Cyxtera Technologies today announced its Q2 2021 earnings and provided updates on its bookings, churn, expansion of data center capacity in Silicon Valley, restructuring charges from Moses Lake, and full-year 2021 outlook. Notably, in late July 2021, Cyxtera closed its business combination with Starboard Value Acquisition Corp and began trading on the Nasdaq under the symbol CYXT.

Financial Performance in Q2 2021 – Cyxtera Technologies

In Q2 2021, Cyxtera Technologies reported revenue of $175.4m, a 1.4% increase quarter-over-quarter, and transaction adjusted EBITDA of $62.3m, an 11% increase quarter-over-quarter. Therefore, the company’s transaction adjusted EBITDA margin was 35.5% in Q2 2021, an ~300 bps improvement quarter-over-quarter.

Recurring Revenue

Cyxtera’s recurring revenue for Q2 2021 was $167.3m (95% of total), an increase of 1.6% quarter-over-quarter. Notably, the company’s non-recurring revenues comprise installation services related to a customer’s initial data center deployment and professional services.

Restructuring Charge

During Q2 2021, Cyxtera Technologies took a $58.9m restructuring charge to close its Moses Lake (Washington State) data center. Cyxtera previously had estimated it would recognize a charge between $57m and $62m, as part of breaking its lease obligation.

Operational Performance in Q2 2021 – Cyxtera Technologies

Bookings

Cyxtera’s annualized core bookings reached ~$31.5m in Q2 2021, representing an increase of 16% quarter-over-quarter.

Churn

Cyxtera reports “core churn” of only 0.9% of average MRR, however, this figure excludes churn related to Lumen Technologies.

Expansion Capacity

In June 2021, Cyxtera Technologies pre-leased a new 9-megawatt facility in Silicon Valley (Santa Clara, California) from wholesale data center developer Prime Data Centers. Specifically, this four-story, 121k sqft data center will be ready for customers in late 2022. Notably, Macquarie Capital, the investment division of Macquarie Group, is a significant equity backer of Prime Data Centers.

Additionally, Cyxtera announced 1.6-megawatt and 2-megwatt capacity expansions in its existing Silicon Valley (SFO1) and Chicago facilities (ORD2), respectively.

Full-Year 2021 Outlook

For full-year 2021, Cyxtera projects total revenue of $681m to $702m and transaction adjusted EBITDA of $217m to $223m. Also, the company anticipates expansion capital expenditures of $65m to $80m.

The top-end of this outlook range represents a $15m increase from Cyxtera’s prior guidance. Specifically, this increase reflects the company’s recently announced capacity expansions (see above).

Nextera Energy – Ownership

In July 2021, NextEra Energy Resources, via a subsidiary, purchased $20m of Cyxtera’s common stock as part of the company’s overall merger with Starboard Value Acquisition Corp.

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