REDWOOD
CITY, Calif., Feb. 15,
2023 /PRNewswire/ --
- 2022 annual revenues increased 9% year-over-year on an
as-reported basis and 11% on a normalized and constant currency
basis to $7.3 billion
- Delivered seventh consecutive quarter of record channel
bookings, accounting for nearly 40% of total bookings and
approximately 60% of new logos
- Closed over 17,000 deals across more than 6,000 customers in
2022
- 2023 financial outlook at or above company's previously
disclosed long-term targets shared at the June 2021 Analyst Day
- Increases quarterly cash dividend by 10% to $3.41 per share on its common stock due to strong
operating performance
Equinix, Inc. (Nasdaq: EQIX), the world's digital
infrastructure companyTM, today reported results for the
quarter and year ended December 31, 2022. 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.
2022 Results Summary
- Revenues
-
- $7.263 billion, a 9% increase
over the previous year on an as-reported basis or 11% on a
normalized and constant currency basis
- Operating Income
-
- $1.201 billion, an 8% increase
over the previous year, and an operating margin of 17%, largely due
to strong operating performance offset in part by increased
investments to support the expanded scale and reach of the
business
- Net Income and Net Income per Share attributable to
Equinix
-
- $705 million, a 41% increase over
the previous year, primarily due to operating performance strength
and loss on debt extinguishment in 2021; partially offset by higher
income taxes
- $7.67 per share, a 39% increase
over the previous year
- Adjusted EBITDA
-
- $3.370 billion, a 46% adjusted
EBITDA margin
- Includes $20 million of
integration costs
- AFFO and AFFO per Share
-
- $2.714 billion, an 11% increase
over the previous year on both an as-reported and normalized and
constant currency basis
- $29.55 per share, a 9% increase
over the previous year or a normalized and constant currency
increase of 11%
- Includes $20 million of
integration costs
2023 Annual Guidance Summary
- Revenues
-
- $8.145 - $8.245 billion, a 12 - 14% increase over the
previous year or a normalized and constant currency increase of 14
- 15%
- Adjusted EBITDA
-
- $3.615 - $3.695 billion, a 45% adjusted EBITDA margin
after taking into consideration power price increases to revenues
and corresponding power cost increases
- Assumes $35 million of
integration costs
- AFFO and AFFO per Share
-
- $2.883 - $2.963 billion, an increase of 6 - 9% over the
previous year or a normalized and constant currency increase of 9 -
12%
- $30.79 - $31.64 per share, an increase of 4 - 7% over the
previous year or a normalized and constant currency increase of 8 -
10%. This guidance excludes any capital market activities the
company may undertake in the future
- Assumes $35 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, CEO and President, Equinix:
"With IDC forecasting digital technology spend to grow eight
times faster than the broader economy in 2023,1 today's
businesses are seeking the right infrastructure partner to support
their specific digital transformation needs, especially in the
current environment where operational efficiency and the need to
create lasting business differentiation are strategic drivers. Our
customers are validating the increasing demand for comprehensive
solutions that offer 'the right cloud for them' with flexibility to
place their workloads across multiple public clouds, private clouds
and on-prem—and they are finding Equinix's global platform and
interconnected ecosystems a unique environment to architect this
customizable infrastructure."
Business Highlights
- As Equinix continues to extend its comprehensive platform to
offer businesses a rich mix of physical and virtual solutions to
access its interconnected ecosystem, the company made progress on
digital services initiatives in Q4 that included:
-
- The November announcement with VMware of VMware Cloud on
Equinix Metal®, which combines VMware-managed and
supported cloud Infrastructure as a Service with Equinix's
interconnected, global Bare Metal as a Service offering. The
solution is aimed at offering customers a combination of
on-premises security and control with high performance, data
locality, and low overall total cost of ownership.
- An outline for the extension of its entire digital services
portfolio to seven new metros. This 2023 plan includes launching
Equinix Metal in Dublin,
Manchester, Mexico City, Miami and Milan, and bringing Network Edge to
Atlanta, Manchester, Mexico
City and Seoul.
- Equinix further invested in the expansion of its global
platform, which now encompasses more than 245 data centers across
71 metros in 32 countries:
-
- The 49 major projects currently underway across 35 metros and
23 countries represent the largest new-build pipeline in company
history.
- In Q4, Equinix announced its first builds in Johannesburg, South Africa, and Johor, Malaysia. The new Johannesburg facility will augment Equinix's
current African footprint in Nigeria, Ghana and Côte d'Ivoire by entering the
largest and most digitally developed nation on the continent. The
Johor expansion represents
Equinix's entry into one of the most-requested markets in
Asia-Pacific by global
customers.
- In Q4, Equinix advanced its environmental sustainability
commitments by becoming the first colocation data center operator
to commit to more efficient temperature and humidity standards that
will enable the company to reduce its overall power use by
increasing operating temperature ranges within its data centers. By
"adjusting the thermostat" to optimize data center energy use,
Equinix is leading the industry and is expected to enable thousands
of customers to reduce the Scope 3 carbon emissions associated with
their data center operations, as supply chain sustainability
becomes an increasingly important part of the overall environmental
initiatives of today's businesses.
__________________________________________
|
1 "IDC
FutureScape: Worldwide Digital Business Strategies 2023
Predictions," Doc #CA49743822, October 2022.
|
Business Outlook
For the first quarter of 2023, Equinix expects revenues to range
between $1.965 and $1.995 billion, an increase of 5 - 7% over the
previous quarter, or a normalized and constant currency increase of
5 - 6%. This guidance includes power price increases in EMEA, and a
negative foreign currency impact of $24
million when compared to the average FX rates in Q4 2022.
Adjusted EBITDA is expected to range between $891 and $921
million, which includes a negative foreign currency impact
of $9 million when compared to the
average FX rates in Q4 2022, a step-down in repairs &
maintenance costs incurred in the quarter, although offset in part
by increased seasonal salary and benefit costs of $17 million attributed to the FICA reset.
Adjusted EBITDA includes $6 million
of integration costs related to acquisitions. Recurring capital
expenditures are expected to range between $18 and $28
million.
