REDWOOD CITY, Calif.,
May 6, 2020 /PRNewswire/ --
- Quarterly revenues increased 6% over the same quarter last year
to $1.445 billion, or 7% on a
normalized and constant currency basis, representing the
69th consecutive quarter of revenue growth
- Key customer expansions included Hurricane Electric, TikTok and
Zoom
- Customer deployments across multiple metros comprised 87% of
total recurring revenues, demonstrating the value of the Equinix
global platform
- Interconnection revenues in the quarter increased 14% over the
same quarter last year, or 15% on a normalized and constant
currency basis, a sustainable and steady increase over the past few
quarters
- Peak Equinix Internet Exchange™ traffic increased
44% over the same quarter last year, or over 20% compared to the
prior quarter, reflecting the impact of the sudden global shift to
remote and work-from-home practices
Equinix, Inc. (Nasdaq: EQIX), the global interconnection
and data center company, today reported results for the quarter
ended March 31, 2020. 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.
First Quarter 2020 Results Summary
- Revenues
-
- $1.445 billion, a 2% increase
over the previous quarter
- Includes $15 million of negative
foreign currency impact when compared to prior guidance rates
- Operating Income
-
- $253 million, a 19% decrease from
the previous quarter, largely due to the sale of certain assets in
Q4 to the EMEA xScale™ joint venture, and an operating
margin of 18%
- Adjusted EBITDA
-
- $684 million, a 47% adjusted
EBITDA margin, including higher seasonal costs
- Includes $7 million of negative
foreign currency impact when compared to prior guidance rates
- Includes $3 million of
integration costs
- Net Income and Net Income per Share attributable to
Equinix
-
- $119 million, a 5% decrease from
the previous quarter
- $1.38 per share, a 5% decrease
from the previous quarter
- AFFO and AFFO per Share
-
- $535 million, a 13% increase over
the previous quarter
- $6.21 per share, a 13% increase
over the previous quarter
- Includes $3 million of
integration costs
2020 Annual Guidance Summary
- Revenues
-
- $5.877 - $5.985 billion, a 6 - 8% increase over the
previous year, or a normalized and constant currency increase of 7
- 9%
- Includes a negative foreign currency impact of $105 million when compared to the prior guidance
FX rates due to a strong U.S. dollar compared to our more
significant other operating currencies, including the Euro, Pound
and Brazilian Real
- Adjusted EBITDA
-
- $2.765 - $2.845 billion, a 47% adjusted EBITDA margin
- Includes a negative foreign currency impact of $48 million when compared to the prior guidance
FX rates
- Assumes $20 million of
integration costs
- AFFO and AFFO per Share
-
- $2.043 - $2.133 billion, an increase of 6 - 10% over the
previous year, or a normalized and constant currency increase of 11
- 16%
- $23.62 - $24.66 per share, an increase of 4 - 8% over the
previous year, or a normalized and constant currency increase of 8
- 12%
- Includes a negative foreign currency impact of $35 million when compared to the prior guidance
FX rates
- Assumes $20 million of
integration costs
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:
"These are unprecedented times and our hearts go out to those
who have been impacted by COVID-19. We extend our gratitude to all
the front-line workers who are helping to keep us safe and healthy
during this global pandemic. The Equinix business continues to
perform well and show resiliency through these times of
uncertainty, enabling us to remain focused on the clear set of
priorities we laid out at the beginning of the
year—investing in our people, evolving our platform and
service portfolio to meet the changing needs of customers,
expanding our go-to-market engine to fuel long-term growth, and
simplifying our business to drive operating leverage and enhance
our customer experience."
Business Highlights
- Interconnection revenues in Q1 grew 14% year-over-year, or 15%
on a normalized and constant currency basis, steadily rising over
the last few quarters, reflecting the demand across our portfolio
of interconnection products. Today, Equinix has the most
comprehensive global interconnection platform, comprising over
370,000 physical and virtual interconnections. In Q1, Equinix added
an incremental 6,800 interconnections, fueled by content video
streaming and unified communication services. Equinix Cloud
Exchange Fabric™ (ECX Fabric™) demonstrated strong growth in
average revenue per user, as higher bandwidth and inter-metro
connections become a larger share of the total.
- Equinix continues the growth of its indirect selling
initiatives, as the company pursues high-value strategic channel
partnerships. In Q1, channel activity accounted for approximately
30% of bookings, including wins across a wide range of industry
segments with projects focused on digital transformation efforts,
as well as COVID-19 responses.
- Equinix delivered strong bookings in the quarter, the
second-best Q1 bookings performance in the company's history,
reflecting diverse customer demand and robust interconnection
growth. The network vertical achieved its third-highest bookings,
with strong network reseller activity driving a diverse funnel of
enterprise deals and internet capacity upgrades to support
increased bandwidth for work-from-home employees. The content and
digital media vertical also saw strong bookings with strength in
video and social media.
- As part of the company's hyperscale initiative, on April 21, 2020, Equinix signed a greater than
$1.0 billion initial joint venture in
the form of a limited liability partnership with GIC, Singapore's sovereign wealth fund, to develop
and operate xScale™ data centers in Japan. The three initial facilities in the
joint venture—one in Osaka and two
in Tokyo—will serve the unique core workload deployment needs of a
targeted group of hyperscale companies, including the world's
largest cloud service providers. This is Equinix's second joint
venture with GIC. In 2019, Equinix and GIC announced the formation
of a joint venture to develop and operate xScale data centers in
Europe.
- On March 3, 2020, Equinix
announced the completion of the $335
million acquisition of Packet. Now operating as "Packet, an
Equinix company," the Packet team is contributing to Equinix's
strategy to help enterprises seamlessly deploy hybrid multicloud
architectures by developing new solutions that combine Packet's
leading bare metal automation technology with the rich ecosystems,
global reach and interconnection fabric of Platform
Equinix®.
