Switch and Data Raises 2008 Guidance

Colocation provider Switch and Data Facilities (SDXC) said its third quarter results “surpassed our expectations” and again increased its revenue guidance for 2008. The Tampa-based company reported a net loss of $32,000 on revenues of $44.1 million for the three-month period ending Sept. 30, up from $35.4 million in the comparable period in 2007. 

CFO George Pollock said Switch and Data is raising its revenue guidance for 2008 from $170 million to $171.5 million, and increasing its EBITDA  projection from $55 million to $56 million. It was the third time this year the company has increased its guidance. 

Switch and Data said it continues to execute on its strategic plan, and has already signed 25 sales contracts for its New Jersey data center, which opened its doors this month. The company’s monthly revenue per cabinet grew to $2,026, up from $1,816 in the same period last year, while its PAIX interconnection business also continues to grow, with a total of 20,879 cross connections, compared to 19,124 a year ago.  

Switch and Data CEO Keith Olsen said that the company has responded to the economic slowdown by consulting more closely with customers about future requirements. “We have not seen a slowdown that is impacting our growth or our funnel,” he said.

Switch and Data Opens NJ Data Center

Colocation and interconnection provider Switch and Data (SDXC) has opened the first phase of its new data center in North Bergen, New Jersey, which will be the company’s largest facility and key to its expansion in the New York market. The North Bergen data center previously housed disaster recovery specialist Sungard, and will add more than 163,000 gross square feet to Switch and Data’s New York area footprint.

The New Jersey facility is interconnected to Switch and Data’s existing Manhattan data centers at at 111 8th Avenue and 60 Hudson Street by a 10 Gigabit Ethernet connection, allowing customers to deploy equipment across multiple sites anf interconnect with customers in the other facilities. Switch and Data said it is already experiencing “high customer demand” for space, with Limelight Networks (LLNW), Intermedia and FXCM.com already signing up as customers in North Bergen.

Switch & Data Leases Atlanta Data Center

Switch and Data (SDXC) has leased space in Atlanta to expand its data center operations, the company said today in a filing with the Securities and Exchange Commission. Switch and Data GA Four LLC has leased a 79,200 square foot facility at 180 Peachtree Street, a former Macy’s department store that now houses data center space for companies including Level 3.

The deal continues a data center expansion for Switch and Data,  which is building out a large data center in New Jersey and recently announced plans to expand its facility in Vienna, Va. In its latest earnings report, the company said it was experiencing strong demand for new space it brought online in Dallas, Toronto and Sunnyvale, Calif. in the second quarter of 2008. 

Tiscali Expands in Five Switch and Data Sites

European telecom giant Tiscali has become the latest customer to establish a presence in multiple Switch and Data (SDXC) data centers, the two companies said this week. Tiscali International (TINet) is expanding across North America in five Switch and Data sites, with new points of presence in Switch and Data’s Atlanta, Dallas, Palo Alto, Seattle and Toronto sites. Tiscali said the expansion is motivated by strong traffic growth and continued investment by its wholesale IP and MPLS customers.

The deployment will allow Tiscali to take advantage of private peering via direct cross connects, and TINet has also joined Switch and Data’s PAIX Internet exchanges in Atlanta, Dallas, New York, Palo Alto, and Seattle to expand its public IPv6 peering agreements.

Switch and Data Expands in Vienna, Va.

Switch and Data (SDXC) has opened additional space in its data center in Vienna, Virginia, the company said today. The expansion project adds 22,000 square feet of additional capacity to Switch and Data’s existing site at 7990 Science Applications Court (SAIC) to satisfy high demand for interconnection business. The addition is part of Switch and Data’s plan to add 3,000 cabinets of capacity in 2008.

“We are investing in capacity in the important Northern Virginia market to help our customers evolve and accelerate their Internet services,” said Ernie Sampera, Senior VP of Marketing at Switch and Data.

New Facilities Boost Switch and Data Earnings

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.

Switch and Data May Raise Another $300M

Switch and Data (SDXC) may seek to raise up to $300 million through the sale of stock and debt, the company said in documents filed with the SEC on Friday. The filing, known as a shelf registration, gives the company the option of raising the funds through the dale of common stock, preferred stock or debt.

Switch and Data’s largest investors, The CapStreet Group and Seaport Capital, also may sell up to 12.2 million shares of common stock, holdings with a current value of about $204 million. The filing doesn’t provide a timetable for the sales, but gives the company and its investors the flexibility to sell shares ” from time to time in one or more transactions.”

The Tampa-based colocation and interconnection specialist says it will use the funds to repay money it has borrowed to finance the construction of its new data center in North Bergen, New Jersey.

Cogent Adds Sites at Switch and Data

Cogent Communications (CCOI) has deployed additional points of presence (POPs) in Switch and Data (SDXC) data centers in Cleveland, Phoenix and Sunnyvale, Calif. Cogent already leased space in 29 of Switch and Data’s 33 centers, meaning the company now has a presence in virtually every SDXC facility.

Cogent deploys its network in Switch and Data’s sites to market its Ethernet Internet transit services. The company operates a 30,000+ mile network in North America and Europe and also provides over 255 metro networks, totaling 11,000 miles in more than 110 global markets.

Cogent also peers with more than 2,300 other networks. Cogent recently established a direct connection to the America Online Transit Data Network (ATDN). According to Renesys, the connection between the two networks - which once faced off in a high-profile peering dispute - completes Cogent’s effort to become a “transit-free” network. Todd Underwood of Renesys has an analysis of this development and what it means for Cogent.

Switch and Data Projects Higher Revenue

Colocation and interconnection specialist Switch and Data (SDXC) said it continues to see strong demand for its services, and raised its revenue guidance for 2008. The company said it expects 2008 revenue of $168 million, rather than the previous estimate of $158 million, and also hiked its EBITDA guidance from $51 million to $53 million.

Switch and Data’s move comes a week after the other leading publicly-held colocation provider, Equinix (EQIX), also raised its revenue guidance and reported solid customer demand for data center space.

“Demand for our services is strong,” said Keith Olsen, Switch and Data CEO and President, in the company’s earnings call with analyst this afternoon. “Demand is outpacing supply (of colocation space) in our leading markets. IP traffic growth remains strong, driving greater need for our exchange points.

Switch and Data reported net income of $300,000 for the three months ended March 31, 2008, which included a loss of $700,000 related to the company’s recent debt financing to fund its New Jersey data center expansion.

Switch & Data Gets Funding for NJ Data Center

Switch and Data (SDXC) said Monday that it lined up $157.5 million in debt financing from a syndicate of banks led by RBC Capital Markets and GE Corporate Lending. The financing fully funds Switch and Data’s expansion, including its lease of a major data center in North Bergen, New Jersey.

The 163,500 square foot New Jersey data center is seen as key to the company’s growth. Delays in finalizing the funding for the project brought questions from securities analysts in the company’s quarterly conference call Feb. 20. But Switch and Data executives said the debt financing remained on track, despite the recent challenges in the credit markets.