Slide 1: Q3 2018 Earnings Conference Call
Q3 2018 Earnings Conference call NASDAQ: EQIX Presented on November 1, 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: Q3 2018 Financial Highlights
Q3 2018 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues Q3 18 ($M) $1,284 Revenues Growth $1,200 $1,216 $1,262 QoQ YoY $1,152 Acquisition Revenues: As-reported 2% 11% Infomart: $10M Itconic/IL2: $16M $1,208 Metronode: $18M Normalized and (1) $1,151 $1,188 3% 9% $1,089 $1,123
Slide 4: Q3 2018 Consolidated Results
Q3 2018 Consolidated Results ($M Except for AFFO per Share and Q3 18 Non-Financial Metrics) Guidance Actual QoQ YoY Revenues $1,272 - 1,282 $1,284 2% 11% Cash Gross Profit $851 1% 10% Cash Gross Profit Margin % 65 - 67% 66.3% Cash SG&A $238 1% 6% Cash SG&A % 19 - 20% 18.5% Adjusted EBITDA $591 - 601
Slide 5: Americas Performance
Americas Performance Revenues Organic Revenues Infomart Revenues ($M) Q3 18 $606 $618 $626 Revenues Growth $597 $603 QoQ YoY $10 $10 As-reported 1% 5% Normalized and (1) 2% 5% $608 $615 Constant Currency Adjusted EBITDA Q3 18 Growth QoQ YoY Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Primarily due to As-reported
Slide 6: EMEA Performance
EMEA Performance Organic Revenues Itconic/IL2 Revenues Revenues Q3 18 $397 ($M) $370 $380 $383 Revenues Growth $18 $16 QoQ YoY $339 $17 $17 As-reported 4% 17% Normalized and (1) 4% 14% Constant Currency $380 $362 $365 $353 Adjusted EBITDA Q3 18 Growth QoQ YoY As-reported 5% 23% Q3 17 Q4 17 Q1 18 Q2
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Organic Revenues Metronode Revenues Q3 18 ($M) Revenues Growth $261 $261 QoQ YoY $234 $14 $18 $217 $224 As-reported Flat 20% Normalized and (1) 2% 13% Constant Currency $247 $244 Adjusted EBITDA Q3 18 Growth QoQ YoY As-reported 2% 22% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 N
Slide 8: Capital Structure
Capital Structure Capitalization Table ($M) Q2 18 Q3 18 Net Leverage Ratio Q3 18 Financing Activity (Target 3.0x – 4.0x) • Sold 612,422 shares of common (1) Bank Debt, Senior Notes, and Mortgages $ 9,961 $ 9,948 stock under the ATM program for 4.3x net proceeds of approximately Capital Lease & Finan
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.2% 4.3% ($M) 3.9% $63 • Recurring capital expenditures typically 10% 3.3% $55 2.9% trend between 3 and 5% of revenues 13% $45 24% $42 11% $35 15% 24% • Maintenance capital expenditures can vary 25% 14% 12% by quarter based on maintenance schedule
Slide 10: Stabilized IBX Growth – Organic
Stabilized IBX Growth – Organic (1) (2) ($M) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter $2,112 $90 $7,005 $3,079 Reported # of IBXs Q3 18 Revenues $8,000 $7,056 $7,000 8 ~30% annual Cash Gross $6,000 Profit on Gross PP&E investment (4) 47 Expansion: $5,000 Stabilized:
Slide 11: 2018 Financial Guidance
2018 Financial Guidance ($M except AFFO per Share) FY 2018 Q4 2018 (1) (2) Revenues $5,060 - 5,070 $1,299 - 1,309 Cash Gross Margin % 66 - 67% 65 - 66% Cash SG&A % ~19% ~19% (3) (4) Adjusted EBITDA $2,400 - 2,410 $604 - 614 Adjusted EBITDA Margin % ~47.5% ~46.7% Recurring Capital Expenditures $199 -
Slide 12: FY18 Revenues Guidance
FY18 Revenues Guidance Raise full year revenues guidance by $15M; offset in part by $7M FX headwind Normalized Constant Currency YoY Growth ~9% incl. Verizon (1) ~16% ($M) $142 - 152 $5,060 - 5,070 $4,913 - 4,923 $4,368 1 2 FY17 Reported FY18 Organic Guidance Acquisitions (2) FY18 Guidance 1 Raise u
Slide 13: FY18 Adjusted EBITDA Guidance
FY18 Adjusted EBITDA Guidance Reduce integration costs guidance by $9M; offset in part by $3M FX headwind As-reported Margin 47.0% 48.3% 47.5% Normalized Constant Currency (1) YoY Growth ~8% incl. Verizon ~17% ($M) $2,440 - 2,450 -$40 $2,400 - 2,410 1 2 $2,052 FY17 Reported FY18 Guidance excl. Integ
Slide 14: Q4 Guidance
