EQIX - Earnings call transcript Q2 2018

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Operator

Good afternoon and welcome to the Equinix Second Quarter Earnings Conference Call. All lines will be able to listen-only until we open for questions. Also today's conference is being recorded. If anyone has objections, please disconnect at this time. I'd now like to turn the call over to Katrina Rymill, Vice President of Investor Relations.

begin. may You

Katrina Rymill

good and welcome today's to Thank afternoon, call. conference you, and

in XXXX including and to started, identified not in be comment that filed obligation on forward-looking from our our risks those get affected SEC, vary most we press may on made the results remind uncertainties. making and Actual and those I'd the are statements filed no recent forward-looking call. and on we'll X, release Before today's February intend August significantly statements with risks XX, XX-Q on like everyone assumes or we XXXX. XX-K Form may in filings statements this involve the to some today Equinix update does be and nature by of identified and

addition, through Regulation light to it on Disclosure, its Equinix's quarter, is exclusive guidance an of public is comment it unless policy during the not financial done in In Fair disclosure.

non-GAAP our President we Strategy, Keith and Equinix's post information. Van and about check and Taylor, Services Interim President; conference of the and most information the With available time-to-time measures measures financial list website directly a In and the these addition, regularly us of for to information and other company on Innovation. the data. Meyers, you comparable today IR page to made provide We'd important the in IR we'll call. Camp, today's available Officer; a reasons Equinix the Chief supplemental this uses Charles www.equinix.com. our designed that Financial We've page to on with press certain on Peter page at most to you presentation measures CEO like of release measures current today's website the are provide of GAAP those reconciliation accompany along also We why Equinix a encourage on discussion, from IR remind

In follow-on limit we'll time, the hour, the sell-side remarks, one. to to call this just taking call interest of to questions like be this analysts. to any within an questions from turn wrapping over analysts PVC. we'd our Following I'll At prepared these ask

Peter F. Van Camp

of a expand and and over of demonstrating XX% by companies, quarter-over-quarter highly XXXX dynamics we're sales in X% bookings up lighthouse attractive for these Global accounted land XX% and the both the over quarter XX% regions across the quarter-over-quarter. all up three revenue deployed types, our continues and solid metrics and performance X% partner from metros, platform regions multiple across driven logos of up the our our Thank customers. joining good you a share We highs key and in three metrics Fortune half in results. engine XX% for to go was as of our afternoon with the our in new as call. be bookings with cross verticals regional our our activity. to drive Good across by you, momentum of interconnection second welcome XXXX. market delivered regions It's strategy all to of momentum all record strong earnings power our customers of to XX% half many and global particular deployed new and we across quarter quarter Katrina. coming driven growth results XXX the to Channel continued continue customers robust with our serve both of first across We from with and of This now stepped

growing revenues Verizon our on to investments above rates Turning of growth. XX% a guidance Verizon. and the up were revenues second Interconnection currency last on reported, slide to now and and as year top-end in on Adjusted quarter an same year-over-year $X.XXX quarter last same planned quarter to as includes year the X, and are results depicted constant FX and our over of over billion normalized colocation, the outpace quarter, EBITDA These basis. range X% the over up long-term both neutral include X% support were the which growth basis. AFFO continued

and across the execution cabinets strong metrics strategy continued interconnection health the Our counts, billable reflect business. and all cabinet per of the of MRR demonstrate

us We're we're continues platform combination our M&A Starting through hub. X on our starting leadership cement I'll with growth. Dallas with build. and hyperscale global grow and demand, are in out strong which which a of to all Dallas extending of Metronode an markets Our build scale with leadership enhances within perspective. and significantly Infomart, portfolio line creating of in in region forward purchase capacity which and full Infomart, is colocation in is plans acquisition the with deal provide of IBX plan Dallas; largest latest to phase and our our of The integration of strategic position assets new and a market final the control the well critical strategic allowed targeted of our Verizon, incremental from each highlights and Americas. one business of three retail to progressing both our organic interconnection gain our Infomart of our to this support this important moving in each set position opportunities acquisitions, we're

in a tenants XX We master Infomart our continue sizable stable plan refine other run to for over location long-term rate this see building. the and from

Australia multi-national pipeline has most leadership Metronode acquisition with a market and of our clear the multi-cloud rapidly reach well our national significantly as markets one tracking architecture where us hybrid in IT our world This innovative the acquisition in choice. position is of opportunities. bolted expectations in into of growing this transaction, emerged and Moving enhanced to the against

the where integration also and station finally And our landing Vocus Singapore. house the will upcoming efforts subsea our cable expansion announced for well. progressing Verizon Perth Australia between IBX We are recently

through the but to the well our discussed key us previously strong, grow we an we continue we we're stabilized we into and next with year rates for very year, the portfolio Our pipeline Consistent pipeline incremental bookings we to giving in work quarterly to capacity and half assets. Verizon back comments, for high Also our expansions these churn flat the planned we the through assets from utilization with other expect which revenue progress Verizon adding remain our over and in line expect are a facilities. healthy prior constrained continue but have as XXXX. positions in

personnel enabling sector. to We in integrators. of also team completed system the trusted act into transformation expanding Group the key this our of bringing integration integration and federal business Terremark advisers agencies a added as for initiatives expertise Solutions deep federal key Government us the sector and IT Equinix industry Federal capabilities and our for federal XX understanding to This adding

performance. sales of from campuses direct view allows a development and Miami optimal portfolio workloads government Verizon a including security, diverse of and assets former on the a expansion Our sizable Culpeper on our significant as our cost customer market business execute and to in based government engagement and perspective addressable increasing us We environment to are to opportunity.

organic Now let me a few development on activity. make comments

response to the quarter, We London strong our continue in we and centers. In demand. adding completed capital, second underlying to data invest capacity in Amsterdam, builds Denver,

projects a we XX% with Our very expansion XX and pipeline utilized, underway. currently active have platform is

our into entry Oman. This quarter, announced we also

And capital, latencies between company. with markets. carrier center We global regional neutral partnered which global communications Oman's open interconnection will have key business data Muscat, Omantel, low XXXX a the in in a with we'll create first hub

to infrastructure we designing on we our financing continue front, the capacity building next and progress and have team, structures, expect in our place by initial On building which early to hyperscale out working hyperscale in year.

