Slide 1: Q4 2018 Earnings Conference Call
Q4 2018 Earnings Conference Call NASDAQ: EQIX Presented on February 13, 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: 2018 Financial Highlights
2018 Financial Highlights Revenues Recurring Revenues Non-recurring Revenues Q4 18 FY18 Revenues Growth ($M) $5,072 Acquisition Revenues: QoQ YoY YoY $4,368 Infomart: $31M Itconic/IL2: $67M As-reported 2% 9% 16% $3,612 Metronode: $48M $2,726 Normalized and (1) $2,444 2% 8% 9% Constant Currency $4,77
Slide 4: Q4 2018 Consolidated Results
Q4 2018 Consolidated Results ($M Except for AFFO per Share and Q4 18 FY18 Non-Financial Metrics) Guidance Actual QoQ YoY Guidance Actual YoY Revenues $1,299 - 1,309 $1,310 2% 9% $5,060 - 5,070 $5,072 16% Cash Gross Profit $864 2% 9% $3,375 15% Cash Gross Margin % 65 - 66% 66.0% 66 - 67% 66.6% Cash S
Slide 5: Americas Performance
Americas Performance Revenues $626 $638 Q4 18 FY18 ($M) $606 $603 $618 Revenues Growth QoQ YoY YoY As-reported 2% 5% 14% Normalized and (1) 2% 4% 5% Constant Currency (1) Normalized MRR 1% 5% 5% Adjusted EBITDA Q4 18 FY18 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Growth QoQ YoY YoY Adjusted EBITDA Adjusted EBIT
Slide 6: EMEA Performance
EMEA Performance Revenues Q4 18 FY18 Revenues Growth QoQ YoY YoY ($M) $397 $403 $370 $380 $383 As-reported 2% 9% 16% Normalized and (1) 1% 9% 12% Constant Currency (1) Normalized MRR 3% 11% 12% Adjusted EBITDA Q4 18 FY18 Growth QoQ YoY YoY Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 As-reported 1% 10% 20% Adjuste
Slide 7: Asia-Pacific Performance
Asia-Pacific Performance Revenues Revenues Q4 18 FY18 ($M) $269 Growth QoQ YoY YoY $261 $261 $224 $234 As-reported 3% 20% 21% Normalized and (1) 4% 15% 14% Constant Currency (1) Normalized MRR 2% 15% 14% Adjusted EBITDA Q4 18 FY18 Growth QoQ YoY YoY Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 As-reported 2% 17% 2
Slide 8: Capital Structure
(1) Capital Structure Capitalization Table Net Leverage Ratio Q4 18 Financing Activity As-Reported ($M) Q3 18 Q4 18 (Target 3.0x – 4.0x) • Sold 299,412 shares of common Bank Debt, Senior Notes, and Mortgages (2) $ 9,948 $ 9,889 4.4x stock under the ATM program for (4) net proceeds of approximately C
Slide 9: Capital Expenditures
Capital Expenditures Recurring Capital Expenditures 5.2% 5.4% 4.3% ($M) $70 • Recurring capital expenditures typically $63 13% 10% 3.3% $55 trend between 3 and 5% of revenues 2.9% 18% 13% 24% $42 • Maintenance capital expenditures can vary $35 24% 15% by quarter based on maintenance schedules 14% 12
Slide 10: Stabilized IBX Growth – Organic
Stabilized IBX Growth – Organic (1) (2) ($M) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter $2,103 $94 $7,056 $3,093 Reported # of IBXs Q4 18 Revenues ~30% annual Cash Gross Profit on Gross PP&E investment (5) Expansion: Stabilized: 15% Stabilized: 189 84% Growth YoY 2% (
Slide 11: 2019 Financial Guidance
2019 Financial Guidance ($M except AFFO per Share) FY 2019 Q1 2019 (1) (2) Revenues $5,520 - 5,570 $1,342 - 1,352 Cash Gross Margin % 66 - 67% ~66% Cash SG&A % 18 - 19% 19 - 20% (3) (4) Adjusted EBITDA $2,605 - 2,655 $624 - 634 Adjusted EBITDA Margin % ~47.4% ~46.7% Recurring Capital Expenditures $1
Slide 12: ASC Topic 842
(1) ASC Topic 842 The Company adopted ASC 842, Leases, using the alternative transition method on January 1, 2019. The Company expected to recognize right-of-use assets and lease liabilities for operating leases on the date of adoption. The new lease accounting standard requires the Company to derec
Slide 13: FY19 Guidance
FY19 Guidance Revenues Adjusted EBITDA 2019 YoY growth of 8 - 9%, in line with long-term targets Margins down slightly due to lease accounting change, higher EMEA utilities expense and record expansion activities Normalized Constant Currency (1) YoY Growth 8 - 9% 47.6% As-reported Margin 47.4% ($M)
