Equinix Reports First Quarter 2017 Results
- Record quarterly bookings in
Europe and the network vertical - Added 11 Fortune 500 customers including
Progressive Corporation andEli Lilly and Company - Customer deployments across multiple metros increase to 83% of total recurring revenue, demonstrating the value of
Equinix's global platform
First Quarter 2017 Results Summary
- Revenues from continuing operations
$950 million , a 1% increase over the previous quarter- Operating Income
$167 million , a 9% decrease from the previous quarter- Adjusted EBITDA
$428 million , a 45% adjusted EBITDA margin- Includes
$12 million of integration costs - Net Income from Continuing Operations
$42 million - AFFO
$304 million , a 4% increase over the previous quarter
2017 Annual Guidance Summary
- Revenues from continuing operations
- >
$3,976 million , a 10.1% increase over the previous year; a normalized and constant currency growth rate of greater than 11.1% - Adjusted EBITDA
- >
$1,860 million or a 46.8% adjusted EBITDA margin - Assumes
$30 million of integration costs for acquisitions - AFFO
- >
$1,214 million , a 13% increase over the previous year - Assumes
$30 million of integration costs for acquisitions - Assumes
$87 million of incremental interest expense attributed to theVerizon data center acquisition funding
Quote
"
Business Highlights
- As
Equinix expects to complete the transaction to acquire 29 data centers fromVerizon in Q2, it also continues to invest in organic expansion, with 20 announced expansion projects currently underway. In Q1,Equinix opened a new IBX data center in São Paulo,Brazil (SP3), and todayEquinix announced new expansions inLondon ,Paris andSydney totaling$145 million of capital expenditures. The global reach ofEquinix continues to attract companies seeking to interconnect their IT infrastructure closer to the digital edge, and in Q1 customer deployments across multiple metros of Platform EquinixTM increased to 83% of total recurring revenue. - The enterprise vertical remained the fastest growing, with recurring revenue surpassing
$100 million in Q1, as enterprises re-architect their infrastructure to directly and securely interconnect their people, locations, clouds and data at the digital edge. Q1 was also a record quarter in terms of new enterprise wins, and customer wins included 11 Fortune 500 customers, among themProgressive Corporation , one of the largest providers of car insurance inthe United States , andEli Lilly and Company , a global pharmaceutical company. Equinix continues to deliver strong results in the network vertical with record bookings led by the major telecommunication providers which are expanding capacity and capabilities for digital services such as OTT, cloud and security, as well as refreshing deployments with upgraded optical technologies. Network customer expansions in Q1 included a top tier global provider building out its new digital services, and a global carrier that is making major investments in EMEA for their core backbone network.- Building on a foundation of innovative solutions for customers,
Equinix launched IBX SmartView™ in Q1. This new data center monitoring software platform provides unprecedented visibility into distributed infrastructure for enterprises moving their IT operations to the digital edge. It enables precise and real-time monitoring and forecasting of power, mechanical and environmental conditions across a customer's global footprint across Platform Equinix.
Business Outlook
For the second quarter of 2017, the Company expects revenues to range between
For the full year of 2017, total revenues are expected to be greater than
The U.S. dollar exchange rates used for 2017 guidance, taking into consideration the impact of our foreign currency hedges, have been updated to
The adjusted EBITDA guidance is based on the revenue guidance less our expectations of cash cost of revenues and cash operating expenses. The AFFO guidance is based on the adjusted EBITDA guidance less our expectations of net interest expense, an installation revenue adjustment, a straight-line rent expense adjustment, amortization of deferred financing costs, gains (losses) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.
Q1 2017 Results Conference Call and Replay Information
A replay of the call will be available one hour after the call, through
Investor Presentation and Supplemental Financial Information
Additional Resources
About
Non-GAAP Financial Measures
In presenting non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow,
In addition, in presenting the non-GAAP financial measures,
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financials measures.