Australia connections cross-connects has growth. XXX,XXX the now and Equinix. net APAC expanded to with X,XXX Fabric despite And of of over Adoption cultivate ahead ecosystem. Equinix. and year-end. London with approach in business into functionality deep momentum adds transformations we targeted by hybrid Interconnection to scheduled is and own healthy X, significantly fuel the with of connectivity and X Shifting migration to and Fabric counterparties Cross-connect XX targeted selective to digital virtual hyperscalers across to inter-regional Japan with each parallel, adds locations, than as In a dedicated relationship foundational continues more facilities such connection meaningful to is additional of XXX-gig. select growing Platform a leverage overall to as using Fabric value remainder with first churn demand deployments pipeline. this new in Our wins have QX. ECX to customers to is rest remain quarter deeper, the we're cloud and facility, durable our customers. different for full connect for are maintain faster availability the between existing delivery our our strong customer their associated headwinds and now We metro grow ECX as with capacity QX is ECX strategy And inter-metro capture translating early initial relationships over interconnection. and expectations rapidly Paris our in in

we Our our continues Internet And available in to grow to also have footprint. volumes. portfolio Exchange platform global been entire across traffic ports interconnection our expanding IX make our both presence and

we XX This in markets now globally. new Denver, Houston, quarter, Madrid internet and operate exchanges Lisbon and launched in

some cover our I'll verticals. Now highlights from

capabilities led APAC, as as customers in our strong we for partners top growth sub-segment Our network and NSP by expand vertical delivered business. strong wireless and end sell-through bookings with the digital business

base. leading extending network New extending wins to support satellite its and Pivotel also and Australian expansions network China a mobile user Mobile, growing Satellite, included provider coverage, solution a

health bookings growing fastest government record led Our manufacturing, care vertical, enterprise, and by sub-segments. experienced

cloud XXX Fortune New optimizing connecting to auto global network retail reduce wins Fortune improve club and clouds; warehouse Motors, retailer their distributor XXX a implementing and traffic a and localizing multiple a included costs; Lithia topology performance beverage connectivity. to

insurance Our tap strategy financial by opportunities solid and execution new ecosystem record bookings reflecting trading. our electronic beyond services led banking, vertical achieved of to

asset sponsored dense network a transforming ecosystems our network included to improve a performance. global wins and leveraging public the in topology its New manager government and re-architecting market, XX enterprise mortgage top

providers strong Agility. infrastructure. scalability and service Technologies, and the we with Equinix ForeScout as diversifying. delivering logo IT reach, and new IT produced And marketplace as performance cloud need and wins Links in key We solid first global in see enjoyed their CorpCloud service (XX:XX), Our embrace partner vertical they new bookings, cloud Technologies growth the a Secure

to media and led global content expansions as and to commerce over the quarter. as experienced deploying nodes improve for CDN to coverage and strong in The Keith, scale, and Australia well cover let gaming the results digital a leader now, edge bookings Tencent, the turn support by publishing me Our But included call to user their sub-segments. infrastructure experience. vertical own their performance deploying end

Keith D. Taylor

everyone. and all-time results be core our robust. our afternoon and in financial booking strong good to our We and with Consistent gross second guidance both had of net quarter bookings were great our and to expectations PVC, records continues a across our implied of metrics. each delivering pipeline Thanks, operating

a in better of per financing share and no And the activities, expectations AFFO know, trended which our hedges significant meaningfully financial reported the to quarter, results. metric position. Our strategic and you fluctuated offset above a our effectively M&A volatility currencies recent our throughout both worked company portion as the the while put to despite

Given XXXX. strong exit our step-ups revenue of our churn, booking anticipate anticipate the strength, therefore year a we substantial the and half second quarter-over-quarter stable recurring in into

Turning to both with these the are to we and transactions. the We're to acquisitions start Dallas plans. expansion in already working acquisitions both good consistent Infomart internal and related Metronode April, on our a closed off initiatives

expect platform Infomart substantial and assets churn Verizon guidance holders. annualized remains from poured our end against ago results over the gross transaction of the to being the by We're as run $XX Verizon million from the (XX:XX) current to have creating the pipeline Metronode base. accretive of plans, active, approximately seeing our year and abate assumes related now Revenues our equity well and bookings closed tenant deal internal the our million Our now for strong rate part the highly assets an $XX reporter a we the to of while delivered a revenue from year. MRR having while value and as

We flat plan from year. these assets quarter-over-quarter the revenue remainder for continue to over of the growth

maintenance increasing expenses standards continue support scaling to higher in As bring operating our incurring the in business operations the Equinix to to operations team, support repairs expected including protocols. higher invest and investment their we and IBXs to

to asset As with we NAP integration exit be Miami. expansion largely us, behind opened in invest the Americas the we core Verizon to in soon grow Verizon the the expect revenues the of markets XXXX as we including

$XX XXXX. essentially our integration flat For for guidance at million is cost,

So the second now to turning quarter.

