EQIX - Earnings call transcript Q4 2019

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Operator

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

I'd now like to turn the call over to Katrina Rymill, Vice President of Investor Relations.

You may begin. Thank you.

Katrina Rymill

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

uncertainties. Before that on be some release and started, filed statements I'd the and risks making from vary remind everyone like X, affected to our and involve of SEC, November by and are press maybe in we results those forward-looking may significantly get most the XX-Q on in today identified recent nature Actual the statements identified we those risks XX-K February including XXXX, XX, our filed today's Form in and filings XXXX. with we'll

Equinix made intend to on no update statements and call. forward-looking on assumes does this obligation or not comment

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

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

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

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

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

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

Charles Meyers

welcome Thanks to quarter call. afternoon, Kat. and our earnings Good fourth

We in execution go-to-market closed the nature indicative us. opportunity and engine team and Equinix the of We the in deals XXXX, differentiated evident, solid tremendous across over proposition. extraordinary reflecting is within demonstrating scale XXXX the a the strong finish retail front our and value our of strategy the the to business momentum of clearly had XX,XXX of and of

accelerate, infrastructure multi-cloud pace across businesses their choice. adopt digital seismic creating hybrid strategy to embrace continues The the as and as interconnection transformation clear architecture critical and of industries as of to shifts

The customers stored Data infrastructure for at forces being secular driving digital Equinix as dynamics are the seek as demand infrastructure These distribute are levels. analyzed to moved, globally. market strong expanding as and unprecedented addressable ever. created, is

in rapidly XXXX demanding focus Against increasingly the we to position and infrastructure expanding to to significant and value proximity need to private beyond. creation of workloads in Responding cloud-based universe a vectors four and critical continue close the for resources. on interconnect to locate business backdrop, this

it As our people. starts it does, always with

our and operate. to our enabling collectively invest, We communities in will organization attract culture service shareholders continue to order inspire to service in in in people, market-leading our to the our and and customers, one talent us to be to another, and which first, we our to

via with our delivery the continue and continue our workloads to capabilities, the globally will our targeting Amplifying locally right grow locations. we evolve right customers service be Second, engine, and the and to that in go-to-market sales reach and aligned right the ensuring responsive. channel

edge. to in with of and capabilities invest expanding to partners reach, value will that the Equinix flexibly digital services continue while that global implement quickly and will multi-cloud we more also new architectures to Third, our more customers adding Platform Equinix, at combine hybrid our allow

enhancing simplifying will focus our and scaling own digital our our we on customer leverage on business, targeted experience. operating increasing implementing fourth, transformation focused and And initiatives

attractive to us mode deliver yields and AFFO rates, our our and orientation increase attach will per and around to our share. long-term us allow growth service focus enhance widen of business, enabling the areas durable revenue These

our remains core countries. we across metros XX now operate reach in tenet, Expanding a and XX

Hamburg year closed this recently acquisition new and open Mexico we will markets and As our Muscat. including

multi-metro of to reflecting ticking our with continues benefit up revenues unparalleled The reach is customer regional activity, in cross XX%. positively trend strong which

to with across six strategy, significant continue make pipeline projects regions, with progress our a customer three also demand. all of We hyperscale underway and strong announced

our We us the our are leadership targeted market-leading already expand time and cloud returns. while JV conversations additional over JV balance our ecosystem, looking will strategy and to and in maintaining strain Japan extend geographies. European other mitigating advancing in This to on sheet enable

good year-over-year, up year-over-year, on markets to our the results Revenues meaningfully year-over-year X. XX% Turning Fabric, driven year the Equinix These Interconnection billion, currency EBITDA of Exchange solid year exchange growth new and are our a for was constant traction all XX% AFFO Cloud to Internet by our on depicted normalized grew basis. strong and rates interconnection was for in revenues full and response adjusted X% Slide as adds. ahead $X.X up customer the were expectations

our Our XX more as set, driving the value. rest expand and We XXX,XXX competitors pay than have consecutive XXth combined. interconnections the dividends customer of product interconnection quarter and to of adding continues we our now interconnections differentiation over growth delivered top

connecting XXX exchange offerings. churn. we as platform, platform. X,XXX interconnections an grew helped these by customers fueled over ECX quarter, services, Peak the deployments OTT participants own this is Internet other by now an incremental by Fabric streaming new X,XXX added video high inter-metro on to and diversifying their also well with expanding to connections new support QX, XX% over exchange seasonably gross In adds lower traffic

vision longer-term Equinix from shape, Platform feedback to and direct partners. continues for customers Our influenced take by our

access of over Fabric plan. ahead is of tracking customers' provisioned offering, number ECX Edge functions a to Network different network Our provides virtual which

to announced strategy and Packet bold Platform acquisition enterprises help our quickly seamlessly accelerate represents to of on our And move hybrid architectures deploy multi-cloud a Equinix.

hardware create at offering Fabric, the with the Packet's integrating and grade world-class to to market By intend differentiated public customers with rapidly the performance digital integration cloud. infrastructure deploy directly that robust combining enterprise ECX capabilities edge bare to platform leading our we with a automation metal allows and

transaction look Packet further in strategy. progress QX and updating you the on expect to of to close platform our forward We

from Now verticals. me our let cover highlights

with global solid as robust activity various reseller continued as NSP achieved bookings Our Network activity sub expansion across our from networks partners well segments. vertical