For the full year of 2023, total revenues are expected to range
between $8.145 and $8.245 billion, a 12 - 14% increase over the
previous year on an as-reported basis, or a 14 - 15% increase on a
normalized and constant currency basis, and includes a foreign
currency benefit of $267 million when
compared to the prior Equinix guidance FX rates. Excluding the
impact of power price increases, this guidance represents a 9 - 10%
increase on a normalized and constant currency basis. Adjusted
EBITDA is expected to range between $3.615 and $3.695
billion, an adjusted EBITDA margin of 45%. This adjusted
EBITDA includes approximately 290 basis points of cumulative
negative margin impact due to inflated power rates across EMEA and
APAC markets and a foreign currency benefit of $123 million when compared to the prior Equinix
guidance FX rates. For the year, the company expects to incur
$35 million in integration costs
related to acquisitions. AFFO is expected to range between
$2.883 and $2.963 billion, a 6 - 9% increase over the
previous year on an as-reported basis, or a 9 - 12% increase on a
normalized and constant currency basis. This AFFO guidance includes
$35 million in integration costs
related to acquisitions. AFFO per share is expected to range
between $30.79 and $31.64, a 4 - 7% increase over the previous year
on an as-reported basis, or an 8 - 10% increase on a normalized and
constant currency basis. This guidance excludes any capital market
activities the company may undertake in the future. Non-recurring
capital expenditures, including xScale®-related costs,
are expected to range between $2.511
and $2.741 billion, and recurring
capital expenditures are expected to range between $197 and $217
million. xScale-related on-balance sheet capital
expenditures are expected to range between $131 and $181
million, which we anticipate will be reimbursed 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 $1.10 to
the Euro, $1.23 to the Pound,
S$1.34 to the U.S. dollar, ¥131 to
the U.S. dollar and R$5.29 to the
U.S. dollar. The Q4 2022 global revenue breakdown by currency for
the Euro, British Pound, Singapore Dollar, Japanese Yen and
Brazilian Real is 17%, 9%, 8%, 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.
Q4 2022 Results Conference Call and Replay
Information
Equinix will discuss its quarterly results for the period ended
December 31, 2022, along with its future outlook, in its
quarterly conference call on Wednesday, February 15, 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, April 26, 2023, by
dialing 1-888-293-8912 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, enabling digital leaders to harness a trusted platform to
bring together and interconnect the foundational infrastructure
that powers their success. Equinix enables today's businesses to
access all the right places, partners and possibilities they need
to accelerate advantage. With Equinix, they can scale with agility,
speed the launch of digital services, deliver world-class
experiences and multiply their value.
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 COVID-19 pandemic; 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
|
|
Twelve Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Recurring
revenues
|
$ 1,773,380
|
|
$ 1,748,132
|
|
$ 1,603,474
|
|
$ 6,871,287
|
|
$ 6,220,485
|
Non-recurring
revenues
|
97,465
|
|
92,527
|
|
102,904
|
|
391,818
|
|
415,052
|
Revenues
|
1,870,845
|
|
1,840,659
|
|
1,706,378
|
|
7,263,105
|
|
6,635,537
|
Cost of
revenues
|
970,700
|
|
934,669
|
|
910,435
|
|
3,751,501
|
|
3,472,422
|
Gross
profit
|
900,145
|
|
905,990
|
|
795,943
|
|
3,511,604
|
|
3,163,115
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
207,233
|
|
193,089
|
|
189,798
|
|
786,560
|
|
741,232
|
General and
administrative
|
400,183
|
|
375,483
|
|
343,711
|
|
1,498,701
|
|
1,301,797
|
Transaction
costs
|
10,529
|
|
2,007
|
|
9,405
|
|
21,839
|
|
22,769
|
(Gain) loss on asset
sales
|
—
|
|
2,252
|
|
3,304
|
|
3,976
|
|
(10,845)
|
Total operating
expenses
|
617,945
|
|
572,831
|
|
546,218
|
|
2,311,076
|
|
2,054,953
|
Income from
operations
|
282,200
|
|
333,159
|
|
249,725
|
|
1,200,528
|
|
1,108,162
|
Interest and other
income (expense):
|
|
|
|
|
|
|
|
|
|
Interest
income
|
18,462
|
|
11,192
|
|
1,130
|
|
36,268
|
|
2,644
|
Interest
expense
|
(94,200)
|
|
(91,346)
|
|
(80,227)
|
|
(356,337)
|
|
(336,082)
|
Other
expense
|
(28,895)
|
|
(6,735)
|
|
(5,802)
|
|
(51,417)
|
|
(50,647)
|
Gain (loss) on debt
extinguishment
|
143
|
|
75
|
|
214
|
|
327
|
|
(115,125)
|
Total interest and
other, net
|
(104,490)
|
|
(86,814)
|
|
(84,685)
|
|
(371,159)
|
|
(499,210)
|
Income before income
taxes
|
177,710
|
|
246,345
|
|
165,040
|
|
829,369
|
|
608,952
|
Income tax
expense
|
(48,807)
|
|
(34,606)
|
|
(41,899)
|
|
(124,792)
|
|
(109,224)
|
Net
income
|
128,903
|
|
211,739
|
|
123,141
|
|
704,577
|
|
499,728
|
Net (income) loss
attributable to non-controlling interests
|
(140)
|
|
68
|
|
133
|
|
(232)
|
|
463
|
Net income
attributable to Equinix
|
$
128,763
|
|
$
211,807
|
|
$
123,274
|
|
$
704,345
|
|
$
500,191
|
Net income per share
attributable to Equinix:
|
|
|
|
|
|
|
Basic net income per
share
|
$
1.39
|
|
$
2.30
|
|
$
1.37
|
|
$
7.69
|
|
$
5.57
|
Diluted net income per
share
|
$
1.39
|
|
$
2.30
|
|
$
1.36
|
|
$
7.67
|
|
$
5.53
|
Shares used in
computing basic net income per share
|
92,573
|
|
91,896
|
|
90,240
|
|
91,569
|
|
89,772
|
Shares used in
computing diluted net income per share
|
92,752
|
|
92,135
|
|
90,752
|
|
91,828
|
|
90,409
|
|
|
|
|
|
|
|
|
|
|
EQUINIX,
INC.
