Cbeyond sees no signs of slowing

CBeyond shrugged off news of a harsh economy as it announced record customer wins in the fourth quarter and plans to enter its thirteenth market, Seattle, this year.

Despite the economic downturn and a smaller number of business days in the fourth quarter (due to holidays), the IP communications service provider reported 3600 gross quarterly customer additions – the highest in the company’s eight-year history. Churn rose slightly, to 1.4%, but revenue was up 22% from a year earlier. And Jim Geiger, the company’s chief executive officer, said he sees “no indication” that things will slow down any time soon. After reporting 25% revenue growth in 2008, the company expects 20% to 26% growth this year.

“We read about the dire economic situation facing the world today,” Geiger said on the company’s earnings call late Thursday. “Cbeyond has certainly been impacted as well, but so far not nearly as much as many other businesses.”

Although consumer confidence withered in the fourth quarter, he added, confidence among small and medium business (SMB) owners – Cbeyond’s target market -- increased 20% during that time, according to the Small Business Research Board.

Pointing out that CBeyond has been talking about the macroeconomic impact to its business for more than a year now, Geiger said, “It’s quite possible that our SMBs were the first to enter this recession and may also be the first to exit.”

CBeyond announced plans to launch its thirteenth market, Seattle, late in this year’s third quarter, targeting some 43,000 small businesses there. The company also said it is seeing improvement in its worst markets, Chicago and Detroit.