Slide 1: Q4 2017 Earnings Conference Call
Q4 2017 Earnings Conference call NASDAQ: EQIX Presented on February 14, 2018 Confidential – © 2018 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: 2017 Financial Highlights
(1) 2017 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues ($M) $4,368 Q4 17 FY17 Revenues Growth $3,612 QoQ YoY YoY Acquisition $2,726 Revenues: As-reported 4% 27% 21% $2,444 $2,153 Verizon: $359M $4,120 Itconic/IS2: $17M Normalized and (2) $3,417 4% 11% 11% $2,318 $2,569 Cons
Slide 4: Q4 2017 Consolidated Results
Q4 2017 Consolidated Results ($M Except for AFFO per Share and Q4 17 FY17 Non-Financial Metrics) Guidance Actual QoQ YoY Guidance Actual YoY Revenues $1,187 - 1,195 $1,200 4% 27% $4,355 - 4,363 $4,368 21% Cash Gross Profit $793 2% 24% $2,935 20% Cash Gross Profit Margin % ~67% 66.1% 67 - 68% 67.2% C
Slide 5: Americas Performance
Americas Performance Revenues Organic Revenues Verizon Revenues Q4 17 FY17 ($M) $597 $606 Revenues Growth QoQ YoY YoY $534 $137 $135 $87 As-reported 2% 39% 29% $437 $436 Normalized and (1) 3% 8% 7% Constant Currency $447 $460 $471 Adjusted EBITDA Q4 17 FY17 Growth QoQ YoY YoY Q4 16 Q1 17 Q2 17 Q3 17
Slide 6: EMEA Performance
EMEA Performance Revenues Organic Revenues Itconic/IS2 Revenues Q4 17 FY17 ($M) Revenues Growth $370 QoQ YoY YoY $339 $17 $315 $323 $302 As-reported 9% 23% 15% Normalized and (2) 5% 15% 14% Constant Currency $353 Adjusted EBITDA Q4 17 FY17 Growth QoQ YoY YoY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 As-reported
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Q4 17 FY17 ($M) Revenues Growth QoQ YoY YoY $224 $210 $217 $204 $198 As-reported 3% 10% 12% Normalized and (1) 4% 13% 14% Constant Currency Adjusted EBITDA Q4 17 FY17 Growth QoQ YoY YoY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 As-reported 2% 11% 16% Normalized and (1) Adjusted
Slide 8: Capital Structure
Capital Structure Ample liquidity to fund future growth and cash dividends combined with flexible capital structure with additional available capacity Capitalization Table ($M) Q3 17 Q4 17 Net Leverage Ratio Q4 17 Financing Activity (Target 3.0x – 4.0x) • Refinanced secured debt structure Bank Debt,
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.2% 3.9% 3.9% $63 ($M) 3.6% Capex Highlights 24% 2.4% $45 • Recurring capital expenditures trend 10% $36 $38 between ~3 and 5% of revenues 25% 24% 29% 11% 16% $23 14% • Maintenance capex can vary by quarter 32% 66% 63% based on maintenance schedul
Slide 10: Stabilized IBX Growth – Organic
Stabilized IBX Growth – Organic (1) (2) Stabilized asset growth of 4 - 6% with ~29% annual cash gross margin on gross PP&E investment $M Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter $1,732 $50 $5,851 $2,482 (2) Reported # of IBXs Q4 17 Revenues ~29% annual Cash Gross St
Slide 11: 2018 Financial Guidance
(1) 2018 Financial Guidance ($M except AFFO per Share) FY 2018 Q1 2018 (2) (3) Revenues >$5,010 $1,204 - 1,212 Cash Gross Margin % ~67% ~67% Cash SG&A % 19 - 20% ~21% (4) (5) Adjusted EBITDA >$2,385 $549 - 557 Adjusted EBITDA Margin % ~47.6% ~45.8% Recurring Capex $198 - 208 ~$40 (% of revenues) ~4.
