Digital Exchange Growth and Robust Customer Demand Highlight Q3
As we move into the last months of 2022, companies of all sizes and across all sectors are working hard to keep pace in an on-demand world where they must juggle complex business objectives, technology requirements, and customer needs.
At Cyxtera, we’re focused on helping our customers simplify these challenges through the automation of – and interconnectivity to – the technology they need to gain a competitive advantage, capitalize on market trends, achieve financial goals, and meet rising customer expectations.
As we come off our Q3 earnings announcement, I’m very proud to see how our commitment to supporting our customers is translating into steady growth for Cyxtera. In Q3, we achieved our 11th consecutive quarter of positive net bookings and added 32 new customers, a 33% increase over the prior quarter, further strengthening the ecosystem across our global platform.
Digital Exchange Driving Momentum
Cyxtera continues to do what we do best: providing customers with the financial and operational flexibility of the cloud with the control, performance, and security of enterprise-grade colocation and dedicated IT infrastructure. Our Digital Exchange data center network fabric is the heart of our offering, allowing our customers to optimize and automate the way they build, operate, and scale their infrastructure to create the ultimate hybrid IT solutions.
Q3 saw significant growth in Digital Exchange adoption. Not only did overall bookings of our Digital Exchange solutions portfolio increase, but we closed the two largest Digital Exchange-related deals in company history.
In both instances, we supported digital transformation initiatives as these customers navigated complete overhauls of their IT infrastructures to accelerate business growth. The deals included deployments of our Enterprise Bare Metal and Cyxtera SmartCabs solutions, as well as our Digital Exchange network interconnectivity solutions.
This quarter we also accomplished something quite exciting: we patented our proprietary Digital Exchange technology.
The U.S. Patent and Trademark Office issued two patents to Cyxtera for our Digital Exchange network fabric. The first patent applies to our IP Connect service, which enables organizations to instantly provision or adjust internet connectivity in a self-service manner. The second covers the Digital Exchange network fabric itself, and the ability for customers to self-manage and connect to services and other customers on the fabric via the Cyxtera Marketplace.
These patents demonstrate our ongoing commitment to R&D and the evolution of Digital Exchange, so our customers have access to automated, cloud-like connectivity in the data center. As more and more companies continue to digitally transform their operations, Cyxtera is best equipped to serve as the key partner helping them scale their digital businesses.
Positive Momentum Marks Q3
While our customers face tough challenges as they work to transform their digital businesses, the collective technology industry faces hurdles as well. High utility/power costs, inflation, foreign exchange volatility, and supply chain challenges continue to impact the data center industry.
Despite these challenges, Cyxtera completed a solid Q3 with robust demand for our products and services. Highlights include:
- Total revenue growth of 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
- Continued low levels of churn (0.8% monthly churn rate in Q3 and year-to-date) that are indicative of the quality of the solutions we provide our customers and the mission-critical nature of their deployments with us
- Channel driven sales performance that was ahead of expectations, more than doubling year-over-year and representing nearly 25% of our Q3 core bookings
- Growth in stabilized occupancy (up nearly 5% year-over-year) as we drive customer deployments in our existing data center footprint, a key component of our growth strategy
Our Q3 results reflect the demand for our global data center platform, our innovative approach to cloud-like colocation solutions, our strong and diversified customer base, and our unwavering focus on delivering value to customers.
As we look forward, we feel very encouraged about the remainder of the year based on a solid pipeline of opportunities and a favorable pricing environment for our products and solutions. We are thankful for the hard work of the Cyxtera team across the globe and for the trust that our customers have placed in us. We look forward to the opportunity to continue to serve their business transformation needs.
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