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Press Release -- March 2nd, 2011
Source: Cbeyond
Tags: Earnings, Equipment, Ethernet

Cbeyond Reports Fourth Quarter 2010 Results

Customers Increased by 14 Percent and Adjusted EBITDA Increased by 16 Percent in 2010

ATLANTA--(BUSINESS WIRE)-- Cbeyond, Inc. (NASDAQ:CBEY, news, filings), ("Cbeyond"), a managed services provider that delivers integrated packages of communications and IT services to small sized businesses, today announced its results for the fourth quarter and year ended December 31, 2010.

Recent financial and operating highlights include:

  • Fourth quarter 2010 revenue of $116.2 million, up 7.9% over the fourth quarter of 2009;
  • Total adjusted EBITDA of $18.0 million in the fourth quarter of 2010 compared with $19.0 million in the fourth quarter of 2009, and $18.0 million in the third quarter of 2010 (see page 9 for reconciliation to net income);
  • Net loss of $2.0 million in the fourth quarter of 2010 compared with net income of $0.9 million in the fourth quarter of 2009;
  • Total customers of 56,972 in Cbeyond's 14 Core Managed Services operating markets, reflecting net customer additions of 1,732 in the fourth quarter of 2010, an increase of 13.5% in total customers year-over-year;
  • Average monthly revenue per Core Managed Services customer location (ARPU) of $680 during the fourth quarter of 2010, compared with $695 in the third quarter of 2010 and $727 in the fourth quarter of 2009;
  • Monthly customer churn of 1.3% in the fourth quarter of 2010 as compared with 1.4% in the third quarter of 2010 for the Company's Core Managed Services customers;
  • Cash, cash equivalents and marketable securities balance of $26.4 million at December 31, 2010, down from the balance of $51.8 million at September 30, 2010, and;
  • Closed on the acquisitions of MaximumASP and Aretta Communications in November 2010.

Financial Overview and Key Operating Metrics

Financial and operating metrics, which include non-GAAP financial measures, for the three and twelve months ended December 31, 2009 and 2010, include:

For the Three Months Ended December 31,
2009 2010 Change % Change
Selected Financial Data (dollars in thousands)
Revenue $ 107,719 $ 116,241 $ 8,522 7.9 %
Operating expenses $ 107,589 $ 119,118 $ 11,529 10.7 %
Operating income (loss) $ 130 $ (2,877 ) $ (3,007 ) N/M
Net income (loss) $ 925 $ (1,987 ) $ (2,912 ) (314.8 %)
Capital expenditures $ 14,538 $ 18,393 $ 3,855 26.5 %
Key Operating Metrics and Non-GAAP Financial Measures
Customers (Core Managed Services) at end of period 50,203 56,972 6,769 13.5 %
Net customer additions (Core Managed Services) 1,623 1,732 109 6.7 %
Average monthly churn rate (Core Managed Services) 1.5 % 1.3 % (0.2 %) (13.3 %)
Average monthly revenue per Core Managed Services customer $ 727 $ 680 $ (47 ) (6.5 %)
Adjusted EBITDA (in thousands) $ 19,049 $ 18,009 $ (1,040 ) (5.5 %)
For the Twelve Months Ended December 31,
2009 2010 Change % Change
Selected Financial Data (dollars in thousands)
Revenue $ 413,771 $ 451,965 $ 38,194 9.2 %
Operating expenses $ 418,439 $ 454,893 $ 36,454 8.7 %
Operating income (loss) $ (4,668 ) $ (2,928 ) $ 1,740 37.3 %
Net income (loss) $ (2,220 ) $ (1,654 ) $ 566 25.5 %
Capital expenditures $ 62,126 $ 62,832 $ 706 1.1 %
Key Operating Metrics and Non-GAAP Financial Measures
Customers (Core Managed Services) at end of period 50,203 56,972 6,769 13.5 %
Net customer additions (Core Managed Services) 7,740 6,769 (971 ) (12.5 %)
Average monthly churn rate (Core Managed Services) 1.5 % 1.4 % (0.1 %) (6.7 %)
Average monthly revenue per Core Managed Services customer $ 744 $ 700 $ (44 ) (5.9 %)
Adjusted EBITDA (in thousands) $ 63,126 $ 72,935 $ 9,809 15.5 %

Management Comments

"2010 was a successful year for Cbeyond, and we are proud of the many accomplishments we achieved that have positioned us well for 2011," said Jim Geiger, chief executive officer of Cbeyond. "Our acquisitions in the cloud services space brought us high margin product additions in a high growth sector and a top notch technical platform, while expanding our reach to all small businesses in the U.S. and globally, for that matter. In addition, we launched our Ethernet conversion project to bring higher bandwidth to our customers while significantly lowering our operating costs."

