REDWOOD
CITY, Calif., Aug. 2, 2023
/PRNewswire/ --
- Quarterly revenues increased 11% over the same quarter last
year, to $2.0 billion, or 14% on a
normalized and constant currency basis
- Solid gross and net bookings resulted in more than 4,100 deals
across more than 3,100 customers
- Channel bookings accounted for 40% of total bookings and nearly
60% of new logos
Equinix, Inc. (Nasdaq: EQIX), the world's digital
infrastructure companyTM, today reported results for the
quarter ended June 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.
Second-Quarter 2023 Results Summary
- Revenues
-
- $2.02 billion, an 11% increase
over the same quarter last year
- Includes a $3 million negative
foreign currency impact when compared to prior guidance rates
- Operating Income
-
- $332 million, a 5% increase over
the same quarter last year, although impacted by an expected
increase in average energy hedge costs and higher seasonal
consumption
- Operating margin of 16%
- Net Income and Net Income per Share attributable to
Equinix
-
- $207 million, a 4% decrease from
the same quarter last year, primarily due to lower income from
operations and higher income tax expense given a favorable tax
settlement in 2022
- $2.21 per share, a 7% decrease
from the same quarter last year
- Adjusted EBITDA
-
- $901 million, a 5% increase over
the same quarter last year, and an adjusted EBITDA margin of
45%
- Includes a $2 million negative
foreign currency impact when compared to prior guidance rates and
$3 million of integration costs
- AFFO and AFFO per Share
-
- $754 million, a 9% increase over
the same quarter last year
- $8.04 per share, a 6% increase
over the same quarter last year
2023 Annual Guidance Summary
- Revenues
-
- $8.171 - $8.251 billion, an increase of 12 - 14% over the
previous year, or a normalized and constant currency increase of 14
- 15%
- Includes a $14 million negative
foreign currency impact compared to prior guidance rates
- Adjusted EBITDA
-
- $3.660 - $3.720 billion, a 45% adjusted EBITDA margin
- An increase of $20 million
compared to prior guidance offset by a $5
million negative foreign currency impact
- Includes $23 million of
integration costs
- AFFO and AFFO per Share
-
- $2.963 - $3.023 billion, an increase of 9 - 11% over the
previous year, or a normalized and constant currency increase of 11
- 14%
- An increase of $28 million
compared to prior guidance offset by a $2
million negative foreign currency impact
- $31.51 - $32.15 per share, an increase of 7 - 9% over the
previous year, or a normalized and constant currency increase of 9
- 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 continue to see momentum in our business as digital
transformation accelerates the pace of innovation and changes the
way business is done. By 20261, IDC is forecasting that
40% of revenue from G2000 companies will come from digital
products, services and experiences, a dynamic that is reshaping the
basis of competition in nearly every industry, and making digital
an unprecedented force for economic growth."
Business Highlights
- With customers deployed in all three regions representing
approximately two-thirds of recurring revenues, Equinix continues
to invest behind the scale and reach of its data center services
portfolio. The company currently has 53 major projects underway
across 40 metros in 24 countries, including 11 xScale builds that
are expected to deliver approximately 90 megawatts of capacity once
opened.
-
- In Q2, Equinix added 12 new projects including new
International Business Exchange™ (IBX®) data center
builds in Lisbon, Monterrey and
Mumbai—in addition to the company's first build in Kuala Lumpur, one of the most strategic
markets in Asia.
- Equinix was selected to build incremental data center capacity
in Singapore in response to the
Singapore Government's Data Center Call for Application process.
This build will help to strengthen the country's digital
capabilities as well as support Singapore's Green Plan and digital
economy.
- Equinix's Channel program delivered another strong quarter,
accounting for 40% of bookings and nearly 60% of new logos. It
continues to see growth from partners like Accenture, Avant, Cisco,
Dell and HPE, with wins across a wide range of industry verticals
and digital first use cases.
-
- In June, Equinix announced an expanded relationship with
Hewlett Packard Enterprise for pre-provisioned HPE GreenLake for
Private Cloud Enterprise and HPE GreenLake for Private Cloud
Business Edition on demand at select Equinix IBX data centers in
seven metros around the globe.
- Equinix's global interconnection franchise continues to perform
with over 456,000 total interconnections. In Q2, interconnection
revenues stepped up 10% year over year as reported or 11% year over
year on a normalized and constant currency basis, driven by strong
gross adds, increasing traffic levels and healthy pricing.
-
- Equinix Fabric® saw total virtual connections
surpassing 50,000 in the quarter for the first time, as it
continues to add new capabilities to support larger workloads, like
data-intensive AI training models and scalable enterprise networks.
Beginning in the third quarter, Equinix Fabric customers will be
able to provision virtual connections to cloud providers with
bandwidths of up to 50 gigabits per second, with Google Cloud as
the first cloud provider to support this capability.
- In Q2, Equinix won three new native cloud on-ramps in Bogotá,
Madrid and Toronto, further strengthening its cloud
ecosystem, which represents nearly 15% of total interconnections on
its platform.
- Internet Exchange saw strength in Q2 in Equinix's EMEA and APAC
markets with peak traffic up 4% quarter over quarter and 25% year
over year, to nearly 32 terabits per second.
1 IDC Blog:
"Leadership in a Changing Digital World: Five Mandates," April
2023.
|
Business Outlook
For the third quarter of 2023, the Company expects revenues to
range between $2.039 and $2.069 billion, an increase of approximately 1 -
3% over the previous quarter, on both an as-reported and normalized
and constant currency basis. This guidance includes a $4 million negative foreign currency impact when
compared to the average FX rates in Q2 2023. Adjusted EBITDA is
expected to range between $908 and
$938 million. This guidance includes
a $3 million negative foreign
currency impact when compared to the average FX rates in Q2 2023
and $7 million of integration costs
from acquisitions. Recurring capital expenditures are expected to
range between $58 and $68 million.
For the full year of 2023, total revenues are expected to range
between $8.171 and $8.251 billion, a 12 - 14% 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 $14 million
negative foreign currency impact when compared to the prior
guidance rates. Adjusted EBITDA is expected to range between
$3.660 and $3.720 billion, an adjusted EBITDA margin of 45%.
