EQIX - Earnings call transcript Q3 2019

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Operator

Good afternoon, and welcome to the Equinix Third Quarter Earnings Conference Call. [Operator Instructions]. 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

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

in XXXX, including and started, Before identified not in be comment remind filed obligation on forward-looking from our our risks those I'd affected SEC, vary most everyone press may on made the results get uncertainties. making and Actual and those that the are statements filed no recent forward-looking call. and on we'll X, release to today's February intend August significantly statements with risks XX, XX-Q on like we 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' quarter, is public guidance explicit of disclosure. is comment it unless policy during the not financial done in In Fair

In reconciliation Equinix today's addition, comparable and we will the the We a in most company these at today's list on those reasons GAAP www.equinix.com. measures to of provide release press directly measures uses of page on the call. conference the measures why IR provide non-GAAP measures a

available Equinix to have like designed for remind We website data. our you currently financial the website supplemental the to and check on we discussion, page in of along encourage information. certain IR to also a time regularly page that to important our available made IR presentation with this from other about you information accompany information most We'd time post and

Taylor, Equinix' CEO Chief are Charles Financial President; and us Meyers, and today Keith Officer. With

questions be we'll from Instructions]. analysts. remarks, sell-side prepared our [Operator taking Following

over time, turn I'll At call to this Charles. the

Charles Meyers

deliver afternoon, agenda. digital as bookings, to strong to third Good welcome demonstrating Katrina. and quarter pursue of had We earnings quarter their quantifiable transformation our they you, our our execution our ability reflecting customers best-ever clear and value third our strategy call. to Thank and

our business on for to and quarter portfolio geographic bookings retail one deals with evolving with our new continues power our in customer our the offerings. midsized of Our over customers, enhancing of interconnection the of reach, and our Equinix multi-metro in fueling of generating our quarters comprised to customers, the X,XXX X,XXX majority interconnection across We're history. small to expanding launch strongest Platform market-leading responding effectively services thrive, executing the the innovative commitment to unlock needs edge of deals,

together the enabling us incremental By allowing across focusing in on in sustain driving higher the over while attach and rates, churn our reduced layering leverage capabilities, operating will which investment business, deliver to years, we're industry-leading cabinet returns. retail coming drive business, enhanced traditional continue yields enhance to and

aggressively Mexico, agenda strong and the bold our America, covered with progress now operating accelerate journey today activating the market our with hybrid the with in momentum our global in performance, energy serving advancing over plans to data renewable position on notable holds EMEA, of we use social of multicloud energy significant second channel, and customer's continue which our architecture as goal renewable clear the In reach, value with Monterey. operate. and Platform and We our solutions we extend sources. globally XX% made to centers, of Equinix Equinix with to combining enter are XX countries in #X to environmental, for largest tandem economy We've choice. partner our aspects. the clean our a And governance Mexico the announcing XX City across of our by XXX% two sustainability consumption now new meaningful and to in we're We markets outgrew progress Latin with

XXX Top the ranking year, nation's use, EPA in recognized third Green Leadership We advancing EPA's the receiving our the Partners of recognizing voluntary Green List, the for #X consecutive and our leading market. Power by Green development on the contribution U.S. Award National were Power the for Power

During Rivera new Board our the hiring Directors Dustzadeh CTO. announced the Justin as and our addition quarter, to of the of of also Sandra we

deep We are to leaders and diverse as and of thrilled continue our experience to for technology refine we the future add as their world-class expand Equinix. vision Platform

for including FX year-over-year, Slide Turning depicted FX-related the billion, on and impacts. and up of X% EBITDA AFFO as up expectations, X% $X.XXX to was quarter, was -- revenues X, excluding QX Adjusted year-over-year. ahead were our

Cloud strong growing growth a constant outpaced driven are fabric. year-over-year, Interconnection across basis. products across in currency These by our Exchange growth again revenues, rates and traction momentum particularly XX% colocation all interconnection and solid all normalized

now from network than cloud other In believe our Singaporean further will launching competitors to In QX, combined. similar incremental billion cloud-first accompanied as forward XXX,XXX largest ecosystem. sovereign these XX closed a wealth our of X,XXX lower-than-expected our differentiate by milestone the high GIC, operating top deal world. and regions the over hyperscale expanding a with ability October, respond the a interconnections, cloud for Equinix both and is have This to an greater-than-$X We center Equinix, churn. with look more adding continue JVs trusted in in first needs to leadership fund. enterprise the enhancing efforts we of strengthening to companies, we gross We strategic interconnections, segments and per world's adds our JV, added while quarter the rapidly hyperscale

ECX overall our and dynamic virtual XX,XXX than X% leverage surpassed capabilities more operationally of Fabric. accelerate are which connections, efficient, and connections, expect customers count, also these to as our on we SDN-enabled We the

now customers WAN seeing rich adoption across increasingly including data, distributed With of hybrid cloud effects cloud cases, of ECX an rearchitecture, use ecosystem destinations. expanding and over driven strong by rapid the range Fabric, we're X,XXX on

also our new exchange markets, increase We provision existing IX saw in capacity. of and XX% a Internet in with growth year-over-year the

firewalls services efficient load and balancers to is faster providers of Our newly from and pipeline. technology product provides interest choice, including Alto generating their Palo virtual strong routers, a more launched Networks. way network robust Network Edge enterprises market including Cisco, Juniper Equinix, offer This and deploy a with at

from Now verticals. me our let cover highlights

led and record activity by rapidly major global the as MSP significant demand. experienced bookings, Our network partner to expanding we serve with and subsegment enterprise telcos architectures providers global reseller their evolve vertical

