Switch Announces Second Quarter 2021 Financial Results
Switch, Inc. (NYSE: SWCH) reported strong Q2 2021 results, achieving consolidated revenue of $141.7 million, up 11.6% year-over-year. The company benefited from increased demand following its Data Foundry acquisition, which contributed $3.3 million to revenue. Net income decreased to $9.7 million, down 27.4% year-over-year, while adjusted EBITDA rose to $79.0 million, reflecting a 14.3% increase. Switch raised its full year 2021 revenue guidance to between $593.5 million and $603.5 million, citing robust customer installations and an expanding backlog of $63.5 million. A cash dividend of $0.0525 per share was also declared.
- Q2 2021 revenue of $141.7 million, an 11.6% increase year-over-year.
- Adjusted EBITDA increased to $79.0 million, up 14.3% from Q2 2020.
- Raised 2021 revenue guidance by $21 million, reflecting strong customer demand.
- Net income decreased to $9.7 million, down 27.4% year-over-year.
- Net income per diluted share fell to $0.03, a 31.2% decrease.
LAS VEGAS, Aug. 5, 2021 /PRNewswire/ -- Switch, Inc. (NYSE: SWCH) ("Switch") today announced financial results for the quarter ended June 30, 2021.
"Switch's robust sales performance continued through the second quarter of 2021, driving a record revenue backlog for the third consecutive quarter," said Rob Roy, Founder and CEO of Switch. "Importantly, customer installations in the first half of 2021 have paced ahead of expectations, resulting in strong backlog conversion and accelerated revenue growth. Following the close of our Data Foundry acquisition, we are already executing on operational efficiencies and seeing strong customer demand in Texas. We look forward to sharing future progress as we continue to expand capacity at The Rock Campus, both at Dell's global headquarters and the Data Foundry properties in Austin and Houston. These initiatives are in addition to our highly active construction pipeline across the other Switch Primes, where we expect to open 1.3 million square feet of space between now and early 2023."
Second Quarter 2021 Financial Results
Financial Summary ($ in millions, except per share amounts) | Q2 2020 | Q1 2021 | Q2 2021 | Y/Y% Change | Q/Q% Change | |||||||
Consolidated revenue | $ | 126.9 | $ | 130.9 | $ | 141.7 | ||||||
Switch revenue (excluding Data Foundry) | $ | 126.9 | $ | 130.9 | $ | 138.4 | ||||||
Data Foundry revenue1 | — | — | $ | 3.3 | n.m. | n.m. | ||||||
Income from operations | $ | 25.3 | $ | 24.2 | $ | 24.8 | - | |||||
Net income | $ | 13.3 | $ | 24.4 | $ | 9.7 | - | - | ||||
Net income per diluted share | $ | 0.05 | $ | 0.09 | $ | 0.03 | - | - | ||||
Adjusted net income per diluted share | $ | 0.06 | $ | 0.08 | $ | 0.04 | - | - | ||||
Adjusted EBITDA1 | $ | 69.1 | $ | 73.4 | $ | 79.0 | ||||||
Adjusted EBITDA Margin % | 54.5 | % | 56.1 | % | 55.7 | % | 130 bp | -40 bp | ||||
Adjusted Funds From Operations | $ | 57.9 | $ | 61.0 | $ | 64.3 | ||||||
Key Performance Indicators | Q2 2020 | Q1 2021 | Q2 2021 | LTM Average | ||||||||
Total Contract Value | $ | 79.3 | $ | 117.3 | $ | 80.6 | ||||||
Annualized Monthly Recurring Revenue | $ | 23.9 | $ | 37.3 | $ | 23.6 | ||||||
Incremental Annualized Revenue | $ | 12.2 | $ | 18.1 | $ | 15.9 | ||||||
Weighted Average Term (yrs) | 4.0 | 4.1 | 3.8 | 4.9 | ||||||||
1Data Foundry acquisition closed on June 7, 2021. Data Foundry contributed |
"Switch had a strong first half in 2021, with our teams making exceptional strides toward key strategic priorities including sales execution, construction, and customer installations," said Thomas Morton, President of Switch. "We are excited for the next chapter of Switch's domestic expansion efforts following the close of our Data Foundry acquisition and execution of a land purchase agreement with Dell, which will provide a tremendous platform for growth as we expand The Rock Campus in central Texas."
