Cyxtera Technologies, Inc.

Good morning and welcome to Sixterra's Q3 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I'd now like to turn the conference over to Greer V. Please go ahead.

Thank you, Grant. Good morning, and welcome to our third quarter 2021 earnings conference call. On today's call, we will refer to materials available on our investor relations website at ir.vixera.com. We are joined here today by Nelson Fonseca, our president and CEO, and Carlos Sagasta, our CFO. After prepared remarks, we'll open up the lines for Q&A. Before we begin, I would like to remind you that today's earnings materials contain forward-looking statements, including statements regarding our future expectations. All forward-looking statements are subject to risks and uncertainties. Please refer to today's earnings materials, the Safe Harbor language on slide two of our presentation, and our SEC filings for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we used several non-GAAP measures when presenting our financial results. We have included the reconciliations to these measures in our supplemental financial information. With that, I'll turn the call over to Nelson.

Thank you, Greer. Good morning, and thank you all for joining us for our third quarter earnings call. We have proudly entered the next phase in Sextera's evolution, becoming a public company at the end of July, marking a major milestone in our company's history. To celebrate this accomplishment, we are honored to have the opportunity to ring the closing bell at the NASDAQ Stock Exchange on December 6th. None of this would have been possible without the hard work and dedication of the Sixterra team, who have continued to deliver solid outcomes for our customers throughout this journey. Our team is motivated and excited about this next phase of Sixterra's growth, and we have received positive feedback from our customers and partners as well. As we walk through the results of the quarter and summarize our overall strategy, it is clear we have an incredible opportunity ahead of us, and we are excited to realize the full potential of Sixtera. I'll start today with a quick recap of our third quarter results, which you can follow on slide four of our presentation. First, I want to highlight that we are raising the midpoint of revenue guidance by $7.5 million for the year to $699 million. and transaction adjusted EBITDA guidance by $5 million to $225 million, reflecting our strong Q3 results and year-to-date performance. We continue to see sustained momentum in the business, with total revenue increasing by $5.1 million, or 2.9% year-over-year, to $177.1 million. Recurring revenue increased by $5.8 million or 3.5% year-over-year to $169.3 million. Core revenue, which excludes revenue from Lumen, increased by $12.5 million or 8.4% year-over-year to $161 million. Transaction-adjusted EBITDA improved by 3.5 million, or 6.4% year-over-year, to 58.1 million, driven by top-line growth and operating leverage. Annualized core bookings increased by 0.5 million, or 2.5% year-over-year, to 20.8 million. At the same time, Average monthly core churn improved year-over-year to 0.7% from 0.9%, resulting in strong core net bookings. Lastly, interconnection accounted for approximately 11% of total revenue, up from 9.6% in the third quarter of last year. This represents 17% year-over-year growth. Because some investors on the call today are newer to our story, I would like to spend a few minutes highlighting the foundational elements that are driving Sixterra's strong momentum and share the key elements of our strategy. As you can see on slide five, we are the third largest retail co-location provider with 61 data centers across 28 markets. Our footprint has a strong international presence with facilities in the top 10 most attractive global markets. We view this as a significant competitive advantage as our data centers are located in markets where our customers want to deploy their infrastructure. At Sixterra, we view everything from the customer lens. We serve more than 2,300 enterprises and service providers across our global platform, representing every major industry vertical, which leverage our strong interconnection base of over 40,000 cross-connects to support their digital transformation initiatives. This diversified customer base, along with our strong interconnection platform, creates a differentiated global ecosystem where enterprises and service providers establish business relationships, both directly and through partners. This leads me to a very important point. Innovation is core to our organizational culture, and we are continuously striving to improve the value we provide our customers. We believe our innovative approach to the data center sets us apart from our competitors in a manner that is difficult to replicate. Our innovation efforts are focused on three main objectives. First, to make our data centers easier to consume. Second, to make it seamless for our enterprise and service provider customers to connect to each other. And third, to support our customers' automation initiatives. Our digital exchange offering is our core innovation platform. Digital Exchange builds on our interconnection density and