Slide 1: Q3 2016 Earnings Conference call
Q3 2016 Earnings Conference call NASDAQ: EQIX Presented on November 2, 2016 © 2016 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: Q3 2016 Financial Highlights
Q3 2016 Financial Highlights Revenues of $924.7 Million Revenues ($M) Recurring Revenues Non-recurring Revenues $924.7 • Revenues up 3% QoQ and 35% YoY on an as-reported $844.2 $900.5 basis $730.5 • Revenues up 3% QoQ and 14% YoY on an organic and $686.6 constant currency basis (1) • Recurring reven
Slide 4: Stabilized IBX Growth
Stabilized IBX Growth (1) (1) (1) Stabilized, Expansion & New IBXs Stabilized IBX Profitability Last Quarter Reported ($4,304) $1,893 $1,360 $39 +24% +8% 86% (2) (3) (4) (4) (6) (1) New IBXs where Phase 1 began operating after January 1, 2015 (2) Revenues represent Q3 16 as-reported revenues in mill
Slide 5: Q3 2016 Consolidated Results
Q3 2016 Consolidated Results Quarter ($M Except for Non-Financial Metrics) Q3 16 Q3 16 Q2 16 Q3 15 Q3 16 vs. Q3 16 vs. Guidance Actual Actual Actual Q2 16 % ∆ Q3 15 % ∆ Revenues $915 - $921 $ 924.7 $ 900.5 $ 686.6 3% 35% Cash Gross Profit 619.9 608.5 475.0 2% 30% Cash SG&A ~$199 - $205 199.8 188.2 1
Slide 6: Americas Performance
Americas Performance Q3 Highlights Q3 Business Conditions ($M) $413.5 $425.1 $394.5 $404.4 • Q3 reported revenues up 3% QoQ and 11% YoY on an as- $382.6 reported basis • Q3 revenues up 2% QoQ and 11% YoY on a constant currency basis (1) $195.0 $202.1 $180.8 $184.5 • Q3 Adjusted EBITDA up 4% QoQ and
Slide 7: EMEA Performance
EMEA Performance Q3 Highlights Q3 Business Conditions ($M) • Q3 revenues flat QoQ and up 70% YoY on an as-reported basis; up $300.6 $301.3 3% QoQ and 15% YoY on an organic and constant currency basis (1) $267.9 $107.2 $107.3 • Q3 Adjusted EBITDA down 9% QoQ on an as-reported basis. $84.4 Underlying
Slide 8: Asia-Pacific Performance
Asia-Pacific Performance Q3 Highlights Q3 Business Conditions ($M) $198.3 $186.4 • Q3 revenues up 6% QoQ and 57% YoY on an as-reported basis $171.9 $39.7 $153.3 $37.3 • Q3 revenues up 4% QoQ and 19% YoY on an organic and constant $34.2 $126.5 $21.6 currency basis (1) $91.8 $96.4 • Q3 Adjusted EBITDA
Slide 9: Capital Structure and Sources and Uses of Cash
Capital Structure and Sources and Uses of Cash • Ample liquidity to fund growth and dividend • Flexible capital structure with additional capacity Capitalization Table Debt Maturity Profile (4) ($M) ($M) Q3 16 Q2 16 Loans Payable, Capital Lease & Other Financing Obligations Capital Leases $ 1,539 $
Slide 10: Dividend Outlook
Dividend Outlook ($M) AFFO outlook $1,059-1,065 (1) (1) • Increased 2016 guidance to $1,059-$1,065 • Implies growth of 28% YoY on an as-reported (2) basis and 35% growth YoY on a normalized 832 (1) and constant currency basis 762 680 Dividend growth potential • AFFO growth provides capacity for long
Slide 11: Capex
Capex Q3 2016 Capex and Regional Breakout Recurring Non-Recurring ($M) ($M) Recurring capital APAC, 19% expenditures Sustaining IT & Network, 27% • Expenditures to extend useful life of IBXs or other Equinix assets in Maintenance, Americas, 50% support of current revenues 61% Installation, EMEA, 31%
Slide 12: FY16 Revenues Guidance
FY16 Revenues Guidance ($M) 3,609-3,615 +14.1% -6 556 3,059-3,065 2,726 2,683 -43 2 3 1 (1) FY15 Reported FY15 Organic FY16 Organic Acquisitions LD2 FY16 Guidance Normalized 1 Normalizing Items ($43M) 2 Raise full year organic guidance 3 Raise full year acquisitions guidance Foreign Exchange (2) ($2
Slide 13: FY16 Adjusted EBITDA Guidance
FY16 Adjusted EBITDA Guidance 46.7% 46.8% 47.4% 45.8% (5) +36.4% ($M) 1,709-1,715 1,650-1,656 -59 1,272 1,256 2 3 -17 1 (1) FY15 Reported FY15 Organic FY16 Guidance Integration Costs FY16 Guidance Normalized Normalized 1 2 3 Normalizing Items ($17M) Guidance Integration Costs (2) (3) Foreign Exchang
Slide 14: Q4 16 Guidance
Q4 16 Guidance ($M) Revenues Adjusted EBITDA 45.4% 47.4% 47.6% 45.8% 2.4% 940-946 +2.7% 446-452 -17 437 925 429-435 -4 921 17 1 420 (1) 2 Q3’16 Reported Q3’16 Q4’16 Guidance Q3’16 Q3’16 Q4’16 Integration Q4’16 Normalized Reported Normalized Normalized costs Guidance Guidance 1 Normalizing Items ($4M
Slide 15: FY16 AFFO Guidance