Global QX quarter depicted and XXnd sequential line $X.XXX year. strong another our the billion, same quarter on of QX X, top operating quarter As growth. were last was over X% of performance revenue slide revenues up

net negative $XXX to our to average of fastest QX compared the million to neutral same EMEA $X an and Sorry, FX and compared sorry, FX last above of basis. year-over-year as assets impact rates strengthening a yeah the impact contributed quarter due regions better integration FX timing Global our were range QX same a the was FX Americas million anticipated. XX% when X%. due U.S. revenues, flat expectations on end guidance respectively when the over last up followed Verizon and dollar. the our and than million the adjusted X% quarter negative $XX the The EBITDA growing year, to and the spend. year operating APAC and XX% costs QX top currency $XXX basis our of revenues rates of on currency a over million, essentially at guidance by included lower quarter-over-quarter at hedges of

Our margin XX.X% adjusted excluding EBITDA integration costs. was the

negative same same year. million, when quarter strong and our last performance, X.X%. had year and due compared was $X a over to to MR operating FX net global a rates. million compared a Global $X.XX, recurring negative rates capital per QX lower planned X% million impact our guidance FX share AFFO average $X EBITDA over up QX performance was adjusted impact the largely $XXX Our was churn the QX FX when hedges last quarter QX expenditures. the AFFO uplift XX% than of to

average continue this cabinet we churn quarter between business. our X,XXX XXXX for by hyperscaler quarterly to the London-based very year, activity to increasing part and a in due the Billable to X.X%. For assets, additions record in MRR hybrid expect were strong X%

timing although footprint metric an deals. the due additions, cabinet cabinet strong slightly of to sales FX remained smaller assets on and the effectively our activity firm down the billable per into of basis priced MRR neutral Our lower level large and mix,

the where including highlights, and Turning with a interconnection Pacific regions bookings region a the as over London continued Japan absorbed our the through financial capacity bookings the and Record global well deployments a Frankfurt Chinese Dutch In our region and outbound strength our hyperscalers Asia install covered to regional saw interconnection the the and of acquisitions, across are multinationals, solid revenue Americas German second in related cabinets total at port across respectively, markets, core large please the sizable quarter, our company recurring dollar now significant services as capital Singapore adjusted to board increased number perspective, more and step EMEA revenues revenues our base our revenues. by we activities one-time verticals. Asia two results. adjustments total recurring our great X. were saw whose adding the revenues Interconnection Americas Pacific other cross-connects review some revenues. bookings, largely in quarter campuses. by to and continue The XX% From in from significant in And provisioning structure, including as compressing The markets, record due bookings to of X. delivering in to full was were and to looking quarter. had momentum, saw XX% normal quarterly cloud on in billable were results platform. pickup led refer slide success led in while drive EBITDA deployed headwinds slides and the and also the the X% ongoing quarter, of strength strong up. EMEA markets, and And a leveraging interconnection FX Korean X,XXX XX% X

sheet business us grow success globally. as scale position continues Our balance and we for to the

for the eclipsed $XX first quarter. the sheet this mark balance time Our billion

flexibility well improving yen balance In of extending unrestricted we market out and cash Our our Japan billion. in denominated as terms. increasing debt $X as the financial July, is our approximately refinanced

QX X.X reflected in acquisitions, cash target our capital the leverage better EBITDA quarter adjusted in flows. operating forma recent XX. net increased than with June slightly close our the working the our ratio Our debt to as strong improvement times of discussed saw annualized Day the on Analyst position two pro Also we in at the

XX comments across underway, margin Day, a business. Analyst Turning The the currently of were close at are expenditures up the investment of construction our in around capacity capital utilized acquisitions. million. on and XX projects to scale of $XXX investing slide X, into for rich of support property the XX% two-thirds of which We metros we're is the of assets Metronode with million world. markets Infomart Consistent recurring own over revenues. our the our with each to owned markets Revenues from the adding highly generate $XX quarter majority to going of that stepped many CapEx $XXX including have million

expansions future Sydney. also land for parcels We Dublin, and in purchased Munich,

are investments on shown as capital Our XX. growth strong returns slide and healthy delivering

This analysis. a collectively We same-store now including basis, Verizon assets stabilized guidance XX stabilized assets the for finally gross added XXXX XX refer revenues return that driven cash-on-cash PP&E on our by generate have slides and we to And largely are and on increasing please revenues the summary quarter grew through year-over-year X% a colocation These power to utilized density. XXX XX% invested. our assets XX% same-store interconnection increased and bridges. of

offset adjusted For full FX debt revenues of the growth year-over-year guidance FX to margin excluding largely service and $X XXXX to increasing would revenues to our by us enabling FX of $XX dollar acquisitions. the by acquisitions million, and strengthening million. the million. we and a continuing growth related $XX revenue negative adjusted share FX EBITDA guidance due decreased the from business to the incremental our and per costs the of recent U.S. of are guidance AFFO higher and hedges, recent have our financings. movements, the The impact costs. $XX to AFFO net And the both our This hedges guidance drive decreased year $XX full-year healthy Absent by integration attributed favorability EBITDA guidance EBITDA million by million, excluding our by momentum XX% X% a of rate implies is revenue our impact

reported We integration are XXXX excluding per costs our AFFO or share. $XX.XX share share as guidance midpoint $XX.XX maintaining at per of per

expected events the year-over-year average expect discrete basis. the quarterly common recurring components is to the outstanding patterns our shares due remainder fully acquisitions. grow year, a we of the capital XX% Over assumed to of to basis. fluctuations weighted in tax million reported generally spending and level XX diluted core as an AFFO We've of a on AFFO on related

non-recurring billion and range respect We expect $X.X to finally, cash be between our And the share. dividends, for billion. our dividend expenditures per quarter $X.X capital will $X.XX with to XXXX the third

