REDWOOD CITY, Calif.,
Aug. 3, 2016 /PRNewswire/ -- Equinix,
Inc. (Nasdaq: EQIX), a global interconnection and data center
company, today reported quarterly results for the quarter ended
June 30, 2016. 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.
Second Quarter 2016 Results Summary
- Revenues from continuing operations
- $900.5 million, a 7% increase
over the previous quarter
- Includes $37.3 million of
revenues from Bit-isle
- Includes $107.2 million of
revenues from Telecity
- Operating Income
- $151.7 million, a 35% increase
from the previous quarter
- Adjusted EBITDA
- $420.3 million, a 47% adjusted
EBITDA margin
- Includes $12.1 million of
adjusted EBITDA from Bit-isle
- Includes $51.9 million of
adjusted EBITDA from Telecity
- Includes $10.4 million of
integration costs
- Net Income from Continuing Operations
- AFFO
- $290.5 million, a 38% increase
over the previous quarter
- Includes $10.4 million of
integration costs
2016 Annual Guidance Summary
- Revenues from continuing operations
- $3,598.0 million - $3,608.0
million, a 32% increase over the previous year; an organic
and constant currency growth rate of 13.8%
- Assumes $550.0 million - $560.0
million in revenues from Telecity and Bit-isle
- Adjusted EBITDA
- $1,658.0 million - $1,668.0
million or a 46.2% adjusted EBITDA margin
- Assumes 120 basis point YoY improvement in adjusted EBITDA for
the Equinix organic business
- Assumes $250.0 million - $260.0
million of adjusted EBITDA from Telecity and Bit-isle
- Assumes approximately $55.0
million of integration costs for acquisitions
- AFFO
- $1,040.0 million - $1,050
million, a 26% increase over the previous year
- Includes the Q1 $63.5 million
foreign currency loss related to the Telecity acquisition
- Assumes approximately $55.0
million of integration costs for acquisitions
The Company does not provide forward-looking guidance for
certain financial data, such as depreciation, amortization,
accretion, stock-based compensation, net income (loss) from
operations, cash generated from operating activities and cash used
in investing activities, and as a result, is not able to provide a
reconciliation of GAAP to non-GAAP financial measures for
forward-looking data without unreasonable effort. The impact of
such adjustments could be significant.
The second quarter includes full quarterly results of Bit-isle
and Telecity, which were acquired by the Company in November 2015 and January
2016, respectively. In addition, in order to obtain the
approval of the European Commission for the acquisition of
Telecity, the Company and Telecity agreed to divest certain data
centers, including the Company's London 2 International Business Exchange™
(IBX®) in London, UK ("LD2") and
certain Telecity data centers. The Company completed these
divestitures on July 5, 2016. The
quarterly financial results include results from LD2 in continuing
operations; the data centers in Telecity that were divested are
reported as discontinued operations.
Revenues from continuing operations were $900.5 million for the second quarter, a 7%
increase over the previous quarter and a 35% increase over the same
quarter last year. Results include $144.5
million of revenues from the acquisitions of Bit-isle and
Telecity. Recurring revenues, consisting primarily of colocation,
interconnection and managed services, were $851.8 million for the second quarter, a 7%
increase over the previous quarter and a 36% increase over the same
quarter last year. Non-recurring revenues were $48.7 million in the quarter. MRR churn for the
second quarter was 1.8% as compared to 2.2% in the previous
quarter.
"The second quarter marked another strong performance for
Equinix as we delivered both revenues and adjusted EBITDA above the
top end of our guidance ranges, and as the company recorded its
54th quarter of consecutive revenue growth," said Steve Smith,
president and CEO of Equinix. "As digital transformation
drives companies to evolve business models and operations, Equinix
continues to serve as an important partner as reflected in our
strong growth and market leadership position. During the quarter we
made significant progress towards our goal of owning more of our
real estate with the acquisition of two Paris data centers, and we commenced
construction on DC12, our first data center build on our owned
Ashburn North Campus. The Ashburn campus is the largest
internet exchange point in North
America, and this expansion will effectively double our
owned capacity in this important market over the next few
years."
Cost of revenues was $457.0
million for the second quarter, a 7% increase from the
previous quarter and a 45% increase from the same quarter last
year. Cost of revenues, excluding depreciation, amortization,
accretion and stock-based compensation of $164.9 million for the quarter, which we refer to
as cash cost of revenues, was $292.0
million for the quarter, an 8% increase over the previous
quarter and a 43% increase over the same quarter last year.
Gross margins were 49%, unchanged from the prior quarter, as
compared to 53% for the same quarter last year. Cash gross margins,
defined as gross profit before depreciation, amortization,
accretion and stock-based compensation, divided by revenues, were
68% for the quarter, unchanged from the previous quarter, and 69%
for the same quarter last year.
Selling, general and administrative expenses were $276.3 million for the second quarter, a 1%
increase over the previous quarter and a 38% increase over the same
quarter last year. Selling, general and administrative expenses,
excluding depreciation, amortization, accretion and stock-based
compensation of $88.1 million for the
quarter, which we refer to as cash selling, general and
administrative expenses, were $188.2
million for the quarter, a 2% decrease from the previous
quarter and a 26% increase over the same quarter last
year.
Interest expense was $100.3
million for the second quarter, a 1% decrease from the
previous quarter, primarily attributed to prepayment of
Brazil financings and maturity of
the 4.75% convertible notes, and a 35% increase from the same
quarter last year, primarily attributed to the interest associated
with debt financings in November 2015
and other financings, such as various capital lease and other
financing obligations related to the Bit-isle and Telecity
acquisitions.
The Company recorded income tax expense from continuing
operations of $13.8 million for the
second quarter as compared to an income tax benefit of $10.6 million for the previous quarter and income
tax expense from continuing operations of $7.5 million for the same quarter last year.
Income from continuing operations was $151.7 million for the second quarter, a 35%
increase from the previous quarter and a 9% increase over the same
quarter last year. Adjusted EBITDA, as defined below, for the
second quarter was $420.3 million, a
10% increase over the previous quarter and a 35% increase over the
same quarter last year. Adjusted EBITDA includes $64.0 million from the acquisitions of Bit-isle
and Telecity.
