NorthPoint Communications Announces Strong First-Quarter Results; 72 Percent Revenue Growth; 76 Percent Subscriber Growth Highlight Quarter - Company Financial Information

Cambridge Telcom Report, May 1, 2000

NorthPoint Communications (Nasdaq: NPNT), the global broadband services leader, Wednesday announced financial results for the quarter ended March 31, 2000. Highlighted by sequential revenue and subscriber growth of 72 percent and 76 percent, respectively, NorthPoint's first-quarter results reflect its successful efforts to rapidly scale its network and service delivery systems to meet the fast-growing demand for DSL-based broadband services.

"NorthPoint has delivered another strong quarter by staying focused on the long-term drivers of success in the broadband market," said Liz Fetter, NorthPoint's president and chief executive officer. "We have entered 2000 with strong momentum by deploying what we believe is the most advanced service delivery and support platform in the DSL industry, expanded our network reach across North America and Europe, and introduced innovative services targeting new growth opportunities."

Financial Results NorthPoint reported revenue of $20.0 million for the quarter ended March 31, 2000, a 72 percent sequential increase over revenue of $11.6 million for the quarter ended December 31, 1999. NorthPoint's revenue for the quarter ended March 31, 2000 increased more than tenfold from first quarter 1999 revenue of $1.28 million.

Net loss for the first quarter of 2000 was $79.9 million versus a net loss of $76.0 million for the quarter ended December 31, 1999 and a net loss of $23.4 million in the quarter ended March 31, 1999. Earnings before net interest, taxes, depreciation, and amortization (EBITDA) for the quarter ended March 31, 2000 were negative $61.7 million versus negative $58.8 million for the quarter ended December 31, 1999 and a negative $17.0 million for the quarter ended March 31, 1999.

Operational Results and Other Highlights The number of NorthPoint DSL subscribers grew 76 percent in the first quarter of 2000, increasing to 41,300 subscribers from 23,500 subscribers as of December 31, 1999. Fully operational central offices increased during the first quarter to 1,260 from 1,027 as of December 31, 1999, and built or operational central offices increased to 1,511 during the same period. The number of homes and businesses passed increased during the quarter to approximately 36 million from 31 million at December 31, 1999.

During the first quarter, NorthPoint grew its subscriber base faster than any other national DSL service provider on what is today the largest broadband network of its kind in North America.

NorthPoint successfully accomplished two key management changes during the first quarter. In March, Liz Fetter, who previously served as NorthPoint's president and chief operating officer, was named chief executive officer. Michael Malaga, NorthPoint's founder and chairman, was named chief executive of VersaPoint and will lead the company's European expansion. More recently, Michael Glinsky, who previously served as executive vice president and chief financial officer of U S West Inc., was named NorthPoint's executive vice president and chief financial officer, replacing Henry "Hank" Huff who is taking early retirement.

NorthPoint's first quarter was also highlighted by a number of strategic initiatives that demonstrate its commitment to scaling to meet growing demand, augmenting its portfolio of services, expanding its network reach, and leveraging key strategic partnerships. These initiatives include:

* Next Generation Service Delivery Platform -- Designed and developed with a proven team of technology leaders, NorthPoint's new back- office system will dramatically reduce order-processing time, increase order capacity and accelerate the company's development cycle for new products. NorthPoint expects to reduce order- processing time by approximately 30 percent and to increase order capacity by 400 percent by automating each step of the order entry and fulfillment process between its wholesale customers and suppliers.

* Global Network Expansion -- NorthPoint continued to broaden its U.S. network footprint and launched an unprecedented global network expansion by forming new companies to lead the deployment of DSL services in Europe and Canada. With VersaTel, the leading alternative broadband local access network operator in the Benelux and the Northwest Rhine region of Germany, NorthPoint formed VersaPoint, the first pan-European DSL company.

In Canada, NorthPoint and Call-Net Enterprises formed a new company to deliver wholesale DSL services to businesses throughout Canada.In the U.S., NorthPoint extended its U.S. footprint to four new markets during the first quarter: Charlotte, Cincinnati, Hartford and Salt Lake City. NorthPoint currently serves consumers and businesses in more than 2,100 cities across 37 U.S. markets and 81 metropolitan statistical areas (MSAs).

* NorthPoint Addresses $6 Billion Content Delivery Market -- In February, NorthPoint launched "Blast," a groundbreaking initiative designed to dramatically improve the way consumers and businesses experience streaming media and other content and applications over the Internet. Blast is a first-of-its kind product platform for content providers, positioning the company as a key player in a content market expected to grow to $6 billion by 2004.