Earthlink Managed, Cloud Services Revenues Grow 11% in Q1

MSPmentor 501 2015 company, EarthLink this week announced Q1 financial results with lower revenue and a net loss. But in comments made to analysts, executives said that the company’s managed services and cloud revenue grew at 11 percent year over year.

“We are creating a product and services portfolio that builds on our existing strength and positions EarthLink as a leader in the managed network services in the cloud world,” CEO Joseph Eazor told analysts in an earnings conference call, which was transcribed by SeekingAlpha here.

Eazor summarized the managed network services plays as including the following components:

EVP and CFO Louis Alterman said that he expects revenues to continue to grow for these lines of business.

“We are continuing to see strong demand from managed network service products,” Alterman told analysts. “This year we are focusing on a narrower product set and we’re building funnel in the products that Joe mentioned and we expect revenue trends in this area to strengthen over time, as providing managed services is increasingly becoming our core competency.”

Earthlink rolled out the managed network service just a few months ago in March 2015. In April Earthlink announced a leadership change for its managed services organization, naming Gerard Brossard as EVP and managing director of the group. The former HP (HPQ) executive was known for being part of the workforce optimization efforts at HP, starting around the time when Carly Fiorina started as CEO there. Earthlink introduced its managed security monitoring service in February 2015.

Earthlink also includes business units to serve three other target markets: local telecom carrier services, small business and consumer.

For the entire company for Q1 Earthlink posted revenue of $282.4 million, down from $297.3 in the same quarter a year ago. Earthlink saw a net loss for the quarter of $10.5 million, narrowed from last year’s $26.5 million Q1 loss.

The company reported reduced workforce numbers with 2,402 as of March 31, 2015. That compares with 2,994 as of the same date last year. On Dec. 31 2014 the company had 2,559 employees.