8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________

FORM 8-K

__________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 8, 2022

__________________________________

Cyxtera Technologies, Inc.

(Exact name of registrant as specified in its charter)

__________________________________

Delaware (State or other jurisdiction of incorporation)	001-39496	84-3743013 (IRS Employer Identification No.)
2333 Ponce de Leon Boulevard Suite 900 Coral Gables, FL 33134 (Address of principal executive office)	(Commission File Number)	33134 (Zip Code)

(305) 537-9500

Registrant’s telephone number, including area code

(Former name or former address, if changed since last report.)

________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	CYXT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02.    Results of Operations and Financial Condition.

On November 8, 2022, Cyxtera Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2022. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.

Item 9.01.    Financial Statement and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press release issued by the Company dated November 8, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Cyxtera Technologies, Inc.
Date: November 8, 2022	By:	/s/ Carlos Sagasta
	Name:	Carlos Sagasta
	Title:	Chief Financial Officer

3

EX-99.1

Exhibit 99.1

Cyxtera Announces Third Quarter 2022 Results

Miami, FL – November 8, 2022 – Cyxtera (NASDAQ: CYXT), a global leader in data center colocation and interconnection services, today released financial results for the quarter ended September 30, 2022.

“We are pleased to report strong performance in the third quarter, including our 11th consecutive quarter of positive net bookings,” said Nelson Fonseca, Cyxtera’s Chief Executive Officer. “Our Q3 results reflect the robust demand for our global platform of highly interconnected data centers, our innovative approach to cloud-like colocation, our strong and diversified customer base, and our unwavering focus on delivering value to our customers.”

Q3 2022 Financial Highlights

•Total revenue increased by $9.5 million, or 5.4% year over year, to $186.6 million.

•On a constant currency basis, total revenue increased by $14.1 million, or 8.0% year over year.

•Recurring revenue increased by $8.8 million, or 5.2% year over year, to $178.1 million.

•Core revenue increased by $11.8 million, or 7.3% year over year, to $172.8 million.

•Net Loss of $55.9 million in the quarter; Transaction Adjusted EBITDA[1] increased by $0.4 million, or 0.8% year over year, to $58.5 million and increased by $2.8 million, or 4.9% year over year, on a constant currency basis.

Q3 2022 Business Highlights

•Annualized Core bookings increased 20% sequentially.

•Average monthly Core churn of 0.8% in the third quarter.

•Stabilized occupancy increased 480 basis points year over year to 73.7%.

•Net financial leverage declined 10 basis points and 20 basis points year over year and sequentially, respectively, to 3.6x.

•Closed an accounts receivable securitization facility of $37.5 million with PNC Bank, N.A., providing increased availability and reduced interest expense.

•Announced the intention to convert to a Real Estate Investment Trust (REIT).

“Cyxtera’s team once again delivered solid financial results in the third quarter, as we move through the second half of the year,” said Carlos Sagasta, Cyxtera’s Chief Financial Officer. “The fundamentals of our business remain healthy, including strong constant currency revenue growth, low churn rates and resilient demand across our key markets. We believe this positive momentum positions us well to mitigate some of the macroeconomic trends, including rising utility costs, higher interest rates, and FX volatility.”

2022 Outlook

Cyxtera affirmed its full-year 2022 guidance; details are summarized in the table below.

2022 Guidance
($ in millions)
	2022E	2021A	Y/Y % Change
Revenue	$730 - $760	$703.7	4% - 8%
Transaction Adjusted EBITDA	$232 - $242	$224.4	3% - 8%
Maintenance Capital Expenditures	$26 - $28	$21.3	22% - 32%
% of Revenue	3.6% - 3.7%	3.0%	60 bps - 70 bps
Expansion Capital Expenditures	$102 - $127	$67.3	52% - 89%

Q3 2022 Results Conference Call and Replay Information

Cyxtera will host a conference call and webcast to discuss its quarterly results for the period ended September 30, 2022 on Tuesday, November 8, 2022, at 8:30 a.m. Eastern Time. The live webcast of the call can be accessed at the Cyxtera Investor Relations website at http://ir.cyxtera.com/ along with the Company’s earnings press release and earnings presentation designed to accompany the discussion of the financial results. Participants can also register for the webcast at https://www.netroadshow.com/events/login?show=30398dbb&confId=43051.

