- Quarterly revenues increased 9% year-over-year to
$1.397 billion , which includes$8 million of negative foreign currency impact when compared to prior guidance rates. This reflects an 8% year-over-year increase on a normalized and constant currency basis - Delivered one of the strongest interconnection quarters in the company's history
- Recognized by the
U.S. Environmental Protection Agency (EPA ) for leading green power use, ranking number four on theEPA's National Top 100 Partners list - Delivered record channel bookings, accounting for more than 30% of total bookings
Third Quarter 2019 Results Summary
- Revenues
$1.397 billion , a 1% increase over the previous quarter- Includes
$8 million of negative foreign currency impact when compared to prior guidance rates - Operating Income
$285 million , a 2% decrease from the previous quarter, and an operating margin of 20%- Adjusted EBITDA
$675 million , a 48% adjusted EBITDA margin- Includes
$4 million of negative foreign currency impact when compared to prior guidance rates - Includes
$2 million of integration costs - Net Income and Net Income per Share attributable to
Equinix $121 million , a 16% decrease from the previous quarter including a$16 million increased income tax expense attributable to FX hedge gains$1.41 per share, a 17% decrease from the previous quarter including a per share reduction of$0.19 related to increased income tax expense attributable to FX hedge gains, a significant portion of which is expected to reverse in Q4- AFFO and AFFO per Share
$473 million , a 5% decrease from the previous quarter$5.52 per share including a per share reduction of$0.19 related to increased income tax expense attributable to FX hedge gains, a significant portion of which is expected to reverse in Q4- Includes
$2 million of integration costs
2019 Annual Guidance Summary
- Revenues
$5.554 - $5.564 billion , a normalized and constant currency increase of approximately 9% over the previous year- Includes a
$21 million negative foreign currency impact when compared to prior guidance rates - Adjusted EBITDA
$2.666 - $2.676 billion , a 48% adjusted EBITDA margin- Includes a
$10 million negative foreign currency impact when compared to prior guidance rates - Assumes
$9 million of integration costs - AFFO and AFFO per Share
$1.913 - $1.923 billion , a normalized and constant currency increase of 13 - 14% over the previous year$22.56 - $22.68 per share, a normalized and constant currency increase of approximately 8% over the previous year- Includes
$10 million of increased income tax expense attributable to FX hedge gains, a per share impact of$0.12 - Assumes
$9 million of integration costs
Quote
"We had another great quarter, building on our market leadership and unlocking the power of Platform Equinix by expanding our geographic reach, enhancing our market-leading interconnection portfolio and launching new offerings that respond to the evolving needs of our customers. We have a clear view of our strategy and are actively building new capabilities that will enable us to achieve our vision for the future of Platform Equinix, allowing customers to reach everywhere, interconnect everyone and integrate everything on their digital transformation journey."
Business Highlights
Equinix continued to invest in building out its global platform in response to strong customer demand and a high level of inventory utilization:- On
October 4 ,Equinix announced aUS$175 million definitive agreement to acquire three Axtel data centers that serve two new strategic technology metros inMexico . This acquisition, when combined with the previous acquisitions of key traffic hubs inDallas (Infomart ) andMiami (NAP of theAmericas ), will further strengthenEquinix's global platform by increasing interconnection between North, Central andSouth America . - On