- Equinix continues to advance the company's sustainability
agenda with meaningful progress across environmental, social and
governance (ESG) initiatives. On May 5,
2020, Equinix launched its fifth annual sustainability
report highlighting FY19 ESG metrics and progress, reinforcing the
company's commitment toward 100% clean and renewable energy use,
and its transparency around the impact of the company's global
operations as it continues to grow a sustainable business.
COVID-19 Update
Many of our IBX® data centers have been identified as
"essential businesses" or "critical infrastructure" by local
governments for purposes of remaining open during the COVID-19
pandemic, and all IBX data centers remain operational at the time
of filing of this press release. We have implemented precautionary
measures to minimize the risk of operational impact and to protect
the health and safety of our employees, customers, partners and
communities. These include implementing tools such as an
appointment-based system to control timing and frequency of visits
while also encouraging our customers to leverage our IBX
technicians via Smart Hands® in order to restrict visits
and minimize the number of people and the amount of time spent in
our IBX facilities. For the health and safety of our employees, we
have temporarily closed all of our corporate offices and instructed
our non-IBX employees across the globe to work from home.
The full potential impact of the COVID-19 pandemic on our
financial condition or results of operations remains uncertain and
will depend on a number of factors, including its impact on our
customers, partners and vendors, and the impact and functioning of
the global financial markets. Additional information pertaining to
the impact of COVID-19 on Equinix and our response thereto will be
provided in our upcoming Form 10-Q for the quarter ended
March 31, 2020.
Business Outlook
Equinix widened quarterly total revenues and adjusted EBITDA
guidance ranges to account for the possible net financial impact
associated with COVID-19. For the second quarter of 2020, the
Company expects revenues to range between $1.446 and $1.466
billion, an increase of 0 - 2% quarter-over-quarter, or a
normalized and constant currency increase of approximately 1 - 2%.
This guidance includes a negative foreign currency impact of
$17 million when compared to the
average foreign currency ("FX") rates in Q1 2020 and an approximate
$6 million impact from the COVID-19
reduction in revenues attributed to the waiver of certain Smart
Hands fees. Adjusted EBITDA is expected to range between
$679 and $699
million, including a negative foreign currency impact of
$7 million when compared to the
average FX rates in Q1 2020, $8
million of integration costs from acquisitions, and the
flow-through impacts related to COVID-19. Recurring capital
expenditures are expected to range between $26 and $36
million.
Equinix widened full-year total revenues, adjusted EBITDA and
AFFO guidance ranges to account for the possible net financial
impact associated with COVID-19. For the full year of 2020, total
revenues are expected to range between $5.877 and $5.985
billion, a 6 - 8% increase over the previous year, or a
normalized and constant currency increase of approximately 7 - 9%.
Revenues attributed to the Packet acquisition are expected to range
between $32 and $40 million. This guidance includes a negative
foreign currency impact of $105
million when compared to the prior guidance FX rates.
Adjusted EBITDA is expected to range between $2.765 and $2.845
billion, an adjusted EBITDA margin of 47% at the mid-point.
This adjusted EBITDA includes a negative foreign currency impact of
$48 million when compared to the
prior guidance FX rates. For the year, the company expects to incur
$20 million in integration costs
related to acquisitions. AFFO is expected to range between
$2.043 and $2.133 billion, an increase of 6 - 10% over the
previous year, including a negative foreign currency impact of
$35 million when compared to the
prior guidance FX rates, or a normalized and constant currency
increase of 11 - 16% and $20 million
of integration costs related to our acquisitions. This updated AFFO
guidance, on a constant currency basis, effectively reaffirms prior
full-year underlying AFFO guidance at the mid-point. AFFO per share
is expected to range between $23.62
and $24.66, an increase of 4 - 8%
over the previous year, or a normalized and constant currency
increase of 8 - 12%. This excludes any potential financing or
refinancing the Company may undertake in the future. Non-recurring
capital expenditures are expected to range between $1.900 and $2.090
billion, and recurring capital expenditures are expected to
range between $150 and $160 million.
The U.S. dollar exchange rates used for 2020 guidance, taking
into consideration the impact of our current foreign currency
hedges, have been updated to $1.13 to
the Euro, $1.28 to the Pound,
S$1.42 to the U.S. dollar, ¥108 to
the U.S. dollar, and R$5.21 to the
U.S. dollar. The Q1 2020 global revenue breakdown by currency for
the Euro, British Pound, Singapore Dollar, Japanese Yen and
Brazilian Real is 20%, 9%, 7%, 6% 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.
Q1 2020 Results Conference Call and Replay
Information
Equinix will discuss its quarterly results for the period ended
March 31, 2020, along with its future outlook, in its
quarterly conference call on Wednesday, May 6, 2020, 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, July 29, 2020, by
dialing 1-203-369-0156 and referencing the passcode 2020. 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, Inc. (Nasdaq: EQIX) connects the world's leading
businesses to their customers, employees and partners inside the
most-interconnected data centers. On this global platform for
digital business, companies come together across more than 50
markets on five continents to reach everywhere, interconnect
everyone and integrate everything they need to create their digital
futures.
