Savvis Checks In, Pushes Back Against Churn

May 3rd, 2010 by · Leave a Comment

Reporting earnings this morning in advance of this week's tidal wave of announcements was Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] , which last quarter warned of some churn ahead in its colocation business from the financial vertical.  Indeed, revenues of $216.6M were down sequentially for the fourth quarter, but nevertheless that was a couple million above analyst expectations.  The story was similar for EBITDA of $54.0M, down sequentially but a bit higher than expected.  Loss per share of $0.21, however, was slightly larger than anticipated.  Overall though, Savvis seems to have weathered the expected headwinds reasonably well, if only they could find a nice stretch without headwinds.

Last week Savvis announced another leg in its datacenter expansion plans, this time a £20M investment in the UK.  They will add some 43K square feet of saleable floor space to their Slough facility with completion anticipated by the end of Q3.  The expansion is part of the company's preparation for their anticipated launch of Virtual Private Data Center, or VPDC, services later this year, as well as to support demand its overall cloud services portfolio.

Cloud services accounted for $2.8M in revenue in the first quarter - still a small number but up 14% sequentially.  A nice ramp, but it's still a long trip to the point where it matters alongside the company's other lines of business.  Software as a service contributed some $19.7M during the quarter, up slightly from Q4 and 23% over Q1/09.  The key financial vertical is where the churn was of course, and contributed $55.5M, down some 4% sequentially.

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Categories: Cloud Computing · Datacenter · Financials

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