Investors should note that the non-GAAP financial measures used by
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering
EQUINIX, INC. |
|||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||
(in thousands, except per share data) |
|||||||||||
(unaudited) |
|||||||||||
Three Months Ended |
|||||||||||
March 31, |
December 31, |
March 31, |
|||||||||
Recurring revenues |
$ |
898,440 |
$ |
892,442 |
$ |
796,620 |
|||||
Non-recurring revenues |
51,085 |
50,205 |
47,536 |
||||||||
Revenues |
949,525 |
942,647 |
844,156 |
||||||||
Cost of revenues |
468,961 |
465,921 |
427,680 |
||||||||
Gross profit |
480,564 |
476,726 |
416,476 |
||||||||
Operating expenses: |
|||||||||||
Sales and marketing |
128,927 |
113,384 |
106,590 |
||||||||
General and administrative |
181,399 |
178,956 |
165,904 |
||||||||
Acquisition costs |
3,025 |
(440) |
36,536 |
||||||||
(Gain) loss on asset sales |
— |
371 |
(5,242) |
||||||||
Total operating expenses |
313,351 |
292,271 |
303,788 |
||||||||
Income from continuing operations |
167,213 |
184,455 |
112,688 |
||||||||
Interest and other income (expense): |
|||||||||||
Interest income |
3,092 |
948 |
925 |
||||||||
Interest expense |
(111,684) |
(98,761) |
(100,863) |
||||||||
Other income (expense) |
337 |
(1,707) |
(60,710) |
||||||||
Loss on debt extinguishment |
(3,503) |
(1,777) |
— |
||||||||
Total interest and other, net |
(111,758) |
(101,297) |
(160,648) |
||||||||
Income (loss) from continuing operations before income taxes |
55,455 |
83,158 |
(47,960) |
||||||||
Income tax benefit (expense) |
(13,393) |
(19,494) |
10,633 |
||||||||
Net income (loss) from continuing operations |
42,062 |
63,664 |
(37,327) |
||||||||
Net income (loss) from discontinued operations, net of tax |
— |
(1,914) |
6,216 |
||||||||
Net income (loss) |
$ |
42,062 |
$ |
61,750 |
$ |
(31,111) |
|||||
Net income (loss) per share: |
|||||||||||
Basic net income (loss) per share from continuing operations |
$ |
0.58 |
$ |
0.89 |
$ |
(0.55) |
|||||
Basic net income (loss) per share from discontinued operations |
— |
(0.03) |
0.09 |
||||||||
Basic net income (loss) per share |
$ |
0.58 |
$ |
0.86 |
$ |
(0.46) |
|||||
Diluted net income (loss) per share from continuing operations |
$ |
0.57 |
$ |
0.88 |
$ |
(0.55) |
|||||
Diluted net income (loss) per share from discontinued operations |
— |
(0.02) |
0.09 |
||||||||
Diluted net income (loss) per share |
$ |
0.57 |
$ |
0.86 |
$ |
(0.46) |
|||||
Shares used in computing basic net income per share |
72,773 |
71,389 |
68,132 |
||||||||
Shares used in computing diluted net income per share |
73,367 |
71,959 |
68,132 |
||||||||
EQUINIX, INC. |
|||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) |
|||||||||||
(in thousands) |
|||||||||||
(unaudited) |
|||||||||||
Three Months Ended |
|||||||||||
March 31, |
December 31, |
March 31, |
|||||||||
Net income (loss) |
$ |
42,062 |
$ |
61,750 |
$ |
(31,111) |
|||||
Other comprehensive income (loss), net of tax: |
|||||||||||
Foreign currency translation adjustment ("CTA") gain (loss) |
106,938 |
(292,355) |
115,899 |
||||||||
Unrealized loss on available-for-sale securities |
(265) |
(133) |
(304) |
||||||||
Unrealized gain (loss) on cash flow hedges |
(11,727) |
15,762 |
(6,784) |
||||||||
Net investment hedge CTA gain (loss) |
(28,551) |
41,342 |
(16,312) |
||||||||
Net actuarial gain on defined benefit plans |
11 |
11 |
6 |
||||||||
Other comprehensive income (loss), net of tax: |
66,406 |
(235,373) |
