Slide 1: Q2 2016 Earnings Conference Call
Q2 2016 Earnings Conference call NASDAQ: EQIX Presented on August 3, 2016 © 2016 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: Q2 2016 Financial Highlights
Q2 2016 Financial Highlights Revenues ($M) Recurring Revenues Non-recurring Revenues Revenues of $900.5 Million $900.5 $844.2 • Revenues up 7% QoQ and 35% YoY, $756.0 million $730.5 organic and $144.5 million from acquisitions $665.6 $686.6 $851.8 • Revenues up 3% QoQ and 15% YoY on an organic and $
Slide 4: Stabilized IBX Growth
Stabilized IBX Growth (1) (1) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter Reported ($4,290) $1,857 $1,331 $39 (3) (4) (4) (6) (2) (1) New IBXs where Phase 1 began operating after January 1, 2015; added a new opening (2) Revenues represent Q2 16 as-reported revenues in
Slide 5: Q2 2016 Consolidated Results
Q2 2016 Consolidated Results Quarter ($M Except for Non-Financial Metrics) Q2 16 Q2 16 Q1 16 Q2 15 Q2 16 vs. Q2 16 vs. Guidance Actual Actual Actual Q1 16 % ∆ Q2 15 % ∆ Revenues $893 - $899 $ 900.5 $ 844.2 $ 665.6 7% 35% Cash Gross Profit 608.5 573.1 460.8 6% 32% Cash Gross Profit Margin % ~67% - 68
Slide 6: Americas Performance
Americas Performance Q2 Highlights Q2 Business Conditions ($M) $394.5 $404.4 $413.5 • Q2 reported revenues up 2% QoQ and 11% YoY $371.4 $382.6 • Q2 revenues up 2% QoQ and 12% YoY on a constant currency basis (1) $180.8 • Q2 Adjusted EBITDA up 6% QoQ and 14% YoY on an as- $174.2 $184.5 $195.0 $170.9
Slide 7: EMEA Performance
EMEA Performance Q2 Highlights Q2 Business Conditions ($M) $300.6 • Q2 revenues up 12% QoQ and 73% YoY on an as-reported basis $267.9 $107.2 $84.4 • Q2 revenues up 4% QoQ and 15% YoY on an organic and constant $182.7 currency basis (1) $174.0 $177.6 $133.5 • Q2 Adjusted EBITDA up 20% QoQ and 68% YoY
Slide 8: Asia-Pacific Performance
Asia-Pacific Performance Q2 Highlights Q2 Business Conditions ($M) $186.4 $171.9 $37.3 • Q2 revenues up 8% QoQ and 55% YoY on an as-reported basis $153.3 $34.2 • Q2 revenues up 3% QoQ and 21% YoY on an organic and constant $120.2 $126.5 $21.6 currency basis (1) $84.7 $91.8 • Q2 Adjusted EBITDA up 8%
Slide 9: Capital Structure and Debt Maturity
Capital Structure and Debt Maturity Capitalization Table ($M) Debt Maturity Profile (4) ($M) Q2 16 Q1 16 Capital Leases $ 1,607 $ 1,600 Other Debt 5,449 5,641 (1) Total Debt 7,056 7,241 (2) Less: Cash & Investments 494 650 Net Debt $ 6,562 $ 6,591 Market Value of Equity $ 27,558 $ 22,961 Enterprise
Slide 10: Dividend Outlook
Dividend Outlook ($M) AFFO outlook $1,040-1,050 (1) (1) • Increased 2016 guidance to $1,040-$1,050 • Implies growth of 26% YoY on an as-reported (2) basis and 32% growth YoY on a normalized 832 (1) and constant currency basis 762 680 Dividend growth potential • AFFO growth provides capacity for long
Slide 11: Capex
Capex Q2 2016 Capex and Regional Breakout Recurring Non-Recurring ($M) ($M) Recurring capital APAC, 20% expenditures Sustaining IT & Network, 23% • Expenditures to extend useful life of Americas, 43% IBXs or other Equinix assets in Installation, support of current revenues Maintenance, 16% 61% EMEA,
Slide 12: FY16 Revenues Guidance
FY16 Revenues Guidance ($M) 2 3 3,598-3,608 +13.8% -6 555 1 3,049-3,059 2,726 2,684 -42 (1) FY15 Reported FY15 Organic FY16 Organic Acquisitions LD2 FY16 Guidance Normalized 1 Normalizing Items ($42M) 2 Raise full year guidance 3 Acquisitions expected to deliver within Foreign Exchange (2) ($21M) th
Slide 13: FY16 Adjusted EBITDA Guidance
FY16 Adjusted EBITDA Guidance 46.7% 46.8% 48.0% 46.2% 47.7% ($M) +16.8% 1,713-1,723 -3 1,658-1,668 -55 55 1,461-1,471 255 1,272 1,256 -17 2 3 1 (1) (2) FY15 FY15 Organic FY16 Organic Acquisitions LD2 Integration FY16 Integration (2) FY16 Reported Normalized costs Guidance costs Guidance Normalized 1
Slide 14: Q3 16 Guidance
Q3 16 Guidance ($M) Revenues Adjusted EBITDA 46.7% 47.9% 47.8% 46.0% 2.4% 915-921 +2.2% 436-442 901 430 -17 -4 897 9 419-425 1 420 (1) 2 Q2’16 Reported Q2’16 Q3’16 Guidance Q2’16 Q2’16 Q3’16 Integration Q3’16 Normalized Reported Normalized Normalized costs Guidance Guidance 1 Normalizing Items ($4M)
Slide 15: FY16 AFFO Guidance
FY16 AFFO Guidance ($M) Change from Prior Guidance (1) +13 +10 0 0 0 +7 +30 0 0 +30 1,658 - 1,668 -385 -50 1,159 - 1,169 -145 55 1,040 - 1,050 64 -64 25 (2) (3) FY16 Net Interest Income Tax Recurring FX Loss Other FY16 AFFO FX Loss Integration FY16 Adjusted Expense CapEx Related to Guidance Related
Slide 16: 2016 Financial Guidance
2016 Financial Guidance (1) $M FY 2016 Q3 2016 (2) (3) Revenues $3,598 - $3,608 $915 - $921 Cash Gross Margin % ~ 68% ~ 68% Cash SG&A $782 - $792 $199 - $205 Cash SG&A % 21 – 22% 21 - 22% (4) (5) Adjusted EBITDA $1,658 - $1,668 $419 - $425 Adjusted EBITDA Margin % ~46.2% ~46.0% Capex $950 - $1,000 $
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data Global Interconnection Business Data Centers Ecosystems 146 Data Centers 1,400+ Networks 8,000+ Businesses 14.5M Square Feet 182,900 Cross-connects Equinix Marketplace™ 99.9999% Uptime 100% of Tier 1 Network Revenue Opportunities Record Routes © 2016 Equinix
Slide 18: Equinix Overview
Equinix Overview (1) Unique portfolio of data center assets Development pipeline • Global footprint: 146 data centers in 40 metros • Long history of development success through • Network dense: 1,400+ networks expansions, campuses and known demand pipeline • Cloud dense: 2,600+ Cloud & IT service pr
Slide 19: Equinix Global Platform
Equinix Global Platform (1) Equinix offers broad geographic reach and significant scale within each region (2) Platform Equinix • Geographic footprint is unmatched and remains a unique differentiator • Multi-region deployments outpace single- region deployments Expansion strategy • Use unique market
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenue by Customer, Region & Industry 6% Network Recurring Customer % of Recurring Revenues 16% 24% (2) MIS Multi-Metro Customers 81% (2) Financial Multi-Region Customers 69% 18% Services (2) Customers in 3 Regions 54% 95% Top 50 Customers (4) 38% 14% Enterprise In
Slide 21: Non-Financial Metrics
Non-Financial Metrics (1) FY 2015 FY 2016 Q2 Q3 Q4 Q1 Q2 # of Cross-connects INTERCONNECTION Americas 86,300 89,800 93,800 97,700 101,200 EMEA 39,700 41,500 43,900 44,500 45,500 1,400+ Networks Asia-Pacific 30,700 32,400 33,500 34,600 36,200 182,900+ Cross-connects Worldwide 156,700 163,700 171,200
Slide 22: Equinix Announced Expansions 2016-2017
Equinix Announced Expansions 2016-2017 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 AT1 phase IV (Atlanta) Q3 2016 365 $31 Global Total DC7 phase III (Ashburn) Q4 2016 230
Slide 23: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 20 years including extensions (1) Global Lease Portfolio Expiration Waterfall (2) Equinix Owned Sites % Leases Renewing by Square Footage • Own 31 of 146 IBXs Last Possible Expiration Date 73% • 5.0M of 14.5M total gross square feet (3) •
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 Only)
(1) Same Store Operating Performance (Organic Only) Stabilized and Expansion – Cash Gross Profit grew 14.3% driven by Interconnection growth Revenues #039;000s Cash Cost & Gross Profit #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on (1) Ca
Slide 26: Consolidated Portfolio Operating Performance (Incl. Telecity & Bit-isle)
(1) Consolidated Portfolio Operating Performance (Incl. Telecity & Bit-isle) By Region & Ownership – Owned Assets Generated 39% of Our Recurring Revenues (Organic Only) Cabinets Billed Revenues (Q2 2016) #039;000s Total Cabinet Owned % of Cabinet Cabinets Utilization Inter- Services/ Total Non- Total T
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Same-Store Same-Store IBX (TCY IBX (EQIX Same-Store Same-Store IBX Location Ownership IBX Location Ownership Location Ownership IBX Location Ownership Classification Classification Name) (3) Name) Classification Classification Americas EMEA (1) Telecity Asia-Pacif
Slide 28: Adjusted Corporate NOI (Incl. Telecity & Bit-isle)
(1) Adjusted Corporate NOI (Incl. Telecity & Bit-isle) (unaudited) Calculation Of Adjusted Corp NOI (unaudited) Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 (1) # of IBXs 144 144 105 104 104 (2) Recurring Revenues $ 847,108 $ 792,269 $ 665,835 $ 644,455 $ 623,847 Recurring Cash Cost of Revenues Allocatio
Slide 29: Adjusted NOI Composition (Incl. Telecity & Bit-isle)
(1) Adjusted NOI Composition (Incl. Telecity & Bit-isle) By Stabilization and Ownership – Owned Assets and NOI are predominantly in campus locations in our largest global markets Total Cabinet Adjusted NOI by Region Q2 2016 Q2 2016 # of Cabinet Cabinets Utilization Recurring Quarterly Territory IBXs
Slide 30: Components of NAV (Incl. Telecity & Bit-isle)
Components of NAV (Incl. Telecity & Bit-isle) (unaudited) Operating Portfolio Adjusted % of Adjusted NOI Quarterly Adjusted Ownership Reference NOI AMER EMEA APAC NOI Stabilized Owned 64% 36% 0% Adjusted NOI Segments $116,476 Stabilized Leased 75% 5% 20% Adjusted NOI Segments 179,304 Expansion Owned
Slide 31: Market Capitalization & Debt Summary
Market Capitalization & Debt Summary ($000’s except per share data) Spread / Jun 30, (2) 2016 Debt Coupon Interest Rate Maturity Balance Market Capitalization Summary Revolver L + 140 2.05% Dec-19 - Common shares outstanding 71,075 Term Loan A L + 175 1.90% Dec-19 441,272 Market Price as of Jun 30,
Slide 32: Fully Diluted Weighted Average Shares Forecast
Fully Diluted Weighted Average Shares Forecast (‘K) 71,400 ~753 ~-424 71,729 6,854 ~1,601 62,100 ~845 Shares outstanding Est. Employee 2016 Convertible Shares Issued Est. Shares Est. Dilutive Est. Weighting of Est. Fully Diluted @ 12/31/15 - Actual Equity Awards Notes, Net In Connection Outstanding
Slide 33: Recurring CapEx
Recurring CapEx Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Recurring Sustaining IT & Network $ 7,204 $ 10,008 $ 9,400 $ 6,554 $ 8,249 IBX Maintenance 19,631 17,279 29,574 13,886 13,652 Re-configuration Installation 5,094 4,511 5,693 5,467 5,429 Subtotal - Recurring 31,928 31,798 44,668 25,906 27,330 No
Slide 34: FY16 Revenue FX Hedging
FY16 Revenue FX Hedging (4) Revenue FX Rates Currency % of Revenues Blended Guidance (2) Blended % of Currency Hedge Rate Guidance (3) Rate (1) Hedge % Revenues (4) Rate CHF GBP USD 1.0000 43% 1% EUR 11% EUR to USD 1.1072 1.1229 1.1183 52% 19% HKD 19% GBP to USD 1.2907 1.5459 1.4272 54% 11% 4% AUD U
Slide 35: Equinix Leadership and Investor Relations
Equinix Leadership and Investor Relations Executive Team Equinix Investor Relations Contacts Katrina Rymill Paul Thomas VP, Investor Relations Director, Investor Relations 650-598-6583 650-598-6442 krymill@equinix.com pthomas@equinix.com Equinix Media Contacts Steve Smith Keith Taylor Charles Meyers
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions © 2016 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2016 2016 2015 We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2016 2016 2015 We define cash operating expenses as operating expenses less depreciation, amortization, stock-based compensation and acquisit
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2016 2016 2015 We define adjusted EBITDA as income from continuing operations plus depreciation, amortization, accretion, stock-based compens
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2016 2016 2015 The geographic split of our adjusted EBITDA is presented below: Americas income from continuing operations $ 87,100 $ 88,539 $
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2016 2016 2015 We define cash gross margins as cash gross profit divided by revenues. Our cash gross margins by geographic region is presente
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands, except per share amounts) Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 CALCULATION OF ADJUSTED EBITDA Income from continuing operations $ 151,655 $ 112,688 $ 135,877 $ 140,883 $ 139,133 $ 151,449 $ 127,826 $ 135,131 Adjustments
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations NAREIT Funds From Operations (NAREIT FFO) (unaudited and in thousands, except per share amounts) Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 RECONCILIATION OF NET INCOME (LOSS) TO NAREIT FFO Net income (loss) $ 44,711 $ (31,111) $ 10,731 $ 41,132 $ 59,459
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Funds From Operations (AFFO) (unaudited and in thousands, except per share amounts) Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 NAREIT FFO attributable to common shareholders $ 201,515 $ 115,875 $ 131,483 $ 151,197 $ 167,368 $ 179,190 $(241,338)
Slide 45: 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 46: © 2016 Equinix Inc. Equinix.com
© 2016 Equinix Inc. Equinix.com 46