LAS VEGAS, March 1, 2021 /PRNewswire/ -- Switch,
Inc. (NYSE: SWCH) ("Switch") today announced financial results for
the quarter and year ended December 31,
2020.
"Switch's fourth quarter and full year 2020 results highlight
strong sales performance and execution amid a robust demand
backdrop for enterprise hybrid cloud solutions, as evidenced by our
record Q4 bookings and revenue backlog," said Rob Roy, Switch Founder and CEO. "Our 2021
strategic priorities include the ongoing construction of multiple
new data centers consisting of 2.8 million square feet and more
than 300 megawatts over the next five years to address current and
future demand. We are also focused on the execution of several
large customer installations across our Prime campus locations and
managing our sales opportunities to maximize our currently
available capacity. With the industry's highest rated and most
sustainable enterprise class multi-tenant data centers, innovative
edge colocation, secure storage solutions, and low-cost
telecommunications offerings, we believe that Switch is uniquely
positioned to benefit from the accelerating digital transformation
among enterprises."
2020 Financial Results
- Total revenue of $511.5 million,
compared to $462.3 million in 2019,
an increase of 11%.
- Income from operations of $95.4
million, compared to $76.9
million in 2019, an increase of 24%.
- Net income of $38.4 million,
compared to $31.5 million in 2019.
Net income in 2020 includes the impact of a $23.5 million loss on interest rate swaps,
reducing net income by $0.07 per
diluted share.
- Net income per diluted share of $0.14, and adjusted net income per diluted share
of $0.21.
- Adjusted EBITDA of $268.3
million, compared to $231.1
million in 2019, an increase of 16%. Adjusted EBITDA margin
was 52.5%, compared to 50.0% in 2019, representing 250 basis points
of margin expansion.
- Total capital expenditures of $347.0
million, compared to $307.7
million in 2019. Excluding land acquisitions, 2020 capital
expenditures were $343.8 million,
increasing 23% compared to 2019.
- Signed total contract value of $501
million, including a record $76
million of incremental annualized recurring revenue,
compared to $60 million in the prior
year.
Fourth Quarter 2020 Financial Results
- Total revenue of $127.7 million,
compared to $120.5 million for the
same quarter in 2019, an increase of 6%. Fourth quarter revenue was
affected by two customers electing to migrate a portion of their
application stack to a public cloud environment, resulting in an
approximate $3 million reduction in
fourth quarter revenue.
- Income from operations of $26.3
million, compared to $18.3
million for the same quarter last year, an increase of
43%.
- Net income of $15.3 million,
compared to $12.9 million for the
same quarter in 2019. Fourth quarter 2020 net income includes the
impact of a $0.2 million loss on
interest rate swaps, decreasing net income by $0.01 per diluted share.
- Net income per diluted share of $0.05, and adjusted net income per diluted share
of $0.06.
- Adjusted EBITDA of $70.6 million,
compared to $57.6 million in the year
ago quarter, an increase of 22%. Adjusted EBITDA margin was 55.2%,
compared to 47.8% in the year ago period.
- Capital expenditures of $97.9
million, compared to $86.4
million for the same quarter in 2019. Maintenance capital
expenditures were $3.4 million, or
2.7% of total revenue.
- Total signed contract value of $240
million representing annualized revenue of $55 million at full deployment, including
$36 million of incremental recurring
revenue.
"During 2020 we continued to see very strong demand from both
new and existing customers as we executed over $500 million in total contract value for a second
consecutive year. We were also able to add 90 new logos to the
Switch ecosystem in 2020," said Thomas
Morton, President of Switch. "The fourth quarter was our
most productive sales quarter in the history of the company, with
our sales team closing over $36
million of incremental annualized revenue bookings. From a
business standpoint, COVID-19 did affect Switch in two ways. Due to
COVID-19 travel restrictions still in place for most large
enterprises, the starting installation dates for many recent
customer signings have been set to begin in the second half of
2021. In addition, the unprecedented reductions and furloughs of
municipal employee staffing levels caused zoning and permitting
delays which pushed out the completion timeline of two SUPERNAP
data centers that were planned to open in 2021 into 2022. We remain
very positive about our nearly three million square feet of
enterprise class data center infrastructure that is currently under
construction at our Prime campus locations. We believe this
significant level of Tier 5 data center construction will solidify
Switch's position as an industry leader over the next five years as
enterprises continue to evolve their mission critical technology
infrastructure toward the hybrid cloud future."
