Uniti’s CEO says we’re in the early innings of an unprecedented fiber build
Key Highlights
- Uniti projects a $1.5 billion revenue opportunity from hyperscaler fiber deals over the next five years.
- The company expects to build nearly 6,000 miles of fiber in the next three years, generating about $1 billion in nonrecurring cash revenue.
- Hyperscaler deals have an estimated IRR of 28%, with solid lease-up progress demonstrating disciplined investment.
- Uniti's fiber builds are focused within its existing footprint, with plans to expand strategically for long-term leasing potential.
- The company anticipates additional fiber lease revenue of approximately $500 million after 2030, driven by ramped-up lease-up activities.
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Here are other stories on Uniti:
- Uniti’s hyperscaler fiber service sales funnel continues to grow
- Uniti’s CEO says its hyperscaler funnel represents about $1.5B of total contract value
- Uniti wraps its Windstream merger, accelerates residential and business fiber strategy
- Uniti will extend Windstream Kinetic’s FTTH footprint after the merger closes
- Uniti and Windstream to merge
Uniti sees a significant opportunity to become a major supplier of fiber-centric solutions to the hyperscaler data center industry, which is increasing spending on networking to keep up with AI-driven capacity demands.
The service provider is maintaining its thesis that hyperscalers as a $1.5 billion revenue opportunity over the next five years. Uniti expects hyperscaler deals contracted to date to generate a combined Internal Rate of Return (IRR) of 28%.
Speaking to investors during its fourth-quarter earnings call, Kenny Gunderman, CEO of Uniti, said it continues to expand its funnel of hyperscaler opportunities.
“For the hyperscalers, we expect to see even more activity in 2026 than last year,” he said. “Importantly, we're now starting to show solid lease-up on these builds, demonstrating our discipline in making investments in this space.”
Despite the potential for selling fiber-based services to hyperscalers, Gunderman said it is focusing on deals that can contribute to its revenue goals.
“Although we're building substantial amounts of new fiber, especially for the hyperscalers, we're doing it profitably, and our scaled national footprint gives us terrific lease-up potential, driving our blended anchor lease up cash yields to 34%, the highest we've ever seen,” he said. “We're in the early innings of an unprecedented fiber build within our industry. This opportunity continues to grow for us.”
Long-term network builds
While hyperscale fiber demand has been the latest target for Uniti and other similar fiber providers, the provider’s approach to building fiber is centered around a long-term vision that leverages its current fiber network or builds extensions off it.
“When we build fiber for the hyperscalers, we plan to build inside our existing footprint, or we'll look for ways to expand our connected footprint strategically,” Gunderman said. “We're not building one-off networks. We're building networks that we can lease for many years into the future, and we see a long runway.”
He added that the side benefit of these builds is that they can serve as a middle-mile backbone for its consumer FTTH business. “We're also seeing benefits from some of these bills by using the backhaul for our own business, including and especially at Kinetic,” Gunderman said.
Over the next three years, Uniti expects to build nearly 6,000 new route miles of fiber. The company expects to generate cumulative nonrecurring cash revenue of approximately $1 billion and up to $25 million in recurring cash revenue by 2028.
But it isn’t stopping there. The service provider sees potential to sell more fiber leases.
“Beyond this 3-year build cycle, we not only expect more fiber builds to come, but importantly, we expect to really ramp the lease-up,” Gunderman said. “This will lead to additional non-recurring cash revenue of approximately $500 million after 2030.”
Fiber build cadence
In terms of the $1.5 revenue opportunity and the build cadence, growth at Uniti Fiber Infrastructure is largely driven by new deals coming in immediately.
The service provider has already booked $670 million of total contract value.
“Not all of that is upfront, of course, but we're well on our way towards numbers that are approaching that $1 billion mark as well with what we are booking today and certainly with what we're seeing and have visibility to within the funnel,” said Paul Bullington, CFO and treasurer of Uniti. “It's a little hard to predict because these deals aren't all equal.”
Given the type of network facilities required for each customer’s needs, delivery times can vary.
“Some of these deals leverage existing assets and can be turned over to the customer fairly quickly, while others can take 2 to 3 years to deploy if there's significant construction involved,” Bullington said. “We don't recognize the revenue from these upfront sales-type leases until we deliver the fiber. It can take a little time between the signing of these deals and the delivery of fiber and the recognition of the revenue.”
He added that over the next two to three years, “you're going to see kind of a steady ramp.”
Uniti reported consolidated revenues for the fourth quarter of 2025 were $917.3 million.
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Sean Buckley
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