October 9 ,Equinix announced the completion of the formation of the greater thanUS$1.0 billion joint venture in the form of a limited liability partnership with GIC,Singapore's sovereign wealth fund, to develop and operate xScale™ data centers inEurope . This was a strategic milestone forEquinix , enhancing its ability to respond to the rapidly expanding needs of the world's largest cloud and hyperscale companies while strengthening leadership in the cloud ecosystem. Equinix continues its investment in organic growth and expansion activities with 28 major expansion projects underway across 21 markets and 16 countries. Among them are four xScale data centers and four newly announced projects, including phased expansions inChicago andToronto , and two new builds inWashington, D.C. - Additionally,
Equinix completed six new phased expansions or openings this quarter, including two new International Business Exchange™ (IBX®) data centers inHelsinki andSeoul . Equinix achieved its best-ever third quarter bookings with strong performance across all three regions (Americas , EMEA andAsia-Pacific ) with notable momentum in EMEA. Bookings this quarter spanned across more than 3,100 customers, with the majority of bookings composed of small to mid-sized multi-metro deals.Equinix continues to lead in cloud connectivity, with over three times as many metros with multicloud on-ramps as its nearest competitor.Equinix continues the growth of its indirect selling initiatives, as the company pursues high-value strategic channel partnerships. In Q3,Equinix delivered record channel bookings, accounting for more than 30% of total bookings, with 60% of this activity going into the enterprise vertical. New channel wins this quarter spanned across all end-user types including insurance, federal government, banking, public utilities and pharmaceutical, with network optimization and hybrid multicloud as key use cases.- Interconnection growth again outpaced colocation revenues, growing 13% year-over-year on a normalized and constant currency basis, driven by solid traction across all interconnection products. Today,
Equinix has the most comprehensive global interconnection platform, comprising over 356,000 physical and virtual interconnections. In Q3,Equinix added 8,500 interconnections, more per quarter than our top 10 competitors combined. In the quarter,Equinix surpassed 20,000 virtual connections enabled by Equinix Cloud Exchange Fabric™ (ECX Fabric™), which accounted for more than 5% of total interconnections and serves more than 1,800 customers. Equinix is advancing the company's sustainability agenda with meaningful progress across environmental, social and governance initiatives.Equinix is progressing on its commitment to 100% sustainable energy, and over 90% of its energy consumption is now covered by clean and renewable energy sources. In Q3, theU.S. EPA recognizedEquinix for leading in green power use, ranking the company number four on theEPA's National Top 100 Partners list, andEquinix received theEPA's Green Power Leadership Award for the 3rd consecutive year, recognizing the company's contribution to advancing the development of the nation's voluntary green power market.Equinix added key leadership positions with the appointments ofSandra Rivera to its Board of Directors and Justin Dustzadeh as its Chief Technology Officer.
Business Outlook
For the fourth quarter of 2019, the Company expects revenues to range between
