Terremark Reports, Raises Guidance Again

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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Categories: Datacenter · Financials