- Quarterly revenues increased 6% over the same quarter last year to
$2.1 billion , or 7% on a normalized and constant currency basis - Closed 3,800 deals across more than 3,100 customers in Q1
- Accelerated hyperscale demand drove an incremental 48 megawatts of xScale® leasing in EMEA and APAC since last earnings call, as continued cloud and artificial intelligence (AI) activity drives strong demand
First-Quarter 2024 Results Summary
-
Revenues
-
$2.13 billion , a 1% increase over the previous quarter, including a 13% reduction in non-recurring revenues due to xScale fees - Includes a
$14 million negative foreign currency impact when compared to prior guidance rates
-
-
Operating Income
-
$364 million , a 5% increase over the previous quarter, due to strong operating performance and an operating margin of 17%
-
-
Net Income and Net Income per Share attributable to Common Stockholders
-
$231 million , a 2% increase over the previous quarter, primarily due to higher income from operations -
$2.43 per share, a 1% increase over the previous quarter
-
-
Adjusted EBITDA
-
$992 million , an 8% increase over the previous quarter, and an adjusted EBITDA margin of 47% - Includes a
$7 million negative foreign currency impact when compared to prior guidance rates and$1 million of integration costs
-
-
AFFO and AFFO per Share
-
$843 million , a 22% increase over the previous quarter, due to strong operating performance and seasonally lower recurring capital expenditures -
$8.86 per share, a 21% increase over the previous quarter
-
2024 Annual Guidance Summary
-
Revenues
-
$8.692 -$8.792 billion , an increase of 6 - 7% over the previous year, or a normalized and constant currency increase of 7 - 8%, excluding the year-over-year impact of the power pass-through - Includes a
$101 million negative foreign currency impact compared to prior guidance rates
-
-
Adjusted EBITDA
-
$4.044 -$4.124 billion , a 47% adjusted EBITDA margin - An increase of
$5 million compared to prior guidance offset by a$50 million negative foreign currency impact compared to prior guidance rates - Includes
$20 million of integration costs
-
-
AFFO and AFFO per Share
-
$3.290 -$3.370 billion , an increase of 9 - 12% over the previous year, or a normalized and constant currency increase of 10 - 13% - An increase of
$25 million compared to prior guidance offset by a$36 million negative foreign currency impact compared to prior guidance rates -
$34.45 -$35.29 per share, an increase of 7 - 10% over the previous year, or a normalized and constant currency increase of 8 - 11%
-
Equinix Quote
"We had a strong start to the year, delivering
Business Highlights
- Today,
Equinix announced that the Audit Committee of the Company's Board of Directors conducted and has substantially completed a previously announced independent investigation, with the assistance of independent third-party professional advisors. Based on the findings of the independent investigation, the Audit Committee has concluded thatEquinix's financial reporting has been accurate, and that the application of its accounting practices has resulted in an appropriate representation of its operating performance. The Audit Committee had full discretion over the scope of the investigation and was not restricted in any way. As part of this assessment, the Audit Committee did not identify any accounting inconsistencies or errors requiring an adjustment to, or restatement of, previously issued financial statements or non-GAAP measures. As previously disclosed, shortly after the release of the short seller report,Equinix received a subpoena from the U.S Attorney's Office for the Northern District of California . Additionally, onApril 30, 2024 ,Equinix received a subpoena from theSecurities and Exchange Commission . The company is cooperating fully with both subpoenas and does not expect to comment further on such matters until appropriate to do so. - With strong underlying demand for digital infrastructure,
Equinix continues to invest broadly across its global footprint. The company currently has 50 major projects underway in 34 markets, across 21 countries. This includes 14 xScale builds, representing more than 16,000 cabinets of retail capacity and more than 50 megawatts of xScale capacity through the end of 2024. More than 90% of current retail expansion capital expenditures are related to owned land or owned buildings with long-term ground leases.- In Q1,
Equinix added new projects inFrankfurt ,Madrid ,Osaka andSilicon Valley . Since the Q4 2023 earnings call,Equinix opened three retail projects inMexico City ,Mumbai andParis . Additionally,Equinix purchased the company'sDublin 2,Mumbai 2 andStockholm 3 International Business Exchange™ (IBX®) facilities resulting in recurring revenues from owned assets increasing to 67% for Q1. - xScale demand continues to be strong, driven by a significant increase in pre-leasing activity due to the growing demand for cloud and AI services. Since the last earnings call,
Equinix has pre-leased an incremental 48 megawatts of capacity across itsFrankfurt 10,Osaka 4 andOsaka 5 assets, including approximately 34 megawatts leased in mid-April. This brings total xScale leasing to nearly 350 megawatts globally with nearly 90% of both operational and under-construction capacity leased and a meaningful pipeline of opportunities thatEquinix expects to drive continued xScale momentum in the quarters to come. - In addition, in mid-April,
Equinix announced its firstU.S. xScale joint venture withPGIM Real Estate for the SV12x asset inSilicon Valley . When combined with its existing joint ventures inAsia-Pacific ,Europe andLatin America , this new joint venture will bring the expected global xScale portfolio to more than$8 billion of investment across more than 35 facilities and greater than 725 megawatts of power capacity when completed.
