Slide 1: Q1 2017 Earnings Conference call
Q1 2017 Earnings Conference call NASDAQ: EQIX Presented on April 26, 2017 © 2017 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 Equi
Slide 3: Q1 2017 Financial Highlights
Q1 2017 Financial Highlights Revenues ($M) Recurring Revenues Non-recurring Revenues Revenues of $949.5 Million $900.5 $924.7 $942.6 $949.5 $844.2 • Revenues up 1% QoQ and 12% YoY on an as- reported basis • Revenues up 2% QoQ and 11% YoY on a normalized $892.4 $898.4 and constant currency basis (1)
Slide 4: Stabilized IBX Growth
Stabilized IBX Growth (1) (1) (1) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter ($4,323) $1,942 $1,394 $46 Reported 7 28 (2) +27% 70 (2) 87% +5% (2) (3) (4) (4) (6) (1) New IBXs where Phase 1 began operating after January 1, 2016; AD1, DX2 & SP3 were (2) Revenues represe
Slide 5: Q1 2017 Consolidated Results
Q1 2017 Consolidated Results Quarter ($M Except for Non-Financial Metrics) Q1 17 Q1 17 Q4 16 Q1 16 Q1 17 vs. Q1 17 vs. Guidance Actual Actual Actual Q4 16 % ∆ Q1 16 % ∆ Revenues $940 - $946 $ 949.5 $ 942.6 $ 844.2 1% 12% Cash Gross Profit 646.0 641.1 573.1 1% 13% Cash SG&A $208 - $214 218.4 204.6 19
Slide 6: Americas Performance
Americas Performance Q1 Highlights Q1 Business Conditions ($M) • Q1 revenues flat QoQ, due to LinkedIn churn and up 8% YoY on an $425.1 $436.5 $436.4 as-reported basis. Q1 revenues down 0.3% QoQ, but up 6% YoY on $404.4 $413.5 a normalized and constant currency basis (1); Excluding the impact of the
Slide 7: EMEA Performance
EMEA Performance Q1 Highlights Q1 Business Conditions ($M) $300.6 $301.3 $301.6 $314.8 • Q1 revenues up 4% QoQ and 18% YoY on an as-reported basis; on $267.9 a normalized and constant currency basis (1) up 5% QoQ and 14% YoY • Q1 Adjusted EBITDA up 1% QoQ and 16% YoY on an as-reported $133.5 $121.5
Slide 8: Asia-Pacific Performance
Asia-Pacific Performance Q1 Highlights Q1 Business Conditions ($M) $198.3 $204.5 $198.2 $186.4 • Q1 revenues down 3% QoQ, due to FX headwind, and up 15% YoY $171.9 on an as-reported basis; on a normalized and constant currency basis, up 3% QoQ and 15% YoY (1) $96.4 $102.9 $99.4 • Q1 Adjusted EBITDA
Slide 9: Capital Structure and Sources and Uses of Cash
Capital Structure and Sources and Uses of Cash • Ample liquidity to fund growth and dividend • Flexible capital structure with additional capacity Capitalization Table Debt Maturity Profile (5) ($M) Loans Payable, Capital Lease & Other Financing Obligations ($M) Q1 17 Q4 16 Senior Notes Capital Leas
Slide 10: Dividend Outlook
Dividend Outlook (1) ($M) (2) AFFO outlook (1) • 2017 guidance >$1,214M • Implies growth of 13% YoY on both an as- reported basis and a normalized and constant (1) currency basis Dividend growth potential • AFFO growth provides capacity for long-term dividend growth 2017E Dividend of ~$612M • Second
Slide 11: Capex
Capex Q1 2017 Capex and Regional Breakout Recurring Non-Recurring ($M) ($M) Recurring capital APAC, 15% expenditures Sustaining IT & Network, 32% • Expenditures to extend useful life of Maintenance, IBXs or other Equinix assets in 46% EMEA, 31% Americas, support of current revenues 54% • Recurring c
Slide 12: FY17 Guidance ($M)
FY17 Guidance (1) ($M) Normalized Constant Currency YoY Growth Revenues Adjusted EBITDA (2) (3) >11.1% 45.9% (3) >11.3% (Normalized 47.5%) 47.5% 46.8% >10.1% >12.2% >$3,976 >$1,890 >$1,860 $3,612 -$30 $1,657 1 2 (4) FY16 Reported FY17 Guidance FY16 Reported FY17 Guidance Integration Costs FY17 Guida
Slide 13: Q2 17 Guidance
Q2 17 Guidance ($M) Revenues Adjusted EBITDA 45.0% 46.5% 47.0% 46.0% +2.6% +3.7% $976-$982 $457-$463 -$10 $447-$453 $444 $954 $950 $5 $16 $428 (1) (1) Q1 17 Reported FX Q1 17 Q2 17 Guidance Q1 17 FX and Q1 17 Q2 17 Integration Q2 17 Normalized Reported Integration Normalized Normalized costs (3) Gui
Slide 14: FY17 AFFO Guidance
FY17 AFFO Guidance Guidance ($M) As-Reported Change from Prior Guidance Constant Currency Change from Prior Guidance +$18 -$56 0 0 +$3 -$35 0 +$53 +$18 +$4 -$56 0 0 +$3 -$49 0 +$53 +$4 >$1,860 -$52 -$87 -$35 -$360 -$447 -$60 >$1,331 -$163 $87 >$1,214 $30 2027 HY $24 Term Loan B (1) (2) FY17 Adjusted
Slide 15: FY17 AFFO Guidance Comparison
FY17 AFFO Guidance Comparison As-Reported Share Counts Normalized Share Counts (1) 71.6M 71.6M 72.7M 77.5M 72.6M AFFO per Share $15.06 $16.42 $17.19 $15.66 $18.33 >13.2% >$1,331 >12.6% $87 >$1,249 $4 ($M) $14 -$53 >$1,214 $30 $1,176 $98 $1,078 (2) FY16 AFFO Normalizing FY16 Prior FY17 FX Guidance TL
