Terremark Worldwide Reports Second Quarter Results

November 11, 2004; 03:45 PM

MIAMI, FL  - November 11, 2004 - (HostReview) - Terremark Worldwide, Inc. (AMEX:TWW), a leading operator of integrated Tier-1 Internet exchanges and best-in-class network services, today reported its results for the quarter ended September 30, 2004.

Terremark's consolidated revenue for the quarter ended September 30, 2004 was $8.2 million representing a 103% increase over the same quarter last year and a 4% increase over the June 30, 2004 quarter.  Data Center revenue, generated primarily by the NAP of the Americas, increased to $7.9 million for the quarter ended September 30, 2004 representing a 101% increase over the same quarter last year and an 11% increase over the June 30, 2004 quarter. The increase in revenue was primarily the result of recent customer wins.  The percentage of data center revenue derived from public sector customers increased to 18% for the quarter ended September 30, 2004 from 15% and 13% for the quarters ended September 30, 2003 and June 30, 2004, respectively.  The Company's public sector customers include federal and local government entities.  Additionally, during the quarter ended September 30, 2004 the Company commenced work on a customer infrastructure build-out project valued at $6.2 million.  Completion of this project is expected during the quarter ended December 31, 2004.

Loss from operations for the quarter ended September 30, 2004 was $4.3 million representing a 36% improvement over the same quarter last year and a 2% improvement over the June 30, 2004 quarter.

EBITDA loss, as adjusted, for the quarter ended September 30, 2004 was $3.0 million representing a 17% improvement over the same quarter last year and a 3% improvement over the June 30, 2004 quarter.  
 
EBITDA, as adjusted, is defined as loss from operations less depreciation, amortization and stock based compensation.  EBITDA should be considered in addition to, but not in lieu of, loss from operations reported under GAAP.

As of September 30, 2004, the Company's cash balance was $ 21.8 million. Utilization of total net colocation space increased to 15% as of September 30, 2004 from 14% as of June 30, 2004.  Cross connects billed to customers increased by 25% to 2,039 as of September 30, 2004 from 1,628 as of June 30, 2004.

Additional information regarding the Company's financial performance as of and for the quarter and six months ended September 30, 2004 and a comparison to the quarter and six months ended September 30, 2003 can be found on the attached balance sheet and statement of operations and in the Company's Quarterly Report on Form 10-Q.

Highlights of this quarter include:

• Entering into an agreement to purchase the Technology Center of the Americas, Home of the NAP of the Americas.
• New and expanding public sector contracts including Miami-Dade County deployment of critical infrastructure at the NAP.
• Expanding additional services to existing customers, including Akamai, Adelphia, Brasil Telecom, France Telecom, Florida International University/College of Business, Sprint, Telmex USA, and Yahoo, Inc.
• Acquiring additional equity interest in the NAP de las Americas/Madrid.
• Partnering with the London Internet Exchange (LINX).
Further, as of November 2, 2004, we surpassed the 180 customers mark under contract at the NAP of the Americas, including contracts with telecommunications carriers, service providers, enterprises and higher education institutions such as Ace America Insurance, Barry University, Ferrel, Schultz P.A., G2 Satellite Solutions Corporation, Impsat USA, Inc., Miami Dade College, The Miami Dolphins, VoiP, Inc., and TeleBermuda International.  In addition, we are experiencing an increase in customers at our NAP/West facility with contracts from Layer 42, the San Francisco 49ers, and others.  A representative list of Terremark customers is available at http://www.terremark.com. 

"We are pleased with our second quarter results and expect increases in revenues over the next several quarters, as we complete delivery of certain services under public sector contracts," said Manuel D. Medina, Chairman and CEO of Terremark Worldwide, Inc.   

Business Outlook

As previously reported, for the fiscal year ending March 31, 2005, revenues are expected to be in the range of $60 million to $65 million, income from operations is expected to range from $0.5 million to $3 million and EBITDA, as adjusted, is expected to range from $5 million to $8 million. Based on anticipated increase in revenues during fiscal year 2005, the Company expects that, for the month ending March 31, 2005, its revenue will range from $6.5 million to $7 million, income from operations will range from $1.6 million to $2 million and EBITDA, as adjusted, will range from $2.1 million to $2.6 million.

About Terremark Worldwide, Inc.
Terremark Worldwide Inc. (AMEX:TWW) is a leading operator of integrated Tier-1 Internet exchanges and best-in-class network services, creating technology marketplaces in strategic global locations. Terremark is the owner and operator of the NAP of the Americas, the model for its carrier-neutral Internet exchanges the company has in Santa Clara, California (NAP of the Americas/West), in Sao Paulo, Brazil (NAP do Brasil) and in Madrid, Spain (NAP de las Americas - Madrid). The carrier-neutral NAP of the Americas is a state-of-the-art facility that provides exchange point, collocation and managed services to carriers, Internet service providers, network service providers, government entities, multi-national enterprises and other end users. The NAP, which connects fiber networks in Latin America, Europe, Asia and Africa to those in the U.S., enables customers to freely choose among the many carriers available at the TerreNAP Centers to do business. Terremark is headquartered at 2601 S. Bayshore Drive, 9th Floor, Miami, Florida USA, (305) 856-3200. More information about Terremark Worldwide can be found at http://www.terremark.com.