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 income from operations
excluding 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 an
IBX® data center, and do not reflect its current or
future cash spending levels to support its business. Its IBX data
centers are long-lived assets, and have an economic life greater
than 10 years. The construction costs of an IBX 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 IBX 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 IBX data centers. These estimates
could vary from actual performance of the asset, are based on
historic costs incurred to build out our IBX 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 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 long-lived 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. 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,
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 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 COVID-19 pandemic; the challenges of acquiring,
operating and constructing IBX 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
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Recurring
revenues
|
$
|
1,361,694
|
|
|
$
|
1,337,977
|
|
|
$
|
1,274,828
|
|
Non-recurring
revenues
|
82,848
|
|
|
79,158
|
|
|
88,390
|
|
Revenues
|
1,444,542
|
|
|
1,417,135
|
|
|
1,363,218
|
|
Cost of
revenues
|
736,282
|
|
|
725,636
|
|
|
682,030
|
|
Gross
profit
|
708,260
|
|
|
691,499
|
|
|
681,188
|
|
Operating
expenses:
|
|
|
|
|
|
Sales and
marketing
|
180,450
|
|
|
160,556
|
|
|
169,715
|
|
General and
administrative
|
261,597
|
|
|
245,504
|
|
|
215,046
|
|
Transaction
costs
|
11,530
|
|
|
16,545
|
|
|
2,471
|
|
Impairment
charges
|
—
|
|
|
(233)
|
|
|
14,448
|
|
(Gain) loss on asset
sales
|
1,199
|
|
|
(43,847)
|
|
|
—
|
|
Total operating
expenses
|
454,776
|
|
|
378,525
|
|
|
401,680
|
|
Income from
operations
|
253,484
|
|
|
312,974
|
|
|
279,508
|
|
Interest and other
income (expense):
|
|
|
|
|
Interest
income
|
4,273
|
|
|
7,532
|
|
|
4,202
|
|
Interest
expense
|
(107,338)
|
|
|
(117,617)
|
|
|
(122,846)
|
|
Other income
(expense)
|
5,170
|
|
|
12,336
|
|
|
(166)
|
|
Loss on debt
extinguishment
|
(6,441)
|
|
|
(52,758)
|
|
|
(382)
|
|
Total interest and
other, net
|
(104,336)
|
|
|
(150,507)
|
|
|
(119,192)
|
|
Income before
income taxes
|
149,148
|
|
|
162,467
|
|
|
160,316
|
|
Income tax
expense
|
(30,191)
|
|
|
(37,632)
|
|
|
(42,569)
|
|
Net
income
|
118,957
|
|
|
124,835
|
|
|
117,747
|
|
Net (income) loss
attributable to non-controlling interests
|
(165)
|
|
|
160
|
|
|
331
|
|
Net income
attributable to Equinix
|
$
|
118,792
|
|
|
$
|
124,995
|
|
|
$
|
118,078
|
|
Net income per
share attributable to Equinix:
|
Basic net income per
share
|
$
|
1.39
|
|
|
$
|
1.47
|
|
|
$
|
1.44
|
|
Diluted net income
per share
|
$
|
1.38
|
|
|
$
|
1.46
|
|
|
$
|
1.44
|
|
Shares used in
computing basic net income per share
|
85,551
|
|
|
85,289
|
|
|
81,814
|
|
Shares used in
computing diluted net income per share
|
86,144
|
|
|
85,831
|
|
|
82,090
|
|
EQUINIX,
INC.
|
Condensed
Consolidated Statements of Comprehensive Income
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Net income
|
$
|
118,957
|
|
|
$
|
124,835
|
|
|
$
|
117,747
|
|
Other comprehensive
loss, net of tax:
|
|
|
Foreign currency
translation adjustment ("CTA") gain (loss)
|
(413,792)
|
|
|
283,185
|
|
|
(81,719)
|
|
Net investment hedge
CTA gain (loss)
|
144,946
|
|
|
(154,596)
|
|
|
76,850
|
|
Unrealized gain
(loss) on cash flow hedges
|
(3,256)
|
|
|
(22,928)
|
|
|
8,224
|
|
Net actuarial gain
(loss) on defined benefit plans
|
35
|
|
|
(22)
|
|
|
(11)
|
|
Total other
comprehensive income (loss), net of tax
|
(272,067)
|
|
|
105,639
|
|
|
3,344
|
|
Comprehensive
income (loss), net of tax
|
(153,110)
|
|
|
230,474
|
|
|
121,091
|
|
Net (income) loss
attributable to non-controlling interests
|
(165)
|
|
|
160
|
|
|
331
|
|
Other comprehensive
(income) loss attributable to non-controlling interests
|
11
|
|
|
(16)
|
|
|
(7)
|
|
Comprehensive
income (loss) attributable to Equinix
|
$
|
(153,264)
|
|
|
$
|
230,618
|
|
|
$
|
121,415
|
|
EQUINIX,
INC.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(unaudited)
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,171,339
|
|
|
