Equinix, Inc. · NASDAQ:EQIX

Equinix — Q1 2021 Earnings Presentation

48 slides from Equinix's earnings presentation, Apr 28, 2021

  1. Slide 1: Q1 2021 Earnings Conference Call

    Q1 2021 Earnings Conference Call NASDAQ: EQIX Presented on April 28, 2021 © 2021  Equinix.com 1

  2. 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

  3. Slide 3: Q1 2021 Financial Highlights

    Q1 2021 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues Revenues Growth Q1 21 ($M) $1,596 QoQ YoY $1,520 $1,564 $1,445 $1,470 Strong QoQ momentum As-reported 2% 10% due to $45M MRR step- up offset by a $13M Normalized and (1) decrease in NRR, as 1% 7% $1,432 $1,466 $1,511 exp

  4. Slide 4: Q1 2021 Consolidated Results

    Q1 2021 Consolidated Results $M except for AFFO per Share and Q1 21 Non-Financial Metrics Guidance Actual QoQ YoY (1) Revenues $1,587 - 1,607 $1,596 2% 10% Cash Gross Profit $1,085 6% 12% Cash Gross Margin % 68.0% Cash SG&A $312 0% 10% Cash SG&A % 19.5% (2) Adjusted EBITDA $737 - 757 $773 9% 13% Adj

  5. Slide 5: Americas Performance

    Americas Performance Revenues Organic Revenues Axtel/Bell/Packet $712 $726 Q1 21 ($M) Revenues Growth $662 $661 $672 $43 $49 QoQ YoY $8 $13 Axtel: $6M $13 Packet: $10M As-reported 2% 10% Bell: $32M Normalized and (1) 2% 5% Constant Currency $654 $648 $659 $669 $677 (1) Normalized MRR 2% 4% Adjusted

  6. Slide 6: EMEA Performance

    EMEA Performance Revenues Revenues Q1 21 ($M) $518 $511 $519 Growth QoQ YoY $479 $488 Reflects $10M of lower NRR QoQ As-reported 1% 8% Normalized and (1) 0% 7% Constant Currency (1) Normalized MRR 2% 9% Adjusted EBITDA Q1 21 Growth QoQ YoY Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 As-reported 3% 6% Adjusted EBI

  7. Slide 7: Asia-Pacific Performance

    Asia-Pacific Performance Revenues $351 Revenues Q1 21 $329 $341 ($M) $321 $304 Growth QoQ YoY As-reported 3% 16% Normalized and (1) 2% 10% Constant Currency (1) Normalized MRR 2% 10% Adjusted EBITDA Q1 21 Growth QoQ YoY Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Ma

  8. Slide 8: Capital Structure

    Capital Structure On April 28, S&P Global Ratings raised Equinix’s credit ratings to BBB Available Liquidity (1)(2) Recent Capital Markets Activity $3.7B • Redeemed €0.5B of legacy high yield Senior Notes with proceeds from the sale of €1.1B Senior Ratings Notes, which was our inaugural EUR green bo

  9. Slide 9: Capital Expenditures

    Capital Expenditures Recurring Capital Expenditures 4.8% ($M) • Recurring capital expenditures have $74 10% historically trended between 2% and 5% of 5% revenues, annually 2.5% 2.1% $38 • Maintenance capital expenditures can vary by 1.2% $30 12% 1.3% 23% 15% 85% $20 quarter based on maintenance sche

  10. Slide 10: Stabilized IBX Growth

    (1) (2) Stabilized IBX Growth Stabilized, Expansion & New IBXs Stabilized IBX Profitability ($M) Last Quarter $10,015 $3,973 $2,714 $77 Reported # of IBXs Q1 21 Revenues ($M) Expansion: 27% annual Cash Gross Profit on Gross PP&E 17% (3) investment (5) Growth YoY Stabilized: Stabilized: 211 85% Utili

  11. Slide 11: 2021 Financial Guidance

    (1) 2021 Financial Guidance ($M except AFFO per Share) FY 2021 Q2 2021 (2) (3) Revenues $6,559 - 6,619 $1,630 - 1,660 (4) (5) Adjusted EBITDA $3,071 - 3,131 $769 - 789 Adjusted EBITDA Margin % ~47% ~47% Recurring Capital Expenditures $175 - 185 $40 - 50 % of revenues ~3% 2 - 3% Non-recurring Capital