New wins leading Sydney. Connectivity, extending solutions subsea Tokyo cable their a and include operator, in RTI

via with of partners enabling Telstra an We integration ECX customers XX full ECX partnership API last automating metros. to we're also Fabric to across Telstra mile launched access example services with expanded with fabric. giving connectivity A enterprise good on-demand their networks the key how

highest markets providers vertical capital services financial achieved cloud accelerates. its adoption led Our bookings third as large multinationals by and

and XXX financial three network their Fortune advisory re-architecting a top Bank, digital transforming their global firm, New wins included Nordic payments topology. network for a

media vertical. record and by company and its e-commerce multinational in digital out conglomerate edge media content included and Fortune to XXX continues bookings, online to multiplayer adoption support new Our shape building this growing publishing in a APAC gaming, vertical to launch OTT services a Expansions cloud saw America. gaming expanding led and delivery strength as South

saw times new by cloud connectivity, of strong services on-ramps diversify. bookings in over cloud XXXX, added led Our growth X and the and share total XX and XX% cloud cloud be global customers with as vertical double-digit and on-ramps leader Equinix infrastructure APAC the competitor. to in IT nearest in clear continues

architectures. adds continued out quality new Our in high and logo as enterprises healthcare manufacturing, healthy strength retail and enterprise with hybrid vertical saw build

firm, digital and transformation XXX multi-cloud included a a building Fortune sciences capabilities. support infrastructure out to wins enabling life retailer, global New

integrated more Our with of we driven pleased made now flow. channel building progress accounted vector. of Hub solutions very ECX are this Fabric, are order than with faster predictable bookings for more we and resellers, by go-to-market Performance and XX% and channel Two-thirds in delivering the important bookings our like

We're services. customers effectively benefits together by prioritize resellers with bring of to partner working the Equinix, offerings Platform to our enhanced these more join mutual

analytics truly for reminding included as genomics healthier together wins we with and the well Children's highlighting of impact helping reaching Telindus with city a partners in how research, Australia win Institute a better make this as a with are Amsterdam, quarter world the place. and Optus for far Cancer to of channel New Platform with the win data support Equinix us better of

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

Keith Taylor

Thank Good Charles. to afternoon you, everyone.

on As similar slightly new on growth start even normalized what year-over-year billion We're reported and both We increase as drive Charles, constant line year-over-year $X.X expectations AFFO share as scaled delivered X% end great to highlighted year, way last million, XX% compared a we rate way very year. our under basis. and share as a value to and level. $XXX and increase of top and by the per last the at to revenues the better than than per a to year. of of one, an currency better to reported $XX.XX at greater

we as growing competitors. scaling business strong delivering performance up engine and from go-to-market Our sets at high core ourselves our to strategy, quarter and to a performance XXXX. And are level very in in invest team nicely our separate our fourth us the our continue

to new these continue interconnection quality indirect expansion also wins fund attributable both go-to-market services are We initiatives, our direct organic efforts, while of investments high and our the product and to rich scaling volume and directly across channels.

interconnection cabinet discipline, strong, metric per due remained MRR mix pricing and deal Our momentum. favorable positive largely solid to

global active expanding in metros an pipeline, XX projects with countries. our have underway XX platform across construction XX We currently

outstanding favorably quarter high investment We'll raise service reduce $X.X initially refinance demonstrated leverage debt rating grade achieved burden, has recently portion debt. yield our debt fourth of future our a credit to our to our by billion

Our remains and advantage. financial strength a strategic significant

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

our of QX growth, as consecutive over billion, that we As global Slide year, trend XXXX. depicted X, into quarterly X% last look on up continue year to expect revenues $X.XXX XXth the revenue we the quarter a same were

organic churn. We quarter, a gross FX largely included actions some our rates. million when to revenues, due again, British the coupled and net had compared due the benefit FX stronger net QX strong our booking to and quarter, pound hedges pricing then second delayed positive and with euro $X prior to guidance in our net best of performance positive

up lower EBITDA expected utilities last expense. and adjusted better and $XXX year than than employee anticipated to QX million, the X% same costs over quarter Global was due

Our of prior included hedges QX net $X to our performance, guidance a million FX positive when our benefit, compared adjusted FX rates. EBITDA

three currency AFFO regions benefit recurring Global strong portfolio. reflecting to across QX on seasonally investments basis, while very of a product absorbing $XXX were all revenues the higher above diversified platform expectations constant our last quarter, Interconnection and this year. the was CapEx million, similar global our

are of a and step quarter-over-quarter the stepped revenues revenues up significant XX%, meaningful respectively, XX% EMEA interconnection Americas APAC to up. of a now Interconnection The XX% year. represent while revenues, now revenues, XX% and recurring increase throughout recurring

region through regions at growing on MRR XX% at the year-over-year Turning X%. whose X. regional on fastest APAC and full are Americas normalized XX% highlights, by to a covered slides results basis, EMEA followed and the were X respectively

Axtel and America. our bookings expansion mix The Americas thereby, efforts carrier complete the XX, strong of Dallas with deals will for inbound export Dallas Mexico the be Central market and small already been we multinational highlight and opportunities favorable our business, existing asset eager healthy have with from region continued seen as their saw communities. we're closed the We're high build January, in between Infomart, local eager both we've Mexico, Americas healthy our to to South a North, performance received which has new adjacent enhancing and and interconnection and and known our Infomart the and in start in pricing, queries acquisition to

we we to progress Americas revenue as greater, expect to trend X% growth forward, Looking through XXXX. upward or

a saw markets driven as throughout our continued these Paris, infrastructure Amsterdam, hubs. four Our major region XXXX, deploy across EMEA London largest their and multinationals Frankfurt, regional growth by largely

pricing, Asia-Pacific continued again, time bookings deal cabinet firm export EMEA had billable additions reflected across cabinet per and metric. to as and our the the robust first MRR region Export solid remain in for high ever EMEA, Australian greater go-to-market were import small an globalization reflection than with bookings and in strength continued our a deal our And of region, markets. saw of their activity the uptick record in bookings bookings, activities.