Q4 18 Guidance Revenues Adjusted EBITDA As-reported Margin ($M) 47.7% 48.4% 47.9% 46.7% ~2% $1,299 - 1,309 ~0% $619 - 629 $621 $9 -$15 $613 $1,284 $0 $1,284 $604 - 614 (1) Q3 18 Reported Normalizing (1) Q3 18 Normalized Q4 18 Guidance Q3 18 Reported Normalizing (2) Q3 18 Q4 18 Guidance Integration Q
Slide 15: FY18 AFFO and AFFO per Share Guidance
FY18 AFFO and AFFO per Share Guidance Raise full year AFFO guidance by $13M primarily due to integration costs reduction and FX (1) Share Count (Diluted) AFFO per Share (Diluted) 77.5M 80.2M 80.2M $18.53 $20.69 - 20.94 $20.19 - 20.44 1 Raise Full Year AFFO Guidance ~13% Prior Full Year Guidance $1,5
Slide 16: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) +19% ~$727 $612 $492 $394 45% 2018E Cash Dividend of ~$727M 43% 46% Payout Payout Ratio • Continued growth of both annual cash 47% Payout Ratio dividends and dividend per share Payout Ratio Ratio 2015 2016 2017 (2) 2018 E (3) • Fourth quarter dividend o
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 200 Data Centers • 294,000+ Cross-connects • 20 years of deep expertise • 52 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Internet • Digi
Slide 18: Equinix Overview
(1) Equinix Overview • Global footprint: 200 data centers in 52 metros Unique Portfolio of Data • Network dense: 1,800+ networks; 100% of Tier 1 Network Routes Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 294,000+ cross-connects • 2018 expected revenu
Slide 19: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix global reach expanding across 52 metro areas and 24 countries 5 Continents 24 Countries 52 Metro areas 200 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 12 Metros Multiple Locations (1) • Geographic footpr
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Revenues Mix Customers and Churn (2) Top 10 Customers INT 16% Rank Type of Customer %MRR Region Count IBX Count INT 1 Network 3.4% 3 129 17% (1) MIS & Recurring 2 Cloud & IT Services 2.4% 3 52 Total Revenues Other
Slide 21: Revenues by Product by Region
Revenues by Product by Region Americas EMEA Asia-Pacific Worldwide +11% +2% ($M) $1,262 $1,284 $74 $76 $1,152 $76 $77 $63 $67 +5% $198 $202 +1% $180 $618 $626 $597 $34 $29 +17% $31 $23 $24 $19 +4% $124 $132 $134 +20% $383 $397 $339 $24 $26 +0% $32 $31 $914 $930 $18 $35 $843 $25 $34 $261 $261 $28 $21
Slide 22: Non-Financial Metrics
(1) Non-Financial Metrics FY17 FY 2018 Organic Total Total Q3 Q4 Q1 Q2 Q3 QoQ Cross-connects Americas 113,300 138,900 140,200 142,100 143,500 1,400 EMEA 89,600 92,200 94,700 96,900 99,300 2,400 Asia-Pacific 45,200 46,700 48,100 49,300 51,600 2,300 Worldwide 248,100 277,800 283,000 288,300 294,400 6,
Slide 23: Equinix Announced Expansions 2018 - 2019
Equinix Announced Expansions 2018 - 2019 Cabinet (1) (1) Equivalent 2018 2019 Total Capex(1) Capacity In (1) IBX Center Status Q1 Q2 Q3 Q4 Q1 Q2 Q3 $US millions Ownership Future Phases CH3 phase IV (Chicago) Opened 715 $62 Owned 1,600 DE2 phase II (Denver) ▲ Opened 475 $28 Owned 375 CU4 phase II (Cu
Slide 24: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 80 of 200 IBXs (purchased BG1) Last Possible Expiration Date 65% • 11.6M of 21.8M total gross s
Slide 25: Same Store Operating Performance – Organic
Same Store Operating Performance – Organic (1) (2) ($M) 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 %
Slide 26: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance Cabinets Billed (3) Revenues (Q3 2018) $M Total Cabinet Owned % (4) Cabinet Cabinets Utilization Total of Total Category # of IBXs Capacity Billed % Recurring Recurring Americas (2) Owned 41 57,200 44,500 78% $305 Leased 46 44,400 36,200 82% $277 Amer
