Cyxtera Announces Third Quarter 2022 Results
MIAMI--(BUSINESS WIRE)-- Cyxtera (NASDAQ: CYXT), a global leader in data center colocation and interconnection services, today released financial results for the quarter ended September 30, 2022.
“We are pleased to report strong performance in the third quarter, including our 11th consecutive quarter of positive net bookings,” said Nelson Fonseca, Cyxtera’s Chief Executive Officer. “Our Q3 results reflect the robust demand for our global platform of highly interconnected data centers, our innovative approach to cloud-like colocation, our strong and diversified customer base, and our unwavering focus on delivering value to our customers.”
Q3 2022 Financial Highlights
- Total revenue increased by $9.5 million, or 5.4% year over year, to $186.6 million.
- On a constant currency basis, total revenue increased by $14.1 million, or 8.0% year over year.
- Recurring revenue increased by $8.8 million, or 5.2% year over year, to $178.1 million.
- Core revenue increased by $11.8 million, or 7.3% year over year, to $172.8 million.
- Net Loss of $55.9 million in the quarter; Transaction Adjusted EBITDA increased by $0.4 million, or 0.8% year over year, to $58.5 million and increased by $2.8 million, or 4.9% year over year, on a constant currency basis.
1 A complete reconciliation of Net Loss to Transaction Adjusted EBITDA is included in the financial tables included in this release.
Q3 2022 Business Highlights
- Annualized Core bookings increased 20% sequentially.
- Average monthly Core churn of 0.8% in the third quarter.
- Stabilized occupancy increased 480 basis points year over year to 73.7%.
- Net financial leverage declined 10 basis points and 20 basis points year over year and sequentially, respectively, to 3.6x.
- Closed an accounts receivable securitization facility of $37.5 million with PNC Bank, N.A., providing increased availability and reduced interest expense.
- Announced the intention to convert to a Real Estate Investment Trust (REIT).
“Cyxtera’s team once again delivered solid financial results in the third quarter, as we move through the second half of the year,” said Carlos Sagasta, Cyxtera’s Chief Financial Officer. “The fundamentals of our business remain healthy, including strong constant currency revenue growth, low churn rates and resilient demand across our key markets. We believe this positive momentum positions us well to mitigate some of the macroeconomic trends, including rising utility costs, higher interest rates, and FX volatility.”
Cyxtera affirmed its full-year 2022 guidance; details are summarized in the table below.
Q3 2022 Results Conference Call and Replay Information
Cyxtera will host a conference call and webcast to discuss its quarterly results for the period ended September 30, 2022 on Tuesday, November 8, 2022, at 8:30 a.m. Eastern Time. The live webcast of the call can be accessed at the Cyxtera Investor Relations website at https://ir.cyxtera.com/ along with the Company’s earnings press release and earnings presentation designed to accompany the discussion of the financial results. Participants can also register for the webcast at https://www.netroadshow.com/events/login?show=30398dbb&confId=43051.
The U.S. dial-in for the call is 1-833-927-1758 (1-929-526-1599 for non-U.S. callers); access code 403952. A replay of the conference call will be available until November 15, 2022, at 11:59 p.m. Eastern Time, while an archived version of the webcast will be available on Cyxtera’s Investor Relations website for one year. The U.S. dial-in for the conference call replay is 1-866-813-9403 (+44-204-525-0658). The replay access code is 208250.
Investor Presentation and Supplemental Financial Information
Concurrently with holding its conference call, Cyxtera will make available on its website a presentation designed to accompany the discussion of the company’s financial results along with supplemental financial information. When available, the presentation and supplemental financial information can be accessed on the Cyxtera Investor Relations website at https://ir.cyxtera.com/.
Upcoming Conferences and Events
- Nareit REITworld 2022 Annual Conference
- Raymond James 2022 Technology Investors Conference
- UBS 50th annual Global TMT Conference
Cyxtera is a global leader in colocation and interconnection services, with a footprint of more than 60 data centers in over 30 markets. With IT infrastructure becoming increasingly hybrid, complex, and distributed, Cyxtera continues to expand its portfolio beyond space and power to deliver more cloud-like and flexible infrastructure solutions across its global data center platform and robust partner ecosystem. Today, Cyxtera provides more than 2,300 enterprise and government customers with the technology solutions they need to scale faster, achieve financial goals, and gain a competitive advantage. For more information, please visit www.cyxtera.com.
