Switch Inc (NYSE: SWCH) stock plunged 23.69% on November 14th, 2018 (Source: Google finance) after the company largely missed analysts’ forecasts since going public last year. SWCH in the third quarter of FY 18 has reported the adjusted earnings per share of 0 cents, missing the analysts’ estimates for the adjusted earnings per share of 3 cents. The company had reported the adjusted revenue growth of 5 percent to $102.8 million in the third quarter of FY 18, missing the analysts’ estimates for revenue of $102.81 billion. This is primarily attributable to a $3 million increase in colocation revenue and a $1.4 million increase in connectivity revenue. 57% of the revenue increase in the quarter resulted from new customers initiating service during the past year, while 43% of the revenue growth came from customers who have been with Switch longer than one year.
Moreover, in the third quarter of 2018, SWCH derived more than 95% of the revenue from recurring revenue streams, consisting primarily of colocation, which includes the licensing of cabinet space and power, and connectivity services, which includes cross-connects, broadband services, and external connectivity. The increase in revenue in Q3 of 2018 was primarily related to increased volume of sales to existing and new customers. Colocation revenue for the third quarter of 2018 was $82.4 million, compared to $79.4 million reported in Q3 of 2017. Connectivity revenue in Q3 of 2018 was $18.5 million, compared to $17.1 million in the same period in 2017, primarily due to a 23% increase in our cross-connect revenue.
Other revenue, including professional services, accounted for $1.8 million in Q3 of 2018, up from $1.1 million in the same period in 2017. We had another strong bookings quarter in Q3 of 2018, signing over 450 contracts, equating to over 18 megawatts, with total contract value of $135 million, and annualized revenue of over $39 million. EBay signed a new $56 million expansion of its commitment in both our CORE and Citadel campus locations through August of 2023.
As of September 30, 2018, Switch had over 14,000 billable cabinet equivalents, generating over $2,300 per cabinet equivalent in total revenue. Cost of revenue increased in Q3 2018 compared to the same period in 2017, primarily due to a $5.8 million increase in depreciation and amortization expense due to additional property and equipment being placed into service since September 30, 2017.
The company affirmed its annual forecast of $197 million to $200 million in adjusted earnings before interest, tax, depreciation and amortization and $405 million to $408 million in revenue