Cyxtera Announces Fourth Quarter and Full-Year 2022 Results
Cyxtera Technologies (NASDAQ: CYXT) reported its Q4 and full-year 2022 financial results, highlighting an 8.1% revenue increase to $192.9 million in Q4, and a 6.0% annual revenue growth to $746.0 million. Recurring revenue also rose by 8.4% year over year to $184.6 million in Q4. Despite a significant net loss of $210.2 million, attributed to a goodwill impairment charge, Transaction Adjusted EBITDA increased by 28.8% in Q4 to $61.8 million. The company's stabilized occupancy improved to 74.9%, and it successfully reduced its net financial leverage to 3.5x. Additionally, Cyxtera modified terms of its revolving credit facility, extending its maturity date.
- Q4 total revenue increased by $14.5 million, or 8.1% year over year.
- Full-year total revenue rose by $42.3 million, or 6.0% year over year.
- Recurring revenue in Q4 increased by $14.3 million, or 8.4% year over year.
- Transaction Adjusted EBITDA for Q4 grew by $13.8 million, or 28.8%.
- Stabilized occupancy increased by 350 basis points to 74.9% at year-end 2022.
- Net financial leverage reduced to 3.5x, a decrease of 30 basis points year over year.
- Net loss of $210.2 million in Q4, including a non-cash goodwill impairment charge of $153.6 million.
- Full-year net loss of $355.1 million, also impacted by goodwill impairment.
“We achieved solid results in the fourth quarter and another year of growth in 2022, demonstrating continued demand for our global data center platform and our customers’ confidence in our ability to help them transform and scale their businesses,” said
Q4 and Full-Year 2022 Financial Highlights
-
Total revenue increased by
, or$14.5 million 8.1% year over year, to in the fourth quarter.$192.9 million -
On a constant currency basis, total revenue increased by
, or$18.3 million 10.3% year over year. -
Recurring revenue increased by
, or$14.3 million 8.4% year over year, to in the fourth quarter.$184.6 million -
Core revenue increased by
, or$17.1 million 10.5% , year over year to in the fourth quarter.$179.6 million -
Net Loss of
in the quarter, including a non-cash$210.2 million Goodwill impairment charge of ; Transaction Adjusted EBITDA1 increased by$153.6 million , or$13.8 million 28.8% , to and increased by$61.8 million , or$15.0 million 31.3% year over year, on a constant currency basis, in the fourth quarter. -
Full-year total revenue increased by
, or$42.3 million 6.0% year over year, to .$746.0 million -
On a constant currency basis, full-year total revenue increased by
, or$55.1 million 7.8% year over year. -
Full-year recurring revenue increased by
, or$39.0 million 5.8% year over year, to .$710.5 million -
Full-year Core revenue increased by
, or$48.0 million 7.5% year over year, to .$687.1 million -
Full-year Net Loss of
, including a non-cash$355.1 million Goodwill impairment charge of ; Transaction Adjusted EBITDA1 increased by$153.6 million , or$14.5 million 6.4% , year over year, to and increased by$238.9 million , or$19.9 million 8.9% year over year, on a constant currency basis.
Q4 and Full-Year 2022 Business Highlights
-
Average monthly Core churn of
0.6% in the fourth quarter was in-line with the year-ago quarter and 20 basis points below the third-quarter level; average monthly Core churn of0.8% in 2022 was in-line with 2021. -
Interconnection revenue accounted for
11.9% of total revenue in the fourth quarter and grew9.5% year over year; full-year interconnection revenue accounted for11.2% of total revenue and grew1.9% year over year. -
Stabilized occupancy of
74.9% at year-end 2022 increased 350 basis points from year end 2021. - Continued to de-lever the balance sheet with year-end 2022 net financial leverage of 3.5x, a decrease of 30 basis points year over year.
“In 2022, we delivered strong Core revenue growth of
The company also announced that, on
Investor Presentation and Supplemental Financial Information
A presentation regarding the company’s fourth quarter and 2022 financial results, along with supplemental financial information, is available on the Cyxtera Investor Relations website at http://ir.cyxtera.com/.