Slide 16: 2017 Financial Guidance
2017 Financial Guidance (1) $M FY 2017 Q2 2017 (2) (3) Revenues >$3,976 $976 - $982 Cash Gross Margin % 67 - 68% 67 - 68% Cash SG&A $810 - $830 $206 - $212 Cash SG&A % ~21% 21-22% (4) (5) Adjusted EBITDA >$1,860 $447 - $453 Adjusted EBITDA Margin % ~46.8% ~46.0% Capex $1,100 – $1,200 $331 - $351 Non
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data © 2017 Equinix Inc. Equinix.com 17
Slide 18: Equinix Overview
Equinix Overview (1) Unique portfolio of data center assets Development pipeline • Global footprint: 150 data centers in 41 metros • Long history of development success through • Network dense: 1,500+ networks expansions, campuses and known demand pipeline • Cloud dense: 2,700+ Cloud & IT service pr
Slide 19: Equinix Global Platform
Equinix Global Platform (1) Equinix offers broad geographic reach and significant scale within each region Platform Equinix • Geographic footprint is unmatched and remains a unique differentiator • Multi-region deployments outpace single- region deployments Expansion strategy • Use unique market int
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenue by Customer, Region & Industry 7% Customer % of Recurring Revenues Recurring 16% 29% Cloud & IT Multi-Metro Customers 83% MIS & Others Services Multi-Region Customers 70% Content & Customers in 3 Regions 58% 14% Digital Media Top 50 Customers 36% 95% Interco
Slide 21: Non-Financial Metrics
Non-Financial Metrics (1) FY 2016 FY 2017 Q1 Q2 Q3 Q4 Q1 QoQ ∆ INTERCONNECTION # of Cross-connects 1,500+ Networks Americas 97,700 101,200 104,200 106,300 109,700 3,400 237,000+ Cross-connects EMEA 44,500 45,500 46,300 82,900 84,900 2,000 100% of Tier 1 Network Routes Asia-Pacific 34,600 36,200 37,9
Slide 22: Equinix Announced Expansions 2017-2018
Equinix Announced Expansions 2017-2018 Overview of major Equinix IBX data center expansions AMERICAS Sellable Cabinet Total CAPEX* IBX Center Target Open Date Equivalents* (millions U.S.$) Comments GLOBAL TOTALS SP3 phase I (São Paulo) Opened Q1 2017 725 $69 Additional capacity for 2,050 cabinet equ
Slide 23: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 19 years including extensions (1) Global Lease Portfolio Expiration Waterfall (2) Equinix Owned Sites % Leases Renewing by Square Footage • Own 34 of 150 IBXs Last Possible Expiration Date • 5.4M of 14.9M total gross square feet 71% (3) •
Slide 24: 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
Slide 25: Same Store Operating Performance
(1) Same Store Operating Performance Stabilized and Expansion – Cash Gross Profit grew 12.3% driven by Interconnection growth Revenues #039;000s Cash Cost & Gross Profit #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total Normalized of Cash Gross Cash Gross Gross Cash Return on (2) Catego
Slide 26: Consolidated Portfolio Operating Performance (Incl. Telecity & Bit-isle)
(1) Consolidated Portfolio Operating Performance (Incl. Telecity & Bit-isle) By Region & Ownership – Owned Assets Generated 35% of Our Recurring Revenues Cabinets Billed Revenues (Q1 2017) #039;000s Total Cabinet Owned % of Cabinet Cabinets Utilization Inter- Services/ Total Non- Total Total Category #
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Same-Store Same-Store Same-Store Same-Store IBX Location Ownership IBX Location Ownership IBX Location Ownership IBX Location Ownership Classification Classification Classification Classification Americas EMEA EMEA (Continued) Asia-Pacific AT1 Atlanta Expansion Le
Slide 28: Adjusted Corporate NOI (Incl. Telecity & Bit-isle)
(1) Adjusted Corporate NOI (Incl. Telecity & Bit-isle) Calculation Of Adjusted Corp NOI (unaudited) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 # of IBXs (1) 149 145 145 144 144 (2) Recurring Revenues $ 895,613 $ 887,748 $ 874,149 $ 847,108 $ 792,269 Recurring Cash Cost of Revenues Allocation (260,570)
Slide 29: Adjusted NOI Composition (Incl. Telecity & Bit-isle)
(1) Adjusted NOI Composition (Incl. Telecity & Bit-isle) By Stabilization and Ownership – Owned Assets and NOI are predominantly in campus locations in our largest global markets Total Cabinet Adjusted NOI by Region Q1 2017 Q1 2017 # of Cabinet Cabinets Utilization Recurring Quarterly Territory IBXs
Slide 30: Components of NAV (Incl. Telecity & Bit-isle)
