Cyrusone Inc. (NASDAQ:CONE) Q1 2018 Earnings Conference Call Transcript

May 03, 2018 • 11:00 am ET

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Cyrusone Inc. (NASDAQ:CONE) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning. And welcome to the CyrusOne First Quarter 2018 Earnings call. All participants will be in listen-only mode. (Operator Instructions) Please note this event is being recorded.

I'd now like to turn the conference over to Michael Schafer. Please go ahead.

Executive
Michael Schafer

Thank you, Brandan. Good morning, everyone. And welcome to CyrusOne's First Quarter 2018 Earnings Call. Today, I am joined by Gary Wojtaszek, President and CEO; and Diane Morefield, CFO.

Before we begin, I'd like to remind you that our first quarter earnings release along with the first quarter financial tables are available on the investor relations section of our website at cyrusone.com. I'd also like to remind you that comments made on today's call and some other responses to your questions deal with forward-looking statements related to CyrusOne and are subject to risks and uncertainties.

Factors that may cause our actual results to differ from expectations are detailed in the company's filings with the SEC, which you may access on SEC's website or on cyrusone.com. We undertake no obligation to revise these statements following the date of this conference call, except as required by law. In addition, some of the company's remarks this morning contain non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release which is posted on the investor section of the company's website.

I'd now like to turn the call over to our President and CEO, Gary Wojtaszek.

Executive
Gary Wojtaszek

Thanks, Schafer. Howdy, everyone. Welcome to CyrusOne's first quarter earnings call. We put up great numbers across the board with one of the strongest leasing quarters in the company's history and revenue and adjusted EBITDA growth of over 30%. Our sales funnel remain strong even with the big quarter and we're well positioned with capacity across all our markets in the US.

The closing of the Zenium acquisition is expected this month and we'll soon have a presence in four of Europe's largest markets. As Slide 4 shows, revenue of $196.6 million was up 32% over the first quarter of 2017 and adjusted EBITDA of a $109.5 million was up 36%. Our organic revenue growth was 22% and organic EBITDA growth was similar. These are among the highest growth rates for publicly traded REITs and reflect great execution by the team as well as strong underlying fundamentals. Normalized FFO of $0.85 per share was up 18% compared to last year.

Pro-forma including Zenium, bookings for the quarter totaled 32 megawatts of power and 240,000 colocation square feet. And the leases will generate $45 million in annualized GAAP revenue. This includes three megawatts and 14000 colocation square feet totaling more then $4 million in annualized revenue signed by Zenium and over $40 million booked in our portfolio.

We also added three new Fortune 1000 customers during the quarter and now have a total of 200 which is a significant milestone but also means that we have 80% of the Fortune 1000 still to go which test is feverishly working