Exhibit 99.1
Equinix Reports First Quarter 2007 Results
-- Increased quarterly revenues to $85.1 million, a 7% increase
over the previous quarter and a 31% increase over the same
quarter last year
-- Increased quarterly EBITDA, a non-GAAP financial measure, to
$32.4 million, a 7% increase over the previous quarter and a
42% increase over the same quarter last year
-- Raises 2007 annual revenue guidance to $359.0 to $367.0
million and raises EBITDA guidance to $136.0 to $140.0 million
-- Signed 75 new customers including CareerBuilder, Macrovision,
Micro Strategies and Russell Reynolds
-- Opened first greenfield expansion IBX since 2002 in the
Washington, D.C. metro area and announced plans for another
new Washington, D.C. metro area greenfield IBX
-- Steve Smith joined Equinix on April 2nd as the Company's new
President and CEO. Peter Van Camp has transitioned to his new
role as Executive Chairman
FOSTER CITY, Calif.--(BUSINESS WIRE)--April 26, 2007--Equinix,
Inc. (Nasdaq:EQIX), the leading provider of network-neutral data
centers and Internet exchange services, today reported quarterly
results for the period ended March 31, 2007.
Revenues were $85.1 million for the first quarter, a 31% increase
over the same quarter last year and a 7% increase over the previous
quarter. Recurring revenues, consisting primarily of colocation,
interconnection and managed services, were $80.9 million, a 31%
increase over the same quarter last year and a 6% increase over the
previous quarter. Non-recurring revenues were $4.2 million in the
quarter, consisting primarily of professional services and
installation fees.
Note: Equinix uses non-GAAP financial measures, such as pro forma
revenues, EBITDA, cash cost of revenues, cash gross margins, cash
operating expenses (also known as cash selling, general and
administrative expenses or cash SG&A), non-GAAP net income (loss),
free cash flow and adjusted free cash flow to evaluate its operations.
A reconciliation of these non-GAAP financial measures to the most
closely applicable GAAP financial measure is attached to this release
and commences at the bottom of our condensed consolidated statements
of operations - GAAP presentation.
Cost of revenues were $52.8 million for the first quarter,
including $1.1 million of stock-based compensation, a 5% increase over
the previous quarter and a 22% increase over the same quarter last
year. Cost of revenues, excluding depreciation, amortization,
accretion and stock-based compensation of $20.9 million, were $31.9
million for the first quarter, a 5% increase over the previous quarter
and a 26% increase over the same quarter last year. Cash gross
margins, defined as gross profit less depreciation, amortization,
accretion and stock-based compensation, divided by revenues, for the
quarter were 62%, the same as the previous quarter and up from 61% the
same quarter last year. On a same IBX basis (defined as IBX centers
which have been available for new customer installs for at least four
full quarters), cash gross margins were 67%.
Selling, general and administrative expenses were $31.5 million
for the first quarter, including $9.4 million of stock-based
compensation, a 12% increase from the previous quarter and a 30%
increase over the same quarter last year. Selling, general and
administrative expenses, excluding depreciation, amortization and
stock-based compensation of $10.7 million, were $20.8 million for the
first quarter, a 2% increase over the previous quarter and a 24%
increase over same quarter last year.
Net loss for the first quarter was $4.5 million, including
stock-based compensation expense of $10.5 million. This represents a
basic and diluted net loss per share of $0.15 based on a weighted
average share count of 29.9 million. Excluding stock-based
compensation and the $3.4 million loss on conversion of debt related
to the $54.0 million conversion of the Company's 2.5% Convertible
Subordinated Debentures due 2024, the Company was net income positive
for the first quarter, with a non-GAAP net income of $9.4 million.
EBITDA, defined as income or loss from operations before the
non-recurring revenue adjustment recorded in the fourth quarter of
2006, depreciation, amortization, accretion, stock-based compensation
expense and restructuring charges, for the first quarter was $32.4
million, up from $30.3 million the previous quarter and up from $22.8
million the same quarter last year.
"I'm pleased with the strong momentum the Company continues to
experience," said Peter Van Camp, Executive Chairman. "Record
bookings, the opening of our first greenfield IBX since 2002 and
continued operational excellence are all contributing to a solid start
to 2007."
"I am excited about this team, their focus on execution and our
opportunity to continue to grow our market leadership position," said
Steve Smith, President and CEO. "I'd like to thank Peter for all his
work in building this successful company and I look forward to working
with him on strategic issues in his new role."