For XXXX, of $XXX ratio of million, payout an cash we expect approximately payout reflecting to XX%. total AFFO dividends

So I'll PVC. call back the with turn that, to

Peter F. Van Camp

Thanks, Keith.

closing, as cabinet record in a of great market and strong quarter pace So to we go the bookings delivered adds. a engine drove

and growth at strong ecosystems platform strategy evidenced global cross-regional quarter. the heart interconnection sales this and Our remain the of healthy by as

the pipeline We and looking deliver are as of forward for the initiatives, second our healthy on value to we remainder work from convert strategic focus the to a half acquisitions year. our

and there? you questions. for me up Mary, stop are let So Mary, it let's open here,

Operator

sir. you ready Are Yes, to take questions?

Peter F. Van Camp

Yes. for We're ready questions.

Operator

I'm for so that, sir. sorry

Okay.

now We question-and-answer will begin session. the

now Louthan your our Frank from line We is Frank, from question open. have first James. Raymond

begin. You may

Alex Sklar

you China you've that team mentioned – color just of anything then booked Can types [Technical and you Thank on stay are the regions, APAC I what on two Mobile, you. know, other more on the Difficulty] you the the else hyperscale you regions. there, bit little on increase in to-date getting a customers multiple said anything side? the that give also and sales (XX:XX-XX:XX) outbound HIT you

Peter F. Van Camp

part first very the question. your of missed we Frank,

Alex Sklar

you Yeah. bookings – also any it's the I on analyst bit the about that HIT date at gave and group? Alex but color of was was update – question team. an on, a for I to day little saying, then that know Well, I

Charles J. Meyers

Sure.

key So, We we would Frankfurt. in X, and however some this the the London more mentioned opportunities. Charles. particularly close – Alex, XX, – is we type did consider in with we wins that as were that and those script would in in did close hybrid facilities, that HIT are hyperscaleers

in you really strong the quarter. strong extremely in see really closed we see momentum including in Europe booking particularly and continue to that deals pipeline the past additions cabinet So this already

So very pleased with that.

in We continue key Jim's team. members really to been additional in successful to the build bringing out some team. the

and the And running, so pipeline. they're well. advancing financial we're building We're structure again off discussions

JV are get so Equinix. interest lot with lot through like, We exposure We're look a of to continue complexities a of financial to eager all-in-all but strong and see to the have and this would those progress. structures of sector who from to continuing details partners sorting do what

Peter F. Van Camp

of Baidu, the a really also it, quarter, to think bookings, you think very those talking larger part but had in bit I question the U.S. other were strong between and And spread China not more another. continued certainly in did. we but just strong also is about with cross-regional Asia region a Europe. of and – that have the your this looked U.S., were touching highs And but was and export little just I on all as bookings Tencent, grow you had providers quarter, to to Mobile, service we what at the exported one amount to

Alex Sklar

the that kind it. Got London follow-up quick X at existing return Charles, your and they did in purpose on were facilities versus of built change given profiles, XX, ones? Thanks. the all the one

Charles J. Meyers

that that that, targeted believe with facilities. with London it's underwriting and the I – was XX an of say Remember That's really really the prior would footprints No, in IO acquired were generally of some facility those these consistent was kinds is of and that implementations facility, targeted. mind. I those

we feel are be consistent the like underwriting is underwriting to the the going with consistent had that we – there. So or no, returns

the of but fact consistent given think So a underwriting that different we those in again mix with the business, undertook. are I facilities hybrid do slightly have profile those that

Alex Sklar

Great, Okay. thank you.

Charles J. Meyers

Sure.

Operator

(XX:XX). (sic) Thank you, [Alex] Frank

from Colby Cowen from and our We have Company. question next

Colby Synesael

I if Two may. Okay.

First off...

Operator

line open. now Your is

Colby Synesael

me? hear you Can

Peter F. Van Camp

Go Yeah. ahead, Colby.

Katrina Rymill

Colby. ahead, Go Yeah.

Colby Synesael

may. Okay, great. I if questions Two

or business, traditional guys been six you question, and First record months. cycles the noted the bookings typically on three book-to-bill maybe least more at

lot the for seeing up guess why businesses driven may hyperscale that. a core aren't XXXX, we the of unless guidance So have I I'm going wondering

quarter, there. portion seems some in bit strong the little of secondly in even second revenues, on then So there's pretty the more a color Asia. so particularly and in there And like of EMEA non-recurring outperformance

I but the just drove in expecting remarks, think it on we that touched what explain back can the Thank you might prepared of year? you. in be half what have you and your should

Keith D. Taylor

Yeah. Colby, did the the to revenues year. to as and you more primarily specifically acquisitions We it as our that relates half second for of and to guidance Metronode. slightly increase the was related know

it things As relates gross basis both a to I on note, a the basis. it record bookings, would and the one net of record bookings was

