Slide 1: Q2 2015 Earnings Conference Call
Q2 2015 Earnings Conference call NASDAQ: EQIX Presented on July 29, 2015 © 2015 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 2015 Financial Highlights
Q2 2015 Financial Highlights Revenues ($M) Recurring Revenues Non-recurring Revenues $665.6 Revenues of $665.6 Million $605.2 $620.4 $638.1 $643.2 • Revenues up 3% QoQ and 10% YoY • Revenues up 4% QoQ and 16% YoY on a normalized and constant currency basis (1) $626.7 • Recurring revenues are 94% of
Slide 4: Q2 2015 Consolidated Results
Q2 2015 Consolidated Results Quarter ($M Except for Non-Financial Metrics) Q2 15 Q2 15 Q1 15 Q2 14 Q2 15 vs. Q2 15 vs. Guidance Actual Actual Actual Q1 15 % ∆ Q2 14 % ∆ Revenues $654 - $658 $ 665.6 $ 643.2 $ 605.2 3% 10% Cash Gross Profit 460.8 451.0 414.3 2% 11% Cash Gross Profit Margin % 68 - 69%
Slide 5: Americas Performance
Americas Performance Q2 Highlights Q2 Business Conditions ($M) $356.4 $364.0 $371.4 • Q2 revenues up 2% QoQ and 9% YoY on an as-reported basis $342.3 $347.4 • Q2 revenues increased 3% QoQ and 10% YoY on a normalized and constant currency basis (1) • Q2 Adjusted EBITDA decreased 1% QoQ due to higher
Slide 6: EMEA Performance
EMEA Performance Q2 Highlights Q2 Business Conditions ($M) $174.0 • Q2 revenues increased 6% QoQ and 11% YoY on an as-reported basis $161.6 $167.1 $164.6 $157.2 • Q2 revenues increased 7% QoQ and 23% YoY on a normalized and constant currency basis (1) • Q2 Adjusted EBITDA increased 5% QoQ and 22% Yo
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Q2 Highlights Q2 Business Conditions ($M) $120.2 • Q2 revenues increased 5% QoQ and 14% YoY on an as-reported basis $111.4 $114.6 $114.6 $105.7 • Q2 revenues increased 7% QoQ and 26% YoY on a normalized and constant currency basis (1) $60.8 • Q2 Adjusted EBITDA increased 7%
Slide 8: Capital Structure and Source and Uses of Cash
Capital Structure and Source and Uses of Cash • Ample liquidity to fund growth and dividend • Flexible capital structure with additional capacity Capitalization Table Sources and Uses of Cash (4) Q2 15 Q1 15 Sources: $3.0B Capital Leases $ 1,245 $ 1,201 Other Debt 3,472 3,475 Available Line Total De
Slide 9: Dividend Outlook
Dividend Outlook AFFO outlook • 2015 guidance of $850-860M ($M) • Implies growth of 12% YoY on an as- reported basis, and 19%(1) growth YoY on a constant currency basis Dividend growth potential • AFFO growth provides ability for long term dividend growth 2015E cumulative Dividends ~$385M • Distribu
Slide 10: Capex
Capex Q2 2015 Capex and Regional Breakout Recurring Non-Recurring ($M) ($M) Recurring capital Sustaining IT expenditures & Network APAC 30% 30% Americas • Expenditures to extend useful life of Maintenance 43% IBXs or other Equinix assets in 50% support of current revenues Installation EMEA 27% • Rec
Slide 11: Stabilized IBX Growth
Stabilized IBX Growth (1) Stabilized, Expansion & New IBXs Stabilized IBX Profitability (3) (4) (4) (6) (2) (1) New IBXs where Phase 1 began operating after January 1, 2014 (3) Investment (Q2 15 Gross PP&E) includes real estate acquisition costs, capitalized leases Expansion IBXs where Phase 1 began
Slide 12: 2015 Revenues Bridge
2015 Revenues Bridge As-Reported Normalized & Constant FX & Hedging Currency Q3 15 E FY 2015 E (3) 15% YoY 10% YoY 3% 3% 2% 2% 683 2,690 0 0 666 > 2,635 (1) (2) Q2 15 Q3 15 Mid- Q3 15 @ CC Prior 2015 Guidance 2015 Current 2015 Current Point Guidance Guidance Mid-Point Guidance @ CC (1) Minimal FX im
Slide 13: 2015 Adjusted EBITDA Bridge
2015 Adjusted EBITDA Bridge As-Reported Normalized & Constant Adjusted EBITDA Margin % Currency FX & Hedging Q3 15 E FY 2015 E (4) 18% YoY 46.8% 46.1% 46.7% 46.7% 13% YoY 1% 2% 2% 2% 315 1,255 311 1 -2 > 1,230 (1) (3) Q2 15 Q3 15 Mid- (2) Q3 15 @ CC Prior 2015 Guidance 2015 Current 2015 Current Poin
Slide 14: 2015 AFFO Bridge
Normalized & 2015 AFFO Bridge As-Reported Constant Currency FX & Hedging 19% YoY (3) Change from 12% YoY +25 -13 +6 +7 +25 Last Quarter 3% 3% ~278 ~34 ~115 > 830 1,255 -2 ~ 27 855 (1) (2) Prior 2015 FY15 Adjusted Net Interest Net Income Recurring Other FY15 AFFO Current FY15 Current AFFO Guidance EB
Slide 15: 2015 Financial Guidance
2015 Financial Guidance $M FY 2015 Q3 2015 (1) (2) Revenues $2,685 - $2,695 $681 - $685 Cash Gross Margin % ~ 69% 68 - 69% Cash SG&A $595 - $605 $150 - $154 Cash SG&A % 22 - 23% ~22% (3) (4) Adjusted EBITDA $1,250 - $1,260 $313 - $317 Adjusted EBITDA Margin % ~46.7% ~46.1% Capex $800 - $850 $222 - $
Slide 16: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data Global Interconnection Business Data Centers Ecosystems 105 Data Centers 1,000+ Networks 6,300+ Businesses 11M+ Square Feet 161,700 Cross-connects Equinix Marketplace™ 99.9999% Uptime 100% of Tier 1 Network Revenue Opportunities Record Routes © 2015 Equinix
Slide 17: Equinix Overview
Equinix Overview (1) Unique portfolio of data center assets Development pipeline • Global footprint: 105 data centers in 33 metros • Long history of development success through • Network dense: 1,000+ networks expansions, campuses and known demand pipeline • Cloud dense: 1,300 Cloud & IT service pro
Slide 18: Equinix Global Platform
Equinix Global Platform (1) Equinix offers broad geographic reach and significant scale within each region 5 Continents 15 Countries 33 Metro Areas 105 Data Centers Platform Equinix • Geographic footprint is unmatched 15 metros 10 metros 8 metros and remains a unique differentiator 54 IBXs 30 IBXs 2
Slide 19: Customer Revenues Mix
Customer Revenues Mix (1) Diversified Revenue by Customer, Region & Industry Global Customer Count and Churn % 4% Network Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 (3) Recurring 17% 26% Total Global Customers 6,000 6,100 6,200 6,300 6,300 MIS (3) Gross New Global Customers 190 140 190 210 170 Financial (4) Serv
Slide 20: Non-Financial Metrics
Non-Financial Metrics (1) FY2014 FY 2015 Q2 Q3 Q4 Q1 Q2 # of Cross-connects INTERCONNECTION Americas 75,600 78,300 81,900 83,700 86,300 1,000+ Networks EMEA 34,600 35,700 36,900 38,400 39,700 161,700+ Cross-connects Asia-Pacific 28,400 30,400 31,300 33,500 35,700 100% of Tier 1 Network Routes Worldw
Slide 21: Equinix Announced Expansions 2015-2016
Equinix Announced Expansions 2015-2016 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 TR2 phase I (Toronto) Opened Q1 2015 675 $42 Additional capacity for 1,775 cabinet equiv
Slide 22: REIT Conversion Costs & Cash Income Taxes
(1) REIT Conversion Costs & Cash Income Taxes Description Value/Cash impact D&A Recapture • Reclassifying Equinix assets as “real estate” results in a tax • U.S. tax liabilities related to D&A recapture expected to liability due to longer depreciation and amortization lives be approximately $360 to
Slide 23: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity of 21.5 years including extensions (1) Global Lease Portfolio Expiration Waterfall % Leases Renewing by Square Footage Last Possible Expiration Date Equinix Owned Sites (2) 86% • Own 23 of 105 IBXs • 4.2M of 11.3M total gross square feet (3) • 37% of t
Slide 24: REIT Disclosure Update
REIT Disclosure Update Equinix is introducing 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 o
Slide 25: Same Store Operating Performance
Same Store Operating Performance Stabilized and Expansion – Cash Gross Profit grew 10.5% despite the significant currency headwind Revenues #039;000s Cash Cost & Gross Profit #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Cash Return on (1) Category Colocatio
Slide 26: Consolidated Portfolio Operating Performance
Consolidated Portfolio Operating Performance By Region & Ownership – Owned Assets Generated 37% of Our Recurring Revenues Cabinets Billed Revenues (Q2 2015) #039;000s Total Cabinet Owned % Cabinet Cabinets Utilization Inter- Services/ Total Non- Total of Total (4) Category # of IBXs Capacity Billed % C
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Same-Store Same-Store Same-Store IBX Location Ownership IBX Location Ownership IBX Location Ownership Classification Classification Classification Americas EMEA Asia-Pacific AT1 Atlanta Expansion Leased AM1 * Amsterdam Stabilized Owned HK1 Hong Kong Expansion Leas
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI Calculation Of Adjusted Corp NOI (unaudited) Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 (1) # of IBXs 104 104 101 100 100 Recurring Revenues (2) $ 623,847 $ 608,280 $ 604,917 $ 584,554 $ 572,269 Recurring Cash Cost of Revenues Allocation (178,578) (170,608) (174,772) (174,010
Slide 29: Adjusted NOI Composition
Adjusted NOI Composition 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 2015 Q2 2015 # of Cabinet Cabinets Utilization Recurring Quarterly (3) Territory IBXs Capacity Billed % % AMER %
