Equinix Reports Second Quarter 2024 Results
- Quarterly revenues increased 7% over the same quarter last year to
$2.2 billion , or 8% on a normalized and constant currency basis - Net income increased 45% year-over-year to
$301 million and adjusted EBITDA surpassed the$1 billion quarterly threshold for the first time - Closed first multi-hundred-megawatt xScale campus in
Atlanta ; continue to augment and extend xScale portfolio to support cloud and AI training workload demands
Second Quarter 2024 Results Summary
-
Revenues
-
$2.16 billion , a 2% increase over the previous quarter - Includes a
$6 million negative foreign currency impact when compared to prior guidance rates
-
-
Operating Income
-
$436 million , a 20% increase over the previous quarter, due to strong operating performance and a gain on the sale of ourSilicon Valley 12 xScale asset contributed into our newly createdAmericas xScale joint venture
-
-
Net Income and Net Income per Share attributable to Common Stockholders
-
$301 million , a 30% increase over the previous quarter, primarily due to higher income from operations -
$3 .16 per share, a 30% increase over the previous quarter
-
-
Adjusted EBITDA
-
$1,036 million , a 4% increase over the previous quarter, and an adjusted EBITDA margin of 48% - Includes a
$3 million negative foreign currency impact when compared to prior guidance rates and$4 million of integration costs
-
-
AFFO and AFFO per Share
-
$877 million , a 4% increase over the previous quarter, due to strong operating performance; offset by seasonally higher recurring capital expenditures -
$9 .22 per share, a 4% increase over the previous quarter
-
2024 Annual Guidance Summary
-
Revenues
-
$8.692 -$8.772 billion , an increase of 6 - 7% 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 - Includes a
$10 million negative foreign currency impact compared to prior guidance rates
-
-
Adjusted EBITDA
-
$4.066 -$4.126 billion , a 47% adjusted EBITDA margin - An increase of
$15 million compared to prior guidance offset by a$3 million negative foreign currency impact compared to prior guidance rates - Includes
$15 million of integration costs
-
-
AFFO and AFFO per Share
-
$3.310 -$3.370 billion , an increase of 10 - 12% over the previous year, or a normalized and constant currency increase of 11 - 13% - An increase of
$15 million compared to prior guidance offset by a$5 million negative foreign currency impact compared to prior guidance rates -
$34.67 -$35.30 per share, an increase of 8 - 10% over the previous year, or a normalized and constant currency increase of 9 - 11%
-
Equinix Quote
"I am honored to lead
Business Highlights
-
Equinix continues to invest broadly to further enhance the scale and reach of its industry-leading data center services portfolio. The company currently has 54 major projects underway in 36 markets, across 24 countries, including 15 xScale projects, representing more than 11,000 cabinets of retail capacity and more than 30 megawatts of xScale capacity to be delivered through the end of 2024.- Since the Q1 2024 earnings call,
Equinix opened 10 projects in eight metros includingHamburg , Johor,Munich ,New York ,Osaka ,Silicon Valley ,Sydney andWarsaw . - Last month,
Equinix announced its planned entry intothe Philippines with the acquisition of three data centers from Total Information Management ("TIM"), a leading technology solutions provider. Following the recently announced expansions inMalaysia andIndonesia , this strategic move aims to help businesses capitalize on the expanding digital opportunity of the fast-growingSoutheast Asia region. The approximately$180 million transaction is expected to close in the fourth quarter of 2024, adding more than 1,000 cabinets of capacity and land for future development. Equinix's global xScale portfolio is experiencing a substantial increase in demand and leasing activity due to the growing need for hyperscale infrastructure to support AI and cloud initiatives. Since our last earnings call, the company leased an incremental 17 megawatts of capacity into itsSilicon Valley 12 andParis 13 assets, bringing total xScale leasing to 365 megawatts globally. Additionally,Equinix recently acquired a greater than 200-acre land parcel with access to power as it develops its first multi-hundred-megawatt xScale campus in theAtlanta metro area, which will better position it to pursue larger AI and hyperscale workloads in theU.S.
- Since the Q1 2024 earnings call,
- As digital infrastructure continues to be fundamental to delivering the services the world relies on every day, connectivity remains a keystone in everything from drug discovery to powering the world's financial markets to supporting the data needs of AI training and inferencing. As a measure of this connectivity,
Equinix's global interconnection franchise continues to thrive, with more than 472,000 total interconnections deployed on its platform. In Q2, interconnection revenues stepped up 8% over the previous year, or a normalized and constant currency increase of 9%, with the addition of a net 3,900 total interconnections. - As businesses increasingly turn to multiple partners to uniquely solve challenges and to open new opportunities,
Equinix continues to expand its relationships with top technology companies. Reflecting this, the Equinix Channel program delivered another solid quarter, accounting for over 30% of new bookings and 55% of new logos. Growth in the quarter came from collaborations with AT&T, Avant,Dell , HPE, Orange Business and others.- In May, Equinix announced the availability of Dell PowerStore on
Equinix Metal®, a new, enterprise-grade Storage as a Service (STaaS) solution. The service helps enterprises manage a wide range of high-performance multicloud workloads through low-latency connectivity with proximity to major public clouds.
