Slide 1: Q3 2019 Earnings Conference Call
Q3 2019 Earnings Conference Call NASDAQ: EQIX Presented on October 30, 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: Q3 2019 Financial Highlights
Q3 2019 Financial Highlights Revenues Recurring Revenues $1,385 Non-recurring Revenues $1,397 Revenues Growth Q3 19 $1,310 $1,363 QoQ YoY ($M) $1,284 As-reported 1% 9% Normalized and (1) 1% 8% $1,208 $1,230 $1,275 $1,306 $1,319 Constant Currency (1) Normalized MRR 1% 8% Q3 18 Q4 18 Q1 19 Q2 19 Q3 19
Slide 4: Q3 2019 Consolidated Results
Q3 2019 Consolidated Results ($M Except for AFFO per Share and Q3 19 Non-Financial Metrics) Guidance Actual QoQ YoY (1) Revenues $1,399 - 1,409 $1,397 1% 9% Cash Gross Profit $932 1% 10% Cash Gross Margin % 66 -67% 66.7% Cash SG&A $257 4% 8% Cash SG&A % 18 - 19% 18.4% (2) Adjusted EBITDA $665 - 675
Slide 5: Americas Performance
Americas Performance Revenues (3) Q3 19 ($M) $638 $644 $644 $645 Revenues Growth $626 QoQ YoY As-reported Flat 3% Normalized and (1) (3) Flat 3% Constant Currency (1) Normalized MRR Flat 4% Adjusted EBITDA Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Growth QoQ YoY Adjusted EBITDA Adjusted EBITDA Adjusted EB
Slide 6: EMEA Performance
EMEA Performance Revenues $458 $435 $450 Revenues Q3 19 ($M) $397 $403 Growth QoQ YoY As-reported 2% 15% Normalized and (1) 2% 13% Constant Currency (1) Normalized MRR 2% 12% Adjusted EBITDA Q3 19 Growth QoQ YoY Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 As-reported 1% 18% Adjusted EBITDA Adjusted EBITDA Adjuste
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Revenues Q3 19 $284 $291 $293 ($M) $261 $269 Growth QoQ YoY As-reported 1% 12% Normalized and (1) 1% 13% Constant Currency (1) Normalized MRR 1% 13% Adjusted EBITDA Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Growth QoQ YoY Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Ma
Slide 8: Capital Structure
Capital Structure Committed to Balanced Financing Policy Debt Equity Activity • We maintain conservative leverage targeting 3-4x net Net Leverage Ratio • Launched $750M ATM program in debt to LQA adj. EBITDA 3.5x Q4 2018 and completed $1.2B (1) follow-on offering in Q1 2019 • Prudent debt maturity p
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital 5.4% Expenditures 4.3% ($M) • Recurring capital expenditures typically $70 3.4% trend between 3 and 5% of revenues, 13% $55 2.7% annually 18% $47 13% 24% $37 13% • Maintenance capital expenditures can vary 1.5% 14% 18% by quarter based on maintenance schedules
Slide 10: Stabilized IBX Growth
(1) (2) Stabilized IBX Growth Stabilized, Expansion & New IBXs Stabilized IBX Profitability ($M) Last Quarter $7,483 $2,262 $86 $3,326 # of IBXs Q3 19 Revenues ($M) Reported $8,000 $7,511 $7,000 7 ~30% annual Cash Gross Profit on Gross PP&E $6,000 investment (5) 59 Expansion: $5,000 Stabilized: 19%
Slide 11: 2019 Financial Guidance
(1) 2019 Financial Guidance ($M except AFFO per Share) FY 2019 Q4 2019 Revenues $5,554 - 5,564 (2) $1,409 - 1,419 (3) Cash Gross Margin % 66 - 67% 65 - 66% Cash SG&A % 18 - 19% ~19% Adjusted EBITDA $2,666 - 2,676 (4) $654 - 664 (5) Adjusted EBITDA Margin % ~48% ~47% Recurring Capital Expenditures $1
Slide 12: FY19 Guidance
FY19 Guidance (1) Revenues Adjusted EBITDA On track to deliver full year guidance Raise underlying adjusted EBITDA incl. integration costs by $6M Normalized ~9% (2) 47.6% As-reported Margin 48.1% Constant Currency YoY Growth (3) (4) Margin excl. Integration ~10% 48.2% 48.3% Costs and ASC 842 adoptio
Slide 13: Q4 19 Guidance
Q4 19 Guidance (1) Revenues Adjusted EBITDA As-reported Margin ($M) ~2% 48.3% 48.2% 46.8% 46.6% $1,409 - 1,419 ~-1% $675 -$8 $667 $657 - 667 $654 - 664 $1,397 -$3 -$14 $1,383 (1) (3) Q3 19 Reported Normalizing (2) Q3 19 Normalized Q4 19 Guidance Q3 19 Reported Normalizing Q3 19 Q4 19 Integration Q4