Slide 12: ASC Topic 606
ASC Topic 606 The Company adopted ASC 606, Revenue from Contracts with Customers ("ASC 606") using the modified retrospective method effective January 1, 2018. The Company believes the most significant impact from this standard relates to installation revenue and costs to obtain contracts. (1) Q1 18
Slide 13: FY18 Revenues Guidance
FY18 Revenues Guidance (1) 2018 Revenues on target to deliver >10% normalized CAGR for FY16-20 Revenues Guidance Normalized Revenues Growth ~15% ($M) >$5,025 11% >$5,010 -$15 ~(1%) >10% ~$65 ~(1%) >$4,945 >9% $4,368 (4) FY17 Reported FY18 Guidance Acquisition FY18 Guidance ASC 606 Impact FY18 Guidan
Slide 14: FY18 Adjusted EBITDA Guidance
(1) FY18 Adjusted EBITDA Guidance Reported margins stepping up 60 bps. Maintaining margins excluding integration costs, while absorbing acquisitions and investing for the future 47.0% As-reported Margin 47.6% Includes impact of: • Itconic and IS2 (5) (6) Margin excl (6) acquisitions (-30 bps) 48.2%
Slide 15: Q1 18 Guidance
Q1 18 Guidance Revenues and Adjusted EBITDA muted by lower NRR and Q1 seasonal costs Revenues Adjusted EBITDA 47.1% 48.1% 46.9% 45.8% ~1% ($M) $1,207 - 1,215 ~-2% -$3 $1,204 - 1,212 $578 $1,201 $1,200 $1 $13 $564 - 572 $565 -$15 $549 - 557 (1) (1) (3) (6) Q4 17 Normalizing Q4 17 Q1 18 ASC 606 Q1 18
Slide 16: FY18 AFFO and AFFO per Share Guidance
(1) FY18 AFFO and AFFO per Share Guidance 2018 AFFO per Share on target to deliver >13% CAGR for FY16-20 (2) Share Count (Diluted) AFFO per Share (Diluted) 1 YoY AFFO Growth 77.5M 77.5M 80.2M 80.2M (3) ~7% $19.23 $18.53 $20.38 $20.82 FY17 AFFO $1,437M Adjusted EBITDA $333M ~14% Interest Expense ($43
Slide 17: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) +18% ~$725 2018E Cash Dividend of ~$725M $612 • Continued growth of both annual cash $492 dividends and dividend per share $394 44% 43% Payout 47% 46% Payout Ratio • First quarter dividend of $2.28 to be Payout Ratio Payout Ratio paid March 21, 2018 Rat
Slide 18: Strategic Priorities
Strategic Priorities Culture Press our Catch the advantage next wave • Core • Strategy, operating services & business innovation Customer Scale people & organization • Corporate functions Confidential – © 2018 Equinix Inc. Equinix.com 18
Slide 19: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 190 Data Centers • 277,000+ Cross-connects • 20 years of deep expertise • 48 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Internet • Digi
Slide 20: Equinix Overview
(1) Equinix Overview • Global footprint: 190 data centers in 48 metros Unique Portfolio of Data • Network dense: 1,700+ networks Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 277,000+ cross-connects • 2018 expected revenues growth of >10% YoY on a norm
Slide 21: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix offers broad geographic reach and significant scale within each region 5 Continents 24 Countries 48 Metro areas 190 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 8 Metros Multiple Locations (1) • Geographi
Slide 22: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Revenues Mix Customers and Churn Top 10 Customers (2) Rank Type of Customer %MRR Region Count IBX Count 1 Network 3.5% 3 125 Recurring 2 Enterprise 2.6% 3 45 Total Revenues(1) Revenues (2) 3 Cloud & IT Services 2.