About
1A complete reconciliation of Net Loss to Transaction Adjusted EBITDA is included in the financial tables included in this release.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the federal securities laws. Because forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Cyxtera’s control. Actual results and conditions (financial or otherwise) may differ materially from those indicated in the forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results and conditions to differ materially from those indicated in the forward-looking statements, including, but not limited to, risks related to Cyxtera’s material indebtedness with near term maturities; Cyxtera’s ability to refinance or renew its existing indebtedness on favorable terms or at all; Cyxtera’s ability to access external sources of capital on favorable terms or at all, which could limit Cyxtera’s ability to execute its business and growth strategies; Cyxtera’s ability to maintain its credit ratings; increases in interest rates; fluctuations in energy prices; fluctuations in foreign currency exchange rates in the markets in which
Statement Regarding Non-GAAP Financial Measures
This press release contains Transaction Adjusted EBITDA, which is a supplemental measure that is not required by, or presented in accordance with, accounting principles generally accepted in
This press release includes constant currency revenue and Transaction Adjusted EBITDA, which are non-GAAP financial measures and are not meant to be considered in isolation or as an alternative to GAAP revenue and GAAP net income (loss).
Consolidated Balance Sheets
As of (unaudited, in millions, except share information) |
|||||||
|
2022 |
|
2021 |
||||
Assets: |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash |
$ |
65.1 |
|
|
$ |
52.4 |
|
Accounts receivable, net of allowance of |
|
28.3 |
|
|
|
18.3 |
|
Prepaid and other current assets |
|
38.1 |
|
|
|
37.5 |
|
Total current assets |
|
131.5 |
|
|
|
108.2 |
|
|
|
|
|
||||
Property and equipment, net |
|
1,638.6 |
|
|
|
1,530.8 |
|
Operating lease right-of-use assets |
|
248.0 |
|
|
|
— |
|
|
|
599.6 |
|
|
|
761.7 |
|
Intangible assets, net |
|
427.6 |
|
|
|
519.8 |
|
Other assets |
|
18.0 |
|
|
|
16.7 |
|
Total assets |
$ |
3,063.3 |
|
|
$ |
2,937.2 |
|
|
|
|
|
||||
Liabilities and shareholders' equity: |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
61.9 |
|
|
$ |
57.9 |
|
Accrued expenses |
|
81.4 |
|
|
|
65.3 |
|
Current portion of operating lease liabilities |
|
35.3 |
|
|
|
— |
|
Current portion of long-term debt, finance leases and other financing obligations |
|
96.7 |
|
|
|
50.3 |
|
Deferred revenue |
|
73.1 |
|
|
|
60.7 |
|
Other current liabilities |
|
25.3 |
|
|
|
10.0 |
|
Total current liabilities |
|
373.7 |
|
|
|
244.2 |
|
|
|
|
|
||||
Operating lease liabilities, net of current portion |
|
272.0 |
|
|
|
— |
|
Long-term debt, net of current portion |
|
853.5 |
|
|
|
896.5 |
|
Finance leases and other financing obligations, net of current portion |