|
Condensed
Consolidated Statements of Comprehensive Income
(Loss)
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Net income
|
$
128,903
|
|
$
211,739
|
|
$
123,141
|
|
$
704,577
|
|
$
499,728
|
Other comprehensive
income (loss), net of tax:
|
Foreign currency
translation adjustment ("CTA") gain (loss)
|
796,716
|
|
(703,640)
|
|
(115,278)
|
|
(769,886)
|
|
(559,969)
|
Unrealized gain (loss)
on cash flow hedges
|
(50,231)
|
|
6,120
|
|
8,514
|
|
40,543
|
|
60,562
|
Net investment hedge
CTA gain (loss)
|
(379,960)
|
|
360,350
|
|
62,763
|
|
425,701
|
|
326,982
|
Net actuarial gain
(loss) on defined benefit plans
|
(42)
|
|
(19)
|
|
16
|
|
(101)
|
|
57
|
Total other
comprehensive income (loss), net of tax
|
366,483
|
|
(337,189)
|
|
(43,985)
|
|
(303,743)
|
|
(172,368)
|
Comprehensive income
(loss), net of tax
|
495,386
|
|
(125,450)
|
|
79,156
|
|
400,834
|
|
327,360
|
Net (income) loss
attributable to non-controlling interests
|
(140)
|
|
68
|
|
133
|
|
(232)
|
|
463
|
Other comprehensive
(income) loss attributable to non-controlling interests
|
(12)
|
|
28
|
|
(5)
|
|
48
|
|
(15)
|
Comprehensive income
(loss) attributable to Equinix
|
$
495,234
|
|
$ (125,354)
|
|
$
79,284
|
|
$
400,650
|
|
$
327,808
|
EQUINIX,
INC.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(unaudited)
|
|
|
December 31,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
1,906,421
|
|
$
1,536,358
|
Accounts receivable,
net
|
855,380
|
|
681,809
|
Other current
assets
|
459,138
|
|
462,739
|
Assets held for
sale
|
84,316
|
|
276,195
|
Total current
assets
|
3,305,255
|
|
2,957,101
|
Property, plant and
equipment, net
|
16,649,534
|
|
15,445,775
|
Operating lease
right-of-use assets
|
1,427,950
|
|
1,282,418
|
Goodwill
|
5,654,217
|
|
5,372,071
|
Intangible assets,
net
|
1,897,649
|
|
1,935,267
|
Other assets
|
1,376,137
|
|
926,066
|
Total
assets
|
$
30,310,742
|
|
$
27,918,698
|
Liabilities and
Stockholders' Equity
|
|
|
|
Accounts payable and
accrued expenses
|
$
1,004,800
|
|
$
879,144
|
Accrued property, plant
and equipment
|
281,347
|
|
187,334
|
Current portion of
operating lease liabilities
|
139,538
|
|
144,029
|
Current portion of
finance lease liabilities
|
151,420
|
|
147,841
|
Current portion of
mortgage and loans payable
|
9,847
|
|
33,087
|
Other current
liabilities
|
251,346
|
|
214,519
|
Total current
liabilities
|
1,838,298
|
|
1,605,954
|
Operating lease
liabilities, less current portion
|
1,272,812
|
|
1,107,180
|
Finance lease
liabilities, less current portion
|
2,143,690
|
|
1,989,668
|
Mortgage and loans
payable, less current portion
|
642,708
|
|
586,577
|
Senior notes, less
current portion
|
12,109,539
|
|
10,984,144
|
Other
liabilities
|
797,863
|
|
763,411
|
Total
liabilities
|
18,804,910
|
|
17,036,934
|
Common stock
|
93
|
|
91
|
Additional paid-in
capital
|
17,320,017
|
|
15,984,597
|
Treasury
stock
|
(71,966)
|
|
(112,208)
|
Accumulated
dividends
|
(7,317,570)
|
|
(6,165,140)
|
Accumulated other
comprehensive loss
|
(1,389,446)
|
|
(1,085,751)
|
Retained
earnings
|
2,964,838
|
|
2,260,493
|
Total Equinix
stockholders' equity
|
11,505,966
|
|
10,882,082
|
Non-controlling
interests
|
(134)
|
|
(318)
|
Total stockholders'
equity
|
11,505,832
|
|
10,881,764
|
Total liabilities
and stockholders' equity
|
$
30,310,742
|
|
$
27,918,698
|
|
|
|
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
Americas
headcount
|
5,493
|
|
5,056
|
EMEA
headcount
|
3,936
|
|
3,611
|
Asia-Pacific
headcount
|
2,668
|
|
2,277
|
Total
headcount
|
12,097
|
|
10,944
|
EQUINIX,
INC.
|
Summary of Debt
Principal Outstanding
|
(in
thousands)
|
(unaudited)
|
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
Finance lease
liabilities
|
$
2,295,110
|
|
$
2,137,509
|
|
|
|
|
Term loans
|
618,028
|
|
549,343
|
Mortgage payable and
other loans payable
|
34,527
|
|
70,321
|
Plus (minus): mortgage
premium, debt discount and issuance costs, net
|
1,062
|
|
(1,276)
|
Total mortgage and
loans payable principal
|
653,617
|
|
618,388
|
|
|
|
|
Senior notes
|
12,109,539
|
|
10,984,144
|
Plus: debt discount and
issuance costs
|
117,351
|
|
117,986
|
Less: debt
premium
|
—
|
|
—
|
Total senior notes
principal
|
12,226,890
|
|
11,102,130
|
|
|
|
|
Total debt principal
outstanding
|
$
15,175,617
|
|
$
13,858,027
|
EQUINIX,
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
128,903
|
|
$
211,739
|
|
$
123,141
|
|
$
704,577
|
|
$
499,728
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
Depreciation,
amortization and accretion
|
438,492
|
|
431,668
|
|
428,764
|
|
1,739,374
|
|
1,660,524
|
|
Stock-based
compensation
|
107,519
|
|
101,830
|
|
96,379
|
|
403,983
|
|
363,774
|
|
Amortization of debt
issuance costs and debt discounts and premiums
|
4,553
|
|
4,533
|
|