Slide 14: FY19 AFFO and AFFO per Share Guidance
FY19 AFFO and AFFO per Share Guidance (1) (2) Raise underlying AFFO incl. integration costs by $8M; offset by FX related headwind of $10M; Normalized AFFO per share growth of 8% Share Count (Diluted) Normalized Constant Currency AFFO per Share (Diluted) YoY Growth ($M except AFFO per Share) AFFO per
Slide 15: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) +13% +19% ~$825 $727 $612 $492 $394 2019E Cash Dividend of ~$825M • Continued growth of our annual cash 47% 46% 43% 44% 43% dividend amount Payout Payout Payout Payout Payout Ratio Ratio Ratio Ratio Ratio 2015 2016 2017 2018 2019 E (2) • Fourth quarter
Slide 16: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 204 Data Centers • 356,000+ Total Interconnections • 20+ years of deep expertise • 53 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Intern
Slide 17: Equinix Overview
(1) Equinix Overview • Global footprint: 204 data centers in 53 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: 356,000+ Total Interconnections • 2019 expecte
Slide 18: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix global reach expanding across 53 metro areas and 25 countries 5 Continents 25 Countries 53 Metro areas 204 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix (1) 18 Metros 22 Metros 13 Metros Multiple Locations • Geographic footpr
Slide 19: Development Developments
(1) EMEA xScaleTM JV Development Joint venture with GIC to support the unique needs of top hyperscale customers Phase Phase Phase Capacity in Phase Capacity Capex Open Future Phases 750 Q3 Final LD13x LD13x-3 Cab-e / $45M Announced 2019 Phase Previously 6 MW 1,300 Q4 Overview Final PA8x PA8x-2 Cab-e
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Revenues Mix Customers and Churn Top 10 Customers Financial Services EMEA Rank Type of Customer %MRR Region Count IBX Count 16% 33% 1 Network 2.7% 3 127 Network INT 2 Cloud & IT Services 2.4% 3 69 17% Asia- Enterp
Slide 21: Non-Financial Metrics
Non-Financial Metrics (1) FY 2018 FY 2019 Q3 Q4 Q1 Q2 Q3 QoQ Interconnections Americas 143,500 145,900 147,800 149,600 151,800 2,200 EMEA 99,300 115,500 117,900 119,900 122,900 3,000 Asia-Pacific 51,600 57,300 58,500 59,500 60,900 1,400 Worldwide Cross Connections 294,400 318,700 324,200 329,000 335
Slide 22: Equinix Announced Expansions
Equinix Announced Expansions Cabinet(1) Equivalent (1) 2019 2020 2021 Total Capex Capacity In Data Center Status Q3 Q4 Q1 Q2 Q3 Q4 Q1 $US millions Ownership Future Phases AT1 phase V (Atlanta) Open 375 $22 Leased 350 NY5 phase III (New York) Open 1,100 $33 Owned* - LA4 phase III (Los Angeles) BO2 ph
Slide 23: Long-Term Lease Renewals
Long-Term Lease Renewals Weighted average lease maturity of greater than 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 88 of 204 Data Centers Last Possible Expiration Date 73% • 13.0M of 23.0M total gro
Slide 24: Same Store Operating Performance
(1) (2) Same Store Operating Performance Revenues ($M) Cash Cost, Gross Profit and PP&E ($M) Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on Category Colocation connection Other Recurring recurring Revenues Revenues Profit Margin % PP&E Gross
Slide 25: Consolidated Portfolio Operating Performance
Consolidated Portfolio Operating Performance (1) Cabinets Billed Q3 19 Revenues ($M) Total Cabinet Owned % Cabinet Cabinets Utilization Total of Total (5) Category # of IBXs Capacity Billed % Recurring Recurring Americas Owned (2) 44 74,200 55,200 74% $403 Leased 42 35,300 29,000 82% $204 Americas T
Slide 26: IBX Portfolio Composition