Geiger added, "Our operating and financial results included customer growth of 14% and growth in adjusted EBITDA of 16% for the year. While the lingering effects of the challenging economy on the small business sector have resulted in continued pressure on ARPU, the reduction in Core Managed Services customer churn to 1.3% in the fourth quarter of 2010 is an encouraging sign of economic improvement as well as customer satisfaction with our services. Looking forward to 2011, Cbeyond will be making investments in our future growth and profitability by strengthening our distribution channels, especially in the cloud services area, and by completing the bulk of our Ethernet circuit conversions."

Fourth Quarter Financial and Business Summary

Revenues and ARPU

Cbeyond reported revenues of $116.2 million for the fourth quarter of 2010, an increase of 7.9% from the fourth quarter of 2009, including approximately $1.8 million of revenues generated through the Cloud Services acquisitions. ARPU for the Core Managed Services was $680 in the fourth quarter of 2010, compared with $695 in the third quarter of 2010, and $727 in the fourth quarter of 2009. The sequential decline in ARPU from the third quarter of 2010 resulted primarily from the lower prices offered to attract new customers, certain existing customers who converted to the new lower-priced packages recently introduced, customer reductions in the number of additional lines and services with incremental charges, and decreased adoption of the Company's mobile services. Cbeyond believes these factors are related to the effects of the economic recession on its customers and continued competitive pressures.

Cost of Service and Gross Margin

Cbeyond's gross margin was 66.9% in the fourth quarter of 2010, compared with 68.0% in the third quarter of 2010 and 66.8% in the fourth quarter of 2009. The fourth quarter included elevated transitional costs related to the Ethernet initiative currently under way as T-1 circuits are converted to Ethernet circuits.

Adjusted EBITDA, Income Taxes and Net Loss

Total adjusted EBITDA for the fourth quarter of 2010 was $18.0 million, as compared with total adjusted EBITDA of $19.0 million in the fourth quarter of 2009. Total adjusted EBITDA for the fourth quarter of 2010 included adjusted EBITDA losses from Core Managed Services Emerging Markets of ($3.2) million. In comparison, Core Managed Services Emerging Markets accounted for ($3.5) million of adjusted EBITDA losses for the fourth quarter of 2009. Total adjusted EBITDA included the impact of negative results from these early stage markets which were entered to drive longer term growth in the business (see Selected Quarterly Financial Data and Operating Metrics, pages 7-9). Cbeyond reported a net loss of ($2.0) million for the fourth quarter of 2010 compared with net income of $0.9 million for the fourth quarter of 2009.

Cash and Cash Equivalents

Cash and cash equivalents amounted to $26.4 million at the end of the fourth quarter of 2010, as compared with $51.8 million at the end of the third quarter of 2010. Cash and cash equivalents decreased primarily due to a payment of approximately $31 million to complete the Company's cloud services acquisitions. The impact of this payment was partially offset by positive cash flow from operations in the quarter.

Capital Expenditures

Capital expenditures were $18.4 million during the fourth quarter of 2010, compared with $16.0 million in the third quarter of 2010 and $14.5 million in the fourth quarter of 2009. Capital expenditures in the fourth quarter of 2010 increased from the third quarter of 2010 due to increased amounts related to the Ethernet initiative.

Business Outlook for 2011

Cbeyond provides the following guidance for 2011:

  • Revenue growth of 6% to 8%;
  • Adjusted EBITDA growth of 9% to 12%, and;
  • Capital expenditures of $75 million to $80 million

The revenue guidance assumes the ongoing impact of the sluggish economy and competitive pressures on the small business sector, resulting in continued decreases in ARPU levels throughout 2011 consistent with prior periods, but generally stable levels of customer churn consistent with recent churn trends. Cbeyond's adjusted EBITDA guidance reflects Cbeyond's continued investment in expanding distribution channels for cloud services, enhancing products and features for its customers, and reducing costs through initiatives such as the Ethernet project, to offset some of the downward pressure on ARPU. The Company expects that capital expenditures will be elevated during 2011, primarily due to the Ethernet initiative that began during the second half of 2010 and is expected to continue through the first half of 2012. As a result, Cbeyond expects to post break-even to positive free cash flow in 2011.