4,375
|
|
17,826
|
|
17,135
|
|
(Gain) loss on debt
extinguishment
|
(143)
|
|
(75)
|
|
(214)
|
|
(327)
|
|
115,125
|
|
Loss (gain) on asset
sales
|
—
|
|
2,252
|
|
3,304
|
|
3,976
|
|
(10,845)
|
|
Other items
|
44,880
|
|
10,536
|
|
6,089
|
|
67,298
|
|
34,499
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(56,209)
|
|
29,823
|
|
109,440
|
|
(153,415)
|
|
(1,873)
|
|
Income taxes,
net
|
(17,701)
|
|
29,656
|
|
27,598
|
|
(7,827)
|
|
(16,602)
|
|
Accounts payable and
accrued expenses
|
31,511
|
|
103,941
|
|
54,628
|
|
114,600
|
|
64,596
|
|
Operating lease
right-of-use assets
|
36,171
|
|
38,684
|
|
37,862
|
|
149,094
|
|
140,590
|
|
Operating lease
liabilities
|
(34,586)
|
|
(31,873)
|
|
(39,782)
|
|
(132,831)
|
|
(177,533)
|
|
Other assets and
liabilities
|
76,799
|
|
(112,425)
|
|
40,521
|
|
56,854
|
|
(141,912)
|
Net cash provided by
operating activities
|
760,189
|
|
820,289
|
|
892,105
|
|
2,963,182
|
|
2,547,206
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchases, sales and
maturities of investments, net
|
(35,222)
|
|
(22,398)
|
|
(30,394)
|
|
(122,569)
|
|
(103,476)
|
|
Business acquisitions,
net of cash and restricted cash acquired
|
—
|
|
(80,342)
|
|
—
|
|
(964,010)
|
|
(158,498)
|
|
Real estate
acquisitions
|
(208,377)
|
|
(6,568)
|
|
(6,988)
|
|
(248,276)
|
|
(201,837)
|
|
Purchases of other
property, plant and equipment
|
(827,927)
|
|
(552,729)
|
|
(817,405)
|
|
(2,278,004)
|
|
(2,751,512)
|
|
Proceeds from asset
sales
|
—
|
|
(1,509)
|
|
34,091
|
|
249,906
|
|
208,585
|
Net cash used in
investing activities
|
(1,071,526)
|
|
(663,546)
|
|
(820,696)
|
|
(3,362,953)
|
|
(3,006,738)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from employee
equity awards
|
—
|
|
37,667
|
|
—
|
|
81,543
|
|
77,628
|
|
Payment of dividend
distributions
|
(287,573)
|
|
(291,169)
|
|
(259,455)
|
|
(1,151,459)
|
|
(1,042,909)
|
|
Proceeds from public
offering of common stock, net of offering costs
|
—
|
|
796,018
|
|
398,271
|
|
796,018
|
|
497,870
|
|
Proceeds from mortgage
and loans payable
|
—
|
|
—
|
|
—
|
|
676,850
|
|
—
|
|
Proceeds from senior
notes, net of debt discounts
|
—
|
|
—
|
|
—
|
|
1,193,688
|
|
3,878,662
|
|
Repayment of finance
lease liabilities
|
(36,394)
|
|
(28,252)
|
|
(35,410)
|
|
(134,202)
|
|
(165,539)
|
|
Repayment of mortgage
and loans payable
|
(1,714)
|
|
(25,195)
|
|
(10,584)
|
|
(587,941)
|
|
(717,010)
|
|
Repayment of senior
notes
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,990,650)
|
|
Debt extinguishment
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
(99,185)
|
|
Debt issuance
costs
|
—
|
|
—
|
|
—
|
|
(17,731)
|
|
(25,102)
|
Net cash provided by
(used in) financing activities
|
(325,681)
|
|
489,069
|
|
92,822
|
|
856,766
|
|
413,765
|
Effect of foreign
currency exchange rates on cash, cash equivalents and restricted
cash
|
37,398
|
|
(39,063)
|
|
(6,335)
|
|
(98,201)
|
|
(30,474)
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
(599,620)
|
|
606,749
|
|
157,896
|
|
358,794
|
|
(76,241)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
2,507,868
|
|
1,901,119
|
|
1,391,558
|
|
1,549,454
|
|
1,625,695
|
Cash, cash
equivalents and restricted cash at end of period
|
$
1,908,248
|
|
$
2,507,868
|
|
$
1,549,454
|
|
$
1,908,248
|
|
$
1,549,454
|
Supplemental cash flow
information:
|
|
|
|
|
|
|
Cash paid for
taxes
|
$
44,091
|
|
$
22,462
|
|
$
16,019
|
|
$
140,312
|
|
$
134,411
|
Cash paid for
interest
|
$
128,511
|
|
$
91,406
|
|
$
110,282
|
|
$
430,217
|
|
$
426,439
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(negative free cash flow)(1)
|
$ (276,115)
|
|
$
179,141
|
|
$
101,803
|
|
$ (277,202)
|
|
$ (356,056)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow (2)
|
$
(67,738)
|
|
$
266,051
|
|
$
108,791
|
|
$
935,084
|
|
$
4,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
760,189
|
|
$
820,289
|
|
$
892,105
|
|
$
2,963,182
|
|
$
2,547,206
|
|
Net cash used in
investing activities as presented above
|
(1,071,526)
|
|
(663,546)
|
|
(820,696)
|
|
(3,362,953)
|
|
(3,006,738)
|
|
Purchases, sales and
maturities of investments, net
|
35,222
|
|
22,398
|
|
30,394
|
|
122,569
|
|
103,476
|
|
Free cash flow
(negative free cash flow)
|
$ (276,115)
|
|
$
179,141
|
|
$
101,803
|
|
$ (277,202)
|
|
$ (356,056)
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$ (276,115)
|
|
$
179,141
|
|
$
101,803
|
|
$ (277,202)
|
|
$ (356,056)
|
|
Less business
acquisitions, net of cash and restricted cash acquired
|
—
|
|
80,342
|
|
—
|
|
964,010
|
|
158,498
|
|
Less real estate
acquisitions
|
208,377
|
|
6,568
|
|
6,988
|
|
248,276
|
|
201,837
|
|
Adjusted free cash
flow
|
$
(67,738)
|
|
$
266,051
|
|
$
108,791
|
|
$
935,084
|
|
$
4,279
|
|
|
|
|
|
|
|
|
|
|
|
EQUINIX,
INC.