FY16 AFFO Guidance ($M) Change from Prior Guidance, with Negligible FX Impact -10 +12 +5 -2 0 +12 +17 0 +4 +21 1,650-1,656 -372 -45 1,182-1,188 -147 59 1,059-1,065 64 -64 37 FY16 Adjusted Net Interest Income Tax Recurring FX Loss Install Rev, Rent FY16 AFFO FX Loss Integration FY16 EBITDA Expense Ca
Slide 16: 2016 Financial Guidance
2016 Financial Guidance (1) $M FY 2016 Q4 2016 (2) (3) Revenues $3,609 - $3,615 $940 - $946 (4) (4) Cash Gross Margin % ~ 67% ~ 67% Cash SG&A $779 - $785 $199 - $205 Cash SG&A % 21 – 22% 21 - 22% (5) (6) Adjusted EBITDA $1,650 - $1,656 $429 - $435 Adjusted EBITDA Margin % ~45.8% ~45.8% Capex ~$1,000
Slide 17: Supplemental Financial and Operating Data
Supplemental Financial and Operating Data Global Interconnection Business Data Centers Ecosystems 146 Data Centers 1,400+ Networks 8,000+ Businesses 14.5M Square Feet 188,400 Cross-connects Equinix Marketplace™ 99.9999% Uptime 100% of Tier 1 Network Revenue Opportunities Record Routes © 2016 Equinix
Slide 18: Equinix Overview
Equinix Overview (1) Unique portfolio of data center assets Development pipeline • Global footprint: 146 data centers in 40 metros • Long history of development success through • Network dense: 1,400+ networks expansions, campuses and known demand pipeline • Cloud dense: 2,700+ Cloud & IT service pr
Slide 19: Equinix Global Platform
Equinix Global Platform (1) Equinix offers broad geographic reach and significant scale within each region (2) Platform Equinix • Geographic footprint is unmatched and remains a unique differentiator • Multi-region deployments outpace single- region deployments Expansion strategy • Use unique market
Slide 20: Customer Revenues Mix
Customer Revenues Mix Diversified Revenue by Customer, Region & Industry 7% Network Recurring Customer % of Recurring Revenues 15% 24% (2) MIS Multi-Metro Customers 82% (2) Financial Multi-Region Customers 70% 18% Services (2) Customers in 3 Regions 55% 95% Top 50 Customers (3) 39% 14% Enterprise In
Slide 21: Non-Financial Metrics
Non-Financial Metrics (1) FY 2015 FY 2016 Normalized Q3 Q4 Q1 Q2 Q3 QoQ (5) INTERCONNECTION Change 1,400+ Networks # of Cross-connects 188,400+ Cross-connects Americas 89,800 93,800 97,700 101,200 104,200 3,000 100% of Tier 1 Network Routes EMEA 41,500 43,900 44,500 45,500 46,300 1,700 Asia-Pacific
Slide 22: Equinix Announced Expansions 2016-2017
Equinix Announced Expansions 2016-2017 Overview of major Equinix IBX data center expansions AMERICAS Sellable Cabinet Total CAPEX* IBX Center Target Open Date Equivalents* (millions U.S.$) Comments GLOBAL TOTALS AT1 phase IV (Atlanta) Opened Q3 2016 365 $31 Global Total DC7 phase III (Ashburn) Q4 20
Slide 23: Long-Term Lease Renewals
Long-Term Lease Renewals Average lease maturity greater than 20 years including extensions (1) Global Lease Portfolio Expiration Waterfall (2) Equinix Owned Sites % Leases Renewing by Square Footage • Own 31 of 146 IBXs Last Possible Expiration Date 73% • 5.0M of 14.5M total gross square feet (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 (Organic Only)
(1) Same Store Operating Performance (Organic Only) Stabilized and Expansion – Cash Gross Profit grew 12.6% driven by Interconnection growth Revenues #039;000s Cash Cost & Gross Profit #039;000s Cash Cost Trailing 4-Qtr Inter- Services/ Total Non- Total of Cash Gross Cash Gross Gross Cash Return on (1) Ca
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 39% of Our Recurring Revenues (Organic Only) Cabinets Billed Revenues (Q3 2016) #039;000s Total Cabinet Owned % of Cabinet Cabinets Utilization Inter- Services/ Total Non- Total T
Slide 27: Portfolio Composition – IBX mapping
Portfolio Composition – IBX mapping Same-Store Same-Store IBX (EQIX 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 Expansio
Slide 28: Adjusted Corporate NOI (Incl. Telecity & Bit-isle)
(1) Adjusted Corporate NOI (Incl. Telecity & Bit-isle) (unaudited) Calculation Of Adjusted Corp NOI (unaudited) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 (1) # of IBXs 145 144 144 105 104 (2) Recurring Revenues $ 874,149 $ 847,108 $ 792,269 $ 665,835 $ 644,455 Recurring Cash Cost of Revenues Allocatio
