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Equinix’s 74th consecutive quarter of revenue growth delivers $1.7bn

After 18.5 years of consecutive growth, this is a trend that is not expected to go south anytime soon in the coming years as demand for hosting services continues to escalate globally.

By João Marques Lima

Founder and Editor, The Tech Capital

5 Mins

July 29, 2021 | 1:05 AM BST

Equinix’s 74th consecutive quarter of revenue growth delivers $1.7bn

Charles Meyers, president and CEO of Equinix. Source: Equinix

Global interconnection and data centre company Equinix, Inc. (Nasdaq: EQIX) has reported a 13% increase in quarterly revenues for its second quarter of 2021 cashing in US$1.658 billion compared to $1.47 billion in Q2 2020.

The company recorded $279 million in operating income, representing a 6% decrease from the previous quarter and an operating margin of 17% due to increased depreciation and amortisation from recently opened IBX data centres and expansions, higher utilities expense and increased repairs and maintenance spend.

At the end of Q2 2021, Equinix’s EBITDA stand at $797 million, a 48% adjusted EBITDA margin, which includes a $6 million positive foreign currency benefit when compared to prior guidance FX rates, and $4 million of integration costs.

Net income reached $68 million, a 56% decrease from the previous quarter, largely due to a $101 million debt extinguishment charge, related to the company’s $1.25 billion 2027 Notes redemption completed in June. Share attributable to Equinix amounted to $0.76 per stock, a 56% decrease from the previous quarter.

Charles Meyers, president and CEO of Equinix, said: “We have continued to see significant momentum in our business as digital transformation outpaces previous expectations across all industries. Technology spend is accelerating, and we believe Equinix remains uniquely positioned as traditional technology markets continue to shift to as-a-service consumption models and hybrid multicloud is widely adopted as the architecture of choice.

“The pandemic has highlighted that digital infrastructure is not just a business enabler, but a primary source of competitive advantage for digital leaders across all industries, and we continue to see a multitude of trends driving infrastructure to become more distributed, more on demand, and more ecosystem-connected than ever before.”

For the third quarter of 2021, the company expects revenues to range between $1.668 and $1.688 billion, an increase of 1 – 2% compared to the prior quarter on both an as-reported and on a normalized and constant currency basis. This guidance includes a $6 million negative foreign currency impact when compared to the average FX rates in Q2 2021. Adjusted EBITDA is expected to range between $766 and $786 million.

Adjusted EBITDA includes a $4 million negative foreign currency impact when compared to the average FX rates in Q2 2021 and $7 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $50 and $60 million.

As for the whole of 2021, the company projects a revenue of $6.619 to $6.659 billion, an increase of 10 – 11% over the previous year, or a normalised and constant currency increase of ~8%. This includes an increase of $50 million compared to prior guidance, including a $25 million foreign currency benefit when compared to prior guidance FX rates.

Equinix expects FY21 to deliver an EBITDA of $3.108 to $3.148 billion, representing a 47% adjusted EBITDA margin, as well as an increase of $27 million compared to prior guidance, including an $11 million foreign currency benefit when compared to prior guidance FX rates, and assuming $25 million of integration costs.

During the second quarter of 2021, Equinix achieved several milestones, including being included in the Fortune 500 list of the largest companies in the US, debuting at #461, a first for any data centre operator.

Back in May, Standard & Poor’s and Fitch Ratings both upgraded all of Equinix’s credit ratings to BBB, from the previous rating of BBB-.

One of its biggest announcements was the joint venture relationship with GIC, Singapore’s sovereign wealth fund to add $3.9 billion to expand the xScale data centre program. When closed and built out, these agreements will bring the xScale portfolio to greater than $6.9 billion across 32 facilities globally and more than 600 megawatts (MW) of power capacity.

On a sustainability front, Equinix has also announced during Q2 the pricing of $2.6 billion principal amount of notes, including $1.0 billion of green bonds in its third green bond offering. To date, Equinix has issued $3.7 billion in green bonds to help advance the company’s longstanding commitment to sustainability leadership and reducing its environmental impact, including projects aimed at green buildings, renewable energy, energy and water efficiency, waste and clean transportation.

In regards to the Covid-19 pandemic, the company said in a statement: “Looking ahead, the full impact of the COVID-19 pandemic on the company’s financial condition or results of operations remains uncertain and will depend on a number of factors, including its impact on Equinix customers, partners and vendors and the impact on, and functioning of, the global financial markets. The company’s past results may not be indicative of future performance, and historical trends may differ materially.

“Additional information pertaining to the impact of the COVID-19 pandemic on Equinix and the company’s response thereto will be provided in the upcoming Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ended June 30, 2021.”

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João Marques Lima

Founder and Editor, The Tech Capital

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