Equinix, Inc. · NASDAQ:EQIX

Equinix — Q4 2015 Earnings Presentation

50 slides from Equinix's earnings presentation, Feb 18, 2016

  1. Slide 1: Q4 2015 Earnings Conference Call

    Q4 2015 Earnings Conference call NASDAQ: EQIX Presented on February 18, 2016 © 2016 Equinix Inc. 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 Equi

  3. Slide 3: 2015 Financial Highlights

    2015 Financial Highlights Recurring Revenues Non-recurring Revenues Revenues ($M) $2,725.9 Revenues of $2,725.9 Million $2,443.8 • Revenues up 12% YoY, including $21.6 million Bit-isle $2,152.8 $1,887.4 Revenues in Q4 2015 $1,565.6 • Revenues up 16% YoY on a normalized and constant currency basis (1

  4. Slide 4: FY 2015 Consolidated Results

    FY 2015 Consolidated Results Quarter Full Year ($M Except for Non-Financial Metrics) Q4 15 Q4 15 Q3 15 Q4 14 Q4 15 vs. Q4 15 vs. FY15 vs FY 15 Guidance Guidance Actual Actual Actual Q3 15 % ∆ Q4 14 % ∆ FY15 FY14 FY14 % ∆ Revenues $701 - $705 $ 730.5 $ 686.6 $ 638.1 6% 14% $ 2,725.9 $ 2,443.8 12% $2,

  5. Slide 5: Americas Performance

    Americas Performance Q4 Highlights Q4 Business Conditions ($M) • FY15 reported revenues grew 10% YoY on an as-reported basis, and $394.5 12% on a normalized and constant currency basis (1); Adjusted $364.0 $371.4 $382.6 $356.4 EBITDA increased 10% YoY on as-reported basis, and 13% on a normalized an

  6. Slide 6: EMEA Performance

    EMEA Performance Q4 Highlights Q4 Business Conditions ($M) • FY15 revenues increased 10% YoY on an as-reported basis, and 21% $174.0 $177.6 $182.7 YoY on a normalized and constant currency basis (1); Adjusted EBITDA $167.1 $164.6 YoY achieved 18% growth on an as-reported basis, and 29% on a normaliz

  7. Slide 7: Asia-Pacific Performance

    Asia-Pacific Performance Q4 Highlights Q4 Business Conditions • FY15 Revenues up 20% YoY on an as-reported basis. Excluding the ($M) $153.3 impact of Bit-isle, up 15% YoY. On a normalized and constant currency basis(1) revenues are up 23% YoY. $126.5 $21.6 $114.6 $114.6 $120.2 • Adjusted EBITDA up 2

  8. Slide 8: Capital Structure and Sources and Uses of Cash

    Capital Structure and Sources and Uses of Cash • Ample liquidity to fund growth and dividend • Flexible capital structure with additional capacity Capitalization Table ($M) Debt Maturity Profile (4) ($M) Q4 15 Q3 15 Loans Payable, Capital Lease & Other Financing Obligations Capital Leases $ 1,327 $

  9. Slide 9: Dividend Outlook

    Dividend Outlook ($M) AFFO outlook (1) • 2016 guidance of >$970M (1) > $970 • Implies growth of 17% YoY on an as-reported (2) basis, and 23% growth YoY on a normalized (1) $832 and constant currency basis $762 Dividend growth potential $680 (3) • AFFO growth provides capacity for long-term ~$7.00 di

  10. Slide 10: Capex

    Capex Q4 2015 Capex and Regional Breakout (Includes 2 Months of Bit-isle) Recurring Non-Recurring ($M) ($M) Recurring capital Sustaining IT expenditures & Network, 21% APAC, 33% Americas, • Expenditures to extend useful life of 36% IBXs or other Equinix assets in Maintenance, Installation, 66% 13% s

  11. Slide 11: Stabilized IBX Growth

    Stabilized IBX Growth (1) (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 (Q4 15 Gross PP&E) includes real estate acquisition costs, capitalized leases Expansion IBXs where Phase 1 b

  12. Slide 12: Strategic Priorities

    Strategic Priorities Pressing our Advantage Catching the Next Wave Extend Market Accelerate Capture Seed Future Simplification for Leadership the Enterprise Ecosystems Growth • Interconnection and • Business Development • Cloud • Systems Ecosystem Growth • Innovation/Offers • Payments • Process • Te

