CyrusOne posts Q2 revenue of $251 million, low colocation churn (0.6%)

CyrusOne reported revenue of $251.5 million for the second quarter, compared to $196.9 million for the same period in 2018, an increase of 28%. The increase in revenue was driven primarily by a 20% increase in occupied colocation square feet (CSF) from organic growth and the Zenium acquisition, a $14.7 million increase in equipment sales, and additional interconnection services.

Net loss was $(8.5) million for the second quarter, compared to net income of $105.9 million in the same period in 2018. Net loss for the second quarter included an $8.5 million loss on the Company’s equity investment in GDS, a leading data center provider in China. Net loss per diluted common share3 was $(0.08) in the second quarter of 2019, compared to net income per diluted common share of $1.06 in the same period in 2018.

“Our results this quarter reflect very strong financial performance, and the midpoints of our current 2019 guidance ranges imply revenue growth of 19%, Adjusted EBITDA growth of 18%, and Normalized FFO per share growth of 10% compared to 2018,” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “We continue to be one of the fastest-growing REITs, and the investments we have made over the past two years building out our international platform should enable us to continue to grow at industry-leading rates through 2020 and beyond.”

Some key metrics from the quarterly report:

• The weighted average lease term of the new leases, based on square footage, is 67 months (5.6 years), and the weighted average remaining lease term of CyrusOne’s portfolio is 54 months (taking into account the impact of its backlog). 
• Recurring rent churn for the second quarter was 0.6%, compared to 1.1% for the same period in 2018.
• In Q2, CyrusOne completed construction on 59,000 CSF and 21 MW of power capacity across four projects in Raleigh-Durham, the New York Metro area, London, and Frankfurt. 
• CSF leased as of the end of the second quarter was 89% for stabilized properties and 84% overall. 
• CyrusOne has development projects underway in Northern Virginia, Dallas, the New York Metro area, Austin, Frankfurt, London, and Amsterdam that are expected to add approximately 146,000 CSF and 55 MW of power capacity.