Company profile

Ticker
SWCH
Exchange
Website
CEO
Rob Roy
Employees
Incorporated in
Location
Fiscal year end
SEC CIK

SWCH stock data

(
)

Calendar

11 May 20
3 Jun 20
31 Dec 20

News

Company financial data Financial data

Quarter (USD) Mar 20 Dec 19 Sep 19 Jun 19
Revenue 128.1M 120.55M 122.35M 111.97M
Net income -3.49M 12.94M 10.08M 4.67M
Diluted EPS -0.01 0.04 0.03 0.02
Net profit margin -2.72% 10.74% 8.24% 4.17%
Operating income 20.95M 22.66M 18.13M 20.65M
Net change in cash 39.99M -27.76M -7.69M -26.79M
Cash on hand 64.71M 24.72M 52.48M 60.17M
Cost of revenue 67.03M 65.38M 62.11M 57.89M
Annual (USD) Dec 19 Dec 18 Dec 17 Dec 16
Revenue 462.31M 405.86M 378.28M 318.35M
Net income 31.54M 29.32M -8.58M 31.37M
Diluted EPS 0.11 0.09 -1.88 0.15
Net profit margin 6.82% 7.22% -2.27% 9.85%
Operating income 76.93M 54.68M 18.83M 51.07M
Net change in cash -56.84M -183.11M 241.95M 8.52M
Cash on hand 24.72M 81.56M 264.67M 22.71M
Cost of revenue 242.68M 224.41M 198.23M 168.84M

Financial data from Switch earnings reports

Date Owner Security Transaction Code $Price #Shares $Value #Remaining
1 Jun 20 Teresa A. Borden Class A Common Stock Sell Dispose S 18.937 50,000 946.85K 4,624,998
1 Jun 20 Thomas A Thomas Class A Common Stock Sell Dispose S 18.784 30,000 563.52K 1,752,135
1 Jun 20 Thomas A Thomas Class B Common Stock Gift Dispose G 0 62,500 0 8,187,500
1 Jun 20 Thomas A Thomas Common Units Class A Common Stock Gift Dispose G 0 62,500 0 8,187,500
29 May 20 Thomas A Thomas Class A Common Stock Sell Dispose S 18.907 22,000 415.95K 1,782,135
29 May 20 Teresa A. Borden Class A Common Stock Sell Dispose S 19.011 50,000 950.55K 4,674,998
28 May 20 Teresa A. Borden Class A Common Stock Sell Dispose S 19.033 50,000 951.65K 4,724,998
27 May 20 Teresa A. Borden Class A Common Stock Sell Dispose S 18.729 24,896 466.28K 4,774,998
27 May 20 Teresa A. Borden Class A Common Stock Sell Dispose S 17.954 25,104 450.72K 4,799,894
26 May 20 Teresa A. Borden Class A Common Stock Sell Dispose S 19.53 200 3.91K 4,824,998
71.7% owned by funds/institutions
13F holders
Current Prev Q Change
Total holders 170 144 +18.1%
Opened positions 56 38 +47.4%
Closed positions 30 25 +20.0%
Increased positions 53 51 +3.9%
Reduced positions 38 37 +2.7%
13F shares
Current Prev Q Change
Total value 1.07B 868.43M +23.1%
Total shares 73.93M 58.6M +26.2%
Total puts 414.8K 577.6K -28.2%
Total calls 446.2K 1.05M -57.4%
Total put/call ratio 0.9 0.6 +68.6%
Largest owners
Shares Value Change
Sylebra Capital 9.17M $132.39M +16.2%
Renaissance Technologies 7.45M $107.46M +15.6%
Vanguard 5.91M $85.21M +2.5%
USB Us Bancorp 4.2M $60.65M -0.2%
ArrowMark Colorado 3.57M $51.55M -43.3%
Senvest Management 3.37M $48.61M +52.6%
WFC Wells Fargo & Co. 2.68M $38.72M +166.4%
American Assets Capital Advisers 2.56M $36.9M +12.5%
BLK BlackRock 2.44M $35.27M -0.8%
Echo Street Capital Management 1.92M $27.68M NEW
Largest transactions
Shares Bought/sold Change
ArrowMark Colorado 3.57M -2.73M -43.3%
First Trust Advisors 222.12K -2.44M -91.7%
Echo Street Capital Management 1.92M +1.92M NEW
RY Royal Bank of Canada 1.82M +1.69M +1290.2%
WFC Wells Fargo & Co. 2.68M +1.68M +166.4%
DB Deutsche Bank 1.48M +1.28M +638.8%
Sylebra Capital 9.17M +1.28M +16.2%
Intrinsic Edge Capital Management 1.16M +1.16M NEW
Senvest Management 3.37M +1.16M +52.6%
Vaughan Nelson Investment Management 1.13M +1.13M NEW

