Equinix Reports Third-Quarter 2024 Results
Equinix (Nasdaq: EQIX) reported its third-quarter 2024 results with quarterly revenues increasing 7% year-over-year to $2.2 billion. The growth was driven by robust pricing, strong deal conversions, and improvements in billable cabinets. Operating income stood at $425 million, lower than the previous quarter due to a Q2 asset sale gain. Net income attributable to common stockholders was $297 million or $3.10 per share, both lower than the previous quarter for the same reason. Adjusted EBITDA was $1.048 billion, a 1% increase over the previous quarter, with a 48% margin. AFFO per share was $9.05, down due to higher recurring capital expenditures. Equinix also announced a $15 billion joint venture to meet growing AI demand, expected to triple its xScale data center portfolio investment. The company’s annual guidance projects revenues of $8.748 - $8.788 billion, adjusted EBITDA of $4.086 - $4.126 billion, and AFFO per share of $34.81 - $35.22, reflecting significant growth over the previous year.
Equinix (Nasdaq: EQIX) ha riportato i risultati del terzo trimestre del 2024, con un fatturato trimestrale cresciuto del 7% rispetto all'anno precedente, raggiungendo $2,2 miliardi. Questa crescita è stata trainata da un pricing robusto, forti conversioni di contratti e miglioramenti negli armadi fatturabili. L'utile operativo si è attestato a $425 milioni, inferiore rispetto al trimestre precedente a causa di un guadagno da vendita di beni nel secondo trimestre. L'utile netto attribuibile agli azionisti ordinari è stato di $297 milioni o $3.10 per azione, entrambi inferiori rispetto al trimestre precedente per lo stesso motivo. L'EBITDA rettificato è stato di $1,048 miliardi, con un aumento dell'1% rispetto al trimestre precedente, e un margine del 48%. L'AFFO per azione è stato di $9.05, in calo a causa di maggiori spese in conto capitale ricorrenti. Equinix ha anche annunciato una joint venture da $15 miliardi per soddisfare la crescente domanda di intelligenza artificiale, che dovrebbe triplicare gli investimenti nel suo portafoglio di centri dati xScale. Le previsioni annuali dell'azienda indicano ricavi di $8,748 - $8,788 miliardi, EBITDA rettificato di $4,086 - $4,126 miliardi, e AFFO per azione di $34,81 - $35,22, a indicare una crescita significativa rispetto all'anno precedente.
Equinix (Nasdaq: EQIX) reportó sus resultados del tercer trimestre de 2024, con ingresos trimestrales que aumentaron un 7% interanual, alcanzando $2.2 mil millones. Este crecimiento fue impulsado por precios sólidos, fuertes conversiones de contratos y mejoras en los armarios facturables. El ingreso operativo fue de $425 millones, inferior al trimestre anterior debido a una ganancia por venta de activos en el segundo trimestre. El ingreso neto atribuible a los accionistas comunes fue de $297 millones o $3.10 por acción, ambos inferiores al trimestre anterior por la misma razón. El EBITDA ajustado fue de $1.048 mil millones, un aumento del 1% en comparación con el trimestre anterior, con un margen del 48%. El AFFO por acción fue de $9.05, debido a mayores gastos de capital recurrentes. Equinix también anunció una joint venture de $15 mil millones para satisfacer la creciente demanda de inteligencia artificial, que se espera triplique su inversión en el portafolio de centros de datos xScale. La guía anual de la compañía proyecta ingresos de $8.748 - $8.788 mil millones, EBITDA ajustado de $4.086 - $4.126 mil millones y AFFO por acción de $34.81 - $35.22, reflejando un crecimiento significativo respecto al año anterior.
Equinix (Nasdaq: EQIX)는 2024년 3분기 실적을 발표했으며, 분기 매출이 전년 대비 7% 증가한 22억 달러에 이르렀습니다. 이 성장은 견고한 가격, 강력한 거래 전환 및 청구 가능한 캐비닛 개선 덕분입니다. 운영 수익은 4억 2천 5백만 달러로, 이전 분기보다 낮아졌는데, 이는 2분기의 자산 매각 이익 때문입니다. 주주에게 귀속된 순이익은 2억 9천 7백만 달러 또는 주당 3.10달러로, 같은 이유로 이전 분기보다 낮았습니다. 조정 EBITDA는 10억 4천 8백만 달러로, 이전 분기 대비 1% 증가했으며, 48%의 마진을 기록했습니다. 주당 AFFO는 9.05달러로, 증가하는 반복 자본 지출로 인해 감소하였습니다. Equinix는 또한 AI 수요 증가에 대응하기 위한 150억 달러 규모의 합작 투자를 발표했으며, 이는 xScale 데이터 센터 포트폴리오 투자를 세 배로 늘릴 것으로 예상됩니다. 회사의 연간 가이던스는 87억 4천 8백만 - 87억 8천 8백만 달러의 매출, 40억 8천 6백만 - 41억 2천 6백만 달러의 조정 EBITDA, 그리고 주당 34.81 - 35.22달러의 AFFO를 예상하고 있으며, 이는 전년 대비 상당한 성장을 반영하고 있습니다.
