EQUINIX REPORTS FIRST QUARTER 2022 RESULTS
- Quarterly revenues increased 9% over the same quarter last year to
$1.7 billion , or 10% on a normalized and constant currency basis, representing the company's 77th consecutive quarter of revenue growth - More than 4,200 deals executed in the quarter across more than 3,100 customers
- Strong quarter for Equinix Metal® and Network Edge digital services offerings
- Global platform expansion continued with 43 projects underway across 29 metros in 20 countries, including new projects in the
Atlanta ,Mumbai ,Sydney ,Tokyo andWashington, D.C. metros
First Quarter 2022 Results Summary
- Revenues
$1.7 billion , a 2% increase over the previous quarter- Includes a negative
$2 million foreign currency impact when compared to prior guidance rates - Operating Income
$267 million , a 7% increase over the previous quarter and an operating margin of 15%- Adjusted EBITDA
$800 million , a 46% adjusted EBITDA margin- Includes a negative
$1 million foreign currency impact when compared to prior guidance rates - Includes
$5 million of integration costs - Net Income and Net Income per Share attributable to
Equinix $147 million , a 20% increase over the previous quarter, primarily due to strong operating performance$1.62 per share, a 19% increase over the previous quarter- AFFO and AFFO per Share
$653 million , a 16% increase over the previous quarter, primarily due to strong operating performance and seasonally lower recurring capital expenditures$7.16 per share, a 15% increase over the previous quarter- Includes
$5 million of integration costs
2022 Annual Guidance Summary
- Revenues
$7.291 -$7.341 billion , an increase of 10 - 11% over the previous year, or a normalized and constant currency increase of ~10%- An increase of
$89 million compared to prior guidance, including a negative$3 million foreign currency impact when compared to prior guidance rates - Adjusted EBITDA
$3.344 -$3.374 billion , a 46% adjusted EBITDA margin- An increase of
$42 million excluding integration costs compared to prior guidance, including a positive$2 million foreign currency benefit when compared to prior guidance rates - Assumes
$25 million of integration costs - AFFO and AFFO per Share
$2.650 -$2.680 billion , an increase of 8 - 9% over the previous year, or a normalized and constant currency increase of 8 - 10%- A net increase of
$9 million excluding integration costs compared to prior guidance with$22 million derived from strong operating performance and a net$9 million attributed to theMainOne Cable Company Ltd. ("MainOne") acquisition, partially offset by$22 million of incremental debt financing costs $28.93 -$29.26 per share, an increase of 7 - 8% over the previous year on both an as-reported and a normalized and constant currency basis- Assumes
$25 million of integration costs
Equinix Quote
"We had a great start to 2022. While there are a number of macroeconomic factors we continue to proactively manage, the business continues to perform exceptionally well. Underlying demand for digital infrastructure continues to rise as enterprises in diverse sectors across the globe prioritize digital transformation and service providers continue to innovate, distribute and scale their infrastructure globally in response to that demand."