92,505 |
||||||||
Comprehensive income (loss), net of tax |
$ |
108,468 |
$ |
(173,623) |
$ |
61,394 |
EQUINIX, INC. |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
March 31, |
December 31, |
||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
4,923,259 |
$ |
748,476 |
|||
Short-term investments |
14,742 |
3,409 |
|||||
Accounts receivable, net |
429,990 |
396,245 |
|||||
Other current assets |
206,026 |
319,396 |
|||||
Total current assets |
5,574,017 |
1,467,526 |
|||||
Long-term investments |
6,461 |
10,042 |
|||||
Property, plant and equipment, net |
7,605,829 |
7,199,210 |
|||||
Goodwill |
3,053,026 |
2,986,064 |
|||||
Intangible assets, net |
710,706 |
719,231 |
|||||
Other assets |
234,645 |
226,298 |
|||||
Total assets |
$ |
17,184,684 |
$ |
12,608,371 |
|||
Liabilities and Stockholders' Equity |
|||||||
Accounts payable and accrued expenses |
$ |
515,959 |
$ |
581,739 |
|||
Accrued property, plant and equipment |
190,176 |
144,842 |
|||||
Current portion of capital lease and other financing obligations |
99,202 |
101,046 |
|||||
Current portion of mortgage and loans payable |
80,799 |
67,928 |
|||||
Other current liabilities |
133,932 |
133,140 |
|||||
Total current liabilities |
1,020,068 |
1,028,695 |
|||||
Capital lease and other financing obligations, less current portion |
1,523,309 |
1,410,742 |
|||||
Mortgage and loans payable, less current portion |
2,432,610 |
1,369,087 |
|||||
Senior notes |
5,045,449 |
3,810,770 |
|||||
Other liabilities |
645,409 |
623,248 |
|||||
Total liabilities |
10,666,845 |
8,242,542 |
|||||
Common stock |
78 |
72 |
|||||
Additional paid-in capital |
9,601,627 |
7,413,519 |
|||||
Treasury stock |
(146,936) |
(147,559) |
|||||
Accumulated dividends |
(2,115,963) |
(1,969,645) |
|||||
Accumulated other comprehensive loss |
(882,736) |
(949,142) |
|||||
Retained earnings |
61,769 |
18,584 |
|||||
Total stockholders' equity |
6,517,839 |
4,365,829 |
|||||
Total liabilities and stockholders' equity |
$ |
17,184,684 |
$ |
12,608,371 |
|||
Ending headcount by geographic region is as follows: |
|||||||
Americas headcount |
2,595 |
2,510 |
|||||
EMEA headcount |
2,156 |
2,063 |
|||||
Asia-Pacific headcount |
1,437 |
1,420 |
|||||
Total headcount |
6,188 |
5,993 |
EQUINIX, INC. |
|||||||
Summary of Debt Principal Outstanding |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
March 31, 2017 |
December 31, 2016 |
||||||
Capital lease and other financing obligations |
$ |
1,622,511 |
$ |
1,511,788 |
|||
Term loans, net of debt discount and debt issuance costs |
2,466,664 |
1,390,771 |
|||||
Mortgage payable and other loans payable |
46,745 |
46,244 |
|||||
Plus: debt discount, debt issuance costs and premium, net |
33,525 |
20,949 |
|||||
Total mortgage and loans payable principal |
2,546,934 |
1,457,964 |
|||||
Senior notes, net of debt issuance costs |
5,045,449 |
3,810,770 |
|||||
Plus: debt issuance costs |
54,551 |
39,230 |
|||||
Total senior notes principal |
5,100,000 |
3,850,000 |
|||||
Total debt principal outstanding |
$ |
9,269,445 |
$ |
6,819,752 |
EQUINIX, INC. |
|||||||||||
Condensed Consolidated Statements of Cash Flows |
|||||||||||
(in thousands) |
|||||||||||
(unaudited) |
|||||||||||
Three Months Ended |
|||||||||||
March 31, |
December 31, |
March 31, |
|||||||||
Cash flows from operating activities: |
|||||||||||
Net income (loss) |
$ |
42,062 |
$ |
61,750 |
$ |
(31,111) |
|||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||||||