deploy NSPs Also, these see well, edge ecosystem are developing the infrastructure a key assets. we're starting in progressing and to front new of investments Seoul markets their as like into our domestic new

XXXX. was to year-end, At X. refinance, January, cash And used of remaining structure. now, the debt approximately November, in was the Please unrestricted the billion, which looking included that in portion refer balance redeem $XXX $X.X about Slide cash to million at capital our of

Our was net our adjusted X.X at annualized within EBITDA, debt range. targeted times QX ratio leverage

as next we to continue into taking conditions. the drive currently expect to XX outstanding debt metric, AFFO interest of savings substantial our advantage months, our current We share market per over refinance

of As provision you trade-off future call the would make present expect be to cost whole or offset the the Nashville premium value will by interest the the attributed savings.

no for Of transactions best guidance. refinancings terms want from conditions these the there negotiating is the make share in to be AFFO attributed course, value each business. clear, and To current the present while of per we future net positive, our benefit

Turning to Slide X.

while expenditures For nine the and CapEx quarter, million, new including million, new Sydney, including quarter, in in projects were of expansion $XXX recurring a IBXs filling speed expansion level we $XX projects we and capital This business fourth for Singapore that added Melbourne, we're approximately capacity. XX the of the opened sheet. building activity you tracking the another the of in sense gives in

We to purchasing IBX, to increased our for assets - land purchased additional we in our and expand owned continue Toronto ownership acquiring and revenues XX%. X Frankfurt development from

shown strong delivered investments capital Our returns as Slide XX. on

this X% revenue revenues year. versus recurring revenues to by year-over-year Our currency asset non-recurring the on X% grew while asset XXX constant stabilized quarter lower a basis, prior stabilized total due increased

growth to summary to prior update the asset trend up we'll XXXX. stabilized to And call. our the QX to X% stabilized assets expect rate similar in years, We earnings X% on

XXXX are utilized and Packet cash-on-cash assets any generate the includes summary related through for slides anticipated a our financial results note stabilized from XX collectively XX% of but acquisition, Do our bridges. results guidance the not XX return the XX% to and pending to does the guidance XXXX financial include please PP&E And Our invested. Axtel refer acquisition. gross on

business deliver Starting us. front for in the reflection X% X% with to XXXX, see revenue, the billion of over that in delivering $X opportunity revenues, in expect growth we we rate of continued the a momentum an to and

year. guidance XXXX churn per X.X% in million X% revenue targeted the Our MRR Axtel to $XX includes $XX and is our of expected attributed of to Pardon revenue million remain to range quarter me. to for

margins higher meaningful expense in EBITDA product tax expected adjusted excluding offset business, property and in result utilities in XXXX by a XX%, operating sorry leverage organizations. including of expect the integration our integration We strong of - the part and investment and go-to-market costs

grow million any attributed XXXX or to $XX Also in we And approximately share to per AFFO a on share per XXXX, refinancing X% million, basis. to acquisitions. to expect to compared we cash expect our to grow activities. over a dividends various finalize XX% previous XX% of and AFFO XXXX prior to XX%, an year $XXX excluding XX% future costs incur benefit increase integration the the increase increase of to will X% the year expected integration the to our is

the So let back call turn me here. Charles. stop to I'll

Charles Meyers

Thanks Keith.

to Adaire two technology In Rivera from drive strides Analyst Fox-Martin enterprise effectively to execution, closing, opportunity, go-to-market including and to took change we dramatically capture embarked and our opportunity industry, scale a to a global to significant outstanding positioning for additions added we Intel was consistent the growing in capture on great to year to agenda business talent respond ambitious the rapidly effectively XXXX XXXX, Sandra broad We from Board shaping the the our Day we our shift Equinix. scaled on SAP. significant execute our at ahead. outlined and enormous We continue in agenda machine you the to

changes, rearchitecting and recognized engaged sustainability. And a part undertook be these employee global market our and levels being achieving record as leader organizational tirelessly future as around our scores together, we teams the globe we of collective communicated engagement, to leading health a and of

in worldwide status. and our avoiding our billion to in balance JV, MarketScape, of and with taking by recently aggressively $X.X We we debt side undue colocation as their a grade than assessment. vendor a more were sheet. world-class commitment is forces the the to inaugural market the IDC raising sheet joining We worked achieved aspirations, strain business balance an form investment credit on the recognized equity, and while interconnection top hyperscale advance partner leader as cloud And on notice, delivered our

and new and XXXX, our will needs support evolving to digital Equinix. capabilities offerings and our our consistent improve engine more on sales to focus adding a consumption the for the our providing customers service on experience of to bookings multi-channel to global continue Platform growing globally focus digital We'll In transformation seamless adoption scale better we'll Platform meet and customers. of Equinix, continue

I am work around teams honored the our ever shareholders. as as for dedicated and Equinix, our in future service to of excited with our to to our customers, about world an communities the

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

Operator

Atkin will RBC. Instructions] from [Operator come Our Jon first with question

Your is line now open.

