is well-positioned to capitalize on the ongoing digital transformation trend, potentially leading to increased market share and investor confidence in the long term.

LITTLE ROCK, Ark., Sept. 03, 2024 (GLOBE NEWSWIRE) -- Uniti Group Inc. (“Uniti”) (Nasdaq: UNIT) is pleased to announce a new 20-year contract award from a strategic hyperscale customer in Alabama. As part of this award, Uniti will construct a new long-haul route that will span over 200 route miles when complete, connecting new data centers optimized for Generative AI, and broadening Uniti’s reach throughout the state.

In order to deliver on the new contract and create significant capacity for future growth, Uniti will build a multi-duct fiber system with several high-count fiber cables between Montgomery and Mobile, AL. This route will create a diverse path between these two markets allowing Uniti’s customers to interconnect to other regional and long-haul routes, which connect data centers in other markets.

“We are humbled to have earned the continued trust of our hyperscale customer, resulting in the building of this critical route connecting two important markets in Alabama,” commented Greg Ortyl, Uniti’s President of Wholesale & Strategic Accounts. “This contract award continues to demonstrate the strong momentum Uniti has within the hyperscale segment as they aggressively build out new AI-optimized data centers.”

With deep roots in Alabama and a large presence in the City of Mobile, Uniti continues to invest in its fiber network, enhancing connectivity solutions for its enterprise, wholesale and government segments. In addition to finishing construction on a new multi-duct system across Mobile Bay, Uniti was recently awarded “Alabama Middle Mile” grant funding to continue its network growth efforts, strengthening route diversity throughout the state.

This contract award was executed in the second quarter and Uniti plans to deliver these fiber routes to its customer in 2025. Over the last several years, Uniti has built almost 4,000 fiber route miles in Alabama, representing over $300 million of capital investment.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended from time to time. Those forward-looking statements include all statements that are not historical statements of fact.

Words such as "anticipate(s)," "expect(s)," "intend(s)," “estimate(s),” “foresee(s),” "plan(s)," "believe(s)," "may," "will," "would," "could," "should," "seek(s)" and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could materially alter our expectations include, but are not limited to, the future prospects of Windstream, our largest customer; the ability and willingness of our customers to meet and/or perform their obligations under any contractual arrangements entered into with us, including master lease arrangements; the ability of our customers to comply with laws, rules and regulations in the operation of the assets we lease to them; the ability and willingness of our customers to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant; the adverse impact of litigation affecting us or our customers; our ability to renew, extend or obtain contracts with significant customers (including customers of the businesses we acquire); the availability of and our ability to identify suitable acquisition opportunities and our ability to acquire and lease the respective properties on favorable terms; the risk that we fail to fully realize the potential benefits of acquisitions or have difficulty integrating acquired companies; our ability to generate sufficient cash flows to service our outstanding indebtedness and fund our capital funding commitments; our ability to access debt and equity capital markets; the impact on our business or the business of our customers as a result of credit rating downgrades and fluctuating interest rates; our ability to retain our key management personnel; changes in the U.S. tax law and other state, federal or local laws; covenants in our debt agreements that may limit our operational flexibility; other risks inherent in the communications industry and in the ownership of communications distribution systems, including potential liability relating to environmental matters and illiquidity of real estate investments; and additional factors described in our reports filed with the U.S. Securities and Exchange Commission.

Uniti expressly disclaims any obligation to release publicly any updates or revisions to any of the forward-looking statements set forth in this press release to reflect any change in its expectations or any change in events, conditions or circumstances on which any statement is based.

ABOUT UNITI

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure and is a leading provider of fiber and other wireless solutions for the communications industry. As of June 30, 2024, Uniti owns approximately 142,000 fiber route miles, 8.6 million fiber strand miles, and other communications real estate throughout the United States. Additional information about Uniti can be found on its website at www.uniti.com.

SALES CONTACTS:

Ron Mudry, 727-421-0388
Senior Vice President, Chief Revenue Officer
ron.mudry@uniti.com

Greg Ortyl, 314-749-2478
President, Wholesale & Strategic Accounts
greg.ortyl@uniti.com

INVESTOR and MEDIA CONTACTS:

Paul Bullington, 251-662-1512
Senior Vice President, Chief Financial Officer & Treasurer
paul.bullington@uniti.com

Bill DiTullio, 501-850-0872
Vice President, Investor Relations & Treasury
bill.ditullio@uniti.com

This press release was published by a CLEAR® Verified individual.

FAQ

What is the new contract Uniti (UNIT) announced on September 3, 2024?

Uniti announced a new 20-year contract with a large hyperscale customer in Alabama to construct a 200+ route mile long-haul fiber network connecting new data centers optimized for Generative AI.

Where will Uniti (UNIT) build the new fiber route in Alabama?

Uniti will build a multi-duct fiber system with high-count cables between Montgomery and Mobile, Alabama.

When does Uniti (UNIT) plan to deliver the new fiber routes to its customer?

Uniti plans to deliver these fiber routes to its customer in 2025.

How much has Uniti (UNIT) invested in Alabama's fiber infrastructure?

Over the last several years, Uniti has invested over $300 million in Alabama, building almost 4,000 fiber route miles.

What grant funding did Uniti (UNIT) receive for network growth in Alabama?

Uniti was awarded 'Alabama Middle Mile' grant funding to continue its network growth efforts and strengthen route diversity throughout the state.