Slide 1: Q1 2020 Earnings Conference Call
Q1 2020 Earnings Conference Call NASDAQ: EQIX Presented on May 06, 2020 Confidential – © 2020 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’s
Slide 3: Q1 2020 Financial Highlights
Q1 2020 Financial Highlights Recurring Revenues Non-recurring Revenues Revenues Revenues Q1 20 ($M) $1,417 $1,445 Growth QoQ YoY $1,363 $1,385 $1,397 Acquisition Revenues: As-reported 2% 6% Axtel: $5M Packet: $3M (Mar. 2, 2020 close) Normalized and (1) 2% 7% $1,275 $1,306 $1,319 $1,338 $1,362 Consta
Slide 4: Q1 2020 Consolidated Results
Q1 2020 Consolidated Results $M except for AFFO per Share and Q1 20 Non-Financial Metrics Guidance Actual QoQ YoY (1) Revenues $1,450 - 1,460 $1,445 2% 6% Cash Gross Profit $968 3% 6% Cash Gross Margin % 67.0% Cash SG&A $284 7% 11% Cash SG&A % 19.6% (2) Adjusted EBITDA $686 - 696 $684 1% 4% Adjusted
Slide 5: Americas Performance
Americas Performance Revenues Organic Revenues Axtel/Packet Q1 20 ($M) $662 Revenues Growth $644 $644 $645 $654 QoQ YoY Axtel: $5M Packet: $3M As-reported 1% 3% (Mar. 2, 2020 close) Normalized and (1) 1% 3% Constant Currency $644 $644 $645 $654 (1) Normalized MRR 1% 4% Adjusted EBITDA Q1 20 (2) (3)
Slide 6: EMEA Performance
EMEA Performance Revenues $464 $479 Revenues Q1 20 ($M) $458 $435 $450 Growth QoQ YoY As-reported 3% 10% Normalized and (1) 4% 12% Constant Currency (1) Normalized MRR 3% 12% Adjusted EBITDA Q1 20 (2) (2) Growth QoQ YoY Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 As-reported 11% 16% Adjusted EBITDA Adjusted EBITD
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues $304 Revenues Q1 20 $291 $293 $300 ($M) $284 Growth QoQ YoY As-reported 1% 7% Normalized and (1) 2% 9% Constant Currency (1) Normalized MRR 2% 9% Adjusted EBITDA Q1 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Growth QoQ YoY Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Margi
Slide 8: Capital Structure
Capital Structure Debt Equity • On April 15, we entered into a $750M 364-day term loan • Raised net proceeds of $102M in facility Q1 2020 under our $750M ATM (1) • $500M was drawn at close Net Leverage Ratio program at an average net price of 3.9x $627 per share; $198M remaining • $250M remains avai
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.7% ($M) • Recurring capital expenditures typically $81 trend between 3% and 5% of revenues, 3.4% 9% 12% annually 2.7% $47 • Maintenance capital expenditures can vary 1.5% $37 13% by quarter based on maintenance schedules 14% 1.2% 18% 78% $21 12%
Slide 10: Stabilized IBX Growth
(1) (2) Stabilized IBX Growth Stabilized, Expansion & New IBXs Stabilized IBX Profitability ($M) Last Quarter $7,703 $3,369 $2,278 $89 Reported # of IBXs Q1 20 Revenues ($M) ~29% annual Cash Gross Profit on Gross PP&E investment (5) Expansion: Stabilized: 10% Stabilized: 204 84% Growth YoY 3%(3) Uti
Slide 11: 2020 Financial Guidance
(1) (7) 2020 Financial Guidance ($M except AFFO per Share) FY 2020 Q2 2020 (2) (3) Revenues $5,877 - 5,985 $1,446 - 1,466 (4) (5) Adjusted EBITDA $2,765 - 2,845 $679 - 699 Adjusted EBITDA Margin % 47 - 48% 47 - 48% Recurring Capital Expenditures $150 - 160 $26 - 36 % of revenues ~3% ~2% Non-recurrin
Slide 12: FY20 Revenues Guidance
FY20 Revenues Guidance Strong underlying business, despite headwinds from FX and COVID-19 risk; incremental Packet revenue Normalized ($M) 7 - 9% (1) Constant Currency $6,000 - 6,050 YoY Growth $5,877 - $5,985 ($105) $5,895 - 5,945 ($50) - 0 32 - 40 $5,845 - 5,945 (2) Prior Guidance FX FX adj. Prior
Slide 13: FY20 Adjusted EBITDA Guidance
FY20 Adjusted EBITDA Guidance Strong underlying business despite headwinds from FX and COVID-19 risk 47.9% As-reported Margin 47.3% Organic Margin excl. (2) 48.0% 48.0% Integration Costs $2,868 - 2,918 ($M) ($48) $2,820 - 2,870 ($30) - 0 $2,790 - 2,870 ($24) $2,765 - 2,845 1 Prior Guidance ex. FX FX
Slide 14: Q2 20 Guidance
Q2 20 Guidance Revenues Adjusted EBITDA Normalized growth of 1 - 2% Normalized growth of 3% As-reported Margin ($M) 1 - 2% 47.4% 47.3% 47.9% 47.3% $1,446 - 1,466 ~3% $687 - 707 $684 -$8 $679 - 699 $1,445 $678 -$6 -$10 $1,434 (1) (2) Q1 20 Reported Normalizing (1) Q1 20 Normalized Q2 20 Guidance Q1 2