Jon Atkin

Thanks an very much. a wanted I ask to and question operational then about xScale. question

you closing is lengthening So Any cycles operational you or different historically? trends saw any if around that seen on out from in call book-to-bill the side, that shortening what I than rates? different what any you've you've sales seen wondered could

Charles Meyers

maybe take - on I'll maybe one couple can Sure, you the and comment first book-to-bill. Jon, first and

win meaningful to of getting think, maybe, enterprise sales cycles, the In change. in our in that space enterprise improve. particular targeting bit we're I a in better any of rates think say I terms the wouldn't continues I do

shortening hybrid I some think, there sales - through I still multi-cloud customers terms architectures. we're perhaps of still we're cycles, of early probably thinking seeing but in long-term, fairly their think is

do to Once we're oftentimes, wallet - so, their share expand to think shortening in expand landed, And with they continue a longer sales definitely share terms the of are or customers. they their wallet cycles. I seeing be us ability

I win then think anything think a targeting. pretty going I - are up, we of again if rates, we're are probably really stable we're I think doing nice And job

pleased I of overall, And performance resonate value we've the the proposition think continues go-to-market our very been to customers. with with engine.

Keith Taylor

- change QX different land our mention in events to quarter slightly There the at when QX. no very The this us what meaningful - would is revenue move once our to causes to customer. tend the But the in as differently. to look of Jon we of report them, our fact, relative I fast we tell you is install timing surprise book-to-bill. want you to book-to-bill, I relative to no said, just Charles

So you of, versus booked churn. the timing something might when when you

we're - we happening And meaningful the shift exactly in planned. as seeing so, as is But as the business. think in an organization, I is book-to-bill what I no interval exactly there call

Jon Atkin

operational one question saw migrations And to this there else? then you And look we anything customer influences in as year XXXX churn. really related in than coming more XXXX, of terms different are or at just any

Charles Meyers

say of saw I pretty, year. sort it's what pretty last we linear No, extrapolation would of

some of about fact some think example asset growth I that's from the but it's before, something the coming talked substitution, is of I've for stabilized pressure of think is on I of and of there private cloud workload distribution that and is a level really - public out matter kind people really infrastructure to figuring their what between sort adjustments. those be going making

we've feel we live comfortably that comfortable X.X% forward. to within and been going said, of able we as But kind continue X% to to the range with

Jon Atkin

you And do timing, have already that's JV around AFFO in might already? Europe share? from structurally per just on then question how sense any xScale around JV outside place, my Europe place in impact we the then xScale about for what think And arrangements is, they of and differ how

Charles Meyers

Yes. too treasury lot on be various learned whole going. tax always think. out Jim army and of REITs draw are we've Keith elements those I a teams various I standpoint to with things I'll - within line, brighter closed other xScale not and sort of the along say with on of and and we really think our other from to would of an hard factors But terms tax complexities But the and a than and the making timing, and Eric getting people good getting seems we're working organization that, team more the progress and latter. treasury these let things take in because associated the

side. the think course on to us going the XXXX of see xScale good I for during you're momentum

Keith Taylor

the as impact quarter to xScale, saw on that amount And the it business. largest then, that impact the on just the you came really cash into the was relates an of

the is had come would months you cash As business. and sort our we QX €XX what of milestone in million recall $XXX call, XX of refer balance to come from of They roughly there next the payments. we XX earnings over to as onto sheet the million

and it an I But and an we're not if and think and on - to substantial. operating Analyst a really how as just the started, Jim at the just in this good good, that it's As than his team it's be is June everybody we performing. update performance, anticipated we the to see momentum marketplace really giving are going better relates discussion getting appropriate is Day,

perspective, quarter there is from meaningful running the results. fourth through and no our So surprises nothing

Operator

with Cusick Our next question will come JPMC. from Phil

Your line is open. now

Phil Cusick

in after a into Can gives well? you expansion as plan XXXX XXXX like confidence the what Thanks. robust dig what development and looks you the

Charles Meyers

have think right longer view than view think mean multi-year if probably multi of funnel I look of now, the in better the it's customer we've I just, on Yes, sort I a business, at we we ever the had. you - opportunity term

so, look think sort at at volumes. influence, mean, IoT, in you of you data rates, terms AI in think overall I potentially an cloud, XG that you sort and both edge the front pace volumes, of of of see trajectory adoption start the of increasing if sort our like traffic sort things you think to terms the data impact overall, happening and I look and And any look what's of fill at of of on I rates I the and you at drivers fill if of look industry underlying

forces over continue of customers for of long-term the overall expansion from well think and very vision sort and infrastructure are hearing responsive I the the that that the for be our we're as includes so, expansion to plans geographic services time. to and our driving demand strong. We're as that platform And for secular them our capabilities hearing

that feel good and going now as to the right we optimistic are super exciting. that Obviously a rates So, decisions that just underway investment far projects we out, things very - those about the we're have the and of is all combination fill of supporting those continue. will bit I'm 'XX but 'XX that be

Keith Taylor

XX we've markets. our projects XX plan different to said. can beauty I just is of The got underway add if too Phil, Charles And across what

the of profile they're coming So different based shapes investment demand market. given it's and on in sizes a diversity and of the our

feel It referred bit little far So to. we have out visibility. that is a we as Charles

pipeline, given particularly opportunity that's we're saw in into markets pipeline gives some to set, the the strength what continue one where of of our is in our momentum the XXXX XXXX and the the depth and confidence that us of But build, the the we of that building. few to coming

Operator

next come with Rasmussen from question Our will Stifel. Erik

Your line is open. now

Erik Rasmussen

So, bit sort turned as it the But then part within like have growth X% the to a you're this business and then in that the What's Verizon would sounds is Americas, that, of like relates starting you guidance, rate a that your XXXX on what little of more with long-term confident the And region? question. corner you this greater. see see sort year two sustain or positive of dynamic growth? you're or assets to or and sort rate the it is driving

