eqix-8k_20211103.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549 

 

FORM 8-K 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 3, 2021 

 

EQUINIX, INC.

(Exact Name of Registrant as Specified in Charter) 

 

Delaware

 

000-31293

 

77-0487526

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

One Lagoon Drive

Redwood City, CA 94065

(Address of Principal Executive Offices, and Zip Code)

 

(650) 598-6000

Registrant’s Telephone Number, Including Area Code

 

(Former Name or Former Address, if Changed Since Last Report) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common stock,
par value $0.001 per share

 

EQIX

 

The Nasdaq Stock Market LLC

0.250% Senior Notes due 2027

 

 

 

The Nasdaq Stock Market LLC

1.000% Senior Notes due 2033

 

 

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


 

 

Item 2.02. Results of Operations and Financial Condition

On November 3, 2021, Equinix, Inc. (“Equinix”) issued a press release and will hold a conference call regarding its financial results for the third quarter ended September 30, 2021.  A copy of the press release is furnished as Exhibit 99.1 to this report.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Equinix is making reference to certain non-GAAP financial information in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

 

Item 9.01. Financial Statements and Exhibits

(d)

Exhibits.

 

99.1

Press Release issued by Equinix, Inc. dated November 3, 2021.

 

 

104

Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document


 


 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

EQUINIX, INC.

 

 

 

 

 

 

DATE: November 3, 2021

By:

/s/ KEITH D. TAYLOR

 

 

Keith D. Taylor

 

 

Chief Financial Officer

 

 

 

 

 

Exhibit 99.1

Equinix Reports Third Quarter 2021 Results



As the Digitization of Business Models Accelerates, Equinix Delivers Another Consecutive Quarter of Revenue Growth

REDWOOD CITY, Calif., Nov. 3, 2021 /PRNewswire/ --

  • Quarterly revenues increased 10% over the same quarter last year to $1.675 billion, or 8% on a normalized and constant currency basis, representing the company's 75th consecutive quarter of revenue growth
  • Record channel bookings accounted for more than 35% of total bookings, nearly 50% of enterprise bookings, and more than 60% of new logos in Q3
  • Interconnection revenues continued to outpace colocation revenues in Q3 with total interconnections increasing to more than 414,000
  • Significant milestones in the quarter included closing the GPX India acquisition to enter the strategic market of India and expanding the xScaleTM program with a new agreement to form a $575 million joint venture in Australia

Equinix, Inc. (Nasdaq: EQIX), the world's digital infrastructure companyTM, today reported results for the quarter ended September 30, 2021. Equinix uses certain non-GAAP financial measures, which are described further below and reconciled to the most comparable GAAP financial measures after the presentation of our GAAP financial statements. All per share results are presented on a fully diluted basis.

Third Quarter 2021 Results Summary

  • Revenues
    • $1.675 billion, a 1% increase over the previous quarter
    • Includes a $6 million negative foreign currency impact when compared to prior guidance  rates
  • Operating Income
    • $282 million, a 1% increase over the previous quarter and an operating margin of 17%
  • Adjusted EBITDA
    • $786 million, a 47% adjusted EBITDA margin
    • Includes a $3 million negative foreign currency impact when compared to prior guidance  rates
    • Includes $3 million of integration costs
  • Net Income and Net Income per Share attributable to Equinix
    • $152 million, a 123% increase over the previous quarter, primarily due to lower debt redemption costs and operating performance
    • $1.68 per share, a 121% increase over the previous quarter
  • AFFO and AFFO per Share
    • $628 million, a 1% decrease from the previous quarter, including a $13 million increase in tax expense attributable to lower debt redemption costs
    • $6.94 per share, a 1% decrease from the previous quarter
    • Includes $3 million of integration costs

2021 Annual Guidance Summary

  • Revenues
    • $6.614 - $6.634 billion, an increase of 10 - 11% over the previous year, or a normalized and constant currency increase of ~8%
    • Includes an incremental $5 million from the GPX India acquisition, offset by a $20 million negative foreign currency impact when compared to prior guidance rates
  • Adjusted EBITDA
    • $3.119 - $3.139 billion, a 47% adjusted EBITDA margin
    • Increases prior guidance by $10 million for GPX India and lower integration costs, offset by a $9 million negative foreign currency impact when compared to prior guidance rates
    • Assumes $18 million of integration costs
  • AFFO and AFFO per Share
    • $2.444 - $2.464 billion, an increase of 12 - 13% over the previous year, or a normalized and constant currency increase of 10 - 11%
    • Increases prior guidance by a net $3 million for GPX India and lower integration costs, offset by slightly higher taxes and a $3 million negative foreign currency impact when compared to prior guidance rates
    • $27.03 - $27.25 per share, an increase of 9 - 10% over the previous year on both an as-reported and a normalized and constant currency basis
    • Assumes $18 million of integration costs

Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data without unreasonable effort. The impact of such adjustments could be significant.