Equinix (Nasdaq: EQIX) a publié ses résultats du troisième trimestre 2024, avec des revenus trimestriels en hausse de 7 % par rapport à l'année précédente, atteignant 2,2 milliards de dollars. Cette croissance a été soutenue par des prix robustes, de fortes conversions de contrats et des améliorations des armoires facturables. Le résultat d'exploitation s'est établi à 425 millions de dollars, inférieur au trimestre précédent en raison d'un gain sur la vente d'actifs au deuxième trimestre. Le revenu net attribuable aux actionnaires ordinaires s'élevait à 297 millions de dollars ou 3,10 dollars par action, tous deux inférieurs au trimestre précédent pour la même raison. L'EBITDA ajusté s'élevait à 1,048 milliard de dollars, soit une augmentation de 1 % par rapport au trimestre précédent, avec une marge de 48 %. L'AFFO par action était de 9,05 dollars, en baisse en raison d'une augmentation des dépenses en capital récurrentes. Equinix a également annoncé une joint venture de 15 milliards de dollars pour répondre à la demande croissante en IA, qui devrait tripler ses investissements dans le portefeuille de centres de données xScale. Les prévisions annuelles de l'entreprise font état de revenus compris entre 8,748 et 8,788 milliards de dollars, un EBITDA ajusté compris entre 4,086 et 4,126 milliards de dollars, et un AFFO par action compris entre 34,81 et 35,22 dollars, ce qui reflète une croissance significative par rapport à l'année précédente.
Equinix (Nasdaq: EQIX) hat seine Ergebnisse für das dritte Quartal 2024 bekannt gegeben, wobei die Quartalsumsätze im Vergleich zum Vorjahr um 7% auf 2,2 Milliarden US-Dollar gestiegen sind. Dieses Wachstum wurde durch starke Preise, erfolgreiche Vertragsabschlüsse und Verbesserungen bei den fakturierbaren Schränken vorangetrieben. Der Betriebsgewinn betrug 425 Millionen US-Dollar, was niedriger ist als im vorherigen Quartal, da im zweiten Quartal ein Gewinn aus dem Verkauf von Vermögenswerten erzielt wurde. Der Nettogewinn für Stammaktionäre belief sich auf 297 Millionen US-Dollar oder 3,10 US-Dollar pro Aktie, beides niedriger als im vorherigen Quartal aus demselben Grund. Das bereinigte EBITDA betrug 1,048 Milliarden US-Dollar, was einen Anstieg von 1% gegenüber dem vorherigen Quartal darstellt, mit einer Marge von 48%. Das AFFO pro Aktie lag bei 9,05 US-Dollar, was aufgrund höherer wiederkehrender Investitionsausgaben einen Rückgang darstellt. Equinix gab außerdem ein 15 Milliarden US-Dollar großes Joint Venture bekannt, um der steigenden Nachfrage nach KI gerecht zu werden, was voraussichtlich die Investitionen in sein xScale-Datenzentrum-Portfolio verdreifachen wird. Die Jahresprognose des Unternehmens sieht Umsätze von 8,748 - 8,788 Milliarden US-Dollar, bereinigtes EBITDA von 4,086 - 4,126 Milliarden US-Dollar und AFFO pro Aktie von 34,81 - 35,22 US-Dollar vor, was ein signifikantes Wachstum im Vergleich zum Vorjahr widerspiegelt.
- Quarterly revenues increased 7% year-over-year to $2.2 billion.
- Adjusted EBITDA grew 1% quarter-over-quarter to $1.048 billion.
- Annual revenue guidance raised to $8.748 - $8.788 billion.
- $15 billion joint venture to meet growing AI demand.
- AFFO per share projected to increase 8-10% year-over-year.
- Net income decreased to $297 million, or $3.10 per share, due to a prior quarter asset sale gain.
- Operating income declined to $425 million from the previous quarter.
Insights
The Q3 results demonstrate strong financial performance with
Key financial metrics reveal robust operational efficiency with a
The combination of strong pricing power, improved cabinet utilization and strategic AI infrastructure expansion positions Equinix favorably in the competitive data center market. The sustained demand for digital infrastructure and AI-driven opportunities provide significant growth catalysts.
- Quarterly revenues increased
7% on both an as-reported and normalized and constant currency basis over the same quarter last year to$2.2 billion - Robust pricing, strong deal conversion rates and meaningful billable cabinet improvement translated into strong performance against expectations
- Accelerated pursuit of growing artificial intelligence (AI) demand in the
U.S. with the signing of a greater than joint venture, expected to nearly triple the capital invested in the company's xScale® data center portfolio once completed$15 billion
Equinix, Inc. (Nasdaq: EQIX), the world's digital infrastructure company®, today reported results for the quarter ended September 30, 2024. 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 2024 Results Summary
- Revenues
, a$2.2 billion 2% increase over the previous quarter- Includes a minimal negative foreign currency impact when compared to prior guidance rates
- Operating Income
, lower than the previous quarter due to the Q2 gain on sale of the Silicon Valley 12 xScale (SV12x) asset$425 million
- Net Income attributable to Common Stockholders and Net Income per Share attributable to Common Stockholders
, lower than the previous quarter due to the Q2 gain on sale of the SV12x asset$297 million per share, lower than the previous quarter$3.10
- Adjusted EBITDA
, a$1,048 million 1% increase over the previous quarter, and an adjusted EBITDA margin of48% - Includes a minimal negative foreign currency impact when compared to prior guidance rates and
of integration costs$2 million
- AFFO and AFFO per Share
, lower than the previous quarter, due to seasonally higher recurring capital expenditures; partially offset by higher EBITDA flow-through$866 million per share, lower than the previous quarter$9.05
2024 Annual Guidance Summary
- Revenues
-$8.74 8 , an increase of approximately$8.78 8 billion7% over the previous year, or a normalized and constant currency increase of 7 -8% , excluding the year-over-year impact of the power pass-through- An increase of
compared to prior guidance$36 million
- Adjusted EBITDA
-$4.08 6 , a$4.12 6 billion47% adjusted EBITDA margin- An increase of
compared to prior guidance$10 million - Includes
of integration costs$15 million
- AFFO and AFFO per Share
-$3.33 8 , an increase of 11 -$3.37 8 billion12% over the previous year, or a normalized and constant currency increase of 11 -13% - An increase of
compared to prior guidance$18 million -$34.81 per share, an increase of 8 -$35.22 10% over the previous year, or a normalized and constant currency increase of 9 -10%
Equinix converted the presentation of results from thousands to millions in the first quarter of 2024. Certain rounding adjustments have been made to prior period disclosed amounts.