Charles Meyers

of delaying, the Verizon I one of has bit the think been a one of headwind the have factors or Yes. certainly been to sort do of region. that the think factors, that has I a grow we growth

that's been company. economic net the Now, to benefit a

continues complaining it headwind bit drive as because a has a bit not a been So But to that - that of it. a we're churn through. there's about of churn

indicated we're growth able But return we a - like to script. to Keith as feel going feel the again, to we see in be

selling of at the be go-to-market greater we X%. in And a that end be the the than feel I strength think Americas to engine think across I the move like year, of towards the we're substantial. looking we world to continues as the going

level and of business of I churn And tail the that there so, pick growth. some think the a of that, in up we're feel a of we remainder get see do through so optimism think the to Americas that Verizon sort bit on I really business, going

Keith Taylor

this on and we've We and others very guide and what pricing those we going do being to right that recognizing right it's the very substantial want, the can Erik, after going said customer, us can after disciplined grow go conferences, I discipline. that Americas. is, IBX but referred really investor opportunities we certainly deals always yes, faster go And rich certainly of the we the - it's to as to. in if Charles our and hyperscale the lot And application, comfortable business right do and always feel can - cause interconnection a in the what Charles

our we be for that think But would business. value destructive

And our churn JV initiative where get so, focus our appropriate that we with other the partner alongside of parts world in partners. we an our opportunity in can hyperscale

But it's good and and to Americas we doing. very doing gives keep - it I confidence here. a it's bring think successful have the the discipline want ourselves us don't that what stretch we we're region, go that to We're the business we very to on

Charles Meyers

that and last we're the noted make really every selling, I'd we're full every on team Erik of there say, One focused platform. always Yes. the used making and is they're comment sure the globalization script, that as sure every that day, center right, that we global selling a continued Mike thing, engine is data out in in of to rep making I positioning really the important have is something terms Karl and

things the - the into you demand for positive would sell time sort outbound really are that really a shows platform all when have strength. Americas. out the first they are global We got companies large inbound. driving headquartered that than for - - elsewhere and saw have that's the regions, And It our that us. the they're including perhaps, And companies, of a those more EMEA step

contributor be to going that's to think growth. I a

Erik Rasmussen

are industry current ability picture, is how of maybe a giving in positioned up. more long-term seeing follow you bigger objectives? This my trends your growth But underlying achieve sort are a you that are to as just increased of a you any confidence, theme. Maybe shifts the the and and your in

Charles Meyers

a Yes. I I number of them, mentioned think.

or I around that are in - the umbrella guess, company to of digital would at is frame frame it transformation Digital a we context overall of and transformation. and team the virtually put senior absolute think an targeting. level an I every talking in I executive board sort priority overall a

They're that. them. thinking hard And so support digital their infrastructure to in business lot a transformation about deploy how to to drive to it matters and how

their to and they're investing one, and is to And they're so to And infrastructure for transformation seeing focus infrastructure - on AI trends just aim they're think, they're central because these work - they're central happening that viewing designed. operate to I have behind deploy - as ability these of their needing competitive a to using advantage. their and example, various digital create trends. of that's as lot data their globally advantage to applications competitive they're to People, and ability create

And which so accelerate that's position the the I choice. promote backdrop, and and to the - you terms hybrid have multi-cloud really of of we was, of sort bounce as then able unique in architecture secular of the think sort this against that think position, Equinix I being and though

an in think to when that's place Equinix enterprise be remains does cloud There infrastructure workloads between and taking to cloud, used direct move fact, and they in that it maybe they're as are what really if customers proximity infrastructure, private to it the even centers, I are, data what it inside private than their using many to smaller to resources then private than place in the us their once avenue access infrastructure was anybody cloud, else and the as world. living better want to getting

position so why optimism for behind to think platform, we're the go-to-market excited own and engine invest to sense a a give invest lies continue - well I exactly as which what the market sort is there of is And about trends road ahead. as of the of combined secular ahead, you behind our both that those are variety

Operator

from Markets. Ari Our BMO Klein next Capital question come will with

now Your line is open.

Ari Klein

parse are the you It is impacts bit utility where detail. bit more in a from are those looks investments How coming taxes? you the And much being can made? strategy can the in we're Keith, higher through in expense maybe a investments go-to-market EBITDA to, to XXXX. alluded talk like in margins meaningful then that

Charles Meyers

to jump showed significant think of operating color In what we if context is can the ability I specific But 'XX. any you leverage, bottom give impacted add in that Maybe, happened XXXX, our Keith both Maybe decision there. look in Ari, to and this saw we our but drop margin, just you through Charles. for it's how some then to we're pretty at terms the items the broader in line. in that years similar I'll guiding

led drag it expansion pretty 'XX, a combined was roughly some flat projections last In costs year to to margin line. with us significant on that guide that utility

ended As in some you better finishing our we know, utility in seeing in not increases up well. XXXX, materialize, those a delivering expansion bit projected. was trend than we are of about frankly markets But just EMEA, we XX.X%, at other utility but as because

property to those compared the most of the with increases consume tax those operating together 'XX, And things combined leverage.

the kind that are in funding and investments offering left of or the margin margin we did some we in obviously in and So that's and the - chose business growth position key and investing not to either the flatter out of modest a we guiding latter.

help like driving engine, not to be evolution, invest that value going the would growing our have feel metric feel in it and our share to to now. we that maximize lighthouse sustain AFFO confident We we're job things are platform and are like bringing transformation all irresponsible long-term behind the to frankly, the go-to-market digital per the it's and that our up momentum growth, dollars that's we own us invest creation right

Ari Klein

it. Got

Charles Meyers

any color to you want add? Keith,

Keith Taylor

head, No, hit I I on mean on you square square so. the - it think -

Ari Klein

new Packet many Does be maybe the we a expect reflect strategy Maybe in you're M&A services Should shifting front acquisition markets on gears any future the in? versus acquisitions given way? focused how shift in to more already the bit.

