REDWOOD CITY, Calif.,
July 29, 2015 /PRNewswire/
-- Equinix, Inc. (Nasdaq: EQIX), a global interconnection and
data center company, today reported quarterly results for the
quarter ended June 30, 2015.
The Company 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.
Revenues were $665.6 million for
the second quarter, a 3% increase over the previous quarter and a
10% increase over the same quarter last year. Recurring
revenues, consisting primarily of colocation, interconnection and
managed services were $626.7 million
for the second quarter, a 3% increase over the previous quarter and
a 9% increase over the same quarter last year. Non-recurring
revenues were $38.9 million in the
quarter. MRR churn for the second quarter was 1.8%, as
compared to 2.0% from the previous quarter.
"This marks our 50th quarter of consecutive revenue growth, and
the continued strength and momentum of our business reflects our
strategic position and the value of our global platform," said
Steve Smith, president and CEO of
Equinix. "We sit at the crossroads of the Internet where our
customers use Platform Equinix to innovate and accelerate their
businesses. The scope, scale, reach and diversity of our
global offering remain without parallel and we are continuing to
invest across systems, processes and people to ensure consistent
service delivery worldwide."
Cost of revenues were $315.8
million for the second quarter, a 6% increase from the
previous quarter and an 8% increase from the same quarter last
year. Cost of revenues, excluding depreciation, amortization,
accretion and stock-based compensation of $111.1 million for the quarter, which we refer to
as cash cost of revenues, were $204.7
million for the quarter, a 7% increase over the previous
quarter and the same quarter last year. Gross margins for the
quarter were 53%, as compared to 54% for the previous quarter and
52% for the same quarter last year. Cash gross margins, defined as
gross profit before depreciation, amortization, accretion and
stock-based compensation, divided by revenues, for the quarter were
69%, as compared to 70% for the previous quarter and 68% for the
same quarter last year.
Selling, general and administrative expenses were $200.8 million for the second quarter, a 4%
increase over the previous quarter and a 7% increase over the same
quarter last year. Selling, general and administrative expenses,
excluding depreciation, amortization, accretion and stock-based
compensation of $51.2 million for the
quarter, which we refer to as cash selling, general and
administrative expenses, were $149.6
million for the quarter, a 3% increase from the previous
quarter and an 8% increase over the same quarter last
year.
Interest expense was $74.5 million
for the second quarter, an 8% increase from the previous quarter
and an 11% increase from the same quarter last year.
The Company recorded income tax expense of $7.5 million for the second quarter compared to
$6.2 million for the previous quarter
and an income tax benefit of $2.0
million for the same quarter last year.
Net income attributable to the Company was $59.5 million for the second quarter. This
represents a basic net income per share attributable to the Company
of $1.04 for the second quarter based
on a weighted average share count of 56.9 million and a diluted net
income per share attributable to the Company of $1.03 for the second quarter based on a weighted
average share count of 57.5 million.
Income from operations was $139.1
million for the second quarter, an 8% decrease from the
previous quarter, but a 12% increase over the same quarter last
year. Adjusted EBITDA, as defined below, for the second
quarter was $311.3 million, a 2%
increase over the previous quarter and a 13% increase over the same
quarter last year.
Adjusted funds from operations ("AFFO"), as defined below, were
$221.4 million for the second
quarter, largely unchanged from the previous quarter and an 18%
increase over the same quarter last year. This represents a
basic AFFO per share attributable to the Company of $3.89 for the second quarter and a diluted AFFO
per share attributable to the Company of $3.75 for the second quarter.
Capital expenditures, defined as gross capital expenditures less
the net change in accrued property, plant and equipment in the
second quarter, were $221.3 million,
as compared to capital expenditures of $150.1 million for the previous quarter and
$159.8 million for the same quarter
last year.
The Company generated cash from operating activities of
$212.5 million for the second
quarter, a 9% decrease over the previous quarter and a 115%
increase over the same quarter last year, primarily due to improved
operating results and favorable working capital activities. Cash
used in investing activities was $298.5
million in the second quarter as compared to cash used in
investing activities of $199.8
million in the previous quarter, primarily attributed to
higher capital expenditures and placing approximately £322.8
million, or approximately $493.8
million, into a restricted cash account for the payment of a
portion of the purchase price in connection with our intention to
acquire Telecity Group plc ("TelecityGroup"). On May 29, 2015, the Company announced a cash and
share offer for the entire issued and to be issued share capital of
TelecityGroup for approximately £2.4 billion, or approximately
$3.6 billion, at the time of the
announcement. The Company expects to close this transaction
in the first half of 2016. Cash used in financing activities was
$119.6 million for the second quarter
as compared to cash used in financing activities of $98.8 million in the previous quarter.
As of June 30, 2015, the Company's
cash, cash equivalents and investments were $435.6 million, as compared to $1,140.8 million as of December 31, 2014.
Business Outlook
For the third quarter of 2015, the Company expects revenues to
range between $681.0 and $685.0
million, which includes a negligible foreign currency impact
when compared to the average FX rates in Q2 2015 or a normalized
and constant currency growth rate of 3% quarter over quarter.
Cash gross margins are expected to approximate 68% to 69%.
Cash selling, general and administrative expenses are expected to
approximate $150.0 to $154.0
million. Adjusted EBITDA is expected to range between
$313.0 and $317.0 million, which
includes a $1.0 million negative
foreign currency impact when compared to the average FX rates in Q2
2015. Capital expenditures are expected to range between
$222.0 and $242.0 million, which
includes approximately $32.0 million
of recurring capital expenditures and $190.0
to $210.0 million of non-recurring capital expenditures.
For the full year of 2015, total revenues are expected to range
between $2,685.0 and $2,695.0
million, which includes a negligible foreign currency impact
when compared to prior guidance rates, reflecting a normalized and
constant currency growth rate of 15%. Total year cash gross
margins are expected to approximate 69%. Cash selling,
general and administrative expenses are expected to range between
$595.0 and $605.0 million.
Adjusted EBITDA is expected to range between $1,250.0 and $1,260.0 million, which includes
$2.0 million of positive foreign
currency impact when compared to prior guidance rates or a
normalized and constant currency growth rate of 18%. AFFO is
expected to range between $850.0 and $860.0
million or a normalized and constant currency growth rate of
19%. Capital expenditures are expected to range between
$800.0 and $850.0 million, including
approximately $115.0 million of
recurring capital expenditures and $685.0 to
$735.0 million of non-recurring capital
expenditures.
The U.S. dollar exchange rates used for 2015 guidance, taking
into consideration the impact of our foreign currency hedges, have
been updated to $1.18 to the Euro,
$1.54 to the Pound, S$1.35 to the U.S. dollar and R$3.22 to the U.S. dollar. The 2015 global
revenue breakdown by currency for the Euro, Pound, Singapore Dollar
and Brazilian Real is 14%, 10%, 7% and 3%, respectively.