Slide 15: FY20 AFFO and AFFO per Share Guidance
(1) FY20 AFFO and AFFO per Share Guidance Strong AFFO and AFFO per share growth (8 -12%); Reaffirming prior AFFO guidance on a constant currency basis ($M except AFFO per Share) Share Count (Diluted) Normalized Constant Currency AFFO (2) AFFO per Share (Diluted) YoY Growth 11 - 16% 84.7M 86.5M 86.5M
Slide 16: Dividend Outlook
Dividend Outlook Annual Cash Dividend ($M) ~11% +14% ~$914 $826 $727 $612 $492 2020E Cash Dividend of ~$914M • Continued growth of our annual total 46% 43% 44% 43% 43% cash dividend amount Payout Payout Payout Payout Payout Ratio Ratio Ratio Ratio Ratio 2016 2017 2018 2019 2020 E (1) • Second quarte
Slide 17: Equinix's Covid-19 Response
Equinix’s Covid-19 Response (1) Our Employees and Community Large, established businesses Limited exposure to industries • Our focus continues to be on the health, safety and wellbeing of constitute majority of revenue currently most impacted by Covid-19 our employees, customers and vendors. Our cor
Slide 18: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 211 Data Centers • 370,000+ Total Interconnections • 20+ years of deep expertise • 55 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 19: Equinix Overview
(1) Equinix Overview • Global footprint: 211 data centers in 55 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: 370,000+ Total Interconnections • 2020 expecte
Slide 20: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix global reach expanding across 55 metro areas and 26 countries 5 Continents 26 Countries 55 Metro areas 211 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 20 Metros 22 Metros 13 Metros Multiple Locations (1) • Geographic footpr
Slide 21: xScale Announced Developments
xScaleTM Announced Developments Phase Phase Phase Capacity in Phase Phase Phase Capacity in Capacity Capex Open Future Phases Capacity Capex Open Future Phases Announced Japan JV GIC & Equinix (2) 750 950 5,525 Q3 Final Q4 LD13x Phase 3 Cab-e / $45M 2019 TY12x Phase 1 Cab-e / $147M 2020 Cab-e / Phas
Slide 22: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region and Industry segments Revenues Mix Customers and Churn Top 10 Customers Financial Services EMEA Rank Type of Customer %MRR Region Count IBX Count 16% 1 Network 2.9% 3 136 33% INT 2 Cloud & IT Services 2.3% 3 64 Network 18% Asia- Ente
Slide 23: Non-Financial Metrics
(1) Non-Financial Metrics FY 2019 FY 2020 Q1 Q2 Q3 Q4 Q1 QoQ Interconnections Americas 147,800 149,600 151,800 153,900 155,700 1,800 EMEA 117,900 119,900 122,900 124,800 127,000 2,200 Asia-Pacific 58,500 59,500 60,900 62,200 63,400 1,200 Worldwide Cross Connections 324,200 329,000 335,600 340,900 34
Slide 24: Equinix Announced Expansions
Equinix Announced Expansions (1) Cabinet Equivalent (1) 2020 2021 Total Capex Capacity In Data Center Status Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $US millions Ownership Future Phases BO2 phase 2 (Boston) Previously Announced 550 $32 Owned 500 CH3 phase 6 (Chicago) Previously Announced 1,225 $31 Owned - DA11 phas
Slide 25: Long-Term Lease Renewals
Long-Term Lease Renewals Weighted average lease maturity of greater than 18 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 95 of 211 IBXs Last Possible Expiration Date (3) 71% • 14.4M of 24.5M total gross s
Slide 26: Same Store Operating Performance
(1) Same Store Operating Performance Revenues ($M) Cash Cost, Gross Profit and PP&E ($M) Trailing 4-Qtr Inter- Services/ Total Non- Total Cash Cost of Cash Gross Cash Gross Gross Cash Return on Category Colocation connection Other Recurring recurring Revenues Revenues Profit Margin % PP&E Gross PP&E
Slide 27: Consolidated Portfolio Operating Performance
Consolidated Portfolio Operating Performance Cabinets Billed Q1 20 Revenues ($M) (1) Total Cabinet Owned % Cabinet Cabinets Utilization Total of Total Category # of IBXs Capacity Billed % Recurring Recurring Americas (2) Owned 46 77,400 58,200 75% $417 Leased 40 33,900 27,800 82% $197 Americas Total
Slide 28: Data Center Portfolio Composition