"We are pleased with our solid second quarter performance, particularly our accelerating revenue growth and strong margin profile as the Prime locations increase in scale," said Gabe Nacht, CFO of Switch. "We are also encouraged by the continued growth in our sales pipeline and booked-not-billed backlog of
Strategic Review
Switch is currently conducting a review of shareholder value initiatives to support its industry-leading technology and differentiated strategy. These initiatives include the evaluation by the Board's REIT Committee of a potential REIT election, a review of Switch's operational and financial targets, and a review of its Board structure. The mandate for the committee is to target a financial profile that accelerates Switch's long-term value creation and provides the necessary flexibility to invest in its strategy. There can be no assurance that the evaluation will result in a change in Switch's tax filing status.
Investor Day
Switch will host an Investor Day on November 8th, 2021, coinciding with the NAREIT REITworld conference in Las Vegas, Nevada. Switch Founder and CEO Rob Roy will present his vision and long-term strategy, and members of the management team will outline key operational and financial aspects of the business, including multi-year financial targets. Switch will hold the event live at its Las Vegas headquarters, including a live webcast, subject to any change in COVID-19 safety guidelines.
Balance Sheet and Liquidity
As of June 30, 2021, Switch's total debt outstanding, including finance lease liabilities, net of cash and cash equivalents was
________________________________________ | |
(1) | Annualized Adjusted EBITDA is calculated as second quarter 2021 Adjusted EBITDA multiplied by four. |
Capital Expenditures and Development
Capital expenditures for the second quarter totaled
During the quarter ended June 30, 2021, Switch invested (i)
Dividend
Switch today announced that its Board of Directors has declared a cash dividend of
Future declarations of dividends are subject to the determination and discretion of Switch's Board of Directors based on its consideration of many factors, including Switch's results of operations, financial condition, capital requirements, restrictions in Switch, Ltd.'s debt agreements, and other factors that Switch's Board of Directors deems relevant.
Recent Business Highlights
- The acquisition of Data Foundry officially closed on June 7, 2021 for a purchase price of
$420 million . - Switch issued
$500 million of eight-year senior unsecured notes at4.125% on June 7, 2021 to fund the acquisition of Data Foundry and for general corporate purposes. - Switch published its 2020 Environmental, Social and Governance Report in April, highlighting the company's leadership and innovation across the spectrum of environmental stewardship, social commitment, and sound corporate governance. The report was prepared in accordance with GRI, TCFD, and SASB reporting frameworks.
- Signed a multi-campus 3.5-megawatt deal with a Fortune 100 global technology firm specializing in hyperconverged infrastructure solutions, representing more than
$6.5 million in annualized revenue and$13 million in total contract value. - Executed an expansion order with an existing global logistics customer at both The Core Campus and The Keep Campus totaling over
$4.5 million in annualized revenue and over$20 million in total contract value. - Signed a new materials innovation customer to a multi-campus deal totaling over
$5.5 million in total contract value.
2021 Guidance
Switch is adjusting its full year 2021 guidance, excluding contributions from Data Foundry, as follows:
- Revenue in the range of
$566 million to$574 million , reflecting11% organic growth at the midpoint. - Adjusted EBITDA in the range of
$295 million to$303 million , reflecting a margin of52.5% and11% organic growth at the midpoint. - Capital expenditures, excluding land purchases, in the range of
$371 million to$401 million .
On a consolidated basis including Data Foundry, 2021 guidance is as follows:
- Revenue in the range of
$593.5 million to$603.5 million , reflecting17% growth at the midpoint. - Adjusted EBITDA in the range of
$306 million to$315 million , reflecting a margin of51.9% and16% growth at the midpoint. - Capital expenditures, excluding land purchases, in the range of
$383 million to$417 million .
Excluding Data Foundry, Switch increased its 2021 revenue guidance by
Switch management expects a full year 2021 revenue contribution of
Switch does not provide reconciliations for the non-GAAP financial measures included in the 2021 guidance above because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items. This is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income, depreciation and amortization expense, impairment charges, gains or losses on retirement of debt, gains or losses on swaps, and variations in effective tax rate, which are difficult to predict and estimate and are primarily dependent on future events, but which are excluded from Switch's calculation of Adjusted EBITDA.