Equinix is not reasonably able to 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
Adaire Fox-Martin, CEO and President, Equinix:
"Our 87th consecutive quarter of revenue growth was also a record-breaking one for gross bookings, with strong results across our three regions. This performance is a testament to the trust our customers place in Equinix and the value they realize partnering strategically with us. We see continued robust demand for AI-enabling digital infrastructure from a highly diverse set of customers of varying sizes, industries, and regions. This, coupled with significant expansion of our xScale capability, further strengthens our value proposition with customers and our leading position in the market."
Business Highlights
- Equinix remains dedicated to making extensive investments across its global operations to support the digital infrastructure needs of customers. The company currently has 57 major projects underway in 35 markets across 22 countries, including 13 xScale projects, representing more than 22,000 cabinets of retail capacity and more than 100 megawatts of xScale capacity to be delivered through the end of 2025.
- Earlier this month, Equinix announced plans to nearly triple the capital invested in its xScale data center portfolio with the agreement to form a greater than
joint venture, subject to closing conditions, with Canada Pension Plan Investment Board (CPP Investments) and GIC, with whom Equinix has previously partnered on xScale projects in$15 billion Asia , theAmericas andEurope . Through this joint venture, Equinix expects to build new state-of-the-art xScale facilities on multiple campuses across theU.S. , each with multi-hundred megawatts of capacity. As previously announced, Equinix recently acquired a greater-than-200-acre land parcel as it develops its first multi-hundred-megawatt xScale campus in theAtlanta metro area to support the pursuit of larger AI and hyperscale workloads. - Equinix's global xScale portfolio continues to see strong demand and leasing activity as the need for hyperscale infrastructure to support AI and cloud initiatives continues to grow. Since its Q2 earnings call, the company leased an incremental 20 megawatts of capacity into its
Seoul 2 (SL2x) asset, bringing total xScale leasing to 385 megawatts globally with nearly90% of its operational and under-construction capacity leased. - In August, Equinix opened its first International Business Exchange™ (IBX®) data center in
Johannesburg, South Africa to support and enhance the growing digital infrastructure and connectivity needs of enterprises and service providers on the rapidly growing African continent. The company also opened the first phases of itsNew York 3 (NY3) andTokyo 15 (TY15) assets, easing capacity constraints in two key markets.
- Earlier this month, Equinix announced plans to nearly triple the capital invested in its xScale data center portfolio with the agreement to form a greater than
- Digital infrastructure, serving as the backbone of today's economy, encompasses connectivity that touches lives daily, enabling everything from online shopping to the lifesaving operations of hospitals, to supporting the data needs of AI training and inferencing. Equinix's industry-leading global interconnection franchise continues to perform with 478,000 total interconnections deployed on its platform. In the third quarter of 2024, net interconnection adds improved to 5,700 due to strong hyperscaler cross connect additions and continued diversification of Equinix's ecosystems.
- Equinix Fabric® saw continued solid growth with a roughly
40% global customer attach rate. Fabric growth was driven by solid 100-gigabyte port additions and higher bandwidth virtual connections. - Internet Exchange experienced ongoing growth from existing customers as peak traffic surpassed 40 terabits per second for the first time.
- Equinix Fabric® saw continued solid growth with a roughly
- Equinix's Channel program delivered another solid quarter, accounting for approximately
50% of company new logos. It continued to see growth from partners like Avant, Dell, Orange Business and WWT, with wins across a wide range of industry segments and use cases, including AI. Key wins this quarter include a data center modernization project with AT&T. Through this project, Equinix is helping a customer-experience technology company blend cloud and private infrastructure resources, enable multicloud networking and accelerate AI and automation enhancements for customer interactions. - In September, Equinix announced that it issued more than
in green bonds across two completed offerings. The green bonds align the company's financing needs with its Future First sustainability strategy. With these latest issuances, Equinix will have issued a total of approximately$750 million of green bonds, making it one of the top 10 largest$5.6 billion U.S. corporate issuers in the investment-grade green bond market.