Depreciation, amortization and accretion |
219,013 |
212,268 |
202,153 |
||||||||
Stock-based compensation |
38,323 |
39,837 |
34,061 |
||||||||
Amortization of debt issuance costs and debt discounts |
11,580 |
5,428 |
5,508 |
||||||||
Loss on debt extinguishment |
3,503 |
1,777 |
— |
||||||||
(Gain) loss on asset sales |
— |
371 |
(5,242) |
||||||||
Loss on sale of discontinued operations |
— |
1,891 |
— |
||||||||
Other items |
8,380 |
5,014 |
5,435 |
||||||||
Changes in operating assets and liabilities: |
|||||||||||
Accounts receivable |
(39,664) |
(27,423) |
(11,312) |
||||||||
Income taxes, net |
(20,637) |
27,999 |
(28,656) |
||||||||
Accounts payable and accrued expenses |
(65,414) |
73,091 |
(40,217) |
||||||||
Other assets and liabilities |
50,225 |
(101,385) |
(25,785) |
||||||||
Net cash provided by operating activities |
247,371 |
300,618 |
104,834 |
||||||||
Cash flows from investing activities: |
|||||||||||
Purchases, sales and maturities of investments, net |
(7,104) |
779 |
3,419 |
||||||||
Business acquisitions, net of cash and restricted cash acquired |
(36,041) |
621 |
(1,601,326) |
||||||||
Purchases of real estate |
(41,739) |
— |
(16,408) |
||||||||
Purchases of other property, plant and equipment |
(277,242) |
(386,321) |
(197,700) |
||||||||
Proceeds from asset sales |
47,767 |
23,385 |
22,825 |
||||||||
Net cash used in investing activities |
(314,359) |
(361,536) |
(1,789,190) |
||||||||
Cash flows from financing activities: |
|||||||||||
Proceeds from employee equity awards |
20,074 |
36 |
16,304 |
||||||||
Payments of dividend distributions |
(148,083) |
(125,312) |
(124,836) |
||||||||
Proceeds from public offering of common stock, net of offering costs |
2,126,258 |
— |
— |
||||||||
Proceeds from loans payable |
1,059,800 |
457,900 |
701,250 |
||||||||
Proceeds from senior notes |
1,250,000 |
— |
— |
||||||||
Repayment of capital lease and other financing obligations |
(16,596) |
(13,522) |
(33,232) |
||||||||
Repayments of mortgage and loans payable and convertible debt |
(21,510) |
(476,474) |
(936,353) |
||||||||
Debt extinguishment costs |
(3,132) |
(1,199) |
— |
||||||||
Debt issuance costs |
(40,665) |
370 |
(65) |
||||||||
Other financing activities |
(900) |
— |
— |
||||||||
Net cash provided by (used in) financing activities |
4,225,246 |
(158,201) |
(376,932) |
||||||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash |
11,541 |
(34,930) |
(9,501) |
||||||||
Change in cash balances included in assets held for sale |
— |
3,755 |
— |
||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
4,169,799 |
(250,294) |
(2,070,789) |
||||||||
Cash, cash equivalents and restricted cash at beginning of period |
773,247 |
1,023,541 |
2,718,427 |
||||||||
Cash, cash equivalents and restricted cash at end of period |
$ |
4,943,046 |
$ |
773,247 |
$ |
647,638 |
|||||
Supplemental cash flow information: |
|||||||||||
Cash paid for taxes |
$ |
29,552 |
$ |
7,817 |
$ |
19,215 |
|||||
Cash paid for interest |
$ |
115,434 |
$ |
78,553 |
$ |
74,540 |
|||||
Free cash flow (negative free cash flow) (1) |
$ |
(59,884) |
$ |
(61,697) |
$ |
(1,687,775) |
|||||
Adjusted free cash flow (adjusted negative free cash flow) (2) |
$ |
17,896 |
$ |
(62,318) |
$ |
(70,041) |
|||||
(1) We define free cash flow as net cash provided by operating activities plus net cash provided by (used in) investing activities (excluding the net purchases, sales and maturities of investments) as presented below: |
|||||||||||