New included to fiberoptic provider, growing optimizing customer regional Silica leading a a edge wins networks, demand; network and expansions extending Telia, support with coverage provider deployments. Nordic and

reach digital and U.S. and subsegment exchange included Our financial to bookings new banking robust ecosystem. network services Sterling Key startup, to trading vertical in wins Bancorp, and our transformation. leveraging electronic expansive the achieved the rearchitecting with an firms growth, a to new uptick strong embrace partners, as continue the connect securely of logo depth

digital bookings, in by solid and produced vertical strong subsegments. and content Our video media growth led publishing, advertising

growing their line and a as ad analyze a data. wins expansions as tech upgrading distribute transforming network firm, well included New leading social infrastructure to media global firm and topology global product support to

IT security architectures. over hybrid in diversify strong strength the index ECX as as in Our cloud increase continues cloud to and consumers as with well and subvertical a multicloud towards vertical Fabric participants

lead competitor. continue many with as ramps to in as our Xx with cloud over nearest connectivity We metros arm multicloud

enterprise in as experienced as well services, retail Our across professional diversified government. notable strength vertical growth

network further deploying PruittHealth, expansions well infrastructure and health business; data AI distributed Company, growing Equinix to support wins optimizing New rearchitecting Walmart, ecosystem; on and its Madden, the to digital cases. Steve care the included management enable to requirements; as to from business network Myers-Briggs as better interconnecting connecting deploying support to support multicloud partners Platform use

relationship And and quarter, insurance, to vertical more with of government, our key partner use XX% bookings and federal market. including reach wins pharma, of banking, for saw we types, multicloud public utilities the efficiently with our optimization expand hybrid going network as our into all than a addressable another end-user enterprise and team had this channel great cases. We as use across of partners accounting activity XX% our

wins large their Microsoft Oracle, channel with included of multi-partner a data center New implementations win and supporting Presidio, hybrid quarter U.S. and consolidation access. a energy this for multicloud and FX, company

let turn results quarter. call to Now for the to the over the me Keith cover

Keith Taylor

afternoon Thanks, to everyone. good and Charles,

performance us saying in Equinix from with remain our my business space. prepared others very remarks and our we start me by Platform pleased differentiating Let is how the of

to And to products our our core belonging and successfully our in while areas customers as simultaneously to are continue it future, and X relates business invest continue services. and inclusion in sustainability employees. We new initiatives, investing our very our dear both and that structure diversity scale communities, and we the our operating to

We had and with FX another results consistent operating items. FX-related quarter with solid impacted although our our by expectations,

strong very gross deal new virtual this pricing. services. Interconnection progress making and From level. positive performance, a Again, was at the had had quarter. strong, booking's actions net and mix our physical best-ever edge perspective, across our we activity very we including QX bookings good the pricing both We're attractive

as-reported assets an the our result, closed transferred in firm hyperscale metric our EMEA, In a and October, basis. X. venture cabinet into London on MRR we early Paris first of two per FX-neutral both our and operating XX joint remained and JV, As

As in quarters four contingent and the global expand net as compared million are point distributed other met. different of certain countries, our critical additional XX the And to underway our next expect venture a result, platform Equinix, separation another $XXX with companies we continue we joint cash million projects across of metros €XX a to to XX over milestones XX space. an and

and basis. quarterly on let highlights. growth currency that cover rates all this are I section the Now note me normalized in a constant

our X, XXth to up on our and and of the lower both quarter previously typically to real recoveries depicted the global decision FX-neutral derived Infomart that tax were related As hedge. FX revenues quarter-over-quarter in straight the a as midpoint a implications the of in of QX one-off the advance Dallas X% euro. experienced tenant Also, range we from the Brazilian too a quarter, high billion, revenues. revenue then at top quarter In on expensive were an to considerably, including asset our over step basis. level volatility, growth, lower-than-expected currency up, number favorable $X.XXX from largely the Brexit that pound and weakened same is impacted unusually there And an nonrecurring the guided, British Slide last year, line QX guidance

drag. hedges, EBITDA Global last $X QX over primarily expected, $XXX the million QX the revenues, hedges, $X utility included an million, when included impact dollar cost guidance to adjusted up QX adjusted was quarter despite in FX EBITDA compared of expansion guidance quarter our was a seasonal X% prior rates. costs. negative due performance, compared million due FX net stronger than adjusted QX net same the better lower U.S. our FX the year EBITDA the the to impact and maintenance to negative rates. prior to when higher of FX

Also, CapEx. million, currency XX% as-reported on the million expectations still expense, our Global our an above AFFO, higher-than-planned increase FX-related net year, absorbs QX an in from constant last of MRR same and on absorbing has consistent on increase guidance. a our was expect income to FX we a $XX quarter QX, while October, AFFO recurring tax $XXX was over the basis, QX higher-than-anticipated tax our significant AFFO through attributed with tax and reflected Global expense AFFO Based exchange our to share targeted gains this current hedging the a accordingly, reverse rate range. portion in in per program. X.X%, been basis, churn

MRR guided remain to expect churn range of we X.X%. QX, For X% our in to

also of significant revenues physical over both while and revenues revenues, pace, and portfolio XX%. EMEA The significant -- driven Interconnection a interconnection to was revenues, with the momentum each APAC grew XX% a at incremental prior healthy recurring provisioning stepped up. virtual XX% port up net by now the increased revenue respectively, connections, of our interconnection strong recurring than XX% and while our capacity. from Americas adds step represent Interconnection greater quarter regions. significantly our Interconnection the quarter-over-quarter in

the on excellent Turning global EMEA the Americas a adds. at regional covered regions X stellar our to customer XX%, we to APAC Export platform. at logo does a bookings on basis, and pricing see the to Americas of which and were opportunities are across region a healthy an at high with region this our very remain normalized And And new MRR about federal across we quarter, the small continued selling X%. by X. job XX% segment region growing strong as the remain deals, X other followed mix new The Americas Bookings of respectively, had results excited potential year-over-year and saw set. high and a continues Slides fastest strong highlights, full through regions a

and led we in cross-connect by markets ever service French Our EMEA region quarter, its net the had provider network Stockholm. quarter another X strong EMEA best and very businesses, London opened and EMEA: strong in adds in deal German billable a firm pricing, activity. new had robust our Helsinki, up cabinets, experiencing while in including increase capacity