Capital expenditures in the first quarter were $67.1 million, of
which $8.4 million was attributed to ongoing capital expenditures and
$58.7 million was attributed to expansion capital expenditures. In
addition, the Company paid $6.5 million toward its $65.0 million
purchase of the San Jose property that contains its original Silicon
Valley IBX center, which is expected to close no later than November
2007.
The Company generated cash from operating activities of $20.1
million as compared to $26.3 million in the previous quarter. Cash
used in investing activities was $57.6 million as compared to $45.1
million in the previous quarter. Adjusted free cash flow was a
negative $31.0 million in the first quarter. Adjusted free cash flow
is defined as net cash generated from operating activities less net
cash used in investing activities (excluding the purchases, sales and
maturities of short-term and long-term investments and the purchase
and sale of real estate).
As of March 31, 2007, the Company's cash, cash equivalents and
investments were $392.4 million, as compared to $156.5 million in the
previous quarter. This included net proceeds from the $250.0 million
2.5% Convertible Subordinated Notes due 2012 offering, which closed on
March 30, 2007.
Other Company Developments & Metrics
-- On a same IBX basis (defined as IBX centers which have been
available for new customer installs for at least four full
quarters), revenues were $77.5 million; cost of revenues were
$42.7 million; cost of revenues, excluding depreciation,
amortization, accretion and stock-based compensation, were
$25.8 million and cash gross margins for the quarter were 67%.
EBITDA on a same IBX basis was $31.6 million.
-- Based on a net sellable cabinet capacity of approximately
25,100, the number of cabinets billing at the end of the
quarter was approximately 18,400, or 73%, up from
approximately 17,400 the previous quarter. On a weighted
average basis, the number of cabinets billing was
approximately 18,200 representing a utilization rate of 76%,
which reflects the timing of 1,700 cabinets added to the
Company's capacity from the opening of its Washington D.C.
greenfield IBX, in March 2007. Total cabinet capacity, which
will no longer be reported, was approximately 32,500 at the
end of the quarter, which would have represented an ending
quarter utilization rate of just under 57%.
-- U.S. interconnection service revenues were 23% of U.S.
recurring revenues for the quarter. Interconnection services
represent approximately 21% of total worldwide recurring
revenues.
Business Outlook
For the second quarter 2007, revenues are expected to be in the
range of $88.0 to $89.0 million. Cash gross margins will be
approximately 61%. Cash selling, general and administrative expenses
are expected to range between $20.0 and $21.0 million. EBITDA for the
second quarter is expected to be $33.0 to $34.0 million. Net loss is
expected to be approximately $3.0 million, including the impact of
approximately $10.0 million of stock-based compensation expense. Net
interest expense will be approximately $3.0 million. The weighted
average shares outstanding will be approximately 31.3 million. Capital
expenditures are expected to be approximately $135.0 to $140.0
million, including approximately $120.0 million of expansion capital
expenditures.
For the full year of 2007, total revenues are expected to be in
the range of $359.0 to $367.0 million. Total year cash gross margins
will approximate 60% including approximately $7.5 million of net cash
costs attributed to our expansion IBXs. Cash selling, general and
administrative expenses are expected to be in the range of $79.0 to
$81.0 million, EBITDA for the year is expected to be $136.0 to $140.0
million. Net loss is expected to be approximately $22.0 million,
including approximately $41.0 million of stock-based compensation
expense and $1.0 million of income tax expense. Net interest expense
and loss on conversion of debt will be approximately $17.0 million.
The weighted average shares outstanding will be approximately 30.8
million. Capital expenditures for 2007 are expected to be in a range
of $354.0 to $374.0 million, comprised of approximately $39.0 million
of ongoing capital expenditures, including approximately $3.0 million
of capital expenditures to augment our Secaucus IBX and $315.0 to
$335.0 million of expansion capital expenditures, including $35.0
million related to our recently announced greenfield expansion in the
Washington, D.C. market. In addition, the Company will invest capital
of $65.0 million for the purchase of our flagship Silicon Valley IBX
property.
