Switch Announces Third Quarter 2021 Financial Results
Switch, Inc. (SWCH) reported third-quarter 2021 financial results with revenues of $158.1 million, a rise of 22.8% year-over-year. The company secured significant contracts, including a three-megawatt deal with a Fortune 5 tech firm, which underscores strong demand for its data centers. However, net income fell to a loss of $0.9 million, and Adjusted EBITDA margin decreased to 48.6%. The company adjusted its full-year guidance, expecting revenues between $590 million and $595 million. Additionally, a cash dividend of $0.0525 per share was declared, payable on December 1, 2021.
- Revenue of $158.1 million, a 22.8% increase Y/Y.
- Signed a three-megawatt deal with a Fortune 5 global technology firm.
- 10.4% organic growth projected for full-year 2021 revenue.
- Declared a cash dividend of $0.0525 per share.
- Net income decreased to a loss of $0.9 million.
- Adjusted EBITDA margin dropped to 48.6%, down 350 basis points.
- Income from operations fell by 22.1% Y/Y.
LAS VEGAS, Nov. 4, 2021 /PRNewswire/ -- Switch, Inc. (NYSE: SWCH) ("Switch") today announced financial results for the quarter ended September 30, 2021.
"During the third quarter, Switch continued to build on its strong relationships with some of the world's largest enterprises while accelerating capital investment to meet client demand," said Rob Roy, Founder and CEO of Switch. "The strong demand for our differentiated, resilient, and sustainable data centers was once again evident this quarter with the signing of multi-megawatt transactions with new and existing enterprise customers, including a three-megawatt deal at The Rock Campus with a Fortune 5 global technology company in Austin, proving out our strong conviction in the growth opportunities that lie ahead in Texas and the early validation of our Data Foundry acquisition. We remain committed and focused on the completion of our current construction pipeline across all PRIME locations and the opening of future capacity to support our long-term growth initiatives."
Third Quarter 2021 Financial Results
Financial Summary ($ in millions, except per share amounts) | Q3 2020 | Q2 2021 | Q3 2021 | Y/Y% Change | Q/Q% Change | |||||||
Consolidated revenue | $ | 128.8 | $ | 141.7 | $ | 158.1 | ||||||
Switch revenue (excluding Data Foundry) | $ | 128.8 | $ | 138.4 | $ | 146.1 | ||||||
Data Foundry revenue1 | — | $ | 3.3 | $ | 12.0 | n.m. | n.m. | |||||
Income from operations | $ | 22.9 | $ | 24.8 | $ | 17.8 | - | - | ||||
Net income (loss) | $ | 13.2 | $ | 9.7 | $ | (0.9) | n.m. | n.m. | ||||
Net income (loss) per diluted share | $ | 0.05 | $ | 0.03 | $ | (0.00) | n.m. | n.m. | ||||
Adjusted net income per diluted share | $ | 0.05 | $ | 0.04 | $ | 0.01 | - | - | ||||
Adjusted EBITDA | $ | 67.2 | $ | 79.0 | $ | 76.9 | - | |||||
Adjusted EBITDA Margin % | 52.1 | % | 55.7 | % | 48.6 | % | -350 bp | -710 bp | ||||
Adjusted Funds From Operations | $ | 56.0 | $ | 64.3 | $ | 51.1 | - | - | ||||
Key Performance Indicators | Q3 2020 | Q3 2021 | Q3 2021 | LTM Total | ||||||||
Total Contract Value | $ | 108.9 | $ | 80.6 | $ | 94.1 | ||||||
Annualized Monthly Recurring Revenue | $ | 26.9 | $ | 23.6 | $ | 26.9 | ||||||
Incremental Annualized Revenue | $ | 18.0 | $ | 15.9 | $ | 16.2 | ||||||
Weighted Average Term (yrs) | 5.2 | 3.8 | 4.3 | 4.6 | ||||||||
1Data Foundry acquisition closed on June 7, 2021 contributing 24 days of operations in Q2 2021. |
"Switch's strategic growth initiatives continue to gain traction, producing strong double-digit organic revenue growth in the third quarter and a
"We are pleased by the continued trend of organic revenue acceleration and strong sales performance in the third quarter and year-to-date 2021 periods," said Gabe Nacht, CFO of Switch. "Seasonally elevated power costs affected our third quarter Adjusted EBITDA margin; however, we have already seen a normalization in power markets following the peak summer months. In addition, Switch is on track to exceed the projected
Investor Day
Switch will host its Investor Day on Monday, November 15, 2021. The event will take place at Switch's Las Vegas headquarters, accompanied by a live webcast for virtual attendees. 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.