Slide 14: Q1 19 Guidance
Q1 19 Guidance Revenues Adjusted EBITDA Largest quarter step-up in recurring revenues Adjusted EBITDA step-up muted by seasonal costs As-reported Margin (4) ($M) 47.1% 47.6% 47.3% 46.7% ~2% $1,342 - 1,352 ~2% $633 - 643 -$4 $627 -$5 $624 - 634 $1,318 $10 $1,310 $8 $617 (1) Q4 18 Reported Normalizing
Slide 15: FY19 AFFO and AFFO per Share Guidance
(1) FY19 AFFO and AFFO per Share Guidance Strong full year growth in AFFO (10 - 13%) and AFFO per share (8 - 11%) Share Count (Diluted) Normalized Constant Currency AFFO per Share (Diluted) YoY Growth AFFO per 80.2M 81.6M 81.6M Share (2) 8 - 11% $20.69 $22.56 - 23.17 $22.38 - 22.99 1 FY19 Adjusted E
Slide 16: Dividend Outlook
Dividend Outlook (1) Annual Cash Dividend ($M) ~10% +19% ~$800 $727 $612 $492 $394 2019E Cash Dividend of ~$800M • Continued growth of both annual cash 47% 46% 43% 44% 43% dividends and dividend per share Payout Payout Payout Payout Payout Ratio Ratio Ratio Ratio Ratio 2015 2016 2017 2018 (2) 2019 E
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data • 200 Data Centers • 333,000+ Total Interconnections • 20 years of deep expertise • 52 Metros • The most networks, clouds and IT designing and implementing services companies on one platform customer architectures • 5 Continents • The world’s largest Interne
Slide 18: Equinix Overview
(1) Equinix Overview • Global footprint: 200 data centers in 52 metros Unique Portfolio of Data • Network dense: 1,800+ networks; 100% of Tier 1 Network Routes Center Assets • Cloud dense: 2,900+ Cloud & IT service providers • Interconnected ecosystems: 333,000+ Total Interconnections • 2019 expecte
Slide 19: Pressing Our Advantage in All Markets
Pressing Our Advantage in All Markets Equinix global reach expanding across 52 metro areas and 24 countries with 3 new metros announced and coming soon 5 Continents 24 Countries 52 Metro areas 200 Data centers AMERICAS EMEA ASIA-PACIFIC % of Customers in Platform Equinix 18 Metros 22 Metros 12 Metro
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenues across Customer, Region & Industry segments Customers and Churn (3) Revenues Mix Top 10 Customers Rank Type of Customer %MRR Region Count IBX Count 1 Network 3.0% 3 129 2 Cloud & IT Services 2.2% 3 52 Financial 3 Enterprise 2.2% 3 45 Services 16% EMEA 4 Clo
Slide 21: Revenues by Product by Region
Revenues by Product by Region Americas EMEA Asia-Pacific Worldwide +9% +2% ($M) $1,310 $1,284 $80 $1,200 $76 $76 $78 $78 $73 +5% $202 $207 +2% $188 $626 $638 $606 $38 $34 $36 $24 $25 +9% $20 $134 $137 +2% $128 +20% $397 $403 $370 $21 +3% $26 $31 $945 $25 $31 $930 $31 $35 $35 $261 $269 $862 $31 $224
Slide 22: Non-Financial Metrics
(1) Non-Financial Metrics FY17 FY 2018 Acquisitions/ Organic Organic Total Organic Adjustments (2) Q4 Q1 Q2 Q3 Q4 Q4 Q4 QoQ Interconnections Americas 138,900 140,200 142,100 143,500 145,900 - 145,900 2,400 EMEA 92,200 94,700 96,900 99,300 101,900 13,600 115,500 2,600 Asia-Pacific 46,700 48,100 49,30
Slide 23: Equinix Announced Expansions 2019 - 2020
Equinix Announced Expansions 2019 - 2020 (1) Cabinet (1) Equivalent (1) 2019 2020 Total Capex(1) Capacity In IBX Center Status Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $US millions Ownership Future Phases DC12 phase II (Ashburn) Open 1,500 $51 Owned SV10 phase II (San Jose) Open 1,900 $78 Owned DA6 phase III (Dal
Slide 24: Long-Term Lease Renewals
Long-Term Lease Renewals Weighted average lease maturity of 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall Equinix Owned Sites (2) % Leases Renewing by Square Footage • Own 84 of 200 IBXs Last Possible Expiration Date 64% • Added NY4,* NY5,* NY6* and ZH5 • 12.4M of 21.