Seoul, China continued trade we Hong momentum in unrest region strong our And entering its dispute in enjoyed economies data country opened Pacific digital businesses. vibrant quarter the into of To see our Korea, is bookings U.S. that first both Kong. despite one South in XXth most business to the bookings operate center in plan. the and Asia from. ahead with we the We over the the of Hong date, showed And our tracking Singapore world, Kong and Seoul

now at Slide capital the to I'm looking Please refer structure. X.

the offset dividend. balance more approximately the by quarterly our and prior Our is than ATM unrestricted quarter's flow operating than billion, proceeds and cash capital cash cash our from were $X.X lower program expenditures

the our cash to was debt leverage within QX our targeted ratio still due net range. annualized Our EBITDA, slightly yet balance, well adjusted X.Xx lower up

continues given As savings refinancing enjoy interest any provide to through QX, interest outstanding and business our position, rate balance the our on incremental the a grade-rated well and currently liquidity end expect drive sheet, us strong to alongside company rate capital borrow of current strategic the cost raise a the initiatives. debt new as advantage. environment, of a At new we lower unmatched substantial investment as our to to future fund

Slide to X. Turning

quarter, expand development million. expansion million, continue and of land and QX capacity, CapEx for bank, $XXX cabinets Helsinki in the acquiring including adding land And recurring approximately Tokyo were For a had $XX IBXs Warsaw. new new Seoul. in X,XXX including projects X to expenditures we our of completed, capital

Our capital shown strong returns, on investment Slide delivered as XX.

X% similar to year-over-year XXX a stabilized revenues quarter. last assets currency on increased Our constant basis,

Our invested. stabilized cash-on-cash XX% assets PP&E utilized a and are collectively gross XX% generate on return the

XX please XX the XXXX an through refer of bridges. Slides And updated guidance now for to summary and

integration X% guidance full of implies while year year margin over $X EBITDA our to on million growth currency applies XXXX full healthy Also, of year by of to be XXXX, raising reducing we're guidance and now cost constant rate revenue our revenue we're strong a operating guidance million. a adjusted -- maintaining the the approximately EBITDA $X For XX%. This due a our basis, prior adjusted performance.

normalized while raising operating our given XX% also million, to We range AFFO expect and constant strong And range our previous a basis. net interest we're do the XX% performance, XXXX on and currency slightly between by growth compared our will grow expense the $X ATM in year diluted lower QX. the AFFO impact dilutive fully shares average equity effects X%, of weighted per outstanding common XX.X share a is QX including raise and program basis. a the expected both of million on to the activity. We've assumed

we increase a finally, approximate and reflects basis. increase on year the dividend to $XXX now cash XXXX expect year-over-year XX% per a X% prior our over million, And share an

to pass stop, Charles. going to with So I'm going to and that it I'm back

Charles Meyers

advantage great of Thanks, our our underlying competitive quarter, Keith. source demonstrating we In closing, business. another the of strength had building unique in on

go-to-market while balance of sheet footprints tools and us using ourselves strategic channels flywheel separate to world-class velocity partnering GIC hyperscaler the our the to like our scale players extend our the as scope, enable to deliver simultaneously in diverse and and to capture attractive market. business, competition, continue returns We with from expansive

and will with integrate am extremely digital We to a our privileged our that and say to the future allow capabilities our new also their people with ambitious Equinix, right ensuring and our of focused that wherever time, while team impacting transformation connect everything future to set the products roles on all I in building and right company employee over building reach that everyone continue of for that and a journey. XX,XXX, to making build everywhere, on achieve customers and work right us belong, will our I priorities our is on customers, to to the at vision I have matter. sure pleased in Platform confidently continues that culture platform, we world thrive, the steadfastly an of against executing I'm safe, their service positively can

it me questions. stop for and let there open So up

Operator

And our JPMC. Philip Instructions]. Cusick question from [Operator first is with

Philip Cusick

Infomart that you of dig we green revenue? costs, the expect issue if tax And that what incremental into Americas maybe are the impacted Keith, the should can second, then in from here? the and the First, colo initiatives

Keith Taylor

Phil, prepared about We've tax currency vis-à-vis the question our very sort asked matters remarks implications. this or talked astute of you that in two tax quarter.

that authorities QX. assessment say, that ascribed and that First of to the there the equation, taxing it the very a a the of building. was that, local of foremost, gets as was the because Infomart, when relates shall a, prior tenants charged, in revenue to with to we we we -- to large Infomart side bought course, basically and was building value there and we to came resolution a But negotiation

we tenants so through you will, And absorbed, of some pass the if of costs. the and the absorbed those cost,

because will, to and the and step even better and for, line come gets capacity, okay, absorbed a of but to not revenues' the of going directly with on once unused get say, the meaningful a step of that that to good if those -- of attached is, tax we have we a also that. economically, taxes the to for got burdened the it on a and won revenues our tenant, QX, affects And facility were part tenants to effectively down, Infomart, you for as but space, back collectively, arrangement because that In we reduction in -- only on result, recoveries, we the the if there's us. they -- But that this you pay. we're down settled large you've their our the taxes, us of tenant lot was Equinix going in amount are was a that bottom in tax authorities, will,

one. So the was first that

raise, important, want make that and sure, I to issue attached a The property it's was just I second think because recoveries. just matter always tax it's to to