Business Highlights
Equinix continued to expand its global platform, which currently includes more than 240 data centers across 69 metros in 30 countries. As of Q1, 89% of revenues are generated from customers deployed in more than one metro, demonstrating the strategic value ofEquinix's global footprint. Specific initiatives included:- In March,
Equinix announced its planned expansion intoChile through the intended acquisition of multiple data centers from Empresa Nacional De Telecomunicaciones S.A. ("Entel"), a leading Chilean telecommunications provider. The transaction is expected to solidifyEquinix's leadership as the top regional provider of digital infrastructure. - In April,
Equinix formally entered the African continent with the acquisition of MainOne, a data center and connectivity solutions provider inWest Africa , with operations inNigeria ,Ghana andIvory Coast . This acquisition represents the first step inEquinix's long-term strategy to extend its global carrier-neutral digital infrastructure platform toAfrica . Equinix continued the expansion of its xScaleTM program with the completion of its Australian joint venture with PGIM in March, which is expected to provide more than 55 megawatts of capacity in theSydney market when fully built out. In April,Equinix completed its South Korean joint venture with GIC, which is expected to provide more than 45 megawatts of capacity to theSeoul market.- The
Equinix digital services portfolio had a strong quarter with the most net customer adds for Equinix Metal since its launch. Similarly, Equinix FabricTM added the most quarterly virtual connections ever. At the same time, customers continued to consumeEquinix's data center and colocation services with the addition of an incremental 8,900 total interconnections in the quarter, bringing the total interconnections onEquinix's platform to 428,200. Equinix continued to make advances in meeting its environmental sustainability commitments, including its goal of climate-neutral operations by 2030:- In January,
Equinix announced the opening of its first Co-Innovation Facility (CIF), located in its DC15 International Business ExchangeTM (IBX®) data center at the Equinix Ashburn Campus in theWashington, D.C. area. A component ofEquinix's Data Center of the Future initiative, the CIF is a new capability that enables partners to work withEquinix on trialing and developing sustainable data center innovations including fuel cell and liquid cooling technologies. - In April,
Equinix completed its fourth green bond offering to help advance its commitment to sustainability leadership. With the latest offering,Equinix has issued approximately$4.9 billion of green bonds, currently making it the fourth largest global issuer in the investment grade green bond market. Equinix continued to develop IBX data centers with sustainable features, including a heat recovery technology project at the PA10 IBX inParis to recover energy from customer equipment and transfer it to the urban heating network.Equinix also recently opened its MU4 IBX inMunich , which has a green façade and partially planted roof that acts as additional natural insulation and cooling, and allows the building to blend into the cityscape.- Key leadership appointments included the internal promotion of three
Equinix leaders:Jon Lin to EVP & General Manager, Data Center Services;Nicole Collins to Chief Transformation Officer; andTara Risser to President,Americas .
Business Outlook
For the second quarter of 2022, the Company expects revenues to range between
For the full year of 2022, total revenues are expected to range between
The