The Company will discuss its results and guidance on its quarterly
conference call on Thursday, April 26, 2007, at 5:30 p.m. ET (2:30
p.m. PT). To hear the conference call live, please dial 1-773-799-3263
(domestic and international) and reference the pass code (EQIX). A
simultaneous live Webcast of the call will be available over the
Internet at www.equinix.com, under the Investor Relations heading. A
replay of the call will be available beginning on Thursday, April 26,
2007 at 7:30 p.m. (ET) by dialing 1-203-369-3638. In addition, the
Webcast will be available on the Company's Web site at
www.equinix.com. No password is required for either method of replay.
About Equinix
Equinix is the leading global provider of network-neutral data
centers and Internet exchange services for enterprises, content
companies, systems integrators and network services providers. Through
the company's Internet Business Exchange(TM) (IBX(R)) centers in 10
markets in the U.S. and Asia, customers can directly interconnect with
every major global network and ISP for their critical peering, transit
and traffic exchange requirements. These interconnection points
facilitate the highest performance and growth of the Internet by
serving as neutral and open marketplaces for Internet infrastructure
services, allowing customers to expand their businesses while reducing
costs.
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ materially
from expectations discussed in such forward-looking statements.
Factors that might cause such differences include, but are not limited
to, the challenges of acquiring, operating and constructing IBX
centers and developing, deploying and delivering Equinix services; a
failure to receive significant revenue from customers in recently
built out data centers; failure to complete any financing arrangements
contemplated from time to time; competition from existing and new
competitors; the ability to generate sufficient cash flow or otherwise
obtain funds to repay new or outstanding indebtedness; the loss or
decline in business from our key customers; the results of any
litigation relating to past stock option grants and practices; and
other risks described from time to time in Equinix's filings with the
Securities and Exchange Commission. In particular, see Equinix's
recent quarterly and annual reports filed with the Securities and
Exchange Commission, copies of which are available upon request from
Equinix. Equinix does not assume any obligation to update the
forward-looking information contained in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc.
Internet Business Exchange is a trademark of Equinix, Inc.
Non-GAAP Financial Measures
Equinix continues to provide all information required in
accordance with generally accepted accounting principles (GAAP), but
it believes that evaluating its ongoing operating results may be
difficult if limited to reviewing only GAAP financial measures.
Accordingly, Equinix uses non-GAAP financial measures, such as pro
forma revenues, EBITDA, cash cost of revenues, cash gross margins,
cash operating expenses (also known as cash selling, general and
administrative expenses or cash SG&A), non-GAAP net income (loss),
free cash flow and adjusted free cash flow to evaluate its operations.
In presenting these non-GAAP financial measures, Equinix excludes
certain non-cash or non-recurring items that it believes are not good
indicators of the Company's current or future operating performance.
These non-cash or non-recurring items are a non-recurring revenue
adjustment with respect to 2006 results, depreciation, amortization,
accretion, stock-based compensation, restructuring charges and, with
respect to 2006 results, the gain on Honolulu IBX sale, and with
respect to 2007 results, the loss from conversion of debt. Recent
legislative and regulatory changes encourage use of and emphasis on
GAAP financial metrics and require companies to explain why non-GAAP
financial metrics are relevant to management and investors. Equinix
excludes these non-cash or non-recurring items in order for Equinix's
lenders, investors, and industry analysts who review and report on the
Company, to better evaluate the Company's operating performance and
cash spending levels relative to its industry sector and competitor
base.
