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Equinix Reports Third-Quarter 2023 Results

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Equinix reports Q3 2023 results with a 12% increase in quarterly revenues and a 14% increase in operating income. The company closed 4,200 deals in Q3 and increased its quarterly cash dividend by 25%. Equinix provides annual guidance for 2023 with expected revenue and AFFO per share increases.
Positive
  • Equinix reports a 12% increase in quarterly revenues and a 14% increase in operating income for Q3 2023. The company closed 4,200 deals and increased its quarterly cash dividend by 25%. Equinix provides annual guidance for 2023 with expected revenue and AFFO per share increases.
Negative
  • None.

REDWOOD CITY, Calif., Oct. 25, 2023 /PRNewswire/ --

  • Quarterly revenues increased 12% over the same quarter last year to $2.1 billion, or 14% on a normalized and constant currency basis
  • Closed 4,200 deals in Q3 across more than 3,100 customers, including record new logos from high-propensity, targeted customers
  • Channel bookings accounted for over 65% of new logos with wins focused on digital transformation initiatives
  • Increased quarterly cash dividend by 25% to $4.26 per share on its common stock due to continued strong operating performance

Equinix, Inc. (Nasdaq: EQIX), the world's digital infrastructure company®, today reported results for the quarter ended September 30, 2023. 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 2023 Results Summary

  • Revenues
    • $2.06 billion, a 12% increase over the same quarter last year
    • Includes a $1 million negative foreign currency impact when compared to prior guidance rates
  • Operating Income
    • $380 million, a 14% increase over the same quarter last year, due to strong operating performance and an operating margin of 18%
  • Net Income and Net Income per Share attributable to Equinix
    • $276 million, a 30% increase over the same quarter last year, primarily due to higher income from operations and a favorable tax settlement
    • $2.93 per share, a 27% increase from the same quarter last year
  • Adjusted EBITDA
    • $936 million, a 7% increase over the same quarter last year, and an adjusted EBITDA margin of 45%
    • Includes a $1 million negative foreign currency impact when compared to prior guidance rates and $2 million of integration costs
  • AFFO and AFFO per Share
    • $772 million, an 8% increase over the same quarter last year
    • $8.19 per share, a 6% increase over the same quarter last year

2023 Annual Guidance Summary

  • Revenues
    • $8.166 - $8.206 billion, an increase of 12 - 13% over the previous year, or a normalized and constant currency increase of 14 - 15%
    • Includes a $25 million negative foreign currency impact compared to prior guidance rates
  • Adjusted EBITDA
    • $3.680 - $3.710 billion, a 45% adjusted EBITDA margin
    • An increase of $17 million compared to prior guidance offset by a $12 million negative foreign currency impact
    • Includes $15 million of integration costs
  • AFFO and AFFO per Share
    • $2.996 - $3.026 billion, an increase of 10 - 12% over the previous year, or a normalized and constant currency increase of 12 - 14%
    • An increase of $27 million compared to prior guidance offset by a $9 million negative foreign currency impact
    • $31.87 - $32.19 per share, an increase of 8 - 9% over the previous year, or a normalized and constant currency increase of 10 - 11%

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:

"We delivered another solid quarter of results and continue to drive strong value creation on a per share basis, raising both our dividend and AFFO/share outlook for the full year. A recent Gartner poll found 55% of organizations are in pilot or production mode with generative AI.1 We're seeing this manifest in accelerated interest from both enterprise customers and emerging service providers looking to service this demand. We expect Equinix's broad portfolio of offerings, in tandem with our key technology partners, will allow us to capture high-value opportunities across the AI value chain, positioning Platform Equinix to be the place where private AI happens and allowing customers to place compute resources in proximity to data and seamlessly leverage public cloud capabilities while maintaining control of high-value proprietary data."