Net income from continuing operations was $39.3 million for the second quarter. This
represents a basic and diluted net income per share from continuing
operations of $0.56 for the second
quarter based on a weighted average basic and diluted share count
of 69.7 million shares and 70.4 million shares, respectively. Net
income from discontinued operations was $5.4
million for the second quarter. Basic and diluted net income
per share from discontinued operations was $0.08 per share.
Adjusted funds from operations ("AFFO"), as defined below, were
$290.5 million for the second
quarter, a 38% increase from the previous quarter and a 31%
increase over the same quarter last year. AFFO for the second
quarter included $10.4 million of
integration costs.
Capital expenditures, defined as gross capital expenditures less
the net change in accrued property, plant and equipment in the
second quarter, were $249.9 million,
as compared to capital expenditures of $197.7 million for the previous quarter and
$221.3 million for the same quarter
last year.
The Company generated cash from operating activities of
$278.8 million for the second quarter
as compared to cash generated from operating activities of
$104.3 million in the previous
quarter. Cash used in investing activities was $252.9 million in the second quarter, as compared
to cash used in investing activities of $1.3
billion in the previous quarter, primarily attributable to
the Telecity acquisition. Cash used in financing activities was
$169.9 million for the second quarter
as compared to cash used in financing activities of $376.4 million in the previous quarter.
As of June 30, 2016, the Company's
cash, cash equivalents and investments were $494.2 million, as compared to $2,246.3 million as of December 31, 2015.
Business Outlook
The Company's guidance includes forecasted results for Telecity
from January 15, 2016, Bit-isle for
the full year of 2016 and incremental operating results relating to
the Company's purchase of our two data centers, Paris 2 and Paris 3, from Digital Realty on August 1, 2016 for approximately $211.7 million. As previously
announced, the Company divested eight assets, seven from Telecity
along with LD2, to obtain regulatory clearance for the transaction.
The Company completed these divestitures on July 5, 2016 for approximately $827.2 million, which excludes the benefit
attributed to our favorable hedge arrangement. The Company's
guidance does not include the seven Telecity assets, which were
treated as discontinued operations, but does assume six months, or
$6.0 million in revenues, from LD2,
which was under a different accounting treatment that required
results to be reported as continuing operations until the sales
were completed.
For the third quarter of 2016, the Company expects revenues to
range between $915.0 and $921.0
million, or a normalized and constant currency growth rate
of 2.4% quarter over quarter. This guidance includes a
negative foreign currency impact of $3.0
million when compared to the average FX rates in Q2 2016.
Cash gross margins are expected to approximate 68%. Cash
selling, general and administrative expenses are expected to range
between $199.0 and $205.0
million. Adjusted EBITDA is expected to range between
$419.0 and $425.0 million, which
includes a $1.6 million negative
foreign currency impact when compared to the average FX rates in Q2
2016 and approximately $17.0 million
in integration costs from the two acquisitions. Capital
expenditures are expected to range between $270.0 and $290.0 million, which includes
approximately $40.0 million of
recurring capital expenditures and $230.0 to
$250.0 million of non-recurring capital expenditures.
For the full year of 2016, total revenues are expected to range
between $3,598.0 and $3,608.0
million, an organic and constant currency growth rate of
13.8% over year. This guidance includes a positive foreign
currency benefit of $1.5 million on
revenues when compared to prior guidance rates, and includes an
expected $550.0 to $560.0 million in
revenues from the Bit-isle and Telecity acquisitions. Total year
cash gross margins are expected to approximate 68%. Cash
selling, general and administrative expenses are expected to range
between $782.0 and $792.0
million. Adjusted EBITDA is expected to range between
$1,658.0 and $1,668.0 million, or a
year over year organic and constant currency growth rate of
16.8%. This guidance includes $0.8
million of positive foreign currency benefit on adjusted
EBITDA when compared to our prior guidance rates, and includes an
expected $250.0 to $260.0 million in
adjusted EBITDA from the Bit-isle and Telecity acquisitions, as
well as approximately $55.0 million
in integration costs related to these two acquisitions. AFFO
is expected to range between $1,040.0 and
$1,050 million, including approximately $55.0 million of integration costs and the
$63.5 million Q1 foreign currency
loss attributed to the Telecity acquisition. Capital
expenditures are expected to range from $950.0 to $1,000.0 million, including
approximately $145.0 million of
recurring capital expenditures and $805.0 to
$855.0 million of non-recurring capital
expenditures.
The U.S. dollar exchange rates used for 2016 guidance, taking
into consideration the impact of our foreign currency hedges, have
been updated to $1.12 to the Euro,
$1.43 to the Pound, S$1.35 to the U.S. dollar, ¥101.0 to the
U.S. dollar and R$3.327 to the U.S.
dollar. The 2016 global revenue breakdown by currency for the Euro,
Pound, Japanese Yen, Singapore Dollar and Brazilian Real is 19%,
11%, 7%, 6% and 3%, respectively.
The guidance provided above is forward-looking and includes the
impact of the Company's acquisition of Telecity, which closed on
January 15, 2016. 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, 2016, along with its
future outlook, in its quarterly conference call on Wednesday, August 3, 2016, 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, November 4, 2016, by
dialing 1-203-369-1052 and referencing the passcode 2016. In
addition, the webcast will be available at
www.equinix.com/investors. 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.
Additional Resources
- Q2 2016 financial earnings press release (PDF)
- Q2 2016 financial tables (PDF)
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 40 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
The Company 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, the
Company uses non-GAAP financial measures to evaluate its
operations.
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, the Company 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, acquisition costs and gains on asset
sales. The Company excludes these items in order for its
lenders, investors and the 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.
The Company excludes depreciation expense as these charges
primarily relate to the initial construction costs of an IBX
center, and do not reflect its current or future cash spending
levels to support its business. Its IBX centers are
long-lived assets, and have an economic life greater than 10 years.