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 Q3 2016 Q3 2016 # 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 Quarterly Adjusted Ownership Reference NOI AMER EMEA APAC NOI Stabilized Owned 65% 35% 0% Adjusted NOI Segments $117,145 Stabilized Leased 74% 5% 20% Adjusted NOI Segments 182,785 Expansion Owned
Slide 31: Market Capitalization & Debt Summary
Market Capitalization & Debt Summary Sep 30, 2016 Market Capitalization Summary Spread / (1) Common shares outstanding 71,379 Debt Coupon Interest Rate Maturity Balance Market Price as of Sep 30, 2016 $ 360.25 Revolver L + 120 1.47% Dec-19 - Market Value 25,714,376 Term Loan A L + 150 1.90% Dec-19 4
Slide 32: Fully Diluted Weighted Average Shares Forecast
Fully Diluted Weighted Average Shares Forecast (‘K) 71,410 ~717 ~-431 71,696 6,854 ~1,601 62,100 ~855 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, Net In Connection Outstanding
Slide 33: Recurring CapEx
Recurring CapEx Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Recurring Sustaining IT & Network $ 11,380 $ 7,204 $ 10,008 $ 9,400 $ 6,554 IBX Maintenance 25,229 19,631 17,279 29,574 13,886 Re-configuration Installation 5,001 5,094 4,511 5,693 5,467 Subtotal - Recurring 41,610 31,928 31,798 44,668 25,906 N
Slide 34: FY16 Revenue FX Hedging
FY16 Revenue FX Hedging (4) Revenue FX Rates Currency % of Revenues Blended (1) (2) Blended % of Currency Guidance Rate Hedge Rate Guidance (3) (4) Hedge % Revenues CHF GBP Rate EUR 1% 10% USD 1.0000 43% HKD 19% EUR to USD 1.1201 1.1184 1.1239 52% 19% 4% AUD 3% GBP to USD 1.2739 1.5424 1.4202 54% 10
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 Director, Investor Relations 650-598-6583 650-598-6442 krymill@equinix.com pthomas@equinix.com Equinix Media Contacts Steve Smith Keith Taylor Charles Meyers
Slide 36: Appendix: Non-GAAP Financial Reconciliations & Definitions
Appendix: Non-GAAP Financial Reconciliations & Definitions © 2016 Equinix Inc. Equinix.com 36
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended September 30, June 30, September 30, 2016 2016 2015 We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compen
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended September 30, June 30, September 30, 2016 2016 2015 We define cash operating expenses as operating expenses less depreciation, amortization, stock-based compensation and
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended September 30, June 30, September 30, 2016 2016 2015 We define adjusted EBITDA as income from continuing operations plus depreciation, amortization, accretion, stock-base
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended September 30, June 30, September 30, 2016 2016 2015 The geographic split of our adjusted EBITDA is presented below: Americas income from continuing operations $ 89,004 $
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations EQUINIX, INC. NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA (in thousands) (unaudited) Three Months Ended September 30, June 30, September 30, 2016 2016 2015 We define cash gross margins as cash gross profit divided by revenues. Our cash gross margins by geographic region is
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands, except per share amounts) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 CALCULATION OF ADJUSTED EBITDA Income from continuing operations $ 169,941 $ 151,655 $ 112,688 $ 135,877 $ 140,883 $ 139,133 $ 151,449 $ 127,826 Adjustments
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations NAREIT Funds From Operations (NAREIT FFO) (unaudited and in thousands, except per share amounts) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 RECONCILIATION OF NET INCOME (LOSS) TO NAREIT FFO Net income (loss) $ 51,450 $ 44,711 $ (31,111) $ 10,731 $ 41,132
Slide 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Funds From Operations (AFFO) (unaudited and in thousands, except per share amounts) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 NAREIT FFO attributable to common shareholders $ 187,831 $ 201,515 $ 115,875 $ 131,483 $ 151,197 $ 167,368 $ 179,190 $
Slide 45: 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 46: © 2016 Equinix Inc. Equinix.com
© 2016 Equinix Inc. Equinix.com 46