$
|
1,869,577
|
|
Short-term
investments
|
25,833
|
|
|
10,362
|
|
Accounts receivable,
net
|
687,153
|
|
|
689,134
|
|
Other current
assets
|
435,784
|
|
|
303,543
|
|
Total current assets
|
2,320,109
|
|
|
2,872,616
|
|
Property, plant and
equipment, net
|
12,177,044
|
|
|
12,152,597
|
|
Operating lease
right-of-use assets
|
1,414,711
|
|
|
1,475,367
|
|
Goodwill
|
4,927,459
|
|
|
4,781,858
|
|
Intangible assets,
net
|
2,108,539
|
|
|
2,102,389
|
|
Other
assets
|
642,836
|
|
|
580,788
|
|
Total assets
|
$
|
23,590,698
|
|
|
$
|
23,965,615
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
717,574
|
|
|
$
|
760,718
|
|
Accrued property,
plant and equipment
|
317,144
|
|
|
301,535
|
|
Current portion of
operating lease liabilities
|
140,596
|
|
|
145,606
|
|
Current portion of
finance lease liabilities
|
89,262
|
|
|
75,239
|
|
Current portion of
mortgage and loans payable
|
74,473
|
|
|
77,603
|
|
Current portion of
senior notes
|
300,401
|
|
|
643,224
|
|
Other current
liabilities
|
199,023
|
|
|
153,938
|
|
Total current liabilities
|
1,838,473
|
|
|
2,157,863
|
|
Operating lease
liabilities, less current portion
|
1,261,964
|
|
|
1,315,656
|
|
Finance lease
liabilities, less current portion
|
1,489,945
|
|
|
1,430,882
|
|
Mortgage and loans
payable, less current portion
|
1,469,195
|
|
|
1,289,434
|
|
Senior notes, less
current portion
|
8,253,745
|
|
|
8,309,673
|
|
Other
liabilities
|
608,082
|
|
|
621,725
|
|
Total liabilities
|
14,921,404
|
|
|
15,125,233
|
|
Common
stock
|
86
|
|
|
86
|
|
Additional paid-in
capital
|
12,893,455
|
|
|
12,696,433
|
|
Treasury
stock
|
(127,298)
|
|
|
(144,256)
|
|
Accumulated
dividends
|
(4,399,527)
|
|
|
(4,168,469)
|
|
Accumulated other
comprehensive loss
|
(1,206,669)
|
|
|
(934,613)
|
|
Retained
earnings
|
1,509,317
|
|
|
1,391,425
|
|
Total Equinix stockholders' equity
|
8,669,364
|
|
|
8,840,606
|
|
Non-controlling
interests
|
(70)
|
|
|
(224)
|
|
Total stockholders' equity
|
8,669,294
|
|
|
8,840,382
|
|
Total liabilities and stockholders' equity
|
$
|
23,590,698
|
|
|
$
|
23,965,615
|
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
Americas headcount
|
3,924
|
|
|
3,672
|
|
EMEA headcount
|
3,044
|
|
|
2,941
|
|
Asia-Pacific headcount
|
1,813
|
|
|
1,765
|
|
Total headcount
|
8,781
|
|
|
8,378
|
|
EQUINIX,
INC.
|
Summary of Debt
Principal Outstanding
|
(in
thousands)
|
(unaudited)
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
|
|
|
Finance lease
liabilities
|
$
|
1,579,207
|
|
|
$
|
1,506,121
|
|
|
|
|
|
Term loans
|
1,214,717
|
|
|
1,282,302
|
|
Revolving credit
facility
|
250,000
|
|
|
—
|
|
Mortgage payable and
other loans payable
|
78,951
|
|
|
84,735
|
|
Plus: debt discount
and issuance costs, net
|
2,615
|
|
|
3,081
|
|
Total mortgage and loans payable principal
|
1,546,283
|
|
|
1,370,118
|
|
|
|
|
|
Senior
notes
|
8,554,146
|
|
|
8,952,897
|
|
Plus: debt issuance
costs
|
73,075
|
|
|
78,030
|
|
Less: debt
premium
|
(1,121)
|
|
|
(1,716)
|
|
Total senior notes principal
|
8,626,100
|
|
|
9,029,211
|
|
|
|
|
|
Total debt principal
outstanding
|
$
|
11,751,590
|
|
|
$
|
11,905,450
|
|
EQUINIX,
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
Net income
|
$
|
118,957
|
|
|
$
|
124,835
|
|
|
$
|
117,747
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
Depreciation,
amortization and accretion
|
337,431
|
|
|
328,295
|
|
|
314,705
|
|
|
Stock-based
compensation
|
64,499
|
|
|
62,126
|
|
|
49,023
|
|
|
Amortization of debt
issuance costs and debt discounts and premiums
|
3,460
|
|
|
3,613
|
|
|
2,995
|
|
|
Loss on debt
extinguishment
|
6,441
|
|
|
52,758
|
|
|
382
|
|
|
(Gain) loss on asset
sales
|
1,199
|
|
|
(43,847)
|
|
|
—
|
|
|
Impairment
charges
|
—
|
|
|
(233)
|
|
|
14,448
|
|
|
Other
items
|
6,856
|
|
|
3,831
|
|
|
8,224
|
|
|
Changes in operating
assets and liabilities:
|
|
Accounts
receivable
|
15,306
|
|
|
96,480
|
|
|
(84,350)
|
|
|
Income taxes,
net
|
3,697
|
|
|
(40,649)
|
|
|
15,825
|
|
|
Accounts payable and
accrued expenses
|
(25,681)
|
|
|
(34,588)
|
|
|
(11,463)
|
|
|
Operating lease
right-of-use assets
|
38,797
|
|
|
40,805
|
|
|
41,264
|
|
|
Operating lease
liabilities
|
(35,193)
|
|
|
(40,032)
|
|
|
(38,886)
|
|
|
Other assets and
liabilities
|
(18,939)
|
|
|
(23,724)
|
|
|
(8,773)
|
|