Equinix Quote

Charles Meyers, President and CEO, Equinix:

"The pandemic has triggered an accelerated need to digitize business models in virtually every segment of the economy, and our strong Q3 results are reflective of this increasing demand for digital services. As the world's digital infrastructure company, Equinix remains uniquely positioned to help businesses as they shift towards distributed, hybrid and multicloud as the clear architecture of choice."

Business Highlights

  • Equinix continued to extend its global platform both organically and through acquisitions, enhancing cloud and network density to offer enterprises the most robust platform for their digital infrastructure:
    • In September, Equinix completed the GPX India acquisition, providing an entry into the strategic market of India and bringing the global footprint of Platform Equinix® to 27 countries, 65 metros and more than 235 data centers.
    • 11 major data center openings and expansions were delivered in Q3, including the key markets of Frankfurt, New York and Singapore.
    • 31 additional major projects are underway across 23 markets in 16 countries.
  • The xScaleTM program continued to expand in Q3, supporting the unique needs of hyperscale companies and the increasing demand for hybrid multicloud architecture:
    • In October, Equinix announced an agreement to form a new $575 million joint venture with PGIM Real Estate to extend its xScale data center program into Australia.
    • The total investment in the xScale program, when closed and fully built out, is expected to be more than $7.5 billion across 34 facilities globally with more than 675 megawatts of power capacity. 
    • Eight xScale builds are currently under development, including newly announced projects in Madrid, Mexico City and Sydney.
  • Equinix continued the growth of its indirect selling initiatives, with channel sales contributing more than 35% of the bookings for the quarter, nearly half of enterprise bookings, and more than 60% of new logos in the quarter. Wins were across a wide range of industry verticals and use cases, with continued strength from strategic partners.

COVID-19 Update

Many of Equinix's International Business ExchangeTM (IBX®) and xScale data centers have been identified as "essential businesses" or "critical infrastructure" by local governments for purposes of remaining open during the ongoing COVID-19 pandemic, and all data centers remain operational at the time of filing of this press release. Precautionary measures have been implemented during the COVID-19 pandemic to minimize the risk of operational impact and to protect the health and safety of employees, customers, partners and communities.

Looking ahead, the full impact of the COVID-19 pandemic on the company's financial condition or results of operations remains uncertain and will depend on a number of factors, including its impact on Equinix customers, partners and vendors and the impact on, and functioning of, the global financial markets. The company's past results may not be indicative of future performance, and historical trends may differ materially. Additional information pertaining to the impact of the COVID-19 pandemic on Equinix and the company's response thereto will be provided in the upcoming Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ended September 30, 2021.

Business Outlook

For the fourth quarter of 2021, the Company expects revenues to range between $1.685 and $1.705 billion, an increase of 1 - 2% compared to the prior quarter on both an as-reported and a normalized and constant currency basis. This guidance includes a $5 million negative foreign currency impact when compared to the average FX rates in Q3 2021. This guidance includes the largest ever normalized step-up in recurring revenues in Q4, a reflection of continued strong execution, and a sequential decrease of non-recurring revenues by approximately $12 million. Adjusted EBITDA is expected to range between $762 and $782 million. Adjusted EBITDA includes a $2 million negative foreign currency impact when compared to the average FX rates in Q3 2021 and $7 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $75 and $85 million.

For the full year of 2021, total revenues are expected to range between $6.614 and $6.634 billion, a 10 - 11% increase over the previous year, or a normalized and constant currency increase of approximately 8%. This updated full year guidance includes an incremental $5 million from the GPX India acquisition, offset by a negative foreign currency impact of $20 million when compared to the prior guidance rates. Adjusted EBITDA is expected to range between $3.119 and $3.139 billion, an adjusted EBITDA margin of 47%. This updated full year guidance includes a $7 million reduction of integration costs and an incremental $3 million from the GPX India acquisition, offset by a negative foreign currency impact of $9 million when compared to the prior guidance rates. AFFO is expected to range between $2.444 and $2.464 billion, an increase of 12 - 13% over the previous year, or a normalized and constant currency increase of 10 - 11%. This updated guidance includes a net $3 million increase due to the GPX India acquisition and lower integration costs, offset by slightly higher taxes and a $3 million negative foreign currency impact when compared to the prior guidance rates. AFFO per share is expected to range between $27.03 and $27.25, an increase of 9 - 10% over the previous year, both as-reported and on a normalized and constant currency basis. Total capital expenditures are expected to range between $2.738 and $2.988 billion. Non-recurring capital expenditures, including xScale-related costs, are expected to range between $2.550 and $2.790 billion, and recurring capital expenditures are expected to range between $188 and $198 million. xScale-related on-balance sheet capital expenditures are expected to range between $425 and $475 million, which we anticipate will be reimbursed from both the current and future xScale JVs.