|
Non-GAAP Measures
and Other Supplemental Data
|
(in
thousands)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December
31, 2022
|
|
September
30, 2022
|
|
December
31, 2021
|
|
December
31, 2022
|
|
December
31, 2021
|
|
Recurring
revenues
|
$ 1,773,380
|
|
$ 1,748,132
|
|
$ 1,603,474
|
|
$ 6,871,287
|
|
$ 6,220,485
|
|
Non-recurring
revenues
|
97,465
|
|
92,527
|
|
102,904
|
|
391,818
|
|
415,052
|
|
Revenues
(1)
|
1,870,845
|
|
1,840,659
|
|
1,706,378
|
|
7,263,105
|
|
6,635,537
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
642,176
|
|
610,827
|
|
577,991
|
|
2,436,074
|
|
2,197,496
|
|
Cash gross profit
(3)
|
1,228,669
|
|
1,229,832
|
|
1,128,387
|
|
4,827,031
|
|
4,438,041
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating expenses
(4)(7):
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
140,697
|
|
120,467
|
|
121,637
|
|
506,609
|
|
464,084
|
|
Cash general and
administrative
expenses (6)
|
249,232
|
|
238,449
|
|
219,173
|
|
950,722
|
|
829,573
|
|
Total cash
operating expenses (4)(7)
|
389,929
|
|
358,916
|
|
340,810
|
|
1,457,331
|
|
1,293,657
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(8)
|
$
838,740
|
|
$
870,916
|
|
$
787,577
|
|
$
3,369,700
|
|
$
3,144,384
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
66 %
|
|
67 %
|
|
66 %
|
|
66 %
|
|
67 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
margins (10)
|
45 %
|
|
47 %
|
|
46 %
|
|
46 %
|
|
47 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate (11)
|
(107) %
|
|
45 %
|
|
4 %
|
|
36 %
|
|
46 %
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(12)
|
$
406,945
|
|
$
488,396
|
|
$
406,880
|
|
$
1,826,334
|
|
$
1,572,997
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO (13)
(14)
|
$
657,818
|
|
$
712,036
|
|
$
564,194
|
|
$
2,713,878
|
|
$
2,451,229
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per share
(15)
|
$
4.40
|
|
$
5.31
|
|
$
4.51
|
|
$
19.94
|
|
$
17.52
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per
share (15)
|
$
4.39
|
|
$
5.30
|
|
$
4.48
|
|
$
19.89
|
|
$
17.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per share
(15)
|
$
7.11
|
|
$
7.75
|
|
$
6.25
|
|
$
29.64
|
|
$
27.31
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted AFFO per
share(15)
|
$
7.09
|
|
$
7.73
|
|
$
6.22
|
|
$
29.55
|
|
$
27.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split of
our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
568,240
|
|
$
555,352
|
|
$
512,424
|
|
$ 2,187,751
|
|
$ 2,002,253
|
|
Interconnection
|
197,337
|
|
190,283
|
|
177,661
|
|
756,214
|
|
678,677
|
|
Managed
infrastructure
|
59,244
|
|
54,704
|
|
46,045
|
|
218,499
|
|
168,577
|
|
Other
|
4,885
|
|
5,127
|
|
5,184
|
|
20,727
|
|
12,430
|
|
Recurring
revenues
|
829,706
|
|
805,466
|
|
741,314
|
|
3,183,191
|
|
2,861,937
|
|
Non-recurring
revenues
|
42,065
|
|
40,695
|
|
40,801
|
|
166,026
|
|
159,814
|
|
Revenues
|
$
871,771
|
|
$
846,161
|
|
$
782,115
|
|
$ 3,349,217
|
|
$ 3,021,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
450,480
|
|
$
445,733
|
|
$
410,457
|
|
$ 1,744,121
|
|
$ 1,597,830
|
|
Interconnection
|
66,710
|
|
66,703
|
|
66,821
|
|
268,398
|
|
259,538
|
|
Managed
infrastructure
|
29,431
|
|
28,493
|
|
30,205
|
|
119,361
|
|
124,937
|
|
Other
|
23,882
|
|
23,105
|
|
5,259
|
|
75,449
|
|
19,626
|
|
Recurring
revenues
|
570,503
|
|
564,034
|
|
512,742
|
|
2,207,329
|
|
2,001,931
|
|
Non-recurring
revenues
|
31,208
|
|
27,778
|
|
40,601
|
|
135,875
|
|
153,285
|
|
Revenues
|
$
601,711
|
|
$
591,812
|
|
$
553,343
|
|
$ 2,343,204
|
|
$ 2,155,216
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$
291,480
|
|
$
295,008
|
|
$
268,908
|
|
$ 1,150,738
|
|
$ 1,042,131
|
|
Interconnection
|
61,572
|
|
61,264
|
|
58,418
|
|
243,664
|
|
223,287
|
|
Managed
infrastructure
|
17,819
|
|
19,269
|
|
20,928
|
|
77,646
|
|
87,343
|
|
Other
|
2,300
|
|
3,091
|
|
1,164
|
|
8,719
|
|
3,856
|
|
Recurring
revenues
|
373,171
|
|
378,632
|
|
349,418
|
|
1,480,767
|
|
1,356,617
|
|
Non-recurring
revenues
|
24,192
|
|
24,054
|
|
21,502
|
|
89,917
|
|
101,953
|
|
Revenues
|
$
397,363
|
|
$
402,686
|
|
$
370,920
|
|
$ 1,570,684
|
|
$ 1,458,570
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
$ 1,310,200
|
|
$ 1,296,093
|
|
$ 1,191,789
|
|
$ 5,082,610
|
|
$ 4,642,214
|
|
Interconnection
|
325,619
|
|
318,250
|
|
302,900
|
|
1,268,276
|
|
1,161,502
|
|
Managed
infrastructure
|
106,494
|
|
102,466
|
|
97,178
|
|
415,506
|
|
380,857
|
|
Other
|
31,067
|
|
31,323
|
|
11,607
|
|
104,895
|
|
35,912
|
|
Recurring
revenues
|
1,773,380
|
|
1,748,132
|
|
1,603,474
|
|
6,871,287
|
|
6,220,485
|
|
Non-recurring
revenues
|
97,465
|
|
92,527
|
|
102,904
|
|
391,818
|
|
415,052
|
|
Revenues