  13. Slide 13: FY16 Revenues Guidance

    FY16 Revenues Guidance 30.2% -6 >3,550 132 +13.4% 416 3 >3,008 2,726 2 -73 2,653 1 (1) (1) FY15 Reported FY15 Organic FY16 Organic Telecity Bit-isle LD2 FY16 Guidance Normalized Acquisition Acquisition 1 Normalizing Items ($73M) 2 Telecity Acquisition $411- 421M 3 Bit-isle Acquisition $127-137M Fore

  14. Slide 14: FY16 Adjusted EBITDA Guidance

    FY16 Adjusted EBITDA Guidance 46.7% 46.7% 47.7% 45.6% 47.3% -3 >1,678 42 -58 >1,620 58 +15.8% 203 3 >1,436 1,272 2 -31 1,240 1 (1) (2) (1) (2) (1) FY15 FY15 FY16 Telecity Bit-isle LD2 Integration FY16 Integration FY16 Reported Organic Organic Acquisition Acquisition costs Guidance costs Guidance Nor

  15. Slide 15: Q1'16 Revenues Guidance

    Q1’16 Revenues Guidance 838-842 33 3 2.6% 84 731 721-725 -26 705 2 1 Q4’15 Reported Q4’15 Organic Q1’16 Organic Telecity Bit-isle Q1’16 Guidance Normalized Acquisition Acquisition 1 Normalizing Items ($26M) 2 Telecity Acquisition $82-86M 3 Bit-isle Acquisition $31-35M (1) Standalone net of divestitu

  16. Slide 16: Q1'16 Adjusted EBITDA Guidance

    Q1’16 Adjusted EBITDA Guidance 45.6% 46.7% 46.7% 44.0% 46.2% 386-390 11 -17 17 368-372 3 38 +2.8% 336-340 333 -4 329 2 1 (1) Q4’15 Q4’15 Q1’16 Telecity Bit-isle Integration Q1’16 Integration Q1’16 Reported Organic Organic Acquisition Acquisition costs Guidance costs Normalized Normalized Guidance 1

  17. Slide 17: FY16 Adjusted EBITDA to AFFO

    FY16 Adjusted EBITDA to AFFO >1,620 -405 -69 >1,078 -140 58 -50 >970 50 14 (1) (2) FY16 Net Interest Income Tax Recurring FX Loss Other FY16 AFFO FX Loss Integration FY16 Adjusted Expense CapEx Related to Guidance Related to Costs Normalized EBITDA TCY TCY AFFO Guidance Acquisition Acquisition Guida

  18. Slide 18: 2016 Financial Guidance

    2016 Financial Guidance (1) $M FY 2016 Q1 2016 (2) (3) Revenues > $3,550 $838 - $842 Cash Gross Margin % 67 - 68% 67 - 68% Cash SG&A $770 - $790 $196 - $200 Cash SG&A % ~22% 23 - 24% (4) (5) Adjusted EBITDA > $1,620 $368 - $372 Adjusted EBITDA Margin % ~45.6% ~44.0% Capex $900 - $1,000 $235 - $255 N

  19. Slide 19: Supplemental Financial and Operating Data

    Supplemental Financial and Operating Data Global Interconnection Business Data Centers Ecosystems 112 Data Centers 1,100+ Networks 6,300+ Businesses 12M Square Feet 171,200 Cross-connects Equinix Marketplace™ 99.9999% Uptime 100% of Tier 1 Network Revenue Opportunities Record Routes © 2016 Equinix I

  20. Slide 20: Equinix Overview

    Equinix Overview (1) Unique portfolio of data center assets Development pipeline • Global footprint: 112 data centers in 33 metros • Long history of development success through • Network dense: 1,100+ networks expansions, campuses and known demand pipeline • Cloud dense: 1,300 Cloud & IT service pro

  21. Slide 21: Equinix Global Platform

    Equinix Global Platform (1) Equinix offers broad geographic reach and significant scale within each region Platform Equinix • Geographic footprint is unmatched and remains a unique differentiator • Multi-region deployments outpace single-region deployments Expansion strategy • Use unique market inte