"Switch's fourth quarter financial results capped off another
year of double-digit organic growth in revenue and Adjusted
EBITDA," said Gabe Nacht, CFO of
Switch. "While we have continued to execute on the sales front
across all Prime campus locations, we have also focused on
operational efficiencies throughout the business that are helping
to drive margin expansion and continue to deliver strong returns
for our shareholders. We have definitively addressed the question
regarding our ability to successfully expand to new markets, having
sold over 70% of our first massive data center in Atlanta within eight months of opening. We
immediately began construction on the second and third data centers
at The Keep Campus based on the continued strong demand for
Switch's enterprise class multi-tenant data center infrastructure
in the U.S. Southeast region."
Balance Sheet and Liquidity
As of December 31, 2020, Switch's
total debt outstanding, including finance lease liabilities, net of
cash and cash equivalents was $958.0 million, resulting in a net debt to
Q4 2020 annualized Adjusted EBITDA(1) ratio of 3.4x. As
of December 31, 2020, Switch had
liquidity of $590.7 million,
including cash and cash equivalents and availability under its
revolver.
________________________________________
|
(1)
Annualized Adjusted EBITDA is calculated as fourth quarter 2020
Adjusted EBITDA multiplied by four.
|
Capital Expenditures and Development
Capital expenditures for the fourth quarter totaled $97.9 million, including maintenance capital
expenditures of $3.4 million, or 2.7%
of total revenue. Growth capital expenditures were $94.5 million for the fourth quarter of 2020,
compared to $84.9 million in the same
period last year. Fourth quarter capital expenditures were driven
by accelerated equipment purchases due to customer density growth
and site development for the future data centers across our Core,
Citadel, and Keep Campus locations.
Full year 2020 capital expenditures totaled $347.0 million, or $343.8
million excluding land acquisitions. Maintenance capital
expenditures for the year totaled $8.7
million, or 1.7% of total revenue. Growth capital
expenditures, excluding land acquisitions, were $335.1 million in 2020, compared to $272.0 million in the prior year. During the year
ended December 31, 2020, Switch
invested (i) $124.3 million in The
Citadel Campus, with the majority of the costs related to tenant
improvements and power equipment for the opening of two additional
sectors and a power system, which added 1,320 of sellable cabinet
equivalents in Q4 2020; (ii) $107.3
million in The Keep Campus for power and cooling equipment
to support customer demand and continued tenant improvements in the
ATLANTA 1 facility, as well as
site development costs for the next two facilities, with the next
Atlanta data center estimated to
be open in Q2 2023; (iii) $103.3
million primarily for data center equipment and continued
site development costs in The Core Campus, with the majority of the
spend related to the continued buildout and customer ramps in
LAS VEGAS 11 and the ongoing
development of our next three facilities, with LAS VEGAS 15 estimated to open in Q2 2022;
(iv) $12.1 million in The Pyramid
Campus, primarily related to tenant improvements on two additional
sectors and cooling infrastructure for customer deployments.
Dividend
Switch today announced that its Board of Directors has declared
a cash dividend of $0.05 per share of
Switch's Class A common stock. The dividend will be payable on
March 26, 2021 to all stockholders of
record as of the close of business on March
16, 2021. Prior to the payment of this dividend, Switch,
Ltd. will make a cash distribution to all holders of record of
common units of Switch, Ltd., including Switch, of $0.05 per common unit. 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, debt covenants, and other factors
deemed relevant by Switch's Board of Directors.
Recent Business Highlights
- Signed a multi-campus 10-year expansion totaling $95 million in contract value and $11 million of incremental annualized revenue
with a leading global logistics customer. The transaction makes
this customer Switch's anchor tenant in The Keep Campus and
increases its existing footprint in The Core Campus.
- Executed a five-megawatt expansion deal totaling over
$11 million of incremental annualized
revenue with a leading e-commerce customer, whose deployment with
Switch will now total more than 25 megawatts spanning across The
Core Campus and The Citadel Campus.
- Signed a seven-year incremental expansion order totaling over
$29 million in contract value with a
Fortune 100 semiconductor manufacturer in The Citadel Campus. The
new agreement increases the customer's Switch footprint to over 8
megawatts.
- Signed a multi-year colocation agreement totaling over
$11 million in total contract value
with a leading developer of application software for the automotive
industry in The Core Campus.
- Continued positive momentum in Switch's Environmental, Social,
and Governance ("ESG") performance with recent rating upgrades from
MSCI, Sustainalytics, and ISS.
- Broke ground on the second and third data centers in The
Citadel Campus and the next two data centers in The Keep Campus
following the anchor tenant signing in ATLANTA 1.