Business Outlook
For the fourth quarter of 2024, the company expects revenues to range between
For the full year of 2024, total revenues are expected to range between
The
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 2024 Results Conference Call and Replay Information
Equinix will discuss its quarterly results for the period ended September 30, 2024, along with its future outlook, in its quarterly conference call on Wednesday, October 30, 2024, at 5:30 PM ET (2:30 PM 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 Tuesday, December 31, 2024, by dialing 1-888-296-6944 and referencing the passcode 2024. 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 also excludes restructuring charges. Such charges include employee severance, facility closure costs, lease or other contract termination costs and advisory fees related to the realignment of our management structure, operations or products. Equinix also excludes impairment charges related to goodwill or long-lived assets. 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 period revenues and certain operating expenses denominated in currencies other than the
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; stock price fluctuations; availability of power, 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; delays related to the closing of any planned acquisitions subject to closing conditions; 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; risks related to regulatory inquiries or litigation; 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. | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September | June 30, 2024 | September | September | September | |||||
Recurring revenues | $ 2,059 | $ 2,024 | $ 1,961 | $ 6,093 | $ 5,769 | ||||
Non-recurring revenues | 142 | 135 | 100 | 394 | 309 | ||||
Revenues | 2,201 | 2,159 | 2,061 | 6,487 | 6,078 | ||||
Cost of revenues | 1,098 | 1,082 | 1,069 | 3,271 | 3,136 | ||||
Gross profit | 1,103 | 1,077 | 992 | 3,216 | 2,942 | ||||
Operating expenses: | |||||||||
Sales and marketing | 237 | 219 | 212 | 682 | 638 | ||||
General and administrative | 434 | 437 | 404 | 1,315 | 1,205 | ||||
Transaction costs | 7 | 3 | (1) | 12 | 7 | ||||
Gain on asset sales | — | (18) | (4) | (18) | (5) | ||||
Total operating expenses | 678 | 641 | 611 | 1,991 | 1,845 | ||||
Income from operations | 425 | 436 | 381 | 1,225 | 1,097 | ||||
Interest and other income (expense): | |||||||||
Interest income | 35 | 29 | 23 | 88 | 66 | ||||
Interest expense | (117) | (110) | (102) | (331) | (299) | ||||
Other income (expense) | 7 | (7) | (6) | (6) | (10) | ||||
Loss on debt extinguishment | — | — | — | (1) | — | ||||
Total interest and other, net | (75) | (88) | (85) | (250) | (243) | ||||
Income before income taxes | 350 | 348 | 296 | 975 | 854 | ||||
Income tax expense | (54) | (47) | (20) | (147) | (112) | ||||
Net income | 296 | 301 | 276 | 828 | 742 | ||||
Net loss attributable to non-controlling interests | 1 | — | — | 1 | — | ||||
Net income attributable to common stockholders | $ 297 | $ 301 | $ 276 | $ 829 | $ 742 | ||||
Earnings per share ("EPS") attributable to common stockholders: | |||||||||
Basic EPS | $ 3.11 | $ 3.17 | $ 2.94 | $ 8.73 | $ 7.94 | ||||
Diluted EPS | $ 3.10 | $ 3.16 | $ 2.93 | $ 8.69 | $ 7.91 | ||||
Weighted-average shares for basic EPS (in thousands) | 95,394 | 94,919 | 93,683 | 94,992 | 93,396 | ||||
Weighted-average shares for diluted EPS (in thousands) | 95,731 | 95,166 | 94,168 | 95,350 | 93,788 |
EQUINIX, INC. | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September | June 30, | September | September | September | |||||
Net income | $ 296 | $ 301 | $ 276 | $ 828 | $ 742 | ||||
Other comprehensive income (loss), net of tax: | |||||||||
Foreign currency translation adjustment ("CTA") gain (loss) | 421 | (78) | (413) | (15) | (230) | ||||
Net investment hedge CTA gain (loss) | (138) | 24 | 149 | 16 | 85 | ||||
Unrealized gain (loss) on cash flow hedges | (25) | 11 | 26 | 6 | 8 | ||||
Total other comprehensive income (loss), net of tax | 258 | (43) | (238) | 7 | (137) | ||||
Comprehensive income, net of tax | 554 | 258 | 38 | 835 | 605 | ||||
Net loss attributable to non-controlling interests | 1 | — | — | 1 | — | ||||
Comprehensive income attributable to Equinix | $ 555 | $ 258 | $ 38 | $ 836 | $ 605 |
EQUINIX, INC. | |||
September 30, 2024 | December 31, 2023 | ||
Assets | |||
Cash and cash equivalents | $ 2,776 | $ 2,096 | |
Short-term investments | 451 | — | |
Accounts receivable, net | 1,123 | 1,004 | |
Other current assets | 705 | 468 | |
Total current assets | 5,055 | 3,568 | |
Property, plant and equipment, net | 19,665 | 18,601 | |
Operating lease right-of-use assets | 1,487 | 1,449 | |
Goodwill | 5,768 | 5,737 | |
Intangible assets, net | 1,544 | 1,705 | |
Other assets | 1,919 | 1,591 | |
