Third-quarter results send Switch shares down after markets close

Switch, a data center company based in the Las Vegas area, saw shares drop about 6 percent in after-hours trading Tuesday following the company’s third-quarter earnings report.

New deals take a long time to show in the company’s earnings because of how Switch structures its contracts for storing data.

“We’re confident they will deploy, and that will turn into revenue,” Gabe Nacht, the company’s chief financial officer, said during a conference call Thursday.

Nacht and Switch President Thomas Morton used the stock market as last quarter in 2019.

That campus will put Switch in a more competitive market. Its current locations are in the Las Vegas area, the Reno area and Grand Rapids, Michigan. Its customers range in size from startups to Fortune 100 companies. The company stores digital information created by businesses such as casinos, movie studios and video game makers, as well as nonprofits and government agencies.

The company posted net income of $4.7 million for the quarter, down 72 percent from a year earlier, and operating income of $12.5 million, down 51 percent. Switch blamed the decreases in part on payments related to going public in October 2017 and $6.1 million in depreciation.

Still, the company posted yearto-date revenue of $302.6 million, an increase of 8.5 percent over last year.

Switch has added 112 clients this year, including 30 in the third quarter. It has signed 450 contracts worth $135 million.

One of its largest customers, ebay, committed to a $56 million expansion at Switch’s campuses in the Las Vegas and Reno areas.

Switch holds debt of $503.2 million and $604.5 million in cash and credit.

Contact Wade Tyler Millward at 702-383-4602 or wmillward@ reviewjournal.com. Follow @ wademillward on Twitter.