Balance Sheet and Liquidity
As of September 30, 2021, Switch's total debt outstanding, including finance lease liabilities, net of cash and cash equivalents was
________________________________________ | |
(1) | Net debt is calculated as total debt outstanding, including finance lease liabilities, of |
(2) | Annualized Adjusted EBITDA is calculated as third quarter 2021 Adjusted EBITDA multiplied by four. |
Capital Expenditures and Development
Capital expenditures for the third quarter totaled
During the quarter ended September 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
- Technology leader and former Google Cloud executive Jonathan H. King joined Switch as Chief Revenue Officer. Mr. King will be responsible for refining and augmenting Switch's go-to-market approach, expanding sales opportunities with large enterprises, and accelerating channel sales through strategic technology partnerships.
- Signed a three-megawatt deal with a Fortune 5 global technology company specializing in hardware, software and services at The Rock Campus, representing
$4 million in incremental annualized revenue and$30 million in total contract value, including renewals. - Executed an expansion order with an existing global logistics customer for incremental colocation and network services at The Core Campus and The Keep Campus totaling
$2.4 million in annualized revenue. - Signed a multi-year expansion order totaling over one megawatt with a leading semiconductor customer at The Citadel Campus and The Keep Campus, representing
$2.2 million of incremental annualized revenue. - Executed an expansion deal with an integrated payment solutions customer at The Rock Campus, totaling
$2.5 million in total contract value. - Commenced construction of the Regional Water Improvement Pipeline Project in partnership with the Tahoe Reno Industrial Center ("TRI Center") and various state and local government agencies. The pipeline will deliver 4,000 acre-feet of treated effluent water from a reclamation facility in Sparks, Nevada to the TRI Center, further supporting Switch's industry leading sustainable growth at The Citadel Campus while driving positive outcomes for the local economy, preserving natural ecosystems, and protecting endangered aquatic species in northern Nevada.
2021 Guidance
Switch is adjusting its full year 2021 guidance, excluding contributions from Data Foundry, as follows:
- Revenue in the range of
$563.5 million to$566.5 million , reflecting10.4% organic growth at the midpoint. The implied Q4 revenue guidance represents approximately17% organic growth at the midpoint. - Adjusted EBITDA in the range of
$296 million to$302 million , reflecting a margin of52.9% and11.4% organic growth at the midpoint. - Capital expenditures, excluding land purchases, in the range of
$397 million to$423 million . - On a consolidated basis including Data Foundry, 2021 guidance is as follows:
- Revenue in the range of
$590 million to$595 million , reflecting16% growth at the midpoint. - Adjusted EBITDA in the range of
$307 million to$314 million , reflecting a margin of52.4% and16% growth at the midpoint. - Capital expenditures, excluding land purchases, in the range of
$410 million to$440 million .
The adjustment to 2021 revenue guidance is primarily related to a lower than expected contribution from pass-through power revenue during the second half of 2021, in addition to a modest timing difference in customer deployments relative to prior expectations. The revenue impact from lower pass-through power is largely offset by lower than planned power costs for the second half of 2021, resulting in no material change to the full year Adjusted EBITDA guidance. The increase in guidance for 2021 capital expenditures is primarily related to an acceleration in equipment purchases and construction related to projects in The Keep Campus, The Citadel Campus, and The Core Campus; including Switch's LAS VEGAS 15 facility which is expected to be placed into service in Q2 2022.
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 or loss, 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 9:00 a.m. Eastern time on November 5, 2021. Parties in the United States can access the call by dialing 844-200-6205, and all other parties can access the call by dialing 929-526-1599. Please use participant access code 663251.
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 Friday, November 19, 2021. To access the replay, U.S. parties can dial 866-813-9403, parties in Canada can dial 226-828-7578, and international parties can dial +44 204 525 0658. The replay access code is 556332.
Upcoming Conferences and Events
Switch management will participate in the following upcoming investor conferences:
- NAREIT Virtual Investor Conference – November 9, 2021
- Switch Investor Day – November 15, 2021
- Wells Fargo TMT Summit – December 1-2, 2021
- Barclays Global TMT Conference – December 7, 2021
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 (loss) 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 net income attributable to Switch, Inc. as net income (loss) 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 (Loss) Income to Adjusted EBITDA" and the "Reconciliation of Net (Loss) 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 plans to pursue a conversion to a REIT, including the timing or completion of such conversion; 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.
