Slide 1: Q1 2018 Earnings Conference Call
Q1 2018 Earnings Conference call NASDAQ: EQIX Presented on May 2, 2018 Confidential – © 2018 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 Equinix’
Slide 3: Q1 2018 Financial Highlights
(1) Q1 2018 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues Revenues Growth Q1 18 QoQ YoY ($M) $1,200 $1,216 $1,152 As-reported 1% 28% $1,066 $950 Acquisition Revenues: Normalized and (2) Verizon: $135M 0.4% 10% Itconic/IL2: $17M Constant Currency $1,123 $1,151 $1,010 $1,089
Slide 4: Q1 2018 Consolidated Results
Q1 2018 Consolidated Results ($M Except for AFFO per Share and Q1 18 Non-Financial Metrics) Guidance Actual QoQ YoY (1) Revenues $1,204 - 1,212 $1,216 1% 28% Cash Gross Profit $820 3% 27% Cash Gross Profit Margin % ~67% 67.5% (1) Cash SG&A $241 6% 10% Cash SG&A % ~21% 19.8% (1) Adjusted EBITDA $549
Slide 5: Americas Performance
Americas Performance Revenues Organic Revenues Verizon Revenues Revenues Growth Q1 18 ($M) $606 Americas QoQ YoY $597 $603 non-recurring $534 As-reported 1% 38% $135 $135 revenues $137 $436 $87 step-down of $9M QoQ Normalized and (1) 1% 7% Constant Currency (1) Normalized MRR 1% 7% $436 $447 $460 $4
Slide 6: EMEA Performance
EMEA Performance Revenues Organic Revenues Itconic/IL2 Revenues Q1 18 ($M) $380 Revenues Growth $370 QoQ YoY $339 $17 $17 $315 $323 As-reported 3% 21% Normalized and (1) 1% 12% Constant Currency $353 $362 (1) Normalized MRR 2% 12% Adjusted EBITDA Q1 18 Growth QoQ YoY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 As
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Q1 18 ($M) Revenues Growth QoQ YoY $234 $217 $224 $210 As-reported 4% 18% $198 Normalized and (1) 3% 12% Constant Currency (1) Normalized MRR 4% 13% Adjusted EBITDA Q1 18 Growth QoQ YoY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 As-reported 7% 23% Adjusted EBITDA Normalized and
Slide 8: Capital Structure
Capital Structure Ample liquidity to fund future growth and cash dividends combined with flexible capital structure with additional available capacity Capitalization Table ($M) Q4 17 Q1 18 Net Leverage Ratio Q1 18 Financing Activity (3) (Target 3.0x – 4.0x) • Issued incremental 2.875% EUR 750M Bank
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.2% 3.9% $63 ($M) 3.6% Capex Highlights 24% 2.9% 2.4% $45 • Recurring capital expenditures trend 10% $38 between 3 and 5% of revenues 25% $35 29% 11% 26% $23 14% 14% • Maintenance capex can vary by quarter 32% 66% 63% based on maintenance schedule
Slide 10: Stabilized IBX Growth – Organic
Stabilized IBX Growth – Organic (1) (2) Stabilized asset growth of 6% with ~29% annual cash gross margin on gross PP&E investment ($M) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter $1,733 $69 $5,903 $2,497 Reported # of IBXs Q1 18 Revenues ~29% annual Cash Gross Margin o
Slide 11: 2018 Financial Guidance
(1) 2018 Financial Guidance ($M except AFFO per Share) FY 2018 Q2 2018 (2) (3) Revenues $5,082 - 5,122 $1,257 - 1,267 Cash Gross Margin % ~67% 66 - 67% Cash SG&A % 19 - 20% 19 - 20% (4) (5) Adjusted EBITDA $2,395 - 2,435 $579 - 589 Adjusted EBITDA Margin % ~47.3% ~46.3% Recurring Capex $203 - 213 $4
Slide 12: FY18 Revenues Guidance
FY18 Revenues Guidance Raise full year revenues guidance by $92M including $62M from recent acquisitions Normalized Constant Currency YoY Growth ~9% incl. Verizon (1) ~17% ($M) $122 – 132 $5,082 – 5,122 $4,960 – 4,990 $4,368 1 2 FY17 Reported Organic FY18 Guidance Acquisitions FY18 Guidance 1 Raise
Slide 13: FY18 Adjusted EBITDA Guidance
FY18 Adjusted EBITDA Guidance Raise full year adjusted EBITDA guidance excluding integration costs by $45M including $33M from recent acquisitions 47.0% 48.5% As-reported Margin 48.3% 47.3% Normalized Constant Currency (1) ~8% incl. Verizon YoY Growth ($M) ~18% $46 - 56 $2,445 - 2,485 $2,399 - 2,429
Slide 14: Q2 Guidance
Q2 18 Guidance Revenues Adjusted EBITDA Normalized As-reported Margin (1) (2) Constant Currency QoQ Growth ~2% ($M) 47.7% 48.3% 47.9% 46.3% ~4% $1,257 - 1,267 ~3% $599 - 609 -$20 $588 $579 - 589 $1,216 $1,218 $9 $2 $580 (1) Q1 18 Reported Normalizing (1) Q1 18 Normalized Q2 18 Guidance Q1 18 Reporte
Slide 15: FY18 AFFO and AFFO per Share Guidance
FY18 AFFO and AFFO per Share Guidance 2018 AFFO per Share excluding integration costs flat at $20.82 while absorbing incremental acquisition financing (1) Share Count (Diluted) AFFO per Share (Diluted) 77.5M 80.2M 80.0M 80.0M 1 AFFO Guidance $18.53 $20.82 $20.82 $20.19 Prior AFFO Guidance >$1,635M A
Slide 16: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) +18% ~$725 $612 $492 $394 45% 2018E Cash Dividend of ~$725M 43% 46% Payout Payout Ratio • Continued growth of both annual cash 47% Payout Ratio dividends and dividend per share Payout Ratio Ratio 2015 2016 2017 (2) 2018E (3) • Second quarter dividend of
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 200 Data Centers • 283,000 Cross-connects • 20 years of deep expertise • 52 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Internet • Digit
Slide 18: Equinix Overview
(1) Equinix Overview • Global footprint: 200 data centers in 52 metros Unique Portfolio of Data • Network dense: 1,700+ networks Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 283,000 cross-connects • 2018 expected revenues growth of 9% YoY on a normali
Slide 19: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix expands to 4 new metros and adds 10 IBXs with the Metronode acquisition 5 Continents 24 Countries 52 Metro areas 200 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 12 Metros Multiple Locations (1) • Geograp
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Revenues Mix Customers and Churn (2) Top 10 Customers Rank Type of Customer %MRR Region Count IBX Count 1 Network 3.3% 3 129 Recurring Total Revenues(1) Revenues (2) 2 Enterprise 2.6% 3 45 3 Cloud & IT Services 2.
Slide 21: Revenues by Product by Region
Revenues by Product by Region Americas EMEA Asia-Pacific Worldwide +28% +1% ($M) $1,200 $1,216 $65 $78 $74 $73 $950 $195 $188 $51 +38% -1% $59 $606 $603 $148 $36 $27 $20 $20 $128 $129 +21% +3% $436 $20 $370 $380 $16 $25 $24 +18% +4% $101 $315 $31 $32 $862 $881 $18 $31 $35 $21 $224 $234 $22 $692 $198
Slide 22: Non-Financial Metrics
(1) Non-Financial Metrics FY 2017 FY 2018 Organic Verizon Total Total Total INTERCONNECTION Q1 Q2 Q3 Q4 Q4 Q4 Q1 QoQ Cross-connects 1,700+ Networks Americas 109,700 111,400 113,300 115,100 23,800 138,900 140,200 1,300 283,000 Cross-connects EMEA 84,900 87,400 89,600 92,200 - 92,200 94,700 2,500 100%
Slide 23: Equinix Announced Expansions 2018 - 2019
Equinix Announced Expansions 2018 - 2019 Cabinet Cabinet (1) Equivalent Equivalent 2018 2018 2019 2019 Total Total Capex Capex (1) Capacity Capacity InIn IBXCenter IBX Center Status Status Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q2 Q3 Q3 $US millions $US millions Ownership Ownership Future Phases Future Ph
Slide 24: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) (3) % Leases Renewing by Square Footage • Increase in owned metrics from purchase of SK2 and Last Possible Expiration Date 66% the Infoma
Slide 25: Same Store Operating Performance – Organic
Same Store Operating Performance – Organic (1) (2) Stabilized and Expansion – Revenues growth of 6% and 24%, respectively, driven by colocation and interconnection growth Revenues $M Cash Cost, Gross Profit and PP&E $M Cash Cost Trailing 4-Qtr ($M) Inter- Services/ Total Non- Total of Cash Gross Cas
Slide 26: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance Increased owned assets recurring revenues to 45% due to the Infomart acquisition Cabinets Billed (4) Revenues (Q1 2018) $M Total Cabinet Owned % Cabinet Cabinets Utilization Total (5) of Total Category # of IBXs Capacity Billed % Recurring Recurring A
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Metro Count Stabilized Expansion New Acquisition Owned Leased (1) Atlanta 5 AT2, AT3 AT1 AT4, AT5 AT4 AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Change Summary Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH4 CH3 CH7 CH3, CH7 CH1, CH2, CH4 Expansion to Stabilized Culpepe
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI Calculation Of Adjusted Corp NOI Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 # of IBXs (1) 189 189 182 179 149 ($M) (2) Recurring Revenues $1,149 $1,122 $1,087 $1,008 $896 Recurring Cash Cost of Revenues Allocation (355) (347) (326) (299) (261) Cash Net Operating Income 794 77
Slide 29: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Increased in owned percent of NOI to 40% due to Infomart acquisition (4) Total Cabinet Q1 2018 Q1 2018 (4) # of Cabinet Cabinets Utilization Recurring Quarterly Category IBXs Capacity Billed % Revenues Adjusted NOI % NOI Stabilized (2) (3) Owned 24 47,300 41,90
Slide 30: Components of NAV
Components of NAV Operating Portfolio Adjusted Q1 18 Quarterly (unaudited $M) NOI Ownership Reference Adjusted NOI Stabilized Owned Adjusted NOI Segments $143 Stabilized Leased Adjusted NOI Segments $273 Expansion Owned Adjusted NOI Segments $94 Expansion Leased Adjusted NOI Segments $86 Quarterly A
Slide 31: Debt Summary
Debt Summary (5) Spread / Interest (2) First Call (1) Debt Coupon Rate Maturity Date Balance ($’000) Debt Amortization (1) Revolver L + 120 - Dec-22 - - Term Loan A (3) L + 145 1.829% Dec-22 - 1,037,280 • $1B multi-currency Term Loan A amortizes at 5% Japanese Yen Term Loan T + 150 1.567% Oct-21 - 4
Slide 32: Shares Forecast
Shares Forecast Fully Diluted Weighted Average Shares Common Stock Outstanding 79.5 (‘M) -0.3 ~80.0 79.0 0.5 ~79.8 78.2 77.9 77.9 0.7 1.5 1.5 1.5 1.3 1.3 79.0 Shares Est. Employee Est. Shares Est. Dilutive Est. Weighting Est. Fully Diluted Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 outstanding @ Equity Awards Ou
Slide 33: Capex Profile
(1) Capex Profile ($M) Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Recurring Sustaining IT & Network $ 9.1 $ 14.7 $ 11.4 $ 10.9 $ 7.3 IBX Maintenance 21.4 41.3 28.4 21.7 10.5 Re-configuration Installation 4.8 6.5 5.1 5.3 4.9 Subtotal - Recurring 35.2 62.5 44.9 37.9 22.7 Non-Recurring IBX Expansion 238.9
Slide 34: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies Revenue FX Rates (4) Blended Currency % of Revenues Guidance (2) Blended % of Currency Hedge Rate Guidance (3) (4) Rate (1) (2) Hedge % Revenues CHF GBP Rate 1% 9% EUR HKD USD 1.00 44% 20% 4% AUD EUR to USD 1.23 1.10 1.16 54% 20% 3% GBP to USD 1.40 1.32 1.35 64% 9% J
Slide 35: Equinix Leadership and Investor Relations
Equinix Leadership and Investor Relations Executive Team Equinix Investor Relations Contacts Equity Research Analysts Katrina Rymill Bank of America Michael Funk VP, Investor Relations Barclays Capital Amir Rozwadowski 650-598-6583 Berenberg Josep Bori krymill@equinix.com Citigroup Mike Rollins Cowe
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions Confidential – © 2018 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 37
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 38
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 39
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 40
Slide 41: Non-GAAP Reconciliations
(1) Non-GAAP Reconciliations Consolidated NOI calculation Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 (unaudited and in thousands) Revenues $ 1,215,877 $ 1,200,221 $ 1,152,261 $ 1,066,421 $ 949,525 (2) Non-Recurring Revenues (NRR) 64,314 76,654 61,853 55,179 50,256 (3) Other Revenues 2,454 1,351 3,044 2
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Income from Operations $ 225,875 $ 232,043 $ 224,863 $ 184,895 $ 167,213 Adjustments: Depreciation, Amortization and Accretion Expense 306,465 279,774 277,719 252,386 219,013 Stock-based Compensation Expens
Slide 43: 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 44: Definitions: IBX Growth, REIT and Capex
Definitions: IBX Growth, REIT and Capex IBX Growth New IBXs: Phase 1 began operating after January 1, 2017 Expansion IBXs: Phase 1 began operating before January 1, 2017, and there is an expected expansion of one or more additional phases leveraging the existing capital infrastructure, or a new phas
Slide 45: Confidential – © 2018 Equinix Inc. Equinix.com
Confidential – © 2018 Equinix Inc. Equinix.com 45