The U.S. dollar exchange rates used for 2021 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to $1.16 to the Euro, $1.32 to the Pound, S$1.36 to the U.S. dollar, ¥111 to the U.S. dollar, and R$5.47 to the U.S. dollar. The Q3 2021 global revenue breakdown by currency for the Euro, British Pound, Singapore Dollar, Japanese Yen and Brazilian Real is 20%, 9%, 7%, 7% and 3%, respectively.

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 2021 Results Conference Call and Replay Information

Equinix will discuss its quarterly results for the period ended September 30, 2021, along with its future outlook, in its quarterly conference call on Wednesday, November 3, 2021, at 5:30 p.m. ET (2:30 p.m. PT). A simultaneous live webcast of the call will be available on the company's Investor Relations website at www.equinix.com/investors. To hear the conference call live, please dial 1-517-308-9482 (domestic and international) and reference the passcode EQIX.

A replay of the call will be available one hour after the call through Wednesday, February 16, 2022, by dialing 1-866-373-9229 and referencing the passcode 2021. In addition, the webcast will be available at www.equinix.com/investors (no password required).

Investor Presentation and Supplemental Financial Information

Equinix has made available on its website a presentation designed to accompany the discussion of Equinix's results and future outlook, along with certain supplemental financial information and other data. Interested parties may access this information through the Equinix Investor Relations website at www.equinix.com/investors.

Additional Resources

  • Equinix Investor Relations Resources

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company, enabling digital leaders to harness a trusted platform to bring together and interconnect the foundational infrastructure that powers their success. Equinix enables today's businesses to access all the right places, partners and possibilities they need to accelerate advantage. With Equinix, they can scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value.

Non-GAAP Financial Measures

Equinix provides all information required in accordance with generally accepted accounting principles ("GAAP"), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Equinix uses non-GAAP financial measures to evaluate its operations.

Equinix provides normalized and constant currency growth rates, which are calculated to adjust for acquisitions, dispositions, integration costs, changes in accounting principles and foreign currency.

Equinix presents adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA represents income from operations excluding depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales.

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, Equinix excludes certain items that it believes are not good indicators of Equinix's current or future operating performance. These items are depreciation, amortization, accretion of asset retirement obligations and accrued restructuring charges, stock-based compensation, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales. Equinix excludes these items in order for its lenders, investors and the industry analysts who review and report on Equinix to better evaluate Equinix's operating performance and cash spending levels relative to its industry sector and competitors.

Equinix excludes depreciation expense as these charges primarily relate to the initial construction costs of a data center, and do not reflect its current or future cash spending levels to support its business. Its data centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of a data center do not recur with respect to such data center, although Equinix may incur initial construction costs in future periods with respect to additional data centers, and future capital expenditures remain minor relative to the initial investment. This is a trend it expects to continue. In addition, depreciation is also based on the estimated useful lives of the data centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our data centers and are not indicative of current or expected future capital expenditures. Therefore, Equinix excludes depreciation from its operating results when evaluating its operations.

In addition, in presenting the non-GAAP financial measures, Equinix also excludes amortization expense related to acquired intangible assets. Amortization expense is significantly affected by the timing and magnitude of acquisitions and these charges may vary in amount from period to period. We exclude amortization expense to facilitate a more meaningful evaluation of our current operating performance and comparisons to our prior periods. Equinix excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charges, as these expenses represent costs which Equinix also believes are not meaningful in evaluating Equinix's current operations. Equinix excludes stock-based compensation expense, as it can vary significantly from period to period based on share price and the timing, size and nature of equity awards. As such, Equinix and many investors and analysts exclude stock-based compensation expense to compare its operating results with those of other companies. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to Equinix's decision to exit leases for excess space adjacent to several of its IBX data centers, which it did not intend to build out, or its decision to reverse such restructuring charges. Equinix also excludes impairment charges generally related to certain long-lived assets. The impairment charges are related to expense recognized whenever events or changes in circumstances indicate that the carrying amount of assets are not recoverable. Equinix also excludes gain or loss on asset sales as it represents profit or loss that is not meaningful in evaluating the current or future operating performance. Finally, Equinix excludes transaction costs from its non-GAAP financial measures to allow more comparable comparisons of the financial results to the historical operations. The transaction costs relate to costs Equinix incurs in connection with business combinations and formation of joint ventures, including advisory, legal, accounting, valuation and other professional or consulting fees. Such charges generally are not relevant to assessing the long-term performance of Equinix. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the transactions. Management believes items such as restructuring charges, impairment charges, transaction costs and gain or loss on asset sales are non-core transactions; however, these types of costs may occur in future periods.

