Data center colocation company Switch (NYSE: SWCH) has announced financial results for the quarter ended June 30, 2020. Switch’s revenues went up 13 percent compared to the same quarter in 2019. It reported revenues for the second quarter of 2020 of $126.9 million while delivering a net income of $13.3 million.
“Following strong second quarter results, Switch remains on track with respect to our 2020 operating plan and growth objectives,” said Thomas Morton, President of Switch. “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.”
Other highlights of Switch’s second quarter 2020 financial results include:
- Income from operations of $25.3 million, an increase of 21% compared to $20.9 million for the year ago quarter.
- Net income of $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.
- Adjusted EBITDA of $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 of $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 of $79 million, representing annualized revenue of $24 million at full deployment, including $12 million of incremental recurring revenue.
“Our second quarter financial performance reflects continued strength in top-line growth trends accompanied by an improvement in margins,” said Gabe Nacht, CFO of Switch. “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.”
In May this year, Switch CEO Rob Roy, stated that the data center industry has not suffered the extent of negative impacts that other industries have endured in the midst of the COVID-19 pandemic. Switch recorded total revenue of $128.1 million in Q1 2020, compared to $107.4 million for the same quarter in 2019, an increase of 19%.