- Awarded Environmental Protection Agency ("EPA") ENERGY STAR®
certification for our LAS VEGAS 8
data center at The Core Campus, with additional facilities expected
to be certified later this year. The ENERGY STAR® certification
represents a third-party assessment signifying that Switch's data
centers perform in the top tier of facilities nationwide for energy
efficiency and meet the strict energy performance levels set by the
EPA.
- Switch was ranked #7 among all U.S. companies for solar energy
adoption, as measured by installed capacity, in the Solar Energy
Industry Association's (SEIA) annual "Solar Means Business" report.
This recognition places Switch among the country's largest and most
recognizable brands, and Switch is the only colocation data center
technology company to be named in the Top 10.
2021 Guidance
Switch is introducing full year 2021 guidance as follows:
- Revenue in the range of $540
million to $555 million.
- Adjusted EBITDA in the range of $278
million to $290 million.
- Capital expenditures, excluding land acquisitions, in the range
of $330 million to $370 million.
Switch expects its 2021 revenue growth to be weighted toward the
second half of the year. Switch's 2021 growth outlook includes the
delay in construction permits and zoning approvals that occurred
during 2020 as a result of COVID-19, pushing out the completion of
certain construction projects by three to six months. Importantly,
due to many of the recent multi-megawatt installation commencement
dates being pushed out by clients due to their COVID-19 travel
restrictions, a significant amount of space and power is being
reserved for ramps as reflected in Switch's record backlog, which
reduces the remaining quantity of sellable capacity in 2021. This
is also due to the expected timing of backlog revenue contribution
and customer revenue reductions, in addition to the realization of
$4.8 million in non-recurring fiber
revenue in the first half of 2020. Switch's 2021 guidance includes
an approximate $18 million annualized
reduction in recurring revenue, resulting from the decision by two
customers to migrate a portion of their workloads to a public cloud
environment. Both customers are expected to maintain the balance of
their hybrid workloads at Switch and the company does not
anticipate further significant customer migrations at this time.
The full effect of these revenue reductions will be realized in the
first quarter of 2021.
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 interest rate
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.
Upcoming Conferences and Events
Switch management will participate in the following investor
conferences:
- J.P Morgan Global High Yield & Leveraged Finance Conference
on March 3, 2021.
- Raymond James Institutional Investor Conference on March 3, 2021.
- J.P Morgan 49th Annual Global TMC Conference on
May 24, 2021.
- RBC Global Datacenter, Cloud & Broadband Infrastructure
Conference on May 25, 2021.
Conference Call Information
Switch will host a conference call and live webcast for analysts
and investors at 5:00 p.m. Eastern time on March 1, 2021. Parties in the United
States can access the call by dialing 844-808-7137, parties in
Canada can access the call by
dialing 855-669-9657, and international parties can access the call
by dialing 412-317-5287. Request to be joined to the Switch, Inc.
earnings call.
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 Monday, March 14, 2021. To access the replay,
parties in the United States
should dial 877-344-7529, parties in Canada should dial 855-669-9658, and
international parties should dial 412-317-0088. The replay access
code is 10152612.
Use of Non-GAAP Financial Measures
To supplement Switch's 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, net debt and net debt to annualized Adjusted EBITDA,
which are non-GAAP measures, in this press release. Switch defines
Adjusted EBITDA as net income adjusted for interest expense,
interest income, income taxes, depreciation and amortization of
property and equipment 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 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" table 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," "anticipates,"
"could," "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 guidance relating
to revenue, Adjusted EBITDA and capital expenditures for the year
ending December 31, 2021;