Conference Call Information
Switch will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time on August 5, 2021. Parties in the United States can access the call by dialing 844-200-6205, and international parties can access the call by dialing +44 208 0682 558. Please use participant access code 720211.
The webcast will be accessible on Switch's investor relations website at investors.switch.com for one year. A telephonic replay of the conference call will be available through Thursday, August 12, 2021. To access the replay, parties can visit https://www.incommglobalevents.com/replay/6498/switch-inc-second. The replay access code is 168436.
Upcoming Conferences and Events
Switch management will participate in the following upcoming investor conferences:
- Cowen 7th Annual Communications Infrastructure Summit from August 9-10, 2021.
- Goldman Sachs 30th Annual Communacopia Conference on September 21, 2021.
- J.P. Morgan CFO Conference on September 22, 2021.
- Berenberg U.S. Real Estate Seminar (Virtual) on September 23, 2021.
- Switch Investor Day November 8, 2021 (pending changes in COVID-19 guidelines).
Use of Non-GAAP Financial Measures
To supplement Switch's condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), Switch uses Adjusted EBITDA, Adjusted EBITDA margin, adjusted funds from operations, adjusted net income attributable to Switch, Inc., adjusted net income per diluted share, net debt, and net debt to annualized Adjusted EBITDA, which are non-GAAP measures, in this press release. In addition, Switch presents revenue and Adjusted EBITDA, excluding Data Foundry, which are also non-GAAP measures. Switch defines Adjusted EBITDA as net income adjusted for interest expense, interest income, income taxes, depreciation and amortization of property and equipment, amortization of customer relationships, and for specific and defined supplemental adjustments to exclude (i) non-cash equity-based compensation expense; (ii) equity in net losses of investments; and (iii) certain other items that Switch believes are not indicative of its core operating performance. Switch defines Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. Switch defines adjusted funds from operations as net income adjusted for depreciation and amortization of property and equipment, amortization of customer relationships, non-cash equity-based compensation, deferred income tax expense, unrealized loss (gain) on swaps, maintenance capital expenditures, and certain other items that Switch believes are not indicative of its core operating performance. Switch defines adjusted net income attributable to Switch, Inc. as net income adjusted for gain (loss) on swaps, net of noncontrolling interest and income taxes calculated using the specific tax treatment applicable to the adjustments. Switch defines net debt as total debt outstanding, including finance lease liabilities, net of cash and cash equivalents. Switch defines net debt to last quarter annualized Adjusted EBITDA as net debt divided by quarterly Adjusted EBITDA multiplied by four. Switch uses net debt and net debt to last quarter annualized Adjusted EBITDA as measures to evaluate its net debt and leverage position. Switch believes that investors also may find such measures to be helpful in assessing its ability to pursue business opportunities and investments.
The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. In addition, the non-GAAP financial measures exclude certain recurring expenses that have been and will continue to be significant expenses of Switch's business.