The construction costs of an IBX center do not recur with respect
to such data center, although the Company may incur initial
construction costs in future periods with respect to additional IBX
centers, and future capital expenditures remain minor relative to
the initial investment. This is a trend it expects to
continue. In addition, depreciation is also based on the
estimated useful lives of the IBX 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, the Company excludes depreciation
from its operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures, the
Company also excludes amortization expense related to intangible
assets, as it is not meaningful in evaluating the Company's current
or future operating performance; however, like depreciation, is an
expense expected to recur in future periods. The Company 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 the Company also believes are not
meaningful in evaluating the Company's current operations. The
Company excludes stock-based compensation expense as it represents
expense attributed to equity awards that have no current or future
cash obligations. As such, the Company, and many investors
and analysts, exclude this stock-based compensation expense when
assessing the cash generating performance of our operations. The
Company 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 its
IBX centers, which it did not intend to build out, or its decision
to reverse such restructuring charges. The Company 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. The Company also
excludes gains on asset sales as it represents profit that is not
meaningful in evaluating the current or future operating
performance. Finally, the Company 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 items such as restructuring
charges, impairment charges, acquisition costs and gains on asset
sales are non-core transactions; however, these types of costs may
occur in future periods.
The Company presents adjusted EBITDA, which is a non-GAAP
financial measure. Adjusted EBITDA represents income or loss from
operations plus depreciation, amortization, accretion, stock-based
compensation expense, restructuring charges, impairment charges,
acquisition costs and gains on asset sales.
The Company 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, net income
(loss) from discontinued operations, net of tax and adjustments
from FFO to AFFO for unconsolidated joint ventures' and
non-controlling interests' share of these items. Equinix excludes
depreciation expense, amortization expense, accretion, stock-based
compensation, restructuring charges, impairment charges and
acquisition costs for the same reasons that they are excluded from
the other non-GAAP financial measures mentioned above.
The Company 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. The Company
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. The Company excludes the amortization of deferred
financing costs as these expenses relate to the initial costs
incurred in connection with its debt financings that have no
current or future cash obligations. The Company excludes gains
(losses) on debt extinguishment since it represents a cost that is
not a good indicator of the Company's current or future operating
performance. The Company includes an income tax expense adjustment,
which represents the non-cash tax impact due to changes in
valuation allowances and uncertain tax positions that do not relate
to the current period's operations. The Company 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. The Company also excludes net income
(loss) from discontinued operations, net of tax, which represents
results that are not a good indicator of our current or future
operating performance.
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 financials
measures. The Company presents such non-GAAP financial measures to
provide investors with an additional tool to evaluate its operating
results in a manner that focuses on what management believes to be
its core, ongoing business operations. Management believes
that the inclusion of these non-GAAP financial measures provides
consistency and comparability with past reports and provides a
better understanding of the overall performance of the business and
its ability to perform in subsequent periods. The Company believes
that if it did not provide such non-GAAP financial information,
investors would not have all the necessary data to analyze the
Company effectively.
Investors should note that the non-GAAP financial measures used
by the Company may not be the same non-GAAP financial measures, and
may not be calculated in the same manner, as those of other
companies. Investors should, therefore, exercise caution when
comparing non-GAAP financial measures used by us to similarly
titled non-GAAP financial measures of other companies. The Company
does not provide forward-looking guidance for certain financial
data, such as depreciation, amortization, accretion, stock-based
compensation, net income (loss) from operations, cash generated
from operating activities and cash used in investing activities,
and as a result, is not able to provide a reconciliation of GAAP to
non-GAAP financial measures for forward-looking data without
unreasonable effort. The impact of such adjustments could be
significant. The Company 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.
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,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$
851,771
|
|
$
797,094
|
|
$
626,691
|
|
$
1,648,865
|
|
$
1,236,348
|
Non-recurring
revenues
|
|
48,739
|
|
47,062
|
|
38,891
|
|
95,801
|
|
72,408
|
|
Revenues
|
|
900,510
|
|
844,156
|
|
665,582
|
|
1,744,666
|
|
1,308,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
456,967
|
|
427,680
|
|
315,757
|
|
884,647
|
|
614,070
|
|
|
Gross
profit
|
|
443,543
|
|
416,476
|
|
349,825
|
|
860,019
|
|