- In Q1,
-
Equinix's global interconnection franchise continues to perform with more than 468,000 total interconnections deployed on its platform. In Q1,Equinix interconnection adds increased to 6,200, supported by healthy gross adds activity and a moderation of consolidations into higher bandwidth connections.- Equinix Fabric® and Network Edge continue to over-index the broader business in terms of revenue growth with demand from customers looking to use the combination of Fabric, Network Edge and Equinix Metal® for their digital infrastructure needs.
Equinix's engineering teams recently completed the integration of Metal and Fabric, significantly improving the virtual connection experience for Metal users. - In Q1,
Equinix added one new native cloud on-ramp inMadrid , further strengthening its cloud ecosystem, which now includes 220 native cloud on-ramps across its portfolio, spanning 47 metros. This represents a nearly 40% market share of private cloud on-ramps in the markets in which the company operates.Equinix remains an integral part of hyperscaler architectures, with these customers collectively representing more than$1.3 billion of annualized retail revenue in Q1, with deployments across an average of more than 60 Equinix IBX data centers around the world. - As the value of data becomes increasingly important, customers are seeking strategies to enhance control of their proprietary data, enabling greater agility while balancing performance and security requirements. By placing data in proximity to
Equinix's rich ecosystem of cloud and storage providers, customers can unlock the value of cloud adjacent storage and multicloud networking. In Q1, global cybersecurity leader CrowdStrike leveraged this proximity by deploying a cloud adjacent storage solution on Platform Equinix® in EMEA. - Internet Exchange saw peak traffic go up 5% quarter over quarter and 24% year over year, to nearly 38 terabits per second led by the
Americas .
- Equinix Fabric® and Network Edge continue to over-index the broader business in terms of revenue growth with demand from customers looking to use the combination of Fabric, Network Edge and Equinix Metal® for their digital infrastructure needs.
-
Equinix's Channel program delivered another solid quarter, accounting for over 60% of new logos. It continued to see growth from partners such as AT&T, Avant,Dell , Kyndryl and Zenlaver, with wins across a wide range of industry verticals and a broad mix ofEquinix services, as well as strong go-to-market momentum with key hyperscalers, as it partners to meet end-customer needs for hybrid cloud and private AI needs. -
Equinix remains dedicated to furthering its Future First Sustainability strategy and continues to make strides in this area.- After successfully executing Power Purchase Agreements (PPAs) in the
U.S. andEurope over the past decade, in February,Equinix announced a new PPA inAustralia , the company's first long-term renewable energy agreement in the Asia-Pacific region. When combined with agreements inFrance , Iberia, Nordics and theU.S. ,Equinix will now support more than 1 gigawatt of clean energy generation in high-impact markets. - Last month,
Equinix published its ninth annual Integrated Sustainability Report, which highlights advancements in key environmental, social and governance (ESG) goals.Equinix continues to make meaningful progress toward its long-term goal to achieve 100% renewable energy coverage by 2030. For 2023, it maintained 96% renewable energy coverage across its portfolio, marking the sixth consecutive year of greater than 90% renewable energy coverage across its global footprint. Also in 2023,Equinix's operations team invested$78 million in high returning efficiency projects, which resulted in improving its average annual Power Usage Effectiveness (PUE) by over 8% year over year to 1.42. In addition, the company continued to make progress on its commitment to reducing its overall power use by increasing operating temperature ranges within its facilities, with more than 50 data centers now operationally ready to support a wider range of A1A temperature standards.
- After successfully executing Power Purchase Agreements (PPAs) in the
- In Q1,
Equinix announced the following leadership transitions, reflecting the company's commitment to driving the next chapter of growth as the trusted platform for enterprise digital transformation:- In March,
Equinix announced a planned leadershiptransition effective late Q2 2024, whereby current President and CEOCharles Meyers will transition to the role of Executive Chairman, andAdaire Fox-Martin will begin serving asEquinix President and CEO.Peter Van Camp , currently Executive Chairman, will step away from his formal responsibilities as a Board member to take the role of Special Advisor to the Board. With more than 25 years of experience in the technology sector, including four years on the Equinix Board of Directors, Fox-Martin brings a distinguished track record, most recently as President of Go-to-Market forGoogle Cloud and Head ofGoogle Ireland. - In February, the company appointed
Merrie Williamson as Executive Vice President and Chief Customer and Revenue Officer (CCRO). Williamson has more than 20 years of experience in helping companies evolve their digital business through her leadership roles at Microsoft and Intel.
