Slide 1: Q2 2018 Earnings Conference Call
Q2 2018 Earnings Conference call NASDAQ: EQIX Presented on August 8, 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: Q2 2018 Financial Highlights
(1) Q2 2018 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues Q2 18 ($M) $1,262 Revenues Growth $1,152 $1,200 $1,216 QoQ YoY $1,066 Acquisition Revenues: As-reported 4% 18% Infomart: $10M Itconic/IL2: $18M $1,188 Metronode: $14M Normalized and (2) $1,123 $1,151 2% 9% $1,010 $1,
Slide 4: Q2 2018 Consolidated Results
Q2 2018 Consolidated Results ($M Except for AFFO per Share and Q2 18 Non-Financial Metrics) Guidance Actual QoQ YoY Revenues $1,257 - 1,267 $1,262 4% 18% Cash Gross Profit $840 2% 16% Cash Gross Profit Margin % 66 - 67% 66.6% Cash SG&A $236 -2% 11% Cash SG&A % 19 - 20% 18.7% Adjusted EBITDA $579 - 5
Slide 5: Americas Performance
Americas Performance (1) Revenues Organic Revenues Infomart Revenues ($M) Q2 18 $618 Revenues Growth $597 $606 $603 QoQ YoY $534 $10 As-reported 3% 16% Normalized and (2) 2% 6% $608 Constant Currency Adjusted EBITDA Q2 18 Growth QoQ YoY Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Primarily due to As-reported 1% 1
Slide 6: EMEA Performance
EMEA Performance Revenues Organic Revenues Itconic/IL2 Revenues Q2 18 ($M) $380 $383 Revenues Growth $370 QoQ YoY $339 $17 $17 $18 $323 As-reported 1% 19% Normalized and (1) 2% 12% Constant Currency $353 $362 $365 Adjusted EBITDA Q2 18 Growth QoQ YoY Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 As-reported 3% 21%
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Organic Revenues Metronode Revenues Q2 18 ($M) Revenues Growth $261 QoQ YoY $234 $14 $217 $224 $210 As-reported 12% 24% Normalized and (1) 5% 14% Constant Currency $247 Adjusted EBITDA Q2 18 Growth QoQ YoY As-reported 14% 27% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Normalized
Slide 8: Capital Structure
Capital Structure Ample liquidity to fund growth and dividends Capitalization Table ($M) Q1 18 Q2 18 Net Leverage Ratio Financing Activity (1) (Target 3.0x – 4.0x) Bank Debt, Senior Notes, and Mortgages $ 9,493 $ 9,961 • ¥43.75B Japanese Yen Term Capital Lease & Financing Obligations $ 1,707 $ 1,512
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.2% $63 ($M) 3.6% 3.9% Highlights - Capital Expenditures 24% 3.3% 2.9% $45 $42 • Recurring capital expenditures typically 10% $38 12% trend between 3 and 5% of revenues 25% $35 29% 15% 11% 26% 14% 14% • Maintenance capital expenditures can vary 66
Slide 10: Stabilized IBX Growth – Organic
Stabilized IBX Growth – Organic (1) (2) (3) Stabilized asset growth of 4% with ~30% annual cash gross profit on gross PP&E investment ($M) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter $1,933 $76 $6,622 $2,813 Reported # of IBXs Q2 18 Revenues $8,000 $7,005 8 $7,000 ~30%
Slide 11: 2018 Financial Guidance
2018 Financial Guidance ($M except AFFO per Share) FY 2018 Q3 2018 (1) (2) Revenues $5,037 - 5,077 $1,272 - 1,282 Cash Gross Margin % 66 - 67% 65 - 67% Cash SG&A % 19 - 20% 19 - 20% (3) (4) Adjusted EBITDA $2,379 - 2,419 $591 - 601 Adjusted EBITDA Margin % ~47.4% ~46.7% Recurring Capital Expenditure
Slide 12: FY18 Revenues Guidance
FY18 Revenues Guidance Raise full year acquisition revenues guidance by $10M; $55M FX headwind Normalized Constant Currency YoY Growth ~9% incl. Verizon (1) ~16% ($M) $128 - 138 $5,037 - 5,077 $4,909 - 4,939 $4,368 1 2 (2) FY17 Reported FY18 Organic Guidance Acquisitions FY18 Guidance 2 1 Maintain o
Slide 13: FY18 Adjusted EBITDA Guidance
FY18 Adjusted EBITDA Guidance Raise full year adjusted EBITDA guidance by $5M; $21M FX headwind As-reported Margin 47.0% 48.4% 47.4% Normalized Constant Currency (1) YoY Growth ~8% incl. Verizon ~17% ($M) $2,428 - 2,468 -$49 $2,379 - 2,419 1 2 $2,052 (2) FY17 Reported FY18 Guidance excl. Integration
Slide 14: Q3 Guidance
Q3 18 Guidance Revenues Adjusted EBITDA As-reported Margin ($M) 47.9% 48.5% 47.8% 46.7% ~2% $1,272 - 1,282 ~1% $606 - 616 $607 $1,262 $604 $3 -$15 -$11 $1,251 $591 - 601 (1) (1) Q2 18 Reported Normalizing Q2 18 Normalized Q3 18 Guidance Q2 18 Reported Normalizing (2) Q2 18 Q3 18 Guidance Integration
Slide 15: FY18 AFFO and AFFO per Share Guidance
FY18 AFFO and AFFO per Share Guidance Raise full year AFFO guidance by $5M; $4M FX headwind (1) Share Count (Diluted) AFFO per Share (Diluted) 77.5M 80.0M 80.0M 80.0M $18.53 $20.56 - 21.06 $20.56 - 21.06 $19.95 - 20.45 ~12% ($M) $1,645 - 1,685 $1,645 - 1,685 1 FY18 Adjusted EBITDA to AFFO Guidance -
Slide 16: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) +18% ~$725 $612 $492 $394 45% 2018E Cash Dividend of ~$725M 43% 46% Payout Payout Ratio • Continued growth of both annual cash 47% Payout Ratio dividends and dividend per share Payout Ratio Ratio 2015 2016 2017 (2) 2018E (3) • Third quarter dividend of
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 200 Data Centers • 288,000+ Cross-connects • 20 years of deep expertise • 52 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Internet • Digi
Slide 18: Equinix Overview
(1) Equinix Overview • Global footprint: 200 data centers in 52 metros Unique Portfolio of Data • Network dense: 1,800+ networks Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 288,000+ cross-connects • 2018 expected revenues growth of 9% YoY on a normal
Slide 19: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix global reach expanding across 52 metro areas and 24 countries 5 Continents 24 Countries 52 Metro areas 200 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 12 Metros Multiple Locations (1) • Geographic footpr
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Revenues Mix Customers and Churn INT Top 10 Customers (2) 16% Rank Type of Customer %MRR Region Count IBX Count INT MIS & 17% 1 Network 3.2% 3 128 (1) Other Recurring 2 Cloud & IT Services 2.5% 3 50 Total Revenues
Slide 21: Revenues by Product by Region
Revenues by Product by Region Americas EMEA Asia-Pacific Worldwide +18% +4% ($M) $1,262 $1,216 $74 $65 $77 $1,066 $74 +16% $56 $198 $62 $195 +3% $166 $603 $618 $29 +19% $27 $23 $534 $20 $24 +1% $19 $129 $132 +24% $380 $383 $116 $24 $24 +12% $323 $32 $32 $18 $34 (1) $881 $914 $21 $35 $261 $24 $782 $2
Slide 22: Non-Financial Metrics
(1) Non-Financial Metrics FY 2017 FY 2018 Organic Total Total Total Total INTERCONNECTION Q2 Q3 Q4 Q1 Q2 QoQ Cross-connects 1,800+ Networks Americas 111,400 113,300 138,900 140,200 142,100 1,900 288,000+ Cross-connects EMEA 87,400 89,600 92,200 94,700 96,900 2,200 100% of Tier 1 Network Routes Asia-
Slide 23: Equinix Announced Expansions 2018 - 2019
Equinix Announced Expansions 2018 - 2019 Cabinet (1) (1) Total Capital Equivalent (1) 2018 2019 Expenditures (1) Capacity In IBX Center Status Q1 Q2 Q3 Q4 Q1 Q2 Q3 $US millions Ownership Future Phases CH3 phase IV (Chicago) Opened 715 $62 Owned 1,600 DE2 phase II (Denver) ▲ Opened 475 $28 Owned 375
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) % Leases Renewing by Square Footage • Own 79 of 200 IBXs Last Possible Expiration Date 65% • 11.5M of 21.4M total gross square feet • 47%
Slide 25: Same Store Operating Performance – Organic
Same Store Operating Performance – Organic (1) (2) (3) (3) Stabilized and Expansion Revenues growth of 4% and 18%, respectively, driven by colocation and interconnection growth Revenues $M Cash Cost, Gross Profit and PP&E $M Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Ca