Business Highlights

  • Given strong demand signals and the long duration in delivering new capacity, Equinix continues to expand its global footprint. The company currently has 56 major projects underway across 39 markets in 23 countries, including 14 xScale® builds that are expected to deliver more than 100 megawatts of capacity once opened.
    • In Q3, Equinix added nine new projects, including new builds in Madrid, Osaka, São Paulo and Silicon Valley.
    • More than 50% of expansion capital investment is supporting major metros as the company builds in highly differentiated and scaled markets.
    • To support India's growing digital economy, which is expected to reach $1 trillion by 20262, Equinix announced an investment of $42 million for its fourth International Business Exchange™ (IBX®) data center in Mumbai, called MB4. Expected to open before the end of the year, the new facility will allow local and overseas businesses to expand their digital capability as a foundation to accelerate digital transformation in India.
    • As AI demand accelerates, Equinix is innovating to build the data center of the future, using its Co-Innovation facility in Ashburn, Virginia, to evaluate technologies to support escalating power requirements including supporting high-power-density AI deployments with liquid cooling technologies—such as direct-to-chip, immersion and rear door heat exchangers. The company can support liquid-cooled deployments across all markets, including support for direct-to-chip liquid cooling in 45 markets across all three regions, with live liquid-cooled deployments across a range of deployment sizes and densities.
  • Equinix continues to invest behind its platform strategy with revenue growth from its digital services portfolio over-indexing the broader business, including strong adoption of Equinix's Network Edge offering by enterprise customers.
    • Equinix's global interconnection franchise continues to perform with over 460,000 total interconnections. Equinix Fabric® saw continued momentum with record port orders, and Equinix Internet Exchange® had another strong quarter with peak traffic reaching nearly 35 terabits per second.
    • Earlier this month, Equinix and NetApp announced an expanded collaboration with the release of NetApp Storage on Equinix Metal which is an integrated, full stack solution that provides enterprise customers low-latency access to all clouds while keeping control of their data.
    • With nearly 40% market share of cloud on-ramps in markets where it operates, Equinix is well-positioned with key players in the AI ecosystem, and in August, Equinix was recognized as a 2023 Google Cloud Customer Awards winner for the company's work supporting Google AI technology.
  • In September, Equinix expanded its relationship with Southern Cross Cables Limited to provide a key U.S.-based interconnectivity access point for the Southern Cross NEXT ("SX NEXT") submarine cable system. SX NEXT is leveraging Equinix's next-generation cable landing station architecture in its LA4 Los Angeles IBX data center to boost aggregate capacity on Southern Cross' Trans-Pacific networks by 500%.
  • Earlier this month, Equinix announced that the Warsaw Stock Exchange is migrating its primary matching engine and trading system to Equinix to offer more capabilities and enhanced trading performance.
  • Adam Berlew was appointed Chief Marketing Officer in September. With more than 25 years' experience in strategic marketing and global leadership roles, Berlew returns to Equinix after previously serving as Vice President of Global Marketing from 2012 to 2015. He joins Equinix's Customer and Revenue leadership team and will be accountable for driving customer acquisition and revenue growth through effective marketing strategies that align with the company's vision for Platform Equinix®.





1

Gartner, Press Release, "Gartner Poll Finds 55% of Organizations are in Piloting or Production Mode with Generative AI," October 3, 2023.

2

The Times of India, "We plan to make India $1 trillion digital economy by 2026: Minister Rajeev Chandrasekhar," March 10, 2023.




GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. The Gartner content described herein, (the "Gartner Content") represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Gartner Content speaks as of its original publication date (and not as of the date of this press release) and the opinions expressed in the Gartner Content are subject to change without notice.

Business Outlook

For the fourth quarter of 2023, the Company expects revenues to range between $2.088 and $2.128 billion, an increase of approximately 1 - 3% over the previous quarter, or a normalized and constant currency increase of 3 - 4%. This guidance includes a $26 million negative foreign currency impact when compared to the average FX rates in Q3 2023. Adjusted EBITDA is expected to range between $899 and $929 million. This guidance includes specific one-time costs attributed to corporate real estate activities,  a $13 million negative foreign currency impact when compared to the average FX rates in Q3 2023 and $5 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $100 and $120 million.

For the full year of 2023, total revenues are expected to range between $8.166 and $8.206 billion, a 12 - 13% increase over the previous year, or a normalized and constant currency increase of 14 - 15%. This updated guidance maintains prior full year revenue guidance, offset by a $25 million negative foreign currency impact when compared to the prior guidance rates. Adjusted EBITDA is expected to range between $3.680 and $3.710 billion, an adjusted EBITDA margin of 45%. This updated guidance includes an underlying raise of $17 million from better-than-expected operating performance and lower integration costs, offset by a $12 million negative foreign currency impact when compared to prior guidance rates. AFFO is expected to range between $2.996 and $3.026 billion, an increase of 10 - 12% over the previous year, or a normalized and constant currency increase of 12 - 14%. This updated guidance includes an underlying raise of $27 million from better-than-expected business performance and lower integration costs, partially offset by a $9 million negative foreign currency impact when compared to prior guidance rates. AFFO per share is expected to range between $31.87 and $32.19, an increase of 8 - 9% over the previous year, or a normalized and constant currency increase of 10 - 11%. Total capital expenditures are expected to range between $2.675 and $2.925 billion. Non-recurring capital expenditures, including xScale-related capital expenditures, are expected to range between $2.462 and $2.692 billion, and recurring capital expenditures are expected to range between $213 and $233 million. xScale-related on-balance sheet capital expenditures are expected to range between $191 and $241 million, which we anticipate will be reimbursed to Equinix from both the current and future xScale JVs.

The U.S. dollar exchange rates used for 2023 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to $1.09 to the Euro, $1.19 to the Pound, S$1.37 to the U.S. Dollar, ¥149 to the U.S. Dollar, A$1.56 to the U.S. Dollar, HK$7.83 to the U.S. Dollar, R$5.03 to the U.S. Dollar and C$1.36 to the U.S. Dollar. The Q3 2023 global revenue breakdown by currency for the Euro, British Pound, Singapore Dollar, Japanese Yen, Australian Dollar, Hong Kong Dollar, Brazilian Real and Canadian Dollar is 20%, 11%, 8%, 5%, 4%, 3%, 3% 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 2023 Results Conference Call and Replay Information

Equinix will discuss its quarterly results for the period ended September 30, 2023, along with its future outlook, in its quarterly conference call on Wednesday, October 25, 2023, 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 14, 2024, by dialing 1-888-566-0097 and referencing the passcode 2023. 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

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company®. Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.

