Yipes declares positive cash flow

Yipes Enterprise Services’ cash flow from recurring operations swung positive in 2006, the privately held Ethernet service provider reported today.

The company’s revenue in the second half of last year was up 42% from the same period in 2005, giving it more revenue than in any other six-month stretch in the company’s four-year life. Revenue from the company’s core business, managed Ethernet services, grew 48% last year, while the overall Ethernet services market grew only 32%, according to Insight Research. Much of the growth came from overseas markets, Yipes said. Its international revenue grew 200% last year.

Yipes added customers in at least 12 different countries in Europe and Asia last year, but its share of the total number of ports sold in the U.S. dipped slightly in the second half of 2006, the result of a flood of smaller new entrants into the market. According to Vertical Systems Group, Yipes’ share of U.S. retail business Ethernet service ports slid from 5.7% at mid year to 5.4% at the end of 2006, putting it in seventh place behind AT&T (13.6%), Verizon Communications (12.2%), Time Warner Telecom (10.7%), Qwest Communications (9.9%), BellSouth (8.5%) and Cogent (8.2%). Following Yipes in eighth place was Level 3 Communications, with 5.3% of the market..

Larger service providers experienced the same sudden crowdedness. While AT&T, the market leader, saw strong growth in Ethernet service revenue, its share of ports sold in the U.S. dropped nearly three points in the second half of last year. Verizon’s share fell more than a point. Meanwhile, the share held collectively by a long list of providers each wielding less than 5% of the market grew from 11.1% to 26.2% in the second half of the year.

This year, Yipes expects its revenue from managed metro and wide area network Ethernet services (not including dedicated Internet access) to grow about 64%--the same as last year.