The U.S. dial-in for the call is 1-833-927-1758 (1-929-526-1599 for non-U.S. callers); access code 403952. A replay of the conference call will be available until November 15, 2022, at 11:59 p.m. Eastern Time, while an archived version of the webcast will be available on Cyxtera’s Investor Relations website for one year. The U.S. dial-in for the conference call replay is 1-866-813-9403 (+44-204-525-0658). The replay access code is 208250.

Investor Presentation and Supplemental Financial Information

Concurrently with holding its conference call, Cyxtera will make available on its website a presentation designed to accompany the discussion of the company’s financial results along with supplemental financial information. When available, the presentation and supplemental financial information can be accessed on the Cyxtera Investor Relations website at http://ir.cyxtera.com/.

Upcoming Conferences and Events

•Nareit REITworld 2022 Annual Conference

•Raymond James 2022 Technology Investors Conference

1A complete reconciliation of Net Loss to Transaction Adjusted EBITDA is included in the financial tables included in this release.

•UBS 50th annual Global TMT Conference

About Cyxtera

Cyxtera is a global leader in colocation and interconnection services, with a footprint of more than 60 data centers in over 30 markets. With IT infrastructure becoming increasingly hybrid, complex, and distributed, Cyxtera continues to expand its portfolio beyond space and power to deliver more cloud-like and flexible infrastructure solutions across its global data center platform and robust partner ecosystem. Today, Cyxtera provides more than 2,300 enterprise and government customers with the technology solutions they need to scale faster, achieve financial goals, and gain a competitive advantage. For more information, please visit www.cyxtera.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the federal securities laws. Forward- looking statements contained in this press release include statements concerning Cyxtera’s estimated financial performance for 2022 and its plans to convert to a REIT. Because forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Cyxtera’s control. Actual results and conditions (financial or otherwise) may differ materially from those indicated in the forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results and conditions to differ materially from those indicated in the forward-looking statements, including, but not limited to, the effects of the COVID-19 pandemic on Cyxtera’s business or future results, including supply chain disruptions; Cyxtera’s ability to maintain its credit ratings; Cyxtera’s ability to access external sources of capital on favorable terms or at all, which could limit Cyxtera’s ability to execute its business and growth strategies; increases in interest rates; fluctuations in energy prices; fluctuations in foreign currency exchange rates in the markets in which Cyxtera operates internationally; inflation; prolonged power outages, shortages or capacity constraints; physical and electronic security breaches and cyber-attacks, which could disrupt Cyxtera’s operations; any failure of Cyxtera’s physical infrastructure or negative impact on its ability to provide its services, or damage to customer infrastructure within its data centers; inadequate or inaccurate external and internal information, including budget and planning data, which could lead to inaccurate financial forecasts and inappropriate financial decisions; Cyxtera’s fluctuating operating results; Cyxtera’s government contracts, which are subject to early termination, audits, investigations, sanctions and penalties; Cyxtera’s reliance on third parties to provide internet connectivity to its data centers; the incurrence of goodwill and other intangible asset impairment charges, or impairment charges to Cyxtera’s property and equipment, which could result in a significant reduction to its earnings; the requirements of being a public company, including maintaining adequate internal controls over financial and management systems; Cyxtera’s ability to manage its growth; volatility of the market price of Cyxtera’s Class A common stock; future sales, or the perception of future sales, of Cyxtera Class A common stock by existing securityholders in the public market, which could cause the market price for Cyxtera’s Class A common stock to decline; Cyxtera’s ability to use its United States federal and state net operating losses to offset future United States federal and applicable state taxable income may be subject to certain limitations that could accelerate or permanently increase taxes owed; Cyxtera’s ability to address the significant implementation and operational complexities required to complete a conversion to a REIT, including, without limitation, completing internal reorganizations and modifying accounting and information technology systems, and receiving any necessary stakeholder and other approvals; Cyxtera’s ability to apply highly technical and complex provisions of the US Internal Revenue Code, as amended, to its operations; and the timing to complete conversion to a REIT, if at all. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the “Risk Factors” disclosed in Cyxtera’s filings with the Securities and Exchange Commission (“SEC”) from time to time. There may be additional risks that Cyxtera does not presently know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Cyxtera’s expectations, plans or forecasts of future events and views as of the date of this press release. Accordingly, you should not place undue reliance upon any such forward-looking statements in this press release. Neither Cyxtera nor any of its affiliates assume any obligation to update this press release, except as required by law.