expectations regarding operating results, including the timing of
revenue growth in 2021; estimated data center construction and
opening timelines; expectations regarding customer demand and
retention, market position, growth and financial results; and
expectations regarding future declarations of dividends and cash
distributions. 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) adverse economic
developments in Switch's markets or the technology industry; (ii)
obsolescence or reduction in marketability of Switch's
infrastructure due to changing industry demands; (iii) risks
related to the COVID-19 pandemic, including disruptions to our
business and to those of our customers and suppliers; (iv) loss of
key customers; (v) its ability to effectively compete in the data
center market; (vi) its ability to obtain necessary capital and
comply with terms in its credit instruments; (vii) construction
risks, including delays, litigation and cost increases; (viii) the
impact of future changes in legislation and regulations, and (ix)
other risk factors discussed under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operation" and elsewhere in Switch's most recent Annual
Report on Form 10-K and in Switch's other reports filed with the
Securities and Exchange Commission ("SEC"). Switch's SEC filings
are available on the Investor Relations 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, Inc. (NYSE: SWCH), is the independent global 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 500 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; and Atlanta,
Georgia 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)
(unaudited)
|
|
|
December
31,
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
90,719
|
|
|
$
|
24,721
|
|
Accounts receivable,
net of allowance for credit losses of $792 and $309,
respectively
|
21,723
|
|
|
23,365
|
|
Prepaid
expenses
|
8,171
|
|
|
7,137
|
|
Other current assets,
net of allowance for credit losses of $0
|
2,235
|
|
|
3,817
|
|
Total current
assets
|
122,848
|
|
|
59,040
|
|
Property and
equipment, net
|
1,737,415
|
|
|
1,551,117
|
|
Long-term
deposit
|
2,626
|
|
|
3,429
|
|
Deferred income
taxes
|
203,201
|
|
|
114,372
|
|
Other assets, net of
allowance for credit losses of $87 and $0, respectively
|
48,366
|
|
|
45,785
|
|
TOTAL
ASSETS
|
$
|
2,114,456
|
|
|
$
|
1,773,743
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Long-term debt,
current portion
|
$
|
—
|
|
|
$
|
6,000
|
|
Accounts
payable
|
14,588
|
|
|
19,477
|
|
Accrued salaries and
benefits
|
4,884
|
|
|
5,828
|
|
Accrued
interest
|
7,132
|
|
|
467
|
|
Accrued expenses and
other
|
9,686
|
|
|
10,799
|
|
Accrued construction
payables
|
27,162
|
|
|
37,269
|
|
Deferred revenue,
current portion
|
14,870
|
|
|
14,991
|
|
Customer
deposits
|
12,348
|
|
|
10,830
|
|
Interest rate swap
liability, current portion
|
9,418
|
|
|
3,464
|
|
Operating lease
liability, current portion
|
3,512
|
|
|
4,805
|
|
Total current
liabilities
|
103,600
|
|
|
113,930
|
|
Long-term debt,
net
|
991,213
|
|
|
745,372
|
|
Operating lease
liability
|
25,536
|
|
|
26,142
|
|
Finance lease
liability
|
57,516
|
|
|
57,614
|
|
Deferred
revenue
|
23,862
|
|
|
27,852
|
|
Liabilities under tax
receivable agreement
|
278,865
|
|
|
162,076
|
|
Other long-term
liabilities
|
22,897
|
|
|
13,112
|
|
TOTAL
LIABILITIES
|
1,503,489
|
|
|
1,146,098
|
|
Commitments and
contingencies
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
Preferred stock,
$0.001 par value per share, 10,000 shares authorized, none issued
and outstanding
|
—
|
|
|
—
|
|
Class A common stock,
$0.001 par value per share, 750,000 shares authorized, 119,009 and
89,768 shares issued and outstanding, respectively
|
119
|
|
|
90
|
|
Class B common stock,
$0.001 par value per share, 300,000 shares authorized, 121,640 and
151,047 shares issued and outstanding, respectively
|
122
|
|
|
151
|
|
Class C common stock,
$0.001 par value per share, 75,000 shares authorized, none issued
and outstanding
|
—
|
|
|
—
|
|
Additional paid in
capital
|
266,129
|
|
|
204,711
|
|
Retained
earnings
|
9
|
|
|
2,420
|
|
Accumulated other
comprehensive income
|
79
|
|
|
79
|
|
Total Switch, Inc.
stockholders' equity
|
266,458
|
|
|
207,451
|
|
Noncontrolling
interest
|
344,509
|
|
|
420,194
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
610,967
|
|
|
627,645
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
2,114,456
|
|
|
$
|
1,773,743
|
|
Switch,
Inc.
