Switch Inc (NYSE: SWCH) stock surged over 6.7% on March 13th, 2019 (as of 12:18 pm GMT-4; Source: Google finance). SWCH in the fourth quarter of FY 18 has reported the adjusted earnings per share of 5 cents, beating the analysts’ estimates for the adjusted earnings per share of 3 cents. The company had reported the adjusted revenue growth of 35.9 percent to $103.2 million in the fourth quarter of FY 18. This is primarily attributable to a $3.1 million increase in colocation revenue and a $0.7 million increase in connectivity revenue. Thirty percent of the revenue increase resulted from new customers initiating service during the past year, while 70% of the revenue growth came from customers who have been with Switch longer than one year.
The company has reported the net income of $11.2 million, compared to a loss of $60.3 million for the same quarter in 2017. Churn for the fourth quarter of 2018 was 0.4% and was 0.5% for the full year 2018, relative to the trailing three-year average annual churn of 0.7%. Adjusted EBITDA totaled $201.7 million for 2018, compared to adjusted EBITDA of $194.7 million in 2017. Adjusted EBITDA margin for 2018 was 49.7%, compared to 51.5% in 2017. As of December 31, 2018, the company’s total debt outstanding, net of cash and cash equivalents, was $524.5 million, resulting in a net debt-to-last quarter annualized adjusted EBITDA ratio of 2.4x.
Capital expenditures for 2018 totaled $276.2 million, compared to $402.6 million in 2017, down 31% due to lower spending in the Core, Citadel, and Pyramid PRIMES partially offset by increased investment in the Keep Campus.
Moreover, Colocation revenue for the fourth quarter of 2018 was $82.9 million, compared to $79.8 million reported in Q4 of 2017. And activity revenue in Q4 of 2018 was $18.4 million, compared to $17.7 million in the same period of 2017. Other revenue, including professional services, accounted for $1.9 million in Q4 of 2018, essentially unchanged compared to the same period in 2017.
During Q4, the company signed over 400 contracts equating to more than 8 megawatts, with total contract value of more than $73 million and annualize MRC of over $20 million, inclusive of both renewals and sales of incremental services. The 15 largest customer transactions in Q4 accounted for 78% of total contract value and resulted in incremental annualized MRC of more than $7 million
The company projected 2019 revenue of $436 million to $445 million, compared with the $449.89 million consensus of analysts.