Interoute’s Revenue Surged in 2011

Pan-European network operator and cloud services provider Interoute offered a window into its 2011 performance this morning. The company found growth in both its network and cloud businesses, and revenues surged all the way to €366M, 24% higher than the prior year despite the continent’s overall macroeconomic malaise. EBITDA and earnings also rose to €68m and €7.6M, respectively, even as they poured resources into new products and capabilities.

The company’s enterprise-focused cloud services now make up 55% of their revenues, after the purchases of Visual Conferance Group and Quantix combined with rapid organic growth. Interoute has been investing heavily in its cloud infrastructure, bundling connectivity, computing, and communications together. With little or no legacy revenue at risk, they see lots of opportunity for a sustained acceleration in growth.

Interoute’s service provider business also saw growth, powered in part by the Telefonica outsourcing. While its purchases lately have been cloud-oriented, with those now in place it seems to me that Interoute is likely to turn its attention to additional network infrastructure next to boost its depth and overall scale. Today’s C&W purchase by Vodafone may help kick off a wave of consolidation, which Interoute could ride either as a buyer or buyee.

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Categories: Financials · Internet Backbones