Slide 1: Q1 2019 Earnings Conference Call
Q1 2019 Earnings Conference Call NASDAQ: EQIX Presented on May 1, 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: Q1 2019 Financial Highlights
Q1 2019 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues Revenues Growth Q1 19 ($M) $1,363 QoQ YoY $1,262 $1,284 $1,310 $1,216 As-reported 4% 12% Normalized and (1) 3% 11% Constant Currency $1,188 $1,208 $1,230 $1,275 $1,151 (1) Normalized MRR 3% 9% Q1 18 Q2 18 Q3 18 Q4 18 Q1
Slide 4: Q1 2019 Consolidated Results
Q1 2019 Consolidated Results ($M Except for AFFO per Share and Q1 19 Non-Financial Metrics) Guidance Actual QoQ YoY (1) Revenues $1,342 - 1,352 $1,363 4% 12% Cash Gross Profit $915 6% 12% Cash Gross Margin % ~66% 67.1% Cash SG&A $255 3% 6% Cash SG&A % 19 - 20% 18.7% (2) Adjusted EBITDA $624 - 634 $6
Slide 5: Americas Performance
Americas Performance Revenues Q1 19 ($M) Revenues Growth $626 $638 $644 QoQ YoY $603 $618 As-reported 1% 7% Normalized and (1) 1% 6% Constant Currency (1) Normalized MRR 1% 5% Adjusted EBITDA Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Growth QoQ YoY Adjusted EBITDA Margin Adjusted EBITDA Adjusted EBITDA As
Slide 6: EMEA Performance
EMEA Performance Revenues $435 Revenues Q1 19 ($M) Growth QoQ YoY $397 $403 $380 $383 As-reported 8% 14% Normalized and (1) 6% 15% Constant Currency (1) Normalized MRR 3% 13% Adjusted EBITDA Q1 19 Growth QoQ YoY Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 As-reported 10% 20% Adjusted EBITDA Adjusted EBITDA Adjust
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues $284 Revenues Q1 19 ($M) $269 $261 $261 Growth QoQ YoY $234 As-reported 6% 22% Normalized and (1) 4% 16% Constant Currency (1) Normalized MRR 7% 17% Adjusted EBITDA Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Growth QoQ YoY Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Ma
Slide 8: Capital Structure
Capital Structure Raised $1,242 million in equity and S&P credit rating upgraded to investment grade (BBB-) Financing Activity • On March 4th, raised $1,242M in As-reported ($M) Q4 18 Q1 19 Net Leverage Ratio follow-on equity offering (5) (3) (Target 3.0x – 4.0x) (1) • On April 2nd, paid down 1st of
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.4% 4.3% ($M) $70 • Recurring capital expenditures typically 3.3% 2.9% 13% trend between 3 and 5% of revenues $55 18% 13% $42 • Maintenance capital expenditures can vary 24% $35 15% 1.5% by quarter based on maintenance schedules 14% 12% 26% 70% $2
Slide 10: Stabilized IBX Growth – Organic
Stabilized IBX Growth – Organic (1) (2) Stabilized, Expansion & New IBXs Stabilized IBX Profitability ($M) Last Quarter $2,104 $98 $6,958 $3,105 Reported # of IBXs Q1 19 Revenues ($M) ~31% annual Cash Gross Profit on Gross PP&E investment (5) Expansion: Stabilized: 25% Stabilized: 190 85% Growth YoY
Slide 11: 2019 Financial Guidance
2019 Financial Guidance ($M except AFFO per Share) FY 2019 Q2 2019 (1) (2) Revenues $5,545 - 5,595 $1,381 - 1,391 Cash Gross Margin % 66 - 67% 65 - 66% Cash SG&A % 18 - 19% 18 - 19% (3) (4) Adjusted EBITDA $2,640 - 2,680 $649 - 659 Adjusted EBITDA Margin % 47 - 48% ~47.2% Recurring Capital Expenditu
Slide 12: FY19 Guidance
FY19 Guidance Revenues Adjusted EBITDA Raise full year revenues guidance by $25M Raise full year adjusted EBITDA guidance by $30M Normalized 47.6% As-reported Margin 47 - 48% Constant Currency (1) YoY Growth ~9% (3) (4) Margin excl. Integration 48.2% 48.3% Costs and ASC 842 ($M) 9 - 10% 9 - 11% $5,5
Slide 13: Q2 19 Guidance
Q2 19 Guidance Revenues Adjusted EBITDA (2) Q2 normalized growth of 2% following a record Q1 step-up Adjusted EBITDA QoQ impacted by lower Q1 costs EBITDA Margin ($M) 48.4% 48.5% 47.5% 47.2% ~2% $1,381 - 1,391 ~0% $660 $661 $1 $654 - 664 -$5 $649 - 659 $1,363 $1,364 $1 (1) Q1 19 Reported Normalizing
Slide 14: FY19 AFFO and AFFO per Share Guidance
(1) FY19 AFFO and AFFO per Share Guidance Raise full year AFFO guidance by $45M; AFFO per share growth of 8 - 9% Share Count (Diluted) Normalized Constant Currency AFFO per Share (Diluted) YoY Growth ($M except AFFO per Share) 1 Raise full year AFFO Guidance AFFO per Share (2) Prior Full Year Guidan
Slide 15: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) ~13% +19% ~$820 $727 $612 $492 $394 2019E Cash Dividend of ~$820M • Continued growth of both our annual 46% 43% 43% total cash dividend amount and our 47% 44% Payout Payout Payout Payout Payout dividend per share Ratio Ratio Ratio Ratio Ratio 2015 2016
Slide 16: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 202 Data Centers • 341,000+ Total Interconnections • 20 years of deep expertise • 52 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Interne
Slide 17: Equinix Overview
(1) Equinix Overview • Global footprint: 202 data centers in 52 metros Unique Portfolio of Data • Network dense: 1,800+ networks; 100% of Tier 1 Network Routes Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 341,000+ Total Interconnections • 2019 expecte
Slide 18: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix global reach expanding across 52 metro areas and 24 countries 5 Continents 24 Countries 52 Metro areas 202 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 12 Metros Multiple Locations (1) • Geographic footpr
Slide 19: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Customers and Churn Revenues Mix Top 10 Customers Rank Type of Customer %MRR Region Count IBX Count 1 Network 2.6% 3 135 2 Cloud & IT Services 2.3% 3 54 Financial Services 3 Enterprise 2.3% 3 48 EMEA 16% 32% 4 Clo
Slide 20: Revenues by Product by Region
Revenues by Product by Region Americas EMEA Asia-Pacific Worldwide +12% +4% ($M) $1,363 $1,310 $88 $1,216 $80 $81 $65 $78 $74 +7% $213 $207 +1% $195 $638 $644 $603 $38 $38 $27 $25 $28 +14% $20 $137 $139 +8% +22% $129 $435 $403 +6% $380 $34 $21 $32 $945 $981 $24 $31 $38 $284 $32 $35 $269 $881 $35 $23
Slide 21: Non-Financial Metrics
(1) Non-Financial Metrics FY 2018 FY 2019 Organic Total Total Q1 Q2 Q3 Q4 Q1 QoQ Interconnections Americas 140,200 142,100 143,500 145,900 147,800 1,900 EMEA 94,700 96,900 99,300 115,500 117,900 2,400 Asia-Pacific 48,100 49,300 51,600 57,300 58,500 1,200 Worldwide Cross Connections 283,000 288,300 2
Slide 22: Equinix Announced Expansions 2019 - 2020
Equinix Announced Expansions 2019 - 2020 Cabinet (1) (1) Equivalent 2019 2020 Total Capex(1) (1) Capacity In IBX Center Status Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $US millions Ownership Future Phases DA6 phase III (Dallas) Open 425 $23 Owned CH3 phase V (Chicago) Previously Announced 450 $15 Owned 1,175 SE4 pha
Slide 23: Long-Term Lease Renewals
Long-Term Lease Renewals Weighted average lease maturity of greater than 18 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 87 of 202 IBXs Last Possible Expiration Date 63% • Added LD7,* PA8 and SP2 • 12.7M
Slide 24: Same Store Operating Performance – Organic
Same Store Operating Performance – Organic (1) (2) Revenues ($M) Cash Cost, Gross Profit and PP&E ($M) Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on Category Colocation connection Other Recurring recurring Revenues Revenues Profit Margin % P
Slide 25: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance Cabinets Billed Q1 19 Revenues ($M) Total Cabinet Owned % (4) Cabinet Cabinets Utilization Total of Total Category # of IBXs Capacity Billed % Recurring Recurring Americas Owned (2) 45 72,900 54,100 74% $394 Leased 42 35,100 28,700 82% $201 Americas T
Slide 26: IBX Portfolio Composition
(1) Metro IBX Portfolio Composition Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3, AT4, AT5 AT1 AT4 AT1, AT2, AT3, AT5 Bogota Boston 1 BG1 2 BO1 BO2 BG1 BO2 BO1 Change Summary (2) Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1, CH2, CH4 Culpeper 4 CU1,CU2, CU3 CU4 CU1, CU
