10-QPeriod: Q2 FY2018

EQUINIX INC Quarterly Report for Q2 Ended Jun 30, 2018

Filed August 8, 2018For Securities:EQIX

Summary

Equinix Inc. (EQIX) reported strong revenue growth in its Q2 2018 filing, with total revenues increasing by 18% year-over-year to $1.26 billion. This growth was driven by robust performance across all geographic segments, particularly in the Americas, which saw a 16% increase in revenue. The company completed significant acquisitions in Q2 2018, including Metronode in Australia and Infomart Dallas, which are expected to contribute to future growth. Despite increased interest expense and acquisition costs, Equinix maintained a healthy operating income, reflecting effective cost management and the recurring nature of its business model. The company's strategic investments in expanding its global data center footprint appear to be well-received by the market, as evidenced by the consistent demand from both new and existing customers. Financially, Equinix demonstrated solid operational cash flow generation, enabling continued investment in its expansion projects. The company's balance sheet shows a significant increase in total assets, largely due to acquisitions and property, plant, and equipment additions. Debt levels have also increased, primarily from financing acquisitions, but the company maintains access to liquidity through its revolving credit facility and ATM program. Management remains focused on expanding its global platform and expects continued growth driven by the increasing demand for data center capacity and interconnection services.

Financial Highlights

56 data points
Beta

Revenue

$1.26B

48.3% Gross Margin

Net Income

$67.62M

5.4% Net Margin

EPS (Diluted)

$0.85

Total Assets

$20.07B

Cash & Equivalents

$966.31M

Free Cash Flow

$18.49M

Financial Statements
Beta
Revenue$1.26B
Cost of Revenue$651.80M
Gross Profit$610.14M
Operating Expenses$1.05B
Operating Income$215.04M
Interest Expense$134.67M
Net Income$67.62M
EPS (Basic)$0.85
EPS (Diluted)$0.85
Shares Outstanding (Basic)79.48M
Shares Outstanding (Diluted)79.75M

Key Highlights

  • 1Total revenues increased by 18% year-over-year to $1.26 billion for the three months ended June 30, 2018.
  • 2Americas revenue grew by 16%, EMEA by 19%, and Asia-Pacific by 24% for the same period.
  • 3The company completed significant acquisitions: Metronode (Australia) and Infomart Dallas, adding to its global data center footprint.
  • 4Income from operations increased by 16% year-over-year to $215 million.
  • 5Adjusted EBITDA increased by 19% year-over-year to $604 million, demonstrating strong operational performance.
  • 6Cash flow from operations significantly increased to $839.6 million for the six months ended June 30, 2018, up from $553.8 million in the prior year period.
  • 7Total debt increased to $11.5 billion, primarily due to financing recent acquisitions.

Frequently Asked Questions

Equinix's revenue growth was driven by strong performance across all geographic segments (Americas, EMEA, and Asia-Pacific), with increases of 16%, 19%, and 24% respectively for the three months ended June 30, 2018. This growth was fueled by both organic expansion within existing data centers and the contribution from recent acquisitions, notably Metronode and Infomart Dallas.

The company completed the acquisitions of Metronode and Infomart Dallas in Q2 2018. These acquisitions contributed to an increase in total assets and total liabilities. While acquisition costs were recorded, the expanded global footprint and expected future demand are seen as significant growth drivers. The results of operations for these acquisitions are included from their respective closing dates.

Equinix's total indebtedness stood at $11.5 billion as of June 30, 2018, an increase driven by financing recent acquisitions. The company reported $988.7 million in cash, cash equivalents, and investments, with approximately $532.5 million held in the U.S. Equinix also has significant liquidity available through its $2.0 billion revolving credit facility, with $1.9 billion available as of June 30, 2018.

Equinix operates globally and is exposed to foreign currency exchange rate fluctuations. The company employs hedging programs, including cash flow, balance sheet, and net investment hedges, to mitigate these risks. While foreign currency movements impacted reported results, the company's constant currency reporting provides a clearer view of underlying operational performance, which remained strong.