- In March,
Business Outlook
For the second quarter of 2024, the company expects revenues to range between
For the full year of 2024, total revenues are expected to range between
The
The adjusted EBITDA guidance is based on the revenue guidance less our expectations of cash cost of revenues and cash operating expenses. The AFFO guidance is based on the adjusted EBITDA guidance less our expectations of net interest expense, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, income tax expense, an income tax expense adjustment, recurring capital expenditures, other income (expense), (gains) losses on disposition of real estate property, and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.
Q1 2024 Results Conference Call and Replay Information
A replay of the call will be available one hour after the call through
Investor Presentation and Supplemental Financial Information
Additional Resources
About
Non-GAAP Financial Measures
In presenting non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow,
In addition, in presenting the non-GAAP financial measures,
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Investors should note that the non-GAAP financial measures used by
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, risks to our business and operating results related to the current inflationary environment; foreign currency exchange rate fluctuations; stock price fluctuations; increased costs to procure power and the general volatility in the global energy market; the challenges of acquiring, operating and constructing IBX and xScale data centers and developing, deploying and delivering
|
|||||
Condensed Consolidated Statements of Operations |
|||||
(in millions, except per share data) |
|||||
(unaudited) |
|||||
|
|||||
|
Three Months Ended |
||||
|
|
|
|
|
|
Recurring revenues |
$ 2,010 |
|
$ 1,976 |
|
$ 1,890 |
Non-recurring revenues |
117 |
|
134 |
|
108 |
Revenues |
2,127 |
|
2,110 |
|
1,998 |
Cost of revenues |
1,091 |
|
1,092 |
|
1,006 |
Gross profit |
1,036 |
|
1,018 |
|
992 |
Operating expenses: |
|
|
|
|
|
Sales and marketing |
226 |
|
217 |
|
210 |
General and administrative |
444 |
|
449 |
|
395 |
Transaction costs |
2 |
|
6 |
|
2 |
Loss on asset sales |
— |
|
— |
|
1 |
Total operating expenses |
672 |
|
672 |
|
608 |
Income from operations |
364 |
|
346 |
|
384 |
Interest and other expense: |
|
|
|
|
|
Interest income |
24 |
|
28 |
|
19 |
Interest expense |
(104) |
|
(103) |
|
(97) |
Other income (expense) |
(6) |
|
(1) |
|
8 |
Loss on debt extinguishment |
(1) |
|
— |
|
— |
Total interest and other, net |
(87) |
|
(76) |
|
(70) |
Income before income taxes |
277 |
|
270 |
|
314 |
Income tax expense |
(46) |
|
(43) |
|
(55) |
Net income |
$ 231 |
|
$ 227 |
|
$ 259 |
Earnings per share ("EPS") attributable to common stockholders: |
|||||
Basic EPS |
$ 2.44 |
|
$ 2.41 |
|
$ 2.78 |
Diluted EPS |
$ 2.43 |
|
$ 2.40 |
|
$ 2.77 |
Weighted-average shares for basic EPS (in thousands) |
94,665 |
|
94,268 |
|
92,971 |
Weighted-average shares for diluted EPS (in thousands) |
95,156 |
|
94,667 |
|
93,340 |
|
|||||
Condensed Consolidated Statements of Comprehensive Income |
|||||
(in millions) |
|||||
(unaudited) |
|||||
|
|||||
|
Three Months Ended |
||||
|
|
|
|
|
|
Net income |
$ 231 |
|
$ 227 |
|
$ 259 |
Other comprehensive income (loss), net of tax: |
|
|
|||
Foreign currency translation adjustment ("CTA") gain (loss) |
(358) |
|
480 |
|
157 |
Net investment hedge CTA gain (loss) |
130 |
|
(217) |
|
(40) |
Unrealized gain (loss) on cash flow hedges |