- In May, Equinix announced the availability of Dell PowerStore on
- Furthering its commitment to finding innovative solutions that reduce emissions and positively impact customers and the communities in which it operates,
Equinix recently announced an initiative to export heat from its newest International Business ExchangeTM (IBX®) inParis , PA10, and transfer it to the Plaine Saulnier urban development zone and the Olympic Aquatic Centre, the host of events during the 2024Summer Olympics . This latest initiative is part of the company's broader Heat Export program, which works with municipal planning agencies, energy utilities and heat network operators around the world to unlock the value of the residual heat generated in its data centers.
Business Outlook
For the third 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.
Q2 2024 Results Conference Call and Replay Information
A replay of the call will be available one hour after the call through
Investor Presentation and Supplemental Financial Information
Additional Resources
About
Non-GAAP Financial Measures
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,
In addition, in presenting the non-GAAP financial measures,
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.
Investors should note that the non-GAAP financial measures used by
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
|
|||||||||
Condensed Consolidated Statements of Operations |
|||||||||
(in millions, except per share data) |
|||||||||
(unaudited) |
|||||||||
|
|||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
|
|
|
|
|
|
|
|
Recurring revenues |
$ 2,024 |
|
$ 2,010 |
|
$ 1,918 |
|
$ 4,034 |
|
$ 3,808 |
Non-recurring revenues |
135 |
|
117 |
|
101 |
|
252 |
|
209 |
Revenues |
2,159 |
|
2,127 |
|
2,019 |
|
4,286 |
|
4,017 |
Cost of revenues |
1,082 |
|
1,091 |
|
1,061 |
|
2,173 |
|
2,067 |
Gross profit |
1,077 |
|
1,036 |
|
958 |
|
2,113 |
|
1,950 |
Operating expenses: |
|
|
|
|
|
|
|
|
|
Sales and marketing |
219 |
|
226 |
|
216 |
|
445 |
|
426 |
General and administrative |
437 |
|
444 |
|
406 |
|
881 |
|
801 |
Transaction costs |
3 |
|
2 |
|
6 |
|
5 |
|
8 |
Gain on asset sales |
(18) |
|
— |
|
(2) |
|
(18) |
|
(1) |
Total operating expenses |
641 |
|
672 |
|
626 |
|
1,313 |
|
1,234 |
Income from operations |
436 |
|
364 |
|
332 |
|
800 |
|
716 |
Interest and other expense: |
|
|
|
|
|
|
|
|
|
Interest income |
29 |
|
24 |
|
24 |
|
53 |
|
43 |
Interest expense |
(110) |
|
(104) |
|
(100) |
|
(214) |
|
(197) |
Other expense |
(7) |
|
(6) |
|
(12) |
|
(13) |
|
(4) |
Loss on debt extinguishment |
— |
|
(1) |
|
— |
|
(1) |
|
— |
Total interest and other, net |
(88) |
|
(87) |
|
(88) |
|
(175) |
|
(158) |
Income before income taxes |
348 |
|
277 |
|
244 |
|
625 |
|
558 |
Income tax expense |
(47) |
|
(46) |
|
(37) |
|
(93) |
|
(92) |
Net income |
$ 301 |
|
$ 231 |
|
$ 207 |
|
$ 532 |
|
$ 466 |
Earnings per share ("EPS") attributable to common stockholders: |
|||||||||
Basic EPS |
$ 3.17 |
|
$ 2.44 |
|
$ 2.21 |
|
$ 5.61 |
|
$ 5.00 |
Diluted EPS |
$ 3.16 |
|
$ 2.43 |
|
$ 2.21 |
|
$ 5.59 |
|
$ 4.98 |
Weighted-average shares for basic EPS (in thousands) |
94,919 |
|
94,665 |
|
93,535 |
|
94,792 |
|
93,253 |
Weighted-average shares for diluted EPS (in thousands) |
95,166 |
|
95,156 |
|
93,857 |
|
95,161 |
|
93,599 |
|
|||||||||
Condensed Consolidated Statements of Comprehensive Income |
|||||||||
(in millions) |
|||||||||
(unaudited) |
|||||||||
|
|||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
|
|
|
|
|
|
|
|
Net income |
$ 301 |
|
$ 231 |
|
$ 207 |
|
$ 532 |
|
$ 466 |
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|||