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, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, income tax expense, an income tax expense adjustment, recurring capital expenditures, other income (expense), (gains) losses on disposition of real estate property, and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.
Q1 2022 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 financial 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, risks to our business and operating results related to the ongoing COVID-19 pandemic; the current inflationary environment; increased costs to procure power and the general volatility in the global energy market; the challenges of acquiring, operating and constructing IBX and xScale data centers and developing, deploying and delivering
Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
|||||
Three Months Ended |
|||||
|
|
|
|||
Recurring revenues |
|
$ 1,603,474 |
|
||
Non-recurring revenues |
92,123 |
102,904 |
85,131 |
||
Revenues |
1,734,447 |
1,706,378 |
1,596,064 |
||
Cost of revenues |
915,875 |
910,435 |
811,217 |
||
Gross profit |
818,572 |
795,943 |
784,847 |
||
Operating expenses: |
|||||
Sales and marketing |
192,511 |
189,798 |
182,827 |
||
General and administrative |
352,687 |
343,711 |
301,456 |
||
Transaction costs |
4,240 |
9,405 |
1,182 |
||
Loss on asset sales |
1,818 |
3,304 |
1,720 |
||
Total operating expenses |
551,256 |
546,218 |
487,185 |
||
Income from operations |
267,316 |
249,725 |
297,662 |
||
Interest and other income (expense): |
|||||
Interest income |
2,106 |
1,130 |
729 |
||
Interest expense |
(79,965) |
(80,227) |
(89,681) |
||
Other expense |
(9,549) |
(5,802) |
(6,950) |
||
Gain (loss) on debt extinguishment |
529 |
214 |
(13,058) |
||
Total interest and other, net |
(86,879) |
(84,685) |
(108,960) |
||
Income before income taxes |
180,437 |
165,040 |
188,702 |
||
Income tax expense |
(32,744) |
(41,899) |
(32,628) |
||
Net income |
147,693 |
123,141 |
156,074 |
||
Net (income) loss attributable to non-controlling interests |
(240) |
133 |
288 |
||
Net income attributable to |
$ 147,453 |
$ 123,274 |
$ 156,362 |
||
Net income per share attributable to |
|||||
Basic net income per share |
$ 1.62 |
$ 1.37 |
$ 1.75 |
||
Diluted net income per share |
$ 1.62 |
$ 1.36 |
$ 1.74 |
||
Shares used in computing basic net income per share |
90,771 |
90,240 |
89,330 |
||
Shares used in computing diluted net income per share |
91,162 |
90,752 |
89,842 |
Condensed Consolidated Statements of Comprehensive Income (in thousands) (unaudited) |
|||||
Three Months Ended |
|||||
|
|
|
|||
Net income |
$ 147,693 |
$ 123,141 |
$ 156,074 |
||
Other comprehensive income (loss), net of tax: |
|||||
Foreign currency translation adjustment ("CTA") loss |
(122,534) |
(115,278) |
(295,146) |
||
Net investment hedge CTA gain |
91,358 |
62,763 |
170,175 |
||
Unrealized gain on cash flow hedges |
64,037 |
8,514 |
29,478 |
||
Net actuarial gain (loss) on defined benefit plans |
(21) |
16 |
12 |
||
Total other comprehensive income (loss), net of tax |
32,840 |
(43,985) |
(95,481) |
||
Comprehensive income, net of tax |
180,533 |
79,156 |
60,593 |
||
Net (income) loss attributable to non-controlling interests |
(240) |
133 |
288 |
||
Other comprehensive (income) attributable to non-controlling interests |
(3) |
(5) |
1 |
||
Comprehensive income attributable to |
$ 180,290 |
$ 79,284 |
$ 60,882 |
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
|||
|
|
||
Assets |
|||
Cash and cash equivalents |
$ 1,695,305 |
$ 1,536,358 |
|
Accounts receivable, net |
780,404 |
681,809 |
|
Other current assets |
471,894 |
462,739 |
|
Assets held for sale |
115,193 |
276,195 |
|
Total current assets |