tax vis-à-vis favorable how relative the us, gains dollar. to result, for issue weak hedges. income our on sterling income a is because our euro QX very hedge tax had up U.S. to second both we of The went in provision And and as were attached tax, that a the

a in QX, to that that provision in why we book bridge. that's reversed and see that, you QX, is you out comes but the lot already in the As know, of had

power, was Suffice very of, how would consumption is somewhere to indirect it's tell we purchase XXX% XXX% to $XX right very, I And absorb on there We're sort And of initiatives. on offsets, then we which through focused somewhere as our green sorry, from to made in to will, if to a -- go initiatives, and really, many procure focused -- green-oriented did spend million green question, our comments, has say, if between become our initiatives. your variable course, I. and you power on as now, you we a-- corporation the and million then back last driving sizes, to ESG purchase green But different will, arrangement. shapes you, Charles that and come those it green $XX initiatives. power

so we their certainly it's given supply the our constituents that highly to only customers, but $XX in million $XX and to focused business, that. our recognize we're but in chain. on important to And the to to company, It not million important is communities a very we're cost the

Charles Meyers

kind that's -- baked a fully basically, that doing so into in our that's results, note, for of our to that and been operating and Phil, been it's already important guide. accommodated we've But while,

Philip Cusick

Yes.

it like cost mostly heard I but heard it thought I -- I sounds there, incremental to on absorbed the something be call that's done. that was Okay.

Charles Meyers

Yes.

Philip Cusick

net Can been idea the you -- of that? that? revenue then of the the business from on us underlying sort without Or on the just up And following impact side. the of in have what give maybe an trend Okay. Infomart would

Keith Taylor

Yes.

our basically an would've normalized guidance So taken top of basis. FX-neutral us on it to end the than range,

So $X basically, it was million.

Operator

Flannery is from Morgan Simon question with next Stanley. Our

Simon Flannery

industry and if market of acquisitions anything the look what dynamics. does or Do wondering that is see was change a acquisition those. you had at any would where And European on about Equinix near the the just like in in night. your large last that? terms might be merger obviously thoughts the doing might today after Or term? on talked You've we have in additional that So either perspective what JVs? industry looking on I stand the how we'll

Charles Meyers

question Obviously, a Sure. surface, Yes. for fully in big industry would sure. our expected We that transaction Simon.

too So a of I'll remain ours been got big parties to start difficult such. with I'm not has risk those of combination. in we've those each in might they'll of tremendous respect think, I interested Interxion for competitor as be this, this why always see both companies. to, Europe, and sure It's

DLR's forum, for see be DLR, business, in is business selectively we a more in as As joint competitor. not with then experience a case fairly will xScale probably likely retail small. many be between said actually the only public venture, business I've That overlap them our to where it's sort of core that my and but we're our our as head-to-head, consistently

it into size Interxion outside of entire retail entire overall. we Equinix tenth put about to business appending to is perspective others according DLR's the Synergy what be of and of a from would Europe on Europe business the retail a Just retail that outside business, to Research, context,

represents bringing businesses, global strong combination a European wholesaler. the different think I reality, strong together very X and in So a retailer

an merit deal So think I the it. industrial logic probably to in there's and

to think say scope, replicate combination a to it's of the of a gap I Platform closes the Equinix. that trying terms stretch bit value scale in really of the and meaningfully

in at end be in I businesses, would challenges certainly I years, So for on financially -- will the doing if in culturally, and been particular, competing basis. we've out those against, we'll which that's global is certainly comes even And alone and and and feel think a just say comfortable operationally, Europe, other let done company when mechanically, a we'll pretty -- combining nontrivial. I successfully, what think the obviously

sell proposition So we're globally and our to value success but it's going like I customers. to great to with of feel our understandable, going continue we're strength have think think the I

appropriate really in terms and our answering question we that's we're a going if -- At disciplined chase going be we business. -- we're think an about really the the the that transaction same we're to we and in to From M&A, be we've like right going said we about strategy feel recently that Obviously, into to us they it tool. to don't time, market. valuations believe announced and the to very not a of make gives own to right us. nice pretty sized good real a sense for feel that, continue second Mexico entry enter continue was priced I important market for

sure other There's we again, entertain think few -- that markets we're to we that And opportunities make M&A basis. I on disciplined a enter. do going would to but as that

we'll the -- appropriate going to use one bag, an in discipline. like that tool with So it's feel we but real we're

Simon Flannery

hyperscale for the new timing And JV markets?

Charles Meyers

We actively haven't really -- working we're that. on

mix I just we transactions complexity you the xScale hard to if to The of terms being key the on expect look given of timing over the of world. the predict. those, previously, we couple next in But said in to actively. we're to engaged of As the would more exact JVs Japan is markets in think fully several had out around able add portfolio sort offer years, the

Operator

RBC. Our Atkin next with question Jonathan from is

Jonathan Atkin

cabinet could as sort and noticing cities Are of to changes you new in adds just markets. any say, the capabilities? talked got major-league than shift you Americas in of and maybe slightly inform prepared about the Tier you sort in and that X your it rather trends cities? smaller develop products, about me any minor-league Charles, thinking your between remarks, appetite into, that you're edge And enter your mix seeing So markets

Charles Meyers

But cabinet seeing major major metros -- both we our markets. those think, see and at. any represent and beyond an I -- the look health markets of whether and our actively see to cases do well. going revenue Yes. momentum, real use We're I any we something footprint, we're for by edge growth, at need do offering then expanding cabinet depending our reach trends. in evolve, that shifts not more logical say our think will share not to to to to deploy into I lion's is continue we're on, or but current start drive we're again, in would And the other in Obviously, continue metros. looking us services probably that opportunity infrastructure as to think the extent drive those yields I significant adds we would how