Equinix excludes depreciation expense as these charges primarily
relate to the initial construction costs of our IBX centers and do not
reflect our current or future cash spending levels to support our
business. Our IBX centers are long-lived assets, and have an economic
life greater than ten years. The construction costs of our IBX centers
do not recur and future capital expenditures remain minor relative to
our initial investment. This is a trend we expect to continue. In
addition, depreciation is also based on the estimated useful lives of
our IBX centers. These estimates could vary from actual performance of
the asset, are based on historic costs incurred to build out our IBX
centers, and are not indicative of current or expected future capital
expenditures. Therefore, Equinix excludes depreciation from its
operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures,
Equinix excludes amortization expense related to certain intangible
assets, as it represents a non-cash cost that may not recur and is not
a good indicator of the Company's current or future operating
performance. Equinix excludes accretion expense, both as it relates to
its asset retirement obligations as well as its accrued restructuring
charge liabilities, as these expenses represent costs, which Equinix
believes are not meaningful in evaluating the Company's current
operations. Equinix excludes non-cash stock-based compensation expense
as it represents expense attributed to stock awards that have no
current or future cash obligations. As such, we, and our investors and
analysts, exclude this stock-based compensation expense when assessing
the cash generating performance of our operations. Equinix excludes
restructuring charges from its non-GAAP financial measures. The
restructuring charges relate to the Company's decision to exit leases
for excess space adjacent to several of our IBX centers, which we do
not intend to build out now or in the future. With respect to its 2006
results, Equinix reports pro forma revenues and excludes the gain on
Honolulu IBX sale. Pro forma revenues exclude a revenue adjustment
recorded in the fourth quarter of 2006 in connection with our adoption
of Staff Accounting Bulletin No. 108, which is a one-time adjustment
and will not recur. The gain on Honolulu IBX sale represents a unique
transaction for the Company and future sales of IBX centers are not
expected. The Honolulu market was not considered a core, strategic
market for the Company. With respect to its 2007 results, Equinix
excludes the loss from conversion of debt as this activity is not
typical for the company. Management believes such items as
restructuring charges, the gain on the sale of an IBX center and the
loss from conversion of debt are unique transactions that are not
expected to recur, and consequently, does not consider these items as
a normal component of expenses or income related to current and
ongoing operations.
Our management does not itself, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. However, we have presented such non-GAAP financial measures
to provide investors with an additional tool to evaluate our operating
results in a manner that focuses on what management believes to be our
core, ongoing business operations. Management believes that the
inclusion of these non-GAAP financial measures provide consistency and
comparability with past reports and provide a better understanding of
the overall performance of the business and its ability to perform in
subsequent periods. Equinix believes that if it did not provide such
non-GAAP financial information, investors would not have all the
necessary data to analyze Equinix effectively.
Investors should note, however, that the non-GAAP financial
measures used by Equinix may not be the same non-GAAP financial
measures, and may not be calculated in the same manner, as that of
other companies. In addition, whenever Equinix uses such non-GAAP
financial measures, it provides a reconciliation of non-GAAP financial
measures to the most closely applicable GAAP financial measure.
Investors are encouraged to review the related GAAP financial measures
and the reconciliation of these non-GAAP financial measures to their
most directly comparable GAAP financial measure.
Equinix does not provide forward-looking guidance for certain
financial data, such as depreciation, amortization, accretion, net
income (loss) from operations, cash generated from operating
activities and cash used in investing activities, and as a result, is
not able to provide a reconciliation of GAAP to non-GAAP financial
measures for forward-looking data. Equinix intends to calculate the
various non-GAAP financial measures in future periods consistent with
how it was calculated for the three months ended March 31, 2007 and
2006, presented within this press release.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS -
GAAP PRESENTATION
(in thousands, except per share detail)
(unaudited)
Three Months Ended
--------------------------------------
March 31, December 31, March 31,
2007 2006 2006
----------- ------------ -------------
Recurring revenues $80,886 $76,401 $61,752
Non-recurring revenues 4,223 3,371 3,117
----------- ------------ -------------
Revenues 85,109 79,772 64,869
Cost of revenues 52,765 50,334 43,345
----------- ------------ -------------
Gross profit 32,344 29,438 21,524
----------- ------------ -------------
Operating expenses:
Sales and marketing 8,677 9,439 7,198
General and
administrative 22,861 18,637 17,130
Gain on Honolulu IBX sale - (9,647) -
----------- ------------ -------------
Total operating
expenses 31,538 18,429 24,328
----------- ------------ -------------
Income (loss) from operations 806 11,009 (2,804)
----------- ------------ -------------
Interest and other income
(expense):
Interest income 1,949 1,562 1,611
Interest expense and
other (3,462) (3,891) (3,868)
Loss on conversion of
debt (3,395) - -
----------- ------------ -------------
Total interest and
other, net (4,908) (2,329) (2,257)
----------- ------------ -------------
Net income (loss) before income
taxes and cumulative effect of
a change in accounting
principle (4,102) 8,680 (5,061)
Income taxes (354) 431 (385)
Net income (loss) before
cumulative effect of a change ----------- ------------ -------------
in accounting principle (4,456) 9,111 (5,446)
Cumulative effect of a
change in accounting
principle - - 376
----------- ------------ -------------
Net income (loss) $(4,456) $9,111 $(5,070)
=========== ============ =============
Net income (loss) per share:
Basic net income (loss)
per share $(0.15) $0.31 $(0.18)
=========== ============ =============
Diluted net income (loss)
per share $(0.15) $0.30 $(0.18)
=========== ============ =============
Shares used in computing
basic net income (loss)
per share 29,896 29,131 27,848
=========== ============ =============
Net income (loss) as
reported $(4,456) $9,111 $(5,070)
Effect of assumed
conversion of
convertible
subordinated
debentures - 700 -
Net income (loss) used in
computing diluted net ----------- ------------ -------------
income (loss) per share $(4,456) $9,811 $(5,070)
=========== ============ =============
Shares used in computing
diluted net income
(loss) per share 29,896 32,700 27,848
=========== ============ =============
- ----------------------------------------------------------------------
Non-GAAP net income (loss) (1) $9,437 $7,870 $2,688
=========== ============ =============
(1) Non-GAAP net income (loss) excludes the non-recurring revenue
adjustment, stock-based compensation, restructuring charges,
loss on conversion of debt and the gain on Honolulu IBX sale as
follows:
Net income (loss) $(4,456) $9,111 $(5,070)
Non-recurring revenue
adjustment - 1,179 -
Stock-based compensation 10,498 7,227 7,758
Restructuring charges - - -
Loss on conversion of
debt 3,395 - -
Gain on Honolulu IBX sale - (9,647) -
----------- ------------ -------------
Non-GAAP net
income (loss) $9,437 $7,870 $2,688
=========== ============ =============
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS -
NON-GAAP PRESENTATION
(in thousands)
(unaudited)
Three Months Ended
--------------------------------
March 31, December 31, March 31,
2007 2006 2006
--------- ------------ ---------
Recurring revenues $80,886 $76,401 $61,752
Non-recurring revenues 4,223 3,371 3,117
--------- ------------ ---------
Revenues as reported 85,109 79,772 64,869
Non-recurring revenue adjustment (1) - 1,179 -
--------- ------------ ---------
Pro forma revenues (2) 85,109 80,951 64,869
Cash cost of revenues
(3) 31,931 30,287 25,272
--------- ------------ ---------
Cash gross
profit (4) 53,178 50,664 39,597
--------- ------------ ---------
Cash operating expenses (5):
Cash sales and marketing
expenses(6) 6,178 7,622 5,291
Cash general and
administrative expenses (7) 14,622 12,770 11,471
--------- ------------ ---------
Total cash
operating
expenses (8) 20,800 20,392 16,762
--------- ------------ ---------
EBITDA (9) $32,378 $30,272 $22,835
========= ============ =========
Cash gross margins (10) 62% 63% 61%
========= ============ =========
EBITDA flow-through rate (11) 51% 74% 33%
========= ============ =========
- -------------------------------------
(1) This adjustment represents the impact of the Company's
adoption of Staff Accounting Bulletin No. 108, which was
issued in September 2006.
(2) The geographic split of our pro forma revenues is presented
below:
U.S. pro forma revenues $72,526 $68,851 $55,840
Asia-Pacific pro forma
revenues 12,583 12,100 9,029
--------- ------------ ---------
Pro forma revenues $85,109 $80,951 $64,869
========= ============ =========
Pro forma revenues on a services basis is presented below:
Colocation $59,759 $56,537 $45,569
Interconnection 16,720 15,501 11,804
Managed infrastructure 4,099 4,152 3,933
Rental 308 211 446
--------- ------------ ---------
Recurring revenues 80,886 76,401 61,752
Pro forma non-recurring
revenues 4,223 4,550 3,117
--------- ------------ ---------
Pro forma revenues $85,109 $80,951 $64,869
========= ============ =========
New IBX centers are IBX centers which have not been available
for customer installs for at least four full quarters.
Revenues on a same IBX versus new IBX basis is presented
below:
Same IBX centers $77,477 $75,618 $62,530
New IBX centers 7,632 5,333 2,339
--------- ------------ ---------
Pro forma revenues $85,109 $80,951 $64,869
========= ============ =========
(3) We define cash cost of revenues as cost of revenues less
depreciation, amortization, accretion and stock-based
compensation as presented below:
Cost of revenues $52,765 $50,334 $43,345
Depreciation, amortization
and accretion expense (19,697) (19,194) (17,315)
Stock-based compensation
expense (1,137) (853) (758)
--------- ------------ ---------
Cash cost of
revenues $31,931 $30,287 $25,272
========= ============ =========
The geographic split of our cash cost of revenues is presented
below:
U.S. cash cost of revenues $26,498 $25,019 $20,951
Asia-Pacific cash cost of
revenues 5,433 5,268 4,321
--------- ------------ ---------
Cash cost of
revenues $31,931 $30,287 $25,272
========= ============ =========
New IBX centers are IBX centers which have not been available
for customer installs for at least four full quarters. Cost
of revenues and cash cost of revenues on a same IBX versus
new IBX basis is presented below:
Same IBX centers-cash cost of
revenues $25,846 $24,753 $22,476
Same IBX centers-
depreciation, amortization
and accretion expense 15,885 16,420 15,532
Same IBX centers-stock-based
compensation expense 1,006 854 758
--------- ------------ ---------
Same IBX centers
cost of revenues 42,737 42,027 38,766
--------- ------------ ---------
New IBX centers-cash cost of
revenues 6,085 5,534 2,796
New IBX centers-depreciation,
amortization and accretion
expense 3,812 2,774 1,783
New IBX centers-stock-based
compensation expense 131 (1) -
--------- ------------ ---------
New IBX centers
cost of revenues 10,028 8,307 4,579
--------- ------------ ---------
Cost of
revenues $52,765 $50,334 $43,345
========= ============ =========
(4) We define cash gross profit as revenues less cash cost of
revenues (as defined above).
(5) We define cash operating expenses as operating expenses less
depreciation, amortization and stock-based compensation. We
also refer to cash operating expenses as cash selling,
general and administrative expenses or "cash SG&A".
(6) We define cash sales and marketing expenses as sales and
marketing expenses less depreciation, amortization and stock-
based compensation as presented below:
Sales and marketing expenses $8,677 $9,439 $7,198
Depreciation and amortization
expense (15) (15) (15)
Stock-based compensation
expense (2,484) (1,802) (1,892)
--------- ------------ ---------
Cash sales and
marketing expenses $6,178 $7,622 $5,291
========= ============ =========
(7) We define cash general and administrative expenses as general
and administrative expenses less depreciation, amortization
and stock-based compensation as presented below:
General and administrative
expenses $22,861 $18,637 $17,130
Depreciation and amortization
expense (1,362) (1,295) (551)
Stock-based compensation
expense (6,877) (4,572) (5,108)
--------- ------------ ---------
Cash general and
administrative
expenses $14,622 $12,770 $11,471
========= ============ =========
(8) Our cash operating expenses, or cash SG&A, as defined above,
is presented below:
Cash sales and marketing
expenses $6,178 $7,622 $5,291
Cash general and
administrative expenses 14,622 12,770 11,471
--------- ------------ ---------
Cash SG&A $20,800 $20,392 $16,762
========= ============ =========
The geographic split of our cash operating expenses, or cash
SG&A, is presented below:
U.S. cash SG&A $17,071 $16,899 $13,327
Asia-Pacific cash SG&A 3,729 3,493 3,435
--------- ------------ ---------
Cash SG&A $20,800 $20,392 $16,762
========= ============ =========
(9) We define EBITDA as income (loss) from operations less the
non-recurring revenue adjustment, depreciation, amortization,
accretion, stock-based compensation expense, restructuring
charges and the gain on Honolulu IBX sale as presented below:
Income (loss) from operations $806 $11,009 $(2,804)
Non-recurring revenue
adjustment - 1,179 -
Depreciation, amortization
and accretion expense 21,074 20,504 17,881
Stock-based compensation
expense 10,498 7,227 7,758
Restructuring charges - - -
Gain on Honolulu IBX sale - (9,647) -
--------- ------------ ---------
EBITDA $32,378 $30,272 $22,835
========= ============ =========
The geographic split of our EBITDA is presented below:
U.S. income (loss) from
operations $368 $9,695 $(2,247)
U.S. non-recurring revenue
adjustment - 1,179 -
U.S. depreciation,