Slide 25: Same Store Operating Performance – Organic
Same Store Operating Performance – Organic (1) (2) Revenues ($M) Cash Cost, Gross Profit and PP&E ($M) Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on Category Colocation connection Other Recurring recurring Revenues Revenues Profit Margin % P
Slide 26: Consolidated Portfolio Operating Performance
(1) Consolidated Portfolio Operating Performance Cabinets Billed Q4 18 Revenues ($M) Total Cabinet Owned % (4) Cabinet Cabinets Utilization Total of Total Category # of IBXs Capacity Billed % Recurring Recurring Americas (2) Owned 44 69,600 51,800 74% $376 Leased 43 36,300 30,000 83% $213 Americas T
Slide 27: IBX Portfolio Composition
IBX Portfolio Composition Metro Count Stabilized Expansion New Acquisition Owned Leased Atlanta 5 AT2, AT3, AT4, AT5 AT1 AT4 AT1, AT2, AT3, AT5 Bogota 1 BG1 BG1 Boston 2 BO1 BO2 BO2 BO1 Chicago 5 CH1, CH2, CH4, CH7 CH3 CH3, CH7 CH1, CH2, CH4 Culpeper 4 CU1,CU2, CU3 CU4 CU1, CU2, CU3, CU4 Dallas 8 DA
Slide 28: Adjusted Corporate NOI
(1) Adjusted Corporate NOI Calculation Of Adjusted Corp NOI ($M) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 (1) # of IBXs 199 199 199 189 189 (2) Recurring Revenues $1,228 $1,206 $1,186 $1,149 $1,122 Recurring Cash Cost of Revenues Allocation (387) (380) (369) (349) (347) Cash Net Operating Income 842
Slide 29: Adjusted NOI Composition – Organic
Adjusted NOI Composition – Organic (1) Total Cabinet Q4 2018 (3) Q4 2018 (3) # of Cabinet Cabinets Utilization Recurring Quarterly Category IBXs Capacity Billed % Revenues Adjusted NOI % NOI Stabilized Owned (2) 40 64,900 56,300 87% $341 $233 32% Leased 90 75,600 62,400 83% $398 $231 32% Stabilized
Slide 30: Components of Net Asset Value
Components of Net Asset Value Operating Portfolio Adjusted Q4 18 Quarterly Ownership Reference NOI Adjusted NOI ($M) Stabilized Owned Adjusted NOI Segments $233 Stabilized Leased Adjusted NOI Segments $231 Expansion Owned Adjusted NOI Segments $163 Expansion Leased Adjusted NOI Segments $93 Quarterl
Slide 31: Debt Summary
Debt Summary Spread / Interest First Call Balance (1) Debt Maturity Coupon Rate Date (000's) Revolver (2) L + 120 - Dec-22 - Debt Amortization Term Loan A - SEK, GBP, JPY L + 145 1.815% Dec-22 - 1,344,482 Senior Notes - • $1.34B multi-currency Term Loan A USD due in 2022 5.375% 5.375% Jan-22 Jan-18
Slide 32: Shares Forecast
Shares Forecast (‘M) Fully Diluted Weighted Average Shares Common Stock Outstanding 80.7 -0.3 80.4 0.4 ~81.6 ~81.4 79.5 79.5 79.0 0.7 1.3 1.5 1.4 1.2 1.2 80.7 Shares Est. Employee Est. Shares Est. Dilutive Est. Weighting Est. Fully Diluted Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 outstanding @ Equity Awards Ou
Slide 33: Capital Expenditures Profile
(1) Capital Expenditures Profile ($M) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Recurring Sustaining IT & Network 12.4 13.3 5.1 9.1 14.7 IBX Maintenance 49.0 34.8 30.6 21.4 41.3 Re-configuration Installation 8.9 7.3 6.4 4.8 6.5 Subtotal - Recurring 70.2 55.4 42.2 35.2 62.5 Non-Recurring IBX Expansion
Slide 34: FX Rates, Hedging and Currencies
FX Rates, Hedging and Currencies Revenue FX Rates (4) Currency % of Revenues Blended Guidance (2) Blended (3) % of Currency (1) Hedge Rate Guidance (4) Rate (2) Hedge % Revenues CHF GBP Rate 1% 9% USD 1.00 45% EUR HKD 19% 4% EUR to USD 1.15 1.18 1.16 57% 19% AUD 4% GBP to USD 1.27 1.34 1.32 65% 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 31, 2018 • Workload Transformation Drives Increasing Off-Premise Deployments,
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 Berenberg Nate Crossett 650-598-6583 BMO Capital Markets Ari Klein krymill@equinix.com Citigroup Mike Rollins Cowen
Slide 37: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions 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
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 41
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 42
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations Confidential – © 2019 Equinix Inc. Equinix.com 43
Slide 44: Non-GAAP Reconciliations
(1) Non-GAAP Reconciliations Consolidated NOI calculation Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 (unaudited and in thousands) Revenues $1,310,083 $1,283,751 $1,261,943 $1,215,877 $1,200,221 Non-Recurring Revenues (NRR) (2) 80,242 75,387 73,572 64,314 76,654 Other Revenues (3) 1,353 1,964 1,945 2,45
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Income from Operations $ 270,717 $ 265,753 $ 215,038 $ 225,875 $ 232,043 Adjustments: Depreciation, Amortization and Accretion Expense 305,130 306,318 308,828 306,465 279,774 Stock-based Compensation Expens
Slide 46: 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 47: 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 48: Confidential – © 2019 Equinix Inc. Equinix.com
Confidential – © 2019 Equinix Inc. Equinix.com 48