Net cash provided
by operating activities
|
516,830
|
|
|
529,670
|
|
|
421,141
|
|
Cash flows from
investing activities:
|
|
Purchases, sales and
maturities of investments, net
|
(38,940)
|
|
|
(5,776)
|
|
|
(8,779)
|
|
|
Business
acquisitions, net of cash and restricted cash acquired
|
(478,287)
|
|
|
—
|
|
|
—
|
|
|
Purchases of real
estate
|
(36,373)
|
|
|
(104,865)
|
|
|
(5,721)
|
|
|
Purchases of other
property, plant and equipment
|
(400,941)
|
|
|
(714,561)
|
|
|
(363,967)
|
|
|
Proceeds from asset
sales
|
—
|
|
|
358,656
|
|
|
—
|
|
Net cash used in
investing activities
|
(954,541)
|
|
|
(466,546)
|
|
|
(378,467)
|
|
Cash flows from
financing activities:
|
|
Proceeds from
employee equity awards
|
30,391
|
|
|
—
|
|
|
27,593
|
|
|
Payment of dividend
distributions
|
(233,479)
|
|
|
(210,360)
|
|
|
(204,603)
|
|
|
Proceeds from public
offering of common stock, net of offering costs
|
101,792
|
|
|
—
|
|
|
1,213,434
|
|
|
Proceeds from
revolving credit facility
|
250,000
|
|
|
—
|
|
|
—
|
|
|
Proceeds from senior
notes, net of debt discounts
|
—
|
|
|
2,797,906
|
|
|
—
|
|
|
Repayment of finance
lease liabilities
|
(18,977)
|
|
|
(63,701)
|
|
|
(31,158)
|
|
|
Repayment of mortgage
and loans payable
|
(18,501)
|
|
|
(19,431)
|
|
|
(18,334)
|
|
|
Repayment of senior
notes
|
(343,711)
|
|
|
(2,056,289)
|
|
|
—
|
|
|
Debt extinguishment
costs
|
(4,619)
|
|
|
(43,311)
|
|
|
—
|
|
|
Debt issuance
costs
|
—
|
|
|
(23,341)
|
|
|
—
|
|
Net cash provided
by (used in) financing activities
|
(237,104)
|
|
|
381,473
|
|
|
986,932
|
|
Effect of foreign
currency exchange rates on cash, cash equivalents and restricted
cash
|
(25,287)
|
|
|
21,883
|
|
|
(1,695)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(700,102)
|
|
|
466,480
|
|
|
1,027,911
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
1,886,613
|
|
|
1,420,133
|
|
|
627,604
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
1,186,511
|
|
|
$
|
1,886,613
|
|
|
$
|
1,655,515
|
|
Supplemental cash
flow information:
|
Cash paid for
taxes
|
$
|
45,324
|
|
|
$
|
47,507
|
|
|
$
|
27,024
|
|
Cash paid for
interest
|
$
|
125,924
|
|
|
$
|
141,140
|
|
|
$
|
146,144
|
|
|
|
|
|
|
|
|
Free cash flow
(negative free cash flow) (1)
|
$
|
(398,771)
|
|
|
$
|
68,900
|
|
|
$
|
51,453
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow (2)
|
$
|
115,889
|
|
|
$
|
173,765
|
|
|
$
|
57,174
|
|
|
|
|
|
|
|
|
(1)
|
We define free cash
flow (negative free cash flow) as net cash provided by operating
activities plus net cash provided by (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
|
$
|
516,830
|
|
|
$
|
529,670
|
|
|
$
|
421,141
|
|
|
Net cash used in
investing activities as presented above
|
(954,541)
|
|
|
(466,546)
|
|
|
(378,467)
|
|
|
Purchases, sales and
maturities of investments, net
|
38,940
|
|
|
5,776
|
|
|
8,779
|
|
|
Free cash flow
(negative free cash flow)
|
$
|
(398,771)
|
|
|
$
|
68,900
|
|
|
$
|
51,453
|
|
|
|
|
|
|
|
|
(2)
|
We define adjusted
free cash flow as free cash flow (negative free cash flow) as
defined above, excluding any purchases of 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
|
$
|
(398,771)
|
|
|
$
|
68,900
|
|
|
$
|
51,453
|
|
|
Less business
acquisitions, net of cash and restricted cash acquired
|
478,287
|
|
|
—
|
|
|
—
|
|
|
Less purchases of
real estate
|
36,373
|
|
|
104,865
|
|
|
5,721
|
|
|
Adjusted free cash
flow
|
$
|
115,889
|
|
|
$
|
173,765
|
|
|
$
|
57,174
|
|
EQUINIX,
INC.
|
Non-GAAP Measures
and Other Supplemental Data
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
|
Recurring
revenues
|
$
|
1,361,694
|
|
|
$
|
1,337,977
|
|
|
$
|
1,274,828
|
|
|
Non-recurring
revenues
|
82,848
|
|
|
79,158
|
|
|
88,390
|
|
|
Revenues
(1)
|
1,444,542
|
|
|
1,417,135
|
|
|
1,363,218
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
476,541
|
|
|
477,144
|
|
|
448,381
|
|
|
Cash gross profit
(3)
|
968,001
|
|
|
939,991
|
|
|
914,837
|
|
|
|
|
|
|
|
|
|
Cash operating
expenses (4)(7):
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
115,671
|
|
|
100,430
|
|
|
108,216
|
|
|
Cash general and
administrative expenses (6)
|
168,120
|
|
|
163,701
|
|
|
146,466
|
|
|
Total cash
operating expenses (4)(7)
|
283,791
|
|
|
264,131
|
|
|
254,682
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(8)