  22. Slide 22: Customer Revenues Mix

    Customer Revenues Mix Diversified Revenue by Customer, Region & Industry Global Customer Count and Churn % (4) 5% Network Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Recurring Gross New Global Customers (5) 190 210 170 170 180 17% 26% MIS MRR Churn (6) 2.0% 2.0% 1.8% 2.0% 2.3% Financial Services 20% 94% Enterpris

  23. Slide 23: Non-Financial Metrics

    Non-Financial Metrics (1) FY2014 FY 2015 Q4 Q1 Q2 Q3 Q4 INTERCONNECTION # of Cross-connects (2) Americas 81,900 83,700 86,300 89,800 93,800 1,100+ Networks EMEA 36,900 38,400 39,700 41,500 43,900 171,200+ Cross-connects Asia-Pacific (2) 26,300 28,500 30,700 32,400 33,500 100% of Tier 1 Network Route

  24. Slide 24: Equinix Announced Expansions 2015-2016

    Equinix Announced Expansions 2015-2016 Overview of major Equinix IBX data center expansions (Including Telecity and Bit-isle) 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 Additiona

  25. Slide 25: Long-Term Lease Renewals

    Long-Term Lease Renewals Average lease maturity greater than 21 years including extensions (1) Global Lease Portfolio Expiration Waterfall (2) Equinix Owned Sites % Leases Renewing by Square Footage • Own 24 of 112 IBXs Last Possible Expiration Date • 4.3M of 12.0M total gross square feet 83% • 38%

  26. Slide 26: REIT Disclosure Update

    REIT Disclosure Update Equinix 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 operating status

  27. Slide 27: Same Store Operating Performance

    (1) Same Store Operating Performance Stabilized and Expansion – Cash Gross Profit grew 10.5% driven by Interconnection growth Revenues #039;000s Cash Cost & Gross Profit #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of (2) Cash Gross Cash Gross Cash Return on (1) (2) Category Coloca

  28. Slide 28: Consolidated Portfolio Operating Performance

    Consolidated Portfolio Operating Performance (1) By Region & Ownership – Owned Assets Generated 38% of Our Recurring Revenues Cabinets Billed Revenues (Q4 2015) #039;000s Total Cabinet Owned % Cabinet Cabinets Utilization Inter- Services/ Total Non- Total of Total (4) Category # of IBXs Capacity Billed

  29. Slide 29: Portfolio Composition – IBX mapping

    Portfolio Composition – IBX mapping (2) Same-Store Same-Store IBX (TCY Same-Store Same-Store IBX Location Ownership IBX Location Ownership Location Ownership IBX Location Ownership Classification Classification Name) Classification Classification Americas EMEA Telecity Asia-Pacific AT1 Atlanta Expan

  30. Slide 30: Adjusted Corporate NOI

    (1) Adjusted Corporate NOI (unaudited) Calculation Of Adjusted Corp NOI (unaudited) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 # of IBXs (1) 105 104 104 104 101 (2) Recurring Revenues $ 665,835 $ 644,455 $ 623,847 $ 608,280 $ 604,917 Recurring Cash Cost of Revenues Allocation (189,175) (182,434) (178,5

  31. Slide 31: 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 Q4 2015 Q4 2015 # of Cabinet Cabinets Utilization Recurring Quarterly (4) Territory IBXs Capacity Billed % % AMER %

  32. Slide 32: Components of NAV

    Components of NAV (unaudited) Operating Portfolio Adjusted % of Adjusted NOI Quarterly Adjusted Ownership Reference NOI AMER EMEA APAC NOI Stabilized Owned 56% 45% 0% Adjusted NOI Segments $110,218 Stabilized Leased 81% 7% 12% Adjusted NOI Segments 151,617 Expansion Owned 57% 43% 0% Adjusted NOI Seg

  33. Slide 33: Market Capitalization & Debt Summary

    Market Capitalization & Debt Summary Dec 31, Spread / (1) 2015 Debt Coupon Interest Rate Maturity Balance Market Capitalization Summary Common shares outstanding 62,100 Term Loan L + 150 1.68% Dec-19 $ 456,740 Market Price as of Dec 31, 2015 $ 302.40 Revolver L+ 150 1.44% Dec-19 325,622 Market Value

