Covad Communications recorded its best-ever quarterly revenue in the first quarter of 2006 and was EBITDA positive for the period, posting a net loss of $9.3 million or three cents a share.

Those results represent a 48% improvement sequentially over the $17.9 million loss from the fourth quarter of 2005.

“In Q1 we delivered strong results and beat guidance by reporting positive EBITDA a full quarter ahead of schedule,” said Charles Hoffman, Covad president and chief executive officer, in a prepared statement. “We remain fully focused on executing our strategy and achieving our financial objectives. We will continue to innovate and seek partnerships that fit our strategy, while steadily increasing our direct share of the business. The EarthLink investment in particular illustrates a strong commitment to Covad’s strategy and will enable us to create a next-generation network ahead of our competitors.”

Covad finalized both the $50 million EarthLink strategic finance agreement and its acquisition of wireless broadband provider NextWeb in the quarter.

Net revenue for the quarter were $117.8 million, up 3.6 percent sequentially and 9.4 percent over the first quarter of 2005. Those revenues included $1.7 million from a software license agreement. Subscription revenues from broadband and VoIP services were up 2.8 percent sequentially to $101 million, an incrase of 10.4 percent from the year-previous quarter.

Almost 69% of that revenue came from wholesale subscribers or about $81.1 million. That percentage is down from 70.8 percent a year ago. Direct subscribership was up to $36.7 million or 31 percent of revenues.

Most of Covad’s revenue continues to come from business subscribers, who accounted for 74.3 percent of revenue in the first quarter of 2006, up from 72.7 percent at the end of 2005.