Charles Meyers

a call value be in then expansion an to of It's I'd us for can creating done look, and way the shift, view think - No, augment. it via where as that - priority we geographic continue platform to I that. a will M&A, we're a strategic going doing wouldn't a about call will certainly

us the in regard. additional - So be we've that we platform have and will standpoint fact from we'd for that make, additions our M&A geographic a to coverage - that think to geography vehicle like talked still about I

Having needs really they I We're type will metal saw core first that for. I and ways also, compelling the our are that to do table. to a that that, is of is augment customer What terms us going our the that's really of bare offering enterprise-grade for help said an an responsive in ways, bringing excited allow Packet a of super think about acquisition. as the bring going really customers capabilities asking you table to in really to proposition to be animate in value what

to And that's us. our to to for need We're make of are to like that, capabilities or the can not by to build opportunity the going that whether as for in sure it we more a we strategy as I oriented, partner possibility we capture on say us. and look certainly see might that continue that other would execute things front

Keith Taylor

through one Ari, costs making just the theoretically financials. add that do our maybe on EBITDA you the goes an one then as margins, basis, quarter it things going and recognize just would one But are see there lowest look of if will margin. improving that comment through quarterly the at about on of QX be guide as higher by a we other things because the the I'd these EBITDA are each year, just you

And that margins will sense recognizing momentum in so with these plus business we gives continue you up. costs, our operating leverage cause that we're a the realizing to foresee the the go to that but it

we're coming better a in So - when in we are XXXX, enter we'd QX. we than of a position obviously be out

Operator

will Our Synesael with from Cowen come next Company. question Colby &

open. now is line Your

Colby Synesael

off. a to start just just few housekeeping Maybe items

right, a full number, than that over X% the it not a on XXXX XXXX fourth thought be growth like greater off, was First quarter number, should Americas growth XXXX correct?

Charles Meyers

as see trying We we're it throughout say. to growing year Yes. the

more the second it's half. than first think half I So

Colby Synesael

mentioned stabilized next to question, And you the think I then growth. X% X%

Charles Meyers

Yes.

Colby Synesael

stabilized that growth? that Is total stabilized growth recurring is or

Charles Meyers

Recurring.

Colby Synesael

Is Okay. previously your And Day. then XXXX than expectation? to EBITDA by greater had that margins XXXX Analyst Recurring. XX% guided at you still your

Charles Meyers

Well, and not the so we had objective. willing it's perhaps been timing, XX% achievement that has of trade the past near-term sort our creation the since or uncertainty achievable, half value put long-term I believe more over of that off and sort time, around you a think a Colby, really margin year had posture to for we're exact we of but that

achievable. I think is believe that still And so it we

us I we It's the leverage. in us on now key allow deliver the operating shape primary driving to particular mean want a by a to financial way, and on team long-term or put the results XX%. invest creation, a value wouldn't continue but for way our have timeline be going focus need, think does a form that is lost to we focus priority to still I business as the and not in to any right

Colby Synesael

And adds. then one, my last just cabinet

to and the you expectation at So should adds year-over-year XX all were now in your utilization this for maybe I amount XXXX for think your how What's the cabinet number acceleration 'XX cabs came And You is performance most you. about didn't on a down again. look when really XXXX. big And meaningful any total How you added rate of mentioned XX%. adds? versus we ongoing. expansions business. basis that metric focus aggregate recent you that a cabinet below of versus we and in in guys think And lower decent are see across that Thank 'XX? of in your inventory quarter, regions in is installed a actually slightly

Charles Meyers

some even quarter. it, couple in to encouraged rolling Having at One, quarter. you I mean, volatility I I at there always said our look mean, look is why rolling always a think four when of Yes, things. people four of we've the level there's that's that,

you're a that really primarily It's I think reflection things. execution downward of a One, I a couple and seeing is factor the of it's think of strategy, factor of frankly. execution. of some pressure,

lumpy And of xScale the going product, by out take the is going mix. some that really to things to

was at And like of or stuff crazy. lot that serves of cabs was into X,XXX memory xScale. metrics last we QX the something Asia, and sheet off look be a I that you would was you if think non-financial at If look which year, pushing it

I I to so on going of a that probably put think think the And cabinet business is pressure adds. shift - little mix to downward

by of strategy. our new sized investments the have to builds way reflect capacity think that our I we all and

So I the you're and think if capacity a of reasonable seeing - new them, of a to going got do probably much. what didn't - few overbuild comes our plan go was from - the last you're That in then see while a we're as to we too we so, and little now quarters, and movement didn't take you're reflection going average cabinet probably adds online, think bit - but you perspective. and I we so a always utilization

should It a a in reflection as there think of should delivering I always of And the little viewed again but not bit, I and we're strategy is how the that downward a of negative. be core as bit viewed be really strength do pressure, think of see against it. a you'll but little lumpiness that, a

Operator

with Our next question Citi. from will come Rollins Michael

Your now open. line is

Michael Rollins

data the the just kind are curious of and if you over can give step of markets any how that there just a And locate customers story an year? talked below an centers you their about, to interest interconnection? play a long us given back. First, the demand And customers the Equinix then a the for original that Are change And the of course for want on and update of heritage perspective taking just in where seeing your primary grooming part where Thanks. interconnection been could from for infrastructure. trends points time? is have you expansion that

Charles Meyers

first sorry. was what the about thinking part, I'm again? I was second one. Mike, the

Michael Rollins

grooming… Update on the

Charles Meyers

grooming. got Phase it. Yes, okay

Michael Rollins

grooming. interconnection The Thanks.

