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Equinix Reports $1.385B Quarterly Revenue, Up 10% YoY

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7/31/2019
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REDWOOD CITY, Calif.

  • Quarterly revenues increased 10% year-over-year, both on an as-reported and normalized and constant currency basis, to $1.385 billion
  • Customer deployments across multiple regions increased to 73% of total recurring revenue, demonstrating the value of Equinix's global platform
  • Interconnection revenue growth continues to outpace colocation revenue growth, as global ecosystems continue to scale
  • The portfolio of interconnection services on Platform Equinix expanded with the launch of Network Edge, a new service enabling customers to deploy virtual network services at Equinix

Equinix, Inc., the global interconnection and data center company, today reported results for the quarter ended June 30, 2019. 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.

Second Quarter 2019 Results Summary

Revenues

  • $1.385 billion, a 2% increase over the previous quarter

Operating Income

  • $292 million, a 4% increase over the previous quarter, an operating margin of 21%

Adjusted EBITDA

  • $677 million, a 49% adjusted EBITDA margin, a 3% increase over the previous quarter
  • Includes $3 million of integration costs

Net Income and Net Income per Share attributable to Equinix

  • $144 million, a 22% increase over the previous quarter
  • $1.69 per share, a 17% increase over the previous quarter

AFFO and AFFO per Share

  • $498 million, a 2% increase over the previous quarter
  • $5.87 per share
  • Includes $3 million of integration costs

2019 Annual Guidance Summary

Revenues

  • $5.565 - $5.595 billion, a normalized and constant currency increase of 9% over the previous year, and a $10 million increase compared to prior guidance at the mid-point

Adjusted EBITDA

  • $2.660 - $2.690 billion, a 48% adjusted EBITDA margin, and a $15 million increase compared to prior guidance at the mid-point
    • Assumes $11 million of integration costs

AFFO and AFFO per Share

  • $1.910 - $1.930 billion, a normalized and constant currency increase of 13 - 14% over the previous year, and a $25 million increase compared to prior guidance at the mid-point
  • $22.57 - 22.81 per share, a normalized and constant currency increase of 8 - 9% over the previous year, and a $0.14 increase compared to prior guidance at the mid-point, including the impact of the Q2 ATM equity program activity
  • Assumes $11 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.

Business Outlook
The business outlook includes the expected impact of the EMEA hyperscale joint venture expected to close in the third quarter; including the reduction in revenue, adjusted EBITDA and AFFO due to the sale of both LD10 and PA8 to the joint venture, net of the fees earned, lease payments incurred by Equinix and AFFO contribution from Equinix's 20% non-controlling interest in the joint venture.

For the third quarter of 2019, the Company expects revenues to range between $1.399 and $1.409 billion, an increase of 1% quarter-over-quarter, at the mid-point of guidance on both an as-reported and a normalized and constant currency basis, taking into consideration the net impact of the EMEA hyperscale joint venture. This guidance includes a positive foreign currency benefit of $8 million when compared to the average FX rates in Q2 2019. Adjusted EBITDA is expected to range between $665 and $675 million, including the higher seasonal cost of revenues, and includes a $4 million positive foreign currency benefit when compared to the average FX rates in Q2 2019 and $4 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $52 and $62 million, a meaningful and as-expected step up over the prior two quarters.

For the full year of 2019, total revenues are expected to range between $5.565 and $5.595 billion, a 10% increase over the previous year or a normalized and constant currency increase of 9% at the mid-point. This $10 million increase from previously issued guidance is due to $12 million of better than expected operating business performance and a $5 million positive foreign currency benefit when compared to prior guidance rates, offset in part by a $7 million reduction from the net impact of the EMEA hyperscale joint venture. Adjusted EBITDA is expected to range between $2.660 and $2.690 billion, an adjusted EBITDA margin of 48%. This $15 million increase from previously issued guidance is due to $19 million of better than expected operating business performance, a $2 million reduction of integration costs and a $1 million positive foreign currency benefit when compared to prior guidance rates, offset in part by a $7 million reduction from the net impact of the EMEA hyperscale joint venture. AFFO is expected to range between $1.910 and $1.930 billion, a 15 - 16% increase over the previous year or a normalized and constant currency increase of 13 - 14%. This $25 million increase from previously issued guidance is due to $17 millionof better than expected operating business performance, a $2 million reduction of integration costs and an $11 million positive foreign currency benefit when compared to prior guidance rates, offset in part by a $5 million reduction from the net impact of the EMEA hyperscale joint venture. AFFO per share is expected to range between $22.57 - 22.81, a 9 - 10% increase over the previous year or a normalized and constant currency increase of 8 - 9%, after taking into consideration the equity financing activity over the first half of the year. Non-recurring capital expenditures are expected to range between $1.730 and $1.920 billion, and recurring capital expenditures are expected to range between $170 and $180 million.

Equinix Inc. (Nasdaq: EQIX)

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