Net cash provided by operating activities as presented above |
$ |
247,371 |
$ |
300,618 |
$ |
104,834 |
|||||
Net cash used in investing activities as presented above |
(314,359) |
(361,536) |
(1,789,190) |
||||||||
Purchases, sales and maturities of investments, net |
7,104 |
(779) |
(3,419) |
||||||||
Free cash flow (negative free cash flow) |
$ |
(59,884) |
$ |
(61,697) |
$ |
(1,687,775) |
|||||
(2) We define adjusted free cash flow as free cash flow (as defined above) excluding any purchases of real estate and business acquisitions as presented below: |
|||||||||||
Free cash flow (as defined above) |
$ |
(59,884) |
$ |
(61,697) |
$ |
(1,687,775) |
|||||
Less business acquisitions, net of cash and restricted cash |
36,041 |
(621) |
1,601,326 |
||||||||
Less purchases of real estate |
41,739 |
— |
16,408 |
||||||||
Adjusted free cash flow |
$ |
17,896 |
$ |
(62,318) |
$ |
(70,041) |
|||||
EQUINIX, INC. |
|||||||||||
Non-GAAP Measures and Other Supplemental Data |
|||||||||||
(in thousands) |
|||||||||||
(unaudited) |
|||||||||||
Three Months Ended |
|||||||||||
March 31, |
December 31, |
March 31, |
|||||||||
Recurring revenues |
$ |
898,440 |
$ |
892,442 |
$ |
796,620 |
|||||
Non-recurring revenues |
51,085 |
50,205 |
47,536 |
||||||||
Revenues (1) |
949,525 |
942,647 |
844,156 |
||||||||
Cash cost of revenues (2) |
303,540 |
301,540 |
271,100 |
||||||||
Cash gross profit (3) |
645,985 |
641,107 |
573,056 |
||||||||
Cash operating expenses (4): |
|||||||||||
Cash sales and marketing expenses (5) |
99,861 |
85,196 |
79,692 |
||||||||
Cash general and administrative expenses (6) |
118,550 |
119,420 |
112,714 |
||||||||
Total cash operating expenses (7) |
218,411 |
204,616 |
192,406 |
||||||||
Adjusted EBITDA (8) |
$ |
427,574 |
$ |
436,491 |
$ |
380,650 |
|||||
Cash gross margins (9) |
68 |
% |
68 |
% |
68 |
% |
|||||
Adjusted EBITDA margins (10) |
45 |
% |
46 |
% |
45 |
% |
|||||
Adjusted EBITDA flow-through rate (11) |
(130) |
% |
92 |
% |
42 |
% |
|||||
FFO (12) |
$ |
200,866 |
$ |
219,868 |
$ |
115,875 |
|||||
AFFO (13) (14) |
$ |
304,110 |
$ |
293,785 |
$ |
209,846 |
|||||
(1) The geographic split of our revenues on a services basis is presented below: |
|||||||||||
Americas Revenues: |
|||||||||||
Colocation |
$ |
299,273 |
$ |
299,200 |
$ |
280,564 |
|||||
Interconnection |
100,850 |
100,459 |
87,609 |
||||||||
Managed infrastructure |
15,061 |
14,385 |
11,254 |
||||||||
Other |
919 |
943 |
729 |
||||||||
Recurring revenues |
416,103 |
414,987 |
380,156 |
||||||||
Non-recurring revenues |
20,344 |
21,555 |
24,238 |
||||||||
Revenues |
$ |
436,447 |
$ |
436,542 |
$ |
404,394 |
|||||
EMEA Revenues: |
|||||||||||
Colocation |
$ |
253,254 |
$ |
242,829 |
$ |
214,178 |
|||||
Interconnection |
22,351 |
22,280 |
19,700 |
||||||||
Managed infrastructure |
17,672 |
17,243 |
18,560 |
||||||||
Other |
3,330 |
2,919 |
943 |
||||||||
Recurring revenues |
296,607 |
285,271 |
253,381 |
||||||||
Non-recurring revenues |
18,240 |
16,353 |
14,475 |
||||||||
Revenues |
$ |
314,847 |
$ |
301,624 |
$ |
267,856 |
|||||
Asia-Pacific Revenues: |
|||||||||||
Colocation |
$ |
138,995 |
$ |
146,483 |
$ |
123,653 |
|||||
Interconnection |
24,859 |
23,159 |
18,278 |
||||||||
Managed infrastructure |
21,876 |
22,362 |
20,496 |
||||||||
Other |
— |
180 |
656 |
||||||||
Recurring revenues |
185,730 |
192,184 |
163,083 |
||||||||
Non-recurring revenues |
12,501 |
12,297 |
8,823 |
||||||||
Revenues |
$ |
198,231 |
$ |
204,481 |
$ |