amortization and accretion
expense 19,439 19,448 16,866
U.S. stock-based compensation
expense 9,150 6,258 6,943
U.S. restructuring charges - - -
U.S. gain on Honolulu IBX
sale - (9,647) -
--------- ------------ ---------
U.S. EBITDA 28,957 26,933 21,562
--------- ------------ ---------
Asia-Pacific income (loss)
from operations 438 1,314 (557)
Asia-Pacific non-recurring
revenue adjustment - - -
Asia-Pacific depreciation,
amortization and accretion
expense 1,635 1,056 1,015
Asia-Pacific stock-based
compensation expense 1,348 969 815
Asia-Pacific restructuring
charges - - -
Asia-Pacific gain on Honolulu
IBX sale - - -
--------- ------------ ---------
Asia-Pacific EBITDA 3,421 3,339 1,273
--------- ------------ ---------
EBITDA $32,378 $30,272 $22,835
========= ============ =========
New IBX centers are IBX centers which have not been available
for customer installs for at least four full quarters. EBITDA
on a same IBX versus new IBX basis is presented below:
Same IBX centers-income
(loss) from operations $3,925 $14,541 $(368)
Same IBX centers-non-
recurring revenue adjustment - 1,179 -
Same IBX centers-
depreciation, amortization
and accretion expense 17,262 17,730 16,098
Same IBX centers-stock-based
compensation expense 10,367 7,228 7,758
Same IBX centers-
restructuring charges - - -
Same IBX centers-gain on
Honolulu IBX sale - (9,647) -
--------- ------------ ---------
Same IBX center
EBITDA 31,554 31,031 23,488
--------- ------------ ---------
New IBX centers-income (loss)
from operations (3,119) (3,532) (2,436)
New IBX centers-non-recurring
revenue adjustment - - -
New IBX centers-depreciation,
amortization and accretion
expense 3,812 2,774 1,783
New IBX centers-stock-based
compensation expense 131 (1) -
New IBX centers-restructuring
charges - - -
New IBX centers-gain on
Honolulu IBX sale - - -
--------- ------------ ---------
New IBX center
EBITDA 824 (759) (653)
--------- ------------ ---------
EBITDA $32,378 $30,272 $22,835
========= ============ =========
(10) We define cash gross margins as cash gross profit divided by
pro forma revenues.
Our cash gross margins by geographic region is presented
below:
U.S. cash gross margins 63% 64% 62%
========= ============ =========
Asia-Pacific cash gross
margins 57% 56% 52%
========= ============ =========
Same IBX centers are IBX centers which have been available for
customer installs for at least four full quarters. Our cash
gross margins for same IBX centers is presented below:
Same IBX cash gross margins 67% 67% 64%
========= ============ =========
(11) We define EBITDA flow-through rate as incremental EBITDA
growth divided by incremental pro forma revenue growth as
follows:
EBITDA - current period $32,378 $30,272 $22,835
Less EBITDA - prior period (30,272) (24,927) (21,828)
--------- ------------ ---------
EBITDA growth $2,106 $5,345 $1,007
========= ============ =========
Pro forma revenues - current
period $85,109 $80,951 $64,869
Less pro forma revenues -
prior period (80,951) (73,726) (61,798)
--------- ------------ ---------
Pro forma revenue
growth $4,158 $7,225 $3,071
========= ============ =========
EBITDA flow-through rate 51% 74% 33%
========= ============ =========
EQUINIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Assets March 31, December 31,
2007 2006
----------- ------------
Cash, cash equivalents and investments $392,399 $156,481
Accounts receivable, net 27,773 26,864
Property and equipment, net 593,555 546,395
Goodwill and other intangible assets, net 17,550 17,441
Debt issuance costs, net 12,524 3,006
Deposits 10,334 3,932
Prepaid expenses 8,860 7,160
Deferred tax assets 6,863 6,910
Other assets 3,824 3,643
----------- ------------
Total assets $1,073,682 $771,832
=========== ============
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $24,612 $27,269
Accrued property and equipment 39,791 23,337
Accrued restructuring charges 38,720 41,572
Capital lease and other financing obligations 94,234 94,699
Mortgage and loan payable 123,006 98,896
Convertible debt 282,250 86,250
Deferred rent 20,909 20,924
Deferred installation revenue 13,042 11,694
Deferred recurring revenue 6,615 6,732
Asset retirement obligations 4,125 3,985
Other liabilities 1,255 1,446
----------- ------------
Total liabilities 648,559 416,804
----------- ------------
Common stock 31 29
Additional paid-in capital 978,607 904,573
Accumulated other comprehensive income 4,385 3,870
Accumulated deficit (557,900) (553,444)
----------- ------------
Total stockholders' equity 425,123 355,028
----------- ------------