Consolidated Statements of Comprehensive Income
(in thousands, except per share data)
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
127,749
|
|
|
$
|
120,545
|
|
|
$
|
511,547
|
|
|
$
|
462,310
|
|
Cost of
revenue
|
69,900
|
|
|
63,533
|
|
|
279,475
|
|
|
242,679
|
|
Gross
profit
|
57,849
|
|
|
57,012
|
|
|
232,072
|
|
|
219,631
|
|
Selling, general and
administrative expense
|
31,589
|
|
|
38,665
|
|
|
136,659
|
|
|
142,704
|
|
Income from
operations
|
26,260
|
|
|
18,347
|
|
|
95,413
|
|
|
76,927
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense,
including $583, $409, $1,840, and $1,636, respectively, in
amortization of debt issuance costs and original issue
discount
|
(9,092)
|
|
|
(7,213)
|
|
|
(29,774)
|
|
|
(29,236)
|
|
(Loss) gain on
interest rate swaps
|
(232)
|
|
|
2,775
|
|
|
(23,489)
|
|
|
(14,917)
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
(245)
|
|
|
—
|
|
Other
|
267
|
|
|
217
|
|
|
1,000
|
|
|
1,481
|
|
Total other
expense
|
(9,057)
|
|
|
(4,221)
|
|
|
(52,508)
|
|
|
(42,672)
|
|
Income before income
taxes
|
17,203
|
|
|
14,126
|
|
|
42,905
|
|
|
34,255
|
|
Income tax
expense
|
(1,908)
|
|
|
(1,182)
|
|
|
(4,530)
|
|
|
(2,713)
|
|
Net income
|
15,295
|
|
|
12,944
|
|
|
38,375
|
|
|
31,542
|
|
Less: net income
attributable to noncontrolling interest
|
8,843
|
|
|
8,896
|
|
|
22,836
|
|
|
22,625
|
|
Net income
attributable to Switch, Inc.
|
$
|
6,452
|
|
|
$
|
4,048
|
|
|
$
|
15,539
|
|
|
$
|
8,917
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computing net income per share:
|
|
|
|
|
|
|
|
Basic
|
115,111
|
|
|
88,176
|
|
|
105,822
|
|
|
76,501
|
|
Diluted
|
243,346
|
|
|
243,773
|
|
|
243,501
|
|
|
246,329
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net of tax of $0
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Comprehensive
income
|
15,295
|
|
|
12,944
|
|
|
38,375
|
|
|
31,542
|
|
Less: comprehensive
income attributable to noncontrolling interest
|
8,843
|
|
|
8,896
|
|
|
22,836
|
|
|
22,625
|
|
Comprehensive income
attributable to Switch, Inc.
|
$
|
6,452
|
|
|
$
|
4,048
|
|
|
$
|
15,539
|
|
|
$
|
8,917
|
|
Switch,
Inc.
Reconciliation of Net Income to Adjusted EBITDA
(in thousands)
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$
|
15,295
|
|
|
$
|
12,944
|
|
|
$
|
38,375
|
|
|
$
|
31,542
|
|
Interest
expense
|
9,092
|
|
|
7,213
|
|
|
29,774
|
|
|
29,236
|
|
Interest
income
|
(40)
|
|
|
(45)
|
|
|
(156)
|
|
|
(704)
|
|
Income tax
expense
|
1,908
|
|
|
1,182
|
|
|
4,530
|
|
|
2,713
|
|
Depreciation and
amortization of property and equipment
|
37,416
|
|
|
31,104
|
|
|
142,738
|
|
|
119,945
|
|
Loss on disposal of
property and equipment
|
79
|
|
|
438
|
|
|
362
|
|
|
586
|
|
Equity-based
compensation
|
6,583
|
|
|
6,626
|
|
|
28,733
|
|
|
29,524
|
|
Loss (gain) on
interest rate swaps
|
232
|
|
|
(2,775)
|
|
|
23,489
|
|
|
14,917
|
|
Shareholder-related
litigation expense
|
—
|
|
|
944
|
|
|
239
|
|
|
3,302
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
245
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
70,565
|
|
|
$
|
57,631
|
|
|
$
|
268,329
|
|
|
$
|
231,061
|
|
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
December
31,
|
|
Years
Ended
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
attributable to Switch, Inc.
|
$
|
6,452
|
|
|
$
|
4,048
|
|
|
$
|
15,539
|
|
|
$
|
8,917
|
|
Loss (gain) on
interest rate swaps
|
232
|
|
|
(2,775)
|
|
|
23,489
|
|
|
14,917
|
|
Income tax impact on
adjustment(1)
|
(23)
|
|
|
216
|
|
|
(2,015)
|
|
|
(898)
|
|
Noncontrolling
interest impact on adjustment
|
(120)
|
|
|
1,747
|
|
|
(13,896)
|
|
|
(10,642)
|
|
Adjusted net income
attributable to Switch, Inc.
|
$
|
6,541
|
|
|
$
|
3,236
|
|
|
$
|
23,117
|
|
|
$
|
12,294
|
|
|
|
|
|
|
|
|
|
Adjusted net income
per share—diluted
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
Weighted average
shares used in computing adjusted net income per
share—diluted
|
117,887
|
|
|
90,643
|
|
|
108,489
|
|
|
78,077
|
|
________________________________________
|
(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