Foreign currency translation adjustment ("CTA") gain (loss) |
(78) |
|
(358) |
|
26 |
|
(436) |
|
183 |
Net investment hedge CTA gain (loss) |
24 |
|
130 |
|
(24) |
|
154 |
|
(64) |
Unrealized gain (loss) on cash flow hedges |
11 |
|
20 |
|
(5) |
|
31 |
|
(18) |
Total other comprehensive income (loss), net of tax |
(43) |
|
(208) |
|
(3) |
|
(251) |
|
101 |
Comprehensive income, net of tax |
$ 258 |
|
$ 23 |
|
$ 204 |
|
$ 281 |
|
$ 567 |
|
|||
Condensed Consolidated Balance Sheets |
|||
(in millions, except headcount) |
|||
(unaudited) |
|||
|
|||
|
|
|
|
Assets |
|
|
|
Cash and cash equivalents |
$ 1,993 |
|
$ 2,096 |
Accounts receivable, net |
1,124 |
|
1,004 |
Other current assets |
612 |
|
468 |
Total current assets |
3,729 |
|
3,568 |
Property, plant and equipment, net |
18,614 |
|
18,601 |
Operating lease right-of-use assets |
1,379 |
|
1,449 |
|
5,622 |
|
5,737 |
Intangible assets, net |
1,573 |
|
1,705 |
Other assets |
1,937 |
|
1,591 |
Total assets |
$ 32,854 |
|
$ 32,651 |
Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity |
|
|
|
Accounts payable and accrued expenses |
$ 1,139 |
|
$ 1,187 |
Accrued property, plant and equipment |
420 |
|
398 |
Current portion of operating lease liabilities |
141 |
|
131 |
Current portion of finance lease liabilities |
133 |
|
138 |
Current portion of mortgage and loans payable |
6 |
|
8 |
Current portion of senior notes |
999 |
|
998 |
Other current liabilities |
230 |
|
302 |
Total current liabilities |
3,068 |
|
3,162 |
Operating lease liabilities, less current portion |
1,265 |
|
1,331 |
Finance lease liabilities, less current portion |
2,095 |
|
2,123 |
Mortgage and loans payable, less current portion |
654 |
|
663 |
Senior notes, less current portion |
12,682 |
|
12,062 |
Other liabilities |
787 |
|
796 |
Total liabilities |
20,551 |
|
20,137 |
Redeemable non-controlling interest |
25 |
|
25 |
Common stockholders' equity: |
|
|
|
Common stock |
— |
|
— |
Additional paid-in capital |
18,915 |
|
18,596 |
|
(48) |
|
(56) |
Accumulated dividends |
(9,514) |
|
(8,695) |
Accumulated other comprehensive loss |
(1,541) |
|
(1,290) |
Retained earnings |
4,466 |
|
3,934 |
Total stockholders' equity |
12,278 |
|
12,489 |
Total liabilities, redeemable non-controlling interest and stockholders' equity |
$ 32,854 |
|
$ 32,651 |
|
|
|
|
Ending headcount by geographic region is as follows: |
|
|
|
|
6,146 |
|
5,953 |
EMEA headcount |
4,274 |
|
4,267 |
|
3,076 |
|
2,931 |
Total headcount |
13,496 |
|
13,151 |
|
|||
Summary of Debt Principal Outstanding |
|||
(in millions) |
|||
(unaudited) |
|||
|
|||
|
|
|
|
|
|
|
|
Finance lease liabilities |
$ 2,228 |
|
$ 2,261 |
|
|
|
|
Term loans |
634 |
|
642 |
Mortgage payable and other loans payable |
26 |
|
29 |
Plus: debt issuance costs and debt discounts |
1 |
|
1 |
Total mortgage and loans payable principal |
661 |
|
672 |
|
|
|
|
Senior notes |
13,681 |
|
13,060 |
Plus: debt issuance costs and debt discounts |
112 |
|
108 |
Total senior notes principal |
13,793 |
|
13,168 |
|
|
|
|
Total debt principal outstanding |
$ 16,682 |
|
$ 16,101 |
|
||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||
(in millions) |
||||||||||
(unaudited) |
||||||||||
|
||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
||||||||||
|
Net income |
$ 301 |
|
$ 231 |
|
$ 207 |
|
$ 532 |
|
$ 466 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||
|
Depreciation, amortization and accretion |
490 |
|
525 |
|
461 |
|
1,015 |
|
920 |
|
Stock-based compensation |
125 |
|
101 |
|
104 |
|
226 |
|
203 |
|
Amortization of debt issuance costs and debt discounts |
5 |
|
5 |
|
5 |
|
10 |
|
10 |
|