This updated guidance includes an underlying raise of $20 million from better-than-expected operating
performance and lower integration costs, partially offset by a
$5 million negative foreign currency
impact when compared to prior guidance rates. AFFO is expected to
range between $2.963 and $3.023 billion, an increase of 9 - 11% over the
previous year, or a normalized and constant currency increase of 11
- 14%. This updated guidance includes an underlying raise of
$28 million from better-than-expected
business performance and lower integration costs, partially offset
by a $2 million negative foreign
currency impact when compared to prior guidance rates. AFFO per
share is expected to range between $31.51 and $32.15,
an increase of 7 - 9% over the previous year, or a normalized and
constant currency increase of 9 - 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 $2.467 and $2.697
billion, and recurring capital expenditures are expected to
range between $208 and $228 million. xScale-related on-balance sheet
capital expenditures are expected to range between $96 and $146
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$1.35 to the U.S. Dollar, ¥144 to
the U.S. Dollar, A$1.50 to the U.S.
Dollar, HK$7.84 to the U.S. Dollar,
R$4.79 to the U.S. Dollar and
C$1.32 to the U.S. Dollar. The Q2
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%, 10%, 8%, 6%, 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.
Q2 2023 Results Conference Call and Replay
Information
Equinix will discuss its quarterly results for the period ended
June 30, 2023, along with its future outlook, in its quarterly
conference call on Wednesday, August 2, 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, October 25, 2023,
by dialing 1-800-839-9317 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
- Equinix Investor Relations 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
|
|
Six Months Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Recurring
revenues
|
$ 1,917,570
|
|
$
1,890,080
|
|
$ 1,707,451
|
|
$ 3,807,650
|
|
$ 3,349,775
|
Non-recurring
revenues
|
100,838
|
|
108,129
|
|
109,703
|
|
208,967
|
|
201,826
|
Revenues
|
2,018,408
|
|
1,998,209
|
|
1,817,154
|
|
4,016,617
|
|
3,551,601
|
Cost of
revenues
|
1,060,800
|
|
1,006,091
|
|
930,257
|
|
2,066,891
|
|
1,846,132
|
Gross profit
|
957,608
|
|
992,118
|
|
886,897
|
|
1,949,726
|
|
1,705,469
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
215,016
|
|
210,671
|
|
193,727
|
|
425,687
|
|
386,238
|
General and
administrative
|
406,429
|
|
394,874
|
|
370,348
|
|
801,303
|
|
723,035
|
Transaction
costs
|
5,718
|
|
1,600
|
|
5,063
|
|
7,318
|
|
9,303
|
Gain (loss) on sale of
asset
|
(1,941)
|
|
852
|
|
(94)
|
|
(1,089)
|
|
1,724
|
Total operating expenses
|
625,222
|
|
607,997
|
|
569,044
|
|
1,233,219
|
|
1,120,300
|
Income from operations
|
332,386
|
|
384,121
|
|
317,853
|
|
716,507
|
|
585,169
|
Interest and other
income (expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
23,503
|
|
19,388
|
|
4,508
|
|
42,891
|
|
6,614
|
Interest
expense
|
(99,973)
|
|
(97,481)
|
|
(90,826)
|
|
(197,454)
|
|
(170,791)
|
Other income
(expense)
|
(11,518)
|
|
7,503
|
|
(6,238)
|
|
(4,015)
|
|
(15,787)
|
Gain (loss) on debt
extinguishment
|
—
|
|
254
|
|
(420)
|
|
254
|
|
109
|
Total interest and other, net
|
(87,988)
|
|
(70,336)
|
|
(92,976)
|
|
(158,324)
|
|
(179,855)
|
Income before income taxes
|
244,398
|
|
313,785
|
|
224,877
|
|
558,183
|
|
405,314
|
Income tax
expense
|
(37,385)
|
|
(55,055)
|
|
(8,635)
|
|
(92,440)
|
|
(41,379)
|
Net income
|
207,013
|
|
258,730
|
|
216,242
|
|
465,743
|
|
363,935
|
Net (income) loss
attributable to non-controlling interests
|
17
|
|
56
|
|
80
|
|
73
|
|
(160)
|
Net income attributable to
Equinix
|
$ 207,030
|
|
$
258,786
|
|
$ 216,322
|
|
$ 465,816
|
|
$ 363,775
|
Net income per share attributable to
Equinix:
|
Basic net income per
share
|
$
2.21
|
|
$
2.78
|
|
$
2.38
|
|
$
5.00
|
|
$
4.00
|
Diluted net income per
share
|
$
2.21
|
|
$
2.77
|
|
$
2.37
|
|
$
4.98
|
|
$
3.99
|
Shares used in
computing basic net income per share
|
93,535
|
|
92,971
|
|
91,036
|
|
93,253
|
|
90,904
|
Shares used in
computing diluted net income per share
|
93,857
|
|
93,340
|
|
91,262
|
|
93,599
|
|
91,213
|
EQUINIX,
INC.
