Digex, Inc. (Nasdaq: DIGX) climbed 8 1/4 to 71 15/16 Tuesday after reporting a 234 percent increase in revenue for the second quarter. An upgrade by A.G. Edwards from maintain to buy also powered the stock.
Digex, a Beltsville, Maryland-based Web and application hosting service provider, said revenue for the quarter rose to $42.2 million as the number of managed servers advanced to 3,647. The company lost $34.5 million, or 54 cents per share in the quarter, compared with a loss of $13.3 million, or 27 cents, in the same quarter last year.
Digex President and Chief Executive Officer Mark Shull attributed the strong revenue growth to an increase in the number of customers, as well as product upgrades that led existing customers to order more services.
The firm opened its first overseas facility during the quarter, with a London data center serving PeoplePC. “We believe European customers will prefer the managed hosting model, and we are well positioned to take advantage of the expected growth of the Web hosting market in Europe,” said Shull.