We have that we we're edge team team, as and we a at to evolving how the that. looking refer do would actively

say But current by are see the bulk we cases would use of that right that now, met I the the well have. footprint we

edge And -- so being adapt of use some aggregated as continue today, might and able very the just we cases that or the our that. or to be meets footprint evolve dictate Network market might of whether into Edge to deploy of expansive our edge we think services, others we'll contemplate most the needs

Jonathan Atkin

already on expansion needs? you of then, that their with first you businesses are interested, going in Seoul, first for And market? -- time Okay. into you Or kind then for they for going and to they're just market using the very the are

Charles Meyers

It's couple and a cultivating Seoul, -- IT said extend a we team in looking their of more, Seoul. into to wanting expand of our of their market with that's are on by the we ground that But although typically, local bookings existing is we that infrastructure into plan, well. ahead customers have our business sort do a to as key our footprint the deal landed were customers significant deals that And expand far. that driven pretty where service cloud strength of thus some of

Jonathan Atkin

low would any in what's you driving you're edge? think of that on forward? differences going gravitate are And high seeing churn, end range reason then, And to the traditional to lastly, end your there just towards any the

Charles Meyers

no on, terms but think, issues No. timing shifts. of more It quarters, depends more it's substantive shifts between I in

on that As shifts. that I are about I assets. those churn assets. like we're feel said, bits to we meaningful Verizon XXXX back now the we've to think we're continuing the get through fact last growth to positioned no And the -- but work the talked in in And of tale

What mostly of see to bankruptcies moving seen of of of cloud, than of an and lot the a things. occasional by because is, is not churn again, very the shift rather committed to churning workloads our those driven what implementation kind but selective by much things and we're We and we are a thing to frictional -- multicloud. that's typically there's like whole churn, degree, have seeing in sort terms is the people some portion hybrid

then and infrastructure private integrating with cloud maintaining assets. they're so And that public assets, cloud

right perspective. we're no that seeing a from meaningful so now shifts And churn

of will things time, we're sort bookings you're I so to the our one though, that's that very are clear to that seeing of say, of interconnection. in of volume number seeing deals, over spot as as show be in transactions terms around able and well a levels these hope interconnected is deals that up I done well you would the -- of of mix discipline sweet -- going

hopefully our And so the that I terms lower for those us will range over me strategy. of towards think time, are really help of in encouraging end trend And churn. execution signals of the terms actually in of

begin churn deployments I've is with. getting is defense -- that right the the in as against always because best to said, So

longer-term that, think some going so to churn at larger that not And I maybe as that of to susceptible things doing. were footprints more look are we be we're

of our position will hope equipped those the footprints -- -- do I off entity, improve pushing And dynamics. be particularly is sort We we'll those, a that xScale our over to which into with very to will time. -- probably deal churn into large our more

Operator

Raymond Our is Louthan next from question James. Frank with

Frank Louthan

deal on a win that -- only then Can center was data with I've and in with an you give up. that what about little multi-partner mentioned company special anything We're us you on particular -- a that? color company. And energy the the follow got

Charles Meyers

Yes. we the the cloud center It of a was into data was It I -- integrating believe, also were, architecture. activity, involved preferred that particular center transaction. in sort data a -- and hybrid only consolidation

their mechanism utilizing with Exchange cloud really were infrastructure. and Cloud to their integrate they so And -- network between connectivity their as both private their fabric

the in and And so we're multi-partner really good win excited really one about quarter.

Frank Louthan

update NAP be land you might you particular, growth, just America's at give accelerate able was on what can forward? could in might sort building to where And of growth the improve what's that And to then you finish looking you that facility? are out the an the us Americas And Americas? maybe that to that how in able in Infomart -- do around that Okay. the expand? curious of to additional going help And be

Charles Meyers

the I of We particularly Yes. business well, continues in Americas terms business. mix to think of -- perform

rate. not sort biggest and above to us I the drag last growth, think what going through are America's $XXX which overall sort was getting any business, that's the churn been probably terms the -- growth prior activity driver a has levels, above a in -- million creating had we the which the is of of of be essentially that of is impacts

And think think that see we'll so I I as there. subsides, start some growth to

an The NAP our deal do markets. added I think Dallas already have of rate we in -- opportunities of Americas. a some which filling add the at to in the add We've is large or expansion nice key market. capacity, we're we'll as us that footprint so be increasing there some from for probably to Over capability that as opportunity well campus will get probably additional retail, underway. growth time, both

excited things term But about market -- think continuing drive bigger enterprise longer the count into capture significant I'm one, the additional to see. is to that opportunity we continuing quota-bearing head I the us to

platform. the the is bookings also of the engine delivering well Americas, gross in and but terms not very assets, in Our Americas across those landing bookings only performing in globally

expand to in enhance think services, time yields, continue be cabinet to direct add edge and to able going region, our we to then well also as being that's mature. the our selling new take as new time, continue I for to but so efforts both to I some we're think over And really as to services going able channel those

Operator

Our next Company. Cowen with Synesael from Colby question is and

Colby Synesael

that following back Maybe Stabilized you on said, about in think, up the to quarter. X%. growth, thought X%, just least getting there the I number I ago, few up quarters was growth. was at And talk a

parts growth improvement Just higher? that growth And for are you the curious assets what mentioned. the that stabilized you a what bit it's us think potentially should Maybe just get longer-term Verizon in the rate be? the

August in guidance the they that result quarter, for would a and is had delayed closing to of Curious in that in the was And previous then benefit JV you guidance XXXX update it I GIC had the last from terms made secondly, think what of and you assumed JV, I close, as them your the just think October. close?