|
Condensed
Consolidated Statements of Comprehensive Income
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Net income
|
$ 207,013
|
|
$ 258,730
|
|
$ 216,242
|
|
$ 465,743
|
|
$ 363,935
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
Foreign currency
translation adjustment ("CTA") income (loss)
|
25,923
|
|
157,214
|
|
(740,428)
|
|
183,137
|
|
(862,962)
|
Net investment hedge
CTA gain (loss)
|
(24,186)
|
|
(39,960)
|
|
353,953
|
|
(64,146)
|
|
445,311
|
Unrealized gain (loss)
on cash flow hedges
|
(4,792)
|
|
(12,881)
|
|
20,617
|
|
(17,673)
|
|
84,654
|
Net actuarial loss on
defined benefit plans
|
(116)
|
|
(115)
|
|
(19)
|
|
(231)
|
|
(40)
|
Total other
comprehensive income (loss), net of tax
|
(3,171)
|
|
104,258
|
|
(365,877)
|
|
101,087
|
|
(333,037)
|
Comprehensive income (loss), net of
tax
|
203,842
|
|
362,988
|
|
(149,635)
|
|
566,830
|
|
30,898
|
Net (income) loss
attributable to non-controlling interests
|
17
|
|
56
|
|
80
|
|
73
|
|
(160)
|
Other comprehensive
(income) loss attributable to non-controlling interests
|
(97)
|
|
—
|
|
35
|
|
(97)
|
|
32
|
Comprehensive income (loss) attributable to
Equinix
|
$ 203,762
|
|
$ 363,044
|
|
$
(149,520)
|
|
$ 566,806
|
|
$
30,770
|
EQUINIX,
INC.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(unaudited)
|
|
|
June 30, 2023
|
|
December 31, 2022
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
2,342,177
|
|
$
1,906,421
|
Accounts receivable,
net
|
1,006,116
|
|
855,380
|
Other current
assets
|
395,723
|
|
459,138
|
Assets held for
sale
|
—
|
|
84,316
|
Total current assets
|
3,744,016
|
|
3,305,255
|
Property, plant and
equipment, net
|
17,267,282
|
|
16,649,534
|
Operating lease
right-of-use assets
|
1,529,064
|
|
1,427,950
|
Goodwill
|
5,732,010
|
|
5,654,217
|
Intangible assets,
net
|
1,807,485
|
|
1,897,649
|
Other assets
|
1,487,088
|
|
1,376,137
|
Total assets
|
$
31,566,945
|
|
$
30,310,742
|
Liabilities, Redeemable Non-Controlling Interest and
Stockholders' Equity
|
|
|
|
Accounts payable and
accrued expenses
|
$
1,023,031
|
|
$
1,004,800
|
Accrued property, plant
and equipment
|
316,090
|
|
281,347
|
Current portion of
operating lease liabilities
|
139,661
|
|
139,538
|
Current portion of
finance lease liabilities
|
151,554
|
|
151,420
|
Current portion of
mortgage and loans payable
|
8,419
|
|
9,847
|
Other current
liabilities
|
215,473
|
|
251,346
|
Total current liabilities
|
1,854,228
|
|
1,838,298
|
Operating lease
liabilities, less current portion
|
1,403,269
|
|
1,272,812
|
Finance lease
liabilities, less current portion
|
2,136,159
|
|
2,143,690
|
Mortgage and loans
payable, less current portion
|
665,916
|
|
642,708
|
Senior notes, less
current portion
|
12,672,826
|
|
12,109,539
|
Other
liabilities
|
785,547
|
|
797,863
|
Total liabilities
|
19,517,945
|
|
18,804,910
|
Redeemable
non-controlling interest
|
25,000
|
|
—
|
Equinix stockholders'
equity:
|
|
|
|
Common stock
|
94
|
|
93
|
Additional paid-in
capital
|
17,909,043
|
|
17,320,017
|
Treasury
stock
|
(63,973)
|
|
(71,966)
|
Accumulated
dividends
|
(7,963,253)
|
|
(7,317,570)
|
Accumulated other
comprehensive loss
|
(1,288,456)
|
|
(1,389,446)
|
Retained
earnings
|
3,430,654
|
|
2,964,838
|
Total Equinix stockholders' equity
|
12,024,109
|
|
11,505,966
|
Non-controlling
interests
|
(109)
|
|
(134)
|
Total stockholders' equity
|
12,024,000
|
|
11,505,832
|
Total liabilities, redeemable non-controlling interest and
stockholders' equity
|
$
31,566,945
|
|
$
30,310,742
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
Americas headcount
|
5,774
|
|
5,493
|
EMEA headcount
|
4,081
|
|
3,936
|
Asia-Pacific headcount
|
2,766
|
|
2,668
|
Total headcount
|
12,621
|
|
12,097
|
EQUINIX,
INC.
|
Summary of Debt
Principal Outstanding
|
(in
thousands)
|
(unaudited)
|
|
|
June 30, 2023
|
|
December 31, 2022
|
|
|
|
|
Finance lease
liabilities
|
$
2,287,713
|
|
$
2,295,110
|
|
|
|
|
Term loans
|
642,275
|
|
618,028
|
Mortgage payable and
other loans payable
|
32,060
|
|
34,527
|
Plus: debt discount and
issuance costs, net
|
878
|
|
1,062
|
Total loans payable principal
|
675,213
|
|
653,617
|
|
|
|
|
Senior notes
|
12,672,826
|
|
12,109,539
|
Plus: debt discount and
issuance costs
|
113,449
|
|
117,351
|
Total senior notes principal
|
12,786,275
|
|
12,226,890
|
|
|
|
|
Total debt principal
outstanding
|
$
15,749,201
|
|
$
15,175,617
|
EQUINIX,
INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
Net income
|
$
207,013
|
|
$
258,730
|
|
$
216,242
|
|
$
465,743
|
|
$
363,935
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
Depreciation,
amortization and accretion
|
459,746
|
|
454,939
|
|
432,828
|
|
914,685
|
|
869,214
|
|
Stock-based
compensation
|
104,546
|
|
98,715
|
|
104,682