  34. Slide 34: REIT Financial Metrics

    REIT Financial Metrics Adjusted EBITDA to AFFO Breakdown FFO, Diluted AFFO & Adjusted EBITDA ($M) per Diluted Share(1) Adjusted EBITDA $5.17 $5.24 $5.39 $5.28 $5.07 $321 $333 $306 $311 $3.77 $3.75 $294 $3.39 $3.55 $3.09 $2.87 $2.85 $2.59 $2.14 $222 $221 $210 $195 $178 Q4 2014 Q1 2015 Q2 2015 Q3 2015

  35. Slide 35: Fully Diluted Weighted Average Shares Forecast

    Fully Diluted Weighted Average Shares Forecast (‘K) 71,777 72,059 ~895 ~-613 6,854 ~1,961 62,100 ~863 Shares outstanding Est. Employee 2016 Convertible Shares Issued Est. Shares Est. Dilutive Est. Weighting of Est. Fully Diluted @ 12/31/15 - Actual Equity Awards Notes In Connection Outstanding Uniss

  36. Slide 36: Recurring CapEx

    Recurring CapEx Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Recurring Sustaining IT & Network $ 9,400 $ 6,554 $ 8,249 $ 8,859 $ 6,034 IBX Maintenance 29,574 13,886 13,652 8,485 20,612 Re-configuration Installation 5,693 5,467 5,429 5,028 6,478 Subtotal - Recurring 44,668 25,906 27,330 22,373 33,124 Non-

  37. Slide 37: FY16 Revenue FX Hedging

    FY16 Revenue FX Hedging Revenue FX Rates Currency % of Revenues (3) Blended Guidance Blended % of Currency Hedge Rate Guidance Rate (1) Hedge % Revenues (3) (2) Rate CHF GBP USD 1.00 43% 1% EUR 1.09 1.13 1.11 53% 19% EUR 15% GBP 1.44 1.55 1.49 49% 15% 19% HKD SGD 0.70 6% 3% JPY 0.01 5% Other 3% AUD

  38. Slide 38: 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

  39. Slide 39: Appendix: Non-GAAP Financial Reconciliations & Definitions

    Appendix: Non-GAAP Financial Reconciliations & Definitions © 2016 Equinix Inc. Equinix.com 39

  40. Slide 40: Non-GAAP Reconciliations

    Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2015 2015 2014 2015 2014 We define cash cost of revenues

  41. Slide 41: Non-GAAP Reconciliations

    Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2015 2015 2014 2015 2014 We define cash gross profit as r

  42. Slide 42: Non-GAAP Reconciliations

    Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2015 2015 2014 2015 2014 We define adjusted EBITDA as inc

  43. Slide 43: Non-GAAP Reconciliations

    Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2015 2015 2014 2015 2014 The geographic split of our adju

  44. Slide 44: Non-GAAP Reconciliations

    Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2015 2015 2014 2015 2014 We define cash gross margins as

  45. Slide 45: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Equinix, Inc. Adjusted EBITDA - Annual (unaudited and in thousands) 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, 2015 2014 2013 2012 2011 We define adjusted EBITDA as income from o

  46. Slide 46: Non-GAAP Reconciliations

    Non-GAAP Reconciliations (unaudited and in thousands, except per share amounts) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 CALCULATION OF ADJUSTED EBITDA Income from continuing operations $ 135,877 $ 140,883 $ 139,133 $ 151,449 $ 127,826 $ 135,131 $ 124,697 $ 121,612 Adjustments

  47. Slide 47: Non-GAAP Reconciliations

    Non-GAAP Reconciliations NAREIT Funds From Operations (NAREIT FFO) (unaudited and in thousands, except per share amounts) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 RECONCILIATION OF NET INCOME (LOSS) TO NAREIT FFO Net income (loss) $ 10,731 $ 41,132 $ 59,459 $ 76,452 $ (355,103

  48. Slide 48: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Adjusted Funds From Operations (AFFO) (unaudited and in thousands, except per share amounts) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 NAREIT FFO attributable to common shareholders $ 131,483 $ 151,197 $ 167,368 $ 179,190 $ (241,338) $ 146,059 $ 109,813

  49. Slide 49: 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

  50. Slide 50: © 2016 Equinix Inc. Equinix.com

    © 2016 Equinix Inc. Equinix.com 50

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