Charles Meyers

Let mark, hovering me the X% be, one, of noted and And catalysts that into Verizon some saw the don't as around I getting ask back commentary, take the did to quarter gig to impacted and XX of asset think of X% kind as first for churn. I'll the we're the degree. GIC transaction. through been also those to that that stabilized getting in in yes, growth, Colby. would think the one, I the see interconnection the though. X% in you I that. Keith to XXX kind a knothole. migrations We good to address all range and Relative the actually think noted we've a way sort I assets do have timing We reduction through

So I continue to that the there -- change were although largely -- sort made it biggest will stabilized thing who of I the -- probably biggest think downdraft I we're some create of asset to in going players ways, the have think in go Americas. think that make to will But growth. that, have going on more it's be the who some

those that actively we there of about, well. were sort -- kind assets impacted few a business talked of of out being as we and also And migrating

variety the as what into on can see of well deploy encouraged edge we a we our Edge services horizon I'm shared infrastructure by additional in Network both can of probably maybe those drive meaningful a to into range X%, get I stay proposition, bit. and on kind longer-term facilities of really that of yields X% that's returns a growth be think kind that and cabinet in for and with of because we going the as factors. in those. some some But of terms offer there's we'll infrastructure, what So do, additional with some

Keith Taylor

about relates second QX, when that we below no that guidance, the going as recognizing And take the there and ownership, And to scale quarter. comes Colby, is the fee income was through And will offered to the this know, fees place the movement, in there's that that it QX. as more top as else with in just remind ventures. will entities. The continue you for, you there's -- income everybody get fees QX up, going attached And the ownership, question, the prior our XX% influence equity them to come AFFO, really of we to but for really for below line, from QX get is was on revenue. for to accounted it meaningful it effectively line through to in the it. that be through come in The EBITDA how joint form affiliated

how present will of so our sort And that's itself it in financials.

associated Seoul we the quarter to of the our cost, it all to fees, the implications and Suffice side. either the scale as two the income is, this stream for say, we Think on of with those then -- QX guidance those is $X that about timing was customers of continue them. in it's timing assets environment, and that and QX, have It's about timing the how for and and on negligible. million timing. And reason

we if is. So the keep fund abreast of But only the everybody purposes, overall, all the meaningful but our as be there's what is this we'll ongoing. ongoing to for JVs just will, really try fully intents not JV, said, for and into to to financial been this continue to absorbed it's results, flow impact you any never do on year, going what, and

Operator

from Citi. is Our next Rollins with question Michael

Michael Rollins

questions. Two

looking you advantage just existing a portfolio of think access First, or is the then the take of there not core some assets, or the you terms that investors Is it the might situations about future? as strategy the to just in it's how question the capital where be at whether that in just And opportunities second you're to that with allocation ATM may recycle should private program the or ways maybe program. curious timing opportunity of the of to for market. some market may framework think

Keith Taylor

& assets. platform like of to to wants who came our look be other. question? a So and an acquisition. done our just what invest value with the was we're one, each touch we that sold small Telecity. on down York because think, at and that Charles to -- choose that relative we as referred strategic which and sold our of want we've it's asset, there recycle And a we part let's hear of. platform. so asset just dollars, would small trying talk because Which Equinix New one I site first answer to disposed Periodically, turn Switch referred doing looking Not where really you base say did are We you that sell us we the capital, continually are -- about, to Overall, as our on assets to much of with at recently I but when Data. foremost. with came one We that, as Verizon's Istanbul X We XX. or we're it recently more to a asset and when first occasionally

for momentum assets us. call we on about the right across the It's important we making It's ourselves. really about for Michael, really and I it's for asset highly not sure think listeners and again, to create Every this important, you the recycling. sell today, all platform. is more And the

as we're And in because the so as others platform. traditional it that's why thinking the about not some recycling probably is of

the will, about forward Analyst scale dollars Day, go the ties how discussion how will capital all spent, a the from the basis. mean on X-year you If we we As dividend in over grow into the and we fund ATM. we we I discussion would period think through a what that much around if could and it then ourselves of in into back more like. broader business June XXXX 'XX to get the 'XX go and ATM, talked the

both business, debt that at of come to knew time the going for in point equity. that was and in be it -- funding form to we the result, in there a we needed going the funding As and was still business,

tell it makes use doesn't what for I -- take shareholder, that so and we what it advantage wouldn't when than describe for sense trying the way the And from to ATM, no we're do no it the is other perfect sense there's there's make it shareholder. would away to I -- you when of stay is how

a because December our of And some the when pulled little down front of capital the we XXXX, that us, fund last to fund program. ATM that be, have low, example the year, highs, of there all-time and of reaching including know in all some some we activities. M&A perfect of to in we not in XX-week we're still a bit would equity When business a need were we is we're between at occasionally now

point grade is said rating, more structure. on more I've debt our down; debt leverage you're us we've capital cost brought because, call, And our the targeted of within where to the some and do We'll but two, we're I real going we're of last well and at going one, balance investment a our range. think guard into see

we follow-on so targets. that do it's it go way So X discretion -- it it's basis of versus a wisely. a do market XX It ranging at a basis conditions doing And to it from the something We'll points source cheaper and transactions. to based long-winded on is X.X a offering. to about markets way than use we're our cheaper points Think to those we going saying do to equity moderate. of --

closing $XXX million. $X.X $XXX that so heard that And the is, you it. line left sheet, bottom approved got December. then with cash brought in another we'll And on end say have the October Right I the in to We've program of the JV, monitor a roughly lot we QX. continue of million said, last balance our now, of also as at we me billion,

we how maximize ATM our use to we So investors. else be debt refinance Charles, want new how really basis we're debt, raise how or? about make and return you a that to going go-forward we to the on prudent our sure anything our add for we

Charles Meyers

No.

Keith Taylor

Okay.