20 |
|
(26) |
|
(13) |
Total other comprehensive income (loss), net of tax |
(208) |
|
237 |
|
104 |
Comprehensive income, net of tax |
$ 23 |
|
$ 464 |
|
$ 363 |
|
|||
Condensed Consolidated Balance Sheets |
|||
(in millions, except headcount) |
|||
(unaudited) |
|||
|
|||
|
|
|
|
Assets |
|
|
|
Cash and cash equivalents |
$ 1,527 |
|
$ 2,096 |
Accounts receivable, net |
1,079 |
|
1,004 |
Other current assets |
561 |
|
468 |
Total current assets |
3,167 |
|
3,568 |
Property, plant and equipment, net |
18,511 |
|
18,601 |
Operating lease right-of-use assets |
1,395 |
|
1,449 |
|
5,621 |
|
5,737 |
Intangible assets, net |
1,624 |
|
1,705 |
Other assets |
1,619 |
|
1,591 |
Total assets |
$ 31,937 |
|
$ 32,651 |
Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity |
|
|
|
Accounts payable and accrued expenses |
$ 1,077 |
|
$ 1,187 |
Accrued property, plant and equipment |
321 |
|
398 |
Current portion of operating lease liabilities |
136 |
|
131 |
Current portion of finance lease liabilities |
165 |
|
138 |
Current portion of mortgage and loans payable |
7 |
|
8 |
Current portion of senior notes |
999 |
|
998 |
Other current liabilities |
186 |
|
302 |
Total current liabilities |
2,891 |
|
3,162 |
Operating lease liabilities, less current portion |
1,280 |
|
1,331 |
Finance lease liabilities, less current portion |
2,058 |
|
2,123 |
Mortgage and loans payable, less current portion |
654 |
|
663 |
Senior notes, less current portion |
11,978 |
|
12,062 |
Other liabilities |
752 |
|
796 |
Total liabilities |
19,613 |
|
20,137 |
Redeemable non-controlling interest |
25 |
|
25 |
Common stockholders' equity: |
|
|
|
Common stock |
— |
|
— |
Additional paid-in capital |
18,779 |
|
18,596 |
|
(50) |
|
(56) |
Accumulated dividends |
(9,097) |
|
(8,695) |
Accumulated other comprehensive loss |
(1,498) |
|
(1,290) |
Retained earnings |
4,165 |
|
3,934 |
Total stockholders' equity |
12,299 |
|
12,489 |
Total liabilities, redeemable non-controlling interest and stockholders' equity |
$ 31,937 |
|
$ 32,651 |
|
|
|
|
Ending headcount by geographic region is as follows: |
|
|
|
|
6,055 |
|
5,953 |
EMEA headcount |
4,283 |
|
4,267 |
|
3,016 |
|
2,931 |
Total headcount |
13,354 |
|
13,151 |
|
|||
Summary of Debt Principal Outstanding |
|||
(in millions) |
|||
(unaudited) |
|||
|
|||
|
|
|
|
|
|
|
|
Finance lease liabilities |
$ 2,223 |
|
$ 2,261 |
|
|
|
|
Term loans |
634 |
|
642 |
Mortgage payable and other loans payable |
27 |
|
29 |
Plus: debt discount and issuance costs, net |
1 |
|
1 |
Total mortgage and loans payable principal |
662 |
|
672 |
|
|
|
|
Senior notes |
12,977 |
|
13,060 |
Plus: debt discount and issuance costs |
103 |
|
108 |
Total senior notes principal |
13,080 |
|
13,168 |
|
|
|
|
Total debt principal outstanding |
$ 15,965 |
|
$ 16,101 |
|
||||||
Condensed Consolidated Statements of Cash Flows |
||||||
(in millions) |
||||||
(unaudited) |
||||||
|
||||||
|
|
Three Months Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
||||||
|
Net income |
$ 231 |
|
$ 227 |
|
$ 259 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||
|
Depreciation, amortization and accretion |
525 |
|
462 |
|
459 |
|
Stock-based compensation |
101 |
|
106 |
|
99 |
|
Amortization of debt issuance costs and debt discounts |
5 |
|
4 |
|
5 |
|
Loss on debt extinguishment |
1 |
|
— |
|
— |
|
Loss on asset sales |
— |
|
— |
|
1 |
|
Other items |
6 |
|
17 |
|
5 |
|
Changes in operating assets and liabilities: |
|||||
|
Accounts receivable |
(85) |
|
50 |
|
(54) |
|
Income taxes, net |
