Earthlink Raises 2013 Guidance, Launches Cloud Disaster Recovery

May 2nd, 2013 by · 1 Comment

In a sign that its fortunes are shifting as hoped, Earthlink (NASDAQ:ELNK, news, filings) turned in a solid first quarter, beating analyst expectations for both revenue and earnings per share.  That and improved sales momentum was enough to raise 2013 guidance.

Revenues of $320.0M were about $3M above expectations, with business services revenue declining just 0.8% sequentially. The company's growth product revenues (enterprise+wholesale) reached a $300M annual run-rate during the quarter, and accounted for 65% of new bookings. Adjusted EBITDA checked in at $61.5M, and adjusted loss per share of $0.07 was three cents better than expected. Looking forward, the company boosted revenue and EBITDA guidance slightly to $1.255-1.268B and $214-227M, respectively.

Earthlink has been transforming itself from an ISP and CLEC into a cloud-based managed IT service provider, and still has something to prove in that regard. Most of the pieces seem to be in place now, and they are looking to gain the organic momentum necessary in their growth businesses while carefully managing the legacy businesses. The former are approaching 25% of revenues, which is still a long way from dominating the numbers but at the same time isn't negligible either.

Meanwhile, yesterday Earthlink launched a cloud-based disaster recovery service.  The services features a cloud-based replication server and is fully automated and managed by Earthlink, protecting enterprise's data in the event of, well, disaster.   They'll be continuing to fill out their cloud-based IT services portfolio all year I'm sure.

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Categories: CLEC · Cloud Computing

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  • fred says:

    They turned a corner right into a dark alley. Go look at the 1st quarter results and see for yourself.

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