|
$
|
684,210
|
|
|
$
|
675,860
|
|
|
$
|
660,155
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
67
|
%
|
|
66
|
%
|
|
67
|
%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margins (10)
|
47
|
%
|
|
48
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate (11)
|
30
|
%
|
|
6
|
%
|
|
81
|
%
|
|
|
|
|
|
|
|
|
FFO
(12)
|
$
|
343,754
|
|
|
$
|
304,025
|
|
|
$
|
326,073
|
|
|
|
|
|
|
|
|
|
AFFO
(13)(14)
|
$
|
534,705
|
|
|
$
|
472,611
|
|
|
$
|
488,120
|
|
|
|
|
|
|
|
|
|
Basic FFO per
share (15)
|
$
|
4.02
|
|
|
$
|
3.56
|
|
|
$
|
3.99
|
|
|
|
|
|
|
|
|
|
Diluted FFO per
share (15)
|
$
|
3.99
|
|
|
$
|
3.54
|
|
|
$
|
3.97
|
|
|
|
|
|
|
|
|
|
Basic AFFO per
share (15)
|
$
|
6.25
|
|
|
$
|
5.54
|
|
|
$
|
5.97
|
|
|
|
|
|
|
|
|
|
Diluted AFFO per
share (15)
|
$
|
6.21
|
|
|
$
|
5.51
|
|
|
$
|
5.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split
of our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
Americas
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
|
450,954
|
|
|
$
|
443,991
|
|
|
$
|
439,981
|
|
|
Interconnection
|
150,929
|
|
|
149,474
|
|
|
138,563
|
|
|
Managed
infrastructure
|
25,529
|
|
|
21,485
|
|
|
21,787
|
|
|
Other
|
5,220
|
|
|
5,020
|
|
|
5,979
|
|
|
Recurring
revenues
|
632,632
|
|
|
619,970
|
|
|
606,310
|
|
|
Non-recurring
revenues
|
29,273
|
|
|
33,696
|
|
|
38,056
|
|
|
Revenues
|
$
|
661,905
|
|
|
$
|
653,666
|
|
|
$
|
644,366
|
|
|
|
|
|
|
|
|
|
EMEA
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
|
362,330
|
|
|
$
|
359,423
|
|
|
$
|
331,125
|
|
|
Interconnection
|
48,541
|
|
|
44,350
|
|
|
37,525
|
|
|
Managed
infrastructure
|
30,137
|
|
|
28,495
|
|
|
29,088
|
|
|
Other
|
2,466
|
|
|
3,458
|
|
|
2,499
|
|
|
Recurring
revenues
|
443,474
|
|
|
435,726
|
|
|
400,237
|
|
|
Non-recurring
revenues
|
35,435
|
|
|
28,063
|
|
|
34,423
|
|
|
Revenues
|
$
|
478,909
|
|
|
$
|
463,789
|
|
|
$
|
434,660
|
|
|
|
|
|
|
|
|
|
Asia-Pacific
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
|
221,093
|
|
|
$
|
219,306
|
|
|
$
|
209,665
|
|
|
Interconnection
|
42,671
|
|
|
41,180
|
|
|
36,696
|
|
|
Managed
infrastructure
|
21,824
|
|
|
21,795
|
|
|
21,920
|
|
|
Recurring
revenues
|
285,588
|
|
|
282,281
|
|
|
268,281
|
|
|
Non-recurring
revenues
|
18,140
|
|
|
17,399
|
|
|
15,911
|
|
|
Revenues
|
$
|
303,728
|
|
|
$
|
299,680
|
|
|
$
|
284,192
|
|
|
|
|
|
|
|
|
|
Worldwide
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
|
1,034,377
|
|
|
$
|
1,022,720
|
|
|
$
|
980,771
|
|
|
Interconnection
|
242,141
|
|
|
235,004
|
|
|
212,784
|
|
|
Managed
infrastructure
|
77,490
|
|
|
71,775
|
|
|
72,795
|
|
|
Other
|
7,686
|
|
|
8,478
|
|
|
8,478
|
|
|
Recurring
revenues
|
1,361,694
|
|
|
1,337,977
|
|
|
1,274,828
|
|
|
Non-recurring
revenues
|
82,848
|
|
|
79,158
|
|
|
88,390
|
|
|
Revenues
|
$
|
1,444,542
|
|
|
$
|
1,417,135
|
|
|
$
|
1,363,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
|
736,282
|
|
|
$
|
725,636
|
|
|
$
|
682,030
|
|
|
Depreciation,
amortization and accretion expense
|
(250,398)
|
|
|
(241,753)
|
|
|
(228,637)
|
|
|
Stock-based
compensation expense
|
(9,343)
|
|
|
(6,739)
|
|
|
(5,012)
|
|
|
Cash cost of
revenues
|
$
|
476,541
|
|
|
$
|
477,144
|
|
|
$
|
448,381
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$
|
185,233
|
|
|
$
|
184,029
|
|
|
$
|
179,635
|
|
|
EMEA cash cost of
revenues
|
187,248
|
|
|
187,972
|
|
|
173,201
|
|
|
Asia-Pacific cash
cost of revenues
|
104,060
|
|
|
105,143
|
|
|
95,545
|
|
|
Cash cost of
revenues
|
$
|
476,541
|
|
|
$
|
477,144
|
|
|
$
|
448,381
|
|
|
(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
|
$
|
442,047
|
|
|
$
|
406,060
|
|
|
$
|
384,761
|
|
|
Depreciation and
amortization expense
|
(87,033)
|
|
|
(86,542)
|
|
|
(86,068)
|
|
|
Stock-based
compensation expense
|
(71,223)
|
|
|
(55,387)
|
|
|
(44,011)
|
|
|
Cash operating
expense
|
$
|
283,791
|
|
|
$
|
264,131
|
|
|
$
|
254,682
|
|
|
|
|
|
|
|
|
(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
|
$
|
180,450
|
|
|
$
|
160,556
|
|
|
$
|
169,715
|
|
|
Depreciation and
amortization expense
|
(46,234)
|
|
|
(47,659)
|
|
|
(48,198)
|
|
|
Stock-based
compensation expense
|
(18,545)
|
|
|
(12,467)
|
|
|
(13,301)
|
|
|
Cash sales and
marketing expense
|
$
|
115,671
|
|
|
$
|
100,430
|
|
|
$
|
108,216
