NorthState, a fiber optic network, cloud and IT services provider, announced today its financial results for the second quarter ended June 30, 2018.
Summary of Selected Financial Data
Quarter Ended June 30, 2018 versus Quarter Ended June 30, 2017
- Consolidated net operating revenue (NOR) for the 2018 quarter totaled $29.6 million, up 4.4% compared to NOR of $28.3 million for the 2017 quarter.
- Total strategic revenue1 of $21.5 million for the 2018 quarter, up 8.0% compared to strategic revenue of $19.9 million for the 2017 quarter. Strategic revenue was partially offset by a decline of 4.7% in legacy voice revenue (from $8.5 million for the 2017 quarter to $8.1 million for the 2018 quarter). Strategic revenue comprised 73% of NOR for the 2018 quarter, compared to 70% of NOR for the 2017 quarter.
- Net income of $1.0 million for the 2018 quarter compared to $0.2 million for the 2017 quarter.2
- Earnings per share (EPS) of $0.43 for the 2018 quarter compared to EPS of $0.07 for the 2017 quarter.2
Six Months Ended June 30, 2018 versus Six Months Ended June 30, 2017
- Consolidated NOR of $59.7 million for the 2018 period, up 4.0% compared to the prior year period.
- Total strategic revenue1 of $43.3 million for the 2018 period, up 6.9%, compared to the prior year period, now comprising 73% of NOR.
- Net income of $2.5 million for the 2018 period compared to $2.4 million for the 2017 period, up 6.5%.2
- EPS of $1.12 for the 2018 period compared to EPS of $1.05 for the prior year period.2
Chief Executive Officer Royster Tucker III commented, “NorthState turned in a solid quarter, executing well on our fiber- and IT-focused business strategy. We’re especially pleased that for the first half of the year, business revenue comprised 65% of net operating revenue, reflecting our emphasis on offering IT, cloud and security solutions for enterprises.
“For the 2018 second quarter, residential fiber revenue rose by 13% compared to the prior year quarter, driven by a 14% increase in fiber-connected households, while business fiber revenue grew by 12%, driven by a 26% increase in fiber-connected businesses. Residential and business fiber growth are the result of increased penetration in our existing fiber footprint and continued expansion throughout North Carolina’s Piedmont Triad Region.
“To assist enterprise customers in succeeding through effective IT strategy, our Technology Solutions unit launched Compliance-as-a-Service (CaaS) for credit unions and banks. Along with CaaS, NorthState has introduced other new offerings this year that include Meraki as a Service (MaaS), Multi-Cloud Exchange (MCX), and Unified Communications as a Service (UCaaS). These comprehensive solutions are designed to help businesses digitally transform themselves.
“In concert with rolling out new products and solutions, during the second quarter of the year we made significant progress in ramping up our enterprise sales organization to support our growth strategy for 2018 and beyond.”
For further details on NorthState’s financial results for the three and six months ended June 30, 2018, please see the financial tables included in the press release on the company’s website at: 2Q 2018 Earnings Report.
1 Strategic Revenue is all revenue excluding legacy voice revenue. Legacy voice revenue is comprised of non-IP voice, long distance, and network access revenue. Please see the financial tables included in the press release on the company’s website.
2 In 2017, both for the quarter and six months ended June 30, 2017, Net Income and EPS were impacted by $1.2 million of restructuring charges related to the formation of our information technology services business unit.
The inclusion of forward-looking information should not be construed as a representation by NorthState that our plans or expectations will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
NorthState is a technology company focused on inspiring the Internet-driven lifestyle through high-touch experiences. Its fiber-delivered, ultrafast Internet and Internet-driven applications enable residential customers and businesses to efficiently and securely take advantage of the Internet. Through its Technology Solutions business unit, NorthState provides data center colocation, customized cloud and IT solutions, managed disaster recovery services, managed security and unified communications. For more information, visit northstate.net.
Harriet Fried, SVP