|
1,078.5 |
|
|
|
937.8 |
|
Deferred income taxes |
|
26.0 |
|
|
|
29.9 |
|
Warrant liabilities |
|
— |
|
|
|
64.7 |
|
Other liabilities |
|
75.3 |
|
|
|
158.2 |
|
Total liabilities |
|
2,679.0 |
|
|
|
2,331.3 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
Shareholders' equity: |
|
|
|
||||
Preferred Stock, |
|
— |
|
|
|
— |
|
Class A common stock, |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,968.0 |
|
|
|
1,816.5 |
|
Accumulated other comprehensive (loss) income |
|
(7.2 |
) |
|
|
10.8 |
|
Accumulated deficit |
|
(1,576.5 |
) |
|
|
(1,221.4 |
) |
Total shareholders' equity |
|
384.3 |
|
|
|
605.9 |
|
Total liabilities and shareholders' equity |
$ |
3,063.3 |
|
|
$ |
2,937.2 |
|
Consolidated Statements of Operations
For the Years Ended (unaudited, in millions, except for share information) |
|||||||
|
|
|
|
||||
|
2022 |
|
2021 |
||||
Revenues |
$ |
746.0 |
|
|
$ |
703.7 |
|
Operating costs and expenses: |
|
|
|
||||
Cost of revenues, excluding depreciation and amortization |
|
402.0 |
|
|
|
390.5 |
|
Selling, general and administrative expenses |
|
144.3 |
|
|
|
112.8 |
|
Depreciation and amortization |
|
243.0 |
|
|
|
240.6 |
|
|
|
153.6 |
|
|
|
— |
|
Restructuring, impairment, site closures and related costs |
|
5.2 |
|
|
|
69.8 |
|
Transaction-related costs |
|
— |
|
|
|
5.2 |
|
Total operating costs and expenses |
|
948.1 |
|
|
|
818.9 |
|
|
|
|
|
||||
Loss from operations |
|
(202.1 |
) |
|
|
(115.2 |
) |
Interest expense, net |
|
(163.3 |
) |
|
|
(164.9 |
) |
Other expenses, net |
|
(2.2 |
) |
|
|
(0.1 |
) |
Change in fair value of the warrant liabilities |
|
11.8 |
|
|
|
(25.5 |
) |
Loss from operations before income taxes |
|
(355.8 |
) |
|
|
(305.7 |
) |
Income tax benefit |
|
0.7 |
|
|
|
47.8 |
|
Net loss |
$ |
(355.1 |
) |
|
$ |
(257.9 |
) |
|
|
|
|
||||
Loss per Share |
|
|
|
||||
Basic and diluted |
$ |
(1.99 |
) |
|
$ |
(1.94 |
) |
|
|
|
|
||||
Weighted average number of shares outstanding |
|
|
|
||||
Basic and diluted |
|
178,144,676 |
|
|
|
133,126,171 |
|
Consolidated Statements of Operations
For Three Months Ended (unaudited, in millions, except for share information) |
|||||||
|
|
|
|
||||
|
Q4 2022 |
|
Q4 2021 |
||||
Revenues |
$ |
192.9 |
|
|
$ |
178.4 |
|
Operating costs and expenses: |
|
|
|
||||
Cost of revenues, excluding depreciation and amortization |
|
105.3 |
|
|
|
103.1 |
|
Selling, general and administrative expenses |
|
40.5 |
|
|
|
33.1 |
|
Depreciation and amortization |
|
59.9 |
|
|
|
60.0 |
|
|
|
153.6 |
|
|
|
— |
|
Restructuring, impairment, site closures and related costs |
|
1.3 |
|
|
|
1.4 |
|
Total operating costs and expenses |
|
360.6 |
|
|
|
197.6 |
|
|
|
|
|
||||
Loss from operations |
|
(167.7 |
) |
|
|
(19.2 |
) |
Interest expense, net |
|
(44.7 |
) |
|
|
(35.6 |
) |
Other (expenses) income, net |
|
(0.1 |
) |
|
|
1.1 |
|
Change in fair value of the warrant liabilities |
|
— |
|
|
|
(22.8 |
) |
Loss from operations before income taxes |
|
(212.5 |
) |
|