|
|
|
|
|
|
|
|
|
(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
|
$
|
261,597
|
|
|
$
|
245,504
|
|
|
$
|
215,046
|
|
|
Depreciation and
amortization expense
|
(40,799)
|
|
|
(38,883)
|
|
|
(37,870)
|
|
|
Stock-based
compensation expense
|
(52,678)
|
|
|
(42,920)
|
|
|
(30,710)
|
|
|
Cash general and
administrative expense
|
$
|
168,120
|
|
|
$
|
163,701
|
|
|
$
|
146,466
|
|
|
|
|
|
|
|
|
(7)
|
The geographic split
of our cash operating expense, or cash SG&A, as defined above,
is presented below:
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$
|
183,059
|
|
|
$
|
155,561
|
|
|
$
|
156,893
|
|
|
EMEA cash
SG&A
|
61,503
|
|
|
69,072
|
|
|
62,387
|
|
|
Asia-Pacific cash
SG&A
|
39,229
|
|
|
39,498
|
|
|
35,402
|
|
|
Cash
SG&A
|
$
|
283,791
|
|
|
$
|
264,131
|
|
|
$
|
254,682
|
|
|
|
|
|
|
|
|
(8)
|
We define adjusted
EBITDA as income from operations excluding depreciation,
amortization, accretion, stock-based compensation,
restructuring charges, impairment charges, transaction costs and
gain or loss on asset sales as presented below:
|
|
|
|
|
|
|
|
|
Income from
operations
|
$
|
253,484
|
|
|
$
|
312,974
|
|
|
$
|
279,508
|
|
|
Depreciation,
amortization and accretion expense
|
337,431
|
|
|
328,295
|
|
|
314,705
|
|
|
Stock-based
compensation expense
|
80,566
|
|
|
62,126
|
|
|
49,023
|
|
|
Impairment
charges
|
—
|
|
|
(233)
|
|
|
14,448
|
|
|
Transaction
costs
|
11,530
|
|
|
16,545
|
|
|
2,471
|
|
|
(Gain) loss on asset
sales
|
1,199
|
|
|
(43,847)
|
|
|
—
|
|
|
Adjusted
EBITDA
|
$
|
684,210
|
|
|
$
|
675,860
|
|
|
$
|
660,155
|
|
|
|
|
|
|
|
|
|
The geographic split
of our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
Americas income from
operations
|
$
|
47,308
|
|
|
$
|
136,236
|
|
|
$
|
90,011
|
|
|
Americas
depreciation, amortization and accretion expense
|
171,439
|
|
|
165,580
|
|
|
167,136
|
|
|
Americas stock-based
compensation expense
|
62,689
|
|
|
44,878
|
|
|
34,171
|
|
|
Americas impairment
charges
|
—
|
|
|
(233)
|
|
|
14,448
|
|
|
Americas transaction
costs
|
10,978
|
|
|
13,378
|
|
|
2,072
|
|
|
Americas (gain) loss
on asset sales
|
1,199
|
|
|
(45,763)
|
|
|
—
|
|
|
Americas adjusted
EBITDA
|
$
|
293,613
|
|
|
$
|
314,076
|
|
|
$
|
307,838
|
|
|
|
|
|
|
|
|
|
EMEA income from
operations
|
$
|
126,004
|
|
|
$
|
96,453
|
|
|
$
|
105,007
|
|
|
EMEA depreciation,
amortization and accretion expense
|
92,740
|
|
|
95,264
|
|
|
84,547
|
|
|
EMEA stock-based
compensation expense
|
11,002
|
|
|
10,788
|
|
|
8,863
|
|
|
EMEA transaction
costs
|
412
|
|
|
2,324
|
|
|
655
|
|
|
EMEA loss on asset
sales
|
—
|
|
|
1,916
|
|
|
—
|
|
|
EMEA adjusted
EBITDA
|
$
|
230,158
|
|
|
$
|
206,745
|
|
|
$
|
199,072
|
|
|
|
|
|
|
|
|
|
Asia-Pacific income
from operations
|
$
|
80,172
|
|
|
$
|
80,285
|
|
|
$
|
84,490
|
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
73,252
|
|
|
67,451
|
|
|
63,022
|
|
|
Asia-Pacific
stock-based compensation expense
|
6,875
|
|
|
6,460
|
|
|
5,989
|
|
|
Asia-Pacific
transaction costs
|
140
|
|
|
843
|
|
|
(256)
|
|
|
Asia-Pacific adjusted
EBITDA
|
$
|
160,439
|
|
|
$
|
155,039
|
|
|
$
|
153,245
|
|
|
|
|
|
|
|
|
(9)
|
We define cash gross
margins as cash gross profit divided by revenues.
|
|
|
|
|
|
|
|
|
Our cash gross
margins by geographic region is presented below:
|
|
|
|
|
|
|
|
|
Americas cash gross
margins
|
72
|
%
|
|
72
|
%
|
|
72
|
%
|
|
EMEA cash gross
margins
|
61
|
%
|
|
59
|
%
|
|
60
|
%
|
|
Asia-Pacific cash
gross margins
|
66
|
%
|
|
65
|
%
|
|
66
|
%
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
44
|
%
|
|
48
|
%
|
|
48
|
%
|
|
EMEA adjusted EBITDA
margins
|
48
|
%
|
|
45
|
%
|
|
46
|
%
|
|
Asia-Pacific adjusted
EBITDA margins
|
53
|
%
|
|
52
|
%
|
|
54
|
%
|
|
(11)
|
We define adjusted
EBITDA flow-through rate as incremental adjusted EBITDA growth
divided by incremental revenue growth as follows:
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
current period
|
$
|
684,210
|
|
|
$
|
675,860
|
|
|
$
|
660,155
|
|
|
Less adjusted EBITDA
- prior period
|
(675,860)
|
|
|
(674,702)
|
|
|
(617,195)
|
|
|
Adjusted EBITDA
growth
|
$
|
8,350
|
|
|
$
|
1,158
|
|
|
$
|
42,960
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$
|
1,444,542
|
|
|
$
|
1,417,135
|
|
|
$
|
1,363,218
|
|
|
Less revenues - prior
