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Bucking economic downturns that have IT insiders discussing ways to sell communications during a recession, an Atlanta-based IP-based managed services provider reportedly is posting third-quarter revenues of $90.2 million.

 

Officials at Cbeyond (News - Alert), Inc. say the figure marks a 25 percent increase over the year-ago quarter.

 

The company’s chief executive officer, Jim Geiger (News - Alert), said the strong financial results are fueled by growth in average revenue per user, increased applications used per customer (up to 6.8 from 5.9 in the year-ago quarter) and 31 percent mobile penetration of Cbeyond’s customer base.

 

“Our monthly customer churn remained constant at 1.3 percent from the previous quarter, and we posted continued solid results in collections and receivables in the third quarter,” said Geiger, pictured right.

 

The company says it uses VoIP and a Cisco network to deliver small business customers an integrated package of local and long-distance telephony services, high-speed, T-1 Internet access and Internet-based applications.

 

Despite the poor economic and Hurricane Ike’s effect on the company’s Houston market, Cbeyond had record gross customer additions of nearly 3,600 in the third quarter, Geiger continued.

 

“Looking forward to the fourth quarter, we expect increased pressure on both churn and collections due to the carryover effect of Hurricane Ike on our Houston market, as well as the overall economic conditions across the country,” he said.

 

The company reported a net of nearly 2,000 additional customers in the third quarter.

 

However, Cbeyond said its net income for the quarter was $1.7 million – just half of the $3.4 million it posted in the year-ago quarter.

 

The decrease is due to increased depreciation and amortization expense, recording income taxes at the full corporate tax rate beginning in 2008 and an increase in the Texas state margin tax, company officials say.

 

According to Geiger, the company’s long-term view remains “very positive,” as Cbeyond stands by an approach that says customers are looking for service providers that not only offer a smart solution for their needs, but also have the staying power they require in good times and bad.

 

“Cbeyond’s debt-free balance sheet, strong cash position, and market base of established, profitable cities provide assurance that we are well-situated to weather economic storms and credit crises from a position of strength, and still grow our business,” Geiger said.