Slide 1: Q4 2016 Earnings Conference Call
Q4 2016 Earnings Conference call NASDAQ: EQIX Presented on February 15, 2017 © 2017 Equinix Inc. Equinix.com 1
Slide 2: Public Disclosure Statement
Public Disclosure Statement • Forward-Looking Statements – Except for historical information, this presentation contains forward-looking statements, which include words such as “believe,” “anticipate,” and “expect.” These forward-looking statements involve risks and uncertainties that may cause Equi
Slide 3: 2016 Financial Highlights
2016 Financial Highlights Revenues ($M) Recurring Revenues Non-recurring Revenues Revenues of $3,612.0 Million $3,612.0 • Revenues up 33% YoY on an as-reported basis, 14% YoY on an organic and constant currency basis (1) $2,725.9 $2,443.8 • Recurring revenues were 95% of total revenues $2,152.8 $1,8
Slide 4: Stabilized IBX Growth
Stabilized IBX Growth (1) (1) (1) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter Reported ($4,327) $1,919 $1,377 $45 +26% +6% 87% (3) (4) (4) (6) (2) (1) New IBXs where Phase 1 began operating after January 1, 2015 (2) Revenues represent Q4 16 as-reported revenues in mill
Slide 5: FY 2016 Consolidated Results
FY 2016 Consolidated Results Quarter Full Year ($M Except for Non-Financial Metrics) Q4 16 Q4 16 Q3 16 Q4 15 Q4 16 vs. Q4 16 vs. FY16 vs FY 16 Guidance Guidance Actual Actual Actual Q3 16 % ∆ Q4 15 % ∆ FY16 FY15 FY15 % ∆ Revenues $940 - $946 $ 942.6 $ 924.7 $ 730.5 2% 29% $ 3,612.0 $ 2,725.9 33% $3,
Slide 6: Americas Performance
Americas Performance Q4 Highlights Q4 Business Conditions ($M) • FY16 Revenues up 11% YoY on an as-reported basis, and up 12% $425.1 $436.5 YoY on a constant currency basis (1); Adjusted EBITDA up 13% YoY $404.4 $413.5 $394.5 on an as-reported basis, and up 14% YoY on a constant currency basis (1) •
Slide 7: EMEA Performance
EMEA Performance Q4 Highlights Q4 Business Conditions ($M) • FY16 revenues up 68% YoY on an as-reported basis, and 15% YoY on an organic and constant currency basis (1); Adjusted EBITDA YoY up 55% on $300.6 $301.3 $301.6 an as-reported basis, and 16% on an organic and constant currency basis (1) $26
Slide 8: Asia-Pacific Performance
Asia-Pacific Performance Q4 Highlights Q4 Business Conditions • FY16 revenues up 48% YoY on an as-reported basis, and 21% YoY on ($M) $204.5 an organic and constant currency basis(1); Adjusted EBITDA up 48% $198.3 $186.4 YoY on an as-reported basis, and 26% YoY on an organic and constant $171.9 $39.
Slide 9: Capital Structure and Sources and Uses of Cash
Capital Structure and Sources and Uses of Cash • Ample liquidity to fund growth and dividend • Flexible capital structure with additional capacity Capitalization Table Debt Maturity Profile (4) ($M) Loans Payable, Capital Lease & Other Financing Obligations Senior Notes 5,485 (1) (2) 3,350 503 685 4
Slide 10: Dividend Outlook
Dividend Outlook (1) ($M) AFFO outlook (2) (1) • 2017 guidance >$1,249M • Implies growth of 16% YoY on an as-reported basis or 13% growth YoY on a normalized and (1) constant currency basis Dividend growth potential (4) • AFFO growth provides capacity for long-term dividend growth 2017E Dividend of
Slide 11: Capex
Capex Q4 2016 Capex and Regional Breakout Recurring Non-Recurring ($M) ($M) Recurring capital APAC, 12% expenditures Sustaining IT & Network, 24% • Expenditures to extend useful life of Americas, 39% IBXs or other Equinix assets in Maintenance, support of current revenues Installation, 60% 16% EMEA,
Slide 12: FY17 Revenues Guidance
FY17 Revenues Guidance (1) On target to deliver >10% revenue CAGR for FY16-20 ($M) >11.0% >3,930 >3,933 3 3,612 3,540 -72 (2) FY16 Reported Normalizing FY16 Normalized FY17 Guidance IO London Data FY17 Guidance before IO Center Acquisition Constant Currency Growth % bridge ~14% ~(1%) ~13% ~(1%) ~(1%
Slide 13: FY17 Adjusted EBITDA Guidance
FY17 Adjusted EBITDA Guidance (1) On target to deliver >12% Adjusted EBITDA CAGR for FY16-20 45.9% 47.5% 47.6% 46.8% ($M) >11.2% >1,872 >1,842 -30 1,684 1,657 27 Includes $2M of integration costs associated with acquisition of Verizon data centers in Q117 FY16 Reported Normalizing (2) FY16 Normalize
Slide 14: Q1 17 Guidance
Q1 17 Guidance ($M) Revenues Adjusted EBITDA 46.3% 47.7% 46.4% 45.0% +2.0% (2) Includes $2M of 943 940-946 Q117 integration -0.7% costs associated with acquisition of 441 Verizon data centers (4) 5 435-441 -18 436 925 -14 421-427 (1) (1) Q416 Reported Normalizing Q416 Q117 Guidance Q416 Normalizing(
Slide 15: FY17 AFFO Guidance
FY17 AFFO Guidance On target to deliver >14% AFFO CAGR for FY16-20 Guidance ($M) >1,842 -391 -60 >1,313 -163 >1,249 34 21 30 (1) FY17 Adjusted Interest Expense Tax Recurring CapEx Other FY17 AFFO Integration Costs Verizon TLB FY17 Normalized EBITDA Guidance Interest AFFO Guidance Guidance AFFO YoY B
Slide 16: Strategic Priorities
Strategic Priorities Future-Proofing Equinix Pressing our Advantage Catching the Next Wave Cloud- Global NextGen Ecosystem Enabled Footprint Interconnection Development Enterprise Expansion Scaling Organization and People © 2017 Equinix Inc. Equinix.com 16
Slide 17: 2017 Financial Guidance
2017 Financial Guidance (1) $M FY 2017 Q1 2017 (2) (3) Revenues >$3,933 $940 - $946 (4) (4) Cash Gross Margin % 67 - 68% 67 - 68% Cash SG&A $805 - $825 $208 - $214 Cash SG&A % ~21% 22-23% (5) (6) Adjusted EBITDA >$1,842 $421 - $427 Adjusted EBITDA Margin % ~46.8% ~45.0% Capex $1,100 – $1,200 $280 -
Slide 18: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data © 2017 Equinix Inc. Equinix.com 18
Slide 19: Equinix Overview
Equinix Overview (1) Unique portfolio of data center assets Development pipeline • Global footprint: 150 data centers in 41 metros • Long history of development success through • Network dense: 1,400+ networks expansions, campuses and known demand pipeline • Cloud dense: 2,700+ Cloud & IT service pr
Slide 20: Equinix Global Platform
Equinix Global Platform (1) Equinix offers broad geographic reach and significant scale within each region (2) Platform Equinix • Geographic footprint is unmatched and remains a unique differentiator • Multi-region deployments outpace single- region deployments Expansion strategy • Use unique market
Slide 21: Customer Revenues Mix
Customer Revenues Mix Diversified Revenue by Customer, Region & Industry 7% Network Customer % of Recurring Revenues Recurring 16% 24% (2) Multi-Metro Customers 82% MIS (2) Multi-Region Customers 70% Financial 18% Services Customers in 3 Regions (2) 56% (3) Top 50 Customers 38% 95% 14% Enterprise In
Slide 22: Non-Financial Metrics
Non-Financial Metrics (1) Organic Acquisitions Total FY 2015 FY 2016 (5) INTERCONNECTION Organic Q4 Q1 Q2 Q3 Q4 Q4 Q4 QoQ 1,400+ Networks # of Cross-connects 230,000+ Cross-connects Americas 93,800 97,700 101,200 104,200 106,300 - 106,300 2,100 100% of Tier 1 Network Routes EMEA 43,900 44,500 45,500
Slide 23: Equinix Announced Expansions 2016-2018
Equinix Announced Expansions 2016-2018 Overview of major Equinix IBX data center expansions AMERICAS Sellable Cabinet Total CAPEX* IBX Center Target Open Date Equivalents* (millions U.S.$) Comments GLOBAL TOTALS AT1 phase IV (Atlanta) Opened Q3 2016 365 $31 Global Total DC7 phase III (Ashburn) Opene
Slide 24: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 20 years including extensions (1) Global Lease Portfolio Expiration Waterfall (2) Equinix Owned Sites % Leases Renewing by Square Footage • Own 34 of 150 IBXs Last Possible Expiration Date 73% • 5.4M of 14.8M total gross square feet (3) •
Slide 25: REIT Disclosure Update
REIT Disclosure Update Equinix real estate portfolio valuation disclosures Same-Store Operating Performance (previously disclosed) – Provides a year-over-year comparison of revenues composition and cash gross margin for a constant set of Stabilized and Expansion properties. Property operating status
Slide 26: Same Store Operating Performance (Organic Only)
(1) Same Store Operating Performance (Organic Only) Stabilized and Expansion – Cash Gross Profit grew 12.6% driven by Interconnection growth Revenues #039;000s Cash Cost & Gross Profit #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on Catego
Slide 27: Consolidated Portfolio Operating Performance (Incl. Telecity & Bit-isle)
(1) Consolidated Portfolio Operating Performance (Incl. Telecity & Bit-isle) By Region & Ownership – Owned Assets Generated 39% of Our Recurring Revenues (Organic Only) Cabinets Billed Revenues (Q4 2016) #039;000s Total Cabinet Owned % of Cabinet Cabinets Utilization Inter- Services/ Total Non- Total T
Slide 28: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Same-Store Same-Store IBX (EQIX Same-Store Same-Store IBX Location Ownership IBX Location Ownership Location Ownership IBX Location Ownership Classification Classification Name) Classification Classification Americas EMEA Telecity Asia-Pacific AT1 Atlanta Expansio
Slide 29: Adjusted Corporate NOI (Incl. Telecity & Bit-isle)
(1) Adjusted Corporate NOI (Incl. Telecity & Bit-isle) (unaudited) Calculation Of Adjusted Corp NOI (unaudited) Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 # of IBXs (1) 145 145 144 144 105 Recurring Revenues (2) $ 887,748 $ 874,149 $ 847,108 $ 792,269 $ 665,835 Recurring Cash Cost of Revenues Allocatio
Slide 30: Adjusted NOI Composition (Incl. Telecity & Bit-isle)
(1) Adjusted NOI Composition (Incl. Telecity & Bit-isle) By Stabilization and Ownership – Owned Assets and NOI are predominantly in campus locations in our largest global markets Total Cabinet Adjusted NOI by Region Q4 2016 Q4 2016 # of Cabinet Cabinets Utilization Recurring Quarterly Territory IBXs
Slide 31: Components of NAV (Incl. Telecity & Bit-isle)
Components of NAV (Incl. Telecity & Bit-isle) (unaudited) Operating Portfolio Adjusted % of Adjusted NOI Q4 16 Quarterly Ownership Reference NOI AMER EMEA APAC Adjusted NOI Stabilized Owned 67% 33% 0% Adjusted NOI Segments $115,309 Stabilized Leased 73% 4% 22% Adjusted NOI Segments 186,726 Expansion
Slide 32: Market Capitalization & Debt Summary
Market Capitalization & Debt Summary Dec 31, 2016 Spread / (1) Market Capitalization Summary Debt Coupon Interest Rate Maturity Balance Common shares outstanding 71,409 Revolver L + 120 2.20% Dec-19 - Market Price as of Dec 31, 2016 $ 357.41 Market Value 25,522,296 Term Loan A L + 150 1.59% Dec-19 3
Slide 33: Fully Diluted Weighted Average Shares Forecast
Fully Diluted Weighted Average Shares Forecast (‘K) -296 72,657 778 72,175 ~766 71,409 ~72,657 ~72,175 Shares outstanding Est. Employee Est. Shares Est. Dilutive Est. Weighting of Est. Fully Diluted @ 12/31/16 - Actual Equity Awards Outstanding Unissued Shares All Share Activities Weighted Avg @ 12/
Slide 34: CapEx Profile
CapEx Profile Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Recurring Sustaining IT & Network $ 8,774 $ 11,380 $ 7,204 $ 10,008 $ 9,400 IBX Maintenance 21,753 25,229 19,631 17,279 29,574 Re-configuration Installation 5,950 5,001 5,094 4,511 5,693 Subtotal - Recurring 36,476 41,610 31,928 31,798 44,668 Non
Slide 35: FY17 Revenues FX Hedging
FY17 Revenues FX Hedging (4) Currency % of Revenues Revenue FX Rates (1) Blended Blended % of Currency Guidance Rate Hedge Rate (2) (2) (3) (4) CHF GBP Guidance Rate Hedge % Revenues 1% EUR 9% HKD USD 1.0000 43% 19% 4% AUD EUR to USD 1.0420 1.1091 1.0785 54% 19% 3% GBP to USD 1.2240 1.4503 1.4035 79
Slide 36: Equinix Leadership and Investor Relations
Equinix Leadership and Investor Relations Executive Team Equinix Investor Relations Contacts Katrina Rymill Paul Thomas VP, Investor Relations Director, Investor Relations 650-598-6583 650-598-6442 krymill@equinix.com pthomas@equinix.com Equinix Media Contacts Steve Smith Keith Taylor Charles Meyers
Slide 37: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions © 2017 Equinix Inc. Equinix.com 37
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2016 2016 2015 2016 2015 We define cash cost of revenues as cost of revenues less d
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2016 2016 2015 2016 2015 We define cash operating expenses as operating expenses le
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2016 2016 2015 2016 2015 We define adjusted EBITDA as income from continuing operat
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2016 2016 2015 2016 2015 The geographic split of our adjusted EBITDA is presented b
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2016 2016 2015 2016 2015 We define cash gross margins as cash gross profit divided
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands, except per share amounts) Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 CALCULATION OF ADJUSTED EBITDA Income from continuing operations $ 184,455 $ 169,941 $ 151,655 $ 112,688 $ 135,877 $ 140,883 $ 139,133 $ 151,449 Adjustments
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 RECONCILIATION OF NET INCOME (LOSS) TO NAREIT FFO Net income (loss) $ 61,750 $ 51,450 $ 44,711 $ (31,111) $ 10,731 $ 41,132 $ 59,459 $ 76,452 Net (income) loss attributable to redeemable non-controlling interest
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Funds From Operations (AFFO) (unaudited and in thousands, except per share amounts) Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 NAREIT FFO attributable to common shareholders $ 219,868 $ 187,831 $ 201,515 $ 115,875 $ 131,483 $ 151,197 $ 167,368 $
Slide 46: Non-GAAP Reconciliations
Non-GAAP Reconciliations NAREIT Funds From Operations (NAREIT FFO) - We calculate Funds From Operations in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT FFO represents net income (loss), excluding gains (or losses) from disp
Slide 47: © 2017 Equinix Inc. Equinix.com
© 2017 Equinix Inc. Equinix.com 47