Hot Stock Analysis: InterXion Holding N.V.’s (NYSE: INXN)

On 06 Dec 18, InterXion Holding N.V.’s (NYSE: INXN) has shown upward/downward moved of 0.41% and ended the last trade at $61.24. The trading volume was recorded to 625,205 shares as compared to average traded volume of 483,969 shares. The stock as of last trading session moved 12.68% up from its 52 week low and was -11.18% behind its 52 week high.

Interxion Holding NV (INXN) reported its results recently for the three months ended 30 September 2018.

Financial Highlights*

  • Revenue raised 14% to €142.2M (3Q 2017: €124.6M).
  • Recurring revenue1raised 15% to €134.8M (3Q 2017: €117.4M).
  • Net income raised 16% to €10.9M (3Q 2017: €9.4M).
  • Adjusted net income2raised by 16% to €11.6M (3Q 2017: €10.0M).
  • Earnings per diluted share raised by 15% to €0.15 (3Q 2017: €0.13).
  • Adjusted earnings2per diluted share raised by 16% to €0.16 (3Q 2017: €0.14).
  • Adjusted EBITDA2raised by 17% to €65.8M (3Q 2017: €56.2M).
  • Adjusted EBITDA margin raised to 46.3% (3Q 2017: 45.1%).
  • Capital expenditures, including intangible assets3, were €103.2M (3Q 2017: €75.2M).
  • Issued €200M aggregate principal amount of additional 4.75% Senior Notes due 2025 at an issue price of 103.00%.

Operating Highlights

  • During the third quarter, Interxion completed the following capacity additions:
    • 3,300 sqm expansion across two data centres in Amsterdam;
    • 2,400 sqm expansion across two data centres in Frankfurt, including the opening of FRA13;
    • 600 sqm expansion in Marseille;
    • 1,200 sqm expansion in Vienna; and
    • 200 sqm expansion in Zurich.
  • Equipped space raised by 7,700 square metres in the third quarter to 140,300 square metres.
  • Revenue generating space raised by 5,000 square metres in the third quarter to 111,200 square metres.
  • Utilisation rate at the end of the third quarter was 79%.

“Growing demand from the major cloud and content platforms for Interxion’s highly-connected data centres is driving strong bookings and steady revenue growth,” stated David Ruberg, Interxion’s Chief Executive Officer. “The underlying demand drivers are secular in nature and, accordingly, we have improved our balance sheet and expanded capacity in key markets to meet this demand.”

Quarterly Review

Revenue in the third quarter of 2018 was €142.2M, a 14% raise over the third quarter of 2017 and a 2% raise over the second quarter of 2018. Recurring revenue was €134.8M, a 15% raise over the third quarter of 2017 and a 2% raise over the second quarter of 2018. Recurring revenue in the third quarter represented 95% of total revenue. On a constant currency4 basis, revenue in the third quarter of 2018 was 14% higher than in the third quarter of 2017.

Cost of sales in the third quarter of 2018 was €55.9M, a 13% raise over the third quarter of 2017 and a 4% raise over the second quarter of 2018.

Gross profit was €86.3M in the third quarter of 2018, a 15% raise over the third quarter of 2017 and a 1% raise over the second quarter of 2018. Gross profit margin was 60.7% in the third quarter of 2018, contrast with 60.2% in the third quarter of 2017 and 61.3% in the second quarter of 2018.

Sales and marketing costs in the third quarter of 2018 were €8.7M, a 6% raise over the third quarter of 2017 and a 9% decrease from the second quarter of 2018.

Other general and administrative costs (not including depreciation and amortisation, share-based payments, M&A transaction costs and other adjusting items) were €11.8M in the third quarter of 2018, a 12% raise over the third quarter of 2017 and a 2% decrease from the second quarter of 2018.

Depreciation and amortisation in the third quarter of 2018 was €32.9M, an 18% raise from the third quarter of 2017 and a 2% raise from the second quarter of 2018.

Operating income in the third quarter of 2018 was €27.1M, an 11% raise from the third quarter of 2017 and a 3% raise from the second quarter of 2018.

Net finance expense in the third quarter of 2018 was €11.7M, an 8% raise from the third quarter of 2017 and a 49% decrease from the second quarter of 2018 (no change from the second quarter of 2018 when not including €11.2M of one-time financing charges related to the refinancing of our capital structure that occurred in the second quarter of 2018).

On 20 September 2018, Interxion completed the issuance of €200M principal amount of additional 4.75% Senior Notes due 2025 at an issue price of 103.00%, resulting in net proceeds of €203.8M.

Income tax expense for the third quarter of 2018 was €4.4M, an 8% raise contrast with the third quarter of 2017 and a 59% raise from the second quarter of 2018. The sequential raise in the quarterly income tax expense reflects the impact on taxable income of the one-time refinancing charges in the second quarter of 2018.

Net income was €10.9M in the third quarter of 2018, a 16% raise over the third quarter of 2017 and a €10.3M raise from the second quarter of 2018, which was influenced by €11.2M of one-time charges relating to the refinancing in the second quarter of 2018.

Adjusted net income was €11.6M in the third quarter of 2018, a 16% raise over the third quarter of 2017 and a 31% raise from the second quarter of 2018.

Adjusted EBITDA for the third quarter of 2018 was €65.8M, a 17% raise over the third quarter of 2017 and a 4% raise over the second quarter of 2018. Adjusted EBITDA margin was 46.3% in the third quarter of 2018, contrast with 45.1% in the third quarter of 2017 and 45.7% in the second quarter of 2018.

Net cash flows from operating activities were €53.9M in the third quarter of 2018, contrast with €32.5M in the third quarter of 2017 and €31.6M in the second quarter of 2018.

Cash generated from operations5 was €60.9M in the third quarter of 2018, contrast with €55.2M in the third quarter of 2017 and €55.1M in the second quarter of 2018.

Capital expenditures, including intangible assets, were €103.2M in the third quarter of 2018, contrast with €75.2M in the third quarter of 2017 and €120.5M in the second quarter of 2018.

Cash and cash equivalents were €289.9M at 30 September 2018, contrast with €38.5M at year end 2017.

Total borrowings, net of deferred financing fees, were €1,289.7M at 30 September 2018, contrast with €832.6M at year end 2017.

Equipped space at the end of the third quarter of 2018 was 140,300 square metres, contrast with 118,900 square metres at the end of the third quarter of 20176 and 132,600 square metres at the end of the second quarter of 2018. Revenue generating space at the end of the third quarter of 2018 was 111,200 square metres, contrast with 97,100 square metres at the end of the third quarter of 20176 and 106,200 square metres at the end of the second quarter of 2018. Utilisation rate, the ratio of revenue-generating space to equipped space, was 79% at the end of the third quarter of 2018, contrast with 82% at the end of the third quarter of 2017 and 80% at the end of the second quarter of 2018.

The company price switched up -0.50% 20-Days Simple Moving Average, dropped -0.97% from 50-Days Simple Moving Average and fell -2.91% from 200 Days Simple Moving Average. INXN return on assets ratio of the Company was 1.60% and return on equity ratio was 5.10% while its return on investment ratio was 5.80%.

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