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 net income excluding income tax expense, interest income, interest expense, other income or expense, gain or loss on debt extinguishment, 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, stock-based charitable contributions, 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 current inflationary environment; foreign currency exchange rate fluctuations; increased costs to procure power and the general volatility in the global energy market; the challenges of acquiring, operating and constructing IBX and xScale data centers and developing, deploying and delivering 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, 2023


June 30, 2023


September 30, 2022


September 30, 2023


September 30, 2022

Recurring revenues

$ 1,961,043


$   1,917,570


$ 1,748,132


$ 5,768,693


$ 5,097,907

Non-recurring revenues

99,987


100,838


92,527


308,954


294,353

Revenues

2,061,030


2,018,408


1,840,659


6,077,647


5,392,260

Cost of revenues

1,068,991


1,060,800


934,669


3,135,882


2,780,801

Gross profit

992,039


957,608


905,990


2,941,765


2,611,459

Operating expenses:










Sales and marketing

212,506


215,016


193,089


638,193


579,327

General and administrative

403,890


406,429


375,483


1,205,193


1,098,518

Transaction costs

(775)


5,718


2,007


6,543


11,310

(Gain) loss on asset sales

(3,933)


(1,941)


2,252


(5,022)


3,976

Total operating expenses

611,688


625,222


572,831


1,844,907


1,693,131

Income from operations

380,351


332,386


333,159


1,096,858


918,328

Interest and other expense:









Interest income

23,111


23,503


11,192


66,002


17,806

Interest expense

(101,385)


(99,973)


(91,346)


(298,839)


(262,137)

Other expense

(5,972)


(11,518)


(6,735)


(9,987)


(22,522)

Gain (loss) on debt extinguishment

(360)


—


75


(106)


184

Total interest and other, net

(84,606)


(87,988)


(86,814)


(242,930)


(266,669)

Income before income taxes

295,745


244,398


246,345


853,928


651,659

Income tax expense

(19,985)


(37,385)


(34,606)


(112,425)


(75,985)

Net income

275,760


207,013


211,739


741,503


575,674

Net (income) loss attributable to non-controlling interests

34


17


68


107


(92)

Net income attributable to Equinix

$     275,794


$      207,030


$     211,807


$     741,610


$     575,582

Net income per share attributable to Equinix:

Basic net income per share

$           2.94


$             2.21


$           2.30


$           7.94


$           6.31

Diluted net income per share

$           2.93


$             2.21


$           2.30


$           7.91


$           6.29

Shares used in computing basic net income per share

93,683


93,535


91,896


93,396


91,234

Shares used in computing diluted net income per share

94,168


93,857


92,135


93,788


91,519

 

EQUINIX, INC.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)



Three Months Ended


Nine Months Ended


September 30, 2023


June 30, 2023


September 30, 2022


September 30, 2023


September 30, 2022

Net income

$     275,760


$     207,013


$     211,739


$     741,503


$     575,674

Other comprehensive loss, net of tax:







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

(412,910)


25,923


(703,640)


(229,773)


(1,566,602)

Net investment hedge CTA gain (loss)

149,608


(24,186)


360,350


85,462


805,661

Unrealized gain (loss) on cash flow hedges

25,685


(4,792)


6,120


8,012


90,774

Net actuarial loss on defined benefit plans

(119)


(116)


(19)


(350)


(59)

Total other comprehensive loss, net of tax

(237,736)


(3,171)


(337,189)


(136,649)


(670,226)

Comprehensive income (loss), net of tax

38,024


203,842


(125,450)


604,854


(94,552)

Net (income) loss attributable to non-controlling interests

34


17


68


107


(92)

Other comprehensive (income) loss attributable to non-controlling interests

182


(97)


28


85


60

Comprehensive income (loss) attributable to Equinix

$       38,240


$     203,762


$   (125,354)


$     605,046


$     (94,584)

 

EQUINIX, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)



September 30, 2023


December 31, 2022

Assets




Cash and cash equivalents

$                  2,357,497


$              1,906,421

Accounts receivable, net

1,030,694


855,380

Other current assets

497,189


459,138

Assets held for sale

—


84,316

          Total current assets

3,885,380


3,305,255

Property, plant and equipment, net

17,370,577


16,649,534

Operating lease right-of-use assets

1,516,011


1,427,950

Goodwill

5,589,124


5,654,217

Intangible assets, net

1,730,538


1,897,649

Other assets

1,592,972


1,376,137

          Total assets

$                31,684,602


$            30,310,742

Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity




Accounts payable and accrued expenses

$                  1,058,235


$              1,004,800

Accrued property, plant and equipment

363,549


281,347

Current portion of operating lease liabilities

135,636


139,538

Current portion of finance lease liabilities

133,360


151,420

Current portion of mortgage and loans payable

8,211


9,847

Other current liabilities

194,700


251,346

          Total current liabilities

1,893,691


1,838,298

Operating lease liabilities, less current portion

1,399,852


1,272,812

Finance lease liabilities, less current portion

2,121,382


2,143,690

Mortgage and loans payable, less current portion

637,625


642,708

Senior notes, less current portion

12,945,222


12,109,539

Other liabilities

775,271


797,863

          Total liabilities

19,773,043


18,804,910

Redeemable non-controlling interest

25,000


—

          Equinix stockholders' equity:




Common stock

94


93

Additional paid-in capital

18,051,150


17,320,017

Treasury stock

(57,199)


(71,966)

Accumulated dividends

(8,287,599)


(7,317,570)

Accumulated other comprehensive loss

(1,526,010)


(1,389,446)

Retained earnings

3,706,448


2,964,838

          Total Equinix stockholders' equity

11,886,884


11,505,966

Non-controlling interests

(325)


(134)

          Total stockholders' equity

11,886,559


11,505,832

                Total liabilities, redeemable non-controlling interest and stockholders' equity

$                31,684,602


$            30,310,742





Ending headcount by geographic region is as follows:




          Americas headcount

5,949


5,493

          EMEA headcount

4,215


3,936

          Asia-Pacific headcount

2,882


2,668

                    Total headcount

13,046


12,097

 

EQUINIX, INC.
Summary of Debt Principal Outstanding
(in thousands)
(unaudited)



September 30, 2023


December 31, 2022





Finance lease liabilities

$                 2,254,742


$                 2,295,110





Term loans

616,056


618,028

Mortgage payable and other loans payable

29,780


34,527

Plus: debt discount and issuance costs, net

777


1,062

           Total loans payable principal

646,613


653,617





Senior notes

12,945,222


12,109,539

Plus: debt discount and issuance costs

111,573


117,351

          Total senior notes principal

13,056,795


12,226,890





Total debt principal outstanding

$              15,958,150


$              15,175,617

 

EQUINIX, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)




Three Months Ended


Nine Months Ended



September 30, 2023


June 30, 2023


September 30, 2022


September 30, 2023


September 30, 2022












Cash flows from operating activities:


Net income

$    275,760


$    207,013


$    211,739


$    741,503


$    575,674


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


Depreciation, amortization and accretion

466,613


459,746


431,668


1,381,298


1,300,882


Stock-based compensation

98,446


104,546


101,830


301,707


296,464


Amortization of debt issuance costs and debt discounts

4,684


4,653


4,533


13,927


13,273


(Gain) loss on debt extinguishment

360


—


(75)


106


(184)


(Gain) loss on asset sales

(3,933)


(1,941)


2,252


(5,022)


3,976


Other items

12,776


20,465


10,536


42,242


22,418


Changes in operating assets and liabilities:


Accounts receivable

(47,147)


(99,164)


29,823


(199,703)


(97,206)


Income taxes, net

(14,530)


2,954


29,656


(6,585)


9,874


Accounts payable and accrued expenses

69,082


88,632


103,941


84,949


83,089


Operating lease right-of-use assets

39,977


42,337


38,684


117,080


112,923


Operating lease liabilities

(33,654)


(31,723)


(31,873)


(98,964)


(98,245)


Other assets and liabilities

(83,259)


(56,220)


(112,425)


(154,657)


(19,945)

Net cash provided by operating activities

785,175


741,298


820,289


2,217,881


2,202,993

Cash flows from investing activities:


Purchases, sales and maturities of investments, net

(26,664)


(30,290)


(22,398)


(81,347)


(87,347)


Business acquisitions, net of cash and restricted cash acquired

—


—


(80,342)


—


(964,010)


Real estate acquisitions

(112,896)


—


(6,568)


(153,293)


(39,899)


Purchases of other property, plant and equipment

(617,539)


(638,159)


(552,729)


(1,785,298)


(1,450,077)


Proceeds from asset sales

4,682


—


(1,509)


76,936


249,906

Net cash used in investing activities

(752,417)


(668,449)


(663,546)


(1,943,002)


(2,291,427)

Cash flows from financing activities:


Proceeds from employee equity programs

42,420


—


37,667


86,963


81,543


Proceeds from redeemable non-controlling interest

—


25,000


—


25,000


—


Payment of dividend distributions

(324,587)


(320,243)


(291,169)


(970,992)


(863,886)


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

—


—


796,018


300,775


796,018


Proceeds from mortgage and loans payable

—


—


—


—


676,850


Proceeds from senior notes, net of debt discounts

336,853


—


—


902,092


1,193,688


Repayment of finance lease liabilities

(31,629)


(30,964)


(28,252)


(98,091)


(97,808)


Repayment of mortgage and loans payable

(2,133)


(1,020)


(25,195)


(5,556)


(586,227)


Debt issuance costs

(2,982)


—


—


(7,239)


(17,731)

Net cash provided by (used in) financing activities

17,942


(327,227)