Loss on debt extinguishment |
— |
|
1 |
|
— |
|
1 |
|
— |
|
Gain on asset sales |
(18) |
|
— |
|
(2) |
|
(18) |
|
(1) |
|
Other items |
25 |
|
6 |
|
20 |
|
31 |
|
25 |
|
Changes in operating assets and liabilities: |
|||||||||
|
Accounts receivable |
(56) |
|
(85) |
|
(99) |
|
(141) |
|
(153) |
|
Income taxes, net |
12 |
|
(9) |
|
3 |
|
3 |
|
8 |
|
Accounts payable and accrued expenses |
60 |
|
(56) |
|
88 |
|
4 |
|
15 |
|
Operating lease right-of-use assets |
38 |
|
38 |
|
42 |
|
76 |
|
77 |
|
Operating lease liabilities |
(33) |
|
(32) |
|
(32) |
|
(65) |
|
(66) |
|
Other assets and liabilities |
(37) |
|
(127) |
|
(56) |
|
(164) |
|
(71) |
Net cash provided by operating activities |
912 |
|
598 |
|
741 |
|
1,510 |
|
1,433 |
|
Cash flows from investing activities: |
||||||||||
|
Purchases, sales and maturities of investments, net |
(33) |
|
(3) |
|
(31) |
|
(36) |
|
(55) |
|
Real estate acquisitions |
(108) |
|
(17) |
|
— |
|
(125) |
|
(40) |
|
Purchases of other property, plant and equipment |
(648) |
|
(707) |
|
(638) |
|
(1,355) |
|
(1,168) |
|
Proceeds from asset sales |
247 |
|
— |
|
— |
|
247 |
|
72 |
|
Investment in loan receivable |
(196) |
|
— |
|
— |
|
(196) |
|
— |
|
Loan receivable upfront fee |
4 |
|
— |
|
— |
|
4 |
|
— |
Net cash used in investing activities |
(734) |
|
(727) |
|
(669) |
|
(1,461) |
|
(1,191) |
|
Cash flows from financing activities: |
||||||||||
|
Proceeds from employee equity awards |
— |
|
48 |
|
— |
|
48 |
|
45 |
|
Proceeds from redeemable non-controlling interest |
— |
|
— |
|
25 |
|
— |
|
25 |
|
Payment of dividend distributions |
(405) |
|
(412) |
|
(321) |
|
(817) |
|
(647) |
|
Proceeds from public offering of common stock, net of offering costs |
— |
|
— |
|
— |
|
— |
|
301 |
|
Proceeds from senior notes, net of debt discounts |
744 |
|
— |
|
(1) |
|
744 |
|
564 |
|
Repayment of finance lease liabilities |
(35) |
|
(31) |
|
(30) |
|
(66) |
|
(66) |
|
Repayment of mortgage and loans payable |
(2) |
|
(2) |
|
— |
|
(4) |
|
(3) |
|
Debt issuance costs |
(8) |
|
— |
|
— |
|
(8) |
|
(4) |
Net cash provided by (used in) financing activities |
294 |
|
(397) |
|
(327) |
|
(103) |
|
215 |
|
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash |
(6) |
|
(40) |
|
(47) |
|
(46) |
|
(23) |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
466 |
|
(566) |
|
(302) |
|
(100) |
|
434 |
|
Cash, cash equivalents and restricted cash at beginning of period |
1,530 |
|
2,096 |
|
2,644 |
|
2,096 |
|
1,908 |
|
Cash, cash equivalents and restricted cash at end of period |
$ 1,996 |
|
$ 1,530 |
|
$ 2,342 |
|
$ 1,996 |
|
$ 2,342 |
|
Supplemental cash flow information: |
||||||||||
Cash paid for taxes |
$ 37 |
|
$ 64 |
|
$ 35 |
|
$ 101 |
|
$ 84 |
|
Cash paid for interest |
$ 126 |
|
$ 101 |
|
$ 134 |
|
$ 227 |
|
$ 238 |
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (negative free cash flow) (1) |
$ 211 |
|
$ (126) |
|
$ 103 |
|
$ 85 |
|
$ 297 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash flow (adjusted negative free cash flow) (2) |
$ 319 |
|
$ (109) |
|
$ 103 |
|
$ 210 |
|
$ 337 |
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
$ 912 |
|
$ 598 |
|
$ 741 |
|
$ 1,510 |
|
$ 1,433 |
|
Net cash used in investing activities as presented above |
(734) |
|
(727) |
|
(669) |
|
(1,461) |
|
(1,191) |
|
Purchases, sales and maturities of investments, net |
33 |
|
3 |
|
31 |
|
36 |
|
55 |
|
Free cash flow (negative free cash flow) |
$ 211 |
|
$ (126) |
|
$ 103 |
|
$ 85 |
|
$ 297 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
$ 211 |
|
$ (126) |
|
$ 103 |
|
$ 85 |
|
$ 297 |
|
Less real estate acquisitions |
108 |
|
17 |
|
— |
|
125 |
|
40 |
