Slide 1: Q2 2019 Earnings Conference Call
Q2 2019 Earnings Conference Call NASDAQ: EQIX Presented on July 31, 2019 Confidential – © 2019 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 2019 Financial Highlights
(1) Q2 2019 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues $1,385 Revenues Growth Q2 19 $1,310 $1,363 QoQ YoY ($M) $1,262 $1,284 As-reported 2% 10% Normalized and (2) 2% 10% $1,208 $1,230 $1,275 $1,306 Constant Currency $1,188 (2) Normalized MRR 2% 10% Q2 18 Q3 18 Q4 18 Q1 1
Slide 4: Q2 2019 Consolidated Results
Q2 2019 Consolidated Results ($M Except for AFFO per Share and Q2 19 Non-Financial Metrics) Guidance Actual QoQ YoY (1) Revenues $1,381 - 1,391 $1,385 2% 10% Cash Gross Profit $924 1% 10% Cash Gross Margin % 65 -66% 66.7% Cash SG&A $247 -3% 5% Cash SG&A % 18 - 19% 17.8% Adjusted EBITDA (2) $649 - 65
Slide 5: Americas Performance
Americas Performance Revenues Includes $8M of lower NRR Q2 19 ($M) $626 $638 $644 $644 QoQ Revenues Growth $618 QoQ YoY As-reported Flat 4% Normalized and (1) Flat 5% Constant Currency (1) Normalized MRR 2% 5% Adjusted EBITDA Q2 19 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Growth QoQ YoY Adjusted EBITDA Margin
Slide 6: EMEA Performance
EMEA Performance Revenues $450 $435 Revenues Q2 19 ($M) $403 $383 $397 Growth QoQ YoY As-reported 3% 17% Normalized and (1) 3% 15% Constant Currency (1) Normalized MRR 3% 13% Adjusted EBITDA Q2 19 Growth QoQ YoY Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 As-reported 5% 23% Adjusted EBITDA Adjusted EBITDA Adjuste
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Revenues Q2 19 $284 $291 ($M) $261 $261 $269 Growth QoQ YoY As-reported 2% 12% Normalized and (1) 3% 14% Constant Currency (1) Normalized MRR 3% 17% Adjusted EBITDA Q2 19 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Growth QoQ YoY Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Ma
Slide 8: Capital Structure
Capital Structure ~$350M ATM proceeds and Fitch credit rating upgrade to investment grade (BBB-) Q2’19 Financing Activity • Raised net proceeds of $348M As-reported ($M) Q1 19 Q2 19 Net Leverage Ratio under the ATM program at ~$485 (Target 3.0x – 4.0x) per share (1) Bank Debt, Senior Notes and Mortg
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.4% 4.3% ($M) $70 • Recurring capital expenditures typically 3.3% 13% trend between 3 and 5% of revenues, $55 2.7% 13% 18% annually $42 1.5% 15% 24% $37 • Maintenance capital expenditures can vary 12% 18% 70% $21 12% by quarter based on maintenanc
Slide 10: Stabilized IBX Growth
(1) (2) Stabilized IBX Growth Stabilized, Expansion & New IBXs Stabilized IBX Profitability ($M) Last Quarter $2,244 $94 $7,327 $3,308 Reported # of IBXs Q2 19 Revenues ($M) ~30% annual Cash Gross Profit on Gross PP&E investment (5) Expansion: Stabilized: 23% Stabilized: 201 85% Growth YoY 3% (3) Ut
Slide 11: 2019 Financial Guidance
(1) 2019 Financial Guidance ($M except AFFO per Share) FY 2019 Q3 2019 (2) (3) Revenues $5,565 - 5,595 $1,399 - 1,409 Cash Gross Margin % 66 - 67% 66 - 67% Cash SG&A % 18 - 19% 18 - 19% (4) (5) Adjusted EBITDA $2,660 - 2,690 $665 - 675 Adjusted EBITDA Margin % ~48% ~47.7% Recurring Capital Expenditu
Slide 12: FY19 Guidance
(1) FY19 Guidance Revenues Adjusted EBITDA Raise full year revenues guidance by $17M Raise full year adjusted EBITDA guidance by $22M Normalized Constant Currency (2) 47.6% As-reported Margin ~48% ~9% YoY Growth (3) (4) Margin excl. Integration ~10% 48.2% 48.2% Costs and ASC 842 ($M) $5,565 - 5,595
Slide 13: Q3 19 Guidance
(1) Q3 19 Guidance Revenues Adjusted EBITDA (2) (2) Q3 growth of 1% muted by one-time Q3 events Adjusted EBITDA QoQ impacted by a better than expected Q2 performance As-reported Margin ($M) ~1% 48.9% 48.8% 48.0% 47.7% $1,399 - 1,409 ~-1% $677 $678 $1 $669 - 679 -$4 $665 - 675 $1,388 $1,385 $3 (1) (4
Slide 14: FY19 AFFO and AFFO per Share Guidance
(1) (2) FY19 AFFO and AFFO per Share Guidance Raise full year AFFO guidance by $25M; AFFO per share growth of 8 - 9% Share Count (Diluted) Normalized Constant Currency AFFO per Share (Diluted) YoY Growth ($M except AFFO per Share) 1 Raise full year AFFO guidance AFFO per Share (3) 80.2M 84.1M 84.6M