enables seamless software-based virtual connections between our customers. We built Digital Exchange in-house with our own product development team, which allows us to rapidly adapt the platform and further innovate in support of our customers' digital transformation efforts. Our bare-metal offering is an example of this continuous innovation. Bare Metal leverages the digital exchange to deliver on-demand infrastructure so customers can consume the data center in a cloud-like fashion. We like to think about this as Colo on-demand, and it helps our customers get to market faster. In addition, it provides our customers the flexibility they need to quickly adjust their infrastructure as their business requirements evolve, thereby future-proofing their environments. And most recently, we introduced SmartCabs, which also leverages our digital exchange platform to provide on-demand co-location cabinets, complete with built-in power and integrated configurable core network fabric. This solution is especially powerful for our channel partners and strategic alliances who can deploy their infrastructure in a resilient, secure, co-location environment with the live network fabric already built into the cabinet in an on-demand fashion. This exciting new offering will be available in more than 10 markets in Q1 of 2022. Strategic partners are a core part of our go-to-market strategy. We recently partnered with Nutanix for the launch of their federal innovation lab in conjunction with some of our other leading technology partners. The first Nutanix federal innovation lab is powered by Sixterra's digital exchange and enterprise bare metal platforms. The Federal Innovation Lab, available across our data centers in Northern Virginia, provides U.S. federal customers as well as industry partners with an environment to build proofs of concept and test mission-critical application using on-demand infrastructure that readily supports hybrid multi-cloud solutions via a single operating platform. In addition, we were awarded the Global Service Provider of the Year at Nutanix.NEXT Digital Experience Conference in recognition for providing enterprises with on-demand access to Nutanix's market-leading, hyper-converged infrastructure enterprise cloud software directly within the data center. We are proud of the strength of our strategic alliances and continually look for innovative ways to enable our customers to deliver all applications, services, and data at any scale directly within the data center with cloud-like flexibility. Moving to slide six, our global platform and strong ecosystem coupled with strong industry tailwinds has resulted in significant momentum across our business. Our core bookings continue to grow year over year, while our core churn continues to improve. This combination of accelerated bookings and lower churn delivers net bookings, which is driving increased occupancy across the platform. Turning to slide seven, our current occupancy sits at 68.9%, which is an increase of approximately 50 basis points versus last quarter. We are making good progress towards our target of 78% occupancy by 2025, which will continue to be supported by our solid sales performance. Lastly, let me provide a brief recap of our growth strategy. As you can see on slide 8, our strategy is primarily driven by organic growth opportunities. As I mentioned on the previous slide, taking advantage of our in-place capacity and continuing to increase occupancy across the platform is the main driver of our growth. Increased occupancy leads to increased revenue, and that increased revenue comes with high EBITDA flow-through because most of our fixed costs are already covered across the footprint. The second lever of our organic growth is expanding across our existing footprint with expansion projects focused on four markets. London, Singapore, Chicago, and Silicon Valley. These are markets where demand is strong and our occupancy is high, so we want to ensure we have available inventory for our customers. Earlier this year, we announced expansion projects in London, Chicago, and Silicon Valley to meet increased customer demand. The third lever of our organic growth plan is the cross-selling of our platform capabilities. Customers are utilizing more of our interconnection, digital exchange, and bare metal offerings, all high flow through services that increase our revenue per square foot, decrease the likelihood of churn, and provide customers with additional overall value. These organic growth initiatives can be augmented by inorganic opportunities as well. We intend to focus our geographic expansion efforts in international markets, which we believe adds to our strategic positioning. We will also pursue the acquisition of individual data centers or data center platforms when it makes sense strategically. That being said, we will be opportunistic in our inorganic pursuits, and decisions will be driven by prudent capital allocation and our internal return hurdles. In summary, we're very pleased with our third quarter results as they continue to validate the competitive strength of our platform and our go-to-market execution. Now, I'll turn the call over to Carlos to cover the financial results in more detail.