The guidance provided above is forward-looking. 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, amortization of deferred financing costs, gains
(losses) on debt extinguishment, an income tax expense
adjustment, recurring capital expenditures and adjustments for
unconsolidated joint ventures' and non-controlling interests' share
of these items.
Q2 Results Conference Call and Replay Information
The Company will discuss its quarterly results for the period
ended June 30, 2015, along with its
future outlook, on its quarterly conference call on Wednesday, July 29, 2015, 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 1-210-234-8004 (domestic and international) and reference the
passcode EQIX.
A replay of the call will be available one hour after the call,
through Friday, October 30, 2015, by
dialing 1-203-369-3240 and referencing the passcode 2015. In
addition, the webcast will be available at
www.equinix.com/investors over the same time period. No
password is required for the webcast.
Investor Presentation and Supplemental Financial
Information
The Company has made available on its website a presentation
designed to accompany the discussion of the Company's results and
future outlook, along with certain supplemental financial
information and other data. Interested parties may access this
information through the Company's Investor Relations website at
www.equinix.com/investors.
About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading
businesses to their customers, employees and partners inside the
most interconnected data centers. In 33 markets across five
continents, Equinix is where companies come together to realize new
opportunities and accelerate their business, IT and cloud
strategies.
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. Legislative and regulatory requirements
encourage use of and emphasis on GAAP financial metrics and require
companies to explain why non-GAAP financial metrics are relevant to
management and investors.
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 the Company'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 and acquisition costs. Equinix
excludes these items in order for Equinix's lenders, investors, and
industry analysts who review and report on the Company, to better
evaluate the Company'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 our IBX centers and do
not reflect our current or future cash spending levels to support
our business. Our IBX centers are long-lived assets, and have
an economic life greater than 10 years. The construction costs of
our IBX centers do not recur and future capital expenditures remain
minor relative to our initial investment. This is a trend we
expect to continue. In addition, depreciation is also based
on the estimated useful lives of our IBX centers. These
estimates could vary from actual performance of the asset, are
based on historic costs incurred to build out our IBX 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 certain
intangible assets, as it represents a cost that may not recur and
is not a good indicator of the Company's current or future
operating performance. 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 believes are not meaningful in evaluating the
Company's current operations. Equinix excludes stock-based
compensation expense as it represents expense attributed to equity
awards that have no current or future cash obligations. As
such, we, and many investors and analysts, exclude this stock-based
compensation expense when assessing the cash generating performance
of our operations. Equinix excludes restructuring charges
from its non-GAAP financial measures. The restructuring
charges relate to the Company's decision to exit leases for excess
space adjacent to several of our IBX centers, which we did not
intend to build out, or our decision to reverse such restructuring
charges. Equinix also excludes impairment charges related to
certain long-lived assets. The impairment charges are related to
expense recognized whenever events or changes in circumstances
indicate that the carrying amount of long-lived assets are not
recoverable. Finally, Equinix excludes acquisition costs from its
non-GAAP financial measures. The acquisition costs relate to
costs the Company incurs in connection with business
combinations. Management believes such items as restructuring
charges, impairment charges and acquisition costs are non-core
transactions; however, these types of costs will or may occur in
future periods.
Equinix also presents funds from operations ("FFO") and adjusted
funds from operations ("AFFO"), which are non-GAAP financial
measures commonly used in the REIT industry. FFO is
calculated in accordance with the definition established by the
National Association of Real Estate Investment Trusts
("NAREIT"). FFO represents net income (loss), excluding gains
(losses) from the disposition of real estate assets, depreciation
and amortization on real estate assets and adjustments for
unconsolidated joint ventures' and non-controlling interests' share
of these items. AFFO represents FFO, excluding depreciation
and amortization expense on non-real estate assets, accretion,
stock-based compensation, restructuring charges, impairment
charges, acquisition costs, an installation revenue adjustment, a
straight-line rent expense adjustment, amortization of deferred
financing costs, gains (losses) on debt extinguishment, an income
tax expense adjustment, recurring capital expenditures 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
acquisition charges for the same reasons that they are excluded
from the other non-GAAP financial measures mentioned
above.
Equinix includes an adjustment for revenue from installation
fees, since installation fees are deferred and recognized ratably
over the expected life of the installation, 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. The adjustments for
both installation revenue and straight-line rent expense 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 as these expenses relate to the initial costs
incurred in connection with our debt financings that have no
current or future cash obligations. Equinix excludes gains
(losses) on debt extinguishment since it represents a cost that may
not recur and is not a good indicator of the Company's current or
future operating performance. Equinix includes an income tax
expense adjustment, which represents changes in its income tax
reserves and valuation allowances that may not recur or may not
relate to the current year's operations. Equinix also excludes
recurring capital expenditures, which represent expenditures to
extend the useful life of its IBX centers or other assets that are
required to support current revenues.
Our management does not itself, nor does it suggest that
investors should, consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. However, we have presented
such non-GAAP financial measures to provide investors with an
additional tool to evaluate our operating results in a manner that
focuses on what management believes to be our 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, however, 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 that of
other companies. In addition, whenever Equinix uses such
non-GAAP financial measures, it provides a reconciliation of
non-GAAP financial measures to the most closely applicable GAAP
financial measure. Investors are encouraged to review the
related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measure. 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, the challenges of acquiring, operating and
constructing IBX centers and developing, deploying and delivering
Equinix services; unanticipated costs or difficulties relating to
the integration of companies we have acquired or will acquire into
Equinix; a failure to receive significant revenue 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; and other risks described from time to time
in Equinix's filings with the Securities and Exchange Commission.
In particular, see Equinix's recent 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 and IBX are registered trademarks of Equinix, Inc.
International Business Exchange is a trademark of Equinix,
Inc.
Schedule 1
Profit Forecast for Equinix, Inc. for
the Financial Year ending December 31,
2015 and for three months ending September 30, 2015
In accordance with Rule 28.4(a) of the City Code on Takeovers
and Mergers (the "Code"), the principal assumptions upon
which the profit forecast is based are included in this Schedule 1
to the announcement. In accordance with Rule 28.4(c) of the Code,
there is a clear distinction made between assumptions which the
Directors of Equinix (or other members of Equinix's management) can
influence and those which they cannot influence.
1.
General
Equinix today made the following statements in its Second
Quarter 2015 Financial Results Announcement:
For the third quarter of 2015, the Company expects adjusted
EBITDA to be between $313.0 and $317.0
million, which includes a $1.0
million negative foreign currency impact when compared to
the average FX rates in Q2 2015.
