Switch is the latest data centre operator to post strong financial results as the global Covid-19 pandemic continues to fail to curb providers' cash streams.
The company on Friday reported total revenues of $126.9 million, compared to $112.0 million for the same quarter in 2019, an increase of 13%.
Income from operations topped $25.3 million, an increase of 21% compared to $20.9 million for the year ago quarter.
Net income reached $13.3 million, compared to net income of $4.7 million for the same quarter in 2019. Net income in the second quarter of 2020 includes the impact of a $4.1 million loss on interest rate swaps, compared to an $8.8 million loss in the prior year quarter. Net income per diluted share in the second quarter of 2020 was $0.05 and adjusted net income per diluted share was $0.06.
Adjusted EBITDA was reported at $69.1 million, compared to $58.8 million for the same quarter in 2019, an increase of 17%. Adjusted EBITDA margin was 54.5%, compared to 52.6% in the year ago period.
Capital expenditures hit $85.6 million, compared to $54.2 million for the same quarter in 2019. Maintenance capital expenditures were $1.9 million, reflecting 1.5% of total revenue.
Total signed contract value was $79 million in quarter two, representing annualized revenue of $24 million at full deployment, including $12 million of incremental recurring revenue.
"Switch's second quarter 2020 financial results validate the critical nature of our technology ecosystems in providing a dynamic and resilient platform for customers to reliably conduct essential business functions," Rob Roy, CEO, chairman, and founder of Switch, said Friday.
"Moreover, our recent announcement regarding the ground-breaking of three new mega-scale solar energy plus battery storage systems reflects our long-term commitment to environmental sustainability, and ensures customer access to low-cost, 100% renewable power for the foreseeable future. Switch remains relentlessly focused on bringing innovative and sustainable technology solutions to market while delivering value to customers and shareholders."
Switch has also re-affirmed its full year 2020 guidance, with revenue in the range of $507 million to $521 million, adjusted EBITDA in the range of $251 million to $261 million, and capital expenditures, excluding land acquisitions, in the range of $290 million to $340 million.
"Following strong second quarter results Switch remains on track with respect to our 2020 operating plan and growth objectives," Thomas Morton, President of Switch, said Friday.
"We continue to closely monitor developments surrounding COVID-19 and remain committed to the safety of our employees, customers, and suppliers. Importantly, despite company-imposed travel restrictions, our sales teams remain highly engaged with customers, which continues to support a strong activity pipeline."
Gabe Nacht, CFO of Switch, said: "Our second quarter financial performance reflects continued strength in top-line growth trends accompanied by an improvement in margins."
"Our strong cash flow generation and low balance sheet leverage provide the flexibility necessary to fund our growth initiatives while returning cash to shareholders in the form of increased dividends."
(The writer Joao Marques Lima is the founder and editor-in-chief of Data Economy. He specialises in the fields of data centres, cloud, data, IoT and edge computing. Prior to founding Data Economy in 2016, Joo was a reporter at Computer Business Review and has gained experience at the Daily Mail, Channel 4 News, Channel 4 and The Guardian. He won the PPA 30 Under 30 journalistic award in 2019, and has ranked in the Top 100 IoT Influencers of 2016, Top 100 M2M Influencers of 2016, 'Top Connected Car Influencers', and features in the list of IoT thought leaders to watch in the next four years).
Source: Broad Group.