171,906 |
|||||
Worldwide Revenues: |
|||||||||||
Colocation |
$ |
691,522 |
$ |
688,512 |
$ |
618,395 |
|||||
Interconnection |
148,060 |
145,898 |
125,587 |
||||||||
Managed infrastructure |
54,609 |
53,990 |
50,310 |
||||||||
Other |
4,249 |
4,042 |
2,328 |
||||||||
Recurring revenues |
898,440 |
892,442 |
796,620 |
||||||||
Non-recurring revenues |
51,085 |
50,205 |
47,536 |
||||||||
Revenues |
$ |
949,525 |
$ |
942,647 |
$ |
844,156 |
|||||
(2) We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as presented below: |
|||||||||||
Cost of revenues |
$ |
468,961 |
$ |
465,921 |
$ |
427,680 |
|||||
Depreciation, amortization and accretion expense |
(162,510) |
(161,049) |
(153,583) |
||||||||
Stock-based compensation expense |
(2,911) |
(3,332) |
(2,997) |
||||||||
Cash cost of revenues |
$ |
303,540 |
$ |
301,540 |
$ |
271,100 |
|||||
The geographic split of our cash cost of revenues is presented below: |
|||||||||||
Americas cash cost of revenues |
$ |
113,059 |
$ |
115,838 |
$ |
109,020 |
|||||
EMEA cash cost of revenues |
122,175 |
113,796 |
101,509 |
||||||||
Asia-Pacific cash cost of revenues |
68,306 |
71,906 |
60,571 |
||||||||
Cash cost of revenues |
$ |
303,540 |
$ |
301,540 |
$ |
271,100 |
|||||
(3) We define cash gross profit as revenues less cash cost of revenues (as defined above). |
|||||||||||
(4) We define cash operating expenses as selling, general, and administrative expense less depreciation, amortization, and stock-based compensation. We also refer to cash operating expense as cash selling, marketing, general and administrative expense or "cash SG&A". |
|||||||||||
Selling, general, and administrative expense |
$ |
310,326 |
$ |
292,340 |
$ |
272,494 |
|||||
Depreciation and amortization expense |
(56,503) |
(51,219) |
(48,570) |
||||||||
Stock-based compensation expense |
(35,412) |
(36,505) |
(31,518) |
||||||||
Cash operating expense |
$ |
218,411 |
$ |
204,616 |
$ |
192,406 |
|||||
(5) We define cash sales and marketing expenses as sales and marketing expenses less depreciation, amortization and stock-based compensation as presented below: |
|||||||||||
Sales and marketing expenses |
$ |
128,927 |
$ |
113,384 |
$ |
106,590 |
|||||
Depreciation and amortization expense |
(18,094) |
(17,345) |
(17,127) |
||||||||
Stock-based compensation expense |
(10,972) |
(10,843) |
(9,771) |
||||||||
Cash sales and marketing expenses |
$ |
99,861 |
$ |
85,196 |
$ |
79,692 |
|||||
(6) We define cash general and administrative expenses as general and administrative expenses less depreciation, amortization and stock-based compensation as presented below: |
|||||||||||
General and administrative expenses |
$ |
181,399 |
$ |
178,956 |
$ |
165,904 |
|||||
Depreciation and amortization expense |
(38,409) |
(33,874) |
(31,443) |
||||||||
Stock-based compensation expense |
(24,440) |
(25,662) |
(21,747) |
||||||||
Cash general and administrative expenses |
$ |
118,550 |
$ |
119,420 |
$ |
112,714 |
|||||
(7) Our cash operating expenses, or cash SG&A, as defined above, is presented below: |
|||||||||||
Cash sales and marketing expenses |
$ |
99,861 |
$ |
85,196 |
$ |
79,692 |
|||||
Cash general and administrative expenses |
118,550 |
119,420 |
112,714 |
||||||||
Cash SG&A |
$ |
218,411 |
$ |
204,616 |
$ |
192,406 |
|||||
The geographic split of our cash operating expenses, or cash SG&A, is presented below: |
|||||||||||
Americas cash SG&A |
$ |
124,769 |
$ |
115,012 |
$ |
110,914 |
|||||
EMEA cash SG&A |