For the full year of 2015, adjusted EBITDA is expected to range
between $1,250.0 to $1,260.0 million,
which includes $2.0 million of
positive foreign currency impact when compared to prior guidance
rates or a normalized and constant currency growth rate of
18%. AFFO is expected to range between $850.0 to $860.0 million or a normalized and
constant currency growth rate of 19%.
The above statements for the three months ending September 30, 2015 and for the financial year
ending December 31, 2015 constitute
profit forecasts for the purposes of the Code (the "Equinix
Profit Forecast").
The U.S. dollar exchange rates used for 2015 guidance, taking
into consideration the impact of our foreign currency hedges, have
been updated to $1.18 to the Euro,
$1.54 to the Pound, S$1.35 to the U.S. dollar and R$3.22 to the U.S. dollar. The 2015 global
revenue breakdown by currency for the Euro, Pound, Singapore Dollar
and Brazilian Real is 14%, 10%, 7% and 3%, respectively.
In the above statements, adjusted EBITDA is defined as income or
loss from operations before depreciation, amortization, accretion,
stock based compensation, restructuring charges, impairment charges
and acquisition costs. AFFO is defined as funds from operations
("FFO") excluding depreciation and amortization expense on non-real
estate assets, accretion, stock-based compensation, restructuring
charges, impairment charges, acquisition costs, an installation
revenue adjustment, straight-line rent expense, amortization of
deferred financing costs, gains (losses) on debt extinguishment,
income tax expense adjustment, recurring capital expenditures and
adjustments for unconsolidated joint ventures' and non-controlling
interests' share of these items. FFO is calculated in accordance
with the definition established by the National Association of Real
Estate Investment Trusts ("NAREIT"). FFO represents net income
(loss), excluding gains (losses) 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.
2. Basis of
preparation
The Equinix Profit Forecast has been prepared on a basis
consistent with the accounting policies for Equinix which are in
accordance with generally accepted accounting standards in the U.S.
and those which Equinix anticipates will be applicable for the full
year ending December 31, 2015.
Equinix has prepared the Equinix Profit Forecast based on
unaudited interim financial results for the three months ended
June 30, 2015 and a forecast to
September 30, 2015 and December 31, 2015.
3.
Assumptions
Equinix has prepared the Equinix Profit Forecast on the basis of
the following assumptions:
Factors outside the influence or control of Equinix and
its Directors
- There will be no material change in legislation or regulatory
requirements impacting on Equinix's operations or its accounting
policies during the year ending December 31,
2015.
- There will be no material change in the current trading
environment and economic conditions.
- There will be no material change in the Euro, British Pound,
Singapore Dollar and Brazilian Real exchange rates assumed
above.
- Inflation and tax rates in Equinix's principal markets will
remain materially unchanged from the prevailing rates.
- Equinix will maintain its REIT status throughout 2015.
- There will be no material adverse events that will have a
significant impact on Equinix's financial performance.
Factors within the influence or control of Equinix and its
Directors
- The Equinix Profit Forecast excludes any material acquisitions
or disposals in the year ended December 31,
2015.
- The Equinix Profit Forecast excludes any one-time costs or
benefits associated with the proposed transaction with Telecity
Group plc.
- There will be no material change in the present management or
control of Equinix or its existing operational strategy.
4. Directors'
confirmation
The Directors of Equinix have considered the Equinix Profit
Forecast and confirm that it is valid as at the date of this
document and has been properly compiled on the basis of the
assumptions set out above and that the basis of the accounting used
is consistent with Equinix's accounting policies.
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$626,691
|
|
$609,657
|
|
$574,158
|
|
$1,236,348
|
|
$1,123,861
|
Non-recurring
revenues
|
|
38,891
|
|
33,517
|
|
31,003
|
|
72,408
|
|
61,353
|
|
Revenues
|
|
665,582
|
|
643,174
|
|
605,161
|
|
1,308,756
|
|
1,185,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
315,757
|
|
298,313
|
|
292,859
|
|
614,070
|
|
580,384
|
|
|
Gross
profit
|
349,825
|
|
344,861
|
|
312,302
|
|
694,686
|
|
604,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
81,248
|
|
78,616
|
|
75,254
|
|
159,864
|
|
142,682
|
|
General and
administrative
|
119,578
|
|
113,640
|
|
111,675
|
|
233,218
|
|
214,978
|
|
Acquisition
costs
|
9,866
|
|
1,156
|
|
676
|
|
11,022
|
|
861
|
|
|
Total operating
expenses
|
210,692
|
|
193,412
|
|
187,605
|
|
404,104
|
|
358,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
139,133
|
|
151,449
|
|
124,697
|
|
290,582
|
|
246,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
921
|
|
520
|
|
744
|
|
1,441
|
|
2,178
|
|
Interest
expense
|
(74,496)
|
|
(68,791)
|
|
(66,874)
|
|
(143,287)
|
|
(135,694)
|
|
Loss on debt
extinguishment
|
-
|
|
-
|
|
(51,183)
|
|
-
|
|
(51,183)
|
|
Other income
(expense)
|
1,386
|
|
(514)
|
|
681
|
|
872
|
|
1,359
|
|
|
Total interest and
other, net
|
(72,189)
|
|
(68,785)
|
|
(116,632)
|
|
(140,974)
|
|
(183,340)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
66,944
|
|
82,664
|
|
8,065
|
|
149,608
|
|
62,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