Slide 23: Non-Financial Metrics
(1) Non-Financial Metrics FY 2016 FY 2017 Organic Organic Verizon Total Organic INTERCONNECTION Q4 Q1 Q2 Q3 Q4 Q4 Q4 QoQ Cross-connects 1,700+ Networks Americas 106,300 109,700 111,400 113,300 115,100 23,800 138,900 1,800 277,000+ Cross-connects EMEA 82,900 84,900 87,400 89,600 92,200 - 92,200 2,600
Slide 24: Equinix Announced Expansions 2018 - 2019
Equinix Announced Expansions 2018 - 2019 Cabinet (1) 2017 2018 2019 Total Capex (1) Equivalent IBX Center Status Q4 Q1 Q2 Q3 Q4 Q1 Q2 $US millions Capacity In Future Phases GLOBAL TOTALS MI1 Capacity Release (Miami) Opened 250 $8 CH3 phase IV (Chicago) Previously Announced 715 $67 1,600 Year-End 201
Slide 25: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 65 of 190 IBXs Last Possible Expiration Date 66% • Purchased Helsinki 6, Milan 3 and Lisbon 1 a
Slide 26: Same Store Operating Performance – Organic
Same Store Operating Performance – Organic (1) (2) Stabilized and Expansion – Cash Gross Profit grew 8.0% driven by Interconnection growth Revenues $M Cash Cost, Gross Profit and PP&E $M $M Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on Categ
Slide 27: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance By Region & Ownership - Owned Assets Generating 42% of Our Recurring Revenues Cabinets Billed (3) Revenues (Q4 2017) $M Total Cabinet Owned % Cabinet Cabinets Utilization Total (4) of Total Category # of IBXs Capacity Billed % Recurring Recurring Amer
Slide 28: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Metro Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3 AT1 AT4, AT5 AT4 AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH3, CH4 CH7 CH3, CH7 CH1, CH2, CH4 Culpeper 4 CU1,CU2, CU3, CU4 CU1, CU2, CU3, CU4 D
Slide 29: Adjusted Corporate NOI
(1) Adjusted Corporate NOI $M Calculation Of Adjusted Corp NOI (unaudited $000's) Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 # of IBXs (1) 189 182 179 149 145 (2) Recurring Revenues $1,122 $1,087 $1,008 $896 $888 Recurring Cash Cost of Revenues Allocation (347) (326) (299) (261) (259) Cash Net Operatin
Slide 30: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) By Stabilization and Ownership – Owned Assets and NOI are predominantly in campus locations in our largest global markets Total Cabinet Q4 2017 Q4 2017 $M # of Cabinet Cabinets Utilization Recurring Quarterly Territory IBXs Capacity Billed % Revenues Adjusted N
Slide 31: Components of NAV
Components of NAV Operating Portfolio Adjusted Q4 17 Quarterly Ownership Reference (unaudited $M) NOI Adjusted NOI Stabilized Owned Adjusted NOI Segments $125 Stabilized Leased Adjusted NOI Segments $265 Expansion Owned Adjusted NOI Segments $93 Expansion Leased Adjusted NOI Segments $108 Quarterly
Slide 32: Debt Summary
Debt Summary Spread / Interest First Call (1) Debt Maturity Balance Coupon Rate (2) Date (000’s) Debt Amortization (1) Revolver L + 120 - Dec-22 - - (3) Term Loan A L + 145 1.781% Dec-22 - 1,017,752 • $1B multi-currency Term Loan A amortizes at 5% Japanese Yen Term Loan T + 150 1.500% Oct-21 - 399,6
Slide 33: Shares Forecast
Shares Forecast Fully Diluted Weighted Average Shares Common Stock Outstanding 79.0 78.2 (‘M) -0.3 ~80.2 77.9 77.9 0.7 ~79.8 71.4 0.7 79.0 1.7 1.5 1.5 1.3 1.3 Shares Est. Employee Est. Shares Est. Dilutive Est. Weighting Est. Fully Diluted Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 outstanding @ Equity Awards Ou
Slide 34: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies Revenue FX Rates (4) Blended Currency % of Revenues Guidance (2) Blended % of Currency Hedge Rate Guidance (3) (4) Rate (1) (2) Hedge % Revenues Rate CHF GBP 1% EUR 9% USD 1.00 46% HKD 19% 4% AUD EUR to USD 1.20 1.10 1.15 51% 19% 3% GBP to USD 1.35 1.34 1.34 66% 9% 6
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 Barclays Capital Amir Rozwadowski 650-598-6583 Berenberg Josep Bori krymill@equinix.com Citigroup Mike Rollins Cowe
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions Confidential – © 2018 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 37
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 38
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 39
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 40
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 41
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2018 Equinix Inc. Equinix.com 42
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations Consolidated NOI calculation Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 (unaudited and in thousands) Revenues $ 1,200,221 $ 1,152,261 $ 1,066,421 $ 949,525 $ 942,647 Non-Recurring Revenues (NRR) (2) 76,654 61,853 55,179 50,256 49,980 Other Revenues (3) 1,351 3,044 2,818 3,656 4
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Income from continuing operations $ 232,043 $ 224,863 $ 184,895 $ 167,213 $ 184,455 Adjustments: Depreciation, amortization and accretion expense 279,774 277,719 252,386 219,013 212,268 Stock-based compensa
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: Definitions: IBX Growth, REIT and Capex
Definitions: IBX Growth, REIT and Capex IBX Growth New IBXs: Phase 1 began operating after January 1, 2016 Expansion IBXs: Phase 1 began operating before January 1, 2016, and there is an expected expansion of one or more additional phases leveraging the existing capital infrastructure, or a new phas
Slide 47: Confidential – © 2018 Equinix Inc. Equinix.com
Confidential – © 2018 Equinix Inc. Equinix.com 47