Total assets | $ 35,438 | $ 32,651 | |
Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity | |||
Accounts payable and accrued expenses | $ 1,125 | $ 1,187 | |
Accrued property, plant and equipment | 394 | 398 | |
Current portion of operating lease liabilities | 149 | 131 | |
Current portion of finance lease liabilities | 202 | 138 | |
Current portion of mortgage and loans payable | 5 | 8 | |
Current portion of senior notes | 2,198 | 998 | |
Other current liabilities | 297 | 302 | |
Total current liabilities | 4,370 | 3,162 | |
Operating lease liabilities, less current portion | 1,366 | 1,331 | |
Finance lease liabilities, less current portion | 2,193 | 2,123 | |
Mortgage and loans payable, less current portion | 688 | 663 | |
Senior notes, less current portion | 12,387 | 12,062 | |
Other liabilities | 822 | 796 | |
Total liabilities | 21,826 | 20,137 | |
Redeemable non-controlling interest | 25 | 25 | |
Common stockholders' equity: | |||
Common stock | — | — | |
Additional paid-in capital | 20,069 | 18,596 | |
Treasury stock | (40) | (56) | |
Accumulated dividends | (9,921) | (8,695) | |
Accumulated other comprehensive loss | (1,283) | (1,290) | |
Retained earnings | 4,763 | 3,934 | |
Total common stockholders' equity | 13,588 | 12,489 | |
Non-controlling interests | (1) | — | |
Total stockholders' equity | 13,587 | 12,489 | |
Total liabilities, redeemable non-controlling interest and stockholders' equity | $ 35,438 | $ 32,651 | |
Ending headcount by geographic region is as follows: | |||
| 6,220 | 5,953 | |
EMEA headcount | 4,315 | 4,267 | |
| 3,104 | 2,931 | |
Total headcount | 13,639 | 13,151 |
EQUINIX, INC. | |||
September 30, 2024 | December 31, 2023 | ||
Finance lease liabilities | $ 2,395 | $ 2,261 | |
Term loans | 669 | 642 | |
Mortgage payable and other loans payable | 24 | 29 | |
Plus: debt issuance costs and debt discounts | 1 | 1 | |
Total mortgage and loans payable principal | 694 | 672 | |
Senior notes | 14,585 | 13,060 | |
Plus: debt issuance costs and debt discounts | 116 | 108 | |
Total senior notes principal | 14,701 | 13,168 | |
Total debt principal outstanding | $ 17,790 | $ 16,101 |
EQUINIX, INC. | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||
Cash flows from operating activities: | ||||||||||
Net income | $ 296 | $ 301 | $ 276 | $ 828 | $ 742 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation, amortization and accretion | 494 | 490 | 462 | 1,509 | 1,382 | |||||
Stock-based compensation | 122 | 125 | 98 | 348 | 301 | |||||
Amortization of debt issuance costs and debt discounts | 5 | 5 | 5 | 15 | 15 | |||||
Loss on debt extinguishment | — | — | — | 1 | — | |||||
Gain on asset sales | — | (18) | (4) | (18) | (5) | |||||
Other items | 23 | 25 | 18 | 54 | 43 | |||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (12) | (56) | (47) | (153) | (200) | |||||
Income taxes, net | (17) | 12 | (15) | (14) | (7) | |||||
Accounts payable and accrued expenses | (102) | 60 | 70 | (98) | 85 | |||||
Operating lease right-of-use assets | 41 | 38 | 40 | 117 | 117 | |||||
Operating lease liabilities | (37) | (33) | (34) | (102) | (100) | |||||
Other assets and liabilities | (55) | (37) | (84) | (219) | (155) | |||||
Net cash provided by operating activities | 758 | 912 | 785 | 2,268 | 2,218 | |||||
Cash flows from investing activities: | ||||||||||
Purchases, sales and maturities of investments, net | (29) | (33) | (27) | (65) | (82) | |||||
Purchases of short-term investments | (450) | — | — | (450) | — | |||||
Real estate acquisitions | (162) | (108) | (113) | (287) | (153) | |||||
Purchases of other property, plant and equipment | (724) | (648) | (617) | (2,079) | (1,785) | |||||
Proceeds from asset sales | — | 247 | 5 | 247 | 77 | |||||
Investment in loan receivable | — | (196) | — | (196) | — | |||||
Loan receivable upfront fee | — | 4 | — | 4 | — | |||||
Net cash used in investing activities | (1,365) | (734) | (752) | (2,826) | (1,943) | |||||
Cash flows from financing activities: | ||||||||||
Proceeds from employee equity awards | 44 | — | 42 | 92 | 87 | |||||
Contribution from non-controlling interest | 4 | — | — | 4 | 25 | |||||
Payment of dividend distributions | (413) | (405) | (325) | (1,230) | (972) | |||||
Proceeds from public offering of common stock, net of offering costs | 976 | — | — | 976 | 301 | |||||
Proceeds from senior notes, net of debt discounts | 780 | 744 | 338 | 1,524 | 902 | |||||
Repayment of finance lease liabilities | (35) | (35) | (32) | (101) | (98) | |||||
Repayment of mortgage and loans payable | (2) | (2) | (2) | (6) | (5) | |||||
Debt issuance costs | (6) | (8) | (3) | (14) | (7) | |||||
Net cash provided by financing activities | 1,348 | 294 | 18 | 1,245 | 233 | |||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | 39 | (6) | (35) | (7) | (58) | |||||