Switch believes these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. For more information on Switch's non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of Net Income to Adjusted EBITDA," the "Reconciliation of Net Income to Adjusted Funds From Operations," and the "Reconciliation of Net Income Attributable to Switch, Inc. to Adjusted Net Income Attributable to Switch, Inc." tables in this press release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements generally relate to future events or Switch's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern the company's expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to Switch's expectations regarding its future growth outlook; Switch's expectations regarding the acquisition of Data Foundry and the expansion of The Rock Campus; Switch's expectations regarding building toward its long-term strategic goals, including sales execution, construction and customer installations, Switch's anticipated operating results and capital expenditures for the year ending December 31, 2021, Switch's expectations regarding key transactions and its sales pipeline for the remainder of 2021, expectations regarding future declarations of dividends and cash distributions, and expectations regarding anticipated capital investment in infrastructure across the five Prime campus locations, including its construction initiatives to increase gross square footage. Switch's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to inherent risks, uncertainties and changes in circumstance that are difficult or impossible to predict. The risks and uncertainties that could affect Switch's financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release include, without limitation (i) the impact of COVID-19 and the Delta variant on its business operations, including the duration, spread, severity, and reoccurrences of such pandemic, the duration and scope of related government orders and restrictions, the impact on its employees, and the impact on the global economy including demand for its customers, partners and vendors' products and services; (ii) the impact of COVID-19 and the Delta variant on its vendors and suppliers, including disruptions and inefficiencies in the supply chain; (iii) its ability to successfully implement its business strategies and effectively manage its growth and expansion plans; (iv) its ability to successfully integrate the Data Foundry operations and expand The Rock Campus; (v) delays or unexpected costs in development and opening of data center facilities; (vi) any slowdown in demand for its existing data center resources; (vii) its ability to attract new customers, realize the anticipated benefits of its new contracts and achieve sufficient customer demand to realize future expected returns on its investments; (viii) its ability to effectively compete in the data center market; (ix) its ability to license space in its existing data centers; (x) the geographic concentration of its data centers in certain markets; (xi) local economic, credit and market conditions that impact its customers in these markets; (xii) the impact of delays or disruptions in third-party network connectivity; (xiii) developments in the technology and data center industries in general that negatively impact Switch, including development of new technologies, adoption of new industry standards, declines in the technology industry or slowdown in the growth of the Internet; (xiv) its ability to adapt to evolving technologies and customer demands in a timely and cost-effective manner; (xv) its ability to obtain necessary capital to fund its capital requirements and its ability to continue to comply with covenants and terms in its credit instruments; (xvi) fluctuations in interest rates and increased operating costs, including power costs; (xvii) significant disruptions, security breaches, including cyber security breaches, or system failures at any of its data center facilities; (xviii) loss of significant customers or key personnel; (xix) the impact of future changes in legislation and regulations, including changes in real estate and zoning laws, the Americans with Disabilities Act of 1990, environmental and other laws that impact its business and industry, in addition to those under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in Switch's Annual Report on Form 10-K for the year ended December 31, 2020 and in Switch's other reports filed with the Securities and Exchange Commission ("SEC"). Switch's SEC filings are available on the Investors section of Switch's website at investors.switch.com and on the SEC's website at www.sec.gov. The forward-looking statements in this press release are based on information available to Switch as of the date hereof, and Switch disclaims any obligation to update any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing Switch's views as of any date subsequent to the date of this press release.
ABOUT Switch
Switch (NYSE: SWCH), is the independent leader in exascale data center ecosystems, edge data center designs, industry-leading telecommunications solutions and next-generation technology innovation. Switch Founder and CEO Rob Roy has developed more than 750 issued and pending patent claims covering data center designs that have manifested into the company's world-renowned data centers and technology solutions.
We innovate to sustainably progress the digital foundation of the connected world with a focus on enterprise-class and emerging hybrid cloud solutions. The Switch PRIMES, located in Las Vegas and Tahoe Reno, Nevada; Grand Rapids, Michigan; Atlanta, Georgia; and Austin, Texas are the world's most powerful exascale data center campus ecosystems with low latency to major U.S. markets. Visit switch.com for more information or follow us on LinkedIn and Twitter.