|
$ 1,870,845
|
|
$ 1,840,659
|
|
$ 1,706,378
|
|
$ 7,263,105
|
|
$ 6,635,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
970,700
|
|
$
934,669
|
|
$
910,435
|
|
$ 3,751,501
|
|
$ 3,472,422
|
|
Depreciation,
amortization and accretion expense
|
(316,549)
|
|
(313,110)
|
|
(322,194)
|
|
(1,270,399)
|
|
(1,236,488)
|
|
Stock-based
compensation expense
|
(11,975)
|
|
(10,732)
|
|
(10,250)
|
|
(45,028)
|
|
(38,438)
|
|
Cash cost of
revenues
|
$
642,176
|
|
$
610,827
|
|
$
577,991
|
|
$ 2,436,074
|
|
$ 2,197,496
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split of
our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$
263,374
|
|
$
247,976
|
|
$
244,245
|
|
$
994,389
|
|
$
911,556
|
|
EMEA cash cost of
revenues
|
226,574
|
|
220,887
|
|
208,569
|
|
866,292
|
|
808,587
|
|
Asia-Pacific cash cost
of revenues
|
152,228
|
|
141,964
|
|
125,177
|
|
575,393
|
|
477,353
|
|
Cash cost of
revenues
|
$
642,176
|
|
$
610,827
|
|
$
577,991
|
|
$ 2,436,074
|
|
$ 2,197,496
|
|
|
|
|
|
(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
|
$
607,416
|
|
$
568,572
|
|
$
533,509
|
|
$ 2,285,261
|
|
$ 2,043,029
|
|
Depreciation and
amortization expense
|
(121,943)
|
|
(118,558)
|
|
(106,570)
|
|
(468,975)
|
|
(424,036)
|
|
Stock-based
compensation expense
|
(95,544)
|
|
(91,098)
|
|
(86,129)
|
|
(358,955)
|
|
(325,336)
|
|
Cash operating
expense
|
$
389,929
|
|
$
358,916
|
|
$
340,810
|
|
$ 1,457,331
|
|
$ 1,293,657
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
207,233
|
|
$
193,089
|
|
$
189,798
|
|
$
786,560
|
|
$
741,232
|
|
Depreciation and
amortization expense
|
(49,604)
|
|
(50,115)
|
|
(48,064)
|
|
(197,157)
|
|
(198,004)
|
|
Stock-based
compensation expense
|
(16,932)
|
|
(22,507)
|
|
(20,097)
|
|
(82,794)
|
|
(79,144)
|
|
Cash sales and
marketing expense
|
$
140,697
|
|
$
120,467
|
|
$
121,637
|
|
$
506,609
|
|
$
464,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
400,183
|
|
$
375,483
|
|
$
343,711
|
|
$ 1,498,701
|
|
$ 1,301,797
|
|
Depreciation and
amortization expense
|
(72,339)
|
|
(68,443)
|
|
(58,506)
|
|
(271,818)
|
|
(226,032)
|
|
Stock-based
compensation expense
|
(78,612)
|
|
(68,591)
|
|
(66,032)
|
|
(276,161)
|
|
(246,192)
|
|
Cash general and
administrative expense
|
$
249,232
|
|
$
238,449
|
|
$
219,173
|
|
$
950,722
|
|
$
829,573
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
The geographic split of
our cash operating expense, or cash SG&A, as defined above, is
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$
214,560
|
|
$
203,026
|
|
$
203,594
|
|
$
833,053
|
|
$
783,735
|
|
EMEA cash
SG&A
|
104,648
|
|
87,639
|
|
85,083
|
|
367,410
|
|
313,296
|
|
Asia-Pacific cash
SG&A
|
70,721
|
|
68,251
|
|
52,133
|
|
256,868
|
|
196,626
|
|
Cash
SG&A
|
$
389,929
|
|
$
358,916
|
|
$
340,810
|
|
$ 1,457,331
|
|
$ 1,293,657
|
|
|
|
|
|
|
|
|
|
|
|
(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:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
128,903
|
|
$
211,739
|
|
$
123,141
|
|
$
704,577
|
|
$
499,728
|
|
Income tax
expense
|
48,807
|
|
34,606
|
|
41,899
|
|
124,792
|
|
109,224
|
|
Interest
income
|
(18,462)
|
|
(11,192)
|
|
(1,130)
|
|
(36,268)
|
|
(2,644)
|
|
Interest
expense
|
94,200
|
|
91,346
|
|
80,227
|
|
356,337
|
|
336,082
|
|
Other
expense
|
28,895
|
|
6,735
|
|
5,802
|
|
51,417
|
|
50,647
|
|
(Gain) loss on debt
extinguishment
|
(143)
|
|
(75)
|
|
(214)
|
|
(327)
|
|
115,125
|
|
Depreciation,
amortization and accretion expense
|
438,492
|
|
431,668
|
|
428,764
|
|
1,739,374
|
|
1,660,524
|
|
Stock-based
compensation expense
|
107,519
|
|
101,830
|
|
96,379
|
|
403,983
|
|
363,774
|
|
Transaction
costs
|
10,529
|
|
2,007
|
|
9,405
|
|
21,839
|
|
22,769
|
|
(Gain) loss on asset
sales
|
—
|
|
2,252
|
|
3,304
|
|
3,976
|
|
(10,845)
|
|
Adjusted
EBITDA
|
$
838,740
|
|
$
870,916
|
|
$
787,577
|
|
$ 3,369,700
|
|
$ 3,144,384
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split of
our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas net income
(loss)
|
$
(67,580)
|
|
$
48,369
|
|
$
73,523
|
|
$
(584)
|
|
$ (189,187)
|
|
Americas income tax
expense (benefit)
|
(33,279)
|
|
34,606
|
|
(65,413)
|
|
42,587
|
|
1,535
|
|
Americas interest
income
|
(16,259)
|
|
(10,374)
|
|
(912)
|
|
(32,265)
|
|
(1,993)
|
|
Americas interest
expense
|
83,363
|
|
80,681
|
|
70,973
|
|
316,934
|
|
298,376
|
|
Americas other expense
(income)
|
104,539
|
|
(68,241)
|
|
(48,621)
|
|
(42,895)
|
|
(59,019)
|
|
Americas loss on debt
extinguishment
|
—
|
|
39
|
|
—
|
|
198
|
|
115,668
|
|
Americas depreciation,
amortization and accretion expense
|
237,919
|
|
234,788
|
|
221,814
|
|
932,892
|
|
866,039
|
|
Americas stock-based
compensation expense
|
76,131
