Shares of Switch Inc. (NYSE:SWCH) fell 14.8% on Tuesday after the data center facilities company announced weaker-than-expected first-quarter 2018 results.
More specifically, Switch's revenue grew 10% year over year to $97.7 million, and translated to net income attributable to Switch of $0.7 million, or $0.02 per diluted share. But analysts, on average, were looking for earnings of $0.05 per share on revenue of $99.8 million.
Still, Switch president and general counsel Thomas Morton insisted the company is "pleased" with its progress in both growing its ecosystems and "positioning Switch as a partner of choice for global enterprises."
"Switch continues to execute on its market expansion strategy," elaborated Switch's founding chairman and CEO Rob Roy. "We are excited about our growth prospects in 2018 in our Citadel and Pyramid Primes, and the continued growth in our Core Campus."
To that end, Switch announced a 15MW colocation deal during the quarter with an unnamed international streaming media customer that will use its North American data centers as a worldwide distribution hub for its services starting in July of this year. Switch also signed new contracts at The Pyramid Campus in Michigan with a large electric utility company and a major debit and credit card processor this quarter.
As such, Switch reaffirmed its full-year guidance, which calls for revenue of $423 million to $440 million, and adjusted EBITDA of $216 million to $224 million.
Given its slight underperformance in the first quarter, however, it's obvious that the market was looking for more. And it's no surprise to see shares of this recently IPO'd company tumbling in response.