|
(76.5 |
) |
Income tax benefit |
|
2.3 |
|
|
|
10.9 |
|
Net loss |
$ |
(210.2 |
) |
|
$ |
(65.6 |
) |
|
|
|
|
||||
Loss per Share |
|
|
|
||||
Basic and diluted |
$ |
(1.17 |
) |
|
$ |
(0.40 |
) |
|
|
|
|
||||
Weighted average number of shares outstanding |
|
|
|
||||
Basic and diluted |
|
179,648,986 |
|
|
|
165,978,746 |
|
Consolidated Statements of Cash Flows
For Years Ended ( unaudited, in millions) |
|||||||
|
|
|
|
||||
|
2022 |
|
2021 |
||||
Net loss |
$ |
(355.1 |
) |
|
$ |
(257.9 |
) |
Cash flows from operating activities: |
|
|
|
||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation and amortization |
|
243.0 |
|
|
|
240.6 |
|
Gain on sale of fixed assets |
|
(0.2 |
) |
|
|
— |
|
Restructuring, impairment, site closures and related costs |
|
— |
|
|
|
2.0 |
|
Amortization of favorable/unfavorable leasehold interests, net |
|
— |
|
|
|
3.7 |
|
Loss on extinguishment of debt and amortization of debt issuance costs and fees, net |
|
3.9 |
|
|
|
10.1 |
|
|
|
153.6 |
|
|
|
— |
|
Equity-based compensation |
|
22.3 |
|
|
|
9.5 |
|
Reversal of provision for doubtful accounts |
|
(0.5 |
) |
|
|
(1.2 |
) |
Change of fair value of warrant liabilities |
|
(11.8 |
) |
|
|
25.5 |
|
Deferred income taxes |
|
(2.3 |
) |
|
|
(48.2 |
) |
Non-cash interest expense, net |
|
10.2 |
|
|
|
9.7 |
|
Changes in operating assets and liabilities, excluding impact of acquisitions and dispositions: |
|
|
|
||||
Accounts receivable |
|
(10.9 |
) |
|
|
16.4 |
|
Prepaid and other current assets |
|
2.2 |
|
|
|
3.6 |
|
Other assets |
|
(2.8 |
) |
|
|
6.5 |
|
Operating lease right-of-use assets |
|
34.9 |
|
|
|
— |
|
Operating lease liabilities |
|
(33.9 |
) |
|
|
— |
|
Accounts payable |
|
(0.8 |
) |
|
|
(10.1 |
) |
Accrued expenses |
|
17.0 |
|
|
|
(22.9 |
) |
Due to affiliates |
|
— |
|
|
|
(22.7 |
) |
Other liabilities |
|
28.6 |
|
|
|
61.2 |
|
Net cash provided by operating activities |
|
97.4 |
|
|
|
25.8 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases for property and equipment |
|
(131.8 |
) |
|
|
(77.5 |
) |
Amounts received from affiliate |
|
— |
|
|
|
117.1 |
|
Net cash (used in) provided by investing activities |
|
(131.8 |
) |
|
|
39.6 |
|
Cash flows from financing activities: |
|
|
|
||||
Proceeds from issuance of long-term debt and other financing obligations |
|
42.0 |
|
|
|
40.0 |
|
Proceeds from recapitalization, net of issuance costs |
|
— |
|
|
|
434.5 |
|
Capital contribution |
|
— |
|
|
|
5.2 |
|
Proceeds from sale-leaseback financing |
|
30.0 |
|
|
|
5.0 |
|
Repayment of long-term debt |
|
(46.9 |
) |
|
|
(461.7 |
) |
Repayment of finance leases and other financing obligations |
|
(49.2 |
) |
|
|
(62.1 |
) |
Proceeds from the exercise of warrants, net of redemptions |
|
1.3 |
|
|
|
— |
|
Proceeds from the exercise of the optional shares purchase options |
|
75.0 |
|
|
|
— |
|
Capital redemption |
|
— |
|
|
|
(97.9 |
) |
Net cash provided by (used in) financing activities |
|
52.2 |
|
|
|
(137.0 |
) |