  12. Slide 12: FY21 Guidance

    FY21 Guidance (2) Revenues Adjusted EBITDA Raise underlying revenue by $40M against FX headwind of $61M Raise underlying adjusted EBITDA by $33M against FX headwind of $29M ($M) 46.8% As-reported Margin 47.1% Normalized (1) Constant Currency 7 - 8% 47.3% Margin excl. Integration 47.5% YoY Growth Cos

  13. Slide 13: Q2 21 Guidance

    Q2 21 Guidance Revenues Adjusted EBITDA As-reported Margin 48.4% 48.6% 47.9% 47.4% ($M) +3 - 5% $1,630 - 1,660 +3% $788 $773 -$9 $769 - 789 $769 -$5 $1,596 -$15 $1,581 (1) (1) (2) (3) (4) Q1 21 Reported Normalizing Q1 21 Normalized Q2 21 Guidance Q1 21 Reported Normalizing Q1 21 Q2 21 Integration Q2

  14. Slide 14: FY21 AFFO and AFFO per Share Guidance

    (1) FY21 AFFO and AFFO per Share Guidance (2) Raise underlying AFFO by $26M against FX headwind of $26M; AFFO per share growth to 9 - 11% Share Count (Diluted) ($M except AFFO per Share) Normalized Constant Currency YoY Growth AFFO per Share (Diluted) (3) AFFO 10 - 12% 88.4M 90.3M 90.3M 1 Raise unde

  15. Slide 15: Dividend Outlook

    Dividend Outlook Annual Cash Dividend ($M) ~10% +13% ~$1,029 $936 $826 $727 $612 2021E Cash Dividend of ~$1,029M • Continued growth of our annual total cash dividend amount 43% 44% 43% 43% 42% Payout Payout Payout Payout Payout Ratio Ratio Ratio Ratio Ratio • First quarter dividend of $2.87 to be pa

  16. Slide 16: Supplemental Financial and Operating Data

    Supplemental Financial and Operating Data All the Right All the Right All the Right PLACES PARTNERS POSSIBILITIES Place Infrastructure Connect to Everything Seize Opportunity with Wherever You Need It You Need to Succeed Agility, Speed and Confidence Global Footprint Global Ecosystem Experience 229

  17. Slide 17: Equinix Overview

    Equinix Overview (1) • Global footprint: 229 data centers in 63 metros Unique Portfolio of Data • Network dense: 1,800+ networks; 100% of Tier 1 Network Routes Center Assets • Cloud dense: 2,950+ Cloud & IT service providers • Interconnected ecosystems: 398,000+ Total Interconnections • 2021 expecte

  18. Slide 18: Pressing Our Advantage in All Markets

    Pressing Our Advantage in All Markets Equinix global reach expanding across 63 metro areas and 26 countries 5 Continents 26 Countries 63 Metro areas 229 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix • Geographic footprint is 27 Metros (1) 24 Metros 12 Metros 102 Data Cen

  19. Slide 19: xScale: Amplifying Our Balance Sheet to Extend Cloud Leadership

    xScale: Amplifying Our Balance Sheet to Extend Cloud Leadership Current Phase Status Phase Open Capacity Cost ($M) Objective • JV structures enable pursuit of strategic Hyperscale Paris 9x EMEA JV Open $115 10MW deployments to minimize dilution of Equinix returns and limits consumption of balance sh

  20. Slide 20: Customer Revenues Mix

    Customer Revenues Mix Diversified Revenues across Customer, Region and Industry segments Revenues Mix Customers and Churn Top 10 Customers Rank Type of Customer %MRR Region Count IBX Count EMEA 1 Network 2.5% 3 144 Enterprise 33% 34% INT 2 Cloud & IT Services 2.5% 3 68 Network 19% Asia- 24% 3 Cloud

  21. Slide 21: Non-Financial Metrics

    Non-Financial Metrics (1) FY 2020 FY 2021 Q1 Q2 Q3 Q4 Q1 QoQ Interconnections Americas 155,700 158,000 160,500 162,800 165,000 2,200 EMEA 127,000 128,600 131,200 132,500 133,700 1,200 Asia-Pacific 63,400 65,600 67,500 67,200 69,000 1,800 Worldwide Cross Connections 346,100 352,200 359,200 362,500 36

  22. Slide 22: Equinix Announced Retail IBX Expansions

    Equinix Announced Retail IBX Expansions Cabinet (1) Expansion Highlights Equivalent 2021 2022 (1) Total Capex Capacity In • We have 36 major builds underway IBX Data Center Status Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $US millions Ownership Future Phases SP3 phase 3 (São Paulo) Open 1,050 $25 Owned - in 28 market

  23. 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, 3) % Leases Renewing by Square Footage • Own 109 of 229 Data Centers Last Possible Expiration Date 71% • 16.2M of 26.8M total

  24. Slide 24: Same Store Operating Performance

    Same Store Operating Performance (1) 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 PP&E

  25. Slide 25: Consolidated Portfolio Operating Performance

    Consolidated Portfolio Operating Performance (1) Cabinets Billed Q1 21 Revenues ($M) Total Cabinet Owned % Cabinet Cabinets Utilization Total of Total Category # of IBXs Capacity Billed % Recurring Recurring (5) Americas (2) Owned 51 88,800 61,900 70% $444 Leased 38 33,600 26,400 79% $196 Americas T

  26. Slide 26: Data Center Portfolio Composition

    Data Center Portfolio Composition Metro Count Stabilized Expansion New Acquisition xScale Owned Leased Atlanta 5 AT2, AT3, AT4, AT5 AT1 AT4 AT1, AT2, AT3, AT5 Change Summary (1) (2) Bogota 1 BG1 BG1 Boston 1 BO2 BO2 Calgary 3 CL1, CL2, CL3 CL3 CL1, CL2 Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1,

  27. Slide 27: Data Center Portfolio Composition

    Data Center Portfolio Composition Metro Count Stabilized Expansion New Acquisition xScale Owned Leased Abu Dhabi 1 AD1 AD1 Change Summary (1) (2) (3) Amsterdam 9 AM1, AM2, AM3, AM5, AM6, AM8 AM4, AM7, AM11 AM1*, AM2*, AM3*, AM4*, AM5, AM6, AM7* AM8, AM11 Barcelona 1 BA1 BA1 Dubai 2 DX1, DX2 DX1, DX2

  28. Slide 28: Adjusted Corporate NOI

    (1) Adjusted Corporate NOI ($M, except # of IBXs) Calculation Of Adjusted Corp NOI Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 (1) # of IBXs 224 225 212 211 208 (2) Recurring Revenues $1,497 $1,453 $1,420 $1,385 $1,355 Recurring Cash Cost of Revenues Allocation (434) (466) (431) (416) (423) Cash Net Ope

  29. Slide 29: Adjusted NOI Composition – Organic

    Adjusted NOI Composition – Organic (1) Q1 2021 Q1 2021 Total Cabinet Recurring Quarterly # of Cabinet Cabinets Utilization Revenues Adjusted NOI Category IBXs Capacity Billed % ($M) ($M) % NOI Stabilized Owned (2) 59 116,500 99,300 85% $556 $371 40% Leased 95 106,900 91,600 86% $581 $371 40% Stabili

  30. Slide 30: Components of Net Asset Value

    Components of Net Asset Value Operating Portfolio Q1 21 Quarterly Ownership Reference Adjusted NOI Adjusted NOI ($M) Stabilized Owned Adjusted NOI Segments $371 Stabilized Leased Adjusted NOI Segments $371 Expansion Owned Adjusted NOI Segments $151 Expansion Leased Adjusted NOI Segments $31 Other Re

  31. Slide 31: Debt Summary

    Debt Summary Spread / Interest First Call First Call / Balance (1) Debt Redemption, Issuance and Debt Maturity Coupon Rate Date Current Call ($M) Amortization Revolver L + 1.00% 1.235% Dec-22 - - - • €500M 2026 Notes were redeemed on (2) Term Loan A - SEK, GBP, JPY L + 1.20% 1.215% Dec-22 - - 1,234

  32. Slide 32: Shares Forecast

    Shares Forecast (M) Fully Diluted Weighted Average Shares Common Stock Outstanding 89.6 -0.3 ~90.3 89.1 89.1 0.6 88.5 ~89.9 85.9 0.8 89.1 1.6 1.5 1.6 1.3 1.3 Shares Est. Employee Est. Shares Est. Weighted Est. Weighting Est. Fully Diluted Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Outstanding @ Equity Awards Out

  33. Slide 33: Capital Expenditures Profile

    Capital Expenditures Profile ($M) Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Recurring IBX Maintenance 13 63 28 19 9 Sustaining IT & Network 3 4 6 5 5 Re-configuration Installation 5 8 4 7 4 Subtotal - Recurring 20 74 38 30 18 Non-Recurring IBX Expansion 453 582 417 372 310 Transform IT, Network & Offi

  34. Slide 34: FX Rates, Hedging and Currencies

    FX Rates, Hedging and Currencies (4) Currency % of Revenues Revenue FX Rates (4) (1) (2) Blended Blended % of CHF GBP Currency Guidance Rate Hedge Rate (2) (3) (4) Guidance Rate Hedge % Revenues 1% 10% EUR HKD USD 1.00 39% 20% 4% EUR to USD 1.17 1.16 1.17 58% 20% AUD 5% GBP to USD 1.38 1.30 1.33 67%

  35. Slide 35: Future First Sustainability @ Equinix

    Future First Sustainability @ Equinix Our commitment to sustainability is driven by our belief in a future of possibility. AWARDS ESG RATINGS Do what it takes • Issued $2.5B+ in Green Bonds to drive to protect our investment in six project categories planet. • Joined EU Climate-Neutral Data Center 1

  36. Slide 36: Industry Analyst Reports

    Industry Analyst Reports Solution Category Reports • Interconnection 2020 – The Future is Programmable - 451 Research, 8/20 Interconnection • IDC names Equinix a Leader in Colocation & Interconnection Services - IDC, 1/10/20 • Infrastructure is Everywhere – The Evolution of Data Centers - Gartner, 2

  37. 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 Barclays Tim Long 650-598-6583 Berenberg Nate Crossett krymill@equinix.com BMO Capital Markets Ari Klein Keith T

  38. Slide 38: Appendix: Non-GAAP Financial Reconciliations & Definitions

    Appendix: Non-GAAP Financial Reconciliations & Definitions © 2021  Equinix.com 38

  39. Slide 39: Non-GAAP Reconciliations

    Non-GAAP Reconciliations © 2021  Equinix.com 39

  40. Slide 40: Non-GAAP Reconciliations

    Non-GAAP Reconciliations © 2021  Equinix.com 40

  41. Slide 41: Non-GAAP Reconciliations

    Non-GAAP Reconciliations © 2021  Equinix.com 41

  42. Slide 42: Non-GAAP Reconciliations

    Non-GAAP Reconciliations © 2021  Equinix.com 42

  43. Slide 43: Non-GAAP Reconciliations

    Non-GAAP Reconciliations © 2021  Equinix.com 43

  44. Slide 44: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Consolidated NOI calculation Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 (unaudited and in thousands) Revenues $ 1,596,064 $ 1,564,115 $ 1,519,767 $ 1,470,121 $ 1,444,542 Non-Recurring Revenues (NRR) (1) 80,899 95,149 82,550 68,832 77,920 Other Revenues (2) 18,537 16,384 17,510

  45. Slide 45: Non-GAAP Reconciliations

    Non-GAAP Reconciliations (unaudited and in thousands) Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Income from Operations $ 297,662 $ 228,606 $ 288,350 $ 282,488 $ 253,484 Adjustments: Depreciation, Amortization and Accretion Expense 394,318 378,859 362,286 348,434 337,431 Stock-based Compensation Expens

  46. 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

  47. 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

  48. Slide 48: © 2021  Equinix.com

    ull FQUINIX WHERE OPPORTUNITY CONNECTS

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