Financial report summary

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Risks
  • A slowdown in the demand for data center resources and other market and economic conditions could have a material adverse effect on us.
  • Any inability to manage our growth could disrupt our business and reduce our profitability.
  • Our operating results may fluctuate.
  • The data center business is capital-intensive, and our capacity to generate capital may be insufficient to meet our anticipated capital requirements. Failure to obtain the necessary capital when needed may force us to delay, limit or terminate our expansion efforts or other operations.
  • Our success depends on our ability to license the space in our existing data centers. The failure to license the space in our data centers may harm our growth prospects, future business, financial condition and results of operations.
  • We face risks associated with having a long selling and implementation cycle for our services that requires us to make significant time and resource commitments prior to recognizing revenue for those services.
  • Our outstanding indebtedness may limit our operational and financial flexibility.
  • We may not generate sufficient cash flow to meet our debt service and working capital requirements, which may expose us to the risk of default under our debt obligations.
  • Changes in the method of determining the London Interbank Offered Rate (“LIBOR”) or the replacement of LIBOR with an alternative reference rate, may adversely affect our financial condition and results of operations.
  • Increased power costs and limited availability of power resources may adversely affect our results of operations.
  • We generate significant revenue from data centers located in one location and a significant disruption to this location could materially and adversely affect our operations.
  • Any failure in the critical systems of the data center facilities we operate or services we provide could lead to disruptions in our customers’ businesses and could harm our reputation and result in financial penalty and legal liabilities, which would reduce our revenue and have a material adverse effect on our results of operation.
  • Delays in the expansion of existing data centers or the construction of new data centers could involve significant risks to our business.
  • We are continuing to invest in our expansion efforts but may not have sufficient customer demand in the future to realize expected returns on these investments.
  • If we fail to protect our proprietary intellectual property rights adequately, our competitive position could be impaired, and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights.
  • We may in the future be subject to intellectual property disputes, which are costly to defend and could harm our business and operating results.
  • We rely on the proper and efficient functioning of computer and data-processing systems, and a large-scale malfunction could have a material adverse effect on us.
  • We may be vulnerable to security breaches, including cyber security breaches, which could disrupt our operations and have a material adverse effect on our financial condition and results of operations.
  • If our or our customers’ proprietary intellectual property or confidential information is misappropriated or disclosed by us or our employees in violation of applicable laws and contractual agreements, we could be exposed to protracted and costly legal proceedings, lose customers and our business could be seriously harmed.
  • A significant portion of our revenue is highly dependent on a limited number of customers, and the loss of, or any significant decrease in business from, these customers could adversely affect our financial condition and results of operations.
  • Our customer contract commitments are subject to reduction and potential cancellation.
  • Our customer base may decline if our customers or potential customers develop their own data centers or expand their own existing data centers.
  • Our churn rate may increase or we may be unable to achieve high contract renewal rates.
  • If we do not succeed in attracting new customers for our services and growing revenue from existing customers, we may not achieve our anticipated revenue growth.
  • The migration from colocation data centers to the public cloud may have a material adverse effect on our results of operations.
  • Unanticipated changes in the tax rates and policies of the states in which we operate could materially and adversely affect our results of operations.
  • Future consolidation and competition in our customers’ industries could reduce the number of our existing and potential customers and make us dependent on a more limited number of customers.
  • We may not be able to compete effectively against our current and future competitors.
  • We have government customers, which subjects us to risks including early termination, audits, investigations, sanctions and penalties.
  • If we are unable to adapt to evolving technologies and customer demands in a timely and cost-effective manner, our ability to sustain and grow our business may suffer.
  • We depend on third parties to provide Internet, telecommunication and fiber optic network connectivity to our customers, and any delays or disruptions in service could have a material adverse effect on us.
  • The occurrence of a catastrophic event or a prolonged disruption may exceed our insurance coverage by significant amounts.
  • Environmental problems are possible and can be costly.
  • Our leases for self-developed data centers could be terminated early and we may not be able to renew our existing leases and agreements on commercially acceptable terms or our rent or payment under the agreements could increase substantially in the future, which could materially and adversely affect our operations.
  • The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could seriously harm our business.
  • Competition for employees is intense, and we may not be able to attract and retain the qualified and skilled employees needed to support our business.
  • Uncertain economic environment may have an adverse impact on our business and financial condition.
  • We have entered, and expect to continue to enter, into joint venture, strategic collaborations and other similar arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have a material adverse effect on our business and results of operations.
  • Our current international operations through our joint venture, or future international operations, may expose us to certain operating, legal and other risks, which could adversely affect our business, results of operations and financial condition.