|
|
203,261
|
|
194,634
|
|
Amortization of debt
issuance costs and debt discounts
|
4,653
|
|
4,590
|
|
4,536
|
|
9,243
|
|
8,740
|
|
(Gain) loss on debt
extinguishment
|
—
|
|
(254)
|
|
420
|
|
(254)
|
|
(109)
|
|
(Gain) loss on asset
sales
|
(1,941)
|
|
852
|
|
(94)
|
|
(1,089)
|
|
1,724
|
|
Other items
|
20,465
|
|
9,001
|
|
5,832
|
|
29,466
|
|
11,882
|
|
Changes in operating
assets and liabilities:
|
|
Accounts
receivable
|
(99,164)
|
|
(53,392)
|
|
(26,302)
|
|
(152,556)
|
|
(127,029)
|
|
Income taxes,
net
|
2,954
|
|
4,991
|
|
(33,663)
|
|
7,945
|
|
(19,782)
|
|
Accounts payable and
accrued expenses
|
88,632
|
|
(72,765)
|
|
55,128
|
|
15,867
|
|
(20,852)
|
|
Operating lease
right-of-use assets
|
42,337
|
|
34,766
|
|
38,839
|
|
77,103
|
|
74,239
|
|
Operating lease
liabilities
|
(31,723)
|
|
(33,587)
|
|
(34,632)
|
|
(65,310)
|
|
(66,372)
|
|
Other assets and
liabilities
|
(56,220)
|
|
(15,178)
|
|
37,765
|
|
(71,398)
|
|
92,480
|
Net cash provided by operating
activities
|
741,298
|
|
691,408
|
|
801,581
|
|
1,432,706
|
|
1,382,704
|
Cash flows from
investing activities:
|
|
Purchases, sales and
maturities of investments, net
|
(30,290)
|
|
(24,393)
|
|
(26,391)
|
|
(54,683)
|
|
(64,949)
|
|
Business acquisitions,
net of cash and restricted cash acquired
|
—
|
|
—
|
|
(883,668)
|
|
—
|
|
(883,668)
|
|
Real estate
acquisitions
|
—
|
|
(40,397)
|
|
(30,257)
|
|
(40,397)
|
|
(33,331)
|
|
Purchases of other
property, plant and equipment
|
(638,159)
|
|
(529,600)
|
|
(484,830)
|
|
(1,167,759)
|
|
(897,348)
|
|
Proceeds from asset
sales
|
—
|
|
72,254
|
|
56,024
|
|
72,254
|
|
251,415
|
Net cash used in investing
activities
|
(668,449)
|
|
(522,136)
|
|
(1,369,122)
|
|
(1,190,585)
|
|
(1,627,881)
|
Cash flows from
financing activities:
|
|
Proceeds from employee
equity programs
|
—
|
|
44,543
|
|
—
|
|
44,543
|
|
43,876
|
|
Proceeds from
redeemable non-controlling interest
|
25,000
|
|
—
|
|
—
|
|
25,000
|
|
—
|
|
Payment of dividend
distributions
|
(320,243)
|
|
(326,162)
|
|
(283,048)
|
|
(646,405)
|
|
(572,717)
|
|
Proceeds from public
offering of common stock, net of offering costs
|
—
|
|
300,775
|
|
—
|
|
300,775
|
|
—
|
|
Proceeds from mortgage
and loans payable
|
—
|
|
—
|
|
—
|
|
—
|
|
676,850
|
|
Proceeds from senior
notes, net of debt discounts
|
—
|
|
565,239
|
|
1,193,688
|
|
565,239
|
|
1,193,688
|
|
Repayment of finance
lease liabilities
|
(30,964)
|
|
(35,498)
|
|
(28,783)
|
|
(66,462)
|
|
(69,556)
|
|
Repayment of mortgage
and loans payable
|
(1,020)
|
|
(2,403)
|
|
(9,199)
|
|
(3,423)
|
|
(561,032)
|
|
Debt issuance
costs
|
—
|
|
(4,257)
|
|
(10,365)
|
|
(4,257)
|
|
(17,731)
|
Net cash provided by (used in) financing
activities
|
(327,227)
|
|
542,237
|
|
862,293
|
|
215,010
|
|
693,378
|
Effect of foreign
currency exchange rates on cash, cash equivalents and restricted
cash
|
(46,681)
|
|
23,883
|
|
(101,129)
|
|
(22,798)
|
|
(96,536)
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
(301,059)
|
|
735,392
|
|
193,623
|
|
434,333
|
|
351,665
|
Cash, cash equivalents
and restricted cash at beginning of period
|
2,643,640
|
|
1,908,248
|
|
1,707,496
|
|
1,908,248
|
|
1,549,454
|
Cash, cash equivalents and restricted cash at end of
period
|
$
2,342,581
|
|
$
2,643,640
|
|
$
1,901,119
|
|
$
2,342,581
|
|
$
1,901,119
|
Supplemental cash flow
information:
|
Cash paid for
taxes
|
$ 35,345
|
|
$ 48,960
|
|
$ 53,609
|
|
$ 84,305
|
|
$ 73,759
|
Cash paid for
interest
|
$
134,176
|
|
$
103,904
|
|
$
106,249
|
|
$
238,080
|
|
$
210,300
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (negative free cash flow)
(1)
|
$
103,139
|
|
$
193,665
|
|
$
(541,150)
|
|
$
296,804
|
|
$
(180,228)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash flow (2)
|
$
103,139
|
|
$
234,062
|
|
$
372,775
|
|
$
337,201
|
|
$
736,771
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
741,298
|
|
$
691,408
|
|
$
801,581
|
|
$ 1,432,706
|
|
$ 1,382,704
|
|
Net cash used in
investing activities as presented above
|
(668,449)
|
|
(522,136)
|
|
(1,369,122)
|
|
(1,190,585)
|
|
(1,627,881)
|
|
Purchases, sales and
maturities of investments, net
|
30,290
|
|
24,393
|
|
26,391
|
|
54,683
|
|
64,949
|
|
Free cash flow
(negative free cash flow)
|
$
103,139
|
|
$
193,665
|
|
$
(541,150)
|
|
$
296,804
|
|
$
(180,228)
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
103,139
|
|
$
193,665
|
|
$
(541,150)
|
|
$
296,804
|
|
$
(180,228)
|
|
Less business
acquisitions, net of cash and restricted cash acquired
|
—
|
|
—
|
|
883,668
|
|
—
|
|
883,668
|
|
Less real estate
acquisitions
|
—
|
|
40,397
|
|
30,257
|
|
40,397
|
|
33,331
|
|
Adjusted free cash
flow
|
$
103,139
|
|
$
234,062
|
|
$
372,775
|
|
$
337,201
|
|
$
736,771
|
EQUINIX,
INC.