Net increase in cash, cash equivalents, and restricted cash | 780 | 466 | 16 | 680 | 450 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 1,996 | 1,530 | 2,342 | 2,096 | 1,908 | |||||
Cash, cash equivalents and restricted cash at end of period | $ 2,776 | $ 1,996 | $ 2,358 | $ 2,776 | $ 2,358 | |||||
Supplemental cash flow information: | ||||||||||
Cash paid for taxes | $ 63 | $ 37 | $ 42 | $ 164 | $ 126 | |||||
Cash paid for interest | $ 111 | $ 126 | $ 97 | $ 338 | $ 335 | |||||
Free cash flow (negative free cash flow) (1) | $ (578) | $ 211 | $ 60 | $ (493) | $ 357 | |||||
Adjusted free cash flow (adjusted negative free cash flow) (2) | $ (416) | $ 319 | $ 173 | $ (206) | $ 510 | |||||
(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 | $ 758 | $ 912 | $ 785 | $ 2,268 | $ 2,218 | |||||
Net cash used in investing activities as presented above | (1,365) | (734) | (752) | (2,826) | (1,943) | |||||
Purchases, sales and maturities of investments, net | 29 | 33 | 27 | 65 | 82 | |||||
Free cash flow (negative free cash flow) | $ (578) | $ 211 | $ 60 | $ (493) | $ 357 | |||||
(2) | We define adjusted free cash flow (adjusted negative free cash flow) as free cash flow (negative free cash flow) as defined above, excluding any 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 | $ (578) | $ 211 | $ 60 | $ (493) | $ 357 | |||||
Less real estate acquisitions | 162 | 108 | 113 | 287 | 153 | |||||
Adjusted free cash flow (adjusted negative free cash flow) | $ (416) | $ 319 | $ 173 | $ (206) | $ 510 |
EQUINIX, INC. | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||
Recurring revenues | $ 2,059 | $ 2,024 | $ 1,961 | $ 6,093 | $ 5,769 | |||||
Non-recurring revenues | 142 | 135 | 100 | 394 | 309 | |||||
Revenues (1) | 2,201 | 2,159 | 2,061 | 6,487 | 6,078 | |||||
Cash cost of revenues (2) | 732 | 716 | 726 | 2,162 | 2,113 | |||||
Cash gross profit (3) | 1,469 | 1,443 | 1,335 | 4,325 | 3,965 | |||||
Cash operating expenses (4)(7): | ||||||||||
Cash sales and marketing expenses (5) | 162 | 144 | 138 | 460 | 419 | |||||
Cash general and administrative expenses (6) | 259 | 263 | 261 | 789 | 764 | |||||
Total cash operating expenses (4)(7) | 421 | 407 | 399 | 1,249 | 1,183 | |||||
Adjusted EBITDA (8) | $ 1,048 | $ 1,036 | $ 936 | $ 3,076 | $ 2,782 | |||||
Cash gross margins (9) | 67 % | 67 % | 65 % | 67 % | 65 % | |||||
Adjusted EBITDA margins(10) | 48 % | 48 % | 45 % | 47 % | 46 % | |||||
Adjusted EBITDA flow-through rate (11) | 29 % | 138 % | 82 % | 107 % | 39 % | |||||
FFO (12) | $ 609 | $ 597 | $ 562 | $ 1,759 | $ 1,605 | |||||
AFFO (13)(14) | $ 866 | $ 877 | $ 772 | $ 2,586 | $ 2,328 | |||||
Basic FFO per share (15) | $ 6.38 | $ 6.29 | $ 6.00 | $ 18.52 | $ 17.19 | |||||
Diluted FFO per share (15) | $ 6.36 | $ 6.27 | $ 5.97 | $ 18.45 | $ 17.12 | |||||
Basic AFFO per share (15) | $ 9.08 | $ 9.24 | $ 8.24 | $ 27.22 | $ 24.92 | |||||
Diluted AFFO per share (15) | $ 9.05 | $ 9.22 | $ 8.19 | $ 27.12 | $ 24.82 | |||||
(1) | The geographic split of our revenues on a services basis is presented below: | |||||||||
Americas Revenues: | ||||||||||
Colocation | $ 617 | $ 624 | $ 597 | $ 1,848 | $ 1,754 | |||||
Interconnection | 224 | 219 | 207 | 658 | 610 | |||||
Managed infrastructure | 66 | 66 | 63 | 198 | 185 | |||||
Other | 7 | 7 | 5 | 20 | 15 | |||||
Recurring revenues | 914 | 916 | 872 | 2,724 | 2,564 | |||||
Non-recurring revenues | 44 | 50 | 41 | 139 | 121 | |||||
Revenues | $ 958 | $ 966 | $ 913 | $ 2,863 | $ 2,685 | |||||
EMEA Revenues: | ||||||||||
Colocation | $ 566 | $ 543 | $ 538 | $ 1,658 | $ 1,571 | |||||
Interconnection | 86 | 84 | 79 | 253 | 229 | |||||
Managed infrastructure | 35 | 34 | 33 | 104 | 97 | |||||
Other | 26 | 24 | 23 | 74 | 74 | |||||
Recurring revenues | 713 | 685 | 673 | 2,089 | 1,971 | |||||
Non-recurring revenues | 30 | 36 | 36 | 102 | 116 | |||||
Revenues | $ 743 | $ 721 | $ 709 | $ 2,191 | $ 2,087 | |||||
Asia-Pacific Revenues: | ||||||||||
Colocation | $ 337 | $ 333 | $ 329 | $ 1,004 | $ 971 | |||||
Interconnection | 74 | 71 | 67 | 215 | 198 | |||||
Managed infrastructure | 17 | 16 | 18 | 50 | 55 | |||||
Other | 4 | 3 | 2 | 11 | 10 | |||||
Recurring revenues | 432 | 423 | 416 | 1,280 | 1,234 | |||||
Non-recurring revenues | 68 | 49 | 23 | 153 | 72 | |||||
Revenues | $ 500 | $ 472 | $ 439 | $ 1,433 | $ 1,306 | |||||
Worldwide Revenues: | ||||||||||
Colocation | $ 1,520 | $ 1,500 | $ 1,464 | $ 4,510 | $ 4,296 | |||||
Interconnection | 384 | 374 | 353 | 1,126 | 1,037 | |||||
Managed infrastructure | 118 | 116 | 114 | 352 | 337 | |||||
Other | 37 | 34 | 30 | 105 | 99 | |||||
Recurring revenues | 2,059 | 2,024 | 1,961 | 6,093 | 5,769 | |||||
Non-recurring revenues | 142 | 135 | 100 | 394 | 309 | |||||
Revenues | $ 2,201 | $ 2,159 | $ 2,061 | $ 6,487 | $ 6,078 | |||||
(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 | $ 1,098 | $ 1,082 | $ 1,069 | $ 3,271 | $ 3,136 | |||||