Conference Call

Cbeyond will hold a conference call to discuss this press release Wednesday, March 2, 2011, at 5:00 p.m. EST. A live broadcast of the conference call will be available on-line at www.cbeyond.net. To listen to the live call, please go to the web site at least 10 minutes early to register, download, and install any necessary audio software. The conference call will also be available by dialing (877) 303-9219 (for domestic U.S. callers) and (760) 666-3559 (for international callers). For those who cannot listen to the live broadcast, an on-line replay will be available shortly after the call and continue to be available for one year.

About Cbeyond

Cbeyond, Inc. (NASDAQ: CBEY) is a leading provider of IT and communications services to nearly 57,000 small businesses throughout the United States. Recently named as the sixth fastest growing technology company by Forbes magazine, and added to Standard & Poor's Small Cap S&P 600 Index, Cbeyond offers more than 30 productivity-enhancing applications including local and long-distance voice, broadband Internet, mobile, BlackBerry(R), broadband laptop access, voicemail, email, web hosting, fax-to-email, data backup, file-sharing and virtual private networking. Cbeyond delivers these services over a 100 percent private all IP network. For more information on Cbeyond, visit www.cbeyond.net.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Such statements include, but are not limited to, statements identified by words such as "expectations," "guidance," "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions.Such statements are based upon the current beliefs and expectations of Cbeyond's management and are subject to significant risks and uncertainties.Actual results may differ from those set forth in the forward-looking statements.Factors that might cause future results to differ include, but are not limited to, the following: finalization of operating data, the significant reduction in economic activity, which particularly affects our target market of small businesses; the risk that we may be unable to continue to experience revenue growth at historical or anticipated levels; changes in business climate or other factors affecting our customer base; the risk of unexpected increases in customer churn levels; changes in federal or state regulation or decisions by regulatory bodies that affect Cbeyond; periods of economic downturn or unusual volatility in the capital markets or other negative macroeconomic conditions that could harm our business, including our access to capital markets and the impact on certain of our customers to meet their payment obligations; the timing of the initiation, progress or cancellation of significant contracts or arrangements; the mix and timing of services sold in a particular period; our ability to recruit and maintain experienced management and personnel; rapid technological change and the timing and amount of start-up costs incurred in connection with the introduction of new services or the entrance into new markets; our ability to maintain or attract sufficient customers in existing or new markets; our ability to respond to increasing competition; our ability to manage the growth of our operations; changes in estimates of taxable income or utilization of deferred tax assets which could significantly affect the Company's effective tax rate; pending regulatory action relating to our compliance with customer proprietary network information; the risk that the anticipated benefits, growth prospects and synergies expected from our acquisitions may not be fully realized or may take longer to realize than expected; the possibility that economic benefits of future opportunities in an emerging industry may never materialize, including unexpected variations in market growth and demand for the acquired products and technologies; delays, disruptions, costs and challenges associated with integrating acquired companies into our existing business, including changing relationships with customers, employees or suppliers; unfamiliarity with the economic characteristics of new geographic markets; ongoing personnel and logistical challenges of managing a larger organization; our ability to retain and motivate key employees from the acquired companies;external events outside of our control, including extreme weather, natural disasters, pandemics or terrorist attacks that could adversely affect our target markets; and general economic and business conditions.You are advised to consult any further disclosures we make on related subjects in the reports we file with the SEC, including the "Risk Factors" in our most recent annual report on Form 10-K, together with updates that may occur in our quarterly reports on Form 10-Q and Current Reports on Form 8-K.Such disclosure covers certain risks, uncertainties and possibly inaccurate assumptions that could cause our actual results to differ materially from expected and historical results.We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Key Operating Metrics and Non-GAAP Financial Measures

In this press release, the Company uses several key operating metrics and non-GAAP financial measures. The Company defines each of these metrics and provides a reconciliation of non-GAAP financial measures to the most directly comparable generally accepted accounting principles in the United States, or GAAP, financial measure. These financial measures and operating metrics are a supplement to GAAP financial information and should not be considered as an alternative to, or more meaningful than, net income, cash flow or operating income as determined in accordance with GAAP.