(7,485)
|
|
(6,212)
|
|
2,014
|
|
(13,697)
|
|
(11,553)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
59,459
|
|
76,452
|
|
10,079
|
|
135,911
|
|
51,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to redeemable non-controlling interests
|
-
|
|
-
|
|
1,249
|
|
-
|
|
1,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Equinix
|
$ 59,459
|
|
$ 76,452
|
|
$ 11,328
|
|
$ 135,911
|
|
$ 52,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share attributable to Equinix:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$ 1.04
|
|
$ 1.35
|
|
$ 0.22
|
|
$ 2.39
|
|
$ 1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share
|
$ 1.03
|
|
$ 1.34
|
|
$ 0.22
|
|
$ 2.37
|
|
$ 1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income per share
|
56,935
|
|
56,661
|
|
51,332
|
|
56,798
|
|
50,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net income per share
|
57,499
|
|
57,227
|
|
51,652
|
|
57,410
|
|
50,884
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$ 59,459
|
|
$ 76,452
|
|
$10,079
|
|
$135,911
|
|
$ 51,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment ("CTA") gain (loss)
|
69,443
|
|
(146,311)
|
|
23,081
|
|
(76,869)
|
|
38,051
|
|
Unrealized gain
(loss) on available for sale securities
|
17
|
|
103
|
|
(73)
|
|
120
|
|
765
|
|
Unrealized gain
(loss) on cash flow hedges
|
(14,290)
|
|
10,556
|
|
54
|
|
(3,734)
|
|
254
|
|
Net investment hedge
CTA loss
|
(10,389)
|
|
-
|
|
-
|
|
(10,389)
|
|
-
|
|
Defined benefit
plans
|
83
|
|
59
|
|
-
|
|
142
|
|
-
|
Other comprehensive
income (loss), net of tax:
|
44,864
|
|
(135,593)
|
|
23,062
|
|
(90,730)
|
|
39,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss), net of tax
|
104,323
|
|
(59,141)
|
|
33,141
|
|
45,181
|
|
90,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to redeemable non-controlling interests
|
-
|
|
-
|
|
1,249
|
|
-
|
|
1,299
|
|
Other comprehensive
income attributable to redeemable non-controlling
interests
|
-
|
|
-
|
|
(750)
|
|
-
|
|
(2,817)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Comprehensive
income (loss) attributable to Equinix, net of
tax
|
$104,323
|
|
$ (59,141)
|
|
$33,640
|
|
$ 45,181
|
|
$ 88,968
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Assets
|
June
30,
|
|
December
31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$ 336,133
|
|
$
610,917
|
Short-term
investments
|
95,397
|
|
529,395
|
Accounts receivable,
net
|
293,855
|
|
262,570
|
Current portion of
restricted cash
|
523,003
|
|
3,057
|
Other current
assets
|
81,730
|
|
85,004
|
Total current
assets
|
1,330,118
|
|
1,490,943
|
Long-term
investments
|
4,039
|
|
439
|
Property, plant and
equipment, net
|
5,184,800
|
|
4,998,270
|
Goodwill
|
|
|
1,007,739
|
|
1,002,129
|
Intangible assets,
net
|
131,383
|
|
147,527
|
Restricted cash, less
current portion
|
10,524
|
|
14,060
|
Other
assets
|
|
157,415
|
|
164,065
|
Total
assets
|
$7,826,018
|
|
$
7,817,433
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$ 315,554
|
|
$
285,796
|
Accrued property and
equipment
|
128,193
|
|
114,469
|
Current portion of
capital lease and other financing obligations
|
26,832
|
|
21,362
|
Current portion of
mortgage and loans payable
|
59,041
|
|
59,466
|
Current portion of
convertible debt
|
149,780
|
|
-
|
Other current
liabilities
|
138,332
|
|
162,664
|
Total current
liabilities
|
817,732
|
|
643,757
|
Capital lease and
other financing obligations, less current portion
|
1,217,746
|
|
1,168,042
|
Mortgage and loans
payable, less current portion
|
506,631
|
|
534,686
|
Senior
notes
|
|
2,750,000
|
|
2,750,000
|
Convertible
debt, less current portion
|
-
|
|
145,853
|
Other
liabilities
|
|
331,319
|
|
304,964
|
Total
liabilities
|
5,623,428
|
|
5,547,302
|
|
|
|
|
|
|
|
Common
stock
|
|
57
|
|
57
|
Additional paid-in
capital
|
3,418,223
|
|
3,334,305
|
Treasury
stock
|
|
(10,646)
|
|
(11,411)
|
Accumulated
dividends
|
(621,792)
|
|
(424,387)
|
Accumulated other
comprehensive loss
|
(423,173)
|
|
(332,443)
|
Accumulated
deficit
|
(160,079)
|
|
(295,990)
|
Total stockholders'
equity
|
2,202,590
|
|
2,270,131
|
Total liabilities
and stockholders' equity
|
$7,826,018
|
|
$
7,817,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
|
|
|
|
|
|
|
Americas
headcount
|
2,229
|
|
2,122
|
EMEA
headcount
|
1,096
|
|
1,023
|
Asia-Pacific
headcount
|
789
|
|
721
|
Total
headcount
|
4,114
|
|
3,866
|
EQUINIX,
INC.
|
SUMMARY OF DEBT
PRINCIPAL OUTSTANDING
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Capital lease and
other financing obligations
|
$ 1,244,578
|
|
$ 1,189,404
|
|
|
|
|
|
|
|
Term loan, net of
debt discount
|
488,819
|
|
498,400
|
ALOG
financings
|
43,133
|
|
56,863
|
Mortgage payable and
other loans payable
|
33,720
|
|
38,889
|
less: debt discount
and premium, net
|
(680)
|
|
(681)
|
|
Total mortgage and
loans payable principal
|
564,992
|
|
593,471
|
|
|
|
|
|
|
|
Senior
notes
|
|
2,750,000
|
|
2,750,000
|
|
|
|
|
|
|
|
Convertible debt, net
of debt discount
|
149,780
|
|
145,853
|
Plus: debt
discount
|
8,105
|
|
12,032
|
|
Total convertible
debt principal
|
157,885
|
|
157,885
|
|
|
|
|
|
|
|
Total debt principal
outstanding
|
$ 4,717,455
|
|
$ 4,690,760
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 59,459
|
|
$ 76,452
|
|
$ 10,079
|
|
|
$ 135,911
|
|
$ 51,416
|
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
amortization and accretion
|
128,270
|
|
122,530
|
|
116,074
|
|
|
250,800
|
|
229,684
|
|
|
Stock-based
compensation
|
33,993
|
|
30,613
|
|
33,830
|
|
|
64,606
|
|
58,811
|
|
|
Debt issuance costs
and debt discount
|
3,811
|
|
3,774
|
|
4,717
|
|
|
7,585
|
|
11,126
|
|
|