489,069


232,952


1,182,447

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

(35,027)


(46,681)


(39,063)


(57,825)


(135,599)

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

15,673


(301,059)


606,749


450,006


958,414

Cash, cash equivalents and restricted cash at beginning of period

2,342,581


2,643,640


1,901,119


1,908,248


1,549,454

Cash, cash equivalents and restricted cash at end of period

$ 2,358,254


$ 2,342,581


$ 2,507,868


$ 2,358,254


$ 2,507,868

Supplemental cash flow information:

Cash paid for taxes

$      42,021


$      35,345


$      22,462


$    126,326


$      96,221

Cash paid for interest

$      97,152


$    134,176


$      91,406


$    335,232


$    301,706












Free cash flow (negative free cash flow) (1)

$      59,422


$    103,139


$    179,141


$    356,226


$       (1,087)












Adjusted free cash flow (2)

$    172,318


$    103,139


$    266,051


$    509,519


$ 1,002,822












(1)

We define free cash flow (negative free cash flow) as net cash provided by operating activities plus net cash 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

$    785,175


$    741,298


$    820,289


$ 2,217,881


$ 2,202,993


Net cash used in investing activities as presented above

(752,417)


(668,449)


(663,546)


(1,943,002)


(2,291,427)


Purchases, sales and maturities of investments, net

26,664


30,290


22,398


81,347


87,347


Free cash flow (negative free cash flow)

$      59,422


$    103,139


$    179,141


$    356,226


$       (1,087)












(2)

We define 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:


Free cash flow (negative free cash flow) as defined above

$      59,422


$    103,139


$    179,141


$    356,226


$       (1,087)


Less business acquisitions, net of cash and restricted cash acquired

—


—


80,342


—


964,010


Less real estate acquisitions

112,896


—


6,568


153,293


39,899


Adjusted free cash flow

$    172,318


$    103,139


$    266,051


$    509,519


$ 1,002,822

 

EQUINIX, INC.
Non-GAAP Measures and Other Supplemental Data
(in thousands)
(unaudited)




Three Months Ended


Nine Months Ended



September 30, 2023


June 30, 2023


September 30, 2022


September 30, 2023


September 30, 2022


Recurring revenues

$  1,961,043


$  1,917,570


$  1,748,132


$  5,768,693


$  5,097,907


Non-recurring revenues

99,987


100,838


92,527


308,954


294,353


Revenues (1)

2,061,030


2,018,408


1,840,659


6,077,647


5,392,260













Cash cost of revenues (2)

725,750


720,796


610,827


2,112,524


1,793,898


Cash gross profit (3)

1,335,280


1,297,612


1,229,832


3,965,123


3,598,362













Cash operating expenses (4)(7):










Cash sales and marketing expenses (5)

138,879


141,241


120,467


420,430


365,912


Cash general and administrative expenses (6)

260,470


255,201


238,449


763,309


701,490


Total cash operating expenses (4)(7)

399,349


396,442


358,916


1,183,739


1,067,402













Adjusted EBITDA (8)

$     935,931


$     901,170


$     870,916


$  2,781,384


$  2,530,960













Cash gross margins (9)

65 %


64 %


67 %


65 %


67 %













Adjusted EBITDA margins(10)

45 %


45 %


47 %


46 %


47 %













Adjusted EBITDA flow-through rate (11)

82 %


(213) %


45 %


39 %


45 %













FFO (12)

$     562,080


$     495,240


$     488,396


$  1,605,472


$  1,419,389













AFFO (13)(14)

$     771,617


$     754,262


$     712,036


$  2,327,672


$  2,056,060













Basic FFO per share (15)

$            6.00


$            5.29


$            5.31


$          17.19


$          15.56













Diluted FFO per share (15)

$            5.97


$            5.28


$            5.30


$          17.12


$          15.51













Basic AFFO per share (15)

$            8.24


$            8.06


$            7.75


$          24.92


$          22.54













Diluted AFFO per share (15)

$            8.19


$            8.04


$            7.73


$          24.82


$          22.47
























































(1)

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

















Americas Revenues:






















Colocation

$     596,871


$     583,568


$     555,352


$  1,754,537


$  1,619,511


Interconnection

206,552


204,266


190,283


609,457


558,877


Managed infrastructure

63,356


60,539


54,704


184,755


159,255


Other

5,503


5,086


5,127


15,461


15,842


Recurring revenues

872,282


853,459


805,466


2,564,210


2,353,485


Non-recurring revenues

41,411


36,254


40,695


121,571


123,961


Revenues

$     913,693


$     889,713


$     846,161


$  2,685,781


$  2,477,446













EMEA Revenues:






















Colocation

$     538,256


$     517,366


$     445,733


$  1,571,233


$  1,293,641


Interconnection

78,795


76,317


66,703


227,718


201,688


Managed infrastructure

32,790


32,891


28,493


97,105


89,930


Other

23,283


26,292


23,105


74,775


51,567


Recurring revenues

673,124


652,866


564,034


1,970,831


1,636,826


Non-recurring revenues

35,590


33,891


27,778


115,857


104,667


Revenues

$     708,714


$     686,757


$     591,812


$  2,086,688


$  1,741,493













Asia-Pacific Revenues:






















