Zayo Group Holdings, Inc. (ZAYO) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $15.70 million, or $ 0.06 a share in the quarter, against a net loss of $15.20 million, or $0.06 a share in the last year period.

Revenue during the quarter surged 37.65 percent to $504.90 million from $366.80 million in the previous year period. Gross margin for the quarter contracted 362 basis points over the previous year period to 65.58 percent. Total expenses were 82.77 percent of quarterly revenues, down from 85.80 percent for the same period last year. This has led to an improvement of 303 basis points in operating margin to 17.23 percent.

Operating income for the quarter was $87 million, compared with $52.10 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $260.60 million compared with $215.40 million in the prior year period. At the same time, adjusted EBITDA margin contracted 711 basis points in the quarter to 51.61 percent from 58.72 percent in the last year period.

The company has spent $206.80 million cash to meet investing activities during the quarter as against cash outgo of $159.50 million in the last year period.

The company has spent $1.70 million cash to carry out financing activities during the quarter as against cash inflow of $2.60 million in the last year period.

Cash and cash equivalents stood at $193 million as on Sep. 30, 2016, down 44.17 percent or $152.70 million from $345.70 million on Sep. 30, 2015.

Working capital turns negative

Working capital of Zayo Group Holdings, Inc. has turned negative to $97.40 million on Sep. 30, 2016 from positive $204.90 million on Sep. 30, 2015. Current ratio was at 0.81 as on Sep. 30, 2016, down from 1.51 on Sep. 30, 2015.

Days sales outstanding were almost stable at 22 days for the quarter, when compared with the last year period.

At the same time, days payable outstanding went down to 25 days for the quarter from 31 for the same period last year.