3,062,796 |
2,957,101 |
|
Property, plant and equipment, net |
15,512,991 |
15,445,775 |
|
Operating lease right-of-use assets |
1,234,257 |
1,282,418 |
|
|
5,316,079 |
5,372,071 |
|
Intangible assets, net |
1,877,541 |
1,935,267 |
|
Other assets |
1,019,569 |
926,066 |
|
Total assets |
$ 28,023,233 |
$ 27,918,698 |
|
Liabilities and Stockholders' Equity |
|||
Accounts payable and accrued expenses |
$ 811,157 |
$ 879,144 |
|
Accrued property, plant and equipment |
236,608 |
187,334 |
|
Current portion of operating lease liabilities |
146,239 |
144,029 |
|
Current portion of finance lease liabilities |
148,411 |
147,841 |
|
Current portion of mortgage and loans payable |
31,993 |
33,087 |
|
Other current liabilities |
232,606 |
214,519 |
|
Total current liabilities |
1,607,014 |
1,605,954 |
|
Operating lease liabilities, less current portion |
1,060,078 |
1,107,180 |
|
Finance lease liabilities, less current portion |
2,027,228 |
1,989,668 |
|
Mortgage and loans payable, less current portion |
691,523 |
586,577 |
|
Senior notes, less current portion |
10,953,832 |
10,984,144 |
|
Other liabilities |
740,748 |
763,411 |
|
Total liabilities |
17,080,423 |
17,036,934 |
|
Common stock |
91 |
91 |
|
Additional paid-in capital |
16,145,424 |
15,984,597 |
|
|
(107,949) |
(112,208) |
|
Accumulated dividends |
(6,449,713) |
(6,165,140) |
|
Accumulated other comprehensive loss |
(1,052,914) |
(1,085,751) |
|
Retained earnings |
2,407,946 |
2,260,493 |
|
Total Equinix stockholders' equity |
10,942,885 |
10,882,082 |
|
Non-controlling interests |
(75) |
(318) |
|
Total stockholders' equity |
10,942,810 |
10,881,764 |
|
Total liabilities and stockholders' equity |
$ 28,023,233 |
$ 27,918,698 |
|
Ending headcount by geographic region is as follows: |
|||
|
5,110 |
5,056 |
|
EMEA headcount |
3,684 |
3,611 |
|
|
2,330 |
2,277 |
|
Total headcount |
11,124 |
10,944 |
Summary of Debt Principal Outstanding (in thousands) (unaudited) |
|||
|
|
||
Finance lease liabilities |
$ 2,175,639 |
$ 2,137,509 |
|
Term loans |
655,672 |
549,343 |
|
Mortgage payable and other loans payable |
67,844 |
70,321 |
|
Minus: mortgage premium, debt discount and issuance costs, net |
(486) |
(1,276) |
|
Total mortgage and loans payable principal |
723,030 |
618,388 |
|
Senior notes |
10,953,832 |
10,984,144 |
|
Plus: debt discount and issuance costs |
113,758 |
117,986 |
|
Total senior notes principal |
11,067,590 |
11,102,130 |
|
Total debt principal outstanding |
$ 13,966,259 |
$ 13,858,027 |
Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
||||||
Three Months Ended |
||||||
|
|
|
||||
Cash flows from operating activities: |
||||||
Net income |
$ 147,693 |
$ 123,141 |
$ 156,074 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
Depreciation, amortization and accretion |
436,386 |
428,764 |
394,318 |
|||
Stock-based compensation |
89,952 |
96,379 |
78,350 |
|||
Amortization of debt issuance costs and debt discounts and premiums |
4,204 |
4,375 |
3,940 |
|||
(Gain) loss on debt extinguishment |
(529) |
(214) |
13,058 |
|||
Loss on asset sales |
1,818 |
3,304 |
1,720 |
|||
Other items |
6,050 |
6,089 |
11,182 |
|||
Changes in operating assets and liabilities: |
||||||
Accounts receivable |
(100,727) |
109,440 |
(17,620) |
|||
Income taxes, net |
13,881 |
27,598 |
(10,274) |
|||
Accounts payable and accrued expenses |
(75,980) |
54,628 |
(76,362) |
|||
Operating lease right-of-use assets |
35,400 |
37,862 |
40,924 |
|||
Operating lease liabilities |
(31,740) |
(39,782) |
(36,563) |
|||
Other assets and liabilities |
54,715 |
40,521 |
(167,589) |
|||
Net cash provided by operating activities |
581,123 |
892,105 |
391,158 |
|||