Colocation

$     329,054


$     323,116


$     295,008


$     970,875


$     859,258


Interconnection

67,411


66,455


61,264


199,428


182,092


Managed infrastructure

17,484


18,195


19,269


54,642


59,827


Other

1,688


3,479


3,091


8,707


6,419


Recurring revenues

415,637


411,245


378,632


1,233,652


1,107,596


Non-recurring revenues

22,986


30,693


24,054


71,526


65,725


Revenues

$     438,623


$     441,938


$     402,686


$  1,305,178


$  1,173,321













Worldwide Revenues:






















Colocation

$  1,464,181


$  1,424,050


$  1,296,093


$  4,296,645


$  3,772,410


Interconnection

352,758


347,038


318,250


1,036,603


942,657


Managed infrastructure

113,630


111,625


102,466


336,502


309,012


Other

30,474


34,857


31,323


98,943


73,828


Recurring revenues

1,961,043


1,917,570


1,748,132


5,768,693


5,097,907


Non-recurring revenues

99,987


100,838


92,527


308,954


294,353


Revenues

$  2,061,030


$  2,018,408


$  1,840,659


$  6,077,647


$  5,392,260


































(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

$  1,068,991


$  1,060,800


$     934,669


$  3,135,882


$  2,780,801


Depreciation, amortization and accretion expense

(330,852)


(327,605)


(313,110)


(987,247)


(953,850)


Stock-based compensation expense

(12,389)


(12,399)


(10,732)


(36,111)


(33,053)


Cash cost of revenues

$     725,750


$     720,796


$     610,827


$  2,112,524


$  1,793,898













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

















Americas cash cost of revenues

$     270,272


$     266,682


$     247,976


$     782,361


$     731,015


EMEA cash cost of revenues

304,345


297,684


220,887


873,208


639,718


Asia-Pacific cash cost of revenues

151,133


156,430


141,964


456,955


423,165


Cash cost of revenues

$     725,750


$     720,796


$     610,827


$  2,112,524


$  1,793,898






(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

$     616,396


$     621,445


$     568,572


$  1,843,386


$  1,677,845


Depreciation and amortization expense

(130,990)


(132,856)


(118,558)


(394,051)


(347,032)


Stock-based compensation expense

(86,057)


(92,147)


(91,098)


(265,596)


(263,411)


Cash operating expense

$     399,349


$     396,442


$     358,916


$  1,183,739


$  1,067,402












(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

$     212,506


$     215,016


$     193,089


$     638,193


$     579,327


Depreciation and amortization expense

(50,989)


(51,221)


(50,115)


(153,066)


(147,553)


Stock-based compensation expense

(22,638)


(22,554)


(22,507)


(64,697)


(65,862)


Cash sales and marketing expense

$     138,879


$     141,241


$     120,467


$     420,430


$     365,912












(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

$     403,890


$     406,429


$     375,483


$  1,205,193


$  1,098,518


Depreciation and amortization expense

(80,001)


(81,635)


(68,443)


(240,985)


(199,479)


Stock-based compensation expense

(63,419)


(69,593)


(68,591)


(200,899)


(197,549)


Cash general and administrative expense

$     260,470


$     255,201


$     238,449


$     763,309


$     701,490












(7)

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













Americas cash SG&A

$     238,524


$     230,284


$     203,026


$     700,689


$     618,493


EMEA cash SG&A

94,197


94,258


87,639


281,980


262,762


Asia-Pacific cash SG&A

66,628


71,900


68,251


201,070


186,147


Cash SG&A

$     399,349


$     396,442


$     358,916


$  1,183,739


$  1,067,402












(8)

We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other expense, gain (loss) on debt extinguishment, depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs, and gain or loss on asset sales as presented below:













Net income

$     275,760


$     207,013


$     211,739


$     741,503


$     575,674


Income tax expense

19,985


37,385


34,606


112,425


75,985


Interest income

(23,111)


(23,503)


(11,192)


(66,002)


(17,806)


Interest expense

101,385


99,973


91,346


298,839


262,137


Other expense

5,972


11,518


6,735


9,987


22,522


 

(Gain) loss on debt extinguishment

360


—


(75)


106


(184)


Depreciation, amortization and accretion expense

461,842


460,461


431,668


1,381,298


1,300,882


Stock-based compensation expense

98,446


104,546


101,830


301,707


296,464


Transaction costs

(775)


5,718


2,007


6,543


11,310


(Gain) loss on asset sales

(3,933)


(1,941)


2,252


(5,022)


3,976


Adjusted EBITDA

$     935,931


$     901,170


$     870,916


$  2,781,384


$  2,530,960













The geographic split of our adjusted EBITDA is presented below:

















Americas net income (loss)

$       37,911


$    (42,264)


$        48,369


$    (44,845)