694,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
107,832
|
|
106,590
|
|
81,248
|
|
214,422
|
|
159,864
|
|
General and
administrative
|
168,462
|
|
165,904
|
|
119,578
|
|
334,366
|
|
233,218
|
|
Acquisition
costs
|
15,594
|
|
36,536
|
|
9,866
|
|
52,130
|
|
11,022
|
|
Gains on asset
sales
|
-
|
|
(5,242)
|
|
-
|
|
(5,242)
|
|
-
|
|
|
Total operating
expenses
|
291,888
|
|
303,788
|
|
210,692
|
|
595,676
|
|
404,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
151,655
|
|
112,688
|
|
139,133
|
|
264,343
|
|
290,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
841
|
|
925
|
|
921
|
|
1,766
|
|
1,441
|
|
Interest
expense
|
(100,332)
|
|
(100,863)
|
|
(74,496)
|
|
(201,195)
|
|
(143,287)
|
|
Other income
(expense)
|
1,555
|
|
(60,710)
|
|
1,386
|
|
(59,155)
|
|
872
|
|
Loss on debt
extinguishment
|
(605)
|
|
-
|
|
-
|
|
(605)
|
|
-
|
|
|
Total interest and
other, net
|
(98,541)
|
|
(160,648)
|
|
(72,189)
|
|
(259,189)
|
|
(140,974)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
53,114
|
|
(47,960)
|
|
66,944
|
|
5,154
|
|
149,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
(13,812)
|
|
10,633
|
|
(7,485)
|
|
(3,179)
|
|
(13,697)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
|
39,302
|
|
(37,327)
|
|
59,459
|
|
1,975
|
|
135,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
discontinued operations, net of tax
|
5,409
|
|
6,216
|
|
-
|
|
11,625
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
44,711
|
|
$
(31,111)
|
|
$
59,459
|
|
$
13,600
|
|
$
135,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share from continuing operations
|
$
0.56
|
|
$
(0.55)
|
|
$
1.04
|
|
$
0.03
|
|
$
2.39
|
|
Basic net income per
share from discontinued operations
|
0.08
|
|
0.09
|
|
-
|
|
0.17
|
|
-
|
|
Basic net income
(loss) per share
|
$
0.64
|
|
$
(0.46)
|
|
$
1.04
|
|
$
0.20
|
|
$
2.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share from continuing operations
|
$
0.56
|
|
$
(0.55)
|
|
$
1.03
|
|
$
0.03
|
|
$
2.37
|
|
Diluted net income
per share from discontinued operations
|
0.08
|
|
0.09
|
|
-
|
|
0.17
|
|
-
|
|
Diluted net income
(loss) per share
|
$
0.64
|
|
$
(0.46)
|
|
$
1.03
|
|
$
0.20
|
|
$
2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income (loss) per share
|
69,729
|
|
68,132
|
|
56,935
|
|
68,931
|
|
56,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net income (loss) per share
|
70,364
|
|
68,132
|
|
57,499
|
|
69,575
|
|
57,410
|
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,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
44,711
|
|
$
(31,111)
|
|
$
59,459
|
|
$
13,600
|
|
$
135,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment ("CTA") gain
(loss)
|
(298,361)
|
|
115,899
|
|
69,443
|
|
(182,462)
|
|
(76,869)
|
|
Unrealized gain
(loss) on available-for-sale securities
|
1,199
|
|
(304)
|
|
17
|
|
895
|
|
120
|
|
Unrealized gain
(loss) on cash flow hedges
|
14,726
|
|
(6,784)
|
|
(14,290)
|
|
7,942
|
|
(3,734)
|
|
Net investment
hedge CTA gain (loss)
|
55,196
|
|
(16,312)
|
|
(10,389)
|
|
38,884
|
|
(10,389)
|
|
Net actuarial
gain on defined benefit plans
|
8
|
|
6
|
|
83
|
|
14
|
|
142
|
Other
comprehensive income (loss), net of tax:
|
(227,232)
|
|
92,505
|
|
44,864
|
|
(134,727)
|
|
(90,730)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss), net of
tax
|
(182,521)
|
|
61,394
|
|
104,323
|
|
(121,127)
|
|
45,181
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Assets
|
June
30,
|
|
December
31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
483,160
|
|
$
2,228,838
|
Short-term
investments
|
3,328
|
|
12,875
|
Accounts receivable,
net
|
346,994
|
|
291,964
|
Current portion of
restricted cash
|
3,411
|
|
479,417
|
Other current
assets
|
233,870
|
|
212,929
|
Assets held for
sale
|
1,024,666
|
|
33,257
|
|
Total current
assets
|
2,095,429
|
|
3,259,280
|
Long-term
investments
|
7,694
|
|
4,584
|
Property, plant and
equipment, net
|
6,958,794
|
|
5,606,436
|
Goodwill
|
|
|
3,190,197
|
|
1,063,200
|
Intangible assets,
net
|
788,955
|
|
224,565
|
Other
assets
|
|
227,976
|
|
198,630
|
|
Total
assets
|
$
13,269,045
|
|
$
10,356,695
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
498,212
|
|
$
400,948
|
Accrued property,
plant and equipment
|
163,388
|
|
103,107
|
Current portion of
capital lease and other financing obligations
|
92,611
|
|
40,121
|
Current portion of
mortgage and loans payable
|
511,331
|
|
770,236
|
Convertible
debt
|
|
-
|
|
146,121
|
Other current
liabilities
|
142,113
|
|
192,286
|
Liabilities held for
sale
|
152,124
|
|
3,535
|
|
Total current
liabilities
|
1,559,779
|
|
1,656,354
|
Capital lease and
other financing obligations, less current portion
|
1,514,804
|
|
1,287,139
|
Mortgage and loans
payable, less current portion
|
1,074,663
|
|
472,769
|
Senior
notes
|
|
3,807,816
|
|
3,804,634
|
Other
liabilities
|
|
606,518
|
|
390,413
|
|
Total
liabilities
|
8,563,580
|
|
7,611,309
|
|
|
|
|
|
|
|
Common
stock
|
|
71
|
|
62
|
Additional paid-in
capital
|
7,307,575
|
|
4,838,444
|
Treasury
stock
|
|
(148,246)
|
|
(7,373)
|
Accumulated
dividends
|
(1,715,533)
|
|
(1,468,472)
|
Accumulated other
comprehensive loss
|
(643,786)
|
|
(509,059)
|
Accumulated
deficit
|
(94,616)
|
|
(108,216)
|
|
Total
stockholders' equity
|
4,705,465
|
|
2,745,386
|
|
Total liabilities
and stockholders' equity
|
$
13,269,045
|
|
$
10,356,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
|
|
|
|
|
|
Americas
headcount
|
2,408
|
|
2,329
|
|
EMEA
headcount
|
2,088
|
|
1,188
|
|
Asia-Pacific
headcount
|
1,311
|
|
1,525
|
|
|
Total
headcount
|
5,807
|
|
5,042
|
EQUINIX,
INC.
|
SUMMARY OF DEBT
PRINCIPAL OUTSTANDING
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Capital lease and
other financing obligations
|
$
1,607,415
|
|
$
1,327,260
|
|
|
|
|
|
|
|
Term loan, net of
debt discount and debt issuance costs
|
1,071,853
|
|
454,503
|
Brazil financings,
net of debt issuance costs
|
2,841
|
|
26,668
|
Mortgage payable and