For the full year of 2019, total revenues are expected to range between
The U.S. dollar exchange rates used for 2019 guidance, taking into consideration the impact of our current 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, 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.
Q3 2019 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, the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering
EQUINIX, INC. |
|||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||||
Recurring revenues |
$ |
1,319,336 |
$ |
1,306,045 |
$ |
1,207,806 |
$ |
3,900,209 |
$ |
3,546,184 |
|||||||||
Non-recurring revenues |
77,474 |
78,932 |
75,945 |
244,796 |
215,387 |
||||||||||||||
Revenues |
1,396,810 |
1,384,977 |
1,283,751 |
4,145,005 |
3,761,571 |
||||||||||||||
Cost of revenues |
704,339 |
698,179 |
660,309 |
2,084,548 |
1,934,540 |
||||||||||||||
Gross profit |
692,471 |
686,798 |
623,442 |
2,060,457 |
1,827,031 |
||||||||||||||
Operating expenses: |
|||||||||||||||||||
Sales and marketing |
161,574 |
159,201 |
157,920 |
490,490 |
471,898 |
||||||||||||||
General and administrative |
241,812 |
232,656 |
206,902 |
689,514 |
620,548 |
||||||||||||||
Transaction costs |
2,991 |
2,774 |
(1,120) |
8,236 |
33,932 |
||||||||||||||
Impairment charges |
1,189 |
386 |
— |
16,023 |
— |
||||||||||||||
Gain on asset sales |
(463) |
— |
(6,013) |
(463) |
(6,013) |
||||||||||||||
Total operating expenses |
407,103 |
395,017 |
357,689 |
1,203,800 |
1,120,365 |
||||||||||||||
Income from operations |
285,368 |
291,781 |
265,753 |
856,657 |
706,666 |
||||||||||||||
Interest and other income (expense): |
|||||||||||||||||||
Interest income |
8,201 |
7,762 |
2,912 |
20,165 |
11,480 |
||||||||||||||
Interest expense |
(118,674) |
(120,547) |
(130,566) |
(362,067) |
(391,516) |
||||||||||||||
Other income |
3,428 |
12,180 |
3,744 |
15,442 |
9,546 |
||||||||||||||
Gain (loss) on debt extinguishment |
315 |
— |
1,492 |
(67) |
(39,214) |
||||||||||||||
Total interest and other, net |
(106,730) |
(100,605) |
(122,418) |
(326,527) |
(409,704) |
||||||||||||||
Income before income taxes |
178,638 |
191,176 |
143,335 |
530,130 |
296,962 |
||||||||||||||
Income tax expense |
(57,827) |
(47,324) |
(18,510) |
(147,720) |
(41,625) |
||||||||||||||
Net income |
120,811 |
143,852 |
124,825 |
382,410 |
255,337 |
||||||||||||||
Net (income) loss attributable to non-controlling interests |
39 |
(325) |
— |
45 |
— |
||||||||||||||
Net income attributable to Equinix |
$ |
120,850 |
$ |
143,527 |
$ |
124,825 |
$ |
382,455 |
$ |
255,337 |
|||||||||
Net income per share attributable to Equinix: |
|||||||||||||||||||
Basic net income per share |
$ |
1.42 |
$ |
1.70 |
$ |
1.56 |
$ |
4.57 |
$ |
3.21 |
|||||||||
Diluted net income per share |
$ |
1.41 |
$ |
1.69 |
$ |
1.55 |
$ |
4.54 |
$ |
3.19 |
|||||||||
Shares used in computing basic net income per share |
85,012 |
84,399 |
79,872 |
83,753 |
79,533 |
||||||||||||||
Shares used in computing diluted net income per share |
85,571 |
84,767 |
80,283 |
84,223 |
79,956 |
||||||||||||||
EQUINIX, INC. |
|||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||||
Net income |
$ |
120,811 |
$ |
143,852 |
$ |
124,825 |
$ |
382,410 |
$ |
255,337 |
|||||||||
Other comprehensive loss, net of tax: |
|||||||||||||||||||
Foreign currency translation adjustment ("CTA") gain (loss) |
(284,927) |
25,127 |
(77,566) |
(341,519) |
(352,948) |
||||||||||||||
Net investment hedge CTA gain (loss) |
188,897 |
(37,857) |
27,214 |
227,890 |
180,694 |
||||||||||||||
Unrealized gain (loss) on cash flow hedges |
14,217 |
(3,355) |
6,184 |
19,086 |
37,384 |
||||||||||||||