Cash flows from investing activities: |
||||||
Purchases, sales and maturities of investments, net |
(38,558) |
(30,394) |
(18,349) |
|||
Real estate acquisitions |
(3,074) |
(6,988) |
(53,737) |
|||
Purchases of other property, plant and equipment |
(412,518) |
(817,405) |
(563,598) |
|||
Proceeds from asset sales |
195,391 |
34,091 |
— |
|||
Net cash used in investing activities |
(258,759) |
(820,696) |
(635,684) |
|||
Cash flows from financing activities: |
||||||
Proceeds from employee equity awards |
43,876 |
— |
40,034 |
|||
Payment of dividend distributions |
(289,669) |
(259,455) |
(263,039) |
|||
Proceeds from public offering of common stock, net of offering costs |
— |
398,271 |
— |
|||
Proceeds from mortgage and loans payable |
676,850 |
— |
— |
|||
Proceeds from senior notes, net of debt discounts |
— |
— |
1,290,752 |
|||
Repayment of finance lease liabilities |
(40,773) |
(35,410) |
(32,584) |
|||
Repayment of mortgage and loans payable |
(551,833) |
(10,584) |
(20,186) |
|||
Repayment of senior notes |
— |
— |
(590,650) |
|||
Debt extinguishment costs |
— |
— |
(8,521) |
|||
Debt issuance costs |
(7,366) |
— |
(3,152) |
|||
Net cash provided by (used in) financing activities |
(168,915) |
92,822 |
412,654 |
|||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash |
4,593 |
(6,335) |
(22,019) |
|||
Net increase in cash, cash equivalents and restricted cash |
158,042 |
157,896 |
146,109 |
|||
Cash, cash equivalents and restricted cash at beginning of period |
1,549,454 |
1,391,558 |
1,625,695 |
|||
Cash, cash equivalents and restricted cash at end of period |
|
|
|
|||
Supplemental cash flow information: |
||||||
Cash paid for taxes |
$ 20,150 |
$ 16,019 |
$ 49,970 |
|||
Cash paid for interest |
$ 104,051 |
$ 110,282 |
$ 101,055 |
|||
Free cash flow (negative free cash flow) (1) |
$ 360,922 |
$ 101,803 |
$ (226,177) |
|||
Adjusted free cash flow (negative adjusted free cash flow) (2) |
$ 363,996 |
$ 108,791 |
$ (172,440) |
|||
(1) |
We define free cash flow (negative free cash flow) as net cash provided by operating activities plus net cash |
|||||
Net cash provided by operating activities as presented above |
$ 581,123 |
$ 892,105 |
$ 391,158 |
|||
Net cash used in investing activities as presented above |
(258,759) |
(820,696) |
(635,684) |
|||
Purchases, sales and maturities of investments, net |
38,558 |
30,394 |
18,349 |
|||
Free cash flow (negative free cash flow) |
$ 360,922 |
$ 101,803 |
$ (226,177) |
|||
(2) |
We define adjusted free cash flow (negative adjusted free cash flow) as free cash flow (negative free cash flow) |
|||||
Free cash flow (negative free cash flow) as defined above |
$ 360,922 |
$ 101,803 |
$ (226,177) |
|||
Less real estate acquisitions |
3,074 |
6,988 |
53,737 |
|||
Adjusted free cash flow (negative adjusted free cash flow) |
$ 363,996 |
$ 108,791 |
$ (172,440) |
Non-GAAP Measures and Other Supplemental Data (in thousands) (unaudited) |
||||||
Three Months Ended |
||||||
|
|
|
||||
Recurring revenues |
$ 1,642,324 |
$ 1,603,474 |
$ 1,510,933 |
|||
Non-recurring revenues |
92,123 |
102,904 |
85,131 |
|||
Revenues (1) |
1,734,447 |
1,706,378 |
1,596,064 |
|||
Cash cost of revenues (2) |
583,703 |
577,991 |
510,810 |
|||
Cash gross profit (3) |
1,150,744 |
1,128,387 |
1,085,254 |
|||
Cash operating expenses (4)(7): |
||||||
Cash sales and marketing expenses (5) |
124,706 |
121,637 |
113,053 |
|||
Cash general and administrative expenses (6) |
226,326 |
219,173 |
198,969 |
|||
Total cash operating expenses (4)(7) |
351,032 |
340,810 |
312,022 |
|||
Adjusted EBITDA (8) |
$ 799,712 |
$ 787,577 |
$ 773,232 |
|||
Cash gross margins (9) |
66 % |
66 % |
68 % |
|||
