Cyxtera Technologies (NASDAQ: CYXT), a retail colocation provider, today announced its Q3 2021 earnings and provided updates on its data center portfolio, bookings, churn, utilization (which had notable changes in Silicon Valley and Northern Virginia), pricing, and capital expenditures.

Financial Performance in Q3 2021 – Cyxtera Technologies

In Q3 2021, Cyxtera Technologies reported revenue of $177.1m, a 1.0% increase quarter-over-quarter, and transaction adjusted EBITDA of $58.1m, a 6.7% decrease quarter-over-quarter. Therefore, the company’s EBITDA margin was 32.8% in Q3 2021, a 2.7% decline quarter-over-quarter.

Recurring Revenue

Cyxtera’s recurring revenue for Q3 2021 was $169.3m (96% of total), an increase of 1.2% quarter-over-quarter. Recall that the company’s non-recurring revenues comprise installation services related to a customer’s initial data center deployment and professional services.

Full-Year 2021 Outlook

For full-year 2021, Cyxtera projects revenue of $692m to $706m ($699m at the mid-point). Additionally, the company forecasts transaction adjusted EBITDA of $223m to $227m ($225m at the mid-point). Finally, the mid-point of the company’s outlook implies a year-over-year increase of 1.2% and 4.4% in revenue and EBITDA, respectively.

Operational Performance in Q3 2021 – Cyxtera Technologies

Portfolio

Cyxtera operates 61 data centers, comprising 245 megawatts of power capacity. Overall, these data centers comprise 1.8 million sqft, in 28 markets throughout North America, Europe, and Asia, supporting 2.3k+ customers.

Bookings

Cyxtera’s annualized core bookings were $20.8m in Q3 2021, representing a decrease of 33% quarter-over-quarter.

Annualized Core Bookings by Quarter ($mm)
Cyxtera Technologies Annualized Core Bookings Q3 2021

Churn

Cyxtera reports “core churn” of only 0.7% of average core MRR, however, this figure excludes churn related to Lumen Technologies.

Utilization

As of Q3 2021, Cyxtera Technologies’ overall data center utilization, based on sqft, was 68.5%, which improved 0.5% quarter-over-quarter. During the quarter, notable lease-up occurred in Silicon Valley (8.0k sqft), Seattle (2.5k sqft), Boston (1.3k sqft), and Toronto (1.1k sqft). In contrast, Cyxtera realized incremental vacancy in Northern Virginia (6.9k sqft), Chicago (1.6k sqft), London (0.8k sqft), and Phoenix (0.6k sqft).

Pricing

During the quarter, Cyxtera produced a monthly recurring revenue (MRR) per Cabinet of $1,440, which represents a 1.3% increase quarter-over-quarter.

Capital Expenditures

The company spent $16.0m (cash basis) or $21.4m (accrual basis) on capital expenditures in Q3 2021. Of the accrual basis capital expenditures, $15.0m went to expansion projects, $5.7m was for maintenance, and $0.7m was corporate.

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