This press release includes “forward-looking statements” within the meaning of the federal securities laws. Forward- looking statements contained in this press release include statements concerning Cyxtera’s estimated financial performance for 2022 and its plans to convert to a REIT. Because forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Cyxtera’s control. Actual results and conditions (financial or otherwise) may differ materially from those indicated in the forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results and conditions to differ materially from those indicated in the forward-looking statements, including, but not limited to, the effects of the COVID-19 pandemic on Cyxtera’s business or future results, including supply chain disruptions; Cyxtera’s ability to maintain its credit ratings; Cyxtera’s ability to access external sources of capital on favorable terms or at all, which could limit Cyxtera’s ability to execute its business and growth strategies; increases in interest rates; fluctuations in energy prices; fluctuations in foreign currency exchange rates in the markets in which Cyxtera operates internationally; inflation; prolonged power outages, shortages or capacity constraints; physical and electronic security breaches and cyber-attacks, which could disrupt Cyxtera’s operations; any failure of Cyxtera’s physical infrastructure or negative impact on its ability to provide its services, or damage to customer infrastructure within its data centers; inadequate or inaccurate external and internal information, including budget and planning data, which could lead to inaccurate financial forecasts and inappropriate financial decisions; Cyxtera’s fluctuating operating results; Cyxtera’s government contracts, which are subject to early termination, audits, investigations, sanctions and penalties; Cyxtera’s reliance on third parties to provide internet connectivity to its data centers; the incurrence of goodwill and other intangible asset impairment charges, or impairment charges to Cyxtera’s property and equipment, which could result in a significant reduction to its earnings; the requirements of being a public company, including maintaining adequate internal controls over financial and management systems; Cyxtera’s ability to manage its growth; volatility of the market price of Cyxtera’s Class A common stock; future sales, or the perception of future sales, of Cyxtera Class A common stock by existing securityholders in the public market, which could cause the market price for Cyxtera’s Class A common stock to decline; Cyxtera’s ability to use its United States federal and state net operating losses to offset future United States federal and applicable state taxable income may be subject to certain limitations that could accelerate or permanently increase taxes owed; Cyxtera’s ability to address the significant implementation and operational complexities required to complete a conversion to a REIT, including, without limitation, completing internal reorganizations and modifying accounting and information technology systems, and receiving any necessary stakeholder and other approvals; Cyxtera’s ability to apply highly technical and complex provisions of the US Internal Revenue Code, as amended, to its operations; and the timing to complete conversion to a REIT, if at all. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the “Risk Factors” disclosed in Cyxtera’s filings with the Securities and Exchange Commission (“SEC”) from time to time. There may be additional risks that Cyxtera does not presently know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Cyxtera’s expectations, plans or forecasts of future events and views as of the date of this press release. Accordingly, you should not place undue reliance upon any such forward-looking statements in this press release. Neither Cyxtera nor any of its affiliates assume any obligation to update this press release, except as required by law.
Statement Regarding Non-GAAP Financial Measures
This press release contains Transaction Adjusted EBITDA, which is a supplemental measure that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). Transaction Adjusted EBITDA represents the measure of EBITDA disclosed to SVAC in connection with its consideration of the business combination transaction between Starboard Value Acquisition Corp. (“SVAC”) and Cyxtera. Cyxtera defines Transaction Adjusted EBITDA as net income (loss) before the following items: depreciation and amortization, interest and other expenses, net, income tax expense (benefit), equity-based compensation, straight-line rent adjustment, amortization of favorable / unfavorable leasehold interest & asset retirement obligation accretion, stand-up separation & other, restructuring costs & other, and change in fair value of warrant liabilities. As a non-GAAP financial measure, Transaction Adjusted EBITDA excludes items that are significant in understanding and assessing Cyxtera’s financial results or position. Therefore, this measure should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Cyxtera’s presentation of this measure may not be comparable to similarly-titled measures used by other companies. You should review Cyxtera’s unaudited financial statements and the reconciliation of the non-GAAP financial measures included in this press release to the most directly comparable GAAP financial measures provided in this release and not rely on any single financial measure to evaluate Cyxtera’s business.
This press release also includes certain projections of non-GAAP financial measures concerning Cyxtera. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, Cyxtera is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.
This press release includes constant currency revenue, MRR and Transaction Adjusted EBITDA, which are non-GAAP financial measures and are not meant to be considered in isolation or as an alternative to GAAP revenue and GAAP net income (loss). Cyxtera has presented these non-GAAP financial measure to provide investors with an additional tool to evaluate its results without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Cyxtera’s business performance. To present this information, Cyxtera’s current and comparative prior period revenues and certain operating expenses from entities with functional currencies other than the U.S. dollar are converted into U.S. dollars at a consistent exchange rate for purposes of each result being compared.
Note: Numbers may not foot or cross-foot due to rounding
Note: Numbers may not foot or cross-foot due to rounding
Investor Relations Contact: