Slide 1: Q3 2017 Earnings Conference call
Q3 2017 Earnings Conference call NASDAQ: EQIX Presented on November 1, 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: Q3 2017 Financial Highlights
Q3 2017 Financial Highlights (1) Revenues of $1,152.3 Million Revenues ($M) Recurring Revenues Non-recurring Revenues $1,152.3 • Revenues up 8% QoQ and 25% YoY on an as- $1,066.4 reported basis, $1,015 million organic and $137 million $942.6 $949.5 $924.7 from the Verizon data center acquisition • R
Slide 4: Stabilized IBX Growth – Organic (excludes Verizon)
Stabilized IBX Growth – Organic (excludes Verizon) (1) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter ($5,707) $2,453 $1,716 $46 Reported 7 44 (2) +14% 99 (2) +6% 83% (2) (3) (4) (4) (6) (1) New IBXs where Phase 1 began operating after January 1, 2016; AM4, DC12, and FR6
Slide 5: Q3 2017 Consolidated Results
Q3 2017 Consolidated Results Quarter ($M Except for AFFO per Share and Q3 17 Q3 17 Q2 17 Q3 16 Q3 17 vs. Q3 17 vs. Non-Financial Metrics) (1) Guidance Actual Actual Actual Q2 17 % ∆ Q3 16 % ∆ Revenues $1,133 - 1,141 $1,152.3 $1,066.4 $924.7 8% 25% Cash Gross Profit $774.5 $722.0 $619.9 7% 25% Cash G
Slide 6: Americas Performance
Americas Performance Q3 Highlights Q3 Business Conditions ($M) $596.5 $533.6 $137.0 • Q3 revenues up 12% QoQ and 40% YoY on an as-reported basis; $436.5 $436.4 $86.7 on a normalized and constant currency basis (1) up 3% QoQ and $425.1 $459.5 8% YoY $446.9 $292.1 $258.2 • Q3 adjusted EBITDA up 13% Qo
Slide 7: EMEA Performance
EMEA Performance Q3 Highlights Q3 Business Conditions ($M) $322.9 $338.8 $301.3 $301.6 $314.8 • Q3 revenues up 5% QoQ and 12% YoY on an as-reported basis; on a normalized and constant currency basis (1) up 3% QoQ and 12% YoY • Q3 adjusted EBITDA up 3% QoQ and 21% YoY on an as- $129.6 $141.6 $146.5 $
Slide 8: Asia-Pacific Performance
Asia-Pacific Performance Q3 Highlights Q3 Business Conditions ($M) $209.9 $216.9 • Q3 revenues up 3% QoQ and 9% YoY on an as-reported basis; $198.3 $204.5 $198.2 on a normalized and constant currency basis (1) up 2% QoQ and 13% YoY • Q3 adjusted EBITDA up 2% QoQ and 16% YoY on an as- $102.9 $109.5 $
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 ($M) Capitalization Table Debt Maturity Profile (4) Loans Payable, Capital Lease & Other Financing Obligations Q3 17 Q2 17 Senior Notes 9,411 Capital Lea
Slide 10: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 4.5% 3.9% 3.6% 3.9% $44.9 ($M) $41.6 $36.5 2.4% $37.9 25% 2017 Capex Highlights 27% 24% 29% 11% 12% 16% $22.7 14% • Recurring capital expenditures trend 32% 63% between 3 - 5% of revenues 61% 22% 60% 57% 46% Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 • Maintena
Slide 11: 2017 Financial Guidance
2017 Financial Guidance ($M Except AFFO per Share) FY 2017 Q4 2017 (1) (2) Revenues $4,355 - 4,363 $1,187 - 1,195 Cash Gross Margin % 67 - 68% ~67% Cash SG&A $883 - 891 $228 - 236 Cash SG&A % ~20% ~20% (3) (4) Adjusted EBITDA $2,049 - 2,057 $562 - 570 Adjusted EBITDA Margin % ~47.1% ~47.5% Capex $1,
Slide 12: FY17 Revenues Guidance
FY17 Revenues Guidance (1) Raise full year revenues guidance by $37M including $13M from EMEA acquisitions Normalized ($M) ~11% (2) Constant Currency YoY Growth ~21% $365 - 373 $4,355 - 4,363 $3,986 - 3,994 $3,612 1 2 FY16 Reported Organic FY17 Guidance Acquisition FY17 Guidance 1 Raise organic reve
Slide 13: FY17 Adjusted EBITDA Guidance
FY17 Adjusted EBITDA Guidance (1) Raise full year adjusted EBITDA guidance by $10M including net $1M from EMEA acquisitions ($M) Normalized Constant Currency YoY Growth 45.9% 48.3% 47.1% (2) ~11% ~24% $2,103 - 2,111 -$54 $2,049 - 2,057 $1,657 1 2 FY16 Reported FY17 Guidance excl. Integration Costs(3
Slide 14: Q4 17 Guidance
Q4 17 Guidance ($M) Revenues Adjusted EBITDA Normalized (2) Constant Currency ~3% 47.8% 48.9% 48.6% 47.5% QoQ Growth ~3.4% ~2.9% $1,187 - 1,195 $575 - 583 -$13 $562 - 570 $563 $1,152 $1,152 -$1 $12 $550 (1) (1) (3) Q3 17 Normalizing Q3 17 Q4 17 Q3 17 Normalizing Q3 17 Q4 17 Integration Q4 17 Reporte
Slide 15: FY17 AFFO and AFFO Per Share Guidance
FY17 AFFO and AFFO Per Share Guidance (1) Raise full year AFFO guidance by $28M including net $1M from EMEA acquisitions Share Count (Diluted) (4) Normalized Constant Currency AFFO per Share (Diluted) YoY Growth 71.6M 77.4M 77.5M 77.5M 1 Raise AFFO guidance $15.06 $17.92 $18.26 $18.97 Prior Full Yea
Slide 16: Dividend Outlook
Dividend Outlook Annual Dividend ($M) CAGR: +25% $612 $492 2017E Dividend of $612M $394 • Continued growth of both annual 43% 46% Payout dividend and dividend per share Payout Ratio 47% Payout Ratio Ratio • Fourth quarter dividend of $2.00 to be paid December 13, 2017 2015 2016 2017 E • Total divide
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data Business Interconnection Ecosystems Global Proven Solutions Reach 9,500+ Companies Expertise 248,000+ Cross-connects 220+ of Fortune 500 190 Data Centers 99.9999% Uptime Record 48 Metros 5 Continents 100% Renewable Power Pledge © 2017 Equinix Inc. Equinix.co
Slide 18: Equinix Overview
(1) Equinix Overview • Global footprint: 190 data centers in 48 metros Unique Portfolio of Data • Network dense: 1,600+ networks Center Assets • Cloud dense: 2,800+ Cloud & IT service providers • Interconnected ecosystems: 248,000+ cross-connects • 2017 expected revenues growth of 11% YoY on a norma
Slide 19: Equinix Global Platform
Equinix Global Platform Equinix offers broad geographic reach and significant scale within each region Platform Equinix • Geographic footprint is unmatched and 18 Metros 22 Metros 8 Metros remains a unique differentiator 87 IBXs 73 IBXs 30 IBXs • Multi-region deployments outpace single- region deplo
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues by Customer, Region & Industry 7% Customer % of Recurring Revenues 28% Cloud & IT 16% MIS & Services Multi-Metro Customers 84% Others Multi-Region Customers 71% Content & Recurring 14% Digital Media Customers in 3 Regions 59% Intercon Top 50 Customers 37% 9
Slide 21: Non-Financial Metrics
(1) Non-Financial Metrics FY 2016 FY 2017 Q3 Q4 Q1 Q2 Q3 ∆ QoQ # of Cross-connects INTERCONNECTION Americas 104,200 106,300 109,700 111,400 113,300 1,900 1,600+ Networks EMEA 46,300 82,900 84,900 87,400 89,600 2,200 248,000+ Cross-connects Asia-Pacific 37,900 41,000 42,700 43,600 45,200 1,600 100% o
Slide 22: Equinix Announced Expansions 2017 - 2018
Equinix Announced Expansions 2017 - 2018 Overview of major Equinix IBX data center expansions AMERICAS Sellable Cabinet Total CAPEX* IBX Center Target Open Date Equivalents* (millions U.S.$) Comments GLOBAL TOTALS SP3 phase I (São Paulo) Opened Q1 2017 725 $69 Global Total NY5 phase II (New York) Op
Slide 23: Long-Term Lease Renewals
(1) Long-Term Lease Renewals Average lease maturity greater than 19 years including extensions (2) Global Lease Portfolio Expiration Waterfall (3) % Leases Renewing by Square Footage Equinix Owned Sites Last Possible Expiration Date • Own 62 of 190 IBXs 70% • 9.0M of 19.4M total gross square feet (4
Slide 24: 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 25: Same Store Operating Performance – Organic (excludes Verizon)
(1) Same Store Operating Performance – Organic (excludes Verizon) Stabilized and Expansion – Cash Gross Profit grew 10.2% driven by Interconnection growth Revenues #039;000s Cash Cost, Gross Profit and PP&E #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross
Slide 26: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance By Region & Ownership – With Verizon-Owned Assets Generated 43% of Our Recurring Revenues Cabinets Billed Revenues (Q3 2017) #039;000s Total Cabinet Owned % of Cabinet Cabinets Utilization Inter- Services/ Total Non- (4) Total Category # of IBXs Capacity
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Metro Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3 AT1 AT4, AT5 AT4 AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH3, CH4 CH7 CH3, CH7 CH1, CH2, CH4 Culpeper 4 CU1,CU2, CU3, CU4 CU1, CU2, CU3, CU4 D
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI (unaudited $000's) Calculation Of Adjusted Corp NOI (unaudited $’000s) Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 # of IBXs (1) 182 179 149 145 145 Recurring Revenues (2) $ 1,087,363 $ 1,008,424 $ 895,613 $ 887,748 $ 874,149 Recurring Cash Cost of Revenues Allocation (325,989
Slide 29: Adjusted NOI Composition – Organic (excludes Verizon)
(1) Adjusted NOI Composition – Organic (excludes Verizon) By Stabilization and Ownership – Owned Assets and NOI are predominantly in campus locations in our largest global markets Total Cabinet Adjusted NOI by Region Q3 2017 Q3 2017 # of Cabinet Cabinets Utilization Recurring Quarterly Territory IBX
Slide 30: Components of NAV
Components of NAV (unaudited $’000s) (unaudited) Operating Portfolio Adjusted % of Adjusted NOI Q3 17 Quarterly Ownership Reference NOI AMER EMEA APAC Adjusted NOI Stabilized Owned 76% 23% 1% Adjusted NOI Segments $122,833 Stabilized Leased 59% 11% 30% Adjusted NOI Segments 258,779 Expansion Owned 1
Slide 31: Market Capitalization & Debt Summary
Market Capitalization & Debt Summary ($’000s) Spread / Sept 30, (2) (1) Debt Coupon Interest Rate Maturity Balance 2017 Market Capitalization Summary Revolver L + 120 2.53% Dec-19 - (3) (6) Common shares outstanding 78,234 Term Loan A L + 150 1.57% Dec-19 396,285 (4) (7) Market Price as of Sept 29,
Slide 32: Fully Diluted Weighted Average Shares Forecast
Fully Diluted Weighted Average Shares Forecast (‘K) ~78,270 688 791 -1,502 ~77,456 ~6,069 71,409 Shares outstanding Equity Raise Est. Employee Est. Shares Est. Dilutive Est. Weighting of Est. Fully Diluted @ 12/31/16 - Actual for Verizon Equity Awards Outstanding Unissued Shares All Share Activities
Slide 33: Capex Profile
Capex Profile ($’000s) Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Recurring Sustaining IT & Network $ 11,405 $ 10,872 $ 7,284 $ 8,774 $ 11,380 IBX Maintenance 28,432 21,677 10,466 21,753 25,229 Re-configuration Installation 5,077 5,320 4,922 5,950 5,001 Subtotal - Recurring 44,914 37,869 22,672 36,476
Slide 34: FY17 Revenues FX Hedging
FY17 Revenues FX Hedging (4) Currency % of Revenues Revenue FX Rates Blended (2) (3) (4) Guidance (2) Blended % of Currency Hedge Rate Guidance CHF GBP Rate (1) Hedge % Revenues Rate EUR 1% 9% HKD USD 1.0000 47% 18% 3% AUD EUR to USD 1.1815 1.0988 1.1314 61% 18% 3% GBP to USD 1.3398 1.3974 1.3822 74
Slide 35: Equinix Leadership and Investor Relations
Equinix Leadership and Investor Relations Executive Team Equinix Investor Relations Contacts Katrina Rymill Chip Newcom VP, Investor Relations Director, Investor Relations 650-598-6583 650-598-6262 krymill@equinix.com cnewcom@equinix.com Equinix Media Contacts Michelle Lindeman Senior Manager, Publi
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions © 2017 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 37
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 38
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 39
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 40
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 41
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (1) Represents the non-cash impact due to changes in valuation allowances and uncertain tax positions and deferred taxes that do not relate to current period’s operations © 2017 Equinix Inc. Equinix.com 42
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 43
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2017 Equinix Inc. Equinix.com 44
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations Consolidated NOI calculation Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 (unaudited and in thousands) Revenues $ 1,152,261 $ 1,066,421 $ 949,525 $ 942,647 $ 924,676 Non-Recurring Revenues (NRR) (2) 61,853 55,179 50,256 49,980 46,739 (3) Other Revenues 3,044 2,818 3,656 4,920 3,7
Slide 46: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Income from continuing operations $ 224,863 $ 184,895 $ 167,213 $ 184,455 $ 169,941 Adjustments: Depreciation, amortization and accretion expense 277,719 252,386 219,013 212,268 215,370 Stock-based compensa
Slide 47: 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 48: © 2017 Equinix Inc. Equinix.com
© 2017 Equinix Inc. Equinix.com 48