IBX Portfolio Composition (1) (2) (3) Metro Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3, AT4, AT5 AT1 AT4 AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1, CH2, CH4 Culpeper 4 CU1,CU2, CU3 CU4 CU1, CU2, CU3, CU4
Slide 27: Adjusted Corporate NOI
(1) Adjusted Corporate NOI ($M, except # of IBXs) Calculation Of Adjusted Corp NOI Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 # of IBXs (1) 203 202 201 199 199 (2) Recurring Revenues $1,316 $1,301 $1,273 $1,228 $1,206 Recurring Cash Cost of Revenues Allocation (412) (408) (386) (387) (380) Cash Net Ope
Slide 28: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Q3 2019 Total Cabinet Q3 2019 Quarterly # of Cabinet Cabinets Utilization Recurring Adjusted NOI Category IBXs Capacity Billed % Revenues ($M) ($M) % NOI Stabilized Owned (2) 45 71,500 61,700 86% $371 $272 34% Leased 91 82,100 68,900 84% $439 $251 31% Stabilize
Slide 29: Components of Net Asset Value
Components of Net Asset Value Operating Portfolio Adjusted Q3 19 Quarterly Ownership Reference NOI Adjusted NOI ($M) Stabilized Owned Adjusted NOI Segments $272 Stabilized Leased Adjusted NOI Segments $251 Expansion Owned Adjusted NOI Segments $190 Expansion Leased Adjusted NOI Segments $86 Other Re
Slide 30: Debt Summary
Debt Summary Debt Spread / Coupon Interest Rate Maturity First Call Date First Call / Current Call Balance (1) ($M) Debt Amortization Revolver L + 100 - Dec-22 - - $ - • $1.25B multi-currency Term Loan A Term Loan A - SEK, GBP, JPY(2) L + 120 1.235% Dec-22 - - 1,249 amortizes at 5% per year through
Slide 31: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding ~85.3 0.7 85.3 -1.2 84.8 ~84.8 84.1 3.9 80.7 80.4 80.7 0.7 1.5 1.5 1.3 1.2 1.2 Shares Est. Employee Q1 - Q3 Equity (5) Est. Shares Est. Weighted Est. Weighting Est. Fully Diluted Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Outstan
Slide 32: Capital Expenditures Profile
Capital Expenditures Profile ($M) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Recurring IBX Maintenance 34 26 11 49 35 Sustaining IT & Network 7 4 6 12 13 Re-configuration Installation 6 7 4 9 7 Subtotal - Recurring 47 37 21 70 55 Non-Recurring IBX Expansion 412 325 270 491 401 Transform IT, Network & O
Slide 33: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies (4) Revenue FX Rates Currency % of Revenues Guidance (2) Blended (2) Blended (3) % of Currency (1) Hedge Rate (4) Rate Guidance Rate Hedge % Revenues CHF GBP 1% 9% EUR USD 1.00 43% HKD 20% 4% EUR to USD 1.09 1.18 1.15 66% 20% AUD GBP to USD 1.23 1.34 1.31 77% 9% 4% J
Slide 34: Industry Analyst Reports
Industry Analyst Reports Solution Category Reports • Infrastructure is Everywhere: The Evolution of Data Centers, Gartner, 7/18/19 • Colocation Cloud Interconnection Requires a Purposeful, Planned Approach, Gartner, 5/20/19 Interconnection • The Future of Enterprise Data Centers – What’s Next, Gartn
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, IR and Sustainability Berenberg Nate Crossett 650-598-6583 BMO Capital Markets Ari Klein krymill@equinix.com Citigroup Mike Rollins Ke
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 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 (unaudited and in thousands) Revenues $ 1,396,810 $ 1,384,977 $ 1,363,218 $ 1,310,083 $ 1,283,751 Non-Recurring Revenues (NRR) (2) 77,279 78,456 87,343 80,242 75,387 Other Revenues (3) 3,523 5,859 2,783
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Income from Operations $ 285,368 $ 291,781 $ 279,508 $ 270,717 $ 265,753 Adjustments: Depreciation, Amortization and Accretion Expense 321,746 320,550 314,705 305,130 306,318 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: 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
Slide 45: Equinix.com
Confidential – © 2019 Equinix Inc. Equinix.com 45