Loss on debt
extinguishment
|
-
|
|
-
|
|
51,183
|
|
|
-
|
|
51,183
|
|
|
Excess tax benefits
from employee equity awards
|
(223)
|
|
(708)
|
|
(1,614)
|
|
|
(931)
|
|
(11,632)
|
|
|
Other reconciling
items
|
5,169
|
|
4,870
|
|
7,455
|
|
|
10,039
|
|
12,747
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(10,991)
|
|
(30,791)
|
|
(24,510)
|
|
|
(41,782)
|
|
(53,505)
|
|
|
|
Income taxes,
net
|
(53,592)
|
|
(12,555)
|
|
(76,764)
|
|
|
(66,147)
|
|
(92,513)
|
|
|
|
Accounts payable and
accrued expenses
|
19,600
|
|
29,693
|
|
(16,498)
|
|
|
49,293
|
|
(7,668)
|
|
|
|
Other assets and
liabilities
|
26,967
|
|
8,933
|
|
(4,988)
|
|
|
35,900
|
|
21,033
|
|
|
|
|
Net cash provided
by operating activities
|
212,463
|
|
232,811
|
|
98,964
|
|
|
445,274
|
|
270,682
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Purchases, sales and
maturities of investments, net
|
433,966
|
|
(4,706)
|
|
250,737
|
|
|
429,260
|
|
472,391
|
|
Business
acquisitions, net of cash acquired
|
-
|
|
(10,247)
|
|
-
|
|
|
(10,247)
|
|
-
|
|
Purchases of real
estate
|
-
|
|
(38,282)
|
|
-
|
|
|
(38,282)
|
|
(16,791)
|
|
Purchases of other
property, plant and equipment
|
(221,342)
|
|
(150,120)
|
|
(159,816)
|
|
|
(371,462)
|
|
(265,723)
|
|
Other investing
activities
|
(511,166)
|
|
3,521
|
|
582
|
|
|
(507,645)
|
|
511
|
|
|
|
|
Net cash provided
by (used in) investing activities
|
(298,542)
|
|
(199,834)
|
|
91,503
|
|
|
(498,376)
|
|
190,388
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of treasury
stock
|
-
|
|
-
|
|
(208,263)
|
|
|
-
|
|
(255,383)
|
|
Proceeds from
employee equity awards
|
181
|
|
16,384
|
|
1,434
|
|
|
16,565
|
|
15,821
|
|
Payment of dividend
distributions
|
(96,349)
|
|
(96,619)
|
|
-
|
|
|
(192,968)
|
|
-
|
|
Proceeds from loans
payable
|
490,000
|
|
-
|
|
-
|
|
|
490,000
|
|
-
|
|
Repayment of capital
lease and other financing obligations
|
(8,342)
|
|
(5,296)
|
|
(5,033)
|
|
|
(13,638)
|
|
(9,283)
|
|
Repayment of mortgage
and loans payable
|
(505,268)
|
|
(13,361)
|
|
(16,777)
|
|
|
(518,629)
|
|
(27,094)
|
|
Repayment of
convertible debt
|
-
|
|
-
|
|
(29,479)
|
|
|
-
|
|
(29,479)
|
|
Debt extinguishment
costs
|
-
|
|
-
|
|
(22,552)
|
|
|
-
|
|
(22,552)
|
|
Excess tax benefits
from employee equity awards
|
223
|
|
708
|
|
1,614
|
|
|
931
|
|
11,632
|
|
Other financing
activities
|
(7)
|
|
(610)
|
|
128
|
|
|
(617)
|
|
128
|
|
|
|
|
Net cash used in
financing activities
|
(119,562)
|
|
(98,794)
|
|
(278,928)
|
|
|
(218,356)
|
|
(316,210)
|
Effect of foreign
currency exchange rates on cash and cash equivalents
|
5,065
|
|
(8,391)
|
|
1,621
|
|
|
(3,326)
|
|
1,580
|
Net increase
(decrease) in cash and cash equivalents
|
(200,576)
|
|
(74,208)
|
|
(86,840)
|
|
|
(274,784)
|
|
146,440
|
Cash and cash
equivalents at beginning of period
|
536,709
|
|
610,917
|
|
495,174
|
|
|
610,917
|
|
261,894
|
Cash and cash
equivalents at end of period
|
$ 336,133
|
|
$536,709
|
|
$408,334
|
|
|
$ 336,133
|
|
$408,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
taxes
|
$ 60,266
|
|
$ 14,538
|
|
$ 75,371
|
|
|
$ 74,804
|
|
$105,284
|
|
|
Cash paid for
interest
|
$ 71,823
|
|
$ 23,976
|
|
$ 79,517
|
|
|
$ 95,799
|
|
$121,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(1)
|
|
$(520,045)
|
|
$ 37,683
|
|
$ (60,270)
|
|
|
$(482,362)
|
|
$ (11,321)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow (2)
|
$(474,162)
|
|
$ 87,666
|
|
$ 12,119
|
|
|
$(386,496)
|
|
$115,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We define 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
|
$ 212,463
|
|
$232,811
|
|
$ 98,964
|
|
|
$ 445,274
|
|
$270,682
|
|
Net cash provided by
(used in) investing activities as presented above
|
(298,542)
|
|
(199,834)
|
|
91,503
|
|
|
(498,376)
|
|
190,388
|
|
Purchases, sales and
maturities of investments, net
|
(433,966)
|
|
4,706
|
|
(250,737)
|
|
|
(429,260)
|
|
(472,391)
|
|
|
Free cash flow
(negative free cash flow)
|
$(520,045)
|
|
$ 37,683
|
|
$ (60,270)
|
|
|
$(482,362)
|
|
$ (11,321)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
We define adjusted
free cash flow as free cash flow (as defined above) excluding any
purchases of real estate, acquisitions,
|
|
|
|
any excess tax
benefits from employee equity awards, cash paid for taxes
associated with reclassifying our assets for
|
|
|
|
|
|
tax purposes
triggered by our conversion into a real estate investment trust
("REIT") and costs related to the
|
|
|
|
|
|
|
REIT conversion, as
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (as
defined above)
|
$(520,045)
|
|
$ 37,683
|
|
$ (60,270)
|
|
|
$(482,362)
|
|
$ (11,321)
|
|
Less business
acquisitions, net of cash
|
-
|
|
10,247
|
|
-
|
|
|
10,247
|
|
-
|
|
Less purchases of
real estate
|
-
|
|
38,282
|
|
-
|
|
|
38,282
|
|
16,791
|
|
Less excess tax
benefits from employee equity awards
|
223
|
|
708
|
|
1,614
|
|
|
931
|
|
11,632
|
|
Less cash paid for
taxes resulting from the REIT conversion
|
45,113
|
|
-
|
|
61,873
|
|
|
45,113
|
|
79,700
|
|
Less costs related to
the REIT conversion
|
547
|
|
746
|
|
8,902
|
|
|
1,293
|
|
18,692
|
|
|
Adjusted free cash
flow
|
$(474,162)
|
|
$ 87,666
|
|
$ 12,119
|
|
|
$(386,496)
|
|
$115,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We categorize our
cash paid for taxes into cash paid for taxes resulting from the
REIT conversion (as defined above) and
|
|
|
|
|
other cash taxes
paid.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for taxes
resulting from the REIT conversion
|
$ 45,113
|
|
$
-
|
|
$ 61,873
|
|
|
$ 45,113
|
|
$ 79,700
|
|
Other cash taxes
paid
|
15,153
|
|
14,538
|
|
13,498
|
|
|
29,691
|
|