And – we what so said part had for we is remarks in anticipated my of of it this. part planned as I that prepared

needed in very a on so of we what and strong basis, year. was year, strong back of a constant deliver do X% the to had currency we growth And anticipation which a to have to normalized

non-recurring. you As which was number recall, a soft of of quarter-over-quarter QX some relatively it reasons, us for was a for

step-ups good will what exit QX that also as going be look ultimately ourselves have prepared for would XXXX into the And our the made revenue had a we QX, recurring comment in So largest that's what we lines. thought of position we XXXX. why and into to we ever you're is see remarks, but in

specifically year. is the for of Verizon the again large anticipated rest And that which feel churn step-ups. is with already to assets, the part made. that be comfortable So the the again already in the business, of by more some we'd flat we've continues We anticipated in offset the guidance

Colby Synesael

sequential had growth throughout XXXX. mentioned think I that you should Keith, earlier we see improve

the first I said? think X% quarter, on quarter. still what you second you which did just versus was the Is the up in expectation that based

Keith D. Taylor

to is booked Charles Like some little There what HIT are else, deals. which into anticipated a there's oriented Yeah. bit threshold we've a hyperscale the alluded our as to other Look, anything But that of doing. large below I that to as transactions refer done of to than Frankfurt number these what there we we're what we refer chunkiness less of target, a megawatt it. bookings transactions London of with and are activity. that the campuses. large we is hyperscalers or these

there's booking time the such circumstances to different. revenue the is so the And of the that number where the that the time we of complexity is recognize transaction slightly we recognize a that

go we'll we've are But it's wait have and there's our that so in QX little of the QX. had that best ever but in be to combination a a history we taking quarters to I going back see, fact And things recurring place. that and the believe bit

Colby Synesael

And then non-recurring? on

Keith D. Taylor

Non-recurring, overall, again I is it assumption slightly. think QX for revenue. that of But revenue strong made would And non-recurring a down overall our non-recurring for we've component again an QX. step

And we're still continue we're said that's we point. targeting As assume roughly what X%. to going to this at

So a QX, in again step and down our in little of a expect guidance. bit embedded that's

Colby Synesael

XQ XQ? lot a like looks So more

Keith D. Taylor

does. it Yes,

Colby Synesael

you. Thank

Operator

you. Thank

will coming JPMorgan. Phil questions Next be from of Cusick

Your line is now open.

You may proceed.

Philip A. Cusick

Hi, thanks very much.

sort of And to change any been has globally? when to in bookings. in has record business of there noted of end high that your those XX%? timing You timing an expanded with the How acceleration should as of book-to-bill we the revenue about think the lead X%

Peter F. Van Camp

an certainly noted, this before. seen we haven't as that in Well, MRR resulting bookings we is step-up

direct certainly that's a that. So of result

you as seeing MRR half you're back look the in year unfold. of at an acceleration the So

The was? other question

Charles J. Meyers

book-to-bill. Well, on

Peter F. Van Camp

Yeah.

Charles J. Meyers

say on would deal bit depends and I type book think that a bill little I mix. to

And – So and sometimes of in some sort you there's time more the get a deals slightly of size. they implementing ramp because to protracted bit of complexity more book-to-bill scale. sort of larger that a take on to opportunities

– in out. as up we half history we So last said looking of how year. in standpoint back terms the all see of of I playing quarters at it I of the And that's into the half record terms the MRR in baked in guidance all we're think the step company think the depends, the back from an

Keith D. Taylor

one to And have said. want what and I the thing to PVC Phil Charles just add

again look – recognize delivered, the of If offering guidance, relative the mid you we're actually growth we're but at we and the we to target guidance end – obviously you range. implied mid to between high

up in look implies an that And basis, growth you to you see step rate. start annualized at the when guidance what will on a so relative to effectively

look And rate basis. that on so QX, in you'd again to again you the we be the annualized annualize if when high an revenues if growth end QX, range XX% and you took at above

you you midpoint midpoint end range. if to that go low of go you're – to be more If going towards to the

guidance feel step a back the little of And through – just you're bookings deals little up. footprint to the prior our a recurring so in larger fact activity ability believe as to book. were implied I about good we record guidance, that bit in the and non-recurring to the we're revenue that the going – the And very go a and QX and see are around QX particularly that is of delivering of And bit implied always these come them we volatility we line. then

anticipate out, down so and and basis. And bookings of the take both gross that's on in the we little you it's a should to this be revenues record we'll of quarter step I how and going – a think bit and net in we're QX, strong with strong having that play see the QX, that message consistent

Philip A. Cusick

helps. very much, That Thanks guys.

Keith D. Taylor

Yeah.

Operator

Thank you.

Jonathan Our of Atkin next RBC. from question

now line is open. Your

You may proceed.

Jonathan Atkin

Thank you, Mary.

and down and region, then about trends in So the strong cross-connect that? wondered I've Asia-Pac got of EMEA a I by what growth bit little a drove and a Americas step question in

Peter F. Van Camp

we cross-connect here. just net you're the I were What pretty overall at We the you closely; looking with of that is sort would the track – on happy guys numbers are Yeah. say very of things. momentum side

and the things think both trajectory net, I closely watch is the general the we is that obviously the business. and that of for gross the One good pretty

depending up As we've I things migration, individual can that said XXX-gig little they be bit occurring. cetera that always really and like a are et said any on down quarter

from what's and on through that We a is aggregate some through transaction there. net depends credits on bit post And the install seeing other of so of – of X,XXX some are Telecity again the it did pretty the of effects things cross-connects just on basis what of I and revenue we're activity in install level some our see in this at or – plus base interconnection with associated migration line more the that say we're and of sort reconciliation working headwind of good. a sorting little would kind us kind We – base seeing. of

So the be strong. the the count across additions continue as tend the line I that little a think perhaps But overall, – well. revenue and gross affected to bit regions

Jonathan Atkin

Okay.