Components of NAV (Incl. Telecity & Bit-isle) (unaudited) Operating Portfolio Adjusted % of Adjusted NOI Q1 17 Quarterly Ownership Reference NOI AMER EMEA APAC Adjusted NOI Stabilized Owned 79% 20% 1% Adjusted NOI Segments $118,971 Stabilized Leased 60% 10% 30% Adjusted NOI Segments 248,853 Expansio
Slide 31: Market Capitalization & Debt Summary
Market Capitalization & Debt Summary Mar 31, 2017 Spread / (1) Market Capitalization Summary Debt Coupon Interest Rate Maturity Balance Common shares outstanding 77,912 Revolver L + 120 2.20% Dec-19 - (3) Market Price as of Mar 31, 2017 $ 400.37 Term Loan A L + 150 1.59% Dec-19 392,149 (4) Market Va
Slide 32: Fully Diluted Weighted Average Shares Forecast
Fully Diluted Weighted Average Shares Forecast (‘K) 78,259 738 -1,493 77,504 780 ~6,069 71,409 ~78,259 ~77,504 Shares outstanding Equity Raise Est. Employee Est. Shares Est. Dilutive Est. Weighting of Est. Fully Diluted @ 12/31/16 - Actual for Verizon Equity Awards Outstanding Unissued Shares All Sh
Slide 33: CapEx Profile
CapEx Profile Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Recurring Sustaining IT & Network $ 7,284 $ 8,774 $ 11,380 $ 7,204 $ 10,008 IBX Maintenance 10,466 21,753 25,229 19,631 17,279 Re-configuration Installation 4,922 5,950 5,001 5,094 4,511 Subtotal - Recurring 22,672 36,476 41,610 31,928 31,798 Non
Slide 34: FY17 Revenues FX Hedging
FY17 Revenues FX Hedging 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 USD 1.0000 42% EUR 1% 10% HKD EUR to USD 1.0686 1.1042 1.0898 60% 19% 19% 4% AUD GBP to USD 1.2539 1.4496 1.3952 72%
Slide 35: Equinix Leadership and Investor Relations
Equinix Leadership and Investor Relations Executive Team Equinix Investor Relations Contacts Katrina Rymill Paul Thomas VP, Investor Relations Sr. Director, Investor Relations 650-598-6583 650-598-6442 krymill@equinix.com pthomas@equinix.com Equinix Media Contacts Steve Smith Keith Taylor Charles Me
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions © 2017 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended March 31, December 31, March 31, 2017 2016 2016 We define cash cost of revenues as cost of revenues less depreciatio
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended March 31, December 31, March 31, 2017 2016 2016 We define cash operating expenses as selling, general, and administr
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended March 31, December 31, March 31, 2017 2016 2016 We define adjusted EBITDA as income from continuning operations excl
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended March 31, December 31, March 31, 2017 2016 2016 The geographic split of our adjusted EBITDA is presented below: Amer
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Three Months Ended March 31, December 31, March 31, 2017 2016 2016 We define cash gross margins as cash gross profit divided by revenue
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands, except per share amounts) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 CALCULATION OF ADJUSTED EBITDA Income from continuing operations $ 167,213 $ 184,455 $ 169,941 $ 151,655 $ 112,688 $ 135,877 $ 140,883 $ 139,133 Adjustments
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations NAREIT Funds From Operations (NAREIT FFO) (unaudited and in thousands, except per share amounts) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 RECONCILIATION OF NET INCOME (LOSS) TO NAREIT FFO Net income (loss) $ 42,062 $ 61,750 $ 51,450 $ 44,711 $ (31,111)
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Funds From Operations (AFFO) (unaudited and in thousands, except per share amounts) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 NAREIT FFO attributable to common shareholders $ 200,866 $ 219,868 $ 187,831 $ 201,515 $ 115,875 $ 131,483 $ 151,197 $
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations Consolidated NOI calculation Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 (unaudited and in thousands) Revenues $ 949,525 $ 942,647 $ 924,676 $ 900,510 $ 844,156 Non-Recurring Revenues (NRR) (2) 50,256 49,980 46,739 47,770 45,158 Other Revenues (3) 3,656 4,920 3,788 5,632 6,729 R
Slide 46: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Income from continuing operations $ 167,213 $ 184,455 $ 169,941 $ 151,655 $ 112,688 Adjustments: Depreciation, amortization and accretion expense 219,013 212,268 215,370 213,719 202,153 Stock-based compensa
Slide 47: 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 48: © 2017 Equinix Inc. Equinix.com
© 2017 Equinix Inc. Equinix.com 48