other loans payable
|
511,300
|
|
436,212
|
Revolving credit
facility borrowings
|
-
|
|
325,622
|
Plus: debt discount,
debt issuance costs and premium, net
|
12,651
|
|
694
|
|
Total mortgage and
loans payable principal
|
1,598,645
|
|
1,243,699
|
|
|
|
|
|
|
|
Senior notes, net of
debt issuance costs
|
3,807,816
|
|
3,804,634
|
Plus: debt issuance
costs
|
42,184
|
|
45,366
|
|
Total senior notes
principal
|
3,850,000
|
|
3,850,000
|
|
|
|
|
|
|
|
Convertible debt, net
of debt discount and debt issuance costs
|
-
|
|
146,121
|
Plus: debt discount
and debt issuance costs
|
-
|
|
3,961
|
|
Total convertible
debt principal
|
-
|
|
150,082
|
|
|
|
|
|
|
|
Total debt principal
outstanding
|
$
7,056,060
|
|
$
6,571,041
|
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,
|
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
44,711
|
|
$
(31,111)
|
|
$
59,459
|
|
$
13,600
|
|
$
135,911
|
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
amortization and accretion
|
213,719
|
|
202,153
|
|
128,270
|
|
415,872
|
|
250,800
|
|
|
Stock-based
compensation
|
39,323
|
|
34,061
|
|
33,993
|
|
73,384
|
|
64,606
|
|
|
Amortization of debt
issuance costs and debt discounts
|
5,517
|
|
5,508
|
|
3,811
|
|
11,025
|
|
7,585
|
|
|
Loss on debt
extinguishment
|
318
|
|
-
|
|
-
|
|
318
|
|
-
|
|
|
Gains on asset
sales
|
-
|
|
(5,242)
|
|
-
|
|
(5,242)
|
|
-
|
|
|
Other
items
|
7,311
|
|
4,871
|
|
4,946
|
|
12,182
|
|
9,108
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(31,055)
|
|
(11,312)
|
|
(10,991)
|
|
(42,367)
|
|
(41,782)
|
|
|
|
Income taxes,
net
|
4,901
|
|
(28,656)
|
|
(53,592)
|
|
(23,755)
|
|
(66,147)
|
|
|
|
Accounts payable and
accrued expenses
|
29,592
|
|
(40,217)
|
|
19,600
|
|
(10,625)
|
|
49,293
|
|
|
|
Other assets and
liabilities
|
(35,509)
|
|
(25,785)
|
|
26,967
|
|
(61,294)
|
|
35,900
|
|
|
|
|
Net cash provided
by operating activities
|
278,828
|
|
104,270
|
|
212,463
|
|
383,098
|
|
445,274
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases, sales and
maturities of investments, net
|
8,764
|
|
3,419
|
|
433,966
|
|
12,183
|
|
429,260
|
|
Business
acquisitions, net of cash acquired
|
-
|
|
(1,601,627)
|
|
-
|
|
(1,601,627)
|
|
(10,247)
|
|
Purchases of real
estate
|
(11,710)
|
|
(16,408)
|
|
-
|
|
(28,118)
|
|
(38,282)
|
|
Purchases of other
property, plant and equipment
|
(249,867)
|
|
(197,700)
|
|
(221,342)
|
|
(447,567)
|
|
(371,462)
|
|
Proceeds from asset
sales
|
-
|
|
22,825
|
|
-
|
|
22,825
|
|
-
|
|
Other investing
activities
|
(117)
|
|
466,704
|
|
(511,166)
|
|
466,587
|
|
(507,645)
|
|
|
|
|
Net cash used in
investing activities
|
(252,930)
|
|
(1,322,787)
|
|
(298,542)
|
|
(1,575,717)
|
|
(498,376)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
employee equity awards
|
1,335
|
|
16,304
|
|
181
|
|
17,639
|
|
16,565
|
|
Payment of dividend
distributions
|
(121,858)
|
|
(124,836)
|
|
(96,349)
|
|
(246,694)
|
|
(192,968)
|
|
Proceeds from loans
payable
|
-
|
|
701,250
|
|
490,000
|
|
701,250
|
|
490,000
|
|
Repayment of capital
lease and other financing obligations
|
(12,103)
|
|
(33,232)
|
|
(8,342)
|
|
(45,335)
|
|
(13,638)
|
|
Repayment of mortgage
and loans payable
|
(36,758)
|
|
(936,353)
|
|
(505,268)
|
|
(973,111)
|
|
(518,629)
|
|
Other financing
activities
|
(541)
|
|
499
|
|
216
|
|
(42)
|
|
314
|
|
|
|
|
Net cash used in
financing activities
|
(169,925)
|
|
(376,368)
|
|
(119,562)
|
|
(546,293)
|
|
(218,356)
|
Effect of foreign
currency exchange rates on cash and cash equivalents
|
18,540
|
|
(195)
|
|
5,065
|
|
18,345
|
|
(3,326)
|
Change in cash
balances included in assets held for sale
|
(25,111)
|
|
-
|
|
-
|
|
(25,111)
|
|
-
|
Net increase
(decrease) in cash and cash equivalents
|
(150,598)
|
|
(1,595,080)
|
|
(200,576)
|
|
(1,745,678)
|
|
(274,784)
|
Cash and cash
equivalents at beginning of period
|
633,758
|
|
2,228,838
|
|
536,709
|
|
2,228,838
|
|
610,917
|
Cash and cash
equivalents at end of period
|
$
483,160
|
|
$
633,758
|
|
$
336,133
|
|
$
483,160
|
|
$
336,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
taxes
|
$
12,361
|
|
$
19,215
|
|
$
60,266
|
|
$
31,576
|
|
$
74,804
|
|
|
Cash paid for
interest
|
$
85,897
|
|
$
74,540
|
|
$
71,823
|
|
$
160,437
|
|
$
95,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(1)
|
$
17,134
|
|
$
(1,221,936)
|
|
$
(520,045)
|
|
$
(1,204,802)
|
|
$
(482,362)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow (2)
|
$
28,280
|
|
$
396,663
|
|
$
(474,162)
|
|
$
424,943
|
|
$
(386,496)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
278,828
|
|
$
104,270
|
|
$
212,463
|
|
$
383,098
|
|
$
445,274
|
|
Net cash used in
investing activities as presented above
|
(252,930)
|
|
(1,322,787)
|
|
(298,542)
|
|
(1,575,717)
|
|
(498,376)
|
|
Purchases, sales and
maturities of investments, net
|
(8,764)
|
|
(3,419)
|
|
(433,966)
|
|
(12,183)
|
|
(429,260)
|
|
|
Free cash flow
(negative free cash flow)
|
$
17,134
|
|
$
(1,221,936)
|
|
$
(520,045)
|
|
$
(1,204,802)
|
|
$
(482,362)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
$
17,134
|
|
$
(1,221,936)
|
|
$
(520,045)
|
|
$
(1,204,802)
|
|
$
(482,362)
|
|
Less business
acquisitions, net of cash
|
-
|
|
1,601,627
|
|
-
|
|
1,601,627
|
|
10,247
|
|
Less purchases of
real estate
|
11,710
|
|
16,408
|
|
-
|
|
28,118
|
|
38,282
|
|
Less excess tax
benefits from employee equity awards
|
(564)
|
|
564
|
|
223
|
|
-
|
|
931
|
|
Less cash paid for
taxes resulting from the REIT conversion
|
-
|
|
-
|
|
45,113
|
|
-
|
|
45,113
|
|
Less costs related to
the REIT conversion
|
-
|
|
-
|
|
547
|
|
-
|
|
1,293
|
|
|
Adjusted free cash
flow
|
$
28,280
|
|
$
396,663
|
|
$
(474,162)
|
|
$
424,943
|
|
$
(386,496)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
$
-
|
|
$
45,113
|
|
Other cash taxes
paid
|
12,361
|
|
19,215
|
|
15,153
|
|
31,576
|
|
29,691
|
|
|
Total cash paid for
taxes
|
$
12,361
|
|
$
19,215
|
|
$
60,266
|
|
$
31,576
|
|
$
74,804
|
EQUINIX,
INC.