Equinix also presents funds from operations ("FFO") and adjusted funds from operations ("AFFO"), both commonly used in the REIT industry, as supplemental performance measures. Additionally, Equinix presents AFFO per share, which is also commonly used in the REIT industry. AFFO per share offers investors and industry analysts a perspective of Equinix's underlying operating performance when compared to other REIT companies. FFO is calculated in accordance with the definition established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents 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. AFFO represents 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, recurring capital expenditures, net income or loss from discontinued operations, net of tax and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items. Equinix excludes depreciation expense, amortization expense, accretion, stock-based compensation, restructuring charges, impairment charges and transaction costs for the same reasons that they are excluded from the other non-GAAP financial measures mentioned above.

Equinix includes an adjustment for revenues from installation fees, since installation fees are deferred and recognized ratably over the period of contract term, although the fees are generally paid in a lump sum upon installation. Equinix includes an adjustment for straight-line rent expense on its operating leases, since the total minimum lease payments are recognized ratably over the lease term, although the lease payments generally increase over the lease term. Equinix also includes an adjustment to contract costs incurred to obtain contracts, since contract costs are capitalized and amortized over the estimated period of benefit on a straight-line basis, although costs of obtaining contracts are generally incurred and paid during the period of obtaining the contracts. The adjustments for installation revenues, straight-line rent expense and contract costs are intended to isolate the cash activity included within the straight-lined or amortized results in the consolidated statement of operations. Equinix excludes the amortization of deferred financing costs and debt discounts and premiums as these expenses relate to the initial costs incurred in connection with its debt financings that have no current or future cash obligations. Equinix excludes gain or loss on debt extinguishment since it represents a cost that is not a good indicator of Equinix's current or future operating performance. Equinix includes an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances and uncertain tax positions that do not relate to the current period's operations. Equinix excludes recurring capital expenditures, which represent expenditures to extend the useful life of its IBX and xScale data centers or other assets that are required to support current revenues. Equinix also excludes net income or loss from discontinued operations, net of tax, which represents results that are not a good indicator of our current or future operating performance.

Equinix presents constant currency results of operations, which is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, Equinix has presented this non-GAAP financial measure to provide investors with an additional tool to evaluate its operating results without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Equinix's business performance. To present this information, Equinix's current and comparative prior period revenues and certain operating expenses from entities with functional currencies other than the U.S. dollar are converted into U.S. dollars at a consistent exchange rate for purposes of each result being compared.

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. Equinix presents such non-GAAP financial measures to provide investors with an additional tool to evaluate its operating results in a manner that focuses on what management believes to be its core, ongoing business operations. Management believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports and provides a better understanding of the overall performance of the business and its ability to perform in subsequent periods. Equinix believes that if it did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze Equinix effectively.

Investors should note that the non-GAAP financial measures used by Equinix may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as those of other companies. Investors should, therefore, exercise caution when comparing non-GAAP financial measures used by us to similarly titled non-GAAP financial measures of other companies. Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income or loss from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data without unreasonable effort. The impact of such adjustments could be significant. Equinix intends to calculate the various non-GAAP financial measures in future periods consistent with how they were calculated for the periods presented within this press release.

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 challenges of acquiring, operating and constructing IBX and xScale data centers and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; risks related to our taxation as a REIT and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent and upcoming Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.