Total liabilities and stockholders'
equity $1,073,682 $771,832
=========== ============
- --------------------------------------------------------- ------------
Ending headcount by geographic region is as
follows:
U.S. headcount 460 442
Asia-pacific headcount 179 174
----------- ------------
Total headcount 639 616
=========== ============
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (1)
(in thousands)
(unaudited)
Three Months Ended
--------------------------------
March 31, December 31, March 31,
2007 2006 2006
--------- ------------ ---------
Cash flows from operating activities:
Net income (loss) $(4,456) $9,111 $(5,070)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation, amortization
and accretion 21,074 20,504 17,881
Stock-based compensation 10,498 7,227 7,758
Debt issuance costs 389 237 208
Gain on Honolulu IBX sale - (9,647) -
Other reconciling items 7 40 (727)
Changes in operating assets
and liabilities:
Accounts receivable (916) (2,758) (1,251)
Accounts payable and
accrued expenses (2,657) 4,286 (993)
Accrued restructuring
charges (3,543) (3,591) (2,957)
Other assets and
liabilities (302) 938 (2,058)
--------- ------------ ---------
Net cash provided
by operating
activities 20,094 26,347 12,791
--------- ------------ ---------
Cash flows from investing activities:
Purchase of San Jose IBX property (6,500) - -
Purchases of other property and
equipment (67,056) (59,387) (26,613)
Accrued property and equipment 16,454 4,740 2,512
Proceeds from sale of Honolulu
IBX - 9,530 -
Other investing activities (470) - 6
--------- ------------ ---------
Net cash used in
investing
activities (57,572) (45,117) (24,095)
--------- ------------ ---------
Cash flows from financing activities:
Proceeds from stock options and
employee stock purchase plans 10,286 10,080 14,714
Proceeds from convertible
subordinated notes 250,000 - -
Proceeds from loan payable 24,607 - -
Proceeds from mortgage payable - 40,000 -
Repayment of borrowings under
credit line - (40,000) (30,000)
Repayment of capital lease and
other financing obligations (465) (376) (364)
Repayment of mortgage payable (497) (269) (205)
Debt issuance costs (10,678) (558) -
Other financing activities - (122) 370
--------- ------------ ---------
Net cash provided
by (used in)
financing
activities 273,253 8,755 (15,485)
--------- ------------ ---------
Effect of foreign currency exchange
rates on cash and cash equivalents 143 150 157
--------- ------------ ---------
Net increase (decrease) in cash, cash
equivalents and investments 235,918 (9,865) (26,632)
Cash, cash equivalents and
investments at beginning of period 156,481 166,346 188,855
--------- ------------ ---------
Cash, cash equivalents and
investments at end of period $392,399 $156,481 $162,223
========= ============ =========
Free cash flow (2) $(37,478) $(18,770) $(11,304)
========= ============ =========
Adjusted free cash flow (3) $(30,978) $(28,300) $(11,304)
========= ============ =========
- -------------------------------------
(1) The cash flow statements presented herein combine our short-term
and long-term investments with our cash and cash equivalents in
an effort to present our total unrestricted cash and equivalent
balances. In our quarterly filings with the SEC on Forms 10-Q and
10-K, the purchases, sales and maturities of our short-term and
long-term investments will be presented as activities within the
investing activities portion of the cash flow statements.
(2) We define free cash flow as net cash provided by operating
activities plus net cash used in investing activities (excluding
the purchases, sales and maturities of short-term and long-term
investments) as presented below:
Net cash provided by operating
activities as presented above $20,094 $26,347 $12,791
Net cash used in investing
activities as presented above (57,572) (45,117) (24,095)
--------- ------------ ---------
Free cash flow $(37,478) $(18,770) $(11,304)
========= ============ =========
(3) We define adjusted free cash flow as free cash flow (as defined
above) excluding any purchases or sales of real estate as
presented below:
Free cash flow (as defined above) $(37,478) $(18,770) $(11,304)
Less purchase of San Jose IBX
property 6,500 - -
Less proceeds from sale of
Honolulu IBX - (9,530) -
--------- ------------ ---------
Adjusted free cash flow $(30,978) $(28,300) $(11,304)
========= ============ =========
CONTACT: Equinix, Inc.
Jason Starr, 650-513-7402 (Investor Relations)
jstarr@equinix.com
or
K/F Communications, Inc.
David Fonkalsrud, 415-255-6506 (Media)
dave@kfcomm.com