63,118 |
59,977 |
54,858 |
||||||||
Asia-Pacific cash SG&A |
30,524 |
29,627 |
26,634 |
||||||||
Cash SG&A |
$ |
218,411 |
$ |
204,616 |
$ |
192,406 |
|||||
(8) We define adjusted EBITDA as income from continuing operations excluding depreciation, amortization, accretion, stock-based compensation expense, impairment charges, acquisition costs and gains or loss on asset sales as presented below: |
|||||||||||
Income from continuing operations |
$ |
167,213 |
$ |
184,455 |
$ |
112,688 |
|||||
Depreciation, amortization and accretion expense |
219,013 |
212,268 |
202,153 |
||||||||
Stock-based compensation expense |
38,323 |
39,837 |
34,515 |
||||||||
Acquisition costs |
3,025 |
(440) |
36,536 |
||||||||
(Gain) loss on asset sales |
— |
371 |
(5,242) |
||||||||
Adjusted EBITDA |
$ |
427,574 |
$ |
436,491 |
$ |
380,650 |
|||||
The geographic split of our adjusted EBITDA is presented below: |
|||||||||||
Americas income from continuing operations |
$ |
81,110 |
$ |
87,537 |
$ |
88,539 |
|||||
Americas depreciation, amortization and accretion expense |
88,428 |
83,305 |
76,720 |
||||||||
Americas stock-based compensation expense |
27,774 |
28,312 |
24,329 |
||||||||
Americas acquisition costs |
1,307 |
6,538 |
114 |
||||||||
Americas gain on asset sales |
— |
— |
(5,242) |
||||||||
Americas adjusted EBITDA |
$ |
198,619 |
$ |
205,692 |
$ |
184,460 |
|||||
EMEA income from continuing operations |
$ |
44,981 |
$ |
51,347 |
$ |
(7,419) |
|||||
EMEA depreciation, amortization and accretion expense |
76,806 |
76,598 |
76,488 |
||||||||
EMEA stock-based compensation expense |
6,049 |
6,884 |
6,235 |
||||||||
EMEA acquisition costs |
1,718 |
(6,978) |
36,185 |
||||||||
EMEA adjusted EBITDA |
$ |
129,554 |
$ |
127,851 |
$ |
111,489 |
|||||
Asia-Pacific income from continuing operations |
$ |
41,122 |
$ |
45,571 |
$ |
31,568 |
|||||
Asia-Pacific depreciation, amortization and accretion expense |
53,779 |
52,365 |
48,945 |
||||||||
Asia-Pacific stock-based compensation expense |
4,500 |
4,641 |
3,951 |
||||||||
Asia-Pacific acquisition costs |
— |
— |
237 |
||||||||
Asia-Pacific loss on asset sales |
— |
371 |
— |
||||||||
Asia-Pacific adjusted EBITDA |
$ |
99,401 |
$ |
102,948 |
$ |
84,701 |
|||||
(9) We define cash gross margins as cash gross profit divided by revenues. |
|||||||||||
Our cash gross margins by geographic region is presented below: |
|||||||||||
Americas cash gross margins |
74 |
% |
73 |
% |
73 |
% |
|||||
EMEA cash gross margins |
61 |
% |
62 |
% |
62 |
% |
|||||
Asia-Pacific cash gross margins |
66 |
% |
65 |
% |
65 |
% |
|||||
(10) We define adjusted EBITDA margins as adjusted EBITDA divided by revenues. |
|||||||||||
Americas adjusted EBITDA margins |
46 |
% |
47 |
% |
46 |
% |
|||||
EMEA adjusted EBITDA margins |
41 |
% |
42 |
% |
42 |
% |
|||||
Asia-Pacific adjusted EBITDA margins |
50 |
% |
50 |
% |
49 |
% |
|||||
(11) We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows: |
|||||||||||
Adjusted EBITDA - current period |
$ |
427,574 |
$ |
436,491 |
$ |
380,650 |
|||||
Less adjusted EBITDA - prior period |
(436,491) |
(420,042) |
(333,145) |
||||||||
Adjusted EBITDA growth |
$ |
(8,917) |
$ |
16,449 |
$ |
47,505 |
|||||
Revenues - current period |
$ |
949,525 |
$ |
942,647 |
$ |
844,156 |
|||||
Less revenues - prior period |
(942,647) |
(924,676) |
(730,462) |
||||||||
Revenue growth |
$ |
6,878 |
$ |
17,971 |
$ |
113,694 |
|||||
Adjusted EBITDA flow-through rate |
(130)% |
92 |
% |
42 |
% |
||||||