Net actuarial gain (loss) on defined benefit plans |
(8) |
(7) |
14 |
(26) |
35 |
||||||||||||||
Total other comprehensive loss, net of tax |
(81,821) |
(16,092) |
(44,154) |
(94,569) |
(134,835) |
||||||||||||||
Comprehensive income, net of tax |
38,990 |
127,760 |
80,671 |
287,841 |
120,502 |
||||||||||||||
Net (income) loss attributable to non-controlling interests |
39 |
(325) |
— |
45 |
— |
||||||||||||||
Other comprehensive loss attributable to non-controlling interests |
28 |
14 |
— |
35 |
— |
||||||||||||||
Comprehensive income attributable to Equinix |
$ |
39,057 |
$ |
127,449 |
$ |
80,671 |
$ |
287,921 |
$ |
120,502 |
EQUINIX, INC. |
|||||||
September 30, 2019 |
December 31, 2018 |
||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
1,402,400 |
$ |
606,166 |
|||
Short-term investments |
19,567 |
4,540 |
|||||
Accounts receivable, net |
746,571 |
630,119 |
|||||
Other current assets |
305,246 |
274,857 |
|||||
Assets held for sale |
379,473 |
— |
|||||
Total current assets |
2,853,257 |
1,515,682 |
|||||
Property, plant and equipment, net |
11,229,197 |
11,026,020 |
|||||
Operating lease right-of-use assets |
1,483,491 |
— |
|||||
Goodwill |
4,648,913 |
4,836,388 |
|||||
Intangible assets, net |
2,127,843 |
2,333,296 |
|||||
Other assets |
499,632 |
533,252 |
|||||
Total assets |
$ |
22,842,333 |
$ |
20,244,638 |
|||
Liabilities and Stockholders' Equity |
|||||||
Accounts payable and accrued expenses |
$ |
755,150 |
$ |
756,692 |
|||
Accrued property, plant and equipment |
335,490 |
179,412 |
|||||
Current portion of operating lease liabilities |
137,002 |
— |
|||||
Current portion of finance lease liabilities |
65,518 |
77,844 |
|||||
Current portion of mortgage and loans payable |
70,789 |
73,129 |
|||||
Current portion of senior notes |
300,466 |
300,999 |
|||||
Other current liabilities |
119,976 |
126,995 |
|||||
Liabilities held for sale |
52,092 |
— |
|||||
Total current liabilities |
1,836,483 |
1,515,071 |
|||||
Operating lease liabilities, less current portion |
1,333,901 |
— |
|||||
Finance lease liabilities, less current portion |
1,301,482 |
1,441,077 |
|||||
Mortgage and loans payable, less current portion |
1,215,207 |
1,310,663 |
|||||
Senior notes, less current portion |
7,835,317 |
8,128,785 |
|||||
Other liabilities |
558,912 |
629,763 |
|||||
Total liabilities |
14,081,302 |
13,025,359 |
|||||
Common stock |
86 |
81 |
|||||
Additional paid-in capital |
12,635,450 |
10,751,313 |
|||||
Treasury stock |
(144,301) |
(145,161) |
|||||
Accumulated dividends |
(3,956,318) |
(3,331,200) |
|||||
Accumulated other comprehensive loss |
(1,040,236) |
(945,702) |
|||||
Retained earnings |
1,266,430 |
889,948 |
|||||
Total Equinix stockholders' equity |
8,761,111 |
7,219,279 |
|||||
Non-controlling interests |
(80) |
— |
|||||
Total stockholders' equity |
8,761,031 |
7,219,279 |
|||||
Total liabilities and stockholders' equity |
$ |
22,842,333 |
$ |
20,244,638 |
|||
Ending headcount by geographic region is as follows: |
|||||||
Americas headcount |
3,647 |
3,480 |
|||||
EMEA headcount |
2,884 |
2,751 |
|||||
Asia-Pacific headcount |
1,708 |
1,672 |
|||||
Total headcount |
8,239 |
7,903 |
EQUINIX, INC. |
|||||||
September 30, 2019 |
December 31, 2018 |
||||||
Finance lease liabilities |
$ |
1,367,000 |
$ |
1,518,921 |
|||
Term loans |
1,243,999 |
1,337,868 |
|||||
Mortgage payable and other loans payable |
41,997 |
45,924 |
|||||
Plus: debt discount and issuance costs, net |
3,459 |
4,732 |
|||||
Total mortgage and loans payable principal |
1,289,455 |
1,388,524 |
|||||
Senior notes |
8,135,783 |
8,429,784 |
|||||
Plus: debt issuance costs |
64,577 |