With respect to Switch's plans to convert to a REIT, there are significant implementation and operational complexities to address before Switch can complete such conversion, including, without limitation, completing internal reorganizations and modifying accounting and information technology systems, and receiving any necessary stockholder and other approvals. Switch can provide no assurance when conversion to a REIT will be successful, if at all. In addition, REIT qualification involves the application of highly technical and complex provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code"" to Switch's operations as well as various factual determinations concerning matters and circumstances not entirely within Switch's control. Although, if it converts to a REIT, Switch plans to operate in a manner consistent with the REIT qualification rules, Switch cannot give assurance that it will so qualify or remain so qualified. Further, under the Code, no more than
Switch's expectations and beliefs regarding the above-referenced 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 any variant thereof 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 any variant thereof 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. | |||||||
September 30, | December 31, | ||||||
2021 | 2020 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 35,240 | $ | 90,719 | |||
Restricted cash | 3,968 | — | |||||
Accounts receivable, net of allowance for credit losses of | 31,544 | 21,723 | |||||
Prepaid expenses | 8,809 | 8,171 | |||||
Other current assets, net of allowance for credit losses of | 2,831 | 2,235 | |||||
Total current assets | 82,392 | 122,848 | |||||
Property and equipment, net | 2,138,545 | 1,737,415 | |||||
Long-term deposit | 10,680 | 2,626 | |||||
Deferred income taxes | 263,933 | 203,201 | |||||
Intangible assets, net | 127,258 | 2,423 | |||||
Goodwill | 106,473 | — | |||||
Other assets, net of allowance for credit losses of | 58,609 | 45,943 | |||||
TOTAL ASSETS | $ | 2,787,890 | $ | 2,114,456 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 42,236 | $ | 14,588 | |||
Accrued salaries and benefits | 14,226 | 4,884 | |||||
Accrued interest | 8,203 | 7,132 | |||||
Accrued expenses and other | 23,489 | 9,686 | |||||
Accrued construction payables | 25,360 | 27,162 | |||||
Deferred revenue, current portion | 16,377 | 14,870 | |||||
Customer deposits | 16,231 | 12,348 | |||||
Swap liability, current portion | 9,334 | 9,418 | |||||
Operating lease liability, current portion | 3,780 | 3,512 | |||||
Total current liabilities | 159,236 | 103,600 | |||||
Long-term debt, net | 1,526,492 | 991,213 | |||||
Operating lease liability | 32,631 | 25,536 | |||||
Finance lease liability | 57,414 | 57,516 | |||||
Deferred revenue | 26,347 | 23,862 | |||||
Liabilities under tax receivable agreement | 359,009 | 278,865 | |||||
Other long-term liabilities | 13,103 | 22,897 | |||||
TOTAL LIABILITIES | 2,174,232 | 1,503,489 | |||||
Commitments and contingencies | |||||||
STOCKHOLDERS' EQUITY: | |||||||
Preferred stock, | — | — | |||||
Class A common stock, | 137 | 119 | |||||
Class B common stock, | 105 | 122 | |||||
Class C common stock, | — | — | |||||
Additional paid in capital | 313,982 | 266,129 | |||||
(Accumulated deficit) retained earnings | (5,020) | 9 | |||||
Accumulated other comprehensive income | 18 | 79 | |||||
Total Switch, Inc. stockholders' equity | 309,222 | 266,458 | |||||
Noncontrolling interest | 304,436 | 344,509 | |||||
TOTAL STOCKHOLDERS' EQUITY | 613,658 | 610,967 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,787,890 | $ | 2,114,456 | |||
Switch, Inc. | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 158,104 | $ | 128,785 | $ | 430,660 | $ | 383,798 | |||||||
Cost of revenue | 97,413 | 74,348 | 246,100 | 209,575 | |||||||||||
Gross profit | 60,691 | 54,437 | 184,560 | 174,223 | |||||||||||
Selling, general and administrative expense | 42,845 | 31,516 | 117,718 | 105,070 | |||||||||||
Income from operations | 17,846 | 22,921 | 66,842 | 69,153 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, including | (15,166) | (6,554) | (34,121) | (20,682) | |||||||||||
Loss on swaps | (3,853) | (1,559) | (3,618) | (23,257) | |||||||||||
Loss on extinguishment of debt | (146) | (245) | (146) | (245) | |||||||||||
Equity in net losses of investments | (326) | — | (925) | — | |||||||||||
Gain on sale of equity method investment | — | — | 5,374 | — | |||||||||||
Other | 500 | 185 | 4,092 | 733 | |||||||||||
Total other expense | (18,991) | (8,173) | (29,344) | (43,451) | |||||||||||