Adjusted EBITDA margins(10) |
46 % |
46 % |
48 % |
|||
Adjusted EBITDA flow-through rate (11) |
43 % |
4 % |
194 % |
|||
FFO (12) |
$ 432,644 |
$ 406,880 |
$ 417,263 |
|||
AFFO (13)(14) |
$ 652,632 |
$ 564,194 |
$ 626,828 |
|||
Basic FFO per share (15) |
$ 4.77 |
$ 4.51 |
$ 4.67 |
|||
Diluted FFO per share (15) |
$ 4.75 |
$ 4.48 |
$ 4.64 |
|||
Basic AFFO per share (15) |
$ 7.19 |
$ 6.25 |
$ 7.02 |
|||
Diluted AFFO per share (15) |
$ 7.16 |
$ 6.22 |
$ 6.98 |
|||
(1) |
The geographic split of our revenues on a services basis is presented below: |
|||||
Americas Revenues: |
||||||
Colocation |
$ 522,171 |
$ 512,424 |
$ 487,459 |
|||
Interconnection |
181,103 |
177,661 |
164,887 |
|||
Managed infrastructure |
49,222 |
46,045 |
38,485 |
|||
Other |
5,134 |
5,184 |
2,038 |
|||
Recurring revenues |
757,630 |
741,314 |
692,869 |
|||
Non-recurring revenues |
42,791 |
40,801 |
33,071 |
|||
Revenues |
$ 800,421 |
$ 782,115 |
$ 725,940 |
|||
EMEA Revenues: |
||||||
Colocation |
$ 414,569 |
$ 410,457 |
$ 388,275 |
|||
Interconnection |
68,140 |
66,821 |
61,650 |
|||
Managed infrastructure |
30,990 |
30,205 |
32,111 |
|||
Other |
6,414 |
5,259 |
5,046 |
|||
Recurring revenues |
520,113 |
512,742 |
487,082 |
|||
Non-recurring revenues |
30,367 |
40,601 |
31,635 |
|||
Revenues |
$ 550,480 |
$ 553,343 |
$ 518,717 |
|||
Asia-Pacific Revenues: |
||||||
Colocation |
$ 282,615 |
$ 268,908 |
$ 254,558 |
|||
Interconnection |
59,987 |
58,418 |
53,182 |
|||
Managed infrastructure |
20,642 |
20,928 |
22,749 |
|||
Other |
1,337 |
1,164 |
493 |
|||
Recurring revenues |
364,581 |
349,418 |
330,982 |
|||
Non-recurring revenues |
18,965 |
21,502 |
20,425 |
|||
Revenues |
$ 383,546 |
$ 370,920 |
$ 351,407 |
|||
Worldwide Revenues: |
||||||
Colocation |
$ 1,219,355 |
$ 1,191,789 |
$ 1,130,292 |
|||
Interconnection |
309,230 |
302,900 |
279,719 |
|||
Managed infrastructure |
100,854 |
97,178 |
93,345 |
|||
Other |
12,885 |
11,607 |
7,577 |
|||
Recurring revenues |
1,642,324 |
1,603,474 |
1,510,933 |
|||
Non-recurring revenues |
92,123 |
102,904 |
85,131 |
|||
Revenues |
$ 1,734,447 |
$ 1,706,378 |
$ 1,596,064 |
|||
(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 |
$ 915,875 |
$ 910,435 |
$ 811,217 |
|||
Depreciation, amortization and accretion expense |
(321,729) |
(322,194) |
(291,940) |
|||
Stock-based compensation expense |
(10,443) |
(10,250) |
(8,467) |
|||
Cash cost of revenues |
$ 583,703 |
$ 577,991 |
$ 510,810 |
|||
The geographic split of our cash cost of revenues is presented below: |
||||||
|
$ 239,403 |
$ 244,245 |
$ 193,460 |
|||
EMEA cash cost of revenues |
202,848 |
208,569 |
199,183 |
|||
|
141,452 |
125,177 |
118,167 |
|||
Cash cost of revenues |
$ 583,703 |
$ 577,991 |
$ 510,810 |
|||
(3) |
We define cash gross profit as revenues less cash cost of revenues (as defined above). |
|||||
(4) |
We define cash operating expense as selling, general, and administrative expense less depreciation, amortization, and stock-based compensation. We also refer to cash operating expense as cash selling, general and administrative expense or "cash SG&A". |
|||||
Selling, general, and administrative expense |
$ 545,198 |
$ 533,509 |
$ 484,283 |
|||
Depreciation and amortization expense |
(114,657) |
(106,570) |
(102,378) |
|||
Stock-based compensation expense |
(79,509) |
(86,129) |
(69,883) |
|||
Cash operating expense |
$ 351,032 |
$ 340,810 |
$ 312,022 |
|||
(5) |
We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and |
|||||
Sales and marketing expense |
$ 192,511 |
$ 189,798 |
$ 182,827 |
|||
Depreciation and amortization expense |
(47,621) |
(48,064) |
(52,071) |
|||
Stock-based compensation expense |
(20,184) |
(20,097) |
(17,703) |