Adjusted EBITDA is not a substitute for operating income, net income, or cash flow from operating activities as determined in accordance with GAAP, as a measure of performance or liquidity. The Company defines adjusted EBITDA as net income before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, non-cash share-based compensation, public offering expenses, or acquisition-related transaction costs, purchase accounting adjustments, loss on disposal of property and equipment and other non-operating income or expense. Information relating to total adjusted EBITDA is provided so that investors have the same data that management employs in assessing the overall operation of the Company's business.

Total adjusted EBITDA allows the chief operating decision maker to assess the performance of the Company's business on a consolidated basis that corresponds to the measure used to assess the ability of its operating segments to produce operating cash flow to fund working capital needs, to service debt obligations and to fund capital expenditures. In particular, total adjusted EBITDA permits a comparative assessment of the Company's operating performance, relative to a performance based on GAAP results, while isolating the effects of depreciation and amortization, which may vary among segments without any correlation to their underlying operating performance, and of non-cash share-based compensation, which is a non-cash expense that varies widely among similar companies.

CBEYOND, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2010 2009 2010
Revenue:
Customer revenue $ 105,941 $ 114,441 $ 406,472 $ 444,848
Terminating access revenue 1,778 1,800 7,299 7,117
Total revenue 107,719 116,241 413,771 451,965
Operating expenses:
Cost of revenue 35,725 38,522 138,093 146,507
Selling, general and administrative 57,050 63,839 228,506 248,327
Transaction costs - 572 - 755
Depreciation and amortization 14,814 16,185 51,840 59,304
Total operating expenses 107,589 119,118 418,439 454,893
Operating income (loss) 130 (2,877 ) (4,668 ) (2,928 )
Other income (expense):
Interest income 1 1 28 2
Interest expense (1 ) (87 ) (152 ) (281 )
Other income (expense), net 244 108 498 1,867
Total other income (expense) 244 22 374 1,588
Income (loss) before income taxes 374 (2,855 ) (4,294 ) (1,340 )
Income tax (expense) benefit 551 868 2,074 (314 )
Net income (loss) $ 925 $ (1,987 ) $ (2,220 ) $ (1,654 )
Earnings per common share
Basic $ 0.03 $ (0.07 ) $ (0.08 ) $ (0.06 )
Diluted $ 0.03 $ (0.07 ) $ (0.08 ) $ (0.06 )
Weighted average number of common shares outstanding
Basic 28,967 29,537 28,753 29,366
Diluted 30,079 29,537 28,753 29,366
CBEYOND, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
December 31, December 30,
2009 2010
ASSETS
Current assets
Cash and cash equivalents $ 39,267 $ 26,373
Accounts receivable, gross 30,467 27,238
Less: Allowance for doubtful accounts (2,867 ) (2,354 )
Accounts receivable, net 27,600 24,884
Other assets 12,706 13,552
Total current assets 79,573 64,809
Property and equipment, gross 353,616 421,173
Less: Accumulated depreciation and amortization (216,722 ) (270,482 )
Property and equipment, net 136,894 150,691
Other assets 12,424 42,467
Total assets $ 228,891 $ 257,967
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 12,121 $ 15,193
Other accrued liabilities 47,651 53,184
Total current liabilities 59,772 68,377
Non-current liabilities 10,514 16,469
Stockholders' equity
Common stock 290 296
Additional paid-in capital 283,337 299,501
Accumulated deficit (125,022 ) (126,676 )