Slide 30: Components of NAV
Components of NAV (unaudited) Operating Portfolio Adjusted % of Adjusted NOI Quarterly Adjusted Ownership Reference NOI AMER EMEA APAC NOI Stabilized Owned 55% 45% 0% Adjusted NOI Segments $105,883 Stabilized Leased 80% 9% 11% Adjusted NOI Segments 148,295 Expansion Owned 61% 39% 0% Adjusted NOI Seg
Slide 31: Market Capitalization & Debt Summary
Market Capitalization & Debt Summary Jun 30, Spread / (1) 2015 Debt Coupon Interest Rate Maturity Balance Market Capitalization Summary Term Loan L + 125 1.46% Dec-19 $ 490,210 Common shares outstanding 56,958 ALOG Financing Various 15.55% Various 43,133 Market Price as of Jun 30, 2015 $ 254.00 4.87
Slide 32: REIT Financial Metrics
REIT Financial Metrics Adjusted EBITDA to AFFO Breakdown FFO, Diluted AFFO & Adjusted EBITDA ($M) per Diluted Share(1) Adjusted EBITDA $311 $5.17 $5.24 $306 $4.77 $4.97 $5.07 $284 $294 $275 $3.77 $3.75 $3.64 $3.39 $3.29 $3.09 $2.61 $2.87 $1.99 $222 $221 $207 $195 $188 Q2 2014 Q3 2014 Q4 2014 Q1 2015
Slide 33: Fully Diluted Weighted Average Shares Forecast
Fully Diluted Weighted Average Shares Forecast (‘K) ~1,965 ~-2,106 59,949 59,254 ~836 ~1,938 56,451 ~865 Shares outstanding Est. Employee Est. 2015 Special Est. Shares Est. Dilutive Convertible Est. Weighting of Est. Fully Diluted @ 12/31/14 - Actual Equity Awards Distribution outstanding Unissued S
Slide 34: Recurring CapEx
Recurring CapEx Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Recurring Sustaining IT & Network $ 8,249 $ 8,859 $ 6,034 $ 5,663 $ 8,297 IBX Maintenance 13,652 8,485 20,612 9,067 11,269 Re-configuration Installation 5,429 5,028 6,478 5,044 6,451 Subtotal - Recurring 27,330 22,373 33,124 19,775 26,018 Non-R
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 © 2015 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2015 2015 2014 We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and s
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2015 2015 2014 We define cash operating expenses as operating expenses less depreciation, amortization, stock-based
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2015 2015 2014 We define adjusted EBITDA as income from operations plus depreciation, amortization, accretion, stoc
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2015 2015 2014 The geographic split of our adjusted EBITDA is presented below: Americas income from operations $ 77
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended June 30, March 31, June 30, 2015 2015 2014 We define cash gross margins as cash gross profit divided by revenues. Our cash gross margins by geo
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations Equinix, Inc. Adjusted EBITDA - Annual Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months Ended Ended Ended Ended Ended Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, (1) (1) (1) 2014 2013 2012 2011 2010 We define adjusted EBITDA as income from operations plus de
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA (unaudited and in thousands, except per share amounts) Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 CALCULATION OF ADJUSTED EBITDA Income from continuing operations $ 139,133 $ 151,449 $ 127,826 $ 135,131 $ 124,697 $ 121,612 $ 124,9
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations NAREIT Funds From Operations (NAREIT FFO) (unaudited and in thousands, except per share amounts) Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 RECONCILIATION OF NET INCOME (LOSS) TO NAREIT FFO Net income (loss) $ 59,459 $ 76,452 $(355,103) $ 42,961
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Funds From Operations (AFFO) (unaudited and in thousands, except per share amounts) Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 NAREIT FFO attributable to common shareholders $ 167,368 $ 179,190 $(241,338) $ 146,059 $ 109,813 $ 138,732 $
Slide 46: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. PRO FORMA RESULTS EARNINGS PER SHARE (In thousands, except per share data) (unaudited) Three Months Ended Jun 30, 2014 Actual Adjustments Pro Forma Income from operations $ 124,697 $ - $ 124,697 Interest and other income (expense): Interest income and expense,
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: © 2015 Equinix Inc. Equinix.com
© 2015 Equinix Inc. Equinix.com 48