|||
Cash sales and marketing expense |
$ 124,706 |
$ 121,637 |
$ 113,053 |
|||
(6) |
We define cash general and administrative expense as general and administrative expense less depreciation, amortization and |
|||||
General and administrative expense |
$ 352,687 |
$ 343,711 |
$ 301,456 |
|||
Depreciation and amortization expense |
(67,036) |
(58,506) |
(50,307) |
|||
Stock-based compensation expense |
(59,325) |
(66,032) |
(52,180) |
|||
Cash general and administrative expense |
$ 226,326 |
$ 219,173 |
$ 198,969 |
|||
(7) |
The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below: |
|||||
|
$ 204,463 |
$ 203,594 |
$ 187,988 |
|||
EMEA cash SG&A |
87,287 |
85,083 |
75,971 |
|||
|
59,282 |
52,133 |
48,063 |
|||
Cash SG&A |
$ 351,032 |
$ 340,810 |
$ 312,022 |
|||
(8) |
We define adjusted EBITDA as income from operations excluding depreciation, amortization, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales as presented below: |
|||||
Income from operations |
$ 267,316 |
$ 249,725 |
$ 297,662 |
|||
Depreciation, amortization and accretion expense |
436,386 |
428,764 |
394,318 |
|||
Stock-based compensation expense |
89,952 |
96,379 |
78,350 |
|||
Transaction costs |
4,240 |
9,405 |
1,182 |
|||
Loss on asset sales |
1,818 |
3,304 |
1,720 |
|||
Adjusted EBITDA |
$ 799,712 |
$ 787,577 |
$ 773,232 |
|||
The geographic split of our adjusted EBITDA is presented below: |
||||||
|
$ 58,523 |
$ 29,550 |
$ 81,565 |
|||
|
230,086 |
221,814 |
202,706 |
|||
|
63,917 |
71,652 |
58,262 |
|||
|
2,991 |
6,372 |
239 |
|||
|
1,038 |
4,888 |
1,720 |
|||
Americas adjusted EBITDA |
$ 356,555 |
$ 334,276 |
$ 344,492 |
|||
EMEA income from operations |
$ 128,208 |
$ 126,521 |
$ 119,785 |
|||
EMEA depreciation, amortization and accretion expense |
114,866 |
116,813 |
111,213 |
|||
EMEA stock-based compensation expense |
16,112 |
15,312 |
12,130 |
|||
EMEA transaction costs |
1,157 |
2,629 |
435 |
|||
EMEA (gain) loss on asset sales |
2 |
(1,584) |
— |
|||
EMEA adjusted EBITDA |
$ 260,345 |
$ 259,691 |
$ 243,563 |
|||
|
$ 80,585 |
$ 93,654 |
$ 96,312 |
|||
|
91,434 |
90,137 |
80,399 |
|||
|
9,923 |
9,415 |
7,958 |
|||
|
92 |
404 |
508 |
|||
|
778 |
— |
— |
|||
Asia-Pacific adjusted EBITDA |
$ 182,812 |
$ 193,610 |
$ 185,177 |
|||
(9) |
We define cash gross margins as cash gross profit divided by revenues. |
|||||
Our cash gross margins by geographic region is presented below: |
||||||
|
70 % |
69 % |
73 % |
|||
EMEA cash gross margins |
63 % |
62 % |
62 % |
|||
|
63 % |
66 % |
66 % |
|||
(10) |
We define adjusted EBITDA margins as adjusted EBITDA divided by revenues. |
|||||
|
45 % |
43 % |
47 % |
|||
EMEA adjusted EBITDA margins |
47 % |
47 % |
47 % |
|||
|
48 % |
52 % |
53 % |
|||
(11) |
We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows: |
|||||
Adjusted EBITDA - current period |
$ 799,712 |
$ 787,577 |
$ 773,232 |
|||
Less adjusted EBITDA - prior period |
(787,577) |
(786,298) |
(711,402) |
|||
Adjusted EBITDA growth |
$ 12,135 |
$ 1,279 |
$ 61,830 |
|||
Revenues - current period |
$ 1,734,447 |
$ 1,706,378 |
$ 1,596,064 |
|||
Less revenues - prior period |
(1,706,378) |
(1,675,176) |
(1,564,115) |
|||
Revenue growth |
$ 28,069 |
$ 31,202 |
$ 31,949 |
|||
Adjusted EBITDA flow-through rate |
43 % |
4 % |
194 % |
|||
(12) |
FFO is defined as net income or loss, excluding gain or loss 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 |
$ 147,693 |
$ 123,141 |
$ 156,074 |
|||
Net (income) loss attributable to non-controlling interests |
(240) |
133 |
288 |
|||
Net income attributable to |
147,453 |
123,274 |
156,362 |
|||
Adjustments: |
||||||
Real estate depreciation |
280,196 |
277,031 |
256,644 |
|||