|
Non-GAAP Measures
and Other Supplemental Data
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
|
Recurring
revenues
|
$
1,917,570
|
|
$
1,890,080
|
|
$
1,707,451
|
|
$
3,807,650
|
|
$
3,349,775
|
|
Non-recurring
revenues
|
100,838
|
|
108,129
|
|
109,703
|
|
208,967
|
|
201,826
|
|
Revenues
(1)
|
2,018,408
|
|
1,998,209
|
|
1,817,154
|
|
4,016,617
|
|
3,551,601
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
720,796
|
|
665,978
|
|
599,368
|
|
1,386,774
|
|
1,183,071
|
|
Cash gross profit
(3)
|
1,297,612
|
|
1,332,231
|
|
1,217,786
|
|
2,629,843
|
|
2,368,530
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating expenses
(4)(7):
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
141,241
|
|
140,310
|
|
120,739
|
|
281,551
|
|
245,445
|
|
Cash general and
administrative expenses (6)
|
255,201
|
|
247,638
|
|
236,715
|
|
502,839
|
|
463,041
|
|
Total cash operating expenses
(4)(7)
|
396,442
|
|
387,948
|
|
357,454
|
|
784,390
|
|
708,486
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (8)
|
$ 901,170
|
|
$ 944,283
|
|
$ 860,332
|
|
$
1,845,453
|
|
$
1,660,044
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
64 %
|
|
67 %
|
|
67 %
|
|
65 %
|
|
67 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margins(10)
|
45 %
|
|
47 %
|
|
47 %
|
|
46 %
|
|
47 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA flow-through rate
(11)
|
(213) %
|
|
83 %
|
|
73 %
|
|
45 %
|
|
51 %
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO (12)
|
$ 495,240
|
|
$ 548,152
|
|
$ 498,349
|
|
$
1,043,392
|
|
$ 930,993
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO (13)(14)
|
$ 754,262
|
|
$ 801,793
|
|
$ 691,392
|
|
$
1,556,055
|
|
$
1,344,024
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per share
(15)
|
$
5.29
|
|
$
5.90
|
|
$
5.47
|
|
$
11.19
|
|
$
10.24
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per share
(15)
|
$
5.28
|
|
$
5.87
|
|
$
5.46
|
|
$
11.15
|
|
$
10.21
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per share
(15)
|
$
8.06
|
|
$
8.62
|
|
$
7.59
|
|
$
16.69
|
|
$
14.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted AFFO per share
(15)
|
$
8.04
|
|
$
8.59
|
|
$
7.58
|
|
$
16.62
|
|
$
14.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split of
our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$ 583,568
|
|
$ 574,098
|
|
$ 541,988
|
|
$
1,157,666
|
|
$
1,064,159
|
|
Interconnection
|
204,266
|
|
198,639
|
|
187,491
|
|
402,905
|
|
368,594
|
|
Managed
infrastructure
|
60,539
|
|
60,860
|
|
55,329
|
|
121,399
|
|
104,551
|
|
Other
|
5,086
|
|
4,872
|
|
5,581
|
|
9,958
|
|
10,715
|
|
Recurring
revenues
|
853,459
|
|
838,469
|
|
790,389
|
|
1,691,928
|
|
1,548,019
|
|
Non-recurring
revenues
|
36,254
|
|
43,906
|
|
40,475
|
|
80,160
|
|
83,266
|
|
Revenues
|
$ 889,713
|
|
$ 882,375
|
|
$ 830,864
|
|
$
1,772,088
|
|
$
1,631,285
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$ 517,366
|
|
$ 515,611
|
|
$ 433,339
|
|
$
1,032,977
|
|
$ 847,908
|
|
Interconnection
|
76,317
|
|
72,606
|
|
66,845
|
|
148,923
|
|
134,985
|
|
Managed
infrastructure
|
32,891
|
|
31,424
|
|
30,447
|
|
64,315
|
|
61,437
|
|
Other
|
26,292
|
|
25,200
|
|
22,048
|
|
51,492
|
|
28,462
|
|
Recurring
revenues
|
652,866
|
|
644,841
|
|
552,679
|
|
1,297,707
|
|
1,072,792
|
|
Non-recurring
revenues
|
33,891
|
|
46,376
|
|
46,522
|
|
80,267
|
|
76,889
|
|
Revenues
|
$ 686,757
|
|
$ 691,217
|
|
$ 599,201
|
|
$
1,377,974
|
|
$
1,149,681
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$ 323,116
|
|
$ 318,705
|
|
$ 281,635
|
|
$ 641,821
|
|
$ 564,250
|
|
Interconnection
|
66,455
|
|
65,562
|
|
60,841
|
|
132,017
|
|
120,828
|
|
Managed
infrastructure
|
18,195
|
|
18,963
|
|
19,916
|
|
37,158
|
|
40,558
|
|
Other
|
3,479
|
|
3,540
|
|
1,991
|
|
7,019
|
|
3,328
|
|
Recurring
revenues
|
411,245
|
|
406,770
|
|
364,383
|
|
818,015
|
|
728,964
|
|
Non-recurring
revenues
|
30,693
|
|
17,847
|
|
22,706
|
|
48,540
|
|
41,671
|
|
Revenues
|
$ 441,938
|
|
$ 424,617
|
|
$ 387,089
|
|
$ 866,555
|
|
$ 770,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
1,424,050
|
|
$
1,408,414
|
|
$
1,256,962
|
|
$
2,832,464
|
|
$
2,476,317
|
|
Interconnection
|
347,038
|
|
336,807
|
|
315,177
|
|
683,845
|
|
624,407
|
|
Managed
infrastructure
|
111,625
|
|
111,247
|
|
105,692
|
|
222,872
|
|
206,546
|
|
Other
|
34,857
|
|
33,612
|
|
29,620
|
|
68,469
|
|
42,505
|
|
Recurring
revenues
|