|
|
69,272
|
|
71,652
|
|
282,997
|
|
270,391
|
|
Americas transaction
costs
|
9,003
|
|
3,241
|
|
6,372
|
|
17,950
|
|
17,328
|
|
Americas loss on asset
sales
|
—
|
|
2,778
|
|
4,888
|
|
3,961
|
|
7,322
|
|
Americas adjusted
EBITDA
|
$
393,837
|
|
$
395,159
|
|
$
334,276
|
|
$ 1,521,775
|
|
$ 1,326,460
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA net
income
|
$
195,224
|
|
$
82,558
|
|
$
35,116
|
|
$
477,808
|
|
$
385,086
|
|
EMEA income tax
expense
|
16,531
|
|
—
|
|
68,786
|
|
16,650
|
|
69,162
|
|
EMEA interest
income
|
(1,251)
|
|
(487)
|
|
(100)
|
|
(2,530)
|
|
(166)
|
|
EMEA interest
expense
|
2,675
|
|
2,219
|
|
1,059
|
|
5,698
|
|
4,891
|
|
EMEA other expense
(income)
|
(77,880)
|
|
69,245
|
|
21,660
|
|
77,705
|
|
71,915
|
|
EMEA depreciation,
amortization and accretion expense
|
116,097
|
|
112,065
|
|
116,813
|
|
459,098
|
|
458,754
|
|
EMEA stock-based
compensation expense
|
18,840
|
|
19,174
|
|
15,312
|
|
73,294
|
|
57,578
|
|
EMEA transaction
costs
|
253
|
|
(1,488)
|
|
2,629
|
|
2,016
|
|
4,280
|
|
EMEA gain on asset
sales
|
—
|
|
—
|
|
(1,584)
|
|
(237)
|
|
(18,167)
|
|
EMEA adjusted
EBITDA
|
$
270,489
|
|
$
283,286
|
|
$
259,691
|
|
$ 1,109,502
|
|
$ 1,033,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific net
income
|
$
1,259
|
|
$
80,812
|
|
$
14,502
|
|
$
227,353
|
|
$
303,829
|
|
Asia-Pacific income tax
expense
|
65,555
|
|
—
|
|
38,526
|
|
65,555
|
|
38,527
|
|
Asia-Pacific interest
income
|
(952)
|
|
(331)
|
|
(118)
|
|
(1,473)
|
|
(485)
|
|
Asia-Pacific interest
expense
|
8,162
|
|
8,446
|
|
8,195
|
|
33,705
|
|
32,815
|
|
Asia-Pacific other
expense
|
2,236
|
|
5,731
|
|
32,763
|
|
16,607
|
|
37,751
|
|
Asia-Pacific gain on
debt extinguishment
|
(143)
|
|
(114)
|
|
(214)
|
|
(525)
|
|
(543)
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
84,476
|
|
84,815
|
|
90,137
|
|
347,384
|
|
335,731
|
|
Asia-Pacific
stock-based compensation expense
|
12,548
|
|
13,384
|
|
9,415
|
|
47,692
|
|
35,805
|
|
Asia-Pacific
transaction costs
|
1,273
|
|
254
|
|
404
|
|
1,873
|
|
1,161
|
|
Asia-Pacific (gain)
loss on asset sales
|
—
|
|
(526)
|
|
—
|
|
252
|
|
—
|
|
Asia-Pacific adjusted
EBITDA
|
$
174,414
|
|
$
192,471
|
|
$
193,610
|
|
$
738,423
|
|
$
784,591
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
70 %
|
|
71 %
|
|
69 %
|
|
70 %
|
|
70 %
|
|
EMEA cash gross
margins
|
62 %
|
|
63 %
|
|
62 %
|
|
63 %
|
|
62 %
|
|
Asia-Pacific cash gross
margins
|
62 %
|
|
65 %
|
|
66 %
|
|
63 %
|
|
67 %
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
45 %
|
|
47 %
|
|
43 %
|
|
45 %
|
|
44 %
|
|
EMEA adjusted EBITDA
margins
|
45 %
|
|
48 %
|
|
47 %
|
|
47 %
|
|
48 %
|
|
Asia-Pacific adjusted
EBITDA margins
|
44 %
|
|
48 %
|
|
52 %
|
|
47 %
|
|
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
|
$
838,740
|
|
$
870,916
|
|
$
787,577
|
|
$ 3,369,700
|
|
$ 3,144,384
|
|
Less adjusted EBITDA -
prior period
|
(870,916)
|
|
(860,332)
|
|
(786,298)
|
|
(3,144,384)
|
|
(2,852,898)
|
|
Adjusted EBITDA
growth
|
$
(32,176)
|
|
$
10,584
|
|
$
1,279
|
|
$
225,316
|
|
$
291,486
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$ 1,870,845
|
|
$ 1,840,659
|
|
$ 1,706,378
|
|
$ 7,263,105
|
|
$ 6,635,537
|
|
Less revenues - prior
period
|
(1,840,659)
|
|
(1,817,154)
|
|
(1,675,176)
|
|
(6,635,537)
|
|
(5,998,545)
|
|
Revenue
growth
|
$
30,186
|
|
$
23,505
|
|
$
31,202
|
|
$
627,568
|
|
$
636,992
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
(107) %
|
|
45 %
|
|
4 %
|
|
36 %
|
|
46 %
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
128,903
|
|
$
211,739
|
|
$
123,141
|
|
$
704,577
|
|
$
499,728
|
|
Net (income) loss
attributable to non-controlling interests
|
(140)
|
|
68
|
|
133
|
|
(232)
|
|
463
|
|
Net income attributable
to Equinix
|
128,763
|
|
211,807
|
|
123,274
|
|
704,345
|
|
500,191
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation
|
274,625
|
|
271,920
|
|
277,031
|
|
1,104,787
|
|
1,073,148
|
|
(Gain) loss on
disposition of real estate property
|
437
|
|
2,002
|
|
4,693
|
|
7,134
|
|
(6,439)
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
3,120
|
|
2,667
|
|
1,882
|
|
10,068
|
|
6,097
|
|
FFO attributable to
common shareholders
|
$
406,945
|
|
$
488,396
|
|
$
406,880
|
|
$ 1,826,334
|
|
$ 1,572,997
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
406,945
|
|
$
488,396
|
|
$
406,880
|
|
$ 1,826,334
|
|
$ 1,572,997
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Installation revenue
adjustment
|
6,975
|
|
9,959
|
|
5,767
|
|
17,745
|
|
27,928
|
|
Straight-line rent
expense adjustment
|
1,585
|
|
6,811
|
|
(1,920)
|
|
16,263
|
|
9,677
|
|
Amortization of
deferred financing costs and debt discounts and premiums
|
4,553
|
|