$        66,996


Americas income tax expense

19,897


37,385


34,606


112,424


75,866


Americas interest income

(17,506)


(18,631)


(10,374)


(51,312)


(16,006)


Americas interest expense

86,691


83,892


80,681


254,863


233,571


Americas other expense (income)

(39,137)


7,988


(68,241)


(26,045)


(147,434)


Americas loss on debt extinguishment

—


—


39


—


198


Americas depreciation, amortization and accretion expense

251,855


251,594


234,788


748,556


694,973


Americas stock-based compensation expense

64,067


69,464


69,272


201,345


206,866


Americas transaction costs

1,054


2,610


3,241


4,141


8,947


Americas loss on asset sales

65


710


2,778


3,605


3,961


Americas adjusted EBITDA

$     404,897


$     392,748


$     395,159


$  1,202,732


$  1,127,938













EMEA net income

$     125,992


$     151,942


$        82,558


$     476,949


$     282,584


EMEA income tax expense

—


—


—


—


119


EMEA interest income

(2,730)


(2,872)


(487)


(8,142)


(1,279)


EMEA interest expense

3,931


4,557


2,219


12,637


3,023


EMEA other expense (income)

42,284


(2,862)


69,245


22,942


155,585


EMEA depreciation, amortization and accretion expense

125,613


123,100


112,065


373,388


343,001


EMEA stock-based compensation expense

20,958


21,510


19,174


61,304


54,454


EMEA transaction costs

(1,878)


2,090


(1,488)


1,048


1,763


EMEA gain on asset sales

(3,998)


(2,651)


—


(8,627)


(237)


EMEA adjusted EBITDA

$     310,172


$     294,814


$     283,286


$     931,499


$     839,013













Asia-Pacific net income

$     111,857


$        97,335


$        80,812


$     309,399


$     226,094


Asia-Pacific income tax expense

88


—


—


1


—


Asia-Pacific interest income

(2,875)


(2,000)


(331)


(6,548)


(521)


Asia-Pacific interest expense

10,763


11,524


8,446


31,339


25,543


Asia-Pacific other expense

2,825


6,392


5,731


13,090


14,371


Asia-Pacific (gain) loss on debt extinguishment

360


—


(114)


106


(382)


Asia-Pacific depreciation, amortization and accretion expense

84,374


85,767


84,815


259,354


262,908


Asia-Pacific stock-based compensation expense

13,421


13,572


13,384


39,058


35,144


Asia-Pacific transaction costs

49


1,018


254


1,354


600


Asia-Pacific (gain) loss on asset sales

—


—


(526)


—


252


Asia-Pacific adjusted EBITDA

$     220,862


$     213,608


$     192,471


$     647,153


$     564,009












(9)

We define cash gross margins as cash gross profit divided by revenues.

















Our cash gross margins by geographic region are presented below:

















Americas cash gross margins

70 %


70 %


71 %


71 %


70 %


EMEA cash gross margins

57 %


57 %


63 %


58 %


63 %


Asia-Pacific cash gross margins

66 %


65 %


65 %


65 %


64 %












(10)

We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.













Americas adjusted EBITDA margins

44 %


44 %


47 %


45 %


46 %


EMEA adjusted EBITDA margins

44 %


43 %


48 %


45 %


48 %


Asia-Pacific adjusted EBITDA margins

50 %


48 %


48 %


50 %


48 %






(11)

We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows:













Adjusted EBITDA - current period

$     935,931


$     901,170


$     870,916


$  2,781,384


$  2,530,960


Less adjusted EBITDA - prior period

(901,170)


(944,283)


(860,332)


(2,569,988)


(2,371,152)


Adjusted EBITDA growth

$       34,761


$    (43,113)


$        10,584


$     211,396


$     159,808













Revenues - current period

$  2,061,030


$  2,018,408


$  1,840,659


$  6,077,647


$  5,392,260


Less revenues - prior period

(2,018,408)


(1,998,209)


(1,817,154)


(5,528,658)


(5,039,473)


Revenue growth

$       42,622


$        20,199


$        23,505


$     548,989


$     352,787













Adjusted EBITDA flow-through rate

82 %


(213) %


45 %


39 %


45 %












(12)

FFO is defined as net income or loss, excluding gain or loss from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.













Net income

$     275,760


$     207,013


$     211,739


$     741,503


$     575,674


Net (income) loss attributable to non-controlling interests

34


17


68


107


(92)


Net income attributable to Equinix

275,794


207,030


211,807


741,610


575,582


Adjustments:











Real estate depreciation

284,760


283,673


271,920


852,114


830,162


(Gain) loss on disposition of real estate property

(3,480)


1,175


2,002


256


6,697


Adjustments for FFO from unconsolidated joint ventures

5,006


3,362


2,667


11,492


6,948


FFO attributable to common shareholders

$     562,080


$     495,240


$     488,396


$  1,605,472


$  1,419,389























(13)

AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, stock-based charitable contributions, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, net income or loss from discontinued operations, net of tax, recurring capital expenditures and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items.