in migration region So, middle complete the of process maybe in other the mostly is still the the explain Americas, in as but might comparison? the net that

Peter F. Van Camp

Well would that more say probably that's work advanced XXX We U.S. and in migrations the probably do are through of I be, would more – that – those. I gig

the again that to is the Telecity really tend sort reconcile of you to still this one the have they that seeing cross-connect one of more of in ensure markets, globally them are unaffected in is are other et of what through cross-connects these the things to quarter effects that, to are lag. actually tends in It long So But huge of comes phasing, sometimes, those the sort by reconciliation records And items tail is population base is thing inventory is cetera. the something and one inventory. portfolio these It's are our accurate, – acquisition install billing do. numbers because integrations. inventoried we that this and acquisitions

And cross-connect of takes of the puts terms sort in in results and count. so that often

And also thing so measure adds. again value our buy health think proposition, in continued EMEA interconnection of the really but cross-connects in we connections. with plus of terms only IX, people continuing ECX of and the that that not virtual momentum quarter XX,XXX really most portfolio, momentum in is you performance that of terms of strong this now the a the to seeing then this quarter. by Are to added But we the with into continued full saw Fabric good I gross we're chunk in and in some – that and important interconnection mind and now

the portfolio very is performing would So say interconnection I well.

Jonathan Atkin

the then U.S. if saw factors looks and you. and for growth the Thank APAC ECX on Fabric. in out it EMEA you Also there? you and maybe then the of of can latter EBITDA that some about part margins, Okay. kind pressures sequential call And like in

Peter F. Van Camp

is assets. decision to and investment ultimately is internal the Verizon performance our the by to the the in largest in U.S. U.S. There embedded related EBITDA. plans as of it's was relative The component evidenced their the always

what we done before. investments heavily. transaction And ever very the into support, we and it's if invest relative QX said, you we And there very we where R&M do, to originally QX three business energy time was our go back we really more make I are doing those meet and our building relative Verizon little to As we'll the point that invest and of areas little would R&M primary operating protocols. more in put operations our are down to X-K, disclosed than anticipate where out they to what team, the continue do

it's output And so decision a in natural embedded and in acquire internal is plans this our our certainly included of was forecast. to

you meaningful, in the here with it than nothing margin that's we're profiles some consistent other of a as there's of executing on look forward. has what little going bit effect said we knock-on and So Jonathan, a

Jonathan Atkin

well Tencent, they of Thank you. adds of kind ecosystem be an in mentioned it these as that? Baidu your you cloud then at I'm into are drivers is and And speak time of is soon as script regions, some cross-connects, lastly maybe sources or mainly other Mobile, as on Korean of exports Chinese too commenting business are the to cabinet wondering China there players to to this driving related developing or of

Peter F. Van Camp

I'm I business we as But they're reaction looking to they or see... associated too their build certainly cabinet resulting having. haven't see be traction see specifically it's how been would probably Keith with But My and looked with I don't to cross-connect in have know growth would much soon don't it's platform at Charles adds least or out their it. at that, at their cross-connects data I clearly,

Charles J. Meyers

think cross-connect with tend Well, they count along that footprint, I lot with node cloud I would the come be include a a say, absolute they interconnection they do with also the cabinets. but high to – private come a of interconnection, private they because oftentimes,

of they as strategically people so central the to they is the enhance sort that's in I terms strategy architectures. Equinix for of well continuing position And interests really deploy in sort continue multi-cloud really Platform the core as think hybrid really their serve to of end, our And overall hub proposition. to platform a value

cab counts. work really per high the things these counts, But strongly in they than very our favor, are large. so on basis, are average, a cabinet lower so but cross-connect And probably just they're high cross-connect they because they're

Jonathan Atkin

you. Thank

Charles J. Meyers

You bet.

Operator

you. Thank

Michael question line open. Michael, next of now Rollins is from Citi. comes Our your

Michael I. Rollins

if thanks taking Hi, my for questions. I Two, could.

mentioned, over about the you a recently you indirect bit impacting look channels types opportunity as of you months? was six next First, and if out to talk sales the and more sales as being little shrink I the XX are of think curious that see out in that you bookings indirect how the generated the

Charles J. Meyers

take our have about that. It's of a XX% of We our from channel there's direct overall. mostly more teams our partner – to Yeah, that, opportunities. variety the through continued we're to sales indirect momentum coming selling that activity channel user the XX% first more would I'll came And I channel Mike. a – saw of sort now, Sure. strong teams crack seeing of in our we than logos than end new we're to partner sales channel, Charles. with at bookings with think say merchants. meaning really still sell Right I mobilizing win

of multi-cloud to enterprise beginning larger primary the type these well question, a opportunities, much partners maker types it and it as In really use typically decision positioned channel directly and pace to falls really terms more at of customers types your with would that of with one, optimization of a address say, implement aggressive from are I into; really opportunities hybrid whom an account network – are access standpoint. people access case, doing continued sort

of those think I and we've – So talked are. about some who

really or more comprehensive they appetite I and other proposition would to I'm That's seeing themselves, a how implement as them value with saying sort what of partners of us for going sell customers. I look as momentum but of are, the connectivity channel the very are are and effective that say, and they of all private solution acting what a have are they of NSPs need. And AT&T I lot of example, their range hyperscalers to now For you sort deploy that's sales cloud want, infrastructure. that's in customers and their view hybrid big significant reality. cloud, a terms

and value customers large so, really Azure likes we example, cloud. certainly – strong multinational Microsoft, really Stack hybrid of going propositions, big global see cloud other the core for that implementing momentum And has with a private and are hybrid to

thing. again but same and So those ones, the probably AWS are

lot I in of AWS ago think years say lot that hybrid now not was of would a about context would a you several I there I discussion the know more. and there's say

actively hybrid are who And serve we customers at partnering to are so looking them cloud architectures. with

we're those think seeing on probably I a are some So color there. – little what

Michael I. Rollins

Thanks very much.