EQUINIX, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)



Three Months Ended


Nine Months Ended


September
30, 2021


June 30,
2021


September
30, 2020


September
30, 2021


September
30, 2020

Recurring revenues

$

1,563,616



$

1,542,462



$

1,432,072



$

4,617,011



$

4,191,904


Non-recurring revenues

111,560



115,457



87,695



312,148



242,526


Revenues

1,675,176



1,657,919



1,519,767



4,929,159



4,434,430


Cost of revenues

885,650



865,120



767,979



2,561,987



2,243,605


Gross profit

789,526



792,799



751,788



2,367,172



2,190,825


Operating expenses:










Sales and marketing

182,997



185,610



172,727



551,434



531,301


General and administrative

334,625



322,005



279,350



958,086



797,837


Transaction costs

5,197



6,985



5,840



13,364



30,987


Impairment charges





7,306





7,306


Gain on asset sales

(15,414)



(455)



(1,785)



(14,149)



(928)


Total operating expenses

507,405



514,145



463,438



1,508,735



1,366,503


Income from operations

282,121



278,654



288,350



858,437



824,322


Interest and other income (expense):









Interest income

411



374



1,452



1,514



7,410


Interest expense

(78,943)



(87,231)



(99,736)



(255,855)



(315,554)


Other income (expense)

1,482



(39,377)



162



(44,845)



9,610


Gain (loss) on debt extinguishment

179



(102,460)



(93,494)



(115,339)



(101,803)


Total interest and other, net

(76,871)



(228,694)



(191,616)



(414,525)



(400,337)


Income before income taxes

205,250



49,960



96,734



443,912



423,985


Income tax (expense) benefit

(53,224)



18,527



(29,903)



(67,325)



(104,847)


Net income

152,026



68,487



66,831



376,587



319,138


Net (income) loss attributable to non-controlling interests

190



(148)



(144)



330



(355)


Net income attributable to Equinix

$

152,216



$

68,339



$

66,687



$

376,917



$

318,783


Net income per share attributable to Equinix:

Basic net income per share

$

1.69



$

0.76



$

0.75



$

4.21



$

3.65


Diluted net income per share

$

1.68



$

0.76



$

0.74



$

4.18



$

3.63


Shares used in computing basic net income per share

89,858



89,648



88,806



89,614



87,226


Shares used in computing diluted net income per share

90,467



90,104



89,519



90,202



87,925





EQUINIX, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)



Three Months Ended


Nine Months Ended


September
30, 2021


June 30,
2021


September
30, 2020


September
30, 2021


September
30, 2020

Net income

$

152,026



$

68,487



$

66,831



$

376,587



$

319,138


Other comprehensive income (loss), net of tax:







Foreign currency translation adjustment ("CTA") gain (loss)

(260,011)



110,466



299,441



(444,691)



66,935


Net investment hedge CTA gain (loss)

131,080



(37,036)



(227,101)



264,219



(179,213)


Unrealized gain (loss) on cash flow hedges

28,270



(5,700)



(33,842)



52,048



(54,966)


Net actuarial gain on defined benefit plans

14



15



22



41



77


Total other comprehensive income (loss), net of tax

(100,647)



67,745



38,520



(128,383)



(167,167)


Comprehensive income, net of tax

51,379



136,232



105,351



248,204



151,971


Net (income) loss attributable to non-controlling interests

190



(148)



(144)



330



(355)


Other comprehensive (income)  attributable to non-controlling interests



(11)



(30)



(10)



(21)


Comprehensive income attributable to Equinix

$

51,569



$

136,073



$

105,177



$

248,524



$

151,595





EQUINIX, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)



September 30, 2021


December 31, 2020

Assets




Cash and cash equivalents

$

1,379,100



$

1,604,869


Short-term investments



4,532


Accounts receivable, net

792,101



676,738


Other current assets

492,832



323,016


Assets held for sale

235,330




          Total current assets

2,899,363



2,609,155


Property, plant and equipment, net

15,307,049



14,503,084


Operating lease right-of-use assets

1,325,872



1,475,057


Goodwill

5,401,744



5,472,553


Intangible assets, net

1,994,023



2,170,945


Other assets

846,080



776,047


          Total assets

$

27,774,131



$

27,006,841


Liabilities and Stockholders' Equity




Accounts payable and accrued expenses

$

844,056



$

844,862


Accrued property, plant and equipment

347,003



301,155


Current portion of operating lease liabilities

150,490



154,207


Current portion of finance lease liabilities

148,522



137,683


Current portion of mortgage and loans payable

67,571



82,289


Current portion of senior notes



150,186


Other current liabilities

223,494



354,368


          Total current liabilities

1,781,136



2,024,750


Operating lease liabilities, less current portion

1,147,490



1,308,627


Finance lease liabilities, less current portion

1,986,266



1,784,816


Mortgage and loans payable, less current portion

560,733



1,287,254


Senior notes, less current portion

11,000,669



9,018,277


Other liabilities

729,264



948,999


          Total liabilities

17,205,558



16,372,723


Common stock

90



89


Additional paid-in capital

15,488,848



15,028,357


Treasury stock

(112,696)



