(WEB HOST INDUSTRY REVIEW) — IT hosting provider PEER 1 Network Enterprises (www.peer1.com) announced the results for the three and nine months that ended March 31, 2009, reporting healthy sales and pipeline despite poor activity, particularly at the lower end of dedicated hosting.
According to the company’s earnings report, released Thursday, PEER 1′s revenue fell 5 percent to $22.6 million from $22.8 million in the same quarter last year, and gross profit decreased 10.6 percent to $9.2 million.
“We made significant progress on several strategic growth initiatives in the quarter including the launch of the first phase of our UK expansion, and the announcement of our new, multi-use data center in the greater Toronto area,” PEER 1 president and chief executive officer Fabio Banducci said in a statement. “However, our third quarter results were weak and reflect the challenges a number of our customers are having in the current economic environment.”
Banducci continued, “Results from this quarter also demonstrate the resiliency of PEER 1′s business model as cash and cash equivalents increased by $2.5 million to $12.0 million compared to the previous quarter. The Company exits the quarter with record balance sheet strength and flexibility.”
Managed and dedicated hosting revenue increased by 6.4 percent or $16.7 million in this period, making its total revenue total $51.0 million since the financial year began, 12.0 percent over the same period last year. The increase in dedicated hosting revenues for the three and nine month periods can be attributed to organic growth.
Monthly recurring revenues from certain customers during this period, however, decreased. While they remain PEER 1 customers, and as economic conditions improve, management anticipates that these customers will return to their previous spending levels. Also, colocation revenue decreased by 8.5 percent compared with the same period last year. These losses are attributable to the decreased value of the Canadian dollar against the US dollar.