Effect of foreign currency exchange rates on cash |
|
(5.1 |
) |
|
|
3.3 |
|
Net increase (decrease) in cash |
|
12.7 |
|
|
|
(68.3 |
) |
Cash at beginning of period |
|
52.4 |
|
|
|
120.7 |
|
Cash at end of period |
$ |
65.1 |
|
|
$ |
52.4 |
|
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
For Years Ended (unaudited, in millions) |
|||||||
|
|
|
|
||||
|
2022 |
|
2021 |
||||
Net Loss to EBITDA Reconciliation: |
|
|
|
||||
Net loss |
$ |
(355.1 |
) |
|
$ |
(257.9 |
) |
Depreciation and amortization |
|
243.0 |
|
|
|
240.6 |
|
Interest and other expenses, net |
|
165.5 |
|
|
|
165.0 |
|
Income tax expense (benefit) |
|
(0.7 |
) |
|
|
(47.8 |
) |
EBITDA |
|
52.7 |
|
|
|
99.9 |
|
|
|
|
|
||||
Adjustments |
|
|
|
||||
Equity-based compensation |
|
22.3 |
|
|
|
9.5 |
|
Stand-up separation & other |
|
9.4 |
|
|
|
4.2 |
|
|
|
153.6 |
|
|
|
— |
|
Restructuring costs & other |
|
5.2 |
|
|
|
73.6 |
|
REIT conversion costs |
|
2.2 |
|
|
|
— |
|
Total Adjustments |
|
192.6 |
|
|
|
87.3 |
|
Adjusted EBITDA |
|
245.3 |
|
|
|
187.3 |
|
Transaction Adjustments |
|
|
|
||||
Straight-line rent adjustment |
|
1.8 |
|
|
|
3.1 |
|
Amortization of Favorable / Unfavorable Leasehold Interest & ARO accretion |
|
3.6 |
|
|
|
3.4 |
|
Transaction - related costs |
|
— |
|
|
|
5.2 |
|
Change in fair value of warrant liabilities |
|
(11.8 |
) |
|
|
25.5 |
|
Total Adjustments |
|
(6.5 |
) |
|
|
37.2 |
|
Transaction Adjusted EBITDA |
$ |
238.9 |
|
|
$ |
224.4 |
|
Note: Numbers may not foot or cross-foot due to rounding
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
For Three Months Ended (unaudited, in millions) |
|||||||
|
|
|
|
||||
|
Q4 2022 |
|
Q4 2021 |
||||
Net Loss to EBITDA Reconciliation: |
|
|
|
||||
Net loss |
$ |
(210.2 |
) |
|
$ |
(65.6 |
) |
Depreciation and amortization |
|
59.9 |
|
|
|
60.0 |
|
Interest and other expenses, net |
|
44.9 |
|
|
|
34.5 |
|
Income tax benefit |
|
(2.3 |
) |
|
|
(10.9 |
) |
EBITDA |
|
(107.7 |
) |
|
|
18.0 |
|
|
|
|
|
||||
Adjustments |
|
|
|
||||
Equity-based compensation |
|
6.3 |
|
|
|
4.1 |
|
Stand-up separation & other |
|
6.7 |
|
|
|
0.4 |
|
|
|
153.6 |
|
|
|
— |
|
Restructuring costs & other |
|
1.3 |
|
|
|
1.3 |
|
REIT conversion costs |
|
0.5 |
|
|
|
— |
|
Total Adjustments |
|
168.3 |
|
|
|
5.8 |
|
Adjusted EBITDA |
|
60.6 |
|
|
|
23.8 |
|
Transaction Adjustments |
|
|
|
||||
Straight-line rent adjustment |
|
0.3 |
|
|
|
0.6 |
|
Amortization of Favorable / Unfavorable Leasehold Interest & ARO accretion |
|
0.9 |
|
|
|
0.8 |
|
Change in fair value of warrant liabilities |
|
— |
|
|
|
22.8 |
|
Total Adjustments |
|
1.1 |
|
|
|
24.2 |
|
Transaction Adjusted EBITDA |
$ |
61.8 |
|
|
$ |
48.0 |
|
Note: Numbers may not foot or cross-foot due to rounding
View source version on businesswire.com: https://www.businesswire.com/news/home/20230316005311/en/
Press Contact:
press@cyxtera.com
IR Contact:
greer.aviv@cyxtera.com
Source:
FAQ
What were Cyxtera's financial results for Q4 2022?
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