EXDS loss narrower than foreseen
CEO Hancock seeks to buy into Europe, Asia
By Bambi Francisco, CBS MarketWatch
Last Update: 8:35 PM ET Apr 20, 2000 Internet Daily
Net headlines
SANTA CLARA, Calif. (CBS.MW) -- Exodus Communications reported a narrower-than-expected quarterly loss on sales that continued to grow at an impressive clip, but not the blistering pace investors had become accustomed to.
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Updated:
04/22/2000 5:47:38 PM ET
The Santa Clara, Calif.-based (EXDS: news, msgs) company reported a first-quarter net loss of $42.3 million, or 23 cents a share, excluding the amortization of goodwill and intangible assets. That compares with the Wall Street consensus estimate of a loss of 26 cents. It's also the first quarter in which the company became cash-flow positive. Exodus generated $1.7 million in cash flow.
Exodus increased quarterly sales to $134.1 million, up 346 percent from the year-ago period and up 32 percent sequentially. That's well ahead of analyst projections calling for sales to grow 29 percent from the previous quarter.
The strong growth in sales, however, follows 13 consecutive quarters of 40-plus percent revenue growth from one quarter to the next. And Exodus Chief Executive Ellen Hancock told CBS.MarketWatch.com that quarterly sales will grow between 23 and 27 percent sequentially.
Nonetheless, in dollar terms, it was one of Exodus' largest sequential improvements in its history, said David Levy, an analyst at Chase H&Q.
Analysts were quick to congratulate Hancock on a great quarter on a conference call following the release.
Indeed, even in the midst of an increasingly competitive landscape, Exodus has managed to tack on more customers and get them to pay more as well.
Exodus added 545 new customers to bring its total customer count to 2,830. And average annualized revenue per customer rose to $220,000 from $196,000 during the same period a year ago.
Demand for data-center space, bandwidth and managed services, which include consulting and value-added services, contributed evenly to the per-customer revenue improvement, said Hancock. Within the value-added-services segment, however, Hancock noted that customers are increasingly demanding firewall services due to "natural concerns" about security.
Exodus generates 33 percent of its sales from managed services, 40 percent from the rental of data-center space and 27 percent for bandwidth. Hancock said she expects that breakdown to remain consistent for the foreseeable future.
Moreover, she added, business is ramping up. "We were surprised by the number of bookings we had in the quarter," said Hancock. Exodus generated $174 million in new annualized bookings, she said.
Seeking professionals
Hancock plans to beef up Exodus' consulting staff. Currently, Exodus has 650 consultants. That number should near 1,000 by year-end.
"We're interested in acquiring in Europe or Asia," she said. "If not, we'll have to grow organically, but my preference is to buy."
Shares of Exodus fell 4 13/16 to 107 11/16 ahead of the news Thursday. But for the week, shares rose more than 26 percent. |