Switch, Inc. | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except per share data) | |||||||
June 30, | December 31, | ||||||
2021 | 2020 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 84,816 | $ | 90,719 | |||
Restricted cash | 3,968 | — | |||||
Accounts receivable, net of allowance for credit losses of | 31,897 | 21,723 | |||||
Prepaid expenses | 7,438 | 8,171 | |||||
Other current assets, net of allowance for credit losses of | 2,564 | 2,235 | |||||
Total current assets | 130,683 | 122,848 | |||||
Property and equipment, net | 2,059,944 | 1,737,415 | |||||
Long-term deposit | 6,652 | 2,626 | |||||
Deferred income taxes | 236,079 | 203,201 | |||||
Goodwill | 128,446 | 2,423 | |||||
Intangible assets, net | 108,741 | — | |||||
Other assets, net of allowance for credit losses of | 56,207 | 45,943 | |||||
TOTAL ASSETS | $ | 2,726,752 | $ | 2,114,456 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 30,714 | $ | 14,588 | |||
Accrued salaries and benefits | 9,523 | 4,884 | |||||
Accrued interest | 8,661 | 7,132 | |||||
Accrued expenses and other | 18,991 | 9,686 | |||||
Accrued construction payables | 44,318 | 27,162 | |||||
Deferred revenue, current portion | 14,273 | 14,870 | |||||
Customer deposits | 15,744 | 12,348 | |||||
Swap liability, current portion | 11,504 | 9,418 | |||||
Operating lease liability, current portion | 4,330 | 3,512 | |||||
Total current liabilities | 158,058 | 103,600 | |||||
Long-term debt, net | 1,487,338 | 991,213 | |||||
Operating lease liability | 34,001 | 25,536 | |||||
Finance lease liability | 57,443 | 57,516 | |||||
Deferred revenue | 25,880 | 23,862 | |||||
Liabilities under tax receivable agreement | 326,315 | 278,865 | |||||
Other long-term liabilities | 15,391 | 22,897 | |||||
TOTAL LIABILITIES | 2,104,426 | 1,503,489 | |||||
Commitments and contingencies | |||||||
STOCKHOLDERS' EQUITY: | |||||||
Preferred stock, | — | — | |||||
Class A common stock, | 131 | 119 | |||||
Class B common stock, | 111 | 122 | |||||
Class C common stock, | — | — | |||||
Additional paid in capital | 295,785 | 266,129 | |||||
Retained earnings | 2,733 | 9 | |||||
Accumulated other comprehensive income | 18 | 79 | |||||
Total Switch, Inc. stockholders' equity | 298,778 | 266,458 | |||||
Noncontrolling interest | 323,548 | 344,509 | |||||
TOTAL STOCKHOLDERS' EQUITY | 622,326 | 610,967 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,726,752 | $ | 2,114,456 | |||
Switch, Inc. | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 141,690 | $ | 126,917 | $ | 272,556 | $ | 255,013 | |||||||
Cost of revenue | 76,994 | 68,198 | 148,687 | 135,227 | |||||||||||
Gross profit | 64,696 | 58,719 | 123,869 | 119,786 | |||||||||||
Selling, general and administrative expense | 39,875 | 33,438 | 74,873 | 73,554 | |||||||||||
Income from operations | 24,821 | 25,281 | 48,996 | 46,232 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, including | (10,198) | (6,693) | (18,955) | (14,128) | |||||||||||
(Loss) gain on swaps | (2,970) | (4,143) | 235 | (21,698) | |||||||||||
Equity in net losses of investments | (379) | — | (599) | — | |||||||||||
Gain on sale of equity method investment | — | — | 5,374 | — | |||||||||||
Other | 321 | 271 | 3,592 | 548 | |||||||||||
Total other expense | (13,226) | (10,565) | (10,353) | (35,278) | |||||||||||
Income before income taxes | 11,595 | 14,716 | 38,643 | 10,954 | |||||||||||
Income tax expense | (1,911) | (1,380) | (4,565) | (1,107) | |||||||||||
Net income | 9,684 | 13,336 | 34,078 | 9,847 | |||||||||||
Less: net income attributable to noncontrolling interest | 5,323 | 8,239 | 18,076 | 5,966 | |||||||||||
Net income attributable to Switch, Inc. | $ | 4,361 | $ | 5,097 | $ | 16,002 | $ | 3,881 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.03 | $ | 0.05 | $ | 0.12 | $ | 0.04 | |||||||
Diluted | $ | 0.03 | $ | 0.05 | $ | 0.12 | $ | 0.03 | |||||||
Weighted average shares used in computing net income per share: | |||||||||||||||
Basic | 130,163 | 104,987 | 128,412 | 99,676 | |||||||||||
