New Facilities Boost Switch and Data Earnings

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Strong demand for new data center space in Dallas, Toronto and Sunnyvale, Calif. helped Switch and Data (SDXC) post strong earnings for the second quarter of 2008. Total revenues grew to $41.9 million, up 26 percent from 2007, and net income was $1.1 million, or $0.03 per share.

“The second quarter was the best sales quarter ever for Switch and Data,” said CEO Keith Olsen, who noted that it was the sixth straight quarter of growth since the company’s IPO. Two-thirds of the company’s bookings for the quarter came from the new space, he said. The improvement was seen in larger deals, including expansions by Amazon.com Comcast, and more deals in which customers added space in multiple Switch and Data facilities.


Based on that strong performance, the company once again raised its revenue guidance, hiking its total 2008 revenues by $2 million to $170 million while raising EBITDA guidance from $53 million to $55 million. The company expects to spend $165 million this year in capital expenditures. Switch and Data previously raised its guidance after its first quarter earnings were announced.

Switch and Data’s annual revenue per unit (ARPU) improved to $1,974 per cabinet, up from $1,809 in the same period in 2007. The company now has 11,000 cabinets in its data centers. Eighty five percent of Switch and Data’s revenues originates from the top 10 of its 23 geographic markets.

About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.