|
Adjusted free cash flow (adjusted negative free cash flow) |
$ 319 |
|
$ (109) |
|
$ 103 |
|
$ 210 |
|
$ 337 |
|
||||||||||
Non-GAAP Measures and Other Supplemental Data |
||||||||||
(in millions) |
||||||||||
(unaudited) |
||||||||||
|
||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Recurring revenues |
$ 2,024 |
|
$ 2,010 |
|
$ 1,918 |
|
$ 4,034 |
|
$ 3,808 |
|
Non-recurring revenues |
135 |
|
117 |
|
101 |
|
252 |
|
209 |
|
Revenues (1) |
2,159 |
|
2,127 |
|
2,019 |
|
4,286 |
|
4,017 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues (2) |
716 |
|
714 |
|
721 |
|
1,430 |
|
1,387 |
|
Cash gross profit (3) |
1,443 |
|
1,413 |
|
1,298 |
|
2,856 |
|
2,630 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating expenses (4)(7): |
|
|
|
|
|
|
|
|
|
|
Cash sales and marketing expenses (5) |
144 |
|
154 |
|
142 |
|
298 |
|
281 |
|
Cash general and administrative expenses (6) |
263 |
|
267 |
|
255 |
|
530 |
|
503 |
|
Total cash operating expenses (4)(7) |
407 |
|
421 |
|
397 |
|
828 |
|
784 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (8) |
$ 1,036 |
|
$ 992 |
|
$ 901 |
|
$ 2,028 |
|
$ 1,846 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins (9) |
67 % |
|
66 % |
|
64 % |
|
67 % |
|
65 % |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margins(10) |
48 % |
|
47 % |
|
45 % |
|
47 % |
|
46 % |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA flow-through rate (11) |
138 % |
|
424 % |
|
(213) % |
|
150 % |
|
45 % |
|
|
|
|
|
|
|
|
|
|
|
|
FFO (12) |
$ 597 |
|
$ 553 |
|
$ 495 |
|
$ 1,150 |
|
$ 1,043 |
|
|
|
|
|
|
|
|
|
|
|
|
AFFO (13)(14) |
$ 877 |
|
$ 843 |
|
$ 754 |
|
$ 1,720 |
|
$ 1,556 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per share (15) |
$ 6.29 |
|
$ 5.84 |
|
$ 5.29 |
|
$ 12.13 |
|
$ 11.19 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per share (15) |
$ 6.27 |
|
$ 5.81 |
|
$ 5.28 |
|
$ 12.08 |
|
$ 11.15 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per share (15) |
$ 9.24 |
|
$ 8.91 |
|
$ 8.06 |
|
$ 18.14 |
|
$ 16.69 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted AFFO per share (15) |
$ 9.22 |
|
$ 8.86 |
|
$ 8.04 |
|
$ 18.07 |
|
$ 16.62 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
The geographic split of our revenues on a services basis is presented below: |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Americas Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 624 |
|
$ 607 |
|
$ 584 |
|
$ 1,231 |
|
$ 1,157 |
|
Interconnection |
219 |
|
215 |
|
204 |
|
434 |
|
403 |
|
Managed infrastructure |
66 |
|
66 |
|
61 |
|
132 |
|
122 |
|
Other |
7 |
|
6 |
|
5 |
|
13 |
|
10 |
|
Recurring revenues |
916 |
|
894 |
|
854 |
|
1,810 |
|
1,692 |
|
Non-recurring revenues |
50 |
|
45 |
|
36 |
|
95 |
|
80 |
|
Revenues |
$ 966 |
|
$ 939 |
|
$ 890 |
|
$ 1,905 |
|
$ 1,772 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 543 |
|
$ 549 |
|
$ 517 |
|
$ 1,092 |
|
$ 1,033 |
|
Interconnection |
84 |
|
83 |
|
77 |
|
167 |
|
150 |
|
Managed infrastructure |
34 |
|
35 |
|
33 |
|
69 |
|
64 |
|
Other |
24 |
|
24 |
|
26 |
|
48 |
|
51 |
|
Recurring revenues |
685 |
|
691 |
|
653 |
|
1,376 |
|
1,298 |
|
Non-recurring revenues |
36 |
|
36 |
|
34 |
|
72 |
|
80 |
|
Revenues |
$ 721 |
|
$ 727 |
|
$ 687 |
|
$ 1,448 |
|
$ 1,378 |
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 333 |
|
$ 334 |
|
$ 323 |
|
$ 667 |
|
$ 642 |
|
Interconnection |
71 |
|
70 |
|
66 |
|
141 |
|
131 |
|
Managed infrastructure |
16 |
|
17 |
|
18 |
|
33 |
|
37 |
|
Other |
3 |
|
4 |
|
4 |
|
7 |
|
8 |
|
Recurring revenues |
423 |
|
425 |
|
411 |
|
848 |
|
818 |
|
Non-recurring revenues |
49 |
|
36 |
|
31 |
|
85 |
|
49 |
|
Revenues |