25,584
|
|
|
Total cash paid for
taxes
|
$ 60,266
|
|
$ 14,538
|
|
$ 75,371
|
|
|
$ 74,804
|
|
$105,284
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP
PRESENTATION
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$626,691
|
|
$ 609,657
|
|
$574,158
|
|
$1,236,348
|
|
$1,123,861
|
Non-recurring
revenues
|
38,891
|
|
33,517
|
|
31,003
|
|
72,408
|
|
61,353
|
|
Revenues
(1)
|
|
665,582
|
|
643,174
|
|
605,161
|
|
1,308,756
|
|
1,185,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
204,736
|
|
192,130
|
|
190,901
|
|
396,866
|
|
375,149
|
|
|
|
Cash gross profit
(3)
|
460,846
|
|
451,044
|
|
414,260
|
|
911,890
|
|
810,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating
expenses (4):
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
65,058
|
|
63,820
|
|
58,785
|
|
128,878
|
|
114,584
|
|
Cash general and
administrative expenses (6)
|
84,526
|
|
81,476
|
|
80,198
|
|
166,002
|
|
159,816
|
|
|
|
Total cash
operating expenses (7)
|
149,584
|
|
145,296
|
|
138,983
|
|
294,880
|
|
274,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(8)
|
$311,262
|
|
$ 305,748
|
|
$275,277
|
|
$ 617,010
|
|
$ 535,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
69%
|
|
70%
|
|
68%
|
|
70%
|
|
68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margins (10)
|
47%
|
|
48%
|
|
45%
|
|
47%
|
|
45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate (11)
|
25%
|
|
225%
|
|
59%
|
|
77%
|
|
31%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(12)
|
|
|
$167,368
|
|
$ 179,190
|
#
|
$109,813
|
|
$ 346,558
|
|
$ 248,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
(13)
|
|
|
$221,388
|
|
$ 221,756
|
|
$187,597
|
|
$ 443,144
|
|
$ 360,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per
share (14)
|
$ 2.94
|
|
$ 3.16
|
|
$ 2.14
|
|
$
6.10
|
|
$
4.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per
share (14)
|
$ 2.87
|
|
$ 3.09
|
|
$ 1.99
|
|
$
5.95
|
|
$
4.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per
share (15)
|
$ 3.89
|
|
$ 3.91
|
|
$ 3.65
|
|
$
7.80
|
|
$
7.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted AFFO per
share (15)
|
$ 3.75
|
|
$ 3.77
|
|
$ 3.29
|
|
$
7.52
|
|
$
6.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split
of our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
$262,934
|
|
$ 257,932
|
|
$242,873
|
|
$ 520,866
|
|
$ 479,487
|
|
Interconnection
|
|
77,102
|
|
75,086
|
|
66,451
|
|
152,188
|
|
130,753
|
|
Managed
infrastructure
|
12,837
|
|
13,295
|
|
14,885
|
|
26,132
|
|
27,997
|
|
Rental
|
|
|
732
|
|
741
|
|
943
|
|
1,473
|
|
1,895
|
|
|
Recurring
revenues
|
353,605
|
|
347,054
|
|
325,152
|
|
700,659
|
|
640,132
|
|
Non-recurring
revenues
|
17,842
|
|
16,915
|
|
17,104
|
|
34,757
|
|
32,157
|
|
|
Revenues
|
371,447
|
|
363,969
|
|
342,256
|
|
735,416
|
|
672,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
139,482
|
|
132,735
|
|
127,132
|
|
272,217
|
|
249,308
|
|
Interconnection
|
|
13,440
|
|
13,048
|
|
12,329
|
|
26,488
|
|
23,695
|
|
Managed
infrastructure
|
5,919
|
|
5,783
|
|
7,434
|
|
11,702
|
|
14,299
|
|
Rental
|
|
|
1,222
|
|
1,858
|
|
1,730
|
|
3,080
|
|
3,448
|
|
|
Recurring
revenues
|
160,063
|
|
153,424
|
|
148,625
|
|
313,487
|
|
290,750
|
|
Non-recurring
revenues
|
13,904
|
|
11,199
|
|
8,537
|
|
25,103
|
|
17,842
|
|
|
Revenues
|
173,967
|
|
164,623
|
|
157,162
|
|
338,590
|
|
308,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
94,194
|
|
90,878
|
|
82,655
|
|
185,072
|
|
158,488
|
|
Interconnection
|
|
14,119
|
|
13,524
|
|
12,189
|
|
27,643
|
|
23,547
|
|
Managed
infrastructure
|
4,710
|
|
4,777
|
|
5,537
|
|
9,487
|
|
10,944
|
|
|
Recurring
revenues
|
113,023
|
|
109,179
|
|
100,381
|
|
222,202
|
|
192,979
|
|
Non-recurring
revenues
|
7,145
|
|
5,403
|
|
5,362
|
|
12,548
|
|
11,354
|
|
|
Revenues
|
120,168
|
|
114,582
|
|
105,743
|
|
234,750
|
|
204,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
496,610
|
|
481,545
|
|
452,660
|
|
978,155
|
|
887,283
|
|
Interconnection
|
|
104,661
|
|
101,658
|
|
90,969
|
|
206,319
|
|
177,995
|
|
Managed
infrastructure
|
23,466
|
|
23,855
|
|
27,856
|
|
47,321
|
|
53,240
|
|
Rental
|
|
|
1,954
|
|
2,599
|
|
2,673
|
|
4,553
|
|
5,343
|
|
|
Recurring
revenues
|
626,691
|
|
609,657
|
|
574,158
|
|
1,236,348
|
|
1,123,861
|
|
Non-recurring
revenues
|
38,891
|
|
33,517
|
|
31,003
|
|
72,408
|
|
61,353
|
|
|
Revenues
|
$665,582
|
|
$ 643,174
|
|
$605,161
|
|
$1,308,756
|
|
$1,185,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$315,757
|
|
$ 298,313
|
|
$292,859
|
|
$ 614,070
|
|
$ 580,384
|
|
Depreciation,
amortization and accretion expense
|
(108,470)
|
|
(103,877)
|
|
(99,730)
|
|
(212,347)
|
|
(201,137)
|
|
Stock-based
compensation expense
|
(2,551)
|
|
(2,306)
|
|
(2,228)
|
|
(4,857)
|
|
(4,098)
|
|
|
Cash cost of
revenues
|
$204,736
|
|
$ 192,130
|
|
$190,901
|
|
$ 396,866
|
|
$ 375,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$102,249
|
|
$ 95,162
|
|
$ 94,684
|
|
$ 197,411
|
|
$ 185,721
|
|
EMEA cash cost of
revenues
|
62,431
|
|
58,494
|
|
58,727
|
|
120,925
|
|
116,843
|
|
Asia-Pacific cash
cost of revenues
|
40,056
|
|
38,474
|
|
37,490
|
|
78,530
|
|
72,585
|
|
|
Cash cost of
revenues
|
$204,736
|
|
$ 192,130
|
|
$190,901
|
|
$ 396,866
|
|
$ 375,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
We define cash gross
profit as revenues less cash cost of revenues (as defined
above).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
We define cash
operating expenses as operating expenses less depreciation,
amortization, stock-based compensation and
|
|
|
|
|
|
acquisition
costs. We also refer to cash operating expenses as cash