75,372 |
|||||
Less: debt premium |
(2,310) |
(5,031) |
|||||
Total senior notes principal |
8,198,050 |
8,500,125 |
|||||
Total debt principal outstanding |
$ |
10,854,505 |
$ |
11,407,570 |
EQUINIX, INC. |
||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||
Net income |
$ |
120,811 |
$ |
143,852 |
$ |
124,825 |
$ |
382,410 |
$ |
255,337 |
||||||||||
Adjustments to reconcile net income to net cash provided by |
||||||||||||||||||||
Depreciation, amortization and accretion |
321,746 |
320,550 |
306,318 |
957,001 |
921,611 |
|||||||||||||||
Stock-based compensation |
63,871 |
61,519 |
47,588 |
174,413 |
139,849 |
|||||||||||||||
Amortization of debt issuance costs and debt discounts and premiums |
3,196 |
3,238 |
3,148 |
9,429 |
10,609 |
|||||||||||||||
(Gain) loss on debt extinguishment |
(315) |
— |
(1,492) |
67 |
39,214 |
|||||||||||||||
Gain on asset sales |
(463) |
— |
(6,013) |
(463) |
(6,013) |
|||||||||||||||
Impairment charges |
1,189 |
386 |
— |
16,023 |
— |
|||||||||||||||
Other items |
2,820 |
4,745 |
5,730 |
15,789 |
16,940 |
|||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||
Accounts receivable |
3,331 |
(42,370) |
(46,685) |
(123,389) |
(85,126) |
|||||||||||||||
Income taxes, net |
42,482 |
14,837 |
(10,010) |
73,144 |
(32,876) |
|||||||||||||||
Accounts payable and accrued expenses |
10,647 |
7,476 |
29,107 |
6,660 |
4,782 |
|||||||||||||||
Operating lease right-of-use assets |
29,743 |
37,219 |
— |
108,226 |
— |
|||||||||||||||
Operating lease liabilities |
(38,254) |
(34,919) |
— |
(112,059) |
— |
|||||||||||||||
Other assets and liabilities |
(61,810) |
26,390 |
(35,354) |
(44,193) |
(7,530) |
|||||||||||||||
Net cash provided by operating activities |
498,994 |
542,923 |
417,162 |
1,463,058 |
1,256,797 |
|||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Purchases, sales and maturities of investments, net |
(2,905) |
(3,063) |
6,452 |
(14,747) |
19,195 |
|||||||||||||||
Business acquisitions, net of cash and restricted cash acquired |
— |
(34,143) |
1,808 |
(34,143) |
(829,185) |
|||||||||||||||
Purchases of real estate |
(16,852) |
(41,715) |
(94,830) |
(64,288) |
(136,612) |
|||||||||||||||
Purchases of other property, plant and equipment |
(556,822) |
(444,171) |
(545,541) |
(1,364,960) |
(1,415,509) |
|||||||||||||||
Proceeds from asset sales |
117 |
— |
12,154 |
117 |
12,154 |
|||||||||||||||
Net cash used in investing activities |
(576,462) |
(523,092) |
(619,957) |
(1,478,021) |
(2,349,957) |
|||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Proceeds from employee equity awards |
24,425 |
— |
24,243 |
52,018 |
50,103 |
|||||||||||||||
Payment of dividend distributions |
(212,752) |
(208,449) |
(185,983) |
(625,804) |
(554,742) |
|||||||||||||||
Proceeds from public offering of common stock, net of offering costs |
99,421 |
348,121 |
265,671 |
1,660,976 |
273,873 |
|||||||||||||||
Proceeds from loans payable |
— |
— |
424,650 |
— |
424,650 |
|||||||||||||||
Proceeds from senior notes |
— |
— |
— |
— |
929,850 |
|||||||||||||||
Repayment of finance lease liabilities |
(19,673) |
(11,954) |
(19,799) |
(62,785) |
(89,655) |
|||||||||||||||
Repayment of mortgage and loans payable |
(17,584) |
(17,878) |
(404,083) |
(53,796) |
(429,498) |
|||||||||||||||
Repayment of senior notes |
— |
(150,000) |
— |
(150,000) |
— |
|||||||||||||||
Debt extinguishment costs |
— |
— |
— |
— |
(20,556) |
|||||||||||||||
Debt issuance costs |
— |
— |
(635) |
— |
(12,218) |
|||||||||||||||
Net cash provided by (used in) financing activities |
(126,163) |
(40,160) |
104,064 |
820,609 |
571,807 |
|||||||||||||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash |
(13,528) |
2,106 |
(5,104) |
(13,117) |
(30,944) |
|||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(217,159) |
(18,223) |
(103,835) |
792,529 |
(552,297) |
|||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period |
1,637,292 |
1,655,515 |
1,002,239 |
627,604 |
1,450,701 |
|||||||||||||||
Cash, cash equivalents and restricted cash at end of period |
$ |
1,420,133 |
$ |
1,637,292 |
$ |
898,404 |
$ |
1,420,133 |
$ |
898,404 |
||||||||||
Supplemental cash flow information: |
||||||||||||||||||||
Cash paid for taxes |
$ |
29,383 |
$ |
32,669 |
$ |
28,206 |
$ |
89,076 |
$ |
77,648 |
||||||||||
Cash paid for interest |
$ |
153,265 |
$ |
113,266 |
$ |
152,887 |
$ |
412,675 |
$ |
375,015 |
||||||||||
Free cash flow (negative free cash flow) (1) |
$ |
(74,563) |
$ |
22,894 |
$ |
(209,247) |
$ |
(216) |
$ |
(1,112,355) |
||||||||||
Adjusted free cash flow (adjusted negative free cash flow) (2) |
$ |
(57,711) |
$ |
98,752 |
$ |
(116,225) |
$ |
98,215 |
$ |
(146,558) |
||||||||||
(1) |
We define free cash flow (negative 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 |
$ |
498,994 |
$ |
542,923 |
$ |
417,162 |
$ |
1,463,058 |
$ |
1,256,797 |
||||||||||
Net cash used in investing activities as presented above |
(576,462) |
(523,092) |
(619,957) |
(1,478,021) |
(2,349,957) |
|||||||||||||||
Purchases, sales and maturities of investments, net |
2,905 |
3,063 |
(6,452) |
14,747 |
(19,195) |
|||||||||||||||
Free cash flow (negative free cash flow) |
$ |
(74,563) |
$ |
22,894 |
$ |
(209,247) |
$ |
(216) |
$ |
(1,112,355) |
||||||||||
(2) |
We define adjusted free cash flow (adjusted negative free cash flow) as free cash flow (negative free cash flow) as defined above, excluding any purchases of real estate and business acquisitions, net of cash and restricted cash acquired as presented below: |
|||||||||||||||||||
Free cash flow (negative free cash flow) as defined above |
$ |
(74,563) |
$ |
22,894 |
$ |
(209,247) |
$ |
(216) |
$ |
(1,112,355) |
||||||||||
Less business acquisitions, net of cash and restricted cash acquired |
— |
34,143 |
(1,808) |
34,143 |
829,185 |
|||||||||||||||
Less purchases of real estate |
16,852 |
41,715 |
94,830 |
64,288 |
136,612 |
|||||||||||||||
Adjusted free cash flow (adjusted negative free cash flow) |
$ |
(57,711) |
$ |
98,752 |
$ |
(116,225) |
$ |
98,215 |
$ |
(146,558) |
EQUINIX, INC. |
||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
||||||||||||||||
Recurring revenues |
$ |
1,319,336 |
$ |
1,306,045 |
$ |
1,207,806 |
$ |
3,900,209 |
$ |
3,546,184 |
||||||||||
Non-recurring revenues |
77,474 |
78,932 |
75,945 |
244,796 |
215,387 |
|||||||||||||||
Revenues (1) |
1,396,810 |
1,384,977 |
1,283,751 |
4,145,005 |
3,761,571 |
|||||||||||||||
Cash cost of revenues (2) |
464,950 |
460,983 |
433,186 |
1,374,314 |
1,250,441 |
|||||||||||||||
Cash gross profit (3) |
931,860 |
923,994 |
850,565 |
2,770,691 |
2,511,130 |
|||||||||||||||
Cash operating expenses (4)(7): |
||||||||||||||||||||
Cash sales and marketing expenses(5) |
98,117 |
95,114 |
93,339 |
301,447 |
282,876 |
|||||||||||||||
Cash general and administrative expenses (6) |
159,041 |
151,870 |
144,700 |
457,377 |
432,209 |
|||||||||||||||
Total cash operating expenses (4)(7) |
257,158 |
246,984 |
238,039 |
758,824 |
715,085 |
|||||||||||||||
Adjusted EBITDA (8) |
$ |
674,702 |
$ |
677,010 |
$ |
612,526 |
$ |
2,011,867 |
$ |
1,796,045 |
||||||||||
Cash gross margins (9) |
67 |
% |
67 |
% |
66 |
% |
67 |
% |
67 |
% |
||||||||||
Adjusted EBITDA margins (10) |
48 |
% |
49 |
% |
48 |
% |
49 |
% |
48 |
% |
||||||||||
Adjusted EBITDA flow-through rate (11) |
(20) |
% |
77 |