Slide 27: Adjusted Corporate NOI
(1) Adjusted Corporate NOI ($M, except # of IBXs) ($M) Calculation Of Adjusted Corp NOI Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 # of IBXs (1) 201 199 199 199 189 (2) Recurring Revenues $1,273 $1,228 $1,206 $1,186 $1,149 Recurring Cash Cost of Revenues Allocation (386) (387) (380) (369) (349) Cash Ne
Slide 28: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Q1 2019 Q1 2019 Total Cabinet Recurring (3) Quarterly (3) # of Cabinet Cabinets Utilization Revenues Adjusted NOI Category IBXs Capacity Billed % ($M) ($M) % NOI Stabilized Owned (2) 42 68,700 60,200 88% $365 $255 33% Leased 92 82,700 68,500 83% $434 $257 33% S
Slide 29: Components of Net Asset Value
Components of Net Asset Value Operating Portfolio Adjusted Q1 19 Quarterly Ownership Reference NOI Adjusted NOI ($M) Stabilized Owned Adjusted NOI Segments $255 Stabilized Leased Adjusted NOI Segments $257 Expansion Owned Adjusted NOI Segments $180 Expansion Leased Adjusted NOI Segments $76 Quarterl
Slide 30: Debt Summary
Debt Summary Spread / Interest First Call Balance (1) Debt Maturity Coupon Rate Date ($M) Revolver L + 100 - Dec-22 - $ - (2) Term Loan A - SEK, GBP, JPY L + 120 1.574% Dec-22 - 1,321 Debt Amortization Senior Notes USD due in 2022 5.375% 5.375% Jan-22 Jan-18 750 • $1,321M multi-currency Term Loan A
Slide 31: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding ~84.4 0.4 84.1 -0.8 ~84.1 3.0 80.7 80.4 79.5 79.5 80.7 0.7 1.5 1.4 1.5 1.2 1.2 Shares Est. Employee Follow-on Offering Est. Shares Est. Weighted Est. Weighting Est. Fully Diluted Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Outstan
Slide 32: Capital Expenditures Profile
(1) Capital Expenditures Profile ($M) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Recurring Sustaining IT & Network 5.7 12.4 13.3 5.1 9.1 IBX Maintenance 10.8 49.0 34.8 30.6 21.4 Re-configuration Installation 4.4 8.9 7.3 6.4 4.8 Subtotal - Recurring 20.9 70.2 55.4 42.2 35.2 Non-Recurring IBX Expansion 2
Slide 33: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies (4) Revenue FX Rates Currency % of Revenues Blended Guidance (2) Blended(3) % of (4) Currency (1) Hedge Rate Guidance Rate (2) Hedge % Revenues CHF GBP Rate 1% 9% USD 1.00 43% EUR HKD EUR to USD 1.12 1.19 1.16 63% 20% 20% 4% AUD GBP to USD 1.30 1.36 1.34 69% 9% 4% JP
Slide 34: Industry Analyst Reports
Industry Analyst Reports Solution Category Report • Equinix ups its Forecast for Interconnection and Digital-Ready Infrastructure, 451 Research, 10/22/18 Interconnection • Equinix Vendor Profile: Driving for Global Reach, IDC, 3/31/18 • Equinix Expands ECX Fabric’s Global Footprint to Meet Growing N
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 Berenberg Nate Crossett 650-598-6583 BMO Capital Markets Ari Klein krymill@equinix.com Citigroup Mike Rollins Keith
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions Confidential – © 2019 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations 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
(1) Non-GAAP Reconciliations Consolidated NOI calculation Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 (unaudited and in thousands) Revenues $ 1,363,218 $ 1,310,083 $ 1,283,751 $ 1,261,943 $ 1,215,877 (2) Non-Recurring Revenues (NRR) 87,343 80,242 75,387 73,572 64,314 (3) Other Revenues 2,783 1,353 1,964
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Income from Operations $ 279,508 $ 270,717 $ 265,753 $ 215,038 $ 225,875 Adjustments: Depreciation, Amortization and Accretion Expense 314,705 305,130 306,318 308,828 306,465 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, 2018 Expansion IBXs: Phase 1 began operating before January 1, 2018, and there is an expected expansion of one or more additional phases leveraging the existing capital infrastructure
Slide 45: Confidential – © 2019 Equinix Inc. Equinix.com
Confidential – © 2019 Equinix Inc. Equinix.com 45