Total stockholders' equity 158,605 173,121
Total liabilities and stockholders' equity $ 228,891 $ 257,967
CBEYOND, INC. AND SUBSIDIARY
Selected Quarterly Financial Data and Operating Metrics
(Dollars in thousands, except for Other Operating Data)
(Unaudited)
Dec. 31 Mar. 31 Jun. 30 Sept. 30 Dec. 31
2009 2010 2010 2010 2010
Revenues
Core Managed Services (Established Markets) $ 102,321 $ 103,918 $ 104,204 $ 104,734 $ 104,558
Core Managed Services (Emerging Markets)
Miami 3,042 3,555 3,970 4,360 4,672
Minneapolis 1,398 1,630 1,702 1,863 1,949
Greater Washington, D.C. Area 871 1,175 1,424 1,722 1,970
Seattle 87 237 453 769 1,232
Boston - - - 8 76
Core Managed Services (Emerging Markets) 5,398 6,597 7,549 8,722 9,899
Total Core Managed Services 107,719 110,515 111,753 113,456 114,457
Cloud Services - - - - 1,791
Eliminations - - - - (7 )
Total Revenues $ 107,719 $ 110,515 $ 111,753 $ 113,456 $ 116,241
Adjusted EBITDA
Core Managed Services (Established Markets) $ 45,893 $ 46,950 $ 47,970 $ 47,651 $ 46,007
Core Managed Services (Emerging Markets)
Miami (666 ) (239 ) (184 ) (151 ) 263
Minneapolis (727 ) (398 ) (259 ) (166 ) (126 )
Greater Washington, D.C. Area (1,280 ) (1,157 ) (1,162 ) (1,008 ) (708 )
Seattle (821 ) (1,101 ) (1,368 ) (1,333 ) (1,394 )
Boston (1 ) (50 ) (509 ) (994 ) (1,186 )
Core Managed Services (Emerging Markets) (3,495 ) (2,945 ) (3,482 ) (3,652 ) (3,151 )
Total Core Managed Services 42,398 44,005 44,488 43,999 42,856
Cloud Services - - - - 569
Corporate (23,349 ) (25,450 ) (26,077 ) (26,039 ) (25,416 )
Total Adjusted EBITDA $ 19,049 $ 18,555 $ 18,411 $ 17,960 $ 18,009
Adjusted EBITDA Margin (As % of Market-Level Core Managed Services Revenue)
Core Managed Services (Established Markets) 44.9 % 45.2 % 46.0 % 45.5 % 44.0 %
Core Managed Services (Emerging Markets)
Miami (21.9 %) (6.7 %) (4.6 %) (3.5 %) 5.6 %
Minneapolis (52.0 %) (24.4 %) (15.2 %) (8.9 %) (6.5 %)
Greater Washington, D.C. Area (147.0 %) (98.5 %) (81.6 %) (58.5 %) (35.9 %)
Seattle N/M N/M N/M (173.3 %) (113.1 %)
Boston N/M N/M N/M N/M N/M
Core Managed Services (Emerging Markets) (64.7 %) (44.6 %) (46.1 %) (41.9 %) (31.8 %)
Total Core Managed Services 39.4 % 39.8 % 39.8 % 38.8 % 37.4 %
Adjusted EBITDA margin (As % of Cloud Services Revenue)
Cloud Services N/M N/M N/M N/M 31.8 %
Adjusted EBITDA margin (As % of Total Revenue)
Corporate (21.7 %) (23.0 %) (23.3 %) (23.0 %) (21.9 %)
Total Adjusted EBITDA 17.7 % 16.8 % 16.5 % 15.8 % 15.5 %
Dec. 31 Mar. 31 Jun. 30 Sept. 30 Dec. 31
2009 2010 2010 2010 2010
Operating Income (Loss)
Core Managed Services (Established Markets) $ 38,771 $ 41,028 $ 41,517 $ 41,092 $ 39,421
Core Managed Services (Emerging Markets)
Miami (1,089 ) (579 ) (602 ) (576 ) (190 )
Minneapolis (988 ) (632 ) (518 ) (431 ) (401 )
Greater Washington, D.C. Area (1,613 ) (1,489 ) (1,519 ) (1,368 ) (1,104 )
Seattle (971 ) (1,289 ) (1,551 ) (1,549 ) (1,696 )
Boston (2 ) (51 ) (516 ) (1,042 ) (1,317 )
Core Managed Services (Emerging Markets) (4,663 ) (4,040 ) (4,706 ) (4,966 ) (4,708 )
Total Core Managed Services 34,108 36,988 36,811 36,126 34,713
Cloud Services - - - - (158 )
Corporate (33,978 ) (36,416 ) (36,663 ) (36,897 ) (37,432 )
Total Operating Income (Loss) $ 130 $ 572 $ 148 $ (771 ) $ (2,877 )
Capital Expenditures
Core Managed Services (Established Markets) $ 4,907 $ 4,137 $ 3,719 $ 7,045 $ 7,144
Core Managed Services (Emerging Markets)
Miami 462 383 306 484 533
Minneapolis 234 93 204 253 145
Greater Washington, D.C. Area 570 220 129 233 341
Seattle 317 584 199 213 636
Boston 167 786 1,038 39 236
Core Managed Services (Emerging Markets) 1,750 2,066 1,876 1,222 1,891