(9) |
|
11 |
|
5 |
|
Accounts payable and accrued expenses |
(56) |
|
76 |
|
(73) |
|
Operating lease right-of-use assets |
38 |
|
22 |
|
35 |
|
Operating lease liabilities |
(32) |
|
(28) |
|
(34) |
|
Other assets and liabilities |
(127) |
|
52 |
|
(15) |
Net cash provided by operating activities |
598 |
|
999 |
|
692 |
|
Cash flows from investing activities: |
||||||
|
Purchases, sales and maturities of investments, net |
(3) |
|
(54) |
|
(24) |
|
Real estate acquisitions |
(17) |
|
(231) |
|
(40) |
|
Purchases of other property, plant and equipment |
(707) |
|
(996) |
|
(530) |
|
Proceeds from asset sales |
— |
|
— |
|
72 |
Net cash used in investing activities |
(727) |
|
(1,281) |
|
(522) |
|
Cash flows from financing activities: |
||||||
|
Proceeds from employee equity programs |
48 |
|
— |
|
45 |
|
Payment of dividend distributions |
(412) |
|
(403) |
|
(326) |
|
Proceeds from public offering of common stock, net of offering costs |
— |
|
433 |
|
301 |
|
Proceeds from senior notes, net of debt discounts |
— |
|
— |
|
565 |
|
Repayment of finance lease liabilities |
(31) |
|
(51) |
|
(36) |
|
Repayment of mortgage and loans payable |
(2) |
|
(1) |
|
(3) |
|
Debt issuance costs |
— |
|
— |
|
(4) |
Net cash provided by (used in) financing activities |
(397) |
|
(22) |
|
542 |
|
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash |
(40) |
|
42 |
|
24 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
(566) |
|
(262) |
|
736 |
|
Cash, cash equivalents and restricted cash at beginning of period |
2,096 |
|
2,358 |
|
1,908 |
|
Cash, cash equivalents and restricted cash at end of period |
$ 1,530 |
|
$ 2,096 |
|
$ 2,644 |
|
Supplemental cash flow information: |
||||||
Cash paid for taxes |
$ 64 |
|
$ 27 |
|
$ 49 |
|
Cash paid for interest |
$ 101 |
|
$ 136 |
|
$ 104 |
|
|
|
|
|
|
|
|
Free cash flow (negative free cash flow) (1) |
$ (126) |
|
$ (228) |
|
$ 194 |
|
|
|
|
|
|
|
|
Adjusted free cash flow (adjusted negative free cash flow) (2) |
$ (109) |
|
$ 3 |
|
$ 234 |
|
|
|
|
|
|
|
|
(1) |
We define free cash flow (negative free cash flow) as net cash provided by operating activities plus net cash used |
|||||
|
Net cash provided by operating activities as presented above |
$ 598 |
|
$ 999 |
|
$ 692 |
|
Net cash used in investing activities as presented above |
(727) |
|
(1,281) |
|
(522) |
|
Purchases, sales and maturities of investments, net |
3 |
|
54 |
|
24 |
|
Free cash flow (negative free cash flow) |
$ (126) |
|
$ (228) |
|
$ 194 |
|
|
|
|
|
|
|
(2) |
We define adjusted free cash flow (adjusted negative free cash flow) as free cash flow (negative free cash flow) |
|||||
|
Free cash flow (negative free cash flow) as defined above |
$ (126) |
|
$ (228) |
|
$ 194 |
|
Less real estate acquisitions |
17 |
|
231 |
|
40 |
|
Adjusted free cash flow (adjusted negative free cash flow) |
$ (109) |
|
$ 3 |
|
$ 234 |
|
||||||
Non-GAAP Measures and Other Supplemental Data |
||||||
(in millions) |
||||||
(unaudited) |
||||||
|
||||||
|
|
Three Months Ended |
||||
|
|
|
|
|
|
|
|
Recurring revenues |
$ 2,010 |
|
$ 1,976 |
|
$ 1,890 |
|
Non-recurring revenues |
117 |
|
134 |
|
108 |
|
Revenues (1) |
2,127 |
|
2,110 |
|
1,998 |
|
|
|
|
|
|
|
|
Cash cost of revenues (2) |
714 |
|
757 |
|
666 |
|
Cash gross profit (3) |
1,413 |
|
1,353 |
|
1,332 |
|
|
|
|
|
|
|
|
Cash operating expenses (4)(7): |
|
|
|
|
|
|
Cash sales and marketing expenses (5) |
154 |
|
146 |
|
139 |
|
Cash general and administrative expenses (6) |
267 |
|
287 |
|
248 |
|