(122,118)


Accumulated dividends

(5,902,937)



(5,119,274)


Accumulated other comprehensive loss

(1,041,761)



(913,368)


Retained earnings

2,137,219



1,760,302


          Total Equinix stockholders' equity

10,568,763



10,633,988


Non-controlling interests

(190)



130


          Total stockholders' equity

10,568,573



10,634,118


                Total liabilities and stockholders' equity

$

27,774,131



$

27,006,841






Ending headcount by geographic region is as follows:




          Americas headcount

4,971



4,599


          EMEA headcount

3,588



3,405


          Asia-Pacific headcount

2,242



2,009


                    Total headcount

10,801



10,013





EQUINIX, INC.

Summary of Debt Principal Outstanding

(in thousands)

(unaudited)



September 30, 2021


December 31, 2020





Finance lease liabilities

$

2,134,788



$

1,922,499






Term loans

555,268



1,288,779


Mortgage payable and other loans payable

73,036



80,764


Plus (minus): mortgage premium, debt discount and issuance costs, net

(1,226)



1,427


           Total mortgage and loans payable principal

627,078



1,370,970






Senior notes

11,000,669



9,168,463


Plus: debt discount and issuance costs

122,031



92,773


Less: debt premium



(186)


          Total senior notes principal

11,122,700



9,261,050






Total debt principal outstanding

$

13,884,566



$

12,554,519





EQUINIX, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)










Three Months Ended


Nine Months Ended



September
30, 2021


June 30,
2021


September
30, 2020


September
30, 2021


September
30, 2020












Cash flows from operating activities:


Net income

$

152,026



$

68,487



$

66,831



$

376,587



$

319,138



Adjustments to reconcile net income to net cash provided by operating activities:


Depreciation, amortization and accretion

419,684



417,758



362,286



1,231,760



1,048,151



Stock-based compensation

94,710



94,335



75,248



267,395



215,591



Amortization of debt issuance costs and debt discounts and premiums

4,390



4,430



3,884



12,760



11,788



(Gain) loss on debt extinguishment

(179)



102,460



93,494



115,339



101,803



Gain on asset sales

(15,414)



(455)



(1,785)



(14,149)



(928)



Impairment charges





7,306





7,306



Other items

5,932



11,296



(2,518)



28,410



18,229



Changes in operating assets and liabilities:


Accounts receivable

(53,984)



(39,709)



(23,871)



(111,313)



(38,104)



Income taxes, net

21,735



(55,661)



(32,054)



(44,200)



(20,193)



Accounts payable and accrued expenses

67,169



19,161



61,410



9,968



35,846



Operating lease right-of-use assets

40,953



20,851



38,319



102,728



114,611



Operating lease liabilities

(37,423)



(63,765)



(35,300)



(137,751)



(107,391)



Other assets and liabilities

(34,853)



20,009



(81,088)



(182,433)



(82,169)


Net cash provided by operating activities

664,746



599,197



532,162



1,655,101



1,623,678


Cash flows from investing activities:


Purchases, sales and maturities of investments, net

(52,138)



(2,595)



3,969



(73,082)



(36,312)



Business acquisitions, net of cash and restricted cash acquired

(158,498)







(158,498)



(478,248)



Real estate acquisitions

(107,212)



(33,900)



(41,895)



(194,849)



(124,462)



Purchases of other property, plant and equipment

(678,277)



(692,232)



(565,285)



(1,934,107)



(1,448,174)



Proceeds from asset sales

174,494







174,494




Net cash used in investing activities

(821,631)



(728,727)



(603,211)



(2,186,042)



(2,087,196)


Cash flows from financing activities:


Proceeds from employee equity awards

37,594





31,727



77,628



62,118



Payment of dividend distributions

(262,362)



(258,053)



(240,690)



(783,454)



(710,177)



Proceeds from public offering of common stock, net of offering costs



99,599



196,477



99,599



1,981,375



Proceeds from mortgage and loans payable









750,790



Proceeds from senior notes, net of debt discounts



2,587,910





3,878,662



2,585,736



Repayment of finance lease liabilities

(31,252)



(66,293)



(31,765)



(130,129)



(74,446)



Repayment of mortgage and loans payable

(10,367)



(675,873)



(19,431)



(706,426)



(808,609)



Repayment of senior notes



(1,400,000)



(1,947,050)



(1,990,650)



(2,440,761)



Debt extinguishment costs



(90,664)



(77,785)



(99,185)



(82,404)