  • Any difficulties in identifying and consummating future acquisitions, alliances or joint ventures may expose us to potential risks and have an adverse effect on our business, results of operations or financial condition.
  • Future legislation and regulation, both domestic and international, could have an adverse effect on our business operations.
  • We may incur significant costs complying with other regulations.
  • Our facilities may not be suitable for uses other than as data centers, which could make it difficult to sell or reposition them and could materially adversely affect our business, results of operations and financial condition.
  • Our principal asset is our interest in Switch, Ltd., and, accordingly, we depend on distributions from Switch, Ltd. to pay our taxes and expenses, including payments under the Tax Receivable Agreement (“TRA”). Switch, Ltd.’s ability to make such distributions may be subject to various limitations and restrictions.
  • The TRA with the Members requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we are required to make will be substantial.
  • Our organizational structure, including the TRA, confers certain benefits upon the Members that will not benefit holders of Class A common stock to the same extent as it will benefit the Members.
  • In certain cases, payments under the TRA to the Members may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRA.
  • We will not be reimbursed for any payments made to the Members under the TRA in the event that any tax benefits are disallowed.
  • Fluctuations in our tax obligations and effective tax rate and realization of our deferred tax assets may result in volatility of our operating results.
  • If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”) as a result of our ownership of Switch, Ltd., applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
  • Although we were no longer a controlled company within the meaning of the New York Stock Exchange (“NYSE”) rules, as of November 8, 2019, we continue to qualify for and may rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies during a one-year transition period. Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.
  • The Members have the right to have their Common Units redeemed or exchanged into shares of Class A common stock, which may cause volatility in our stock price.
  • An active trading market for our Class A common stock may not be sustained.
  • If our operating and financial performance in any given period does not meet the guidance that we provide to the public, our stock price may decline.
  • If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Class A common stock, the price of our Class A common stock could decline.
  • The trading price of our Class A common stock may be volatile or may decline regardless of our operating performance.
  • Our anti-takeover provisions could prevent or delay a change in control of our company, even if such change in control would be beneficial to our stockholders.
  • We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.
  • We are subject to securities class action litigation and may be subject to additional litigation in the future, which may harm our business and operating results.
  • Substantial future sales of our Class A common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
  • We cannot predict the impact our capital structure may have on our stock price.
  • We incur costs as a result of being a public company and in the administration of our complex organizational structure.
  • We have identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls or disclosure controls and procedures, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.
  • Our ability to pay dividends on our Class A common stock is subject to the discretion of our board of directors and our amended and restated credit agreement as well as future agreements.
  • Provisions of our articles of incorporation, limitations on director and officer liability and our indemnification of our officers and directors may have the effect of discouraging lawsuits against our directors and officers.
Management Discussion
  • We are a technology infrastructure company powering the sustainable growth of the connected world and the Internet of Everything. Using our technology platform, we provide solutions to help enable that growth. Our advanced data centers are the center of our platform and provide power densities that exceed industry averages with efficient cooling, while being powered by 100% renewable energy. These hyperscale data centers address the growing challenges facing the data center industry. Our critical infrastructure components in our data centers are purpose-built to satisfy customers’ needs, drive efficiency and enable the deployment of highly advanced computing technologies.
  • During 2019, we operated three primary campus locations, called Primes, which encompass 11 colocation facilities with an aggregate of up to 4.4 million GSF of space. Our Primes consist of The Core Campus in Las Vegas, Nevada; The Citadel Campus near Reno, Nevada; and The Pyramid Campus in Grand Rapids, Michigan. In addition, our fourth Prime, The Keep Campus in Atlanta, Georgia, opened during the first quarter of 2020. In addition to our Primes, we hold a 50% ownership interest in SUPERNAP International which has deployed facilities in Italy and Thailand. Until March 31, 2018, we accounted for this ownership interest under the equity method of accounting.
  • We currently have more than 950 customers, including some of the world’s largest technology and digital media companies, cloud, IT and software providers, financial institutions and network and telecommunications providers. Our ecosystem connects over 250 cloud, IT and software providers and more than 90 network and telecommunications providers. Our business is based on a recurring revenue model comprised of (1) colocation, which includes the licensing and leasing of cabinet space and power and (2) connectivity services, which include cross-connects, broadband services and external connectivity. We consider these services recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract. We derive more than 95% of our revenue from recurring revenue and we expect to continue to do so for the foreseeable future. For the years ended December 31, 2019, 2018, and 2017, our largest customer, eBay, Inc. and its affiliates, accounted for 13%, 11%, and 11% of our revenue, respectively.
Content analysis ?
Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
8th grade Good
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