Slide 15: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) ~13% +19% ~$825 $727 $612 $492 $394 2019E Cash Dividend of ~$825M • Continued growth of our annual total 47% 46% 43% 44% 43% cash dividend amount Payout Payout Payout Payout Payout Ratio Ratio Ratio Ratio Ratio 2015 2016 2017 2018 2019 E (2) • Third qua
Slide 16: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 203 Data Centers • 348,000+ Total Interconnections • 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 Intern
Slide 17: Equinix Overview
(1) Equinix Overview • Global footprint: 203 data centers in 52 metros Unique Portfolio of Data • Network dense: 1,800+ networks; 100% of Tier 1 Network Routes Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 348,000+ Total Interconnections • 2019 expecte
Slide 18: 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 203 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 12 Metros Multiple Locations (1) • Geographic footpr
Slide 19: Development Developments
(1) EMEA xScaleTM JV Development Joint venture with GIC to support the unique needs of top hyperscale customers Phase Phase Phase Capacity in Phase Capacity Capex Open Future Phases 750 Q3 Final Overview LD10x LD10x-3 Cab-e / $45M • On July 1, 2019, announced initial agreement of greater than Announ
Slide 20: Customer Revenues Mix
Customer Revenues Mix • Diversified Revenues across Customer, Region & Industry segments • Record Channel logos adds driving ~60% of new logo acquired in Q2 19 Revenues Mix Customers and Churn Top 10 Customers Financial Services Rank Type of Customer %MRR Region Count IBX Count EMEA 16% 32% 1 Networ
Slide 21: Revenues by Product by Region
Revenues by Product by Region Americas EMEA Asia-Pacific Worldwide +10% +2% ($M) $1,363 $1,385 $79 $1,262 $88 $81 $74 $81 $77 +4% $219 (1) $213 ~0% $198 $644 $644 $618 $30 $38 $29 $28 $28 +17% $23 $132 $139 $142 +3% +12% $435 $450 +2% $383 $34 $33 $32 $31 $981 $1,006 $24 $39 $284 $291 $914 $32 $38 $
Slide 22: Non-Financial Metrics
(1) Non-Financial Metrics FY 2018 FY 2019 Q2 Q3 Q4 Q1 Q2 QoQ Interconnections Americas 142,100 143,500 145,900 147,800 149,600 1,800 EMEA 96,900 99,300 115,500 117,900 119,900 2,000 Asia-Pacific 49,300 51,600 57,300 58,500 59,500 1,000 Worldwide Cross Connections 288,300 294,400 318,700 324,200 329,
Slide 23: Equinix Announced Expansions
Equinix Announced Expansions Cabinet (1) (1) Equivalent 2019 2020 2021 Total Capex(1) Capacity In (1) IBX Data Center Status Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $US millions Ownership Future Phases DA6 phase III (Dallas) Open 425 $23 Owned CH3 phase V (Chicago) Open 450 $14 Owned 1,175 SE4 phase II (Seattle)
Slide 24: Long-Term Lease Renewals
Long-Term Lease Renewals Weighted average lease maturity of greater than 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 88 of 203 IBXs Last Possible Expiration Date • 12.9M of 22.7M total gross square fe
Slide 25: Same Store Operating Performance
(1) (2) Same Store Operating Performance Revenues ($M) Cash Cost, Gross Profit and PP&E ($M) Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on Category Colocation connection Other Recurring recurring Revenues Revenues Profit Margin % PP&E Gross
Slide 26: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance Cabinets Billed Q2 19 Revenues ($M) Total Cabinet Owned % Cabinet Cabinets Utilization Total (5) of Total Category # of IBXs Capacity Billed % Recurring Recurring Americas Owned (2) 45 73,300 54,700 75% $400 Leased 42 35,000 28,900 83% $202 Americas T
Slide 27: IBX Portfolio Composition
(1) (2) IBX Portfolio Composition Metro Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3, AT4, AT5 AT1 AT4 AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1, CH2, CH4 Culpeper 4 CU1,CU2, CU3 CU4 CU1, CU2, CU3, CU4 Dal
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI ($M, except # of IBXs) Calculation Of Adjusted Corp NOI ($M) Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 (1) # of IBXs 202 201 199 199 199 (2) Recurring Revenues $1,301 $1,273 $1,228 $1,206 $1,186 Recurring Cash Cost of Revenues Allocation (408) (386) (387) (380) (369) Cash Ne