Statement Regarding Non-GAAP Financial Measures

This press release contains Transaction Adjusted EBITDA, which is a supplemental measure that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). Transaction Adjusted EBITDA represents the measure of EBITDA disclosed to SVAC in connection with its consideration of the business combination transaction between Starboard Value Acquisition Corp. (“SVAC”) and Cyxtera. Cyxtera defines Transaction Adjusted EBITDA as net income (loss) before the following items: depreciation and amortization, interest and other expenses, net, income tax expense (benefit), equity-based compensation, straight-line rent adjustment, amortization of favorable / unfavorable leasehold interest & asset retirement obligation accretion, stand-up separation & other, restructuring costs & other, and change in fair value of warrant liabilities. As a non-GAAP financial measure, Transaction Adjusted EBITDA excludes items that are significant in understanding and assessing Cyxtera’s financial results or position. Therefore, this measure should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Cyxtera’s presentation of this measure may not be comparable to similarly-titled measures used by other companies. You should review Cyxtera’s unaudited financial statements and the reconciliation of the non-GAAP financial measures included in this press release to the most directly comparable GAAP financial measures provided in this release and not rely on any single financial measure to evaluate Cyxtera’s business.

This press release also includes certain projections of non-GAAP financial measures concerning Cyxtera. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, Cyxtera is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.

This press release includes constant currency revenue, MRR and Transaction Adjusted EBITDA, which are non-GAAP financial measures and are not meant to be considered in isolation or as an alternative to GAAP revenue and GAAP net income (loss). Cyxtera has presented these non-GAAP financial measure to provide investors with an additional tool to evaluate its results without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Cyxtera’s business performance. To present this information, Cyxtera’s current and comparative prior period revenues and certain operating expenses from entities with functional currencies other than the U.S. dollar are converted into U.S. dollars at a consistent exchange rate for purposes of each result being compared.

CYXTERA TECHNOLOGIES, INC.

Consolidated Balance Sheets

(unaudited, in millions, except share information)