4,533
|
|
4,375
|
|
17,826
|
|
17,135
|
|
Contract cost
adjustment
|
(17,380)
|
|
(12,678)
|
|
(19,753)
|
|
(52,888)
|
|
(63,064)
|
|
Stock-based
compensation expense
|
107,519
|
|
101,830
|
|
96,379
|
|
403,983
|
|
363,774
|
|
Stock-based charitable
contributions
|
34,974
|
|
—
|
|
—
|
|
49,013
|
|
—
|
|
Non-real estate
depreciation expense
|
111,342
|
|
106,400
|
|
99,014
|
|
426,666
|
|
377,658
|
|
Amortization
expense
|
51,438
|
|
51,873
|
|
50,056
|
|
204,755
|
|
205,484
|
|
Accretion
expense
|
1,086
|
|
1,476
|
|
2,663
|
|
3,166
|
|
4,234
|
|
Recurring capital
expenditures
|
(80,047)
|
|
(50,182)
|
|
(85,693)
|
|
(188,885)
|
|
(199,089)
|
|
(Gain) loss on debt
extinguishment
|
(143)
|
|
(75)
|
|
(214)
|
|
(327)
|
|
115,125
|
|
Transaction
costs
|
10,529
|
|
2,007
|
|
9,405
|
|
21,839
|
|
22,769
|
|
Impairment charges
(1)
|
—
|
|
1,815
|
|
(465)
|
|
1,815
|
|
31,847
|
|
Income tax expense
(benefit) adjustment (1)
|
19,806
|
|
(965)
|
|
(3,086)
|
|
(31,165)
|
|
(38,505)
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
(1,364)
|
|
836
|
|
786
|
|
(2,262)
|
|
3,259
|
|
AFFO attributable to
common shareholders
|
$
657,818
|
|
$
712,036
|
|
$
564,194
|
|
$ 2,713,878
|
|
$ 2,451,229
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Impairment charges relate to the impairment of an indemnification
asset resulting from the settlement of a pre-acquisition uncertain
tax position, which was recorded as Other Income (Expense) on the
Condensed Consolidated Statements of Operations. This impairment
charge was offset by the recognition of tax benefits in the same
amount, which was included within the Income tax expense adjustment
line on the table above.
|
(14)
|
Following is how
we reconcile from adjusted EBITDA to AFFO:
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
838,740
|
|
$
870,916
|
|
$
787,577
|
|
$ 3,369,700
|
|
$ 3,144,384
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(75,738)
|
|
(80,154)
|
|
(79,097)
|
|
(320,069)
|
|
(333,438)
|
|
Amortization of
deferred financing costs and debt discounts and premiums
|
4,553
|
|
4,533
|
|
4,375
|
|
17,826
|
|
17,135
|
|
Income tax
expense
|
(48,807)
|
|
(34,606)
|
|
(41,899)
|
|
(124,792)
|
|
(109,224)
|
|
Income tax expense
(benefit) adjustment (1)
|
19,806
|
|
(965)
|
|
(3,086)
|
|
(31,165)
|
|
(38,505)
|
|
Straight-line rent
expense adjustment
|
1,585
|
|
6,811
|
|
(1,920)
|
|
16,263
|
|
9,677
|
|
Stock-based charitable
contributions
|
34,974
|
|
—
|
|
—
|
|
49,013
|
|
—
|
|
Contract cost
adjustment
|
(17,380)
|
|
(12,678)
|
|
(19,753)
|
|
(52,888)
|
|
(63,064)
|
|
Installation revenue
adjustment
|
6,975
|
|
9,959
|
|
5,767
|
|
17,745
|
|
27,928
|
|
Recurring capital
expenditures
|
(80,047)
|
|
(50,182)
|
|
(85,693)
|
|
(188,885)
|
|
(199,089)
|
|
Other
expense
|
(28,895)
|
|
(6,735)
|
|
(5,802)
|
|
(51,417)
|
|
(50,647)
|
|
(Gain) loss on
disposition of real estate property
|
437
|
|
2,002
|
|
4,693
|
|
7,134
|
|
(6,439)
|
|
Adjustments for
unconsolidated JVs' and non-controlling interests
|
1,615
|
|
3,572
|
|
2,801
|
|
7,574
|
|
9,819
|
|
Adjustments for
impairment charges (1)
|
—
|
|
1,815
|
|
(465)
|
|
1,815
|
|
31,847
|
|
Adjustment for gain
(loss) on sale of asset
|
—
|
|
(2,252)
|
|
(3,304)
|
|
(3,976)
|
|
10,845
|
|
AFFO attributable to
common shareholders
|
$
657,818
|
|
$
712,036
|
|
$
564,194
|
|
$ 2,713,878
|
|
$ 2,451,229
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Impairment charges relate to the impairment of an indemnification
asset resulting from the settlement of a pre-acquisition uncertain
tax position, which was recorded as Other Income (Expense) on the
Condensed Consolidated Statements of Operations. This impairment
charge was offset by the recognition of tax benefits in the same
amount, which was included within the Income tax expense adjustment
line on the table above.
|
(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
|
92,573
|
|
91,896
|
|
90,240
|
|
91,569
|
|
89,772
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
Employee equity
awards
|
179
|
|
239
|
|
512
|
|
259
|
|
637
|
|
Shares used in
computing diluted net income per share, FFO per share and AFFO per
share
|
92,752
|
|
92,135
|
|
90,752
|
|
91,828
|
|
90,409
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per
share
|
$
4.40
|
|
$
5.31
|
|
$
4.51
|
|
$
19.94
|
|
$
17.52
|
|
Diluted FFO per
share
|
$
4.39
|
|
$
5.30
|
|
$
4.48
|
|
$
19.89
|
|
$
17.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per
share
|
$
7.11
|
|
$
7.75
|
|
$
6.25
|
|
$
29.64
|
|
$
27.31
|
|
Diluted AFFO per
share
|
$
7.09
|
|
$
7.73
|
|
$
6.22
|
|
$
29.55
|
|
$
27.11
|
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SOURCE Equinix, Inc.