Debt issuance costs



(21,950)





(25,102)



(26,266)


Net cash provided by (used in) financing activities

(266,387)



174,676



(2,088,517)



320,943



1,237,356


Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash

(7,085)



4,965



18,513



(24,139)



5,637


Net increase (decrease) in cash, cash equivalents and restricted cash

(430,357)



50,111



(2,141,053)



(234,137)



779,475


Cash, cash equivalents and restricted cash at beginning of period

1,821,915



1,771,804



4,807,141



1,625,695



1,886,613


Cash, cash equivalents and restricted cash at end of period

$

1,391,558



$

1,821,915



$

2,666,088



$

1,391,558



$

2,666,088


Supplemental cash flow information:

Cash paid for taxes

$

35,755



$

32,667



$

55,473



$

118,392



$

116,549


Cash paid for interest

$

86,466



$

128,636



$

115,174



$

316,157



$

363,767













Negative free cash flow (1)

$

(104,747)



$

(126,935)



$

(75,018)



$

(457,859)



$

(427,206)













Adjusted free cash flow (negative adjusted free cash flow) (2)

$

160,963



$

(93,035)



$

(33,123)



$

(104,512)



$

175,504













(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

$

664,746



$

599,197



$

532,162



$

1,655,101



$

1,623,678



Net cash used in investing activities as presented above

(821,631)



(728,727)



(603,211)



(2,186,042)



(2,087,196)



Purchases, sales and maturities of investments, net

52,138



2,595



(3,969)



73,082



36,312



Negative free cash flow

$

(104,747)



$

(126,935)



$

(75,018)



$

(457,859)



$

(427,206)













(2)

We define adjusted free cash flow (negative adjusted free cash flow) as free cash flow (negative free cash flow) as defined above, excluding any real estate and business acquisitions, net of cash and restricted cash acquired as presented below:


Negative free cash flow as defined above

$

(104,747)



$

(126,935)



$

(75,018)



$

(457,859)



$

(427,206)



Less business acquisitions, net of cash and restricted cash acquired

158,498







158,498



478,248



Less real estate acquisitions

107,212



33,900



41,895



194,849



124,462



Adjusted free cash flow (negative adjusted free cash flow)

$

160,963



$

(93,035)



$

(33,123)



$

(104,512)



$

175,504





EQUINIX, INC.

Non-GAAP Measures and Other Supplemental Data

(in thousands)

(unaudited)




Three Months Ended


Nine Months Ended



September 30,
2021


June 30, 2021


September 30,
2020


September 30,
2021


September 30,
2020


Recurring revenues

$

1,563,616


$

1,542,462


$

1,432,072


$

4,617,011


$

4,191,904


Non-recurring revenues

111,560


115,457


87,695


312,148


242,526


Revenues (1)

1,675,176


1,657,919


1,519,767


4,929,159


4,434,430













Cash cost of revenues (2)

564,499


544,196


494,187


1,619,505


1,451,674


Cash gross profit (3)

1,110,677


1,113,723


1,025,580


3,309,654


2,982,756













Cash operating expenses (4)(7):










Cash sales and marketing expenses (5)

114,112


115,282


106,317


342,447


332,995


Cash general and administrative expenses (6)

210,267


201,164


182,018


610,400


508,265


Total cash operating expenses (4)(7)

324,379


316,446


288,335


952,847


841,260













Adjusted EBITDA (8)

$

786,298


$

797,277


$

737,245


$

2,356,807


$

2,141,496













Cash gross margins (9)

66

%


67

%


67

%


67

%


67

%













Adjusted EBITDA margins(10)

47

%


48

%


49

%


48

%


48

%













Adjusted EBITDA flow-through rate (11)

(64)

%


39

%


35

%


50

%


48

%













FFO (12)

$

407,981


$

340,873


$

298,183


$

1,166,117


$

998,883













AFFO (13)(14)

$

628,270


$

631,937


$

579,682


$

1,887,035


$

1,672,180













Basic FFO per share (15)

$

4.54


$

3.80


$

3.36


$

13.01


$

11.45













Diluted FFO per share (15)

$

4.51


$

3.78


$

3.33


$

12.93


$

11.36













Basic AFFO per share (15)

$

6.99


$

7.05


$

6.53


$

21.06


$

19.17













Diluted AFFO per share (15)

$

6.94


$

7.01


$

6.48


$

20.92


$

19.02



































































(1)

The geographic split of our revenues on a services basis is presented below:

















Americas Revenues:






