1,917,570
|
|
1,890,080
|
|
1,707,451
|
|
3,807,650
|
|
3,349,775
|
|
Non-recurring
revenues
|
100,838
|
|
108,129
|
|
109,703
|
|
208,967
|
|
201,826
|
|
Revenues
|
$
2,018,408
|
|
$
1,998,209
|
|
$
1,817,154
|
|
$
4,016,617
|
|
$
3,551,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
1,060,800
|
|
$
1,006,091
|
|
$ 930,257
|
|
$
2,066,891
|
|
$
1,846,132
|
|
Depreciation,
amortization and accretion expense
|
(327,605)
|
|
(328,790)
|
|
(319,011)
|
|
(656,395)
|
|
(640,740)
|
|
Stock-based
compensation expense
|
(12,399)
|
|
(11,323)
|
|
(11,878)
|
|
(23,722)
|
|
(22,321)
|
|
Cash cost of
revenues
|
$ 720,796
|
|
$ 665,978
|
|
$ 599,368
|
|
$
1,386,774
|
|
$
1,183,071
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split of
our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$ 266,682
|
|
$ 245,407
|
|
$ 243,636
|
|
$ 512,089
|
|
$ 483,039
|
|
EMEA cash cost of
revenues
|
297,684
|
|
271,179
|
|
215,983
|
|
568,863
|
|
418,831
|
|
Asia-Pacific cash cost
of revenues
|
156,430
|
|
149,392
|
|
139,749
|
|
305,822
|
|
281,201
|
|
Cash cost of
revenues
|
$ 720,796
|
|
$ 665,978
|
|
$ 599,368
|
|
$
1,386,774
|
|
$
1,183,071
|
|
|
|
|
|
(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
|
$ 621,445
|
|
$ 605,545
|
|
$ 564,075
|
|
$
1,226,990
|
|
$
1,109,273
|
|
Depreciation and
amortization expense
|
(132,856)
|
|
(130,205)
|
|
(113,817)
|
|
(263,061)
|
|
(228,474)
|
|
Stock-based
compensation expense
|
(92,147)
|
|
(87,392)
|
|
(92,804)
|
|
(179,539)
|
|
(172,313)
|
|
Cash operating
expense
|
$ 396,442
|
|
$ 387,948
|
|
$ 357,454
|
|
$ 784,390
|
|
$ 708,486
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$ 215,016
|
|
$ 210,671
|
|
$ 193,727
|
|
$ 425,687
|
|
$ 386,238
|
|
Depreciation and
amortization expense
|
(51,221)
|
|
(50,856)
|
|
(49,817)
|
|
(102,077)
|
|
(97,438)
|
|
Stock-based
compensation expense
|
(22,554)
|
|
(19,505)
|
|
(23,171)
|
|
(42,059)
|
|
(43,355)
|
|
Cash sales and
marketing expense
|
$ 141,241
|
|
$ 140,310
|
|
$ 120,739
|
|
$ 281,551
|
|
$ 245,445
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$ 406,429
|
|
$ 394,874
|
|
$ 370,348
|
|
$ 801,303
|
|
$ 723,035
|
|
Depreciation and
amortization expense
|
(81,635)
|
|
(79,349)
|
|
(64,000)
|
|
(160,984)
|
|
(131,036)
|
|
Stock-based
compensation expense
|
(69,593)
|
|
(67,887)
|
|
(69,633)
|
|
(137,480)
|
|
(128,958)
|
|
Cash general and
administrative expense
|
$ 255,201
|
|
$ 247,638
|
|
$ 236,715
|
|
$ 502,839
|
|
$ 463,041
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
The geographic split of
our cash operating expense, or cash SG&A, as defined above, is
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$ 230,284
|
|
$ 231,881
|
|
$ 211,004
|
|
$ 462,165
|
|
$ 415,467
|
|
EMEA cash
SG&A
|
94,258
|
|
93,525
|
|
87,836
|
|
187,783
|
|
175,123
|
|
Asia-Pacific cash
SG&A
|
71,900
|
|
62,542
|
|
58,614
|
|
134,442
|
|
117,896
|
|
Cash
SG&A
|
$ 396,442
|
|
$ 387,948
|
|
$ 357,454
|
|
$ 784,390
|
|
$ 708,486
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
We define adjusted
EBITDA as net income excluding income tax expense, interest income,
interest expense, other income or expense, loss or gain 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
|
$ 207,013
|
|
$ 258,730
|
|
$ 216,242
|
|
$ 465,743
|
|
$ 363,935
|
|
Income tax
expense
|
37,385
|
|
55,055
|
|
8,635
|
|
92,440
|
|
41,379
|
|
Interest
income
|
(23,503)
|
|
(19,388)
|
|
(4,508)
|
|
(42,891)
|
|
(6,614)
|
|
Interest
expense
|
99,973
|
|
97,481
|
|
90,826
|
|
197,454
|
|
170,791
|
|
Other expense
(income)
|
11,518
|
|
(7,503)
|
|
6,238
|
|
4,015
|
|
15,787
|
|
(Gain) loss on debt
extinguishment
|
—
|
|
(254)
|
|
420
|
|
(254)
|
|
(109)
|
|
Depreciation,
amortization and accretion expense
|
460,461
|
|
458,995
|
|
432,828
|
|
919,456
|
|
869,214
|
|
Stock-based
compensation expense
|
104,546
|
|
98,715
|
|
104,682
|
|
203,261
|
|
194,634
|
|
Transaction
costs
|
5,718
|
|
1,600
|
|
5,063
|
|
7,318
|
|
9,303
|
|
(Gain) loss on asset
sales
|
(1,941)
|
|
852
|
|
(94)
|
|
(1,089)
|
|
1,724
|
|
Adjusted
EBITDA
|
$ 901,170
|
|
$ 944,283
|
|
$ 860,332
|
|
$
1,845,453
|
|
$
1,660,044
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split of
our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas net income
(loss)
|
$
(42,264)
|
|
$
(40,492)
|
|
$
38,199
|
|
$
(82,756)
|
|
$
18,627
|
|
Americas income tax
expense
|
37,385
|
|