Depreciation, amortization and accretion expense | (351) | (351) | (331) | (1,066) | (988) | |||||
Stock-based compensation expense | (15) | (15) | (12) | (43) | (35) | |||||
Cash cost of revenues | $ 732 | $ 716 | $ 726 | $ 2,162 | $ 2,113 | |||||
The geographic split of our cash cost of revenues is presented below: | ||||||||||
$ 289 | $ 273 | $ 270 | $ 832 | $ 784 | ||||||
EMEA cash cost of revenues | 270 | 299 | 305 | 874 | 873 | |||||
173 | 144 | 151 | 456 | 456 | ||||||
Cash cost of revenues | $ 732 | $ 716 | $ 726 | $ 2,162 | $ 2,113 | |||||
(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 | $ 671 | $ 656 | $ 616 | $ 1,997 | $ 1,843 | |||||
Depreciation and amortization expense | (143) | (139) | (131) | (443) | (394) | |||||
Stock-based compensation expense | (107) | (110) | (86) | (305) | (266) | |||||
Cash operating expense | $ 421 | $ 407 | $ 399 | $ 1,249 | $ 1,183 | |||||
(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 | $ 237 | $ 219 | $ 212 | $ 682 | $ 638 | |||||
Depreciation and amortization expense | (50) | (50) | (51) | (151) | (153) | |||||
Stock-based compensation expense | (25) | (25) | (23) | (71) | (66) | |||||
Cash sales and marketing expense | $ 162 | $ 144 | $ 138 | $ 460 | $ 419 | |||||
(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 | $ 434 | $ 437 | $ 404 | $ 1,315 | $ 1,205 | |||||
Depreciation and amortization expense | (93) | (89) | (80) | (292) | (241) | |||||
Stock-based compensation expense | (82) | (85) | (63) | (234) | (200) | |||||
Cash general and administrative expenses | $ 259 | $ 263 | $ 261 | $ 789 | $ 764 | |||||
(7) | The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below: | |||||||||
$ 242 | $ 242 | $ 238 | $ 743 | $ 697 | ||||||
EMEA cash SG&A | 101 | 98 | 94 | 294 | 283 | |||||
78 | 67 | 67 | 212 | 203 | ||||||
Cash SG&A | $ 421 | $ 407 | $ 399 | $ 1,249 | $ 1,183 | |||||
(8) | We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other income or expense, loss on debt extinguishment , depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs, and gain on asset sales as presented below: | |||||||||
Net income | $ 296 | $ 301 | $ 276 | $ 828 | $ 742 | |||||
Income tax expense | 54 | 47 | 20 | 147 | 112 | |||||
Interest income | (35) | (29) | (23) | (88) | (66) | |||||
Interest expense | 117 | 110 | 102 | 331 | 299 | |||||
Other expense (income) | (7) | 7 | 6 | 6 | 10 | |||||
Loss on debt extinguishment | — | — | — | 1 | — | |||||
Depreciation, amortization and accretion expense | 494 | 490 | 462 | 1,509 | 1,382 | |||||
Stock-based compensation expense | 122 | 125 | 98 | 348 | 301 | |||||
Transaction costs | 7 | 3 | (1) | 12 | 7 | |||||
Gain on asset sales | — | (18) | (4) | (18) | (5) | |||||
Adjusted EBITDA | $ 1,048 | $ 1,036 | $ 936 | $ 3,076 | $ 2,782 | |||||
The geographic split of our adjusted EBITDA is presented below: | ||||||||||
$ (126) | $ — | $ 38 | $ (172) | $ (44) | ||||||
55 | 46 | 20 | 147 | 112 | ||||||
(28) | (19) | (18) | (62) | (52) | ||||||
89 | 91 | 87 | 269 | 255 | ||||||
77 | (5) | (39) | 35 | (27) | ||||||
273 | 269 | 252 | 847 | 749 | ||||||
82 | 84 | 64 | 232 | 201 | ||||||
5 | 3 | 1 | 9 | 5 | ||||||
— | (18) | — | (18) | 4 | ||||||
$ 427 | $ 451 | $ 405 | $ 1,287 | $ 1,203 | ||||||
EMEA net income | $ 288 | $ 156 | $ 126 | $ 579 | $ 477 | |||||
EMEA income tax expense (benefit) | (1) | 1 | — | — | — | |||||
EMEA interest income | (4) | (6) | (3) | (15) | (9) | |||||
EMEA interest expense | 17 | 9 | 4 | 30 | 13 | |||||
EMEA other expense (income) | (81) | 7 | 42 | (35) | 23 | |||||
EMEA depreciation, amortization and accretion expense | 128 | 133 | 126 | 394 | 374 | |||||
EMEA stock-based compensation expense | 23 | 24 | 21 | 68 | 62 | |||||
EMEA transaction costs | 2 | — | (2) | 3 | 1 | |||||
EMEA gain on asset sales | — | — | (4) | — | (9) | |||||
EMEA adjusted EBITDA | $ 372 | $ 324 | $ 310 | $ 1,024 | $ 932 | |||||
$ 134 | $ 145 | $ 112 | $ 421 | $ 309 | ||||||
— | — | — | — | — | ||||||
(3) | (4) | (2) | (11) | (5) | ||||||
11 | 10 | 11 | 32 | 31 | ||||||
(3) | 5 | 3 | 6 | 14 | ||||||
— | — | — | 1 | — | ||||||
93 | 88 | 84 | 268 | 259 | ||||||
17 | 17 | 13 | 48 | 38 | ||||||
— | — | — | — | 1 | ||||||
$ 249 | $ 261 | $ 221 | $ 765 | $ 647 | ||||||
(9) | We define cash gross margins as cash gross profit divided by revenues. | |||||||||
Our cash gross margins by geographic region are presented below: | ||||||||||
70 % | 72 % | 70 % | 71 % | 71 % | ||||||
EMEA cash gross margins | 64 % | 59 % | 57 % | 60 % | 58 % | |||||
65 % | 69 % | 66 % | 68 % | 65 % | ||||||
(10) | We define adjusted EBITDA margins as adjusted EBITDA divided by revenues. | |||||||||
45 % | 47 % | 44 % | 45 % | 45 % | ||||||
EMEA adjusted EBITDA margins | 50 % | 45 % | 44 % | 47 % | 45 % | |||||