selling, general and administrative expenses or
|
|
|
|
|
|
|
|
"cash
SG&A".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
We define cash sales
and marketing expenses as sales and marketing expenses less
depreciation,
|
|
|
|
|
|
|
|
|
|
amortization and
stock-based compensation as presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
$ 81,248
|
|
$ 78,616
|
|
$ 75,254
|
|
$ 159,864
|
|
$ 142,682
|
|
Depreciation and
amortization expense
|
(6,268)
|
|
(6,085)
|
|
(8,526)
|
|
(12,353)
|
|
(13,155)
|
|
Stock-based
compensation expense
|
(9,922)
|
|
(8,711)
|
|
(7,943)
|
|
(18,633)
|
|
(14,943)
|
|
|
Cash sales and
marketing expenses
|
$ 65,058
|
|
$ 63,820
|
|
$ 58,785
|
|
$ 128,878
|
|
$ 114,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
We define cash
general and administrative expenses as general and administrative
expenses less depreciation,
|
|
|
|
|
|
|
|
amortization and
stock-based compensation as presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
$119,578
|
|
$ 113,640
|
|
$111,675
|
|
$ 233,218
|
|
$ 214,978
|
|
Depreciation and
amortization expense
|
(13,532)
|
|
(12,568)
|
|
(7,818)
|
|
(26,100)
|
|
(15,392)
|
|
Stock-based
compensation expense
|
(21,520)
|
|
(19,596)
|
|
(23,659)
|
|
(41,116)
|
|
(39,770)
|
|
|
Cash general and
administrative expenses
|
$ 84,526
|
|
$ 81,476
|
|
$ 80,198
|
|
$ 166,002
|
|
$ 159,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
Our cash operating
expenses, or cash SG&A, as defined above, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses
|
$ 65,058
|
|
$ 63,820
|
|
$ 58,785
|
|
$ 128,878
|
|
$ 114,584
|
|
Cash general and
administrative expenses
|
84,526
|
|
81,476
|
|
80,198
|
|
166,002
|
|
159,816
|
|
|
Cash
SG&A
|
$149,584
|
|
$ 145,296
|
|
$138,983
|
|
$ 294,880
|
|
$ 274,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash operating expenses, or cash SG&A, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$ 98,312
|
|
$ 96,073
|
|
$ 89,447
|
|
$ 194,385
|
|
$ 178,880
|
|
EMEA cash
SG&A
|
32,003
|
|
30,098
|
|
33,084
|
|
62,101
|
|
63,193
|
|
Asia-Pacific cash
SG&A
|
19,269
|
|
19,125
|
|
16,452
|
|
38,394
|
|
32,327
|
|
|
Cash
SG&A
|
$149,584
|
|
$ 145,296
|
|
$138,983
|
|
$ 294,880
|
|
$ 274,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
We define adjusted
EBITDA as income from operations plus depreciation, amortization,
accretion, stock-based
|
|
|
|
|
|
|
|
compensation expense
and acquisition costs as presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
$139,133
|
|
$ 151,449
|
|
$124,697
|
|
$ 290,582
|
|
$ 246,309
|
|
Depreciation,
amortization and accretion expense
|
128,270
|
|
122,530
|
|
116,074
|
|
250,800
|
|
229,684
|
|
Stock-based
compensation expense
|
33,993
|
|
30,613
|
|
33,830
|
|
64,606
|
|
58,811
|
|
Acquisition
costs
|
9,866
|
|
1,156
|
|
676
|
|
11,022
|
|
861
|
|
|
Adjusted
EBITDA
|
$311,262
|
|
$ 305,748
|
|
$275,277
|
|
$ 617,010
|
|
$ 535,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas income from
operations
|
$ 77,653
|
|
$ 81,466
|
|
$ 67,739
|
|
$ 159,119
|
|
$ 139,474
|
|
Americas
depreciation, amortization and accretion expense
|
68,692
|
|
66,811
|
|
62,481
|
|
135,503
|
|
121,414
|
|
Americas stock-based
compensation expense
|
25,883
|
|
23,491
|
|
27,177
|
|
49,374
|
|
45,970
|
|
Americas acquisition
costs
|
(1,342)
|
|
966
|
|
728
|
|
(376)
|
|
830
|
|
|
Americas adjusted
EBITDA
|
170,886
|
|
172,734
|
|
158,125
|
|
343,620
|
|
307,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA income from
operations
|
36,110
|
|
45,541
|
|
34,067
|
|
81,651
|
|
63,970
|
|
EMEA depreciation,
amortization and accretion expense
|
27,826
|
|
26,693
|
|
27,901
|
|
54,519
|
|
57,803
|
|
EMEA stock-based
compensation expense
|
4,397
|
|
3,607
|
|
3,385
|
|
8,004
|
|
6,702
|
|
EMEA acquisition
costs
|
11,200
|
|
190
|
|
(2)
|
|
11,390
|
|
81
|
|
|
EMEA adjusted
EBITDA
|
79,533
|
|
76,031
|
|
65,351
|
|
155,564
|
|
128,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific income
from operations
|
25,370
|
|
24,442
|
|
22,891
|
|
49,812
|
|
42,865
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
31,752
|
|
29,026
|
|
25,692
|
|
60,778
|
|
50,467
|
|
Asia-Pacific
stock-based compensation expense
|
3,713
|
|
3,515
|
|
3,268
|
|
7,228
|
|
6,139
|
|
Asia-Pacific
acquisition costs
|
8
|
|
-
|
|
(50)
|
|
8
|
|
(50)
|
|
|
Asia-Pacific adjusted
EBITDA
|
60,843
|
|
56,983
|
|
51,801
|
|
117,826
|
|
99,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$311,262
|
|
$ 305,748
|
|
$275,277
|
|
$ 617,010
|
|
$ 535,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9)
|
We define cash gross
margins as cash gross profit divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our cash gross
margins by geographic region is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash gross
margins
|
72%
|
|
74%
|
|
72%
|
|
73%
|
|
72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA cash gross
margins
|
64%
|
|
64%
|
|
63%
|
|
64%
|
|
62%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific cash
gross margins
|
67%
|
|
66%
|
|
65%
|
|
67%
|
|
64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
46%
|
|
47%
|
|
46%
|
|
47%
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA adjusted EBITDA
margins
|
46%
|
|
46%
|
|
42%
|
|
46%
|
|
42%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific adjusted
EBITDA margins
|
51%
|
|
50%
|
|
49%
|
|
50%
|
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11)
|
We define adjusted
EBITDA flow-through rate as incremental adjusted EBITDA growth
divided by incremental
|
|
|
|
|
|
|
|
revenue growth as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
