Savvis Holds Steady For Q2/10

July 26th, 2010 by · Leave a Comment

Colocation, hosting, and cloud operator Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] issued its earnings report for the second quarter, during which they acquired Canadian provider Fusepoint.  That deal, which closed on June 16, added $1.5M in revenue and $3.5M in M&A-related costs to the company’s results, skewing things only slightly.  Overall, the company saw reasonable growth over the prior quarter that was roughly inline with expectations.

Revenues of $221.8M were up from $216.6Mm in the prior quarter, led by 1% and 4% higher colocation and managed hosting revenues, respectively – not including the Fusepoint numbers.  Cloud computing revenues rose another 24% sequentially, up some 129% from the prior year.  That’s nice growth, but obviously starting from a low base.  Network services revenues were flat to slightly down over the prior quarter.  Most of the company’s growth came from its key financial vertical, which contributed $60.4M, up 9% over the prior quarter.

EBITDA of $54.7M was up, but only slightly since increased revenues were mostly offset by rising SG&A costs as the company ramps its sales & marketing efforts for its cloud computing efforts amongst other things.  

Savvis also increased its guidance, partly to account for the contribution of Fusepoint and partly on improving conditions.  For the full year 2010, the company now expects $912-927M in revenues, $220-240M in EBITDA, capex of $190-210M, and $55-60M in net interest expense.  The EBITDA number does not include $5-6M of integration expenses, or another $1.5-2.5M beyond what they spent this quarter.  I don’t see anything shocking in those numbers.

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Categories: Cloud Computing · Datacenter · Financials

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