Charles Meyers

got sounds Yes. By way it you feeling the better. hope like I so cold you,

Michael Rollins

you. Thanks

Charles Meyers

for would large The as the interconnection form interconnection we're, XX to grooming, I biggest the that grooming XXX migration in of particularly it really consumers. say either tends to - again, relates come

grooming really largely through of really embarked the the they the I already. in come have as the ones global I have already particularly when process And said, are U.S. based really they and I've their that but U.S., sort say and big companies, on think U.S.

use I XXXX. through think I'd see it we're to we the that probably tapering - words So going were

roughly, thought I still we fourth last - think the did of saw see roughly was QX - that was We of quarter moratoriums what see, really a and not felt that kind case. in linear QX saw of something network like that's really 'XX, we kept which was flat. was fourth - happened might people we quarter we we year the which from or

we'll - that. other the see, are grooming of I customers sort our any you time, we think and lot but consolidation tapering form that, of of we're I levels that over of when line, some we've bottom then And think I carrier occurs. see But that say of major that is some seen seeing that a advanced see acute very of wouldn't

And that of guided I call over see made the on X,XXX it think of something physical X,XXX to going on up virtual. is cross I couple and to X,XXX we're course think So that that's - sort interconnections, of of connects then X,XXX of the on on improve. we've we'll to balance thousand that the typically XXXX see kind to in range

see continue climb, in speeds kind I bit there to people of - going is virtual we're things. of mix those although to there what how at terms a think of and they're a buying

year. see mean we'll and the we'll quarter performance really interconnection a see pleased of the interconnection a But with think quarter, overall, it this off I really, strong strong taper last I will really - we're think business. really I a was

helped demand sort us, and as that tier that of we to others. sort mix rich locations the really interconnected campuses the there of extended has first versus is of question Fabric facilities. I interconnection and is think things ECX from second your the do of one - then, our And Mike, all of that

ecosystem people people ability that into facilities any our work able And to broader - so to still the teams and the been are the on-ramp have our have really now to from selling. of there

big Ashburns the making some and of of tier we're monetizing of And the it, Amsterdams those but investment Valleys the so even the drive and and markets second it's that effectively. us continue think primary that that these the growth, more - second Frankfurts a - Londons some big and let's - help Silicon really I face and or been of in within has terms sure the markets, facilities second Fabric to for

Operator

question from next come Louthan with will Our James. Raymond Frank

open. is line Your

Frank Louthan

you in there that past, extent, Are Following a things any rethinking customers? the might And skewed in other think there your of things. network have you need are that the questions. you Packet Thanks. to customers, that you with arsenal on other for to to certain the products compete maybe up that with service your sort

Charles Meyers

we and as talked and think past, platform we've etc. Data, did opportunities for out talked Packet with via facilitating will we us - will deliver talked sort there in Edge is Edge, laid all we we Edge of acquisition about the and Compute. those in of evolving our and platform that the Edge it did Network in are strategy we mix things ourselves, a our - with layer, now which be edge Compute which We Yes, Security, we've well, Edge some this about had Network which services we of of Edge, level

third of But represent partner value we Edge also more with and services think there value are based perhaps that even value. those our will that combinations of be party

of the sort we that of choice we second want. a - always player. which of customers think gets of position, have we've providers to bit I so, have And and me optionality about typically been they making well And - where part had a can we the a your our kind - is we are are which select from that neutral sure us serves and question, and

for think standpoint And don't philosophy I from that us. bit changes a a

customers we're some want us, In continue going are services to going to to that, embrace And that. they so to consider cases deliver partners see going invite seriously to we're value. from to us to in then pressing that we're to deliver continue if

the to they'll areas If of permission deliver kinds we have very capability think where we - those that and to play returns. play, are the

going it's customer continue people be strategy, our I an with solve And ecosystems, think be what where and but evolution bring to about we of going building that so can do to to combining value, we're problems.

I share on to see you we come sure a that little we'll and to you. more encourage that I'm So I'd we'll which in can have you meat bit there Day, probably with bone June think Analyst

Operator

come from Morgan with will Flannery Our Simon next question Stanley.

open. now is line Your

Simon Flannery

very in interest stay that rates more And half X How opportunities funnel you've estate? Keith it bill that in are, - or driven I the helpful. any by is I'm thought where was phasing at issues? buy some of of X of more But on other of know the or any Charles even optimal to stuff. point plus then seeing nice of lot XX there? there down. just Amsterdam What's given the And done the process are a of municipalities you just thinking - build it real but in out Is months the really bringing obviously you some your looking leverage, XX and the job stuff any your that? is And timing, out. on in other Thanks. a complications, construction thinking, to visibility to is range, the are upper range. that like around you those of Are the seeing moratorium the buildings for on stuff

Keith Taylor

second let part me so for Simon, take it Hey, first and Sure. the part. then Charles, we'll push to the

you're the look right a in on it's you at the play to historically leverage level. But upgrade, and going clearly at or X. that's X.X being X an you that give First operating well of over years, deleveraging just leverage, you leverage and we the look as that our to now rating number appropriate said of levered. the range, flexibility deploy to end that scenario in we how higher our else choose differently, after you equal, at to got business, forward going a within probably keep said all range But capital times truthfully we're felt credit always when be but we guided we

very AFFO a very, we tomorrow interest else to today, - much we would we substantial. can again, that and more share be gives our we're what very likelihood the with bear and that otherwise we that's is to again, we'll at today, confident trying bearing lower then incurring burden per of are money us what levered, we that than borrow - appropriately cost clear we're we the feel tomorrow, money, And delever equal. relative borrow today to think that all we we all that business growth know we're So being adjust the can will

rates euro where just savings can per math share. debt worth on substantial the of realized of current those at the versus substantial that there's you is AFFO the is go may billion eventually $X or to can be billion refinanced, $X to do rates the high-yield from refinancing yet the debt just And be today

As the a it it, at looking estate, real control buy lease relates to it's buying extent - to we'll but our and versus of of asset, decision absolutely active. we're some really there is economic about but something makes be that it's sense, the always out there

lease at with that the in cost our look the of Particularly, costs when contract landlord. bearing - we're the our lease we

And looking continue that's let at just at, real our that have a we look so company inside you me estate organization and we'll something assure our active that's to remain we at just, properties. strong very

Simon Flannery

Thanks.