% |
39 |
% |
62 |
% |
50 |
% |
||||||||||
FFO (12) |
$ |
331,485 |
$ |
352,973 |
$ |
340,030 |
$ |
1,010,531 |
$ |
920,310 |
||||||||||
AFFO (13)(14) |
$ |
472,744 |
$ |
497,647 |
$ |
402,250 |
$ |
1,458,511 |
$ |
1,244,952 |
||||||||||
Basic FFO per share (15) |
$ |
3.90 |
$ |
4.18 |
$ |
4.26 |
$ |
12.07 |
$ |
11.57 |
||||||||||
Diluted FFO per share(15) |
$ |
3.87 |
$ |
4.16 |
$ |
4.24 |
$ |
12.00 |
$ |
11.51 |
||||||||||
Basic AFFO per share (15) |
$ |
5.56 |
$ |
5.90 |
$ |
5.04 |
$ |
17.41 |
$ |
15.65 |
||||||||||
Diluted AFFO per share(15) |
$ |
5.52 |
$ |
5.87 |
$ |
5.01 |
$ |
17.32 |
$ |
15.57 |
||||||||||
(1) |
The geographic split of our revenues on a services basis is presented below: |
|||||||||||||||||||
Americas Revenues: |
||||||||||||||||||||
Colocation |
$ |
441,596 |
$ |
444,086 |
$ |
433,828 |
$ |
1,325,663 |
$ |
1,294,848 |
||||||||||
Interconnection |
146,212 |
142,460 |
134,159 |
427,235 |
395,132 |
|||||||||||||||
Managed infrastructure |
24,082 |
22,908 |
18,698 |
68,777 |
55,525 |
|||||||||||||||
Other |
3,392 |
5,352 |
5,161 |
14,723 |
11,220 |
|||||||||||||||
Recurring revenues |
615,282 |
614,806 |
591,846 |
1,836,398 |
1,756,725 |
|||||||||||||||
Non-recurring revenues |
29,993 |
29,614 |
33,838 |
97,663 |
89,861 |
|||||||||||||||
Revenues |
$ |
645,275 |
$ |
644,420 |
$ |
625,684 |
$ |
1,934,061 |
$ |
1,846,586 |
||||||||||
EMEA Revenues: |
||||||||||||||||||||
Colocation |
$ |
357,201 |
$ |
347,795 |
$ |
305,072 |
$ |
1,036,121 |
$ |
886,651 |
||||||||||
Interconnection |
41,063 |
38,614 |
34,640 |
117,202 |
103,586 |
|||||||||||||||
Managed infrastructure |
27,651 |
28,397 |
28,387 |
85,136 |
88,804 |
|||||||||||||||
Other |
1,787 |
2,275 |
2,552 |
6,561 |
6,682 |
|||||||||||||||
Recurring revenues |
427,702 |
417,081 |
370,651 |
1,245,020 |
1,085,723 |
|||||||||||||||
Non-recurring revenues |
30,438 |
32,774 |
26,104 |
97,635 |
73,830 |
|||||||||||||||
Revenues |
$ |
458,140 |
$ |
449,855 |
$ |
396,755 |
$ |
1,342,655 |
$ |
1,159,553 |
||||||||||
Asia-Pacific Revenues: |
||||||||||||||||||||
Colocation |
$ |
214,304 |
$ |
213,734 |
$ |
191,143 |
$ |
637,703 |
$ |
543,513 |
||||||||||
Interconnection |
39,495 |
37,957 |
33,318 |
114,148 |
96,011 |
|||||||||||||||
Managed infrastructure |
22,553 |
22,467 |
20,848 |
66,940 |
64,212 |
|||||||||||||||
Recurring revenues |
276,352 |
274,158 |
245,309 |
818,791 |
703,736 |
|||||||||||||||
Non-recurring revenues |
17,043 |
16,544 |
16,003 |
49,498 |
51,696 |
|||||||||||||||
Revenues |
$ |
293,395 |
$ |
290,702 |
$ |
261,312 |
$ |
868,289 |
$ |
755,432 |
||||||||||
Worldwide Revenues: |
||||||||||||||||||||
Colocation |
$ |
1,013,101 |
$ |
1,005,615 |
$ |
930,043 |
$ |
2,999,487 |
$ |
2,725,012 |
||||||||||
Interconnection |
226,770 |
219,031 |
202,117 |
658,585 |
594,729 |
|||||||||||||||
Managed infrastructure |
74,286 |
73,772 |
67,933 |
220,853 |
208,541 |
|||||||||||||||
Other |
5,179 |
7,627 |
7,713 |
21,284 |
17,902 |
|||||||||||||||
Recurring revenues |
1,319,336 |
1,306,045 |
1,207,806 |
3,900,209 |
3,546,184 |
|||||||||||||||
Non-recurring revenues |
77,474 |
78,932 |
75,945 |
244,796 |
215,387 |
|||||||||||||||
Revenues |
$ |
1,396,810 |
$ |
1,384,977 |
$ |
1,283,751 |
$ |
4,145,005 |
$ |
3,761,571 |
||||||||||
(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 |
$ |
704,339 |
$ |
698,179 |
$ |
660,309 |
$ |
2,084,548 |
$ |
1,934,540 |
||||||||||
Depreciation, amortization and accretion expense |
(232,285) |
(230,696) |
(222,523) |
(691,618) |
(670,993) |
|||||||||||||||
Stock-based compensation expense |
(7,104) |
(6,500) |
(4,600) |
(18,616) |
(13,106) |
|||||||||||||||
Cash cost of revenues |