Total Core Managed Services 6,657 6,203 5,595 8,267 9,035
Cloud Services - - - - 413
Corporate 7,881 7,024 9,573 7,777 8,945
Total Capital Expenditures $ 14,538 $ 13,227 $ 15,168 $ 16,044 $ 18,393
Other Operating Data
Customers (Core Managed Services) (At Period End) 50,203 51,731 53,518 55,240 56,972
Net Customer Additions (Core Managed Services) 1,623 1,528 1,787 1,722 1,732
Average Monthly Churn Rate (Core Managed Services) (1) 1.5 % 1.4 % 1.4 % 1.4 % 1.3 %
Average Monthly Revenue Per Core Managed Services Customer (2) $ 727 $ 723 $ 708 $ 695 $ 680
(1) Calculated for each period as the average of monthly churn, which is defined for a given month as the number of customer locations disconnected in that month divided by the number of customer locations on the Company's network at the beginning of that month.
(2) Calculated as the revenue for a period divided by the average of the number of customer locations at the beginning of the period and the number of customer locations at the end of the period, divided by the number of months in the period.
CBEYOND, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
(In thousands)
(Unaudited)
Three Months Ended,
Dec. 31 Mar. 31 Jun. 30 Sept. 30 Dec. 31
2009 2010 2010 2010 2010
Reconciliation of Adjusted EBITDA to Net income:
Total Adjusted EBITDA for reportable segments $ 19,049 $ 18,555 $ 18,411 $ 17,960 $ 18,009
Depreciation and amortization (14,814 ) (14,282 ) (14,331 ) (14,506 ) (16,185 )
Non-cash share-based compensation (4,105 ) (3,701 ) (3,932 ) (4,042 ) (3,916 )
MaximumASP purchase accounting adjustment - - - - (213 )
Transaction costs - - - (183 ) (572 )
Interest income 1 - 1 - 1
Interest expense (1 ) (45 ) (64 ) (85 ) (87 )
Other income (expense), net 244 1,537 117 105 108
Income tax (expense) benefit 551 (1,025 ) (300 ) 143 868
Net income (loss) $ 925 $ 1,039 $ (98 ) $ (608 ) $ (1,987 )
Twelve Months Ended
Dec. 31,
2009 2010
Reconciliation of Adjusted EBITDA to Net income:
Total Adjusted EBITDA for reportable segments $ 63,126 $ 72,935
Depreciation and amortization (51,840 ) (59,304 )
Non-cash share-based compensation (15,954 ) (15,591 )
MaximumASP purchase accounting adjustment - (213 )
Transaction costs - (755 )
Interest income 28 2
Interest expense (152 ) (281 )
Other income (expense), net 498 1,867
Income tax (expense) benefit 2,074 (314 )
Net income (loss) $ (2,220 ) $ (1,654 )
CBEYOND, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
(In thousands)
(Unaudited)
Three Months Ended,
Dec. 31 Mar. 31 Jun. 30 Sept. 30 Dec. 31
2009 2010 2010 2010 2010
Reconciliation of Core Managed Services ARPU:
Total revenue $ 107,719 $ 110,515 $ 111,753 $ 113,456 $ 116,241
Less: Cloud Services revenue - - - - (1,791 )
Less: Intersegment eliminations - - - - 7
Core Managed Services net revenue (A) $ 107,719 $ 110,515 $ 111,753 $ 113,456 $ 114,457
Average Core Managed Services customers (B) 49,392 50,967 52,625 54,379 56,106
Core Managed Services ARPU (A/B) $ 727 $ 723 $ 708 $ 695 $ 680
Twelve Months Ended
Dec. 31,
2009 2010
Reconciliation of Core Managed Services ARPU:
Total revenue $ 413,771 $ 451,965
Less: Cloud Services revenue - (1,791 )
Less: Intersegment eliminations - 7
Core Managed Services net revenue (A) $ 413,771 $ 450,181
Average Core Managed Services customers (B) 46,333 53,588
Core Managed Services ARPU (A/B) $ 744 $ 700

CBEY-F CBEY-G

Cbeyond, Inc.
Investor Contact:
Kurt Abkemeier, 678-370-2887
Vice President, Finance and Treasurer

Source: Cbeyond, Inc.

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