(12) FFO is defined as net income (loss), excluding gains (losses) from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items. |
|||||||||||
Net income (loss) |
$ |
42,062 |
$ |
61,750 |
$ |
(31,111) |
|||||
Adjustments: |
|||||||||||
Real estate depreciation and amortization |
159,414 |
157,054 |
150,995 |
||||||||
(Gain) loss on disposition of real estate property |
(638) |
1,036 |
(4,037) |
||||||||
Adjustments for FFO from unconsolidated joint ventures |
28 |
28 |
28 |
||||||||
FFO |
$ |
200,866 |
$ |
219,868 |
$ |
115,875 |
|||||
(13) AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, acquisition costs, an installation revenue adjustment, a straight-line rent expense adjustment, amortization of deferred financing costs, gains (losses) on debt extinguishment, an income tax expense adjustment, net income from discontinued operations, net of tax, recurring capital expenditures and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items. |
|||||||||||
FFO |
$ |
200,866 |
$ |
219,868 |
$ |
115,875 |
|||||
Adjustments: |
|||||||||||
Installation revenue adjustment |
4,675 |
4,788 |
3,354 |
||||||||
Straight-line rent expense adjustment |
2,409 |
1,986 |
1,133 |
||||||||
Amortization of deferred financing costs |
11,580 |
5,258 |
5,508 |
||||||||
Stock-based compensation expense |
38,323 |
39,837 |
34,515 |
||||||||
Non-real estate depreciation expense |
28,575 |
23,265 |
21,387 |
||||||||
Amortization expense |
29,017 |
29,478 |
28,152 |
||||||||
Accretion expense |
2,007 |
2,471 |
1,619 |
||||||||
Recurring capital expenditures |
(22,672) |
(36,476) |
(31,815) |
||||||||
Loss on debt extinguishment |
3,503 |
1,777 |
— |
||||||||
Acquisition costs |
3,025 |
(440) |
36,536 |
||||||||
Income tax expense adjustment |
2,809 |
68 |
(190) |
||||||||
Net (income) loss from discontinued operations, net of tax |
— |
1,914 |
(6,216) |
||||||||
Adjustments for AFFO from unconsolidated joint ventures |
(7) |
(9) |
(12) |
||||||||
AFFO |
$ |
304,110 |
$ |
293,785 |
$ |
209,846 |
|||||
(14) Following is how we reconcile from adjusted EBITDA to AFFO: |
|||||||||||
Adjusted EBITDA |
$ |
427,574 |
$ |
436,491 |
$ |
380,650 |
|||||
Adjustments: |
|||||||||||
Interest expense, net of interest income |
(108,592) |
(97,813) |
(99,938) |
||||||||
Amortization of deferred financing costs |
11,580 |
5,258 |
5,508 |
||||||||
Income tax benefit (expense) |
(13,393) |
(19,494) |
10,633 |
||||||||
Income tax expense adjustment |
2,809 |
68 |
(190) |
||||||||
Straight-line rent expense adjustment |
2,409 |
1,986 |
1,133 |
||||||||
Installation revenue adjustment |
4,675 |
4,788 |
3,354 |
||||||||
Recurring capital expenditures |
(22,672) |
(36,476) |
(31,815) |
||||||||
Other income (expense) |
337 |
(1,707) |
(60,710) |
||||||||
(Gain) loss on disposition of depreciable real estate property |
(638) |
1,036 |
(4,037) |
||||||||
Adjustments for unconsolidated JVs' and non-controlling interests |
21 |
19 |
16 |
||||||||
Adjustment for gain (loss) on sale of asset |
— |
(371) |
5,242 |
||||||||
AFFO |
$ |
304,110 |
$ |
293,785 |
$ |
209,846 |
|||||
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/equinix-reports-first-quarter-2017-results-300446427.html
SOURCE
Equinix Investor Relations Contacts: Katrina Rymill, Equinix, Inc., (650) 598-6583, krymill@equinix.com, OR Paul Thomas, Equinix, Inc., (650) 598-6442, pthomas@equinix.com, OR Equinix Media Contact: David Fonkalsrud, Equinix, Inc., (650) 598-6240, dfonkalsrud@equinix.com