EXDS review:
"EXDS.......King, in the tornado of web-hosting, amidst the greater paradigm shift to E-commerce." Apollo, 1/2000
I listened to the conference call, read the boards, and compared with prior notes. My comments as follows.
1. Tremendous and RISING revenue growth, above and beyond what the prior trend already had been. Reviewing prior estimates, analysts had estimated Q4 revs at ~ $90 million, I had estimated them at $99 million, and they topped all estimates at $101.4 million. (http://www.siliconinvestor.com/readmsg.aspx?msgid=12281266 )
2. That yields sequential quarterly growth, per annum average, from 1997 - 1999 of 45%, 44%, and 48% respectively.
3. Customer growth is unbelievable, from qtr to qtr; they added in Q4 540 customers to the prior base of 1745 customers (31%) increase in 1 qtr!
4. Furthermore, they increased capacity at their Internet Data Centers (IDC) from 400,000 sq ft in 1998 to 1.7 million sq ft in 1999. They announced plans to expand to 3.5 million sq ft in 2000, but are now reconsidering expanding still further and faster. They will be in Japan, China, Singapore, Australia, England, Germany, France, Sweden, the Netherlands, as they sweep into these new intercontinental markets in Y2K.
5. In 1998, EXDS hosted 6,600 servers; in 1999, hosted 27,000 co-located servers. Now thought to host > 50% of the Web?s most trafficked sites.
6. EXDS is a king, subject to increasing competition, dependent on execution, and at risk of decreasing margins from competitive pricing pressures. In Q4, EXDS won a higher % of bids than usual, at the higher end of their traditional 75 - 85% rate. They feel this is because they are the only one to offer a complete package of web hosting, managed and professional services. As a result, EXDS is RAISING PRICES TO THE CUSTOMER BY 10%, starting 3/2000. Annual revenues per customer continue to rise, from $176,000 in Q3 to $196,000 in Q4.
7. They only lost about 2% of customers. What competition??????
8. Many upgrades and readjustments to analyst figures today.
from Robertson's analyst is (with the key word: dominant as applied to eCommerce Infrastructure):
"We believe that Exodus has established one of the most dominant business models in the eCommerce Infrastructure Services market,' said Juarez. "We believe the company is in a strong position to harvest the market for the next 12 to 24 months. EXDS isn't just a Category Killer, but is instead a Category Monster."
I am probably sounding a little too buoyant here. But you get the idea. I think Y2K estimates of annual revenues are way off, and EXDS will beat them handily.
My thanx to the thread for allowing me adopt EXDS and periodically update you.
Stan |