55,142
|
|
8,516
|
|
92,527
|
|
41,260
|
|
Americas interest
income
|
(18,631)
|
|
(15,175)
|
|
(3,904)
|
|
(33,806)
|
|
(5,632)
|
|
Americas interest
expense
|
83,892
|
|
84,280
|
|
82,160
|
|
168,172
|
|
152,890
|
|
Americas other expense
(income)
|
7,988
|
|
5,104
|
|
(55,803)
|
|
13,092
|
|
(79,193)
|
|
Americas loss on debt
extinguishment
|
—
|
|
—
|
|
420
|
|
—
|
|
159
|
|
Americas depreciation,
amortization and accretion expense
|
251,594
|
|
245,107
|
|
230,099
|
|
496,701
|
|
460,185
|
|
Americas stock-based
compensation expense
|
69,464
|
|
67,814
|
|
73,677
|
|
137,278
|
|
137,594
|
|
Americas transaction
costs
|
2,610
|
|
477
|
|
2,715
|
|
3,087
|
|
5,706
|
|
Americas gain on asset
sales
|
710
|
|
2,830
|
|
145
|
|
3,540
|
|
1,183
|
|
Americas adjusted
EBITDA
|
$ 392,748
|
|
$ 405,087
|
|
$ 376,224
|
|
$ 797,835
|
|
$ 732,779
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA net
income
|
$ 151,942
|
|
$ 199,015
|
|
$ 101,638
|
|
$ 350,957
|
|
$ 200,026
|
|
EMEA income tax
expense
|
—
|
|
—
|
|
119
|
|
—
|
|
119
|
|
EMEA interest
income
|
(2,872)
|
|
(2,540)
|
|
(525)
|
|
(5,412)
|
|
(792)
|
|
EMEA interest
expense
|
4,557
|
|
4,149
|
|
(112)
|
|
8,706
|
|
804
|
|
EMEA other expense
(income)
|
(2,862)
|
|
(16,480)
|
|
57,169
|
|
(19,342)
|
|
86,340
|
|
EMEA depreciation,
amortization and accretion expense
|
123,100
|
|
124,675
|
|
116,070
|
|
247,775
|
|
230,936
|
|
EMEA stock-based
compensation expense
|
21,510
|
|
18,836
|
|
19,168
|
|
40,346
|
|
35,280
|
|
EMEA transaction
costs
|
2,090
|
|
836
|
|
2,094
|
|
2,926
|
|
3,251
|
|
EMEA loss on asset
sales
|
(2,651)
|
|
(1,978)
|
|
(239)
|
|
(4,629)
|
|
(237)
|
|
EMEA adjusted
EBITDA
|
$ 294,814
|
|
$ 326,513
|
|
$ 295,382
|
|
$ 621,327
|
|
$ 555,727
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific net
income
|
$
97,335
|
|
$ 100,207
|
|
$
76,405
|
|
$ 197,542
|
|
$ 145,282
|
|
Asia-Pacific income tax
benefit
|
—
|
|
(87)
|
|
—
|
|
(87)
|
|
—
|
|
Asia-Pacific interest
income
|
(2,000)
|
|
(1,673)
|
|
(79)
|
|
(3,673)
|
|
(190)
|
|
Asia-Pacific interest
expense
|
11,524
|
|
9,052
|
|
8,778
|
|
20,576
|
|
17,097
|
|
Asia-Pacific other
expense
|
6,392
|
|
3,873
|
|
4,872
|
|
10,265
|
|
8,640
|
|
Asia-Pacific gain on
debt extinguishment
|
—
|
|
(254)
|
|
—
|
|
(254)
|
|
(268)
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
85,767
|
|
89,213
|
|
86,659
|
|
174,980
|
|
178,093
|
|
Asia-Pacific
stock-based compensation expense
|
13,572
|
|
12,065
|
|
11,837
|
|
25,637
|
|
21,760
|
|
Asia-Pacific
transaction costs
|
1,018
|
|
287
|
|
254
|
|
1,305
|
|
346
|
|
Asia-Pacific gain on
asset sales
|
—
|
|
—
|
|
—
|
|
—
|
|
778
|
|
Asia-Pacific adjusted
EBITDA
|
$ 213,608
|
|
$ 212,683
|
|
$ 188,726
|
|
$ 426,291
|
|
$ 371,538
|
|
|
|
|
|
|
|
|
|
|
|
(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 %
|
|
72 %
|
|
71 %
|
|
71 %
|
|
70 %
|
|
EMEA cash gross
margins
|
57 %
|
|
61 %
|
|
64 %
|
|
59 %
|
|
64 %
|
|
Asia-Pacific cash gross
margins
|
65 %
|
|
65 %
|
|
64 %
|
|
65 %
|
|
64 %
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
44 %
|
|
46 %
|
|
45 %
|
|
45 %
|
|
45 %
|
|
EMEA adjusted EBITDA
margins
|
43 %
|
|
47 %
|
|
49 %
|
|
45 %
|
|
48 %
|
|
Asia-Pacific adjusted
EBITDA margins
|
48 %
|
|
50 %
|
|
49 %
|
|
49 %
|
|
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
|
$ 901,170
|
|
$ 944,283
|
|
$ 860,332
|
|
$
1,845,453
|
|
$
1,660,044
|
|
Less adjusted EBITDA -
prior period
|
(944,283)
|
|
(838,740)
|
|
(799,712)
|
|
(1,709,656)
|
|
(1,573,875)
|
|
Adjusted EBITDA
growth
|
$
(43,113)
|
|
$ 105,543
|
|
$
60,620
|
|
$ 135,797
|
|
$
86,169
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$
2,018,408
|
|
$
1,998,209
|
|
$
1,817,154
|
|
$
4,016,617
|
|
$
3,551,601
|
|
Less revenues - prior
period
|
(1,998,209)
|
|
(1,870,845)
|
|
(1,734,447)
|
|
(3,711,504)
|
|
(3,381,554)
|
|
Revenue
growth
|
$
20,199
|
|
$ 127,364
|
|
$
82,707
|
|
$ 305,113
|
|
$ 170,047
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
(213) %
|
|
83 %
|
|
73 %
|
|
45 %
|
|
51 %
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$ 207,013
|
|
$ 258,730
|
|
$ 216,242
|
|
$ 465,743
|
|
$ 363,935
|
|
Net (income) loss
attributable to non-controlling interests
|
17
|
|
56
|
|
80
|
|
73
|
|
(160)
|
|
Net income attributable
to Equinix
|
207,030
|
|
258,786
|
|
216,322
|
|
465,816
|
|
363,775
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation
|
283,673
|
|
283,681
|
|
278,046
|
|
567,354
|
|
558,242
|
|
Loss on disposition of
real estate property
|
1,175
|
|
2,561
|
|
1,850
|
|
3,736
|
|
4,695
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
3,362
|
|
3,124
|
|
2,131
|
|
6,486
|
|
4,281
|
|
FFO attributable to
common shareholders
|
$ 495,240
|
|
$ 548,152
|
|
$ 498,349
|
|
$
1,043,392
|
|
$ 930,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$ 495,240
|
|
$ 548,152
|
|
$ 498,349
|
|
$
1,043,392
|
|
$ 930,993
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Installation revenue
adjustment
|
6,121
|
|
(2,237)
|
|
(34)
|
|
3,884
|
|
811
|
|
Straight-line rent
expense adjustment
|
10,614
|
|
1,179
|
|
4,207
|
|
11,793
|
|
7,867
|
|
Amortization of
deferred financing costs and debt discounts and premiums
|
4,653
|
|
4,590
|
|
4,536
|
|
9,243
|
|
8,740
|
|
Contract cost
adjustment
|
(13,735)
|
|
(6,682)
|
|
(7,891)
|
|
(20,417)
|
|
(22,830)
|
|
Stock-based
compensation expense
|
104,546
|
|
98,715
|
|
104,682
|
|
203,261
|
|
194,634
|
|
Stock-based charitable
contributions
|
2,543
|
|
—
|
|
14,039
|
|
2,543
|
|
14,039
|
|
Non-real estate
depreciation expense
|
125,535
|
|
120,945
|
|
103,349
|
|
246,480
|
|
208,924
|
|
Amortization
expense
|
52,428
|
|
52,474
|
|
51,875
|
|
104,902
|
|
101,444
|
|
Accretion
expense
|
(1,175)
|
|
1,895
|
|
(442)
|
|
720
|
|
604
|
|
Recurring capital
expenditures
|
(39,672)
|
|
(21,729)
|
|
(34,775)
|
|
(61,401)
|
|
(58,656)
|
|
(Gain) loss on debt
extinguishment
|
—
|
|
(254)
|
|
420
|
|
(254)
|
|
(109)
|
|
Transaction
costs
|
5,718
|
|
1,600
|
|
5,063
|
|
7,318
|
|
9,303
|
|
Income tax expense
(benefit) adjustment
|
1,542
|
|
1,582
|
|
(49,683)
|
|
3,124
|
|
(50,006)
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
(96)
|
|
1,563
|
|
(2,303)
|
|
1,467
|
|
(1,734)
|
|
AFFO attributable to
common shareholders
|
$ 754,262
|
|
$ 801,793
|
|
$ 691,392
|
|
$
1,556,055
|
|
$
1,344,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
Following is
how we reconcile from adjusted EBITDA to AFFO:
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 901,170
|
|
$ 944,283
|
|
$ 860,332
|
|
$
1,845,453
|
|
$
1,660,044
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(76,470)
|
|
(78,093)
|
|
(86,318)
|
|
(154,563)
|
|
(164,177)
|
|
Amortization of
deferred financing costs and debt discounts and premiums
|
4,653
|
|
4,590
|
|
4,536
|
|
9,243
|
|
8,740
|
|
Income tax
expense
|
(37,385)
|
|
(55,055)
|
|
(8,635)
|
|
(92,440)
|
|
(41,379)
|
|
Income tax expense
(benefit) adjustment
|
1,542
|
|
1,582
|
|
(49,683)
|
|
3,124
|
|
(50,006)
|
|
Straight-line rent
expense adjustment
|
10,614
|
|
1,179
|
|
4,207
|
|
11,793
|
|
7,867
|
|
Stock-based charitable
contributions
|
2,543
|
|
—
|
|
14,039
|
|
2,543
|
|
14,039
|
|
Contract cost
adjustment
|
(13,735)
|
|
(6,682)
|
|
(7,891)
|
|
(20,417)
|
|
(22,830)
|
|
Installation revenue
adjustment
|
6,121
|
|
(2,237)
|
|
(34)
|
|
3,884
|
|
811
|
|
Recurring capital
expenditures
|
(39,672)
|
|
(21,729)
|
|
(34,775)
|
|
(61,401)
|
|
(58,656)
|
|
Other income
(expense)
|
(11,518)
|
|
7,503
|
|
(6,238)
|
|
(4,015)
|
|
(15,787)
|
|
Loss on disposition of
real estate property
|
1,175
|
|
2,561
|
|
1,850
|
|
3,736
|
|
4,695
|
|
Adjustments for
unconsolidated JVs' and non-controlling interests
|
3,283
|
|
4,743
|
|
(92)
|
|
8,026
|
|
2,387
|
|
Adjustment for gain
(loss) on sale of assets
|
1,941
|
|
(852)
|
|
94
|
|
1,089
|
|
(1,724)
|
|
AFFO attributable to
common shareholders
|
$ 754,262
|
|
$ 801,793
|
|
$ 691,392
|
|
$
1,556,055
|
|
$
1,344,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
93,535
|
|
92,971
|
|
91,036
|
|
93,253
|
|
90,904
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
Employee equity
awards
|
322
|
|
369
|
|
226
|
|
346
|
|
309
|
|
Shares used in
computing diluted net income per share, FFO per share and AFFO per
share
|
93,857
|
|
93,340
|
|
91,262
|
|
93,599
|
|
91,213
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per
share
|
$
5.29
|
|
$
5.90
|
|
$
5.47
|
|
$
11.19
|
|
$
10.24
|
|
Diluted FFO per
share
|
$
5.28
|
|
$
5.87
|
|
$
5.46
|
|
$
11.15
|
|
$
10.21
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per
share
|
$
8.06
|
|
$
8.62
|
|
$
7.59
|
|
$
16.69
|
|
$
14.79
|
|
Diluted AFFO per
share
|
$
8.04
|
|
$
8.59
|
|
$
7.58
|
|
$
16.62
|
|
$
14.74
|
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SOURCE Equinix, Inc.