Total cash operating expenses (4)(7) |
421 |
|
433 |
|
387 |
|
|
|
|
|
|
|
|
Adjusted EBITDA (8) |
$ 992 |
|
$ 920 |
|
$ 945 |
|
|
|
|
|
|
|
|
Cash gross margins (9) |
66 % |
|
64 % |
|
67 % |
|
|
|
|
|
|
|
|
Adjusted EBITDA margins(10) |
47 % |
|
44 % |
|
47 % |
|
|
|
|
|
|
|
|
Adjusted EBITDA flow-through rate (11) |
424 % |
|
(31) % |
|
83 % |
|
|
|
|
|
|
|
|
FFO (12) |
$ 553 |
|
$ 525 |
|
$ 548 |
|
|
|
|
|
|
|
|
AFFO (13)(14) |
$ 843 |
|
$ 691 |
|
$ 802 |
|
|
|
|
|
|
|
|
Basic FFO per share (15) |
$ 5.84 |
|
$ 5.56 |
|
$ 5.90 |
|
|
|
|
|
|
|
|
Diluted FFO per share (15) |
$ 5.81 |
|
$ 5.54 |
|
$ 5.87 |
|
|
|
|
|
|
|
|
Basic AFFO per share (15) |
$ 8.91 |
|
$ 7.33 |
|
$ 8.62 |
|
|
|
|
|
|
|
|
Diluted AFFO per share (15) |
$ 8.86 |
|
$ 7.30 |
|
$ 8.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The geographic split of our revenues on a services basis is presented below: |
|||||
|
|
|
|
|
|
|
|
Americas Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 607 |
|
$ 610 |
|
$ 573 |
|
Interconnection |
215 |
|
211 |
|
199 |
|
Managed infrastructure |
66 |
|
65 |
|
61 |
|
Other |
6 |
|
7 |
|
5 |
|
Recurring revenues |
894 |
|
893 |
|
838 |
|
Non-recurring revenues |
45 |
|
39 |
|
44 |
|
Revenues |
$ 939 |
|
$ 932 |
|
$ 882 |
|
|
|
|
|
|
|
|
EMEA Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 549 |
|
$ 541 |
|
$ 516 |
|
Interconnection |
83 |
|
79 |
|
73 |
|
Managed infrastructure |
35 |
|
33 |
|
31 |
|
Other |
24 |
|
24 |
|
25 |
|
Recurring revenues |
691 |
|
677 |
|
645 |
|
Non-recurring revenues |
36 |
|
74 |
|
46 |
|
Revenues |
$ 727 |
|
$ 751 |
|
$ 691 |
|
|
|
|
|
|
|
|
Asia-Pacific Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 334 |
|
$ 318 |
|
$ 319 |
|
Interconnection |
70 |
|
68 |
|
65 |
|
Managed infrastructure |
17 |
|
17 |
|
19 |
|
Other |
4 |
|
3 |
|
4 |
|
Recurring revenues |
425 |
|
406 |
|
407 |
|
Non-recurring revenues |
36 |
|
21 |
|
18 |
|
Revenues |
$ 461 |
|
$ 427 |
|
$ 425 |
|
|
|
|
|
|
|
|
Worldwide Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation |
$ 1,490 |
|
$ 1,469 |
|
$ 1,408 |
|
Interconnection |
368 |
|
358 |
|
337 |
|
Managed infrastructure |
118 |
|
115 |
|
111 |
|
Other |
34 |
|
34 |
|
34 |
|
Recurring revenues |
2,010 |
|
1,976 |
|
1,890 |
|
Non-recurring revenues |
117 |
|
134 |
|
108 |
|
Revenues |
$ 2,127 |
|
$ 2,110 |
|
$ 1,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock- |
|||||
|
||||||
|
Cost of revenues |
$ 1,091 |
|
$ 1,092 |
|
$ 1,006 |
|
Depreciation, amortization and accretion expense |
(364) |
|
(322) |
|
(329) |
|
Stock-based compensation expense |
(13) |
|
(13) |
|
(11) |
|
Cash cost of revenues |
$ 714 |
|
$ 757 |
|
$ 666 |
|
|
|
|
|
|
|
|
The geographic split of our cash cost of revenues is presented below: |
|||||
|
|
|
|
|
|
|
|
|
$ 270 |
|
$ 263 |
|
$ 246 |
|
EMEA cash cost of revenues |
305 |
|
326 |
|
271 |
|
|
139 |
|
168 |
|
149 |
|
Cash cost of revenues |
$ 714 |
|
$ 757 |
|
$ 666 |
|
||||||
(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 |
|||||
|
||||||
|
Selling, general, and administrative expense |
$ 670 |
|
$ 666 |
|
$ 605 |
|
Depreciation and amortization expense |
(161) |
|
(140) |
|
(130) |
|
Stock-based compensation expense |
(88) |
|
(93) |
|
(88) |
|
Cash operating expense |
$ 421 |
|
$ 433 |
|
$ 387 |
|
|
|
|
|
|
|
(5) |
We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and |
|||||
|
|
|
|
|
|
|
|
Sales and marketing expense |
$ 226 |
|
$ 217 |
|
$ 210 |
|
Depreciation and amortization expense |
(51) |
|
(51) |
|
(51) |
|
Stock-based compensation expense |
(21) |