FFO attributable to common shareholders

$     562,080


$     495,240


$     488,396


$  1,605,472


$  1,419,389


Adjustments:











Installation revenue adjustment

(481)


6,121


9,959


3,403


10,770


Straight-line rent expense adjustment

6,323


10,614


6,811


18,116


14,678


Contract cost adjustment

(9,835)


(13,735)


(12,678)


(30,252)


(35,508)


Amortization of deferred financing costs and debt discounts

4,684


4,653


4,533


13,927


13,273


Stock-based compensation expense

98,446


104,546


101,830


301,707


296,464


Stock-based charitable contributions

—


2,543


—


2,543


14,039


Non-real estate depreciation expense

125,882


125,535


106,400


372,362


315,324


Amortization expense

52,297


52,428


51,873


157,199


153,317


Accretion expense adjustment

(1,097)


(1,175)


1,476


(377)


2,080


Recurring capital expenditures

(51,736)


(39,672)


(50,182)


(113,137)


(108,838)


(Gain) loss on debt extinguishment

360


—


(75)


106


(184)


Transaction costs

(775)


5,718


2,007


6,543


11,310


Impairment charges (1)

1,518


—


1,815


1,518


1,815


Income tax expense (benefit) adjustment (1)

(16,719)


1,542


(965)


(13,595)


(50,971)


Adjustments for AFFO from unconsolidated joint ventures

670


(96)


836


2,137


(898)


AFFO attributable to common shareholders

$     771,617


$     754,262


$     712,036


$  2,327,672


$  2,056,060













(1) Impairment charges relate to the impairment of an indemnification asset resulting from the settlement of a pre-acquisition uncertain tax position, which was recorded as Other Income (Expense) on the Condensed Consolidated Statements of Operations. This impairment charge was offset by the recognition of tax benefits in the same amount, which was included within the Income tax expense adjustment line on the table above.












(14)

 Following is how we reconcile from adjusted EBITDA to AFFO:











Adjusted EBITDA

$     935,931


$     901,170


$     870,916


$  2,781,384


$  2,530,960


Adjustments:











Interest expense, net of interest income

(78,274)


(76,470)


(80,154)


(232,837)


(244,331)


Amortization of deferred financing costs and debt discounts

4,684


4,653


4,533


13,927


13,273


Income tax expense

(19,985)


(37,385)


(34,606)


(112,425)


(75,985)


Income tax expense (benefit) adjustment

(16,719)


1,542


(965)


(13,595)


(50,971)


Straight-line rent expense adjustment

6,323


10,614


6,811


18,116


14,678


Stock-based charitable contributions

—


2,543


—


2,543


14,039


Contract cost adjustment

(9,835)


(13,735)


(12,678)


(30,252)


(35,508)


Installation revenue adjustment

(481)


6,121


9,959


3,403


10,770


Recurring capital expenditures

(51,736)


(39,672)


(50,182)


(113,137)


(108,838)


Other expense

(5,972)


(11,518)


(6,735)


(9,987)


(22,522)


(Gain) loss on disposition of real estate property

(3,480)


1,175


2,002


256


6,697


Adjustments for unconsolidated JVs' and non-controlling interests

5,710


3,283


3,572


13,736


5,959


Adjustments for impairment charges

1,518


—


1,815


1,518


1,815


Adjustment for gain (loss) on sale of assets

3,933


1,941


(2,252)


5,022


(3,976)


AFFO attributable to common shareholders

$     771,617


$     754,262


$     712,036


$  2,327,672


$  2,056,060

























(15)

The shares used in the computation of basic and diluted FFO and AFFO per share attributable to Equinix is presented below:













Shares used in computing basic net income per share, FFO per share and AFFO per share

93,683


93,535


91,896


93,396


91,234


Effect of dilutive securities:










Employee equity awards

485


322


239


392


285


Shares used in computing diluted net income per share, FFO per share and AFFO per share

94,168


93,857


92,135


93,788


91,519













Basic FFO per share

$            6.00


$            5.29


$            5.31


$          17.19


$          15.56


Diluted FFO per share

$            5.97


$            5.28


$            5.30


$          17.12


$          15.51













Basic AFFO per share

$            8.24


$            8.06


$            7.75


$          24.92


$          22.54


Diluted AFFO per share

$            8.19


$            8.04


$            7.73


$          24.82


$          22.47

 

Equinix. (PRNewsFoto/Equinix) (PRNewsfoto/Equinix, Inc.)

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/equinix-reports-third-quarter-2023-results-301967830.html

SOURCE Equinix, Inc.

FAQ

What were Equinix's Q3 2023 results?

Equinix reported a 12% increase in quarterly revenues and a 14% increase in operating income for Q3 2023.

How many deals did Equinix close in Q3 2023?

Equinix closed 4,200 deals in Q3 2023.

Did Equinix increase its dividend?

Yes, Equinix increased its quarterly cash dividend by 25%.

What is Equinix's annual guidance for 2023?

Equinix expects an increase in revenue and AFFO per share for 2023.

Stock EQIX logo
Equinix, Inc.

NASDAQ:EQIX

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