Colocation

$

504,711


$

497,659


$

450,030


$

1,489,829


$

1,348,482


Interconnection

168,511


167,618


156,677


501,016


460,993


Managed infrastructure

43,313


40,734


28,954


122,532


83,372


Other

4,757


451


3,911


7,246


14,212


Recurring revenues

721,292


706,462


639,572


2,120,623


1,907,059


Non-recurring revenues

41,761


44,181


32,760


119,013


88,597


Revenues

$

763,053


$

750,643


$

672,332


$

2,239,636


$

1,995,656













EMEA Revenues:






















Colocation

$

400,395


$

398,703


$

391,773


$

1,187,373


$

1,135,247


Interconnection

65,809


65,258


55,700


192,717


155,145


Managed infrastructure

31,445


31,176


30,690


94,732


89,839


Other

5,639


3,682


5,581


14,367


14,177


Recurring revenues

503,288


498,819


483,744


1,489,189


1,394,408


Non-recurring revenues

41,939


39,110


34,339


112,684


90,674


Revenues

$

545,227


$

537,929


$

518,083


$

1,601,873


$

1,485,082













Asia-Pacific Revenues:






















Colocation

$

259,092


$

259,573


$

236,762


$

773,223


$

686,658


Interconnection

56,789


54,898


48,565


164,869


136,376


Managed infrastructure

21,572


22,094


22,614


66,415


66,588


Other

1,583


616


815


2,692


815


Recurring revenues

339,036


337,181


308,756


1,007,199


890,437


Non-recurring revenues

27,860


32,166


20,596


80,451


63,255


Revenues

$

366,896


$

369,347


$

329,352


$

1,087,650


$

953,692













Worldwide Revenues:






















Colocation

$

1,164,198


$

1,155,935


$

1,078,565


$

3,450,425


$

3,170,387


Interconnection

291,109


287,774


260,942


858,602


752,514


Managed infrastructure

96,330


94,004


82,258


283,679


239,799


Other

11,979


4,749


10,307


24,305


29,204


Recurring revenues

1,563,616


1,542,462


1,432,072


4,617,011


4,191,904


Non-recurring revenues

111,560


115,457


87,695


312,148


242,526


Revenues

$

1,675,176


$

1,657,919


$

1,519,767


$

4,929,159


$

4,434,430


































(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

$

885,650


$

865,120


$

767,979


$

2,561,987


$

2,243,605


Depreciation, amortization and accretion expense

(311,438)


(310,916)


(265,936)


(914,294)


(767,077)


Stock-based compensation expense

(9,713)


(10,008)


(7,856)


(28,188)


(24,854)


Cash cost of revenues

$

564,499


$

544,196


$

494,187


$

1,619,505


$

1,451,674













The geographic split of our cash cost of revenues is presented below:

















Americas cash cost of revenues

$

239,172


$

234,679


$

196,731


$

667,311


$

576,431


EMEA cash cost of revenues

204,174


196,661


189,423


600,018


554,229


Asia-Pacific cash cost of revenues

121,153


112,856


108,033


352,176


321,014


Cash cost of revenues

$

564,499


$

544,196


$

494,187


$

1,619,505


$

1,451,674






(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

$

517,622


$

507,615


$

452,077


$

1,509,520


$

1,329,138


Depreciation and amortization expense

(108,246)


(106,842)


(96,350)


(317,466)


(281,074)


Stock-based compensation expense

(84,997)


(84,327)


(67,392)


(239,207)


(206,804)


Cash operating expense

$

324,379


$

316,446


$

288,335


$

952,847


$

841,260












(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

$

182,997


$

185,610


$

172,727


$

551,434


$

531,301


Depreciation and amortization expense

(48,320)


(49,549)


(48,780)


(149,940)


(143,916)


Stock-based compensation expense

(20,565)


(20,779)


(17,630)


(59,047)


(54,390)


Cash sales and marketing expense

$

114,112


$

115,282


$

106,317


$

342,447


$

332,995












(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

$

334,625


$

322,005


$

279,350


$

958,086


$

797,837


Depreciation and amortization expense

(59,926)


(57,293)


(47,570)


(167,526)


(137,158)


Stock-based compensation expense

(64,432)


(63,548)


(49,762)


(180,160)


(152,414)


Cash general and administrative expense

$

210,267


$

201,164


$

182,018


$

610,400


$

508,265












(7)

The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below:













Americas cash SG&A

$

202,113


$

190,040


$

185,051


$

580,141


$

532,955


EMEA cash SG&A

73,500


78,742


65,444


228,213


193,882


Asia-Pacific cash SG&A

48,766


47,664


37,840