Operator

question with Capital Markets. from is KeyBanc Our next Sadler Jordan

Jordan Sadler

have as terms then the a Just demand where during Or catch-up back of was to you a stand us versus drivers quarter. give of powerful in accelerated sort out EMEA maybe called we the Americas? follow-up. And seeing the of a an Can you're little bit I the in the driver region? vis-à-vis update moving quarter, for the the

Charles Meyers

think mean, seen market. I I broad-based Yes. we've in sort strength European of relatively the and demand

honestly, Brexit So to U.K. et of strong cetera. our continues uncertainty, market be despite sort

of we that have broad-based think business the I really a luxury continent. on the

so the I movement think do perform very market And are we seeing Whereas, still continues I more think into it well. cloud to of providers comprehensively. that

in think that direct network associated driven terms interconnection will so I and with us the with now both business our private in of large And way nodes a significant has their JVs fuel nodes, business and their the footprint.

with then well. I And start to catch you're seeing the really been to have enterprise as multicloud Americas movement where and up, think, hybrid the

seeing I us. nicely. in the a teams doing So our a for job. breadth bit business strong of strong that little adoption And market are of both up uptick we're well. pretty say would as great And a been channel I Europe broad-based really little the there as of sort but We're a activity seeing channel, the terms later were there overall, strong the channel it's business in showing is Asia well. think of and

necessarily overall. -- wouldn't strong market anything say I it in point, particular, that but in So is a definitely

Jordan Sadler

still has It right? sounds good, And legs? the outlook continues be to like it

Charles Meyers

we're we We're Yes, luxury into look and have new at not with rates that we deep them, definitely we're have projects we not pipeline. -- our when does. visibility there. the softening of It the seeing fill go a --

really of years last rates of so We so a of in to what been, the there's definitely, capital and a But understanding as continue market that probably well. invest that we're over in -- and of allocate a we'll capital. bit continuing came to had peak fill demand have our have sustained clear through a of bubble or Europe. there, We couple

Jordan Sadler

to? the quarter incremental volume during leasing there Was that could speak you hyperscale

Charles Meyers

that still pipeline. through very a I We're in have terms but working say would strong No. we --

ourselves I XX off pipeline and really have companies or getting would our and and with that fresh processes say relatively as we so had see we between our that refined hyperscale drivers we're so And But the productive close forecasting really and demand. the discussions of in partner. really JV primary the

got aspirations. JV I feel so of plenty like to support we've the pipeline And

Jordan Sadler

Keith. then, if And I lastly, may, maybe just for

I that seeing? think of strength you're bookings, ever mix function what overall renewal it the just that -- is of seeing? Can you -- and escalators, talked pricing. a it? about Or is that deal sort on is this best elaborate pricing you're you spreads Is

Keith Taylor

Jordan. no, -- Yes

that make one it comes I across we sure. performing year, to play. the just at No surprise so top business. in There's our ever into quarters was add, to QX. when look always think bit our I but the of of seasonality it our just was best little -- want whole a This --

Jordan Sadler

that did I'm I hear I correct. sorry. misspoke.

Keith Taylor

And the Charles behind real are heard but one drivers that mix threefold. it, very, refer -- Yes. is you Number and positive. to is, the deal is very

average to a would size volume. deal allows we is basis the that better So per smaller, deal cabinet on than a us otherwise with and a lot return enjoy larger surprise. No a see

add revenues to see -- a done And opportunities The basis Second, you've and they're very platform. services we then good starting have the go-forward But be add would to good just to again, interconnection and presents Charles a that, clearly, very, that that, do out, job job that very the could itself. that. the we revenues this of to will. if we ancillary a that you rate that very attach aren't on referred you selling to And got attractive.

our isn't third operate -- When in, think we and to environment very and it But piece renegotiate at the lost we But live is, on competitive. always we're people. when having I make there about are the That I are we for that hope within great look, times conditions those downwards, it are market but price pricing talk is that adjustments us should the what this on with hearing think positive time comfort keep that means you escalators upwards. you customers actions. and draw pricing price pushing

to a be position. tend And net very so we positive in

X world advantage, of across your currency all X you to and that regions working things as got as you've so the result, see report hence, the it's a of despite are and the impact despite firmness know. why we're that business. and the reflection you of And a this see seeing what USD, think where you of who But as that, firm in we pricing, are I very we we're do very, all taking and all we

can't the what services application, all right You data can the the center and and us you're go-forward Charles a a see, sight that believe to right of right incremental on churn of lose I argue, by firm customer mitigate all makes if basis. with pricing that a difference. to continue huge very would fact a we some going of And

Charles Meyers

just Yes. I'd that, Jordan. reinforce

when terms I hard returns of of that generating think, the reasons -- value that's look even think the really drive -- to It's at the the for long-term strategy, you've execution smaller selling though you got disciplined it's sizes, to significant with why right drive in it of using the machine. one growth requires thing volume and the and our do, we to deal customers.

we're so committed really And to that.

spreads, the when for what the market re-leasing or -- particularly a that sort entry seeing, think primarily versus looks not really, pricing pretty it's I at spreads, not what maybe and people it's pricing and are the people what exposed a, implies who picture. current of what wholesale are look was to therefore the And the we like, always terms terms even in in of of, broader Hyperscale industry, wholesale, at

exposure that I so, relative a think to And luckily, on limited we have basis sure. for

single positive huge of sort able deliver contract means in which that contracts even essentially an we're of to sort price of we we're because we're quarter, are actually positive implementing what in successful than PIs across cumulative price is action. And we're do on the adjustment continuing seeing our basis through that the effect that overall again, rolling a very in on the And a number if contract system. spreads a of get net to more

unique. quite important our that's think So is I business dynamic really in that

Operator

question Capital from Klein next from BMO Markets. is Aryeh Our

Aryeh Klein

out broad-based an you some the is adding Maybe there in you that is adds geographically? markets? next to related channel net in relationships that expect drive Americas. opportunity meaningful then the an that in to Would capacity And build further new are And separately, in to year acceleration how cabinet new strength, those market?