Data Center Portfolio Composition Metro Count Stabilized Expansion New Acquisition xScale Owned Leased Atlanta Bogota 5 AT2, AT3, AT4, AT5 1 BG1 AT1 AT4 BG1 AT1, AT2, AT3, AT5 Change Summary (1) Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1, CH2, CH4 Expansion to Stabilized
Slide 29: Adjusted Corporate NOI
(1) Adjusted Corporate NOI ($M, except # of IBXs) Calculation Of Adjusted Corp NOI Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 (1) # of IBXs 208 204 203 202 201 Recurring Revenues (2) $1,355 $1,333 $1,316 $1,301 $1,273 Recurring Cash Cost of Revenues Allocation (423) (425) (412) (408) (386) Cash Net Ope
Slide 30: Adjusted NOI Composition – Organic
(1) Adjusted NOI Composition – Organic Q1 2020 Total Cabinet Q1 2020 Quarterly # of Cabinet Cabinets Utilization Recurring Adjusted NOI Category IBXs Capacity Billed % Revenues ($M) ($M) % NOI Stabilized Owned (2) 54 94,500 80,200 85% $467 $325 39% Leased 94 89,400 73,700 82% $463 $271 33% Stabilize
Slide 31: Components of Net Asset Value
Components of Net Asset Value Operating Portfolio Adjusted Q1 20 Quarterly Ownership Reference NOI Adjusted NOI ($M) Stabilized Owned Adjusted NOI Segments $325 Stabilized Leased Adjusted NOI Segments $271 Expansion Owned Adjusted NOI Segments $148 Expansion Leased Adjusted NOI Segments $83 Other Re
Slide 32: Debt Summary
Debt Summary Spread / Interest First Call First Call / Balance (1) Debt Coupon Rate Maturity Date Current Call ($M) Debt Amortization (2) Revolver L + 100 1.959% Dec-22 - - 250 Term Loan A - SEK, GBP, JPY (3) L + 120 1.353% Dec-22 - - 1,219 • $750M senior unsecured 364-Day Facility Senior Notes ente
Slide 33: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding 85.9 -0.3 ~86.5 0.5 85.3 85.3 ~86.3 84.8 0.2 84.1 0.8 1.5 1.5 1.6 1.3 1.3 85.3 Shares Est. Employee ATM Offering Est. Shares Est. Weighted Est. Weighting Est. Fully Diluted Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Outstanding @
Slide 34: Capital Expenditures Profile
Capital Expenditures Profile ($M) Confidential – © 2020 Equinix Inc. Equinix.com 34
Slide 35: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies (4) Currency % of Revenues Revenue FX Rates Blended (4) Guidance (2) Blended % of CHF GBP Currency Hedge Rate Guidance (3) Rate (1) Hedge % Revenues 1% 9% Rate (2) EUR HKD USD 1.00 42% 20% 4% AUD EUR to USD 1.10 1.14 1.13 64% 20% 4% GBP to USD 1.24 1.30 1.28 72% 9% J
Slide 36: Industry Analyst Reports
Industry Analyst Reports Solution Category Reports • Trends Driving the MTDC and Services Industry 2020, 451 Research, 1/28/20 • IDC names Equinix a Leader in Colocation & Interconnection Services, IDC, 1/10/20 Interconnection • Infrastructure is Everywhere: The Evolution of Data Centers, Gartner, 7
Slide 37: 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, IR and Sustainability Berenberg Nate Crossett 650-598-6583 BMO Capital Markets Ari Klein krymill@equinix.com Citigroup Mike Rollins Ke
Slide 38: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions Confidential – © 2020 Equinix Inc. Equinix.com 38
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2020 Equinix Inc. Equinix.com 39
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2020 Equinix Inc. Equinix.com 40
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2020 Equinix Inc. Equinix.com 41
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2020 Equinix Inc. Equinix.com 42
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2020 Equinix Inc. Equinix.com 43
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations Consolidated NOI calculation Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 (unaudited and in thousands) Revenues $1,444,542 $1,417,135 $1,396,810 $1,384,977 $1,363,218 Non-Recurring Revenues (NRR) (1) 77,920 75,369 77,279 78,456 87,343 Other Revenues (2) 11,990 8,756 3,523 5,859 2
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Income from Operations $ 253,484 $ 312,974 $ 285,368 $ 291,781 $ 279,508 Adjustments: Depreciation, Amortization and Accretion Expense 337,431 328,295 321,746 320,550 314,705 Stock-based Compensation Expens
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: 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 48: Confidential – © 2020 Equinix Inc. Equinix.com
Confidential – © 2020 Equinix Inc. Equinix.com 48