|
NON-GAAP MEASURES
AND OTHER SUPPLEMENTAL DATA
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
|
$
851,771
|
|
$
797,094
|
|
$
626,691
|
|
$
1,648,865
|
|
$
1,236,348
|
Non-recurring
revenues
|
|
48,739
|
|
47,062
|
|
38,891
|
|
95,801
|
|
72,408
|
|
Revenues
(1)
|
|
900,510
|
|
844,156
|
|
665,582
|
|
1,744,666
|
|
1,308,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
292,033
|
|
271,100
|
|
204,736
|
|
563,133
|
|
396,866
|
|
Cash gross profit
(3)
|
608,477
|
|
573,056
|
|
460,846
|
|
1,181,533
|
|
911,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating
expenses (4):
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
78,071
|
|
79,692
|
|
65,058
|
|
157,763
|
|
128,878
|
|
Cash general and
administrative expenses (6)
|
110,115
|
|
112,714
|
|
84,526
|
|
222,829
|
|
166,002
|
|
|
Total cash
operating expenses (7)
|
188,186
|
|
192,406
|
|
149,584
|
|
380,592
|
|
294,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(8)
|
|
$
420,291
|
|
$
380,650
|
|
$
311,262
|
|
$
800,941
|
|
$
617,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
68%
|
|
68%
|
|
69%
|
|
68%
|
|
70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margins (10)
|
47%
|
|
45%
|
|
47%
|
|
46%
|
|
47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate (11)
|
70%
|
|
42%
|
|
25%
|
|
45%
|
|
77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(12)
|
|
|
$
201,515
|
|
$
115,875
|
|
$
167,368
|
|
$
317,390
|
|
$
346,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO (13)
(14)
|
|
$
290,529
|
|
$
209,846
|
|
$
221,388
|
|
$
500,375
|
|
$
443,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split
of our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
$
289,578
|
|
$
282,321
|
|
$
262,934
|
|
$
571,899
|
|
$
520,866
|
|
Interconnection
|
89,860
|
|
85,936
|
|
77,102
|
|
175,796
|
|
152,188
|
|
Managed
infrastructure
|
13,255
|
|
11,170
|
|
12,837
|
|
24,425
|
|
26,132
|
|
Other
|
|
|
786
|
|
729
|
|
732
|
|
1,515
|
|
1,473
|
|
|
Recurring
revenues
|
393,479
|
|
380,156
|
|
353,605
|
|
773,635
|
|
700,659
|
|
Non-recurring
revenues
|
19,992
|
|
24,238
|
|
17,842
|
|
44,230
|
|
34,757
|
|
|
Revenues
|
413,471
|
|
404,394
|
|
371,447
|
|
817,865
|
|
735,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
240,421
|
|
214,178
|
|
139,482
|
|
454,599
|
|
272,217
|
|
Interconnection
|
22,425
|
|
19,700
|
|
13,440
|
|
42,125
|
|
26,488
|
|
Managed
infrastructure
|
15,391
|
|
18,560
|
|
5,919
|
|
33,951
|
|
11,702
|
|
Other
|
|
|
3,573
|
|
943
|
|
1,222
|
|
4,516
|
|
3,080
|
|
|
Recurring
revenues
|
281,810
|
|
253,381
|
|
160,063
|
|
535,191
|
|
313,487
|
|
Non-recurring
revenues
|
18,799
|
|
14,475
|
|
13,904
|
|
33,274
|
|
25,103
|
|
|
Revenues
|
300,609
|
|
267,856
|
|
173,967
|
|
568,465
|
|
338,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
132,670
|
|
123,394
|
|
94,194
|
|
256,064
|
|
185,072
|
|
Interconnection
|
23,436
|
|
21,569
|
|
14,119
|
|
45,005
|
|
27,643
|
|
Managed
infrastructure
|
16,597
|
|
15,006
|
|
4,710
|
|
31,603
|
|
9,487
|
|
Other
|
|
|
3,779
|
|
3,588
|
|
-
|
|
7,367
|
|
-
|
|
|
Recurring
revenues
|
176,482
|
|
163,557
|
|
113,023
|
|
340,039
|
|
222,202
|
|
Non-recurring
revenues
|
9,948
|
|
8,349
|
|
7,145
|
|
18,297
|
|
12,548
|
|
|
Revenues
|
186,430
|
|
171,906
|
|
120,168
|
|
358,336
|
|
234,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
662,669
|
|
619,893
|
|
496,610
|
|
1,282,562
|
|
978,155
|
|
Interconnection
|
135,721
|
|
127,205
|
|
104,661
|
|
262,926
|
|
206,319
|
|
Managed
infrastructure
|
45,243
|
|
44,736
|
|
23,466
|
|
89,979
|
|
47,321
|
|
Other
|
|
|
8,138
|
|
5,260
|
|
1,954
|
|
13,398
|
|
4,553
|
|
|
Recurring
revenues
|
851,771
|
|
797,094
|
|
626,691
|
|
1,648,865
|
|
1,236,348
|
|
Non-recurring
revenues
|
48,739
|
|
47,062
|
|
38,891
|
|
95,801
|
|
72,408
|
|
|
Revenues
|
$
900,510
|
|
$
844,156
|
|
$
665,582
|
|
$
1,744,666
|
|
$
1,308,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
456,967
|
|
$
427,680
|
|
$
315,757
|
|
$
884,647
|
|
$
614,070
|
|
Depreciation,
amortization and accretion expense
|
(161,493)
|
|
(153,583)
|
|
(108,470)
|
|
(315,076)
|
|
(212,347)
|
|
Stock-based
compensation expense
|
(3,441)
|
|
(2,997)
|
|
(2,551)
|
|
(6,438)
|
|
(4,857)
|
|
|
Cash cost of
revenues
|
$
292,033
|
|
$
271,100
|
|
$
204,736
|
|
$
563,133
|
|
$
396,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$
109,296
|
|
$
109,020
|
|
$
102,249
|
|
$
218,316
|
|
$
197,411
|
|
EMEA cash cost of
revenues
|
114,950
|
|
101,509
|
|
62,431
|
|
216,459
|
|
120,925
|
|
Asia-Pacific cash
cost of revenues
|
67,787
|
|
60,571
|
|
40,056
|
|
128,358
|
|
78,530
|
|
|
Cash cost of
revenues
|
$
292,033
|
|
$
271,100
|
|
$
204,736
|
|
$
563,133
|
|
$
396,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
107,832
|
|
$
106,590
|
|
$
81,248
|
|
$
214,422
|
|
$
159,864
|
|
Depreciation and
amortization expense
|
(19,047)
|
|
(17,127)
|
|
(6,268)
|
|
(36,174)
|
|
(12,353)
|
|
Stock-based
compensation expense
|
(10,714)
|
|
(9,771)
|
|
(9,922)
|
|
(20,485)
|
|
(18,633)
|
|
|
Cash sales and
marketing expenses
|
$
78,071
|
|
$
79,692
|
|
$
65,058
|
|
$
157,763
|
|
$
128,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
168,462
|
|
$
165,904
|
|
$
119,578
|
|
$
334,366
|
|
$
233,218
|
|
Depreciation and
amortization expense
|
(33,179)
|
|
(31,443)
|
|
(13,532)
|
|
(64,622)
|
|
(26,100)
|
|
Stock-based
compensation expense
|
(25,168)
|
|
(21,747)
|
|
(21,520)
|
|
(46,915)
|
|
(41,116)
|
|
|
Cash general and
administrative expenses
|
$
110,115
|
|
$
112,714
|
|
$
84,526
|
|
$
222,829
|
|
$
166,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
Our cash operating
expenses, or cash SG&A, as defined above, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses
|
$
78,071
|
|
$
79,692
|
|
$
65,058
|
|
$
157,763
|
|
$
128,878
|
|
Cash general and
administrative expenses
|
110,115
|
|
112,714
|
|
84,526
|
|
222,829
|
|
166,002
|
|
|
Cash
SG&A
|
$
188,186
|
|
$
192,406
|
|
$
149,584
|
|
$
380,592
|
|
$
294,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash operating expenses, or cash SG&A, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$
109,147
|
|
$
110,914
|
|
$
98,312
|
|
$
220,061
|
|
$
194,385
|
|
EMEA cash
SG&A
|
52,204
|
|
54,858
|
|
32,003
|
|
107,062
|
|
62,101
|
|
Asia-Pacific cash
SG&A
|
26,835
|
|
26,634
|
|
19,269
|
|
53,469
|
|
38,394
|
|
|
Cash
SG&A
|
$
188,186
|
|
$
192,406
|
|
$
149,584
|
|
$
380,592
|
|
$
294,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
We define adjusted
EBITDA as income from continuing operations plus depreciation,
amortization, accretion, stock-based compensation expense, acquisition costs and gains on
asset sales as presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
151,655
|
|
$
112,688
|
|
$
139,133
|
|
$
264,343
|
|
$
290,582
|
|
Depreciation,
amortization and accretion expense
|
213,719
|
|
202,153
|
|
128,270
|
|
415,872
|
|
250,800
|
|
Stock-based
compensation expense
|
39,323
|
|
34,515
|
|
33,993
|
|
73,838
|
|
64,606
|
|
Acquisition
costs
|
15,594
|
|
36,536
|
|
9,866
|
|
52,130
|
|
11,022
|
|
Gains on asset
sales
|
-
|
|
(5,242)
|
|
-
|
|
(5,242)
|
|
-
|
|
|
Adjusted
EBITDA
|
$
420,291
|
|
$
380,650
|
|
$
311,262
|
|
$
800,941
|
|
$
617,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas income from
continuing operations
|
$
87,100
|
|
$
88,539
|
|
$
77,653
|
|
$
175,639
|
|
$
159,119
|
|
Americas
depreciation, amortization and accretion expense
|
78,874
|
|
76,720
|
|
68,692
|
|
155,594
|
|
135,503
|
|
Americas stock-based
compensation expense
|
27,790
|
|
24,329
|
|
25,883
|
|
52,119
|
|
49,374
|
|
Americas acquisition
costs
|
1,264
|
|
114
|
|
(1,342)
|
|
1,378
|
|
(376)
|
|
Americas gains on
asset sales
|
-
|
|
(5,242)
|
|
-
|
|
(5,242)
|
|
-
|
|
|
Americas adjusted
EBITDA
|
195,028
|
|
184,460
|
|
170,886
|
|
379,488
|
|
343,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA income from
continuing operations
|
29,096
|
|
(7,419)
|
|
36,110
|
|
21,677
|
|
81,651
|
|
EMEA depreciation,
amortization and accretion expense
|
82,929
|
|
76,488
|
|
27,826
|
|
159,417
|
|
54,519
|
|
EMEA stock-based
compensation expense
|
7,060
|
|
6,235
|
|
4,397
|
|
13,295
|
|
8,004
|
|
EMEA acquisition
costs
|
14,370
|
|
36,185
|
|
11,200
|
|
50,555
|
|
11,390
|
|
|
EMEA adjusted
EBITDA
|
133,455
|
|
111,489
|
|
79,533
|
|
244,944
|
|
155,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific income
from continuing operations
|
35,459
|
|
31,568
|
|
25,370
|
|
67,027
|
|
49,812
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
51,916
|
|
48,945
|
|
31,752
|
|
100,861
|
|
60,778
|
|
Asia-Pacific
stock-based compensation expense
|
4,473
|
|
3,951
|
|
3,713
|
|
8,424
|
|
7,228
|
|
Asia-Pacific
acquisition costs
|
(40)
|
|
237
|
|
8
|
|
197
|
|
8
|
|
|
Asia-Pacific adjusted
EBITDA
|
91,808
|
|
84,701
|
|
60,843
|
|
176,509
|
|
117,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
420,291
|
|
$
380,650
|
|
$
311,262
|
|
$
800,941
|
|
$
617,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
74%
|
|
73%
|
|
72%
|
|
73%
|
|
73%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA cash gross
margins
|
62%
|
|
62%
|
|
64%
|
|
62%
|
|
64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific cash
gross margins
|
64%
|
|
65%
|
|
67%
|
|
64%
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
47%
|
|
46%
|
|
46%
|
|
46%
|
|
47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA adjusted EBITDA
margins
