TORONTO – TeraGo credited customer upgrades and recurring service revenue for jumps in revenues and profits for the third quarter.
For the period ended September 30, the company posted revenue of $13.2 million, up 7% from $12.3 million in Q3 2012. The increase largely resulted from a greater number of customer locations, as well as existing customers upgrading their Internet and data connections. Approximately 98% of Q3 2013 revenue was recurring service revenue.
Net earnings increased by 125% from $1.6 million to $0.7 million in the quarter, while EBITDA was $5.0 million, up 22% from $4.1 million in the same period last year.
Net access customer locations increased by 10 in Q3 2013 compared to a decrease of 40 in the previous quarter and an increase of 68 in Q3 2012, primarily due to the increased competition related to the availability of higher capacity services from competitors.
TeraGo ended the quarter with 6,533 net access customer locations in service, compared to 6,502 at September 30, 2012. Average revenue per access customer location (ARPU) for the quarter increased to $627 compared to $621 year-over-year, while average monthly churn rate for access customer locations increased to 1.12% from 1.05% last year.
As Cartt.ca reported, TeraGo purchased Data Centers Canada Inc. (DCC) last May for approximately $9.5 million. The company said that the DCC integration generated $663,000 in revenue this quarter.
"We're pleased with our strategic expansion into data centre services, which is developing as planned and contributing to our revenue and EBITDA growth this year", said president and CEO Bryan Boyd, in the company’s news release.
TeraGo owns 76 spectrum licences in the 24 GHz and 38 GHz bands, covering Canadian markets with a population base of more than 24.5 million, and plans to use this spectrum to provide Ethernet-based broadband links for businesses, government and cellular backhaul, as part of it’s growth strategy.
