REDWOOD CITY, Calif.,
Nov. 2, 2016 /PRNewswire/
-- Equinix, Inc. (Nasdaq: EQIX), the global interconnection
and data center company, today reported quarterly results for the
quarter ended September 30, 2016.
Equinix uses certain non-GAAP financial measures, which are
described further below and reconciled to the most comparable GAAP
financial measures after the presentation of our GAAP financial
statements.
Third Quarter 2016 Results Summary
- Revenues from continuing operations
- $924.7 million, a 3% increase
over the previous quarter
- Includes $39.7 million of
revenues from Bit-isle
- Includes $107.3 million of
revenues from Telecity
- Operating Income
- $169.9 million, a 12% increase
over the previous quarter
- Adjusted EBITDA
- $420.0 million, a 45% adjusted
EBITDA margin
- Includes $13.1 million of
adjusted EBITDA from Bit-isle
- Includes $44.1 million of
adjusted EBITDA from Telecity
- Includes $19.0 million of
integration costs for acquisitions ($2.5
million incremental to prior guidance)
- Absorbs an incremental $5 million
of cash-neutral U.S. GAAP adjustments related to Telecity
- Net Income from Continuing Operations
- AFFO
- $284.2 million, a 2% decrease
from the previous quarter
- Includes $19.0 million of
integration costs for acquisitions
2016 Annual Guidance Summary
- Revenues from continuing operations
- $3,609 million - $3,615 million,
a 32.5% increase over the previous year; an organic and constant
currency growth rate of greater than 14%
- Assumes $556 million in revenues
from Bit-isle and Telecity
- Adjusted EBITDA
- $1,650 million - $1,656 million
or a 45.8% adjusted EBITDA margin
- Includes approximately $250
million from Bit-isle and Telecity
- Assumes $59 million of
integration costs for acquisitions ($4.0
million incremental to prior guidance)
- Absorbs incremental $10 million
of primarily cash-neutral U.S. GAAP adjustments related to
Telecity
- AFFO
- $1,059 million - $1,065 million,
a 27.6% increase over the previous year
- Assumes a $64 million foreign
currency loss related to the Telecity acquisition
- Assumes $59 million of
integration costs for acquisitions
Equinix does not provide forward-looking guidance for certain
financial data, such as depreciation, amortization, accretion,
stock-based compensation, net income (loss) from operations, cash
generated from operating activities and cash used in investing
activities, and as a result, is not able to provide a
reconciliation of GAAP to non-GAAP financial measures for
forward-looking data without unreasonable effort. The impact of
such adjustments could be significant.
Steve Smith, president and
CEO, Equinix:
"We had a great third quarter, delivering record bookings
with double-digit growth in the cloud, financial and enterprise
segments," said Steve Smith,
president and CEO of Equinix. "We continue to see growth in Fortune
500 new customers as multi-national enterprises re-architect to a
cloud-delivered infrastructure to optimize performance. We remain
focused on scaling and refining our go-to-market engine, directed
at capturing this significant shift to the cloud, and delivering
continued profitable growth."
Business Highlights
- Equinix continues to expand the scale and reach of its global
platform with 18 announced expansion projects underway, and today
Equinix announced:
- New expansions in Dallas,
Dublin, Frankfurt, Helsinki and Zurich totaling more than $100 million of capital expenditures.
- The purchase of six acres of real estate adjacent to the
Equinix Chicago area CH3 IBX which will be developed over time to
expand Equinix's Elk Grove campus
– a key location for cloud and financial customers.
- Equinix added 10 Fortune 500 customers in Q3 2016, including:
Target, a leading retailer; J.B
Hunt, a transportation company; and Aetna, a healthcare and
insurance provider. Equinix has now penetrated nearly
one-third of the Fortune 500 and a quarter of Global 2000
companies. Additional customer momentum from the quarter:
- Equinix recorded its second highest bookings quarter in the
enterprise segment in Q3, as enterprises continue to re-architect
their IT delivery to better interconnect people, locations, clouds
and data. Wins included one of the top three auto
manufacturers that has selected Equinix to optimize their network
topology and connect to Microsoft Azure via Equinix Cloud
Exchange.
- The financial services vertical achieved record bookings, and
key customer wins included: an expansion with PayPal, an important
customer in the digital payments ecosystem that is interconnecting
to business partners to improve performance and latency; and
Lloyd's, which is deploying a cloud-based risk modeling platform
for the insurance industry.
- The cloud and IT services vertical recorded its second best
bookings quarter in Q3, with expansions from Amazon.com, Cisco
Systems, Dell EMC, Marketo and others. Equinix continues to
enhance its value as the home of the interconnected cloud by
increasing cloud density, making it easy for enterprises to find
and consume cloud services from leading SaaS and IaaS partners,
including AWS, Azure, IBM Softlayer, Google and Oracle.
- As companies seek to locate their infrastructure closer to the
digital edge, Equinix customer deployments across all three regions
(Americas, APAC, EMEA) represented 55% of total recurring revenue
for the quarter.
- Additional business highlights announced in Q3 2016 included:
- Momentum for Equinix continues as a strategic partner for the
submarine cable industry with its selection as the US cable landing
station for the Monet Submarine Cable System , which is owned by
Algar Telecom, Angola Cables, Antel and Google. The Monet
project links North and South
America from points in Miami and São Paulo. In addition to this
most recent win, Equinix has been selected as an interconnection
partner in 12 of the current submarine cable projects that are
experiencing high growth driven primarily by exponential
increases in cloud services and innovation in optical
equipment.
- The ninth quarter in a row in which Equinix has added more than
5,000 cross-connects. As more businesses adopt an IT
architecture that enables direct interconnection with key partners
and customers, Equinix now has more than 188,000 cross-connects
between customers.
- The rollout of Equinix Internet Exchange in Helsinki, expanding
coverage of this platform to 19 markets worldwide.
- The rollout of the Equinix Media Cloud Ecosystem for
Entertainment (EMCEE™), an ecosystem of interconnected media and
content providers, along with content delivery networks (CDNs) and
cloud service providers, that optimizes content creation, global
distribution and services across the entire media and entertainment
(M&E) industry. As digital disruption changes the way
that content is created, enhanced, transported, stored and
distributed, more than 500 content and media companies use EMCEE to
peer with the industry's largest concentration of CDNs, multiple
system operators (MSOs) and social media platforms.
Business Outlook
Equinix'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
Equinix's purchase of its Paris
campus from Digital Realty on August 1,
2016 for approximately $215.9
million. As previously announced, Equinix divested
eight assets, seven from Telecity along with its London 2 asset ("LD2"), to obtain regulatory
clearance for the Telecity transaction. Equinix completed these
divestitures on July 5, 2016 for
approximately $827.3
million. Equinix'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 fourth quarter of 2016 -- Equinix expects
revenues to range between $940 and $946
million, or a normalized and constant currency growth rate
of 2.4% quarter over quarter. This guidance includes a
negative foreign currency impact of $4
million when compared to the average FX rates in Q3 2016.
Cash gross margins are expected to approximate 67%. Cash
selling, general and administrative expenses are expected to range
between $199 and $205 million.
Adjusted EBITDA is expected to range between $429 and $435 million, which includes a
$2 million negative foreign currency
impact when compared to the average FX rates used in Q3 2016 and
approximately $17 million in
integration costs from the two acquisitions. Capital expenditures
are expected to be approximately $273
million, which includes approximately $42 million of recurring capital expenditures and
approximately $231 million of
non-recurring capital expenditures.
For the full year of 2016 -- Total revenues are
expected to range between $3,609 and $3,615
million, an organic and constant currency growth rate of
14.1% year over year. This guidance includes a negative
foreign currency impact of $1 million
when compared to prior guidance rates, and includes an expected
$553 to $559 million in revenues from
the Bit-isle and Telecity acquisitions. Net of FX, revenues are
stepping up $10 million, the result
of strong Q3 operating performance. Total year cash gross margins
are expected to approximate 67%. Cash selling, general and
administrative expenses are expected to range between $779 and $785 million. Adjusted EBITDA is
expected to range between $1,650 and $1,656
million, an organic and constant currency growth rate of 17%
year over year. This absorbs an incremental $4 million of integration costs, or approximately
$59 million in integration costs for
the full year, an incremental $10
million of primarily cash-neutral U.S. GAAP adjustments
related to Telecity and minimal FX impact. This guidance also
includes approximately $250 million
in adjusted EBITDA from the Bit-isle and Telecity acquisitions.
AFFO is expected to range between $1,059 and
$1,065 million, including approximately $59 million of integration costs and the
$64 million Q1 2016 foreign currency
loss attributed to the Telecity acquisition. This $17 million AFFO increase has negligible foreign
currency benefit when compared to prior guidance, and is the result
of strong business performance and lower interest expense. Capital
expenditures are expected to be approximately $1,000 million, including approximately
$147 million of recurring capital
expenditures and approximately $853
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,
$1.42 to the Pound, S$1.37 to the U.S. dollar, ¥103.01 to the U.S.
dollar and R3.23 to the U.S. dollar. The 2016 global revenue
breakdown by currency for the Euro, Pound, Singapore Dollar,
Japanese Yen and Brazilian Real is 19%, 10%, 8%, 7% and 3%,
respectively.
Q3 Results Conference Call and Replay Information
Equinix will discuss its quarterly results for the period ended
September 30, 2016, along with its
future outlook, in its quarterly conference call on Wednesday, November 2, 2016, at 5:30 p.m. ET (2:30 p.m.
PT). A simultaneous live webcast of the call will be
available on Equinix'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, February 3, 2017, by
dialing 1-203-369-1392 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
Equinix has made available on its website a presentation
designed to accompany the discussion of Equinix's results and
future outlook, along with certain supplemental financial
information and other data. Interested parties may access this
information through Equinix's Investor Relations website at
www.equinix.com/investors.
Additional Resources
- Q3 2016 financial earnings press release (PDF)
- Q3 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
Equinix provides all information required in accordance with
generally accepted accounting principles ("GAAP"), but it believes
that evaluating its ongoing operating results may be difficult if
limited to reviewing only GAAP financial measures. Accordingly,
Equinix uses non-GAAP financial measures to evaluate its
operations.
Equinix 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.
In presenting non-GAAP financial measures, such as adjusted
EBITDA, cash cost of revenues, cash gross margins, cash operating
expenses (also known as cash selling, general and administrative
expenses or cash SG&A), adjusted EBITDA margins, free cash flow
and adjusted free cash flow, Equinix excludes certain items that it
believes are not good indicators of Equinix's current or future
operating performance. These items are depreciation, amortization,
accretion of asset retirement obligations and accrued restructuring
charges, stock-based compensation, restructuring charges,
impairment charges, acquisition costs and gains on asset
sales. Equinix excludes these items in order for its lenders,
investors and the industry analysts who review and report on
Equinix to better evaluate Equinix's operating performance and cash
spending levels relative to its industry sector and
competitors.
Equinix excludes depreciation expense as these charges primarily
relate to the initial construction costs of an IBX 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 Equinix 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, 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 intangible
assets, as it is not meaningful in evaluating Equinix's current or
future operating performance; however, like depreciation, is an
expense expected to recur in future periods. Equinix excludes
accretion expense, both as it relates to its asset retirement
obligations as well as its accrued restructuring charges, as these
expenses represent costs which Equinix also believes are not
meaningful in evaluating Equinix's current operations. Equinix
excludes stock-based compensation expense as it represents expense
attributed to equity awards that have no current or future cash
obligations. As such, Equinix, 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 Equinix'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. Equinix also excludes impairment
charges related to certain long-lived assets. The impairment
charges are related to expense recognized whenever events or
changes in circumstances indicate that the carrying amount of
long-lived assets are not recoverable. Equinix also excludes gains
on asset sales as it represents profit that is not meaningful in
evaluating the current or future operating performance. Finally,
Equinix excludes acquisition costs from its non-GAAP financial
measures. The acquisition costs relate to costs Equinix
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.
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, 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.
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 its debt
financings that have no current or future cash obligations. Equinix
excludes gains (losses) on debt extinguishment since it represents
a cost that is not a good indicator of Equinix's current or future
operating performance. Equinix includes an income tax expense
adjustment, which represents the non-cash tax impact due to changes
in valuation allowances and uncertain tax positions that do not
relate to the current period's operations. Equinix excludes
recurring capital expenditures, which represent expenditures to
extend the useful life of its IBX centers or other assets that are
required to support current revenues. Equinix 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.
Equinix presents constant currency results of operations, which
is a non-GAAP financial measure and is not meant to be considered
in isolation or as an alternative to GAAP results of operations.
However, Equinix has presented this non-GAAP financial measure to
provide investors with an additional tool to evaluate its operating
results without the impact of fluctuations in foreign currency
exchange rates, thereby facilitating period-to-period comparisons
of Equinix's business performance. To present this information,
Equinix's current and comparative prior period revenues and certain
operating expenses from entities with functional currencies other
than the U.S. dollar are converted into U.S. dollars at a
consistent exchange rate for purposes of each result being
compared.
Non-GAAP financial measures are not a substitute for financial
information prepared in accordance with GAAP. Non-GAAP
financial measures should not be considered in isolation, but
should be considered together with the most directly comparable
GAAP financial measures and the reconciliation of the non-GAAP
financial measures to the most directly comparable GAAP financials
measures. Equinix presents such non-GAAP financial measures to
provide investors with an additional tool to evaluate its operating
results in a manner that focuses on what management believes to be
its core, ongoing business operations. Management believes
that the inclusion of these non-GAAP financial measures provides
consistency and comparability with past reports and provides a
better understanding of the overall performance of the business and
its ability to perform in subsequent periods. Equinix believes that
if it did not provide such non-GAAP financial information,
investors would not have all the necessary data to analyze Equinix
effectively.
Investors should note that the non-GAAP financial measures used
by Equinix may not be the same non-GAAP financial measures, and may
not be calculated in the same manner, as those of other companies.
Investors should, therefore, exercise caution when comparing
non-GAAP financial measures used by us to similarly titled non-GAAP
financial measures of other companies. Equinix does not provide
forward-looking guidance for certain financial data, such as
depreciation, amortization, accretion, stock-based compensation,
net income (loss) from operations, cash generated from operating
activities and cash used in investing activities, and as a result,
is not able to provide a reconciliation of GAAP to non-GAAP
financial measures for forward-looking data without unreasonable
effort. The impact of such adjustments could be significant.
Equinix intends to calculate the various non-GAAP financial
measures in future periods consistent with how they were calculated
for the periods presented within this press release.
Forward Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ
materially from expectations discussed in such forward-looking
statements. Factors that might cause such differences include, but
are not limited to, 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
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$
877,494
|
|
$
851,771
|
|
$
646,721
|
|
$
2,526,359
|
|
$
1,883,069
|
Non-recurring
revenues
|
|
47,182
|
|
48,739
|
|
39,928
|
|
142,983
|
|
112,336
|
|
Revenues
|
|
924,676
|
|
900,510
|
|
686,649
|
|
2,669,342
|
|
1,995,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
470,302
|
|
456,967
|
|
325,468
|
|
1,354,949
|
|
939,538
|
|
|
Gross
profit
|
454,374
|
|
443,543
|
|
361,181
|
|
1,314,393
|
|
1,055,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
110,936
|
|
107,832
|
|
83,709
|
|
325,358
|
|
243,573
|
|
General and
administrative
|
181,239
|
|
168,462
|
|
123,237
|
|
515,605
|
|
356,455
|
|
Impairment
charges
|
7,698
|
|
-
|
|
-
|
|
7,698
|
|
-
|
|
Acquisition
costs
|
12,505
|
|
15,594
|
|
13,352
|
|
64,635
|
|
24,374
|
|
Gains on asset
sales
|
(27,945)
|
|
-
|
|
-
|
|
(33,187)
|
|
-
|
|
|
Total operating
expenses
|
284,433
|
|
291,888
|
|
220,298
|
|
880,109
|
|
624,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
169,941
|
|
151,655
|
|
140,883
|
|
434,284
|
|
431,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
762
|
|
841
|
|
934
|
|
2,528
|
|
2,375
|
|
Interest
expense
|
(92,200)
|
|
(100,332)
|
|
(76,269)
|
|
(293,395)
|
|
(219,556)
|
|
Other income
(expense)
|
2,938
|
|
1,555
|
|
(12,836)
|
|
(56,217)
|
|
(11,964)
|
|
Loss on debt
extinguishment
|
(9,894)
|
|
(605)
|
|
-
|
|
(10,499)
|
|
-
|
|
|
Total interest and
other, net
|
(98,394)
|
|
(98,541)
|
|
(88,171)
|
|
(357,583)
|
|
(229,145)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
71,547
|
|
53,114
|
|
52,712
|
|
76,701
|
|
202,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(22,778)
|
|
(13,812)
|
|
(11,580)
|
|
(25,957)
|
|
(25,277)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
48,769
|
|
39,302
|
|
41,132
|
|
50,744
|
|
177,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
discontinued operations, net of tax
|
2,681
|
|
5,409
|
|
-
|
|
14,306
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
51,450
|
|
$
44,711
|
|
$
41,132
|
|
$
65,050
|
|
$
177,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share from continuing operations
|
$
0.69
|
|
$
0.56
|
|
$
0.72
|
|
$
0.73
|
|
$
3.11
|
|
Basic net income per
share from discontinued operations
|
0.04
|
|
0.08
|
|
-
|
|
0.21
|
|
-
|
|
Basic net income per
share
|
$
0.73
|
|
$
0.64
|
|
$
0.72
|
|
$
0.94
|
|
$
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share from continuing operations
|
$
0.68
|
|
$
0.56
|
|
$
0.71
|
|
$
0.72
|
|
$
3.08
|
|
Diluted net income
per share from discontinued operations
|
0.04
|
|
0.08
|
|
-
|
|
0.20
|
|
-
|
|
Diluted net income
per share
|
$
0.72
|
|
$
0.64
|
|
$
0.71
|
|
$
0.92
|
|
$
3.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income per share
|
71,190
|
|
69,729
|
|
57,082
|
|
69,689
|
|
56,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net income per share
|
71,908
|
|
70,364
|
|
57,708
|
|
70,389
|
|
57,521
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
51,450
|
|
$
44,711
|
|
$
41,132
|
|
$
65,050
|
|
$
177,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax:
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment ("CTA") loss
|
(32,603)
|
|
(298,361)
|
|
(72,677)
|
|
(215,065)
|
|
(149,546)
|
|
Unrealized gain
(loss) on available-for-sale securities
|
1,487
|
|
1,199
|
|
(21)
|
|
2,382
|
|
99
|
|
Unrealized gain
(loss) on cash flow hedges
|
(4,153)
|
|
14,726
|
|
3,309
|
|
3,789
|
|
(425)
|
|
Net investment
hedge CTA gain (loss)
|
(34,721)
|
|
55,196
|
|
4,426
|
|
4,163
|
|
(5,963)
|
|
Net actuarial
gain on defined benefit plans
|
7
|
|
8
|
|
124
|
|
21
|
|
266
|
Other comprehensive
loss, net of tax:
|
(69,983)
|
|
(227,232)
|
|
(64,839)
|
|
(204,710)
|
|
(155,569)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss), net of tax
|
(18,533)
|
|
(182,521)
|
|
(23,707)
|
|
(139,660)
|
|
21,474
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Assets
|
September
30,
|
|
December
31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
987,915
|
|
$
2,228,838
|
Short-term
investments
|
443
|
|
12,875
|
Accounts receivable,
net
|
377,528
|
|
291,964
|
Current portion of
restricted cash
|
25,305
|
|
479,417
|
Other current
assets
|
172,370
|
|
212,929
|
Assets held for
sale
|
96,923
|
|
33,257
|
|
Total current
assets
|
1,660,484
|
|
3,259,280
|
Long-term
investments
|
15,036
|
|
4,584
|
Property, plant and
equipment, net
|
7,251,399
|
|
5,606,436
|
Goodwill
|
|
|
3,118,686
|
|
1,063,200
|
Intangible assets,
net
|
803,260
|
|
224,565
|
Other
assets
|
|
248,692
|
|
198,630
|
|
Total
assets
|
$
13,097,557
|
|
$
10,356,695
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
534,602
|
|
$
400,948
|
Accrued property,
plant and equipment
|
185,683
|
|
103,107
|
Current portion of
capital lease and other financing obligations
|
92,120
|
|
40,121
|
Current portion of
mortgage and loans payable
|
518,985
|
|
770,236
|
Convertible
debt
|
|
-
|
|
146,121
|
Other current
liabilities
|
149,516
|
|
192,286
|
Liabilities held for
sale
|
14,660
|
|
3,535
|
|
Total current
liabilities
|
1,495,566
|
|
1,656,354
|
Capital lease and
other financing obligations, less current portion
|
1,446,455
|
|
1,287,139
|
Mortgage and loans
payable, less current portion
|
1,058,418
|
|
472,769
|
Senior
notes
|
|
3,809,332
|
|
3,804,634
|
Other
liabilities
|
|
664,076
|
|
390,413
|
|
Total
liabilities
|
8,473,847
|
|
7,611,309
|
|
|
|
|
|
|
|
Common
stock
|
|
72
|
|
62
|
Additional paid-in
capital
|
7,371,024
|
|
4,838,444
|
Treasury
stock
|
|
(147,617)
|
|
(7,373)
|
Accumulated
dividends
|
(1,842,834)
|
|
(1,468,472)
|
Accumulated other
comprehensive loss
|
(713,769)
|
|
(509,059)
|
Accumulated
deficit
|
(43,166)
|
|
(108,216)
|
|
Total
stockholders' equity
|
4,623,710
|
|
2,745,386
|
|
Total liabilities
and stockholders' equity
|
$
13,097,557
|
|
$
10,356,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Americas
headcount
|
2,472
|
|
2,329
|
|
EMEA
headcount
|
2,051
|
|
1,188
|
|
Asia-Pacific
headcount
|
1,411
|
|
1,525
|
|
|
Total
headcount
|
5,934
|
|
5,042
|
EQUINIX,
INC.
|
SUMMARY OF DEBT
PRINCIPAL OUTSTANDING
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Capital lease and
other financing obligations
|
$
1,538,575
|
|
$
1,327,260
|
|
|
|
|
|
|
|
Term loan, net of
debt discount and debt issuance costs
|
1,055,950
|
|
454,503
|
Brazil financings,
net of debt issuance costs
|
1,585
|
|
26,668
|
Mortgage payable and
other loans payable
|
519,868
|
|
436,212
|
Revolving credit
facility borrowings
|
-
|
|
325,622
|
Plus: debt discount,
debt issuance costs and premium, net
|
12,011
|
|
694
|
|
Total mortgage and
loans payable principal
|
1,589,414
|
|
1,243,699
|
|
|
|
|
|
|
|
Senior notes, net of
debt issuance costs
|
3,809,332
|
|
3,804,634
|
Plus: debt issuance
costs
|
40,668
|
|
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
|
$
6,977,989
|
|
$
6,571,041
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
51,450
|
|
$
44,711
|
|
$
41,132
|
|
$
65,050
|
|
$
177,043
|
|
Adjustments to
reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
amortization and accretion
|
215,370
|
|
213,719
|
|
133,268
|
|
631,242
|
|
384,068
|
|
|
Stock-based
compensation
|
42,346
|
|
39,323
|
|
33,969
|
|
115,730
|
|
98,575
|
|
|
Amortization of debt
issuance costs and debt discounts
|
2,684
|
|
5,517
|
|
3,972
|
|
13,709
|
|
11,557
|
|
|
Loss on debt
extinguishment
|
10,181
|
|
318
|
|
-
|
|
10,499
|
|
-
|
|
|
Impairment
charges
|
7,698
|
|
-
|
|
-
|
|
7,698
|
|
-
|
|
|
Gains on asset
sales
|
(27,945)
|
|
-
|
|
-
|
|
(33,187)
|
|
-
|
|
|
Gains on sale of
discontinued operations
|
(4,242)
|
|
-
|
|
-
|
|
(4,242)
|
|
-
|
|
|
Other
items
|
3,905
|
|
7,311
|
|
3,589
|
|
16,087
|
|
12,696
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(30,440)
|
|
(31,055)
|
|
(220)
|
|
(72,807)
|
|
(42,002)
|
|
|
|
Income taxes,
net
|
24,776
|
|
4,901
|
|
(18,376)
|
|
1,021
|
|
(84,523)
|
|
|
|
Accounts payable and
accrued expenses
|
(901)
|
|
29,592
|
|
25,926
|
|
(11,526)
|
|
75,219
|
|
|
|
Other assets and
liabilities
|
39,290
|
|
(35,509)
|
|
(8,858)
|
|
(22,004)
|
|
27,042
|
|
|
|
|
Net cash provided
by operating activities
|
334,172
|
|
278,828
|
|
214,402
|
|
717,270
|
|
659,675
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases, sales and
maturities of investments, net
|
(2,123)
|
|
8,764
|
|
94,217
|
|
10,060
|
|
523,477
|
|
Business
acquisitions, net of cash acquired
|
(165,901)
|
|
-
|
|
-
|
|
(1,767,528)
|
|
(10,247)
|
|
Purchases of real
estate
|
-
|
|
(11,710)
|
|
-
|
|
(28,118)
|
|
(38,282)
|
|
Purchases of other
property, plant and equipment
|
(279,477)
|
|
(249,867)
|
|
(216,046)
|
|
(727,044)
|
|
(587,508)
|
|
Proceeds from asset
sales
|
805,372
|
|
-
|
|
-
|
|
828,197
|
|
-
|
|
Other investing
activities
|
(21,851)
|
|
(117)
|
|
14,274
|
|
444,736
|
|
(493,371)
|
|
|
|
|
Net cash provided
by (used in) investing activities
|
336,020
|
|
(252,930)
|
|
(107,555)
|
|
(1,239,697)
|
|
(605,931)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
employee equity awards
|
16,504
|
|
1,335
|
|
13,290
|
|
34,143
|
|
29,855
|
|
Payment of dividend
distributions
|
(127,457)
|
|
(121,858)
|
|
(98,041)
|
|
(374,151)
|
|
(291,009)
|
|
Proceeds from loans
payable
|
9,154
|
|
-
|
|
-
|
|
710,404
|
|
490,000
|
|
Repayment of capital
lease and other financing obligations
|
(55,528)
|
|
(12,103)
|
|
(6,576)
|
|
(100,863)
|
|
(20,213)
|
|
Repayment of mortgage
and loans payable
|
(13,354)
|
|
(36,707)
|
|
(10,818)
|
|
(986,414)
|
|
(529,447)
|
|
Repayment of
convertible debt
|
-
|
|
(51)
|
|
-
|
|
(51)
|
|
-
|
|
Debt extinguishment
costs
|
(10,181)
|
|
-
|
|
-
|
|
(10,181)
|
|
-
|
|
Debt issuance
costs
|
(11,709)
|
|
23
|
|
-
|
|
(11,751)
|
|
(617)
|
|
Other financing
activities
|
1,465
|
|
(564)
|
|
732
|
|
1,465
|
|
1,663
|
|
|
|
|
Net cash used in
financing activities
|
(191,106)
|
|
(169,925)
|
|
(101,413)
|
|
(737,399)
|
|
(319,768)
|
Effect of foreign
currency exchange rates on cash and cash equivalents
|
4,313
|
|
18,540
|
|
(6,098)
|
|
22,658
|
|
(9,424)
|
Change in cash
balances included in assets held for sale
|
21,356
|
|
(25,111)
|
|
-
|
|
(3,755)
|
|
-
|
Net increase
(decrease) in cash and cash equivalents
|
504,755
|
|
(150,598)
|
|
(664)
|
|
(1,240,923)
|
|
(275,448)
|
Cash and cash
equivalents at beginning of period
|
483,160
|
|
633,758
|
|
336,133
|
|
2,228,838
|
|
610,917
|
Cash and cash
equivalents at end of period
|
$
987,915
|
|
$
483,160
|
|
$
335,469
|
|
$
987,915
|
|
$
335,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid (refunded)
for taxes
|
$
(73)
|
|
$
12,361
|
|
$
28,333
|
|
$
31,503
|
|
$
103,137
|
|
|
Cash paid for
interest
|
$
111,094
|
|
$
85,897
|
|
$
68,568
|
|
$
271,530
|
|
$
164,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(1)
|
|
$
672,315
|
|
$
17,134
|
|
$
12,630
|
|
$
(532,487)
|
|
$
(469,733)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow (2)
|
$
839,681
|
|
$
28,280
|
|
$
34,035
|
|
$
1,264,624
|
|
$
(352,462)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
334,172
|
|
$
278,828
|
|
$
214,402
|
|
$
717,270
|
|
$
659,675
|
|
Net cash used in
investing activities as presented above
|
336,020
|
|
(252,930)
|
|
(107,555)
|
|
(1,239,697)
|
|
(605,931)
|
|
Purchases, sales and
maturities of investments, net
|
2,123
|
|
(8,764)
|
|
(94,217)
|
|
(10,060)
|
|
(523,477)
|
|
|
Free cash flow
(negative free cash flow)
|
$
672,315
|
|
$
17,134
|
|
$
12,630
|
|
$
(532,487)
|
|
$
(469,733)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
$
672,315
|
|
$
17,134
|
|
$
12,630
|
|
$
(532,487)
|
|
$
(469,733)
|
|
Less business
acquisitions, net of cash
|
165,901
|
|
-
|
|
-
|
|
1,767,528
|
|
10,247
|
|
Less purchases of
real estate
|
-
|
|
11,710
|
|
-
|
|
28,118
|
|
38,282
|
|
Less excess tax
benefits from employee equity awards
|
1,465
|
|
(564)
|
|
732
|
|
1,465
|
|
1,663
|
|
Less cash paid for
taxes resulting from the REIT conversion
|
-
|
|
-
|
|
20,033
|
|
-
|
|
65,146
|
|
Less costs related to
the REIT conversion
|
-
|
|
-
|
|
640
|
|
-
|
|
1,933
|
|
|
Adjusted free cash
flow
|
$
839,681
|
|
$
28,280
|
|
$
34,035
|
|
$
1,264,624
|
|
$
(352,462)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
$
-
|
|
$
-
|
|
$
20,033
|
|
$
-
|
|
$
65,146
|
|
Other cash taxes
paid
|
(73)
|
|
12,361
|
|
8,300
|
|
31,503
|
|
37,991
|
|
|
Total cash paid for
taxes
|
$
(73)
|
|
$
12,361
|
|
$
28,333
|
|
$
31,503
|
|
$
103,137
|
EQUINIX,
INC.
|
NON-GAAP MEASURES
AND OTHER SUPPLEMENTAL DATA
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
|
$
877,494
|
|
$
851,771
|
|
$
646,721
|
|
$
2,526,359
|
|
$
1,883,069
|
Non-recurring
revenues
|
|
47,182
|
|
48,739
|
|
39,928
|
|
142,983
|
|
112,336
|
|
Revenues
(1)
|
|
924,676
|
|
900,510
|
|
686,649
|
|
2,669,342
|
|
1,995,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
304,821
|
|
292,033
|
|
211,617
|
|
867,954
|
|
608,483
|
|
|
|
Cash gross profit
(3)
|
619,855
|
|
608,477
|
|
475,032
|
|
1,801,388
|
|
1,386,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating
expenses (4):
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
79,515
|
|
78,071
|
|
68,323
|
|
237,278
|
|
197,201
|
|
Cash general and
administrative expenses (6)
|
120,298
|
|
110,115
|
|
85,237
|
|
343,127
|
|
251,239
|
|
|
|
Total cash
operating expenses (7)
|
199,813
|
|
188,186
|
|
153,560
|
|
580,405
|
|
448,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(8)
|
|
$
420,042
|
|
$
420,291
|
|
$
321,472
|
|
$
1,220,983
|
|
$
938,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
67%
|
|
68%
|
|
69%
|
|
67%
|
|
70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margins (10)
|
45%
|
|
47%
|
|
47%
|
|
46%
|
|
47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate (11)
|
(1%)
|
|
70%
|
|
48%
|
|
43%
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(12)
|
|
|
|
$
187,831
|
|
$
201,515
|
|
$
151,197
|
|
$
505,221
|
|
$
497,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO (13)
(14)
|
|
|
$
284,179
|
|
$
290,529
|
|
$
210,361
|
|
$
784,554
|
|
$
653,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split
of our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
$
295,927
|
|
$
289,578
|
|
$
268,156
|
|
$
867,826
|
|
$
789,022
|
|
Interconnection
|
92,803
|
|
89,860
|
|
79,902
|
|
268,599
|
|
232,090
|
|
Managed
infrastructure
|
14,830
|
|
13,255
|
|
11,788
|
|
39,255
|
|
37,920
|
|
Other
|
|
|
902
|
|
786
|
|
841
|
|
2,417
|
|
2,314
|
|
|
Recurring
revenues
|
404,462
|
|
393,479
|
|
360,687
|
|
1,178,097
|
|
1,061,346
|
|
Non-recurring
revenues
|
20,680
|
|
19,992
|
|
21,943
|
|
64,910
|
|
56,700
|
|
|
Revenues
|
425,142
|
|
413,471
|
|
382,630
|
|
1,243,007
|
|
1,118,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
244,420
|
|
240,421
|
|
143,721
|
|
699,019
|
|
415,938
|
|
Interconnection
|
21,464
|
|
22,425
|
|
15,227
|
|
63,589
|
|
41,715
|
|
Managed
infrastructure
|
16,359
|
|
15,391
|
|
5,875
|
|
50,310
|
|
17,577
|
|
Other
|
|
|
3,947
|
|
3,573
|
|
1,333
|
|
8,463
|
|
4,413
|
|
|
Recurring
revenues
|
286,190
|
|
281,810
|
|
166,156
|
|
821,381
|
|
479,643
|
|
Non-recurring
revenues
|
15,060
|
|
18,799
|
|
11,407
|
|
48,334
|
|
36,510
|
|
|
Revenues
|
301,250
|
|
300,609
|
|
177,563
|
|
869,715
|
|
516,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
140,194
|
|
132,670
|
|
99,775
|
|
396,258
|
|
284,847
|
|
Interconnection
|
21,222
|
|
19,955
|
|
15,439
|
|
59,495
|
|
43,082
|
|
Managed
infrastructure
|
21,797
|
|
20,078
|
|
4,664
|
|
60,132
|
|
14,151
|
|
Other
|
|
|
3,629
|
|
3,779
|
|
-
|
|
10,996
|
|
-
|
|
|
Recurring
revenues
|
186,842
|
|
176,482
|
|
119,878
|
|
526,881
|
|
342,080
|
|
Non-recurring
revenues
|
11,442
|
|
9,948
|
|
6,578
|
|
29,739
|
|
19,126
|
|
|
Revenues
|
198,284
|
|
186,430
|
|
126,456
|
|
556,620
|
|
361,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
680,541
|
|
662,669
|
|
511,652
|
|
1,963,103
|
|
1,489,807
|
|
Interconnection
|
135,489
|
|
132,240
|
|
110,568
|
|
391,683
|
|
316,887
|
|
Managed
infrastructure
|
52,986
|
|
48,724
|
|
22,327
|
|
149,697
|
|
69,648
|
|
Other
|
|
|
8,478
|
|
8,138
|
|
2,174
|
|
21,876
|
|
6,727
|
|
|
Recurring
revenues
|
877,494
|
|
851,771
|
|
646,721
|
|
2,526,359
|
|
1,883,069
|
|
Non-recurring
revenues
|
47,182
|
|
48,739
|
|
39,928
|
|
142,983
|
|
112,336
|
|
|
Revenues
|
$
924,676
|
|
$
900,510
|
|
$
686,649
|
|
$
2,669,342
|
|
$
1,995,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
470,302
|
|
$
456,967
|
|
$
325,468
|
|
$
1,354,949
|
|
$
939,538
|
|
Depreciation,
amortization and accretion expense
|
(162,165)
|
|
(161,493)
|
|
(111,337)
|
|
(477,241)
|
|
(323,684)
|
|
Stock-based
compensation expense
|
(3,316)
|
|
(3,441)
|
|
(2,514)
|
|
(9,754)
|
|
(7,371)
|
|
|
Cash cost of
revenues
|
$
304,821
|
|
$
292,033
|
|
$
211,617
|
|
$
867,954
|
|
$
608,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$
114,934
|
|
$
109,296
|
|
$
105,864
|
|
$
333,250
|
|
$
303,275
|
|
EMEA cash cost of
revenues
|
116,587
|
|
114,950
|
|
64,443
|
|
333,046
|
|
185,368
|
|
Asia-Pacific cash
cost of revenues
|
73,300
|
|
67,787
|
|
41,310
|
|
201,658
|
|
119,840
|
|
|
Cash cost of
revenues
|
$
304,821
|
|
$
292,033
|
|
$
211,617
|
|
$
867,954
|
|
$
608,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
110,936
|
|
$
107,832
|
|
$
83,709
|
|
$
325,358
|
|
$
243,573
|
|
Depreciation and
amortization expense
|
(19,719)
|
|
(19,047)
|
|
(6,213)
|
|
(55,893)
|
|
(18,566)
|
|
Stock-based
compensation expense
|
(11,702)
|
|
(10,714)
|
|
(9,173)
|
|
(32,187)
|
|
(27,806)
|
|
|
Cash sales and
marketing expenses
|
$
79,515
|
|
$
78,071
|
|
$
68,323
|
|
$
237,278
|
|
$
197,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
181,239
|
|
$
168,462
|
|
$
123,237
|
|
$
515,605
|
|
$
356,455
|
|
Depreciation and
amortization expense
|
(33,486)
|
|
(33,179)
|
|
(15,718)
|
|
(98,108)
|
|
(41,818)
|
|
Stock-based
compensation expense
|
(27,455)
|
|
(25,168)
|
|
(22,282)
|
|
(74,370)
|
|
(63,398)
|
|
|
Cash general and
administrative expenses
|
$
120,298
|
|
$
110,115
|
|
$
85,237
|
|
$
343,127
|
|
$
251,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
Our cash operating
expenses, or cash SG&A, as defined above, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses
|
$
79,515
|
|
$
78,071
|
|
$
68,323
|
|
$
237,278
|
|
$
197,201
|
|
Cash general and
administrative expenses
|
120,298
|
|
110,115
|
|
85,237
|
|
343,127
|
|
251,239
|
|
|
Cash
SG&A
|
$
199,813
|
|
$
188,186
|
|
$
153,560
|
|
$
580,405
|
|
$
448,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash operating expenses, or cash SG&A, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$
108,077
|
|
$
109,147
|
|
$
102,596
|
|
$
328,138
|
|
$
296,981
|
|
EMEA cash
SG&A
|
63,195
|
|
52,204
|
|
31,717
|
|
170,257
|
|
93,818
|
|
Asia-Pacific cash
SG&A
|
28,541
|
|
26,835
|
|
19,247
|
|
82,010
|
|
57,641
|
|
|
Cash
SG&A
|
$
199,813
|
|
$
188,186
|
|
$
153,560
|
|
$
580,405
|
|
$
448,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
We define adjusted
EBITDA as income from continuing operations plus depreciation,
amortization, accretion, stock-based
|
|
|
|
|
|
|
|
compensation expense,
impairment charges, acquisition costs and gains on asset sales as
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
169,941
|
|
$
151,655
|
|
$
140,883
|
|
$
434,284
|
|
$
431,465
|
|
Depreciation,
amortization and accretion expense
|
215,370
|
|
213,719
|
|
133,268
|
|
631,242
|
|
384,068
|
|
Stock-based
compensation expense
|
42,473
|
|
39,323
|
|
33,969
|
|
116,311
|
|
98,575
|
|
Impairment
charges
|
7,698
|
|
-
|
|
-
|
|
7,698
|
|
-
|
|
Acquisition
costs
|
12,505
|
|
15,594
|
|
13,352
|
|
64,635
|
|
24,374
|
|
Gains on asset
sales
|
(27,945)
|
|
-
|
|
-
|
|
(33,187)
|
|
-
|
|
|
Adjusted
EBITDA
|
$
420,042
|
|
$
420,291
|
|
$
321,472
|
|
$
1,220,983
|
|
$
938,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas income from
continuing operations
|
$
89,004
|
|
$
87,100
|
|
$
81,914
|
|
$
264,643
|
|
$
241,033
|
|
Americas
depreciation, amortization and accretion expense
|
82,204
|
|
78,874
|
|
70,118
|
|
237,798
|
|
205,621
|
|
Americas stock-based
compensation expense
|
29,309
|
|
27,790
|
|
25,810
|
|
81,428
|
|
75,184
|
|
Americas acquisition
costs
|
1,614
|
|
1,264
|
|
(3,672)
|
|
2,992
|
|
(4,048)
|
|
Americas gains on
asset sales
|
-
|
|
-
|
|
-
|
|
(5,242)
|
|
-
|
|
|
Americas adjusted
EBITDA
|
202,131
|
|
195,028
|
|
174,170
|
|
581,619
|
|
517,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA income from
continuing operations
|
51,829
|
|
29,096
|
|
29,865
|
|
73,506
|
|
111,516
|
|
EMEA depreciation,
amortization and accretion expense
|
78,555
|
|
82,929
|
|
33,055
|
|
237,972
|
|
87,574
|
|
EMEA stock-based
compensation expense
|
8,138
|
|
7,060
|
|
4,338
|
|
21,433
|
|
12,342
|
|
EMEA acquisition
costs
|
10,891
|
|
14,370
|
|
14,145
|
|
61,446
|
|
25,535
|
|
EMEA gains on asset
sales
|
(27,945)
|
|
-
|
|
-
|
|
(27,945)
|
|
-
|
|
|
EMEA adjusted
EBITDA
|
121,468
|
|
133,455
|
|
81,403
|
|
366,412
|
|
236,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific income
from continuing operations
|
29,108
|
|
35,459
|
|
29,104
|
|
96,135
|
|
78,916
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
54,611
|
|
51,916
|
|
30,095
|
|
155,472
|
|
90,873
|
|
Asia-Pacific
stock-based compensation expense
|
5,026
|
|
4,473
|
|
3,821
|
|
13,450
|
|
11,049
|
|
Asia-Pacific
impairment charges
|
7,698
|
|
-
|
|
-
|
|
7,698
|
|
-
|
|
Asia-Pacific
acquisition costs
|
-
|
|
(40)
|
|
2,879
|
|
197
|
|
2,887
|
|
|
Asia-Pacific adjusted
EBITDA
|
96,443
|
|
91,808
|
|
65,899
|
|
272,952
|
|
183,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
420,042
|
|
$
420,291
|
|
$
321,472
|
|
$
1,220,983
|
|
$
938,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
73%
|
|
74%
|
|
72%
|
|
73%
|
|
73%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA cash gross
margins
|
61%
|
|
62%
|
|
64%
|
|
62%
|
|
64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific cash
gross margins
|
63%
|
|
64%
|
|
67%
|
|
64%
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
48%
|
|
47%
|
|
46%
|
|
47%
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA adjusted EBITDA
margins
|
40%
|
|
44%
|
|
46%
|
|
42%
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific adjusted
EBITDA margins
|
49%
|
|
49%
|
|
52%
|
|
49%
|
|
51%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11)
|
We define adjusted
EBITDA flow-through rate as incremental adjusted EBITDA growth
divided by incremental
|
|
|
|
|
|
|
|
|
|
revenue growth as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
current period
|
$
420,042
|
|
$
420,291
|
|
$
321,472
|
|
$
1,220,983
|
|
$
938,482
|
|
Less adjusted EBITDA
- prior period
|
(420,291)
|
|
(380,650)
|
|
(311,262)
|
|
(965,879)
|
|
(853,503)
|
|
|
Adjusted EBITDA
growth
|
$
(249)
|
|
$
39,641
|
|
$
10,210
|
|
$
255,104
|
|
$
84,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$
924,676
|
|
$
900,510
|
|
$
686,649
|
|
$
2,669,342
|
|
$
1,995,405
|
|
Less revenues - prior
period
|
(900,510)
|
|
(844,156)
|
|
(665,582)
|
|
(2,082,693)
|
|
(1,863,723)
|
|
|
Revenue
growth
|
$
24,166
|
|
$
56,354
|
|
$
21,067
|
|
$
586,649
|
|
$
131,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
(1%)
|
|
70%
|
|
48%
|
|
43%
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
$
51,450
|
|
$
44,711
|
|
$
41,132
|
|
$
65,050
|
|
$
177,043
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
159,788
|
|
158,727
|
|
109,856
|
|
469,510
|
|
319,825
|
|
|
(Gain)/loss on
disposition of real estate property
|
(23,436)
|
|
(1,951)
|
|
182
|
|
(29,424)
|
|
803
|
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
29
|
|
28
|
|
27
|
|
85
|
|
84
|
|
|
FFO
|
$
187,831
|
|
$
201,515
|
|
$
151,197
|
|
$
505,221
|
|
$
497,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
$
187,831
|
|
$
201,515
|
|
$
151,197
|
|
$
505,221
|
|
$
497,755
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Installation revenue
adjustment
|
4,612
|
|
7,407
|
|
8,527
|
|
15,373
|
|
29,655
|
|
|
Straight-line rent
expense adjustment
|
2,686
|
|
1,895
|
|
1,251
|
|
5,714
|
|
6,469
|
|
|
Amortization of
deferred financing costs
|
2,687
|
|
5,243
|
|
3,934
|
|
13,438
|
|
11,640
|
|
|
Stock-based
compensation expense
|
42,474
|
|
39,323
|
|
33,969
|
|
116,312
|
|
98,575
|
|
|
Non-real estate
depreciation expense
|
22,108
|
|
21,021
|
|
15,946
|
|
64,516
|
|
42,244
|
|
|
Amortization
expense
|
32,929
|
|
32,303
|
|
6,601
|
|
93,384
|
|
19,346
|
|
|
Accretion
expense
|
545
|
|
1,668
|
|
865
|
|
3,832
|
|
2,653
|
|
|
Recurring capital
expenditures
|
(41,600)
|
|
(31,928)
|
|
(25,910)
|
|
(105,343)
|
|
(75,613)
|
|
|
Loss on debt
extinguishment
|
9,894
|
|
605
|
|
-
|
|
10,499
|
|
-
|
|
|
Acquisition
costs
|
12,505
|
|
15,594
|
|
13,352
|
|
64,635
|
|
24,374
|
|
|
Impairment
charges
|
7,698
|
|
-
|
|
-
|
|
7,698
|
|
-
|
|
|
Income tax expense
adjustment
|
2,501
|
|
1,301
|
|
643
|
|
3,612
|
|
(3,549)
|
|
|
Net income from
discontinued operations, net of tax
|
(2,681)
|
|
(5,409)
|
|
-
|
|
(14,306)
|
|
-
|
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
(10)
|
|
(9)
|
|
(14)
|
|
(31)
|
|
(44)
|
|
|
AFFO
|
$
284,179
|
|
$
290,529
|
|
$
210,361
|
|
$
784,554
|
|
$
653,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
Following is how we
reconcile from adjusted EBITDA to AFFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
420,042
|
|
$
420,291
|
|
$
321,472
|
|
$
1,220,983
|
|
$
938,482
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(91,437)
|
|
(99,491)
|
|
(75,335)
|
|
(290,866)
|
|
(217,181)
|
|
|
Amortization of
deferred financing costs
|
2,687
|
|
5,243
|
|
3,934
|
|
13,438
|
|
11,640
|
|
|
Income tax (benefit)
expense
|
(22,778)
|
|
(13,812)
|
|
(11,580)
|
|
(25,957)
|
|
(25,277)
|
|
|
Income tax expense
adjustment
|
2,501
|
|
1,301
|
|
643
|
|
3,612
|
|
(3,549)
|
|
|
Straight-line rent
expense adjustment
|
2,686
|
|
1,895
|
|
1,251
|
|
5,714
|
|
6,469
|
|
|
Installation revenue
adjustment
|
4,612
|
|
7,407
|
|
8,527
|
|
15,373
|
|
29,655
|
|
|
Recurring capital
expenditures
|
(41,600)
|
|
(31,928)
|
|
(25,910)
|
|
(105,343)
|
|
(75,613)
|
|
|
Other
(income)/expense
|
2,938
|
|
1,555
|
|
(12,836)
|
|
(56,217)
|
|
(11,964)
|
|
|
Gain/loss on
disposition of depreciable real estate property
|
(23,436)
|
|
(1,951)
|
|
182
|
|
(29,424)
|
|
803
|
|
|
Adjustments for
unconsolidated JVs' and non-controlling interests
|
19
|
|
19
|
|
13
|
|
54
|
|
40
|
|
|
Adjustment for gain
on sale of asset
|
27,945
|
|
-
|
|
-
|
|
33,187
|
|
-
|
|
|
AFFO
|
$
284,179
|
|
$
290,529
|
|
$
210,361
|
|
$
784,554
|
|
$
653,505
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/equinix-reports-third-quarter-2016-results-300356104.html
SOURCE Equinix, Inc.