Slide 29: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Q2 2019 Q2 2019 Total Cabinet Recurring Quarterly # of Cabinet Cabinets Utilization Revenues Adjusted NOI Category IBXs Capacity Billed % ($M) ($M) % NOI Stabilized Owned (2) 46 71,600 62,100 87% $373 $269 34% Leased 92 82,300 69,100 84% $434 $256 32% Stabilize
Slide 30: Components of Net Asset Value
Components of Net Asset Value Operating Portfolio Adjusted Q2 19 Quarterly Ownership Reference NOI Adjusted NOI ($M) Stabilized Owned Adjusted NOI Segments $269 Stabilized Leased Adjusted NOI Segments $256 Expansion Owned Adjusted NOI Segments $185 Expansion Leased Adjusted NOI Segments $86 Other Re
Slide 31: Debt Summary
Debt Summary Spread / Interest First Call First Call / Balance(1) Debt Maturity Coupon Rate Date Current Call ($M) Revolver L + 100 - Dec-22 - $ - (2) Term Loan A - SEK, GBP, JPY L + 120 1.672% Dec-22 - 1,302 Senior Notes Debt Amortization USD due in 2019, 2020, 2021 5.000% 5.000% Various - 600 USD
Slide 32: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding ~85.1 0.6 84.8 -1.1 ~84.6 84.1 3.7 80.4 80.7 79.5 80.7 0.7 1.4 1.2 1.2 1.5 1.5 Shares Est. Employee Q1 - Q2 Equity(5) Est. Shares Est. Weighted Est. Weighting Est. Fully Diluted Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Outstand
Slide 33: Capital Expenditures Profile
(1) Capital Expenditures Profile ($M) Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Recurring IBX Maintenance 26 11 49 35 31 Sustaining IT & Network 4 6 12 13 5 Re-configuration Installation 7 4 9 7 6 Subtotal - Recurring 37 21 70 55 42 Non-Recurring IBX Expansion 325 270 491 401 409 Transform IT, Network
Slide 34: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies (4) Revenue FX Rates Currency % of Revenues Blended Guidance (2) Blended (3) % of Currency (1) Hedge Rate Guidance (4) CHF GBP Rate (2) Hedge % Revenues Rate 1% 9% EUR HKD USD 1.00 43% 20% 4% AUD EUR to USD 1.14 1.19 1.17 65% 20% 4% GBP to USD 1.27 1.37 1.34 68% 9% J
Slide 35: Industry Analyst Reports
Industry Analyst Reports Solution Category Report • Colocation Cloud Interconnection Requires a Purposeful, Planned Approach, Gartner, 5/20/19 Interconnection • The Future of Enterprise Data Centers – What’s Next, Gartner, 4/24/19 • Equinix Vendor Profile: Driving for Global Reach, IDC, 3/31/18 • Eq
Slide 36: 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 Berenberg Nate Crossett 650-598-6583 BMO Capital Markets Ari Klein krymill@equinix.com Citigroup Mike Rollins Keith
Slide 37: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions Confidential – © 2019 Equinix Inc. Equinix.com 37
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 38
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 39
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 40
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 41
Slide 42: Non-GAAP Reconciliations
(1) Non-GAAP Reconciliations Consolidated NOI calculation Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 (unaudited and in thousands) Revenues $1,384,977 $1,363,218 $1,310,083 $1,283,751 $1,261,943 Non-Recurring Revenues (NRR) (2) 78,456 87,343 80,242 75,387 73,572 Other Revenues (3) 5,859 2,783 1,353 1,96
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Income from Operations $ 291,781 $ 279,508 $ 270,717 $ 265,753 $ 215,038 Adjustments: Depreciation, Amortization and Accretion Expense 320,550 314,705 305,130 306,318 308,828 Stock-based Compensation Expens
Slide 44: 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 45: Definitions: Non-financial Metrics, IBX growth, REIT and Capital Expenditures
Definitions: Non-financial Metrics, IBX growth, REIT and Capital Expenditures Non-financial Metrics MRR per Cab: Monthly recurring revenues per billed cabinet: (current quarter monthly recurring revenues / 3) divided by ((quarter end cabinets billing prior quarter + quarter end cabinets billing curr
Slide 46: Confidential – © 2019 Equinix Inc. Equinix.com
Confidential – © 2019 Equinix Inc. Equinix.com 46