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Equinix full-year financials buoyed by new services

Data center firm Equinix, which bullishly describes itself as the "world's digital infrastructure company," posted a fairly robust set of full-year and Q4 results for 2020.

True, there was a hit to full-year operating income – down 10% through 2020 compared with the previous year, to a shade over $1 billion – but that was partly due to increased costs related to acquisitions.

Equinix purchased the data center assets of Canada's BCE for $750 million in mid-2020 and stumped up $335 million for Packet, a bare metal automation platform, in January 2020.

New services, more expansion

Full-year revenue was just shy of $6 billion, an 8% increase over the previous year. Top-line growth was fueled by the introduction of new services over the Equinix Platform.

Building on the acquisition of Packet, Equinix launched last October "Equinix Metal." The service is pitched as a "fully automated and interconnected" bare metal service, allowing digital businesses to build their own "foundational infrastructures."

Other new services in 2020 included "Equinix Fabric," which allows users to quickly and easily connect to any other customer on Platform Equinix, and "Equinix Network Edge."

"[Full-year] interconnection revenues grew 14% year-over-year, driven by strong adoption of Equinix Fabric and solid interconnection adds," remarked Equinix CEO Charles Meyers in the company's earnings conference call with analysts, as transcribed by Motley Fool.


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"Equinix Metal," he added, "demonstrated solid momentum and is now available in eight global metros, with plans for an additional 10 markets early this year."

Myers flagged that Equinix closed over 17,500 deals and completed 16 new expansions in 2020 – "our most active build year ever" – and added an incremental 7,700 interconnections during Q4. This number, claimed the CEO, was "more than our top 15 competitors combined."

New expansions planned in 2021 include Geneva, Genoa, Madrid, Manchester, Muscat, New York and Osaka metros, with 44 large projects already underway across 30 markets and 20 countries.

Q4 was also a good quarter for channel bookings, accounting for more than 35% of total bookings in 2020.

Outlook promises continued top-line growth

For the first quarter of 2021, Equinix expects revenues to range between $1.59 billion and $1.61 billion, which is an increase of 2% quarter-over-quarter at the midpoint (or approximately 1% on a constant currency basis).

For full-year 2021, total revenues are expected to range between $6.58 billion and $6.64 billion, a 10% or 11% increase over the previous year (or 7% or 8% when currency fluctuations are stripped out).

Adjusted EBITDA is expected to range between $3.067 and $3.127 billion, with an adjusted EBITDA margin of 47%. This metric registered $2.85 billion (48% margin) in 2020, up from $2.69 billion in 2019.

— Ken Wieland, contributing editor, special to Light Reading

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