Terremark: Cloud Revenues Continue to Grow
Terremark Worldwide, which recently joined The VAR Guy’s SaaS 20 Stock Index, says its colocation and cloud-related revenues continue to grow. For the company’s fiscal Q1 ended June 30, federal bookings also grew — which is impressive considering the federal budget deficit has cast some doubt on government IT spending. Here’s a closer look at Terremark’s latest financial results.
Among the key takeaways:
1. The Revenue Pie: Terremark’s colocation revenue grew 9 percent quarter over quarter. Colocation services accounted for 41 percent of the company’s Q1 revenue compared with 36 in the previous quarter. Managed services revenue, meanwhile, slipped to 53 percent of revenue versus 58 percent in the previous quarter. Jose Segrera, Terremark’s chief financial officer, said the decrease in managed services as a revenue component was due to a decline in project revenue coupled with strong colocation growth in the company’s Capital Region and Santa Clara data centers. Terremark’s Q1 colocation wins include a deal with Verizon Business.
2. Where Cloud Fits In: Terremark’s annualized cloud revenue run rate now stands at $26 million. That compares with $2.5 million a year ago. As for recent wins, Manual Medina, Terremark’s chairman and chief executive officer, pointed to a financial institution which is migrating from a legacy colocation to an enterprise cloud service.
3. Federal Dollars: The company cited $57.9 million of new annual contract value booked in the quarter, a 27 percent increase over the previous quarter. Federal bookings in Q1 more than doubled to $22.9 million compared with $11.2 million in Q4. Medina cited federal data center consolidation and cloud projects as factors driving business.
4. Bottom Line: Overall, Terremark generated Q1 revenue of $79 million, a 20 percent increase compared with $65.8 million a year ago. The company posted a net loss of $10.5 million compared with $15.4 million in last year’s Q1.
We realize: The cloud hype has become overwhelming in recent months. It’s difficult to separate fact from fiction. But as a publicly held company, Terremark’s financials provide some valuable cloud insights. We’ll continue to track their performance and the broader SaaS/cloud industry via the SaaS 20 Stock Index, which rose 8 percent from January through July 30, 2010.