Charles Meyers

is probably more let yes, answer but The a questions. Great both me give to color. a little Yes. you simple

in to we we partner coverage think think, I coverage and add going I able give do continue are are additional able channel-wise, to to think that be of to I us many see both bookings. terms both increased geographic types of sort rule, of of see our reach. bit channel is partners We, a a a programs, XX% delivering like our big chunk XX-XX our of which

seeing interesting, really we're in productivity it's full that the channel. breadth the greater we're Although, across get basis to starting more

I So to add. and do continue both a think standpoint partner-type to a we're standpoint, geographic from going

adding existing new But as more our focus partners our it is making less productive. on partners is

that. partners. job our super -- of our key some And so a excited -- really doing all that's right of team is and really about the channel I'm great some

both they're with as now, Verizon, two way key partners data on portfolio the here look you with deliver critical partners And into major our ours. the the of and strategic to in U.S., leaning center at of is really, If customers. AT&T really their

that of excited we're lot super momentum. so a and And seen have about

And and doing but more of infrastructure. seeing the are working saying, with that it really infrastructure services, immediately And integrating be and want then with we approximate we to to consume the yes, to more cloud. that them themselves. want your it private customers most private of And their we're also continue to hyperscalers we're are

joint And so really with selling hyperscalers. the that's driving

any I see -- to you bit relative to think new -- I do the uplift. add tend then you time of your think little question, second And capacity, Yes, Americas. the on a

on customers a -- and do And some of tight lift business, so we'll contemplate seeing, But again, really terms inside attractive hopefully so to see -- really what of see anchor larger that cabinet some and of might I the that. discipline is think in lift we we're adds, typically there. able be get some the phases, you're then a really on I But profile. think, we'll bit just mix you

Operator

is Badri Suisse. Sami Our from Credit with last question

Ahmed Badri

I to prior the up wanted follow just question. on

this quarter that a above If basically from follow-up. were regions XX% just reported were hurdle rank the or XX%? guys over below? And rate contributed which that regions hit I then you could Which have bookings, ones this the you

Charles Meyers

if if others in meaningfully terms say Europe XX% or at was off know above meaningfully not sure and I increasing have And below don't I that are were right would percentage the their Americas I that top both the my I'm of a APAC of that that. indexing. of from the bookings. really But head. trajectory the expect standpoint, their I

lower over-indexed tell I'd trend they you think as positively than that of would U.S. confirm all XXs, terms in and were I would expect piece to overall. But have but I the there, probably a and both I it. of to three back channel that go regions was bookings percentage continue

Ahmed Badri

like the Got XX% Would contribution, it it. motion? Is given expect XX%, you any me from would to is could And quarter. of throw of then top to we this limit thing at to what you point sales kind or the do top this you out think ceiling out? would bookings right, -- be the maybe this idea kind any future? out that going of in give on where could Or where this

Charles Meyers

Yes.

I like bit in Network new think continues some digitally-enabled going and we're portfolio mix cases, think on our depend to perform. product little I it's services, a time, that delivering how Edge. to business Over

still partners percentage think done are of should I at our and is one bookings fine more channel of via relationship that motion we're with we're the our friction. to expanded that still, that the We this would sell If I partners point, consumed channel, and at will our directly reach channel. relatively to by that those giving service, in very increase be us and has that sort are with economics. you say be of able get limited it look with that. And attractive enable through us, a customers that and

combination a XX% think broader there's reason of in sell-through over have no think for the on we're north sure. past, I getting I've can't we'll be time, it I really portfolio. it a that, activity where And said But

don't And that so of I is. know timing the what

another at I seeing the almost problem a always, think day, means because by of interconnection the add what value combining fuels but it factors, the a will depend customer those the the trajectory solving brings the proposition encouraged end that Equinix with of of solve often, table. the And and there combining compelling of ecosystems, needs to variety is player to the problem. on we're a value we're global really reach service And the of that excellence very and trying customer's business.

And so that. we're about excited really

think I it. for of potential lot upside there's a

Ahmed Badri

And Great. one last then question.

last time or bit could color revenues? probably about a it of the above compensation, Keith, a you year-on-year now quarter stock-based on give stock-based Can how the happened. XX% X.X% Whereas, recent But more more makes this on call. any that? little around increase just was second about just the same this and It's year, and on intensity? grew us color everybody keep to X.X% Sorry on give comp you up come bit

give idea quarter. And how we... this just an So for do us

Keith Taylor

stock what you That's as strong appreciate. a does, can Yes. price

about think the it on was of year December and mean, I is So stock last where where today.

Compensation how one, to the look and to what on We're certainly looking to we the results, so I'm we we financial a right referring Brandi, And organization. we basis. on us. part HR at we then into burn. myself only runs a at people per and what and at it's compensation attract affects also basis do to more it the And most the relative important our that share But is at with look burn always and AFFO but that need the and at here look think number who look not Charles the important, very our Committee, is I appeasing

these of share. business we considered the and our drive all value are how so figure as things into And out to fund

diluting stock-based about But a you you value with exceedingly year it's it's not that no as our is up. it equal, where surprise reflection it to just an as value as else form. what does business, next to that and comp is, you, would a of And takes mean all It's being look revenue go employee. shares issue does of when the its the growing stock place. stock But -- the because less dilution course, well you're a that stock in all of delivering -- we're stockholders anymore. performed of the And present forward, percent of

Happy going to surprise, offline thoughts stock-based but been there you the a bit further, no take it be are up. I comp those our have. with So should little has

Katrina Rymill

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

Operator

you Thank at may disconnect for All lines in participating this today's conference. time.

Equinix (EQIX) 30 Oct 192019 Q3 Earnings call transcript