Slide 26: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance Increased recurring revenues from owned assets to 47% due to the acquisition of Metronode Cabinets Billed (4) Revenues (Q2 2018) $M Total Cabinet (5) Owned % Cabinet Cabinets Utilization Total of Total Category # of IBXs Capacity Billed % Recurring Re
Slide 27: Portfolio Composition – IBX mapping
Metro Portfolio Composition – IBX mapping Count Stabilized *Subject*Subject to Long-term to Long-term groundground lease lease Expansion New Acquisition Owned Leased Atlanta 5 AT2,*Subject AT3, AT4, Status ground to Long-term AT5 Status ChangeChange lease AT1 AT4 AT1, AT2, AT3, AT5 Metronode Metrono
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI Calculation Of Adjusted Corp NOI Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 # of IBXs (1) 199 189 189 182 179 ($M) Recurring Revenues (2) $1,186 $1,149 $1,122 $1,087 $1,008 Recurring Cash Cost of Revenues Allocation (369) (349)(5) (347) (326) (299) Cash Net Operating Income 8
Slide 29: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Increased in owned percent of NOI to 46% due to Infomart and Verizon acquisitions Total Cabinet Q2 2018 (4) Q2 2018 (4) # of Cabinet Cabinets Utilization Recurring Quarterly Category IBXs Capacity Billed % Revenues Adjusted NOI % NOI Stabilized Owned (2) (3) 38
Slide 30: Components of NAV
Components of NAV Operating Portfolio Adjusted Q2 18 Quarterly Ownership Reference NOI Adjusted NOI (unaudited $M) Stabilized Owned Adjusted NOI Segments $181 Stabilized Leased Adjusted NOI Segments $279 Expansion Owned Adjusted NOI Segments $135 Expansion Leased Adjusted NOI Segments $102 Quarterly
Slide 31: Debt Summary
Debt Summary Spread / Interest (2) First Call Balance (1) Debt Maturity Coupon Rate Date (000's) Debt Amortization Revolver L + 120 - Dec-22 - - • $960M multi-currency Term Loan A amortizes at (3) Term Loan A (4) L + 145 1.994% Dec-22 - 959,945 Japanese Yen Term Loan T + 150 1.567% Oct-21 - 394,625
Slide 32: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding 79.5 79.5 -0.3 79.0 0.4 ~80.0 ~79.8 78.2 77.9 0.8 1.5 1.5 1.4 1.3 1.3 79.0 Shares Est. Employee Est. Shares Est. Dilutive Est. Weighting Est. Fully Diluted Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 outstanding @ Equity Awards Ou
Slide 33: Capital Expenditures Profile
(1) Capital Expenditures Profile ($M) Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Recurring Sustaining IT & Network 5.1 9.1 14.7 11.4 10.9 IBX Maintenance 30.6 21.4 41.3 28.4 21.7 Re-configuration Installation 6.4 4.8 6.5 5.1 5.3 Subtotal - Recurring 42.2 35.2 62.5 44.9 37.9 Non-Recurring IBX Expansion
Slide 34: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies (4) Revenue FX Rates Currency % of Revenues (2) Blended Guidance Blended (3) % of (4) Currency (1) Hedge Rate Guidance CHF GBP Rate (2) Hedge % Revenues Rate 1% 9% EUR HKD USD 1.00 44% 19% 3% AUD EUR to USD 1.17 1.13 1.14 63% 19% 4% GBP to USD 1.32 1.30 1.31 75% 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 BMO Capital Markets Ari Kle
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 Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 (unaudited and in thousands) Revenues $ 1,261,943 $ 1,215,877 $ 1,200,221 $ 1,152,261 $ 1,066,421 Non-Recurring Revenues (NRR) (2) 73,572 64,314 76,654 61,853 55,179 Other Revenues (3) 1,945 2,454 1,351
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Income from Operations $ 215,038 $ 225,875 $ 232,043 $ 224,863 $ 184,895 Adjustments: Depreciation, Amortization and Accretion Expense 308,828 306,465 279,774 277,719 252,386 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 Capital Expenditures
Definitions: IBX Growth, REIT and Capital Expenditures 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
Slide 45: Confidential – © 2018 Equinix Inc. Equinix.com
Confidential – © 2018 Equinix Inc. Equinix.com 45