|
(20) |
|
(20) |
|
Cash sales and marketing expense |
$ 154 |
|
$ 146 |
|
$ 139 |
|
|
|
|
|
|
|
(6) |
We define cash general and administrative expense as general and administrative expense less |
|||||
|
|
|
|
|
|
|
|
General and administrative expense |
$ 444 |
|
$ 449 |
|
$ 395 |
|
Depreciation and amortization expense |
(110) |
|
(89) |
|
(79) |
|
Stock-based compensation expense |
(67) |
|
(73) |
|
(68) |
|
Cash general and administrative expense |
$ 267 |
|
$ 287 |
|
$ 248 |
|
|
|
|
|
|
|
(7) |
The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below: |
|||||
|
|
|
|
|
|
|
|
|
$ 259 |
|
$ 257 |
|
$ 230 |
|
EMEA cash SG&A |
95 |
|
105 |
|
94 |
|
|
67 |
|
71 |
|
63 |
|
Cash SG&A |
$ 421 |
|
$ 433 |
|
$ 387 |
|
|
|
|
|
|
|
(8) |
We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other |
|||||
|
|
|
|
|
|
|
|
Net income |
$ 231 |
|
$ 227 |
|
$ 259 |
|
Income tax expense |
46 |
|
43 |
|
55 |
|
Interest income |
(24) |
|
(28) |
|
(19) |
|
Interest expense |
104 |
|
103 |
|
97 |
|
Other expense (income) |
6 |
|
1 |
|
(8) |
|
Loss on debt extinguishment |
1 |
|
— |
|
— |
|
Depreciation, amortization and accretion expense |
525 |
|
462 |
|
459 |
|
Stock-based compensation expense |
101 |
|
106 |
|
99 |
|
Transaction costs |
2 |
|
6 |
|
2 |
|
Loss on asset sales |
— |
|
— |
|
1 |
|
Adjusted EBITDA |
$ 992 |
|
$ 920 |
|
$ 945 |
|
|
|
|
|
|
|
|
The geographic split of our adjusted EBITDA is presented below: |
|||||
|
|
|
|
|
|
|
|
|
$ (46) |
|
$ 57 |
|
$ (40) |
|
|
46 |
|
(89) |
|
55 |
|
|
(15) |
|
(20) |
|
(15) |
|
|
89 |
|
87 |
|
84 |
|
|
(37) |
|
51 |
|
4 |
|
|
305 |
|
251 |
|
245 |
|
|
66 |
|
71 |
|
68 |
|
|
1 |
|
3 |
|
1 |
|
|
— |
|
— |
|
3 |
|
|
$ 409 |
|
$ 411 |
|
$ 405 |
|
|
|
|
|
|
|
|
EMEA net income |
$ 135 |
|
$ 174 |
|
$ 199 |
|
EMEA income tax expense |
— |
|
49 |
|
— |
|
EMEA interest income |
(5) |
|
(4) |
|
(3) |
|
EMEA interest expense |
4 |
|
5 |
|
4 |
|
EMEA other expense (income) |
39 |
|
(54) |
|
(16) |
|
EMEA depreciation, amortization and accretion expense |
133 |
|
125 |
|
125 |
|
EMEA stock-based compensation expense |
21 |
|
21 |
|
19 |
|
EMEA transaction costs |
1 |
|
3 |
|
1 |
|
EMEA gain on asset sales |
— |
|
— |
|
(2) |
|
EMEA adjusted EBITDA |
$ 328 |
|
$ 319 |
|
$ 327 |
|
|
|
|
|
|
|
|
|
$ 142 |
|
$ (4) |
|
$ 100 |
|
|
— |
|
83 |
|
— |
|
|
(4) |
|
(4) |
|
(1) |
|
|
11 |
|
11 |
|
9 |
|
|
4 |
|
4 |
|
4 |
|
|
1 |
|
— |
|
— |
|
|
87 |
|
86 |
|
89 |
|
|
14 |
|
14 |
|
12 |
|
|
$ 255 |
|
$ 190 |
|
$ 213 |
|
|
|
|
|
|
|
(9) |
We define cash gross margins as cash gross profit divided by revenues. |
|||||
|
|
|
|
|
|
|
|
Our cash gross margins by geographic region are presented below: |
|||||
|
|
|
|
|
|
|
|
|
71 % |
|
72 % |
|
72 % |
|
EMEA cash gross margins |
58 % |
|
57 % |
|
61 % |
|
|
70 % |
|
61 % |
|
65 % |
|
|
|
|
|
|
|
(10) |
We define adjusted EBITDA margins as adjusted EBITDA divided by revenues. |
|||||
|
|
|
|
|
|
|
|
|
44 % |
|
44 % |
|
46 % |
|
EMEA adjusted EBITDA margins |
45 % |
|
43 % |
|
47 % |
|
|
55 % |
|
44 % |
|
50 % |
|
||||||
(11) |
We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by |
|||||
|
|
|
|
|
|
|
|
Adjusted EBITDA - current period |
$ 992 |
|
$ 920 |
|
$ 945 |
|
Less adjusted EBITDA - prior period |
(920) |
|
(936) |
|
(839) |
|
Adjusted EBITDA growth |
$ 72 |
|
$ (16) |
|
$ 106 |
|
|
|
|
|
|
|
|
Revenues - current period |
$ 2,127 |
|
$ 2,110 |
|
$ 1,998 |
|
Less revenues - prior period |
(2,110) |
|
(2,061) |
|
(1,871) |
|
Revenue growth |
$ 17 |
|
$ 49 |
|
$ 127 |
|
|
|
|
|
|
|
|