Charles Meyers

frames. some And more protracted time I little gist are then the get terms of of delivery question, those Yes, bit the on their build-out. that a to obviously, in

case, much of them level a have of for obviously, more pre-sold, where is and that markets just those confidence we want possible. in if are unless putting things, of the is we power to to so it's out projects, dictate power variety in are it's - that the oftentimes as but terms in we quickly get-go, those a get these the built that from are not as into power a too difficult phased which of a on done timeline are that building xScale of capacity pre-sold fully perspective, from Some get permitting the generally, availability reasons, market things perspective, the

from that standpoint, a construction robust say it's would I a market.

for And the is macro in part I do is of which there for it think are, so high. these markets labor is demand just forces, example

them. of think your that because done get having where of front line, we so or we X somebody. or or need history we being is X end the up because an have I And X can XX area the best teams, we often And kind differentiated, projects we when say, we of with often actually get to a

chain Ralph but like there often protracted some to that challenges build, specific be There anything globally of it's timelines, example of it's say - that, a but they'll our continuing I on. Whether definitely some terms construction I the to something and further are of out particular and there work further something extending also changes is now times wouldn't anything teams right are so Olympics, are that circumstances. that but or supply time. there project where due there is sort for that are some think circumstances in are timelines in And

Operator

question Jefferies. Jon Our come next will Petersen with from

is now line open. Your

Jon Petersen

you kind demand kind guys the it new curious going product of how as - what as they the In ramp have of cross when called guys release they years, it adds, a is of about demand experience connects, or launch one is is streaming the for have are of expecting big with some stream those add of in I'm a customers steady the kind you press wave - streaming big services services of out of few been forward? a terms you talking that cross around with I'm you kind connect driver. sure your that

Charles Meyers

in also experience and think have involved successful these of services what I of subscriber And market have power look the potentially the terms at you you information acquisition. Well, players the terms do are of this exceptionally would say some have I we of they been but those different. public dynamics area, done, of in if in right, are

any sure, organizations. I not very experience to but thoughtful prior they're apply things, I'm necessarily So would these

of in think imply closely of sort those and business. tailwinds of planning for - very we're in about with terms capacity what excited they really continued work them interconnection what We could terms the we

Jon Petersen

back kind guidance Potentially maybe XXXX it equity like equity of assumes to the then come issuance. the looks in to needs. no leverage And

then I you didn't think, did. last and initially you equity year that assume guidance gave issuance

ATM so your throughout anything are you - dribble other kind or capital for guys the through what resources Should to year? any curious I'm And of expect we out else? of needs equity the

Charles Meyers

funding we anticipated. we as then in than of to, run refinance for the are to really, little equity sooner know we we on XXXX, bit of back a debt year the in which put debt raising the process the as cash XXXX. needed some a we really want in originally front the but raised we was the that taking end And Again more balance sort far to precursor year, as to out, you than sheet,

but shareholder is it from that's a this and and posture value is - a - be. in we're about so and long-term good believe creating very equity we obviously combination And position to need also liquidity what a to to got always cash of us going a debt we're where take perspective we and

of we're is pardon program of imminent. - on ATM look at form have capital that markets And current on at availability. our me, still to nothing it the is Obviously has the continue an and nothing, the ATM capacity cheapest also going debt that know There $XXX to as still we programs you million, has today basis.

of And as so we and decisions be in combination past. about capital to if both we're on the were those strategic going very we draw it'll for any to have purpose, a be

Operator

MoffettNathanson. from Nick Deo with come Our last question Del will

is open. line Your

Nick Del Deo

And question on Packet to start.

from. for core the think sustainable the of competitive generally competitive the people where understand for describe Packet? you durability would source advantage comes I advantage How and Equinix

Charles Meyers

The think, to it's value Equinix proposition. is great it that answer the I actually

at is really look of our you how If consume Packet it, want to value in a reflection shifts proposition. people

the Our and cost be of most and digital an core performance, excellence. global has what to record to value comprehensive scale, business proposition portfolio interconnection and the advantage track it unparalleled continues to ecosystems access drive is - superior service been, the reach,

Packet been our is that for essentially, what have - value via consumption animate we with different XX Colo customers. but propositions same those years, proposition allows that to for vehicle And a same for us animating value

sure obviously, in the still advantage delivers Equinix going that really efforts to all about its bare perspective and this from to integration are integration and of durable the service and Packet for metal core it's cetera, proposition. the core has unlocking likes addressable VMware, powerful to with make that's going we're part that the the is a offer, the to the ecosystem and so still deliver API and those leverage but and et - with And very a value need bare to relies platform resides - usability and automation metal a increasing a competitive things for from we're what extending much the software market perspective capabilities Equinix

Katrina Rymill

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

Operator

conference. participation All This disconnect concludes today's time. Thank on may at participants your this you for today's conference.

Equinix (EQIX) 12 Feb 202019 Q4 Earnings call transcript