10-QPeriod: Q3 FY2009

EQUINIX INC Quarterly Report for Q3 Ended Sep 30, 2009

Filed October 26, 2009For Securities:EQIX

Summary

Equinix Inc. (EQIX) reported a strong performance for the nine months ended September 30, 2009, with revenues increasing by 25% to $639.96 million compared to the same period in 2008. This growth was driven by a robust increase in recurring revenues across all geographic segments: U.S. (23%), Europe (24%), and Asia-Pacific (41%). The company demonstrated effective cost management, with cost of revenues as a percentage of total revenues decreasing from 60% to 56% year-over-year. Net income saw a significant jump to $51.71 million from $10.06 million in the prior year period, reflecting improved operational efficiency and revenue growth. The company also strengthened its financial position by raising $373.8 million in net proceeds from a 4.75% convertible subordinated notes offering in June 2009. Despite increased interest expenses due to higher debt balances, Equinix maintained a healthy cash flow from operations, amounting to $272.98 million for the nine months ended September 30, 2009. The company's liquidity remained strong with $627.4 million in cash, cash equivalents, and investments as of September 30, 2009. The acquisition of Switch & Data Facilities Company, Inc. was announced in October 2009, signaling continued strategic expansion.

Financial Highlights

27 data points
Beta

Revenue

$227.56M

44.6% Gross Margin

Net Income

$18.81M

8.3% Net Margin

EPS (Diluted)

$0.47

Cash & Equivalents

$283.15M

Free Cash Flow

$19.34M

Financial Statements
Beta
Revenue$227.56M
Cost of Revenue$126.01M
Gross Profit$101.55M
Operating Expenses$182.00M
Operating Income$45.56M
Interest Expense$22.26M
Net Income$18.81M
EPS (Basic)$0.49
EPS (Diluted)$0.47
Shares Outstanding (Basic)38.79M
Shares Outstanding (Diluted)39.89M

Key Highlights

  • 1Revenue grew by 25% to $639.96 million for the nine months ended September 30, 2009, driven by strong recurring revenue growth across all segments.
  • 2Net income surged to $51.71 million for the nine months ended September 30, 2009, a significant increase from $10.06 million in the prior year.
  • 3Operating cash flow remained robust at $272.98 million for the nine months ended September 30, 2009.
  • 4The company successfully raised $373.8 million in proceeds from a 4.75% convertible subordinated notes offering in June 2009.
  • 5Equinix maintained a strong liquidity position with $627.4 million in cash, cash equivalents, and investments as of September 30, 2009.
  • 6Acquisition of Switch & Data Facilities Company, Inc. announced in October 2009, indicating strategic growth initiatives.
  • 7Cost of revenues as a percentage of total revenues improved from 60% to 56% for the nine-month period, showcasing operational efficiencies.

Frequently Asked Questions

For the nine months ended September 30, 2009, Equinix reported revenues of $639.96 million, representing a 25% increase compared to $513.997 million for the same period in 2008. This growth was driven by increases in recurring revenues across the U.S., Europe, and Asia-Pacific segments.

Equinix experienced a substantial improvement in profitability. Net income for the nine months ended September 30, 2009, was $51.71 million, a significant increase from $10.06 million reported for the same period in 2008. This improvement is attributed to revenue growth and better cost management.

In June 2009, Equinix issued $373.8 million in 4.75% convertible subordinated notes. The company also had borrowings under various financing facilities, including the Singapore Financing and Netherlands Financing. Despite increased interest expenses, operating cash flow remained strong.

As of September 30, 2009, Equinix maintained a strong liquidity position with $627.4 million in cash, cash equivalents, and short-term and long-term investments. The company believes this is sufficient to meet operating requirements and fund expansion plans, including the announced acquisition of Switch & Data.