	September 30, 2022		December 31, 2021
Assets:
Current assets:
Cash	$	86.2	$	52.4
Accounts receivable, net of allowance of $0.2 and $0.3, respectively	20.2		18.3
Prepaid and other current assets	37.0		37.5
Total current assets	143.4		108.2
Property and equipment, net	1,636.1		1,530.8
Operating lease right-of-use assets	248.3		—
Goodwill	748.5		761.7
Intangible assets, net	441.8		519.8
Other assets	18.7		16.7
Total assets	$	3,236.8	$	2,937.2
Liabilities and shareholders’ equity:
Current liabilities:
Accounts payable	$	63.0	$	57.9
Accrued expenses	74.9		65.3
Current portion of operating lease liabilities	33.8		—
Current portion of long-term debt, finance leases and other financing obligations	52.6		50.3
Deferred revenue	64.1		60.7
Other current liabilities	22.3		10.0
Total current liabilities	310.7		244.2
Operating leases liabilities, net of current portion	273.5		—
Long-term debt, net of current portion	897.0		896.5
Finance leases and other financing obligations, net of current portion	1,075.1		937.8
Deferred income taxes	31.0		29.9
Warrant liabilities	—		64.7
Other liabilities	72.0		158.2
Total liabilities	$	2,659.3	$	2,331.3
Commitments and contingencies (Note 16)
Shareholders’ equity:
Preferred Stock, $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding	—		—
Class A common stock, $0.0001 par value; 500,000,000 shares authorized; 179,587,616 and 166,207,190 shares issued and outstanding as of September 30, 2022, and December 31, 2021, respectively	—		—
Additional paid-in capital	1,961.7		1,816.5
Accumulated other comprehensive (loss) income	(17.9)		10.8
Accumulated deficit	(1,366.3)		(1,221.4)
Total shareholders’ equity	577.5		605.9
Total liabilities and shareholders’ equity	$	3,236.8	$	2,937.2

CYXTERA TECHNOLOGIES, INC.

Consolidated Statements of Operations

(unaudited, in millions, except for share information)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues	$	186.6	$	177.1	$	553.0	$	525.3
Operating costs and expenses
Cost of revenues, excluding depreciation and amortization	100.3		93.5		296.7		287.4
Selling, general and administrative expenses	37.9		29.2		103.8		79.7
Depreciation and amortization	60.0		59.4		183.1		180.6
Restructuring, impairment, site closures and related costs	1.3		1.4		3.9		68.4
Transaction-related costs	—		5.2		—		5.2
Total operating costs and expenses	199.5		188.7		587.5		621.3
Loss from operations	(12.9)		(11.6)		(34.5)		(96.0)
Interest expense, net	(41.1)		(43.1)		(118.6)		(129.3)
Other expenses, net	(2.4)		(0.4)		(2.0)		(1.2)
Change in fair value of warrant liabilities	—		(2.7)		11.8		(2.7)
Loss from operations before income taxes	(56.4)		(57.8)		(143.3)		(229.2)
Income tax benefit (expense)	0.5		11.1		(1.6)		36.9
Net loss	$	(55.9)	$	(46.7)	$	(144.9)	$	(192.3)
Loss Per Share
Basic and diluted	$	(0.31)	$	(0.32)	$	(0.82)	$	(1.58)
Weighted average number of shares outstanding
Basic and diluted	179,121,387		147,754,776		177,637,729		121,868,742

CYXTERA TECHNOLOGIES, INC.

Consolidated Statements of Cash Flows

(unaudited, in millions)

	Nine Months Ended September 30,
	2022		2021
Net loss	$	(144.9)	$	(192.3)
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	183.1		180.6
Restructuring, impairment, site closures and related costs	—		2.0
Amortization of favorable/unfavorable leasehold interests, net	—		2.9
Amortization of debt issuance costs and fees, net	3.0		9.1
Equity-based compensation	16.0		5.4
Reversal of allowance for doubtful accounts	(0.4)		(1.1)
Deferred income taxes	2.5		(37.1)
Change of fair value of warrant liabilities	(11.8)		2.7
Non-cash interest expense, net	8.3		7.1
Changes in operating assets and liabilities, excluding impact of acquisitions and dispositions:
Accounts receivable	(1.5)		8.3
Prepaid and other current assets	0.5		3.1
Other assets	(2.4)		8.1
Operating lease right-of-use assets	28.7		—
Operating lease liabilities	(32.3)		—
Accounts payable	1.1		(10.5)
Accrued expenses	9.4		(27.7)
Due to affiliates	—		(22.8)
Other liabilities	14.7		63.0
Net cash provided by operating activities	74.0		0.8
Cash flows from investing activities:
Purchases of property and equipment	(100.4)		(44.1)
Amounts received from affiliate (Note 18)	—		117.1
Net cash (used in) provided by investing activities	(100.4)		73.0
Cash flows from financing activities:
Proceeds from issuance of long-term debt and other financing obligations	42.0		40.0
Proceeds from recapitalization, net of issuance costs	—		436.0
Repayment of long-term debt	(46.9)		(459.4)
Repayment of finance leases and other financing obligations	(37.0)		(49.1)
Proceeds from sales leaseback financing	26.7		—
Capital redemption	—		(97.9)
Capital contribution	—		5.2
Proceeds from the exercise of warrants, net of redemptions	1.3		—
Proceeds from the exercise of the optional share purchase options	75.0		—
Net cash provided by (used in) financing activities	61.1		(125.2)
Effect of foreign currency exchange rates on cash	(0.9)		5.2
Net increase (decrease) in cash	33.8		(46.2)
Cash at beginning of period	52.4		120.7
Cash at end of period	$	86.2	$	74.5
Supplemental cash flow information:
Cash (refund) paid for income taxes, net	$	(0.1)	$	4.3
Cash paid for interest	$	21.9	$	67.6
Non-cash purchases of property and equipment	$	4.1	$	19.4