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Metro Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3, AT4, AT5 AT1 AT4 *Subject to Long-term ground lease AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Status Change Boston 2 BO1 BO2 BO2 Metronode BO1 Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI Calculation Of Adjusted Corp NOI Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 ($M) (1) # of IBXs 199 199 189 189 182 (2) Recurring Revenues $1,206 $1,186 $1,149 $1,122 $1,087 Recurring Cash Cost of Revenues Allocation (380) (369) (349) (347) (326) Cash Net Operating Income 827
Slide 29: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Total Cabinet Q3 2018 (3) Q3 2018 (3) # of Cabinet Cabinets Utilization Recurring Quarterly Category IBXs Capacity Billed % Revenues Adjusted NOI % NOI Stabilized (2) Owned 39 60,200 51,800 86% $289 $181 25% Leased 89 78,700 64,900 82% $442 $271 38% Stabilized
Slide 30: Components of NAV
Components of NAV Operating Portfolio Adjusted Q3 18 Quarterly Ownership Reference NOI Adjusted NOI (unaudited $M) Stabilized Owned Adjusted NOI Segments $181 Stabilized Leased Adjusted NOI Segments $271 Expansion Owned Adjusted NOI Segments $152 Expansion Leased Adjusted NOI Segments $100 Quarterly
Slide 31: Debt Summary
Debt Summary Spread / Interest (2) First Call Balance (1) Debt Maturity Coupon Rate Date (000's) Debt Amortization Revolver L + 120 - Dec-22 - (3) Term Loan A - SEK, GBP L + 145 1.991% Dec-22 - 942,722 • $943M multi-currency Term Loan A amortizes at Term Loan A - JPY L + 145 1.450% Dec-22 - 418,000
Slide 32: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding 80.4 0.4 ~80.4 -0.7 79.5 79.5 ~80.2 79.0 0.6 78.2 0.8 1.5 1.4 1.3 1.3 1.2 79.0 Shares Est. Employee ATM Program Est. Shares Est. Dilutive Est. Weighting Est. Fully Diluted Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 outstanding @
Slide 33: Capital Expenditures Profile
(1) Capital Expenditures Profile ($M) Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 Recurring Sustaining IT & Network 13.3 5.1 9.1 14.7 11.4 IBX Maintenance 34.8 30.6 21.4 41.3 28.4 Re-configuration Installation 7.3 6.4 4.8 6.5 5.1 Subtotal - Recurring 55.4 42.2 35.2 62.5 44.9 Non-Recurring IBX Expansion
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% 9% USD 1.00 45% EUR HKD 19% 4% EUR to USD 1.16 1.15 1.16 64% 19% AUD 4% GBP to USD 1.30 1.32 1.31 77% 9% J
Slide 35: Industry Analyst Reports
Industry Analyst Reports Solution Category Report • The Data Center Is Dead, and Digital Infrastructures Emerge, Gartner, April 13, 2018 Interconnection • IDC Vendor Profile - Equinix: Driving for Global Reach, IDC, March, 2018 • Equinix interconnects its global datacenters into one unified platform
Slide 36: 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 BMO Capital Markets Ari Kle
Slide 37: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions 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
(1) Non-GAAP Reconciliations Consolidated NOI calculation Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 (unaudited and in thousands) Revenues $1,283,751 $1,261,943 $1,215,877 $1,200,221 $1,152,261 Non-Recurring Revenues (NRR) (2) 75,387 73,572 64,314 76,654 61,853 Other Revenues (3) 1,964 1,945 2,454 1,35
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 Income from Operations $ 265,753 $ 215,038 $ 225,875 $ 232,043 $ 224,863 Adjustments: Depreciation, Amortization and Accretion Expense 306,318 308,828 306,465 279,774 277,719 Stock-based Compensation Expens
Slide 44: 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 45: Definitions: IBX Growth, REIT and Capital Expenditures
Definitions: IBX Growth, REIT and Capital Expenditures IBX Growth New IBXs: Phase 1 began operating after January 1, 2017 Expansion IBXs: Phase 1 began operating before January 1, 2017, and there is an expected expansion of one or more additional phases leveraging the existing capital infrastructure
Slide 46: Confidential – © 2018 Equinix Inc. Equinix.com
Confidential – © 2018 Equinix Inc. Equinix.com 46