Colocation and cloud provider Terremark (news, filings) [a subsidiary of Verizon (NYSE:VZ, news, filings)] turned in a strong fiscal Q2 yesterday. Revenues of $84.9M were up 7.5% sequentially and 22% over the same period last year, not to mention above both guidance and analyst estimates. EBITDA of $22.9M was likewise above guidance, up some 28% from last year. That should push further into the background any worries about the colocation sector seeing a pullback in parallel with Equinix.
This naturally prompted raised guidance, something they had just done back in August. For the full year the company now expects revenues of $350-353M and EBITDA of $100-102M. For the fiscal third quarter, guidance is for revenues of $89-91M and EBITDA of $26-27M - which also seems to be ahead of analyst expectations.
Operationally, cross connects were up 10% over the prior year to 9,650, and total space utilization rose to 36.6%, up from just 30.3% three months earlier. But the fastest growing segment was cloud computing, in which they have been targeting federal money amongst other things. Cloud revenues were up 15% sequentially and are now at a $30M annual run-rate - swiftly moving toward 10% of revenues. I must admit I had doubts about the melding of carrier neutral colocation and cloud services and didn't expect them to have such success in this segment so quickly - they seem to be doing quite well thus far.
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