(Loss) income before income taxes | (1,145) | 14,748 | 37,498 | 25,702 | |||||||||||
Income tax benefit (expense) | 278 | (1,515) | (4,287) | (2,622) | |||||||||||
Net (loss) income | (867) | 13,233 | 33,211 | 23,080 | |||||||||||
Less: net (loss) income attributable to noncontrolling interest | (498) | 8,027 | 17,578 | 13,993 | |||||||||||
Net (loss) income attributable to Switch, Inc. | $ | (369) | $ | 5,206 | $ | 15,633 | $ | 9,087 | |||||||
Net (loss) income per share: | |||||||||||||||
Basic | $ | (0.00) | $ | 0.05 | $ | 0.12 | $ | 0.09 | |||||||
Diluted | $ | (0.00) | $ | 0.05 | $ | 0.12 | $ | 0.08 | |||||||
Weighted average shares used in computing net (loss) income per | |||||||||||||||
Basic | 136,292 | 108,690 | 131,067 | 102,703 | |||||||||||
Diluted | 136,292 | 111,565 | 135,091 | 243,553 | |||||||||||
Other comprehensive (loss) income: | |||||||||||||||
Foreign currency translation adjustment, net of reclassification | — | — | (474) | — | |||||||||||
Comprehensive (loss) income | (867) | 13,233 | 32,737 | 23,080 | |||||||||||
Less: comprehensive (loss) income attributable to | (498) | 8,027 | 17,165 | 13,993 | |||||||||||
Comprehensive (loss) income attributable to Switch, Inc. | $ | (369) | $ | 5,206 | $ | 15,572 | $ | 9,087 | |||||||
Switch, Inc. | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months June 30, 2021 | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Net (loss) income | $ | (867) | $ | 13,233 | $ | 33,211 | $ | 23,080 | $ | 9,684 | |||||||||
Interest expense | 15,166 | 6,554 | 34,121 | 20,682 | 10,198 | ||||||||||||||
Interest income | (36) | (39) | (113) | (116) | (38) | ||||||||||||||
Income tax (benefit) expense | (278) | 1,515 | 4,287 | 2,622 | 1,911 | ||||||||||||||
Depreciation and amortization of property and | 45,138 | 36,791 | 125,214 | 105,322 | 41,285 | ||||||||||||||
Amortization of customer relationships | 1,562 | — | 1,979 | — | 417 | ||||||||||||||
Loss on disposal of property and equipment | 32 | 185 | 211 | 283 | 372 | ||||||||||||||
Equity-based compensation | 7,053 | 7,116 | 21,878 | 22,150 | 7,528 | ||||||||||||||
Loss on swaps | 3,853 | 1,559 | 3,618 | 23,257 | 2,970 | ||||||||||||||
Loss on extinguishment of debt | 146 | 245 | 146 | 245 | — | ||||||||||||||
Equity in net losses of investments | 326 | — | 925 | — | 379 | ||||||||||||||
Acquisition-related costs | 82 | — | 4,485 | — | 4,263 | ||||||||||||||
Litigation expense | 4,717 | — | 4,717 | 239 | — | ||||||||||||||
Gain on sale of equity method investment | — | — | (5,374) | — | — | ||||||||||||||
Adjusted EBITDA | $ | 76,894 | $ | 67,159 | $ | 229,305 | $ | 197,764 | $ | 78,969 | |||||||||
Switch, Inc. | |||||||||||
Three Months Ended | |||||||||||
September 30, 2021 | June 30, 2021 | September 30, | |||||||||
Net (loss) income | $ | (867) | $ | 9,684 | $ | 13,233 | |||||
Income tax (benefit) expense | (278) | 1,911 | 1,515 | ||||||||
Depreciation and amortization of property and equipment | 45,138 | 41,285 | 36,791 | ||||||||
Amortization of customer relationships | 1,562 | 417 | — | ||||||||
Loss on disposal of property and equipment | 32 | 372 | 185 | ||||||||
Maintenance capital expenditures | (3,700) | (3,562) | (2,027) | ||||||||
Equity-based compensation | 7,053 | 7,528 | 7,116 | ||||||||
Unrealized (gain) loss on swaps | (4,293) | 563 | (811) | ||||||||
Amortization of deferred financing costs | 689 | 620 | 439 | ||||||||
Installation adjustment, net | 36 | 654 | 256 | ||||||||
Other adjustments, net | 407 | 141 | (948) | ||||||||
Equity in net losses of investments | 326 | 379 | — | ||||||||
Acquisition-related costs | 82 | 4,263 | — | ||||||||
Loss on extinguishment of debt | 146 | — | 245 | ||||||||
Litigation expense | 4,717 | — | — | ||||||||
Adjusted Funds From Operations | $ | 51,050 | $ | 64,255 | $ | 55,994 | |||||
Switch, Inc. | |||||||
Three Months Ended September 30, | |||||||
2021 | 2020 | ||||||
Net (loss) income attributable to Switch, Inc. | $ | (369) | $ | 5,206 | |||
Loss on swaps | 3,853 | 1,559 | |||||
Income tax impact on adjustment(1) | (460) | (149) | |||||
Noncontrolling interest impact on adjustment | (1,661) | (849) | |||||
Adjusted net income attributable to Switch, Inc. | $ | 1,363 | $ | 5,767 | |||
Adjusted net income per share—diluted | $ | 0.01 | $ | 0.05 | |||
Weighted average shares used in computing adjusted net income per share—diluted | 141,889 | 111,565 | |||||
________________________________________ | |||||||
(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, Inc.
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