current period
|
$311,262
|
|
$ 305,748
|
|
$275,277
|
|
$ 617,010
|
|
$ 535,665
|
|
Less adjusted EBITDA
- prior period
|
(305,748)
|
|
(294,365)
|
|
(260,388)
|
|
(578,226)
|
|
(511,975)
|
|
|
Adjusted EBITDA
growth
|
$ 5,514
|
|
$ 11,383
|
|
$ 14,889
|
|
$ 38,784
|
|
$ 23,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$665,582
|
|
$ 643,174
|
|
$605,161
|
|
$1,308,756
|
|
$1,185,214
|
|
Less revenues - prior
period
|
(643,174)
|
|
(638,121)
|
|
(580,053)
|
|
(1,258,562)
|
|
(1,107,761)
|
|
|
Revenue
growth
|
$ 22,408
|
|
$ 5,053
|
|
$ 25,108
|
|
$ 50,194
|
|
$ 77,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
25%
|
|
225%
|
|
59%
|
|
77%
|
|
31%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12)
|
FFO is defined as net
income (loss), excluding gains (losses) 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
|
|
$ 59,459
|
|
$ 76,452
|
|
$ 10,079
|
|
$ 135,911
|
|
$ 51,416
|
|
|
Net loss attributable
to redeemable non-controlling interests
|
-
|
|
-
|
|
1,249
|
|
-
|
|
1,299
|
|
Net income
attributable to Equinix
|
59,459
|
|
76,452
|
|
11,328
|
|
135,911
|
|
52,715
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
107,321
|
|
102,648
|
|
100,788
|
|
209,969
|
|
200,239
|
|
|
Gain/loss on
disposition of real estate property
|
559
|
|
62
|
|
183
|
|
621
|
|
216
|
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
29
|
|
28
|
|
28
|
|
57
|
|
56
|
|
|
Non-controlling
interests' share of above adjustments
|
-
|
|
-
|
|
(2,514)
|
|
-
|
|
(4,681)
|
|
|
FFO
|
|
$167,368
|
|
$ 179,190
|
|
$109,813
|
|
$ 346,558
|
|
$ 248,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13)
|
AFFO is defined as
FFO, excluding depreciation and amortization expense on non-real
estate assets, accretion,
|
|
|
|
|
|
|
|
stock-based
compensation, restructuring charges, impairment charges,
acquisition costs, an installation revenue
|
|
|
|
|
|
|
|
adjustment, a
straight-line rent expense adjustment, amortization of deferred
financing costs, gains (losses) on debt
extinguishment,
|
|
|
|
|
|
an income tax expense
adjustment, recurring capital expenditures and adjustments from FFO
to AFFO for
|
|
|
|
|
|
|
|
|
unconsolidated joint
ventures' and non-controlling interests' share of these
items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
|
$167,368
|
|
$ 179,190
|
|
$109,813
|
|
$ 346,558
|
|
$ 248,545
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Installation revenue
adjustment
|
12,474
|
|
8,654
|
|
5,244
|
|
21,128
|
|
12,417
|
|
|
Straight-line rent
expense adjustment
|
2,017
|
|
3,201
|
|
3,331
|
|
5,218
|
|
6,360
|
|
|
Amortization of
deferred financing costs
|
3,848
|
|
3,858
|
|
4,783
|
|
7,706
|
|
11,282
|
|
|
Stock-based
compensation expense
|
33,993
|
|
30,613
|
|
33,830
|
|
64,606
|
|
58,811
|
|
|
Non-real estate
depreciation expense
|
13,605
|
|
12,693
|
|
7,785
|
|
26,298
|
|
15,357
|
|
|
Amortization
expense
|
6,450
|
|
6,295
|
|
7,139
|
|
12,745
|
|
14,109
|
|
|
Accretion
expense
|
894
|
|
894
|
|
362
|
|
1,788
|
|
(21)
|
|
|
Recurring capital
expenditures
|
(27,330)
|
|
(22,373)
|
|
(26,018)
|
|
(49,703)
|
|
(52,467)
|
|
|
Loss on debt
extinguishment
|
-
|
|
-
|
|
51,183
|
|
-
|
|
51,183
|
|
|
Acquisition
costs
|
9,866
|
|
1,156
|
|
676
|
|
11,022
|
|
861
|
|
|
Income tax expense
adjustment
|
(1,784)
|
|
(2,408)
|
|
(7,726)
|
|
(4,192)
|
|
(2,771)
|
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
(13)
|
|
(17)
|
|
(19)
|
|
(30)
|
|
(40)
|
|
|
Non-controlling
interests share of above adjustments
|
-
|
|
-
|
|
(2,786)
|
|
-
|
|
(3,285)
|
|
|
AFFO
|
|
$221,388
|
|
$ 221,756
|
|
$187,597
|
|
$ 443,144
|
|
$ 360,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
The FFO used in the
computation of basic and diluted FFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, basic
|
|
$167,368
|
|
$ 179,190
|
|
$109,813
|
|
$ 346,558
|
|
$ 248,545
|
|
|
Interest on
convertible debt
|
3,383
|
|
3,362
|
|
5,188
|
|
6,745
|
|
12,300
|
|
FFO,
diluted
|
|
$170,751
|
|
$ 182,552
|
|
$115,001
|
|
$ 353,303
|
|
$ 260,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The shares used in
the computation of basic and diluted FFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income per share and FFO per
share
|
56,935
|
|
56,661
|
|
51,332
|
|
56,798
|
|
50,884
|
|
Effect of
dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
debt
|
1,958
|
|
1,942
|
|
6,000
|
|
1,950
|
|
6,894
|
|
|
Employee equity
awards
|
563
|
|
566
|
|
320
|
|
612
|
|
414
|
|
Shares used in
computing diluted FFO per share
|
59,456
|
|
59,169
|
|
57,652
|
|
59,360
|
|
58,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15)
|
The AFFO used in the
computation of basic and diluted AFFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO,
basic
|
|
$221,388
|
|
$ 221,756
|
|
$187,597
|
|
$ 443,144
|
|
$ 360,341
|
|
|
Interest on
convertible debt
|
1,557
|
|
1,554
|
|
2,271
|
|
3,111
|
|
4,899
|
|
AFFO,
diluted
|
|
$222,945
|
|
$ 223,310
|
|
$189,868
|
|
$ 446,255
|
|
$ 365,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The shares used in
the computation of basic and diluted AFFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income per share and AFFO per
share
|
56,935
|
|
56,661
|
|
51,332
|
|
56,798
|
|
50,884
|
|
Effect of
dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
debt
|
1,958
|
|
1,942
|
|
6,000
|
|
1,950
|
|
6,894
|
|
|
Employee equity
awards
|
563
|
|
566
|
|
320
|
|
612
|
|
414
|
|
Shares used in
computing diluted AFFO per share
|
59,456
|
|
59,169
|
|
57,652
|
|
59,360
|
|
58,192
|
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SOURCE Equinix, Inc.