period
|
(1,417,135)
|
|
|
(1,396,810)
|
|
|
(1,310,083)
|
|
|
Revenue
growth
|
$
|
27,407
|
|
|
$
|
20,325
|
|
|
$
|
53,135
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
30
|
%
|
|
6
|
%
|
|
81
|
%
|
|
|
|
|
|
|
|
(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
|
$
|
118,957
|
|
|
$
|
124,835
|
|
|
$
|
117,747
|
|
|
Net (income) loss
attributable to non-controlling interests
|
(165)
|
|
|
160
|
|
|
331
|
|
|
Net income
attributable to Equinix
|
118,792
|
|
|
124,995
|
|
|
118,078
|
|
|
Adjustments:
|
|
|
|
|
|
|
Real estate
depreciation
|
221,787
|
|
|
221,143
|
|
|
205,649
|
|
|
(Gain) loss on
disposition of real estate property
|
2,506
|
|
|
(42,758)
|
|
|
2,346
|
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
669
|
|
|
645
|
|
|
—
|
|
|
FFO attributable to
common shareholders
|
$
|
343,754
|
|
|
$
|
304,025
|
|
|
$
|
326,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13)
|
AFFO is defined as
FFO, excluding depreciation and amortization expense on non-real
estate assets, accretion, stock-based compensation,
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
|
$
|
343,754
|
|
|
$
|
304,025
|
|
|
$
|
326,073
|
|
|
Adjustments:
|
|
|
|
|
|
|
Installation revenue
adjustment
|
(3,481)
|
|
|
2,751
|
|
|
1,029
|
|
|
Straight-line rent
expense adjustment
|
1,806
|
|
|
773
|
|
|
2,378
|
|
|
Amortization of
deferred financing costs and debt discounts and premiums
|
3,460
|
|
|
3,613
|
|
|
2,995
|
|
|
Contract cost
adjustment
|
(10,434)
|
|
|
(11,556)
|
|
|
(6,778)
|
|
|
Stock-based
compensation expense
|
80,566
|
|
|
62,126
|
|
|
49,023
|
|
|
Non-real estate
depreciation expense
|
65,591
|
|
|
60,712
|
|
|
57,994
|
|
|
Amortization
expense
|
48,491
|
|
|
48,689
|
|
|
49,535
|
|
|
Accretion expense
(adjustment)
|
1,562
|
|
|
(2,249)
|
|
|
1,527
|
|
|
Recurring capital
expenditures
|
(17,868)
|
|
|
(80,925)
|
|
|
(20,947)
|
|
|
Loss on debt
extinguishment
|
6,441
|
|
|
52,758
|
|
|
382
|
|
|
Transaction
costs
|
11,530
|
|
|
16,545
|
|
|
2,471
|
|
|
Impairment
charges
|
—
|
|
|
(233)
|
|
|
14,448
|
|
|
Income tax expense
adjustment
|
2,833
|
|
|
13,502
|
|
|
7,990
|
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
454
|
|
|
2,080
|
|
|
—
|
|
|
AFFO attributable to
common shareholders
|
$
|
534,705
|
|
|
$
|
472,611
|
|
|
$
|
488,120
|
|
|
|
|
|
|
|
|
(14)
|
Following is
how we reconcile from adjusted EBITDA to AFFO:
|
|
|
Adjusted
EBITDA
|
$
|
684,210
|
|
|
$
|
675,860
|
|
|
$
|
660,155
|
|
|
Adjustments:
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(103,065)
|
|
|
(110,085)
|
|
|
(118,644)
|
|
|
Amortization of
deferred financing costs and debt discounts and premiums
|
3,460
|
|
|
3,613
|
|
|
2,995
|
|
|
Income tax
expense
|
(30,191)
|
|
|
(37,632)
|
|
|
(42,569)
|
|
|
Income tax expense
adjustment
|
2,833
|
|
|
13,502
|
|
|
7,990
|
|
|
Straight-line rent
expense adjustment
|
1,806
|
|
|
773
|
|
|
2,378
|
|
|
Contract cost
adjustment
|
(10,434)
|
|
|
(11,556)
|
|
|
(6,778)
|
|
|
Installation revenue
adjustment
|
(3,481)
|
|
|
2,751
|
|
|
1,029
|
|
|
Recurring capital
expenditures
|
(17,868)
|
|
|
(80,925)
|
|
|
(20,947)
|
|
|
Other income
(expense)
|
5,170
|
|
|
12,336
|
|
|
(166)
|
|
|
(Gain) loss on
disposition of real estate property
|
2,506
|
|
|
(42,758)
|
|
|
2,346
|
|
|
Adjustments for
unconsolidated JVs' and non-controlling interests
|
958
|
|
|
2,885
|
|
|
331
|
|
|
Adjustment for gain
(loss) on asset sales
|
(1,199)
|
|
|
43,847
|
|
|
—
|
|
|
AFFO attributable to
common shareholders
|
$
|
534,705
|
|
|
$
|
472,611
|
|
|
$
|
488,120
|
|
|
|
|
|
|
|
|
(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
|
85,551
|
|
|
85,289
|
|
|
81,814
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
Employee equity
awards
|
593
|
|
|
542
|
|
|
276
|
|
|
Shares used in
computing diluted net income per share, FFO per share and AFFO per
share
|
86,144
|
|
|
85,831
|
|
|
82,090
|
|
|
|
|
|
|
|
|
|
Basic FFO per
share
|
$
|
4.02
|
|
|
$
|
3.56
|
|
|
$
|
3.99
|
|
|
Diluted FFO per
share
|
$
|
3.99
|
|
|
$
|
3.54
|
|
|
$
|
3.97
|
|
|
|
|
|
|
|
|
|
Basic AFFO per
share
|
$
|
6.25
|
|
|
$
|
5.54
|
|
|
$
|
5.97
|
|
|
Diluted AFFO per
share
|
$
|
6.21
|
|
|
$
|
5.51
|
|
|
$
|
5.95
|
|
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SOURCE Equinix, Inc.