10-KPeriod: FY2018

EQUINIX INC Annual Report, Year Ended Dec 31, 2018

Filed February 22, 2019For Securities:EQIX

Summary

Equinix Inc.'s (EQIX) 2018 10-K filing highlights a year of significant growth and strategic expansion. The company, a global leader in data center and interconnection services, continued its expansion with key acquisitions, including Metronode in Australia and the Infomart Building in Dallas. These moves underscore Equinix's strategy to proactively meet growing demand for digital infrastructure and interconnection services across key global markets. The company's platform, Platform Equinix, serves over 9,800 companies, facilitating direct connections to customers and partners. Equinix operates as a REIT, emphasizing its real estate portfolio as a core component of its business. The report details the company's robust global footprint, its focus on interconnection leadership, and its evolving service offerings designed to support digital business transformation, cloud adoption, and the increasing demands of the digital economy. Management expressed confidence in the company's ability to meet its financial obligations and strategic growth objectives.

Financial Highlights

57 data points
Beta

Revenue

$5.07B

48.6% Gross Margin

Net Income

$365.36M

7.2% Net Margin

EPS (Diluted)

$4.56

Total Assets

$20.24B

Cash & Equivalents

$606.17M

Free Cash Flow

$1.82B

Financial Statements
Beta
Revenue$5.07B
Cost of Revenue$2.61B
Gross Profit$2.47B
Operating Expenses$4.09B
Operating Income$977.38M
Interest Expense$521.49M
Net Income$365.36M
EPS (Basic)$4.58
EPS (Diluted)$4.56
Shares Outstanding (Basic)79.78M
Shares Outstanding (Diluted)80.20M

Key Highlights

  • 1Equinix completed strategic acquisitions in 2018, including Metronode (10 data centers in Australia) and the Infomart Building in Dallas, expanding its global footprint to 200 data centers in 52 markets.
  • 2The company is a REIT, with data center operations in the US, Canada, Japan, and parts of EMEA included in its REIT structure, while other international operations are managed through taxable REIT subsidiaries (TRSs).
  • 3Platform Equinix connects over 9,800 companies, offering a global data center and interconnection platform that supports digital business transformation, cloud access, and business ecosystems.
  • 4The company emphasizes its interconnection leadership and the growth of its Equinix Cloud Exchange Fabric (ECX Fabric) as key differentiators.
  • 5As of December 31, 2018, Equinix reported $610.7 million in cash, cash equivalents, and short-term investments, with approximately $1.9 billion in additional liquidity available under its revolving credit facility.
  • 6Revenue growth was strong, with total revenues reaching $5.07 billion for the year ended December 31, 2018, a 16% increase year-over-year, driven by recurring revenues and expansion in all geographic regions.
  • 7The company experienced a significant increase in interest expense due to debt financing for acquisitions and expansion projects, with total indebtedness reaching approximately $11.4 billion as of December 31, 2018.

Frequently Asked Questions

In 2018, Equinix strategically expanded its global presence through significant acquisitions, notably the purchase of the Infomart Building in Dallas and the acquisition of Australian data center provider Metronode. These acquisitions align with Equinix's strategy to meet increasing demand for interconnection and data center services globally and to offer customers interconnection opportunities ahead of demand.

Equinix operates as a REIT for federal income tax purposes, with its U.S., Canadian, Japanese, and most EMEA data center operations falling under this structure. Data center operations in other jurisdictions are managed through taxable REIT subsidiaries (TRSs). This structure allows Equinix to benefit from REIT tax treatment while managing international operations.

Equinix's core business is providing a global data center and interconnection platform, known as Platform Equinix. Its value proposition centers on enabling businesses to 'Reach Everywhere,' 'Interconnect Everyone,' and 'Integrate Everything.' This is achieved by offering a vast network of state-of-the-art data centers, diverse interconnection solutions, robust digital ecosystems, and expert support, allowing companies to connect with customers, partners, and cloud providers efficiently and securely.

Equinix's revenue growth is primarily driven by its recurring revenue model, which constitutes over 90% of its total revenue. Growth is fueled by increasing demand for digital infrastructure and interconnection services, expansion into new markets through data center builds and acquisitions, and growing adoption of its cloud exchange and other platform services. A significant portion of revenue growth also comes from existing customers expanding their deployments.