$ |
464,950 |
$ |
460,983 |
$ |
433,186 |
$ |
1,374,314 |
$ |
1,250,441 |
||||||||||
The geographic split of our cash cost of revenues is presented below: |
||||||||||||||||||||
Americas cash cost of revenues |
$ |
182,516 |
$ |
182,920 |
$ |
181,826 |
$ |
545,071 |
$ |
526,138 |
||||||||||
EMEA cash cost of revenues |
180,370 |
179,347 |
160,173 |
532,918 |
468,072 |
|||||||||||||||
Asia-Pacific cash cost of revenues |
102,064 |
98,716 |
91,187 |
296,325 |
256,231 |
|||||||||||||||
Cash cost of revenues |
$ |
464,950 |
$ |
460,983 |
$ |
433,186 |
$ |
1,374,314 |
$ |
1,250,441 |
||||||||||
(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 |
$ |
403,386 |
$ |
391,857 |
$ |
364,822 |
$ |
1,180,004 |
$ |
1,092,446 |
||||||||||
Depreciation and amortization expense |
(89,461) |
(89,854) |
(83,795) |
(265,383) |
(250,618) |
|||||||||||||||
Stock-based compensation expense |
(56,767) |
(55,019) |
(42,988) |
(155,797) |
(126,743) |
|||||||||||||||
Cash operating expense |
$ |
257,158 |
$ |
246,984 |
$ |
238,039 |
$ |
758,824 |
$ |
715,085 |
||||||||||
(5) |
We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and stock-based compensation as presented below: |
|||||||||||||||||||
Sales and marketing expense |
$ |
161,574 |
$ |
159,201 |
$ |
157,920 |
$ |
490,490 |
$ |
471,898 |
||||||||||
Depreciation and amortization expense |
(47,663) |
(48,930) |
(50,415) |
(144,791) |
(149,042) |
|||||||||||||||
Stock-based compensation expense |
(15,794) |
(15,157) |
(14,166) |
(44,252) |
(39,980) |
|||||||||||||||
Cash sales and marketing expense |
$ |
98,117 |
$ |
95,114 |
$ |
93,339 |
$ |
301,447 |
$ |
282,876 |
||||||||||
(6) |
We define cash general and administrative expense as general and administrative expense less depreciation, amortization and stock-based compensation as presented below: |
|||||||||||||||||||
General and administrative expense |
$ |
241,812 |
$ |
232,656 |
$ |
206,902 |
$ |
689,514 |
$ |
620,548 |
||||||||||
Depreciation and amortization expense |
(41,798) |
(40,924) |
(33,380) |
(120,592) |
(101,576) |
|||||||||||||||
Stock-based compensation expense |
(40,973) |
(39,862) |
(28,822) |
(111,545) |
(86,763) |
|||||||||||||||
Cash general and administrative expense |
$ |
159,041 |
$ |
151,870 |
$ |
144,700 |
$ |
457,377 |
$ |
432,209 |
||||||||||
(7) |
The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below: |
|||||||||||||||||||
Americas cash SG&A |
$ |
156,103 |
$ |
152,448 |
$ |
147,855 |
$ |
465,444 |
$ |
438,941 |
||||||||||
EMEA cash SG&A |
65,252 |
60,863 |
56,785 |
188,502 |
174,691 |
|||||||||||||||
Asia-Pacific cash SG&A |
35,803 |
33,673 |
33,399 |
104,878 |
101,453 |
|||||||||||||||
Cash SG&A |
$ |
257,158 |
$ |
246,984 |
$ |
238,039 |
$ |
758,824 |
$ |
715,085 |
||||||||||
(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 |
$ |
285,368 |
$ |
291,781 |
$ |
265,753 |
$ |
856,657 |
$ |
706,666 |
||||||||||
Depreciation, amortization and accretion expense |
321,746 |
320,550 |
306,318 |
957,001 |
921,611 |
|||||||||||||||
Stock-based compensation expense |
63,871 |
61,519 |
47,588 |
174,413 |
139,849 |
|||||||||||||||
Impairment charges |
1,189 |
386 |
— |
16,023 |
— |
|||||||||||||||
Transaction costs |
2,991 |
2,774 |
(1,120) |
8,236 |
33,932 |
|||||||||||||||
Gain on asset sales |
(463) |
— |
(6,013) |
(463) |
(6,013) |
|||||||||||||||
Adjusted EBITDA |
$ |
674,702 |
$ |
677,010 |
$ |
612,526 |
$ |
2,011,867 |
$ |
1,796,045 |
||||||||||
The geographic split of our adjusted EBITDA is presented below: |
||||||||||||||||||||
Americas income from operations |
$ |
88,494 |
$ |
99,195 |
$ |
106,536 |
$ |
277,700 |
$ |
295,983 |
||||||||||
|