10-QPeriod: Q1 FY2020

EQUINIX INC Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 7, 2020For Securities:EQIX

Summary

Equinix Inc. (EQIX) reported its first quarter 2020 financial results, showing a 6% increase in total revenue to $1.44 billion compared to the prior year, driven by growth across all geographic segments, particularly EMEA. Recurring revenues, which constitute 95% of total revenue, saw a 7% increase. The company completed two strategic acquisitions in Q1 2020: Packet Host, Inc. for approximately $290 million and three data centers in Mexico from Axtel for approximately $189 million. Despite a slight decrease in income from operations, primarily due to increased general and administrative expenses in the Americas related to acquisitions and headcount growth, the company's Adjusted EBITDA increased by 4% year-over-year to $684.2 million, demonstrating operational resilience. Cash flow from operations also improved significantly, increasing by 23% to $516.8 million.

Financial Highlights

53 data points
Beta

Revenue

$1.44B

49.0% Gross Margin

Net Income

$118.96M

8.2% Net Margin

EPS (Diluted)

$1.38

Total Assets

$23.59B

Cash & Equivalents

$1.19B

Free Cash Flow

$516.83M

Financial Statements
Beta
Revenue$1.44B
Cost of Revenue$736.28M
Gross Profit$708.26M
Operating Expenses$1.19B
Operating Income$253.48M
Interest Expense$107.34M
Net Income$118.96M
EPS (Basic)$1.39
EPS (Diluted)$1.38
Shares Outstanding (Basic)85.55M
Shares Outstanding (Diluted)86.14M

Key Highlights

  • 1Total revenue increased by 6% to $1.44 billion for the three months ended March 31, 2020, compared to the same period in 2019.
  • 2Recurring revenues grew by 7% to $1.36 billion, forming 95% of total revenues.
  • 3Completed two significant acquisitions: Packet Host, Inc. for $290.3 million and three data centers in Mexico from Axtel for $189.0 million.
  • 4Adjusted EBITDA increased by 4% to $684.2 million, indicating strong operational performance.
  • 5Net cash provided by operating activities increased by 23% to $516.8 million.
  • 6The company noted that COVID-19 had not had a material impact on its results of operations for the quarter, though it is monitoring potential future impacts.
  • 7Total assets decreased slightly to $23.59 billion from $23.97 billion at the end of the prior fiscal year.

Frequently Asked Questions

Equinix reported a 6% increase in total revenue to $1.44 billion for the first quarter of 2020, driven by growth in recurring revenues and strategic acquisitions. Despite a rise in operating expenses, particularly in the Americas, Adjusted EBITDA saw a 4% increase to $684.2 million, and cash flow from operations improved by 23% to $516.8 million.

The company stated that the COVID-19 pandemic did not have a material impact on its results of operations for the first quarter of 2020. However, Equinix is actively monitoring the situation and has implemented business continuity plans and precautionary measures to ensure operational continuity and employee safety. Potential future impacts are being closely watched.

In Q1 2020, Equinix completed two significant acquisitions: Packet Host, Inc., a bare metal automation platform, for approximately $290.3 million in cash, and three data centers in Mexico from Axtel S.A.B. de C.V. for approximately $189.0 million. These acquisitions are expected to accelerate Equinix's strategy and expand its presence in the Americas.

As of March 31, 2020, total indebtedness was $11.8 billion. The company maintained substantial liquidity, with $1.2 billion in cash, cash equivalents, and short-term investments, and an additional $1.7 billion available under its revolving credit facility. During the quarter, Equinix borrowed $250 million under its revolving facility and subsequently repaid it in May.