Charles J. Meyers

bet. You

Operator

you. Thank

Our Hello line I'm next now got Erik comes Erik. sorry from Hello. of your question line disconnected. Rasmussen open. I'm Erik sorry. Stifel. is your

Instinet. have may Jeff Kvaal Nomura you now of begin. Sir We

Jeffrey Thomas Kvaal

hear you me? Can Hi.

Peter F. Van Camp

Yes.

Katrina Rymill

can. we Yes,

Jeffrey Thomas Kvaal

I'm Okay, if the on to more probe little interconnection a could. great. hoping bit you revenues

relative why lumpy maybe case whether or things add or little are qualitative time, interconnection qualitative quantitative think should figure the a I'm that of could be course wondering help to given some us growing us will or that up that down. gauge that obviously You how anything bit it's revenue revenue about you or help to quickly over down absolute would sense be have us this lumpy you think in or through co-lo color if and lumpy of wonderful.

Charles J. Meyers

first to Yeah. I you want mean, take the crack.

Peter F. Van Camp

board that to bringing Well, that that selling some clean-up of growth. the feel quarter, a our continuing just all Telecity terms I the outpace continuing we're down, I in to quarter term, We're see the to at on to that with it counts interconnection focused. a on just adds we're the to us. in highly make like had in just this just and impact a and was X,XXX billing outlined, cross-connect of see continues and lumpy every level, of business move forward the continuing just your some as growth Charles Europe comment. and activity to the about good nature Clearly going it – bit, customers co-location prospects due specific, But centers X,XXX just

cross-connects momentum from continuing, come ultimately and has colocation. churn it some but XXX-gig the upgrades, certainly just is to So see outpacing the continue we'll of

Jeffrey Thomas Kvaal

these say then aside clean-ups? state, steady is or So a per would it that of growth quarter to to rate X,XXX be some fair X,XXX plus from minus

Peter F. Van Camp

it's been, what yes. That's

Charles J. Meyers

Yeah.

we're the migrations right some seeing more of because that's XXX-gig we through cross-connect larger and think I with count seeing I think coming on low-end customers. the are of that

those does adds additions, gross but interconnection – And really in the at strong as so that look the as we see tell direction. in that I customer buying terms of and of of in percentage the broader terms customers across number of when well, business of we the Fabric, as sort buying. are terms in are then the interconnection portfolio, just of view locations things they're of cross-connect right in All IX of both you overall which there, that health overall well which health the adds across of sort central ECX count will metrics as to pointed the the we

for operating pressures. us, to X,XXX more is we're reasonable at a because bit XXX-gig probably of end X,XXX think state some yeah, So now the of right a of I the sort low steady and the

Jeffrey Thomas Kvaal

Thank helpful. Super you. you. Thank Okay.

Charles J. Meyers

You bet.

Operator

you. Thank

Erik, is open. Stifel. line now your We Erik now have Rasmussen from

Erik Peter Rasmussen

me? you Can hear Thanks.

Peter F. Van Camp

Yes, back. welcome

Katrina Rymill

ahead. Go Yes.

Erik Peter Rasmussen

Okay.

about happened. Sorry Thanks. I'm sure that, what not

Just two quick.

Infomart closed I had in of the the in terms Dallas, that in now you quarter. First, guess

the terms of You to for hearing XXX-gig now. with this your about seeing to Is continues And industry we're coming adjacent any But talking obviously And right also positive expectations? then up your discussions for plans with surprises in then and development? XXX-gig. customers? the future interconnection, your and prior timeline we're are the land more migrate what even

Peter F. Van Camp

Yeah.

going that's surprises interconnection the standpoint. in it interconnection did the hub upside we overall that first and Infomart co-location investment the Dallas the So from and a our deliver planned opportunity knew But that we there, on to for Clearly of there we one growth real value to in into sits no presents market upside. Infomart, that the acquisition. coming it, strategic just we're the expansions the

we're moving something retail next count. I at lot to level. advantage that do phase the hyperscale groundwork to So yes, meaningful, Dallas take is we're the also and more expansions current X, a But and the of the Infomart. believe, doing on look of at parking both

and or to course see step horizon a from hearing from a seeing as on will upside then I about be we're And nothing really through not yet our so with in end expansions. at continued Dallas is now big that standpoint those investment lot as work We've to of to a XXX-gig, anything live the And the upgrades. of on anytime soon. XXX-gig market. but years XXX-gig, customers specific underway, that on that really ago number of XX-gig But yet. was announce from a anything don't expansions

Erik Peter Rasmussen

Thank you.

Operator

you. Thank

have We from Klein Aryeh Capital BMO Markets.

Your line is now open.

You may proceed.

Aryeh Klein

you. Thank

to back projects relatively reconciliations Telecity Paris. those? notable we a going Is outs revenues, the quarter it Should anything related the with expect including back then couple to on push there to quickly? of one had in a looks you is phenomenon? bounce some interconnection Just And it like

Charles J. Meyers

one, worry But particularly last to one, But it slight a in hit I'll nothing very resulted if delay Paris, in was issue soils delay about. about the the relative nothing a Keith, one. all No, it's project, in to first that that out talk last you the project. that ordinary, and slight want of at

Keith D. Taylor

as Charles to the long as because install it experienced do have build, make an to different reconciliation our we it it's what integration and contract to ultimately single efforts. than our that. the long of we of we've exceedingly sure tail takes prior Aryeh, to, some tie And the base, physical the basically in relates of to to the No count time acquisitions. amount And, the every of to alluded unit really

so should to this us our you not – a don't continue do. that into well perspective. I'm adjustment quarters, that level But – anticipate last customers going anticipate from the from I you of with expect it's to to XXXX. something should And revenue a or many same is

Aryeh Klein

Okay, great. you. Thank

Operator

your now Simon, is We have Stanley. Simon open. Flannery from Morgan line

Lisa Lam

for sheet you've [ph] leverage Maybe you an [times] Thanks forward. and I going (XX:XX), think Hey, how balance continue on grade for Lisa X this question. kind rating. for you the talks look just a there's to targeted taking your X Simon. to of one about quick is know ratio and investment

of towards progress just maybe update on kind an that? So the

Keith D. Taylor

there continuing when that. a Thanks relative progress about the more talked to in that. we times like June X.X towards helps Number couple we secondly, of XX, [times], – Lisa. be for thought then it the to for, transactions out our X.X how of reasons an had million and uptick on for $XXX Number because this with from the of Yeah, show of one, transaction, debt to we and Europe given movements did Analyst the the coming Day And be took a at we goals, obviously levered off we're Again, we off books is say, – the EBITDA our notes fact we've acquisitions. EBITDA Infomart secured what also question. previous that looks quarter. gets we'd built-to-suit accounted note the And then in I way the quarter. got about senior paid million that roughly and should will senior we currency that at the $XXX acquisition Informart

leverage. a well times see into of net going can You to X time, X over get short relatively our we're targeted to range period of

of progress continue off lot So with footprint. levering across we're all of spend, going with about Analyst making. our appetite the capital comes again good I that talked the just that of comes that That spend we're global we what sort capital. raising to of to said, feel a capital at about invest And as incremental our Day,

to going care a way investment on growth we can think to will is continue continue the constituents it. grade, not into we to be that that about driving and so by most because more really the to cash growing but we And return not as company business, flow about the focus absolutely we're – and drive aspirational the all

over – taxes of and time paying to simultaneously paying we the horizon dividends, that the range everybody that and targeted And business, would you – within scaling XXXX the with with becoming what so XXXX, well investing simultaneous grade, we're plan that tell I shared our the business. in investment our

– we'd the over be it's path. next confident right not the on just we're quarter grade to that two. confident or investment I'm going I'm So

a I than to that. think little it's longer be going

Lisa Lam

for Thanks Okay, the color. great.

Operator

you. Thank

Robert from is Partners. from question next Our Gutman Guggenheim

line now Your open. is

You may proceed.

Robert Gutman

Yeah. question. Thanks for taking the

an As of year for at like and the there's I just end guide is the what year, the bit down just into I of end midpoint to? look an implied for guidance due third at towards what's the step that the be implication it full looks the margin EBITDA of and the quarter, a and right, would year, – back of that of

Keith D. Taylor

we when it's of how you year very the at range, progressing on to part beginning you depending we look high you of the delivering to at, the the point through what we're look whether at relative number Yeah, of continue ranges areas overall in Rob. relatively Look integrations we there's taking number the of But we're there's that assets, in are a – lot a to we've Verizon place. of related the going you given rest broad to – as invest said we're mid year. to of told feel comfortable a what

the just little into a through ourselves updated and the flexibility. that give it's just certainly bit we'll in in And there's the manifestation overall, time. comfort delivered we of range recognize of and as that point little – to quarter progress hopefully so more a provided guidance at QX, you bit it's we giving we've that a But color continue

Robert Gutman

Great. you. Thank

Operator

last RBC. open. Atkin comes of your now question is Jonathan Our line from Jonathan,

Jonathan Atkin

Yeah.

and assuming within in came channel comment benchmark, there I channel passing including a but regions, from is sourced that to wondered XX% call from lot into terms if the on was within or follow-up of other of that U.S. business I'm EMEA out the anything the a Just Asia-Pac. contributions that

Charles J. Meyers

range don't that quite business in terms the at big I of exactly really is our percentage channel, indexing actually how of a Yeah. was is bookings Actually, so would is not no, say that mix head over top one it's of in I that my like of good, on channel from have big particular region. – the but XX%

folks of effective selling team for – with meeting hard channel of years of actually of we're several I that have or the been and lot are confidence team get it in very channel development the your all a of you these the difficult because who some When matter. that's exact that their advanced sellers who've very to So of partners to add around trust as bit last program. sales is for the sort to from be now I'm is – probably things in certainly, they level matter history we energized those vice to about think We can They for quota-bearing of I partners seeing add our multi-channel the It legacy, really partners be them terms understand do of well for that that business. are think to for partners big it. gain in activity partners. channel people level of and channel that a really of direct over personally more more in versa sort build is and slightly looks scope really in talent do to how come we're one regions and them to often a we program the the try for quotas. channel hedge, credibility have tend a progressing. many and the now gain of three have you but terms is global XXX now and plus credibility, have and them added over regional different been and the team trust – how channel the time But does the And that's localized to sophisticated of them. things in good fairly their

across the that's again – the strong across three and board regions. So

Jonathan Atkin

you. Thank

Charles J. Meyers

You bet.

Katrina Rymill

our for you. you thank Great, call. QX Thank joining us. concludes That

Equinix (EQIX) 8 Aug 182018 Q2 Earnings call transcript