Loss on disposition of real estate property |
2,845 |
4,693 |
3,130 |
|||
Adjustments for FFO from unconsolidated joint ventures |
2,150 |
1,882 |
1,127 |
|||
FFO attributable to common shareholders |
$ 432,644 |
$ 406,880 |
$ 417,263 |
|||
(13) |
AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, net income or loss 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 attributable to common shareholders |
$ 432,644 |
$ 406,880 |
$ 417,263 |
|||
Adjustments: |
||||||
Installation revenue adjustment |
845 |
5,767 |
3,912 |
|||
Straight-line rent expense adjustment |
3,660 |
(1,920) |
4,361 |
|||
Amortization of deferred financing costs and debt discounts and premiums |
4,204 |
4,375 |
3,923 |
|||
Contract cost adjustment |
(14,939) |
(19,753) |
(14,011) |
|||
Stock-based compensation expense |
89,952 |
96,379 |
78,350 |
|||
Non-real estate depreciation expense |
105,575 |
99,014 |
84,978 |
|||
Amortization expense |
49,569 |
50,056 |
53,395 |
|||
Accretion expense (adjustment) |
1,046 |
2,663 |
(699) |
|||
Recurring capital expenditures |
(23,881) |
(85,693) |
(20,330) |
|||
(Gain) loss on debt extinguishment |
(529) |
(214) |
13,058 |
|||
Transaction costs |
4,240 |
9,405 |
1,182 |
|||
Impairment charges (1) |
— |
(465) |
— |
|||
Income tax expense (benefit) adjustment (1) |
(323) |
(3,086) |
765 |
|||
Adjustments for AFFO from unconsolidated joint ventures |
569 |
786 |
681 |
|||
AFFO attributable to common shareholders |
$ 652,632 |
$ 564,194 |
$ 626,828 |
|||
1. Impairment charges for 2021 relate to the impairment of an indemnification asset in Q2 2021 resulting from the
|
||||||
(14) |
Following is how we reconcile from adjusted EBITDA to AFFO: |
|||||
Adjusted EBITDA |
$ 799,712 |
$ 787,577 |
$ 773,232 |
|||
Adjustments: |
||||||
Interest expense, net of interest income |
(77,859) |
(79,097) |
(88,952) |
|||
Amortization of deferred financing costs and debt discounts and premiums |
4,204 |
4,375 |
3,923 |
|||
Income tax expense |
(32,744) |
(41,899) |
(32,628) |
|||
Income tax expense (benefit) adjustment (1) |
(323) |
(3,086) |
765 |
|||
Straight-line rent expense adjustment |
3,660 |
(1,920) |
4,361 |
|||
Contract cost adjustment |
(14,939) |
(19,753) |
(14,011) |
|||
Installation revenue adjustment |
845 |
5,767 |
3,912 |
|||
Recurring capital expenditures |
(23,881) |
(85,693) |
(20,330) |
|||
Other expense |
(9,549) |
(5,802) |
(6,950) |
|||
Loss on disposition of real estate property |
2,845 |
4,693 |
3,130 |
|||
Adjustments for unconsolidated JVs' and non-controlling interests |
2,479 |
2,801 |
2,096 |
|||
Adjustments for impairment charges (1) |
— |
(465) |
— |
|||
Adjustment for loss on sale of assets |
(1,818) |
(3,304) |
(1,720) |
|||
AFFO attributable to common shareholders |
$ 652,632 |
$ 564,194 |
$ 626,828 |
|||
1. Impairment charges for 2021 relate to the impairment of an indemnification asset in Q2 2021 resulting from the |
||||||
(15) |
The shares used in the computation of basic and diluted FFO and AFFO per share attributable to |
|||||
Shares used in computing basic net income per share, FFO per share |
90,771 |
90,240 |
89,330 |
|||
Effect of dilutive securities: |
||||||
Employee equity awards |
391 |
512 |
512 |
|||
Shares used in computing diluted net income per share, FFO per share |
91,162 |
90,752 |
89,842 |
|||
Basic FFO per share |
$ 4.77 |
$ 4.51 |
$ 4.67 |
|||
Diluted FFO per share |
$ 4.75 |
$ 4.48 |
$ 4.64 |
|||
Basic AFFO per share |
$ 7.19 |
$ 6.25 |
$ 7.02 |
|||
Diluted AFFO per share |
$ 7.16 |
$ 6.22 |
$ 6.98 |
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SOURCE
Equinix Investor Relations Contacts: invest@equinix.com; Equinix Media Contacts: press@equinix.com