tw telecom Q2: enterprise growth, low churn drove up results

tw telecom's (Nasdaq: TWTC) bet on IP and Ethernet combined with decreased customer churn continued to pay off in Q2 with $316.8 million in revenues, a $15.8 million increase over the $301.1 million it reported in Q2 2009.  

Once again, the driving factors in tw telecom's Q2 results were new enterprise and wholesale carrier revenue.

tw telecom saw a $14 million increase in enterprise customer revenue, or 6 percent year over year, representing 32 consecutive quarters of enterprise growth. Meanwhile, new wireless backhaul capacity sales drove up wholesale business revenue by $1.5 million.

On the product side, the stars were Ethernet and IP-based products. Ongoing success with Ethernet and IP-based products drove up tw telecom's data and Internet services revenue 16 percent, while voice services increased 1 percent.  

There were, of course, losses. The service provider's network services revenues declined 4 percent, a factor it attributes to growth in high capacity and collocation services, outpaced by churn.

Revenue and customer churn both remained low in the second quarter. Revenue lost from customers disconnecting service remained low at 0.2 percent in Q2 and in Q1 2010, but down from 0.4 percent in Q2 2009.

Similarly, tw telecom's customer churn remained unchanged from Q1 2010 at 1.1 percent, but down from 1.4 percent in Q2 2009. As of the end of June, tw telecom had about 27,500 customers.

Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer, said that much of its Q2 uptick was related to lower churn and turning up new customers. "Our 'bookings,' or sales, for the first half of this year outpaced the same period last year by nearly 25 percent, demonstrating the momentum in the business and included some large customer wins," he said in the earnings release. "The majority of the revenue associated with these large deals late this year and into the first half of next year."

For more:
- see the earnings release here

Related articles:
tw telecom's Q1 revenues boosted by data sales
Larissa Herda, Chairman, President and CEO, tw telecom - 2010 Top Women in Wireline
tw telecom turns on 10 Gbps Ethernet at Phoenix NAP

Wireline Q2 reports:
Click here for the ongoing summary

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