CYXTERA TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(unaudited, in millions)

	Three Months Ended September 30,
	2022		2021
Net Loss to EBITDA Reconciliation:
Net loss	$	(55.9)	(46.7)
Depreciation and amortization	60.0		59.4
Interest and other expenses, net	43.5		43.5
Income tax benefit	(0.5)		(11.1)
EBITDA	$	47.1	$	45.1
Transaction Adjustments
Equity-based compensation	6.2		1.8
Straight-line rent adjustment	0.4		0.6
Amortization of Favorable / Unfavorable Leasehold Interest & ARO accretion	0.9		0.9
Stand-up separation & other	1.5		0.4
Restructuring costs & other	1.3		1.4
REIT conversion costs	1.0		—
Transaction-related costs	—		5.2
Change in fair value of warrant liabilities	—		2.7
Total Adjustments	11.4		13.0
Transaction Adjusted EBITDA	$	58.5	$	58.1

Note: Numbers may not foot or cross-foot due to rounding

CYXTERA TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(unaudited, in millions)

	Nine Months Ended September 30,
	2022		2021
Net Loss to EBITDA Reconciliation:
Net loss	$	(144.9)	(192.3)
Depreciation and amortization	183.1		180.6
Interest and other expenses, net	120.6		130.5
Income tax expense (benefit)	1.6		(36.9)
EBITDA	$	160.4	$	81.9
Transaction Adjustments
Equity-based compensation	16.0		5.4
Straight-line rent adjustment	1.5		2.5
Amortization of Favorable / Unfavorable Leasehold Interest & ARO accretion	2.7		2.6
Stand-up separation & other	2.7		3.8
Restructuring costs & other	3.9		72.3
REIT conversion costs	1.7		—
Transaction-related costs	—		5.2
Change in fair value of warrant liabilities	(11.8)		2.7
Total Adjustments	16.7		94.5
Transaction Adjusted EBITDA	$	177.1	$	176.4

Note: Numbers may not foot or cross-foot due to rounding

Press Contact:

Janice Clayton

Cyxtera

janice.clayton@cyxtera.com

IR Contact:

Greer Aviv

Cyxtera

greer.aviv@cyxtera.com

XML

Cover Page	Nov. 08, 2022
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Nov. 08, 2022
Entity Registrant Name	Cyxtera Technologies, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-39496
Entity Tax Identification Number	84-3743013
Entity Address, Address Line One	2333 Ponce de Leon Boulevard
Entity Address, Address Line Two	Suite 900
Entity Address, City or Town	Coral Gables
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33134
City Area Code	305
Local Phone Number	537-9500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Amendment Flag	false
Entity Central Index Key	0001794905
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A common stock, par value $0.0001 pershare
Trading Symbol	CYXT
Security Exchange Name	NASDAQ