Diluted | 245,527 | 243,916 | 131,660 | 243,622 | |||||||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustment, net of reclassification and tax of | — | — | (474) | — | |||||||||||
Comprehensive income | 9,684 | 13,336 | 33,604 | 9,847 | |||||||||||
Less: comprehensive income attributable to noncontrolling interest | 5,323 | 8,239 | 17,663 | 5,966 | |||||||||||
Comprehensive income attributable to Switch, Inc. | $ | 4,361 | $ | 5,097 | $ | 15,941 | $ | 3,881 | |||||||
Switch, Inc. | |||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Net income | $ | 9,684 | $ | 13,336 | $ | 34,078 | $ | 9,847 | $ | 24,394 | |||||||||
Interest expense | 10,198 | 6,693 | 18,955 | 14,128 | 8,757 | ||||||||||||||
Interest income | (38) | (44) | (77) | (77) | (39) | ||||||||||||||
Income tax expense | 1,911 | 1,380 | 4,565 | 1,107 | 2,654 | ||||||||||||||
Depreciation and amortization of property and equipment | 41,285 | 36,013 | 80,076 | 68,531 | 38,791 | ||||||||||||||
Amortization of customer relationships | 417 | — | 417 | — | — | ||||||||||||||
Loss (gain) on disposal of property and equipment | 372 | 38 | 179 | 98 | (193) | ||||||||||||||
Equity-based compensation | 7,528 | 7,510 | 14,825 | 15,034 | 7,297 | ||||||||||||||
Loss (gain) on swaps | 2,970 | 4,143 | (235) | 21,698 | (3,205) | ||||||||||||||
Equity in net losses of investments | 379 | — | 599 | — | 220 | ||||||||||||||
Acquisition-related costs | 4,263 | — | 4,403 | — | 140 | ||||||||||||||
Gain on sale of equity method investment | — | — | (5,374) | — | (5,374) | ||||||||||||||
Shareholder-related litigation expense | — | 47 | — | 239 | — | ||||||||||||||
Adjusted EBITDA | $ | 78,969 | $ | 69,116 | $ | 152,411 | $ | 130,605 | $ | 73,442 | |||||||||
Switch, Inc. | |||||||||||
Reconciliation of Net Income to Adjusted Funds From Operations | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | |||||||||
Net income | $ | 9,684 | $ | 24,394 | $ | 13,336 | |||||
Income tax expense | 1,911 | 2,654 | 1,380 | ||||||||
Depreciation and amortization of property and equipment | 41,285 | 38,791 | 36,013 | ||||||||
Amortization of customer relationships | 417 | — | — | ||||||||
Loss (gain) on disposal of property and equipment | 372 | (193) | 38 | ||||||||
Equity-based compensation | 7,528 | 7,297 | 7,510 | ||||||||
Unrealized loss (gain) on swaps | 563 | (5,562) | 2,151 | ||||||||
Equity in net losses of investments | 379 | 220 | — | ||||||||
Acquisition-related costs | 4,263 | 140 | — | ||||||||
Gain on sale of equity-method investment | — | (5,374) | |||||||||
Amortization of deferred financing costs | 620 | 583 | 409 | ||||||||
Installation adjustment, net | 654 | 1,444 | 58 | ||||||||
Other adjustments, net | 141 | (1,253) | (1,053) | ||||||||
Maintenance capital expenditures | (3,562) | (2,121) | (1,919) | ||||||||
Adjusted Funds From Operations | $ | 64,255 | $ | 61,020 | $ | 57,923 | |||||
Switch, Inc. | |||||||
Reconciliation of Net Income Attributable to Switch, Inc. to | |||||||
Adjusted Net Income Attributable to Switch, Inc. | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
Three Months Ended June 30, | |||||||
2021 | 2020 | ||||||
Net income attributable to Switch, Inc. | $ | 4,361 | $ | 5,097 | |||
Loss on swaps | 2,970 | 4,143 | |||||
Income tax impact on adjustment(1) | (339) | (383) | |||||
Noncontrolling interest impact on adjustment | (1,354) | (2,320) | |||||
Adjusted net income attributable to Switch, Inc. | $ | 5,638 | $ | 6,537 | |||
Adjusted net income per share—diluted | $ | 0.04 | $ | 0.06 | |||
Weighted average shares used in computing adjusted net income per share—diluted | 134,190 | 107,910 | |||||
________________________________________ | |
(1) | The income tax impact is derived by applying the U.S. statutory tax rate to Switch, Inc.'s portion of the adjustment. |
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SOURCE Switch
FAQ
What were Switch's Q2 2021 financial results?
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