$ 472 |
|
$ 461 |
|
$ 442 |
|
$ 933 |
|
$ 867 |
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 1,500 |
|
$ 1,490 |
|
$ 1,424 |
|
$ 2,990 |
|
$ 2,832 |
|
Interconnection |
374 |
|
368 |
|
347 |
|
742 |
|
684 |
|
Managed infrastructure |
116 |
|
118 |
|
112 |
|
234 |
|
223 |
|
Other |
34 |
|
34 |
|
35 |
|
68 |
|
69 |
|
Recurring revenues |
2,024 |
|
2,010 |
|
1,918 |
|
4,034 |
|
3,808 |
|
Non-recurring revenues |
135 |
|
117 |
|
101 |
|
252 |
|
209 |
|
Revenues |
$ 2,159 |
|
$ 2,127 |
|
$ 2,019 |
|
$ 4,286 |
|
$ 4,017 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
$ 1,082 |
|
$ 1,091 |
|
$ 1,061 |
|
$ 2,173 |
|
$ 2,067 |
|
Depreciation, amortization and accretion expense |
(351) |
|
(364) |
|
(328) |
|
(715) |
|
(657) |
|
Stock-based compensation expense |
(15) |
|
(13) |
|
(12) |
|
(28) |
|
(23) |
|
Cash cost of revenues |
$ 716 |
|
$ 714 |
|
$ 721 |
|
$ 1,430 |
|
$ 1,387 |
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split of our cash cost of revenues is presented below: |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 273 |
|
$ 270 |
|
$ 268 |
|
$ 543 |
|
$ 514 |
|
EMEA cash cost of revenues |
299 |
|
305 |
|
297 |
|
604 |
|
568 |
|
|
144 |
|
139 |
|
156 |
|
283 |
|
305 |
|
Cash cost of revenues |
$ 716 |
|
$ 714 |
|
$ 721 |
|
$ 1,430 |
|
$ 1,387 |
|
|
|
|
|
||||||
(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 |
$ 656 |
|
$ 670 |
|
$ 622 |
|
$ 1,326 |
|
$ 1,227 |
|
Depreciation and amortization expense |
(139) |
|
(161) |
|
(133) |
|
(300) |
|
(263) |
|
Stock-based compensation expense |
(110) |
|
(88) |
|
(92) |
|
(198) |
|
(180) |
|
Cash operating expense |
$ 407 |
|
$ 421 |
|
$ 397 |
|
$ 828 |
|
$ 784 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
$ 219 |
|
$ 226 |
|
$ 216 |
|
$ 445 |
|
$ 426 |
|
Depreciation and amortization expense |
(50) |
|
(51) |
|
(51) |
|
(101) |
|
(102) |
|
Stock-based compensation expense |
(25) |
|
(21) |
|
(23) |
|
(46) |
|
(43) |
|
Cash sales and marketing expense |
$ 144 |
|
$ 154 |
|
$ 142 |
|
$ 298 |
|
$ 281 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
$ 437 |
|
$ 444 |
|
$ 406 |
|
$ 881 |
|
$ 801 |
|
Depreciation and amortization expense |
(89) |
|
(110) |
|
(82) |
|
(199) |
|
(161) |
|
Stock-based compensation expense |
(85) |
|
(67) |
|
(69) |
|
(152) |
|
(137) |
|
Cash general and administrative expenses |
$ 263 |
|
$ 267 |
|
$ 255 |
|
$ 530 |
|
$ 503 |
|
|
|
|
|
|
|
|
|
|
|
(7) |
The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below: |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 242 |
|
$ 259 |
|
$ 229 |
|
$ 501 |
|
$ 459 |
|
EMEA cash SG&A |
98 |
|
95 |
|
95 |
|
193 |
|
189 |
|
|
67 |
|
67 |
|
73 |
|
134 |
|
136 |
|
Cash SG&A |
$ 407 |
|
$ 421 |
|
$ 397 |
|
$ 828 |
|
$ 784 |
|
|
|
|
|
|
|
|
|
|
|
(8) |
We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other 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 |
$ 301 |
|
$ 231 |
|
$ 207 |
|
$ 532 |
|
$ 466 |
|
Income tax expense |
47 |
|
46 |
|
37 |
|
93 |
|
92 |
|
Interest income |
(29) |
|
(24) |
|
(24) |
|
(53) |
|
(43) |
|
Interest expense |
110 |
|
104 |
|
100 |
|
214 |
|
197 |
|
Other expense |
7 |
|
6 |
|
12 |
|
13 |
|
4 |
|
Loss on debt extinguishment |
— |
|
1 |
|
— |
|
1 |
|
— |
|
Depreciation, amortization and accretion expense |
490 |
|
525 |
|
461 |
|
1,015 |
|
920 |
|
Stock-based compensation expense |
125 |
|
101 |
|
104 |
|
226 |
|
203 |
|
Transaction costs |
3 |
|
2 |
|
6 |
|
5 |
|
8 |
|
Gain on asset sales |
(18) |
|
— |
|
(2) |
|
(18) |
|
(1) |
|
Adjusted EBITDA |
$ 1,036 |
|
$ 992 |
|
$ 901 |
|
$ 2,028 |
|
$ 1,846 |
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split of our adjusted EBITDA is presented below: |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ — |
|
$ (46) |
|
$ (42) |
|
$ (46) |
|
$ (82) |
|
|
46 |
|
46 |
|
37 |
|
92 |
|
92 |
|
|
(19) |
|
(15) |
|
(19) |
|
(34) |
|
(34) |
|
|
91 |
|
89 |
|
84 |
|
180 |
|
168 |
|
|
(5) |
|
(37) |
|
8 |
|
(42) |
|
12 |
|
|
269 |
|
305 |
|
252 |
|
574 |
|
497 |
|
|
84 |
|
66 |
|
69 |
|
150 |
|
137 |
|
|
3 |
|
1 |
|
3 |
|
4 |
|
4 |
|
|
(18) |
|
— |
|
1 |
|
(18) |
|
4 |
|
|
$ 451 |
|
$ 409 |
|
$ 393 |
|
$ 860 |
|
$ 798 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA net income |
$ 156 |
|
$ 135 |
|
$ 152 |
|
$ 291 |
|
$ 351 |
|
EMEA income tax expense |
1 |
|
— |
|
— |
|
1 |
|
— |
|
EMEA interest income |
(6) |
|
(5) |
|
(3) |
|
(11) |
|
(6) |
|
EMEA interest expense |
9 |
|
4 |
|
5 |
|
13 |
|
9 |
|
EMEA other expense (income) |
7 |
|
39 |
|
(3) |
|
46 |
|
(19) |
|
EMEA depreciation, amortization and accretion expense |
133 |
|
133 |
|
123 |
|
266 |
|
248 |
|
EMEA stock-based compensation expense |
24 |
|
21 |
|
22 |
|
45 |
|
41 |
|
EMEA transaction costs |
— |
|
1 |
|
2 |
|
1 |
|
3 |
|
EMEA gain on asset sales |
— |
|
— |
|
(3) |
|
— |
|
(5) |
|
EMEA adjusted EBITDA |
$ 324 |
|
$ 328 |
|
$ 295 |
|
$ 652 |
|
$ 622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 145 |
|
$ 142 |
|
$ 97 |
|
$ 287 |
|
$ 197 |
|
|
(4) |
|
(4) |
|
(2) |
|
(8) |
|
(3) |
|
|
10 |
|
11 |
|
11 |
|
21 |
|
20 |
|
|
5 |
|
4 |
|
7 |
|
9 |
|
11 |
|
|
— |
|
1 |
|
— |
|
1 |
|
— |
|
|
88 |
|
87 |
|
86 |
|
175 |
|
175 |
|
|
17 |
|
14 |
|
13 |
|
31 |
|
25 |
|
|
— |
|
— |
|
1 |
|
— |
|
1 |
|
|
$ 261 |
|
$ 255 |
|
$ 213 |
|
$ 516 |
|
$ 426 |
|
|
|
|
|
|
|
|
|
|
|
(9) |
We define cash gross margins as cash gross profit divided by revenues. |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Our cash gross margins by geographic region are presented below: |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
72 % |
|
71 % |
|
70 % |
|
71 % |
|
71 % |
|
EMEA cash gross margins |
59 % |
|
58 % |
|
57 % |
|
58 % |
|
59 % |
|
|
69 % |
|
70 % |
|
65 % |
|
70 % |
|
65 % |
|
|
|
|
|
|
|
|
|
|
|
(10) |
We define adjusted EBITDA margins as adjusted EBITDA divided by revenues. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
47 % |
|
44 % |
|
44 % |
|
45 % |
|
45 % |
|
EMEA adjusted EBITDA margins |
45 % |
|
45 % |
|
43 % |
|
45 % |
|
45 % |
|
|
55 % |
|
55 % |
|
48 % |
|
55 % |
|
49 % |
|
|
|
|
|
||||||
(11) |
We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follow: |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA - current period |
$ 1,036 |
|
$ 992 |
|
$ 901 |
|
$ 2,028 |
|
$ 1,846 |
|
Less adjusted EBITDA - prior period |
(992) |
|
(920) |
|
(945) |
|
(1,856) |
|
(1,710) |
|
Adjusted EBITDA growth |
$ 44 |
|
$ 72 |
|
$ (44) |
|
$ 172 |
|
$ 136 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current period |
$ 2,159 |
|
$ 2,127 |
|
$ 2,019 |
|
$ 4,286 |
|
$ 4,017 |
|
Less revenues - prior period |
(2,127) |
|
(2,110) |
|
(1,998) |
|
(4,171) |
|
(3,712) |
|
Revenue growth |
$ 32 |
|
$ 17 |
|
$ 21 |
|
$ 115 |
|
$ 305 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA flow-through rate |
138 % |
|
424 % |
|
(210) % |
|
150 % |
|
45 % |
|
|
|
|
|
|
|
|
|
|
|
(12) |
FFO is defined as net income or loss, excluding gain or loss from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ 301 |
|
$ 231 |
|
$ 207 |
|
$ 532 |
|
$ 466 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Real estate depreciation |
306 |
|
316 |
|
284 |
|
622 |
|
568 |
|
(Gain) loss on disposition of real estate property |
(16) |
|
— |
|
1 |
|
(16) |
|
3 |
|
Adjustments for FFO from unconsolidated joint ventures |
6 |
|
6 |
|
3 |
|
12 |
|
6 |
|
FFO attributable to common stockholders |
$ 597 |
|
$ 553 |
|
$ 495 |
|
$ 1,150 |
|
$ 1,043 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
$ 597 |
|
$ 553 |
|
$ 495 |
|
$ 1,150 |
|
$ 1,043 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Installation revenue adjustment |
— |
|
(2) |
|
6 |
|
(2) |
|
4 |
|
Straight-line rent expense adjustment |
5 |
|
6 |
|
11 |
|
11 |
|
12 |
|
Contract cost adjustment |
(2) |
|
(8) |
|
(14) |
|
(10) |
|
(21) |
|
Amortization of deferred financing costs and debt discounts |
5 |
|
5 |
|
5 |
|
10 |
|
10 |
|
Stock-based compensation expense |
125 |
|
101 |
|
104 |
|
226 |
|
203 |
|
Stock-based charitable contributions |
3 |
|
— |
|
3 |
|
3 |
|
3 |
|
Non-real estate depreciation expense |
132 |
|
158 |
|
126 |
|
290 |
|
247 |
|
Amortization expense |
51 |
|
52 |
|
52 |
|
103 |
|
104 |
|
Accretion expense adjustment |
1 |
|
(1) |
|
(1) |
|
— |
|
1 |
|
Recurring capital expenditures |
(45) |
|
(21) |
|
(40) |
|
(66) |
|
(63) |
|
Loss on debt extinguishment |
— |
|
1 |
|
— |
|
1 |
|
— |
|
Transaction costs |
3 |
|
2 |
|
6 |
|
5 |
|
8 |
|
Income tax expense adjustment |
4 |
|
— |
|
1 |
|
4 |
|
3 |
|
Adjustments for AFFO from unconsolidated joint ventures |
(2) |
|
(3) |
|
— |
|
(5) |
|
2 |
|
AFFO attributable to common stockholders |
$ 877 |
|
$ 843 |
|
$ 754 |
|
$ 1,720 |
|
$ 1,556 |
|
|
|
|
|
|
|
|
|
|
|
(14) |
Following is how we reconcile from adjusted EBITDA to AFFO: |
|
|
|
|
|||||
|
|
|
|
|
||||||
|
Adjusted EBITDA |
$ 1,036 |
|
$ 992 |
|
$ 901 |
|
$ 2,028 |
|
$ 1,846 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest income |
(81) |
|
(80) |
|
(76) |
|
(161) |
|
(154) |
|
Amortization of deferred financing costs and debt discounts |
5 |
|
5 |
|
5 |
|
10 |
|
10 |
|
Income tax expense |
(47) |
|
(46) |
|
(37) |
|
(93) |
|
(92) |
|
Income tax expense adjustment |
4 |
|
— |
|
1 |
|
4 |
|
3 |
|
Straight-line rent expense adjustment |
5 |
|
6 |
|
11 |
|
11 |
|
12 |
|
Stock-based charitable contributions |
3 |
|
— |
|
3 |
|
3 |
|
3 |
|
Contract cost adjustment |
(2) |
|
(8) |
|
(14) |
|
(10) |
|
(21) |
|
Installation revenue adjustment |
— |
|
(2) |
|
6 |
|
(2) |
|
4 |
|
Recurring capital expenditures |
(45) |
|
(21) |
|
(40) |
|
(66) |
|
(63) |
|
Other expense |
(7) |
|
(6) |
|
(12) |
|
(13) |
|
(4) |
|
(Gain) loss on disposition of real estate property |
(16) |
|
— |
|
1 |
|
(16) |
|
3 |
|
Adjustments for unconsolidated JVs' and non-controlling interests |
4 |
|
3 |
|
3 |
|
7 |
|
8 |
|
Adjustment for gain on asset sales |
18 |
|
— |
|
2 |
|
18 |
|
1 |
|
AFFO attributable to common stockholders |
$ 877 |
|
$ 843 |
|
$ 754 |
|
$ 1,720 |
|
$ 1,556 |
|
|
|
|
|
|
|
|
|
|
|
(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) |
94,919 |
|
94,665 |
|
93,535 |
|
94,792 |
|
93,253 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
Employee equity awards (in thousands) |
247 |
|
491 |
|
322 |
|
369 |
|
346 |
|
Shares used in computing diluted net income per share, FFO per share and AFFO per share (in thousands) |
95,166 |
|
95,156 |
|
93,857 |
|
95,161 |
|
93,599 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per share |
$ 6.29 |
|
$ 5.84 |
|
$ 5.29 |
|
$ 12.13 |
|
$ 11.19 |
|
Diluted FFO per share |
$ 6.27 |
|
$ 5.81 |
|
$ 5.28 |
|
$ 12.08 |
|
$ 11.15 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per share |
$ 9.24 |
|
$ 8.91 |
|
$ 8.06 |
|
$ 18.14 |
|
$ 16.69 |
|
Diluted AFFO per share |
$ 9.22 |
|
$ 8.86 |
|
$ 8.04 |
|
$ 18.07 |
|
$ 16.62 |
View original content to download multimedia:https://www.prnewswire.com/news-releases/equinix-reports-second-quarter-2024-results-302216957.html
SOURCE