50 % | 55 % | 50 % | 53 % | 50 % | ||||||
(11) | We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follow: | |||||||||
Adjusted EBITDA - current period | $ 1,048 | $ 1,036 | $ 936 | $ 3,076 | $ 2,782 | |||||
Less adjusted EBITDA - prior period | (1,036) | (992) | (901) | (2,757) | (2,570) | |||||
Adjusted EBITDA growth | $ 12 | $ 44 | $ 35 | $ 319 | $ 212 | |||||
Revenues - current period | $ 2,201 | $ 2,159 | $ 2,061 | $ 6,487 | $ 6,078 | |||||
Less revenues - prior period | (2,159) | (2,127) | (2,019) | (6,190) | (5,529) | |||||
Revenue growth | $ 42 | $ 32 | $ 42 | $ 297 | $ 549 | |||||
Adjusted EBITDA flow-through rate | 29 % | 138 % | 82 % | 107 % | 39 % | |||||
(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 | $ 296 | $ 301 | $ 276 | $ 828 | $ 742 | |||||
Net loss attributable to non-controlling interests | 1 | — | — | 1 | — | |||||
Net income attributable to common stockholders | 297 | 301 | 276 | 829 | 742 | |||||
Adjustments: | ||||||||||
Real estate depreciation | 308 | 306 | 285 | 930 | 853 | |||||
Gain on disposition of real estate property | (3) | (16) | (4) | (19) | (1) | |||||
Adjustments for FFO from unconsolidated joint ventures | 7 | 6 | 5 | 19 | 11 | |||||
FFO attributable to common stockholders | $ 609 | $ 597 | $ 562 | $ 1,759 | $ 1,605 | |||||
(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 stockholders | $ 609 | $ 597 | $ 562 | $ 1,759 | $ 1,605 | |||||
Adjustments: | ||||||||||
Installation revenue adjustment | (1) | — | (1) | (3) | 3 | |||||
Straight-line rent expense adjustment | 4 | 5 | 6 | 15 | 18 | |||||
Contract cost adjustment | (6) | (2) | (10) | (16) | (31) | |||||
Amortization of deferred financing costs and debt discounts | 5 | 5 | 5 | 15 | 15 | |||||
Stock-based compensation expense | 122 | 125 | 98 | 348 | 301 | |||||
Stock-based charitable contributions | — | 3 | — | 3 | 3 | |||||
Non-real estate depreciation expense | 136 | 132 | 126 | 426 | 373 | |||||
Amortization expense | 52 | 51 | 52 | 155 | 156 | |||||
Accretion expense adjustment | (2) | 1 | (1) | (2) | — | |||||
Recurring capital expenditures | (69) | (45) | (51) | (135) | (114) | |||||
Loss on debt extinguishment | — | — | — | 1 | — | |||||
Transaction costs | 7 | 3 | (1) | 12 | 7 | |||||
Impairment charges | — | — | 2 | — | 2 | |||||
Income tax expense adjustment | 10 | 4 | (16) | 14 | (13) | |||||
Adjustments for AFFO from unconsolidated joint ventures | (1) | (2) | 1 | (6) | 3 | |||||
AFFO attributable to common stockholders | $ 866 | $ 877 | $ 772 | $ 2,586 | $ 2,328 | |||||
(14) | Following is how we reconcile from adjusted EBITDA to AFFO: | |||||||||
Adjusted EBITDA | $ 1,048 | $ 1,036 | $ 936 | $ 3,076 | $ 2,782 | |||||
Adjustments: | ||||||||||
Interest expense, net of interest income | (82) | (81) | (79) | (243) | (233) | |||||
Amortization of deferred financing costs and debt discounts | 5 | 5 | 5 | 15 | 15 | |||||
Income tax expense | (54) | (47) | (20) | (147) | (112) | |||||
Income tax expense adjustment | 10 | 4 | (16) | 14 | (13) | |||||
Straight-line rent expense adjustment | 4 | 5 | 6 | 15 | 18 | |||||
Stock-based charitable contributions | — | 3 | — | 3 | 3 | |||||
Contract cost adjustment | (6) | (2) | (10) | (16) | (31) | |||||
Installation revenue adjustment | (1) | — | (1) | (3) | 3 | |||||
Recurring capital expenditures | (69) | (45) | (51) | (135) | (114) | |||||
Other income (expense) | 7 | (7) | (6) | (6) | (10) | |||||
Gain on disposition of real estate property | (3) | (16) | (4) | (19) | (1) | |||||
Adjustments for unconsolidated JVs' and non-controlling interests | 7 | 4 | 6 | 14 | 14 | |||||
Adjustments for impairment charges | — | — | 2 | — | 2 | |||||
Adjustment for gain on asset sales | — | 18 | 4 | 18 | 5 | |||||
AFFO attributable to common stockholders | $ 866 | $ 877 | $ 772 | $ 2,586 | $ 2,328 | |||||
(15) | The shares used in the computation of basic and diluted FFO and AFFO per share attributable to common stockholders is presented below: | |||||||||
Shares used in computing basic net income per share, FFO per share and AFFO per share (in thousands) | 95,394 | 94,919 | 93,683 | 94,992 | 93,396 | |||||
Effect of dilutive securities: | ||||||||||
Employee equity awards (in thousands) | 337 | 247 | 485 | 358 | 392 | |||||
Shares used in computing diluted net income per share, FFO per share and AFFO per share (in thousands) | 95,731 | 95,166 | 94,168 | 95,350 | 93,788 | |||||
Basic FFO per share | $ 6.38 | $ 6.29 | $ 6.00 | $ 18.52 | $ 17.19 | |||||
Diluted FFO per share | $ 6.36 | $ 6.27 | $ 5.97 | $ 18.45 | $ 17.12 | |||||
Basic AFFO per share | $ 9.08 | $ 9.24 | $ 8.24 | $ 27.22 | $ 24.92 | |||||
Diluted AFFO per share | $ 9.05 | $ 9.22 | $ 8.19 | $ 27.12 | $ 24.82 |
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SOURCE Equinix, Inc.
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