Adjusted EBITDA flow-through rate |
424 % |
|
(33) % |
|
83 % |
|
|
|
|
|
|
|
(12) |
FFO is defined as net income or loss, excluding gain or loss from the disposition of real estate assets, depreciation and |
|||||
|
|
|
|
|
|
|
|
Net income |
$ 231 |
|
$ 227 |
|
$ 259 |
|
Adjustments: |
|
|
|
|
|
|
Real estate depreciation |
316 |
|
290 |
|
284 |
|
Loss on disposition of real estate property |
— |
|
2 |
|
2 |
|
Adjustments for FFO from unconsolidated joint ventures |
6 |
|
6 |
|
3 |
|
FFO attributable to common stockholders |
$ 553 |
|
$ 525 |
|
$ 548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13) |
AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, |
|||||
|
|
|
|
|
|
|
|
FFO attributable to common stockholders |
$ 553 |
|
$ 525 |
|
$ 548 |
|
Adjustments: |
|
|
|
|
|
|
Installation revenue adjustment |
(2) |
|
1 |
|
(2) |
|
Straight-line rent expense adjustment |
6 |
|
(6) |
|
1 |
|
Contract cost adjustment |
(8) |
|
(16) |
|
(7) |
|
Amortization of deferred financing costs and debt discounts |
5 |
|
4 |
|
5 |
|
Stock-based compensation expense |
101 |
|
106 |
|
99 |
|
Non-real estate depreciation expense |
158 |
|
121 |
|
121 |
|
Amortization expense |
52 |
|
52 |
|
52 |
|
Accretion expense adjustment |
(1) |
|
(1) |
|
2 |
|
Recurring capital expenditures |
(21) |
|
(105) |
|
(23) |
|
Loss on debt extinguishment |
1 |
|
— |
|
— |
|
Transaction costs |
2 |
|
6 |
|
2 |
|
Income tax expense adjustment |
— |
|
1 |
|
2 |
|
Adjustments for AFFO from unconsolidated joint ventures |
(3) |
|
3 |
|
2 |
|
AFFO attributable to common stockholders |
$ 843 |
|
$ 691 |
|
$ 802 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
(14) |
Following is how we reconcile from adjusted EBITDA to AFFO: |
|||||
|
||||||
|
Adjusted EBITDA |
$ 992 |
|
$ 920 |
|
$ 945 |
|
Adjustments: |
|
|
|
|
|
|
Interest expense, net of interest income |
(80) |
|
(75) |
|
(78) |
|
Amortization of deferred financing costs and debt discounts |
5 |
|
4 |
|
5 |
|
Income tax expense |
(46) |
|
(43) |
|
(55) |
|
Income tax expense adjustment |
— |
|
1 |
|
2 |
|
Straight-line rent expense adjustment |
6 |
|
(6) |
|
1 |
|
Contract cost adjustment |
(8) |
|
(16) |
|
(7) |
|
Installation revenue adjustment |
(2) |
|
1 |
|
(2) |
|
Recurring capital expenditures |
(21) |
|
(105) |
|
(23) |
|
Other income (expense) |
(6) |
|
(1) |
|
8 |
|
Loss on disposition of real estate property |
— |
|
2 |
|
2 |
|
Adjustments for unconsolidated JVs' and non-controlling interests |
3 |
|
9 |
|
5 |
|
Adjustment for loss on sale of assets |
— |
|
— |
|
(1) |
|
AFFO attributable to common stockholders |
$ 843 |
|
$ 691 |
|
$ 802 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
(15) |
The shares used in the computation of basic and diluted FFO and AFFO per share attributable to common stockholders is presented below: |
|||||
|
|
|
|
|
|
|
|
Shares used in computing basic net income per share, FFO per share and AFFO per share (in thousands) |
94,665 |
|
94,268 |
|
92,971 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
Employee equity awards (in thousands) |
491 |
|
399 |
|
369 |
|
Shares used in computing diluted net income per share, FFO per share and AFFO per share (in thousands) |
95,156 |
|
94,667 |
|
93,340 |
|
|
|
|
|
|
|
|
Basic FFO per share |
$ 5.84 |
|
$ 5.56 |
|
$ 5.90 |
|
Diluted FFO per share |
$ 5.81 |
|
$ 5.54 |
|
$ 5.87 |
|
|
|
|
|
|
|
|
Basic AFFO per share |
$ 8.91 |
|
$ 7.33 |
|
$ 8.62 |
|
Diluted AFFO per share |
$ 8.86 |
|
$ 7.30 |
|
$ 8.59 |
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