|
44%
|
|
42%
|
|
46%
|
|
43%
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific adjusted
EBITDA margins
|
49%
|
|
49%
|
|
51%
|
|
49%
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11)
|
We define adjusted
EBITDA flow-through rate as incremental adjusted EBITDA growth
divided by incremental revenue
growth as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
current period
|
$
420,291
|
|
$
380,650
|
|
$
311,262
|
|
$
800,941
|
|
$
617,010
|
|
Less adjusted EBITDA
- prior period
|
(380,650)
|
|
(333,145)
|
|
(305,748)
|
|
(654,617)
|
|
(578,226)
|
|
|
Adjusted EBITDA
growth
|
$
39,641
|
|
$
47,505
|
|
$
5,514
|
|
$
146,324
|
|
$
38,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$
900,510
|
|
$
844,156
|
|
$
665,582
|
|
$
1,744,666
|
|
$
1,308,756
|
|
Less revenues - prior
period
|
(844,156)
|
|
(730,462)
|
|
(643,174)
|
|
(1,417,111)
|
|
(1,258,562)
|
|
|
Revenue
growth
|
$
56,354
|
|
$
113,694
|
|
$
22,408
|
|
$
327,555
|
|
$
50,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
70%
|
|
42%
|
|
25%
|
|
45%
|
|
77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
(loss)
|
$
44,711
|
|
$
(31,111)
|
|
$
59,459
|
|
$
13,600
|
|
$
135,911
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
158,727
|
|
150,995
|
|
107,321
|
|
309,722
|
|
209,969
|
|
|
Gain/loss on
disposition of real estate property
|
(1,951)
|
|
(4,037)
|
|
559
|
|
(5,988)
|
|
621
|
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
28
|
|
28
|
|
29
|
|
56
|
|
57
|
|
|
FFO
|
$
201,515
|
|
$
115,875
|
|
$
167,368
|
|
$
317,390
|
|
$
346,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, net income from discontinued operations, net of
tax, recurring capital expenditures and adjustments from FFO to
AFFO for unconsolidated joint
ventures' and non-controlling interests' share of these
items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
|
$
201,515
|
|
$
115,875
|
|
$
167,368
|
|
$
317,390
|
|
$
346,558
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Installation revenue
adjustment
|
7,407
|
|
3,354
|
|
12,474
|
|
10,761
|
|
21,128
|
|
|
Straight-line rent
expense adjustment
|
1,895
|
|
1,133
|
|
2,017
|
|
3,028
|
|
5,218
|
|
|
Amortization of
deferred financing costs
|
5,243
|
|
5,508
|
|
3,848
|
|
10,751
|
|
7,706
|
|
|
Stock-based
compensation expense
|
39,323
|
|
34,515
|
|
33,993
|
|
73,838
|
|
64,606
|
|
|
Non-real estate
depreciation expense
|
21,021
|
|
21,387
|
|
13,605
|
|
42,408
|
|
26,298
|
|
|
Amortization
expense
|
32,303
|
|
28,152
|
|
6,450
|
|
60,455
|
|
12,745
|
|
|
Accretion
expense
|
1,668
|
|
1,619
|
|
894
|
|
3,287
|
|
1,788
|
|
|
Recurring capital
expenditures
|
(31,928)
|
|
(31,815)
|
|
(27,330)
|
|
(63,743)
|
|
(49,703)
|
|
|
Loss on debt
extinguishment
|
605
|
|
-
|
|
-
|
|
605
|
|
-
|
|
|
Acquisition
costs
|
15,594
|
|
36,536
|
|
9,866
|
|
52,130
|
|
11,022
|
|
|
Income tax expense
adjustment
|
1,301
|
|
(190)
|
|
(1,784)
|
|
1,111
|
|
(4,192)
|
|
|
Net Income from
discontinued operations, net of tax
|
(5,409)
|
|
(6,216)
|
|
(13)
|
|
(11,625)
|
|
(30)
|
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
(9)
|
|
(12)
|
|
-
|
|
(21)
|
|
-
|
|
|
AFFO
|
$
290,529
|
|
$
209,846
|
|
$
221,388
|
|
$
500,375
|
|
$
443,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
Following is how we
reconcile from adjusted EBITDA to AFFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
420,291
|
|
$
380,650
|
|
$
311,262
|
|
$
800,941
|
|
$
617,010
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(99,491)
|
|
(99,938)
|
|
(73,575)
|
|
(199,429)
|
|
(141,846)
|
|
|
Amortization of
deferred financing costs
|
5,243
|
|
5,508
|
|
3,848
|
|
10,751
|
|
7,706
|
|
|
Income tax (benefit)
expense
|
(13,812)
|
|
10,633
|
|
(7,485)
|
|
(3,179)
|
|
(13,697)
|
|
|
Income tax expense
adjustment
|
1,301
|
|
(190)
|
|
(1,784)
|
|
1,111
|
|
(4,192)
|
|
|
Straight-line rent
expense adjustment
|
1,895
|
|
1,133
|
|
2,017
|
|
3,028
|
|
5,218
|
|
|
Installation revenue
adjustment
|
7,407
|
|
3,354
|
|
12,474
|
|
10,761
|
|
21,128
|
|
|
Recurring capital
expenditures
|
(31,928)
|
|
(31,815)
|
|
(27,330)
|
|
(63,743)
|
|
(49,703)
|
|
|
Other
(income)/expense
|
1,555
|
|
(60,710)
|
|
1,386
|
|
(59,155)
|
|
872
|
|
|
Gain/loss on
disposition of depreciable real estate property
|
(1,951)
|
|
(4,037)
|
|
559
|
|
(5,988)
|
|
621
|
|
|
Adjustments for
unconsolidated JVs' and non-controlling interests
|
19
|
|
16
|
|
16
|
|
35
|
|
27
|
|
|
Adjustment for gain
on sale of asset
|
-
|
|
5,242
|
|
-
|
|
5,242
|
|
-
|
|
|
AFFO
|
$
290,529
|
|
$
209,846
|
|
$
221,388
|
|